BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 16 – 23 MAY 2008 )
Sections/headline briefs:
MACROECONOMY:
· Cabinet approves macroeconomic, fiscal projections for 2009-2011
· Bulgaria's economy to grow by real 6.3%, inflation to slow to some 7% in 2008
· Bulgaria's economy firmly on the rise
· Bulgarian food - most expensive in EU
· Meat prices increases over the oil
· Bulgarian wine sector to bag �18 М in EU funding this year
· Bulgaria offers excellent natural conditions for wine growing
- Japanese Ambassador: Bulgaria must popularize nature beauties
- Bulgaria pharmaceutical market one of the most promising in CEE
· Number of people hired under employment contracts at 2.45 million at the end of March
· Bulgaria to fund new roads with Iraqi debt, budget surplus
· The fake goods Land
· Bulgaria to call tenders for �58.8 M upgrade of water utilities in Sofia in July and August
· Prognosis: 1 USD = 1.13 BGN
INVESTMENTS:
· US Ambassador: USA invested $600 M in Bulgaria for 18 Years
· 70 SEE entrepreneurs and investors attend a conference in Sofia
· Russia's MIAN to invest �35 M in office building in Bulgarian capital
· ABB to build $20M plant in Plovdiv
· Energy most appealing sector for investors
· E.ON testing wind potential of turbine locations on Bulgarian sea coast
· Japan interested in growing vegetables in Bulgaria
· Japanese-Bulgarian JV to launch 35 MW wind park in July
· Bulgarian company Pellets and JV to invest up to �12 M in biomass plants
· Bulgarian-Macedonian JV embarks on �18 M investment
· Bulgaria's International Fair-Plovdiv says will invest over �50 M in expansion
· Government to provide Plovdiv fair with 8.5 ha site near Sofia airport
· New factory for car springs opens in Bulgaria's Plovdiv
· Toyota service center to open in Gabrovo
· Galchev Holding to build logistic centre in Sofia
· Israel to invest in Varna Medical Centre
· Israel invested over $1 Billion in Bulgaria
· Mechel to raise investments in Toplofikatsia-Rousse
· Bulgaria's largest Mall opens in Varna in June
· Rollplast to invest � 30.7 M in window plant
· Golf and wine tourism with strong potential for Bulgaria
· Burgas Dockyards to invest � 23M in capacity upgrade
COMPANIES:
· Belgium company 'Electrabel' to build NPP Belene
· Large companies to double their income
· SMEs to buy electricity on free market
· 22 products awarded gold medals in Plovdiv
· Large majority of participants satisfied with Plovdiv Fair
· FIB raised its profit by 50%
· Equest Balkan Properties may sell City Centre Sofia shopping mall
· Austrian packaging company Mayr-Melnhof to shut down Bulgarian unit
· Energy 21 mulls entering Bulgarian market by year-end
· ENEL reports �1 B net income
· Mobiltel customers number 5.1 million at the end of March
· Lakshmi Mittal to pay $ 1.2 B for Kremikovtsi
· 120 banks eye Bulgarian market
· Arab sheikh opens bank in Bulgaria
ANALYSIS:
· Why investing in Bulgaria worths?
Articles:
MACROECONOMY:
Cabinet approves macroeconomic, fiscal projections for 2009-2011
The cabinet approved macroeconomic projections for drafting the fiscal framework for 2009-2011 setting up two major policy objectives: (1) meeting of eurozone membership criteria and (2) maintaining high economic growth through productivity gains. The government expects GDP growth to speed to 6.5% next year and inflation to slow down to an annual average of 5.1%. The GDP growth rate is forecast at 6.4% in the budget law for this year while the annual average CPI inflation is set at 6.9% but official data reports show much steeper price hikes (14.6% y/y in Jan-Apr). The government will keep the flat 10% tax rate on personal incomes and the 20% VAT rate unchanged next year while the mandatory health insurance contributions will be raised from 6% to 8% of the gross insurance income as earlier announced by the ruling parties. on the expenditure side, the draft fiscal framework envisages several social expansion measures: budget wage hike of 10% per year in 2009-2011; minimum wage hike of 9.1% next year; and average pension growth by at least 10% next year after a 19.7% increase by the end of this year to be operated in two steps as of July and October.
Bulgaria's economy to grow by real 6.3%, inflation to slow to some 7% in 2008
Bulgaria's real economic growth is seen accelerating to 6.3% this year, from 6.2% in 2007, and end-year inflation is expected to slow down to 7.0%, central bank governor Ivan Iskrov said on Friday. "We expect a very good growth, around 6.3% for the year," Iskrov told the annual meeting of the Association of Bulgarian Banks held in the town of Sandanski, in southern Bulgaria. "We, at the central bank, think that the instability of international global markets will not have a significant impact." "[Inflation will reach] maybe 7.0% at the end of the year," Iskrov told SeeNews on the sidelines of the meeting. He said inflation is expected to slow in the second half of the year, which will help the Bulgarian government meet its end-2008 inflation target. The government in Sofia has projected economic growth of a real 6.4% this year and end-year inflation slowing to 6.9% from 12.5% in 2007. "At the first sight, it looks like that inflation is going up, as we have the base effect from last year. But March and April levels show that it has cooled off, so from the second half of the year, I am sure, inflation in Bulgaria will be slowing down," Iskrov told SeeNews. High end-year inflation in 2007 was fuelled mainly by surging food prices, reflecting the worse-than-expected performance of the agriculture sector, as crops were damaged by unfavourable weather conditions like elsewhere in Europe.Food prices will be again the key factor influencing inflation in Bulgaria but unlike last year, a good crop is forecast for this year thanks to improved weather conditions, Iskrov said. Rising global oil prices that also fuelled Bulgaria's two-digit inflation last year, will not increase as fast in the current year and will help the expected slowdown in end-year inflation."We also expect that the budget surplus will be a minimum 3.0%, around 3.5%," Iskrov said. The coalition government which faces elections next year has targeted a budget surplus equivalent to more than 3.0% of gross domestic product projected for the current year. The country ended 2007 with a budget surplus equivalent to 3.8% of the projected gross domestic product.Bulgaria had a consolidated budget surplus of 1.664 billion levs ($1.3 billion/851 million euro) for the first quarter, up 32.8% from a year earlier, the finance ministry said earlier. The lending growth, which has been blamed for the rise in Bulgaria's current account deficit, is seen slowing to some 40% this year from last year's record high 64%."Regarding lending [...] there has been a slight slowdown in its growth since the beginning of the year and we think that lending could reach a 40% growth at the year's end," Iskrov said. To keep lending growth under control, the central bank last year increased its minimum reserves requirements for Bulgarian commercial banks to 12% from 8.0% as of September 2007. The bank currently has no plans to raise the minimum reserves requirements or impose other measures to restrict lending growth, he added. Bulgaria's first-quarter current account deficit was equivalent to a preliminary 5.1% of the gross domestic product projected for 2008, compared to 5.4% of GDP a year earlier. The country ended 2007 with a current account gap equivalent to 21.5% of the projected GDP, compared to 17.8% in the previous year, mainly due to a widening trade gap.
Bulgaria's economy firmly on the rise
Bulgaria's economy is extremely dynamic and shows one of the fastest growth rates in Central and Eastern Europe in the past few years, Pari daily's rankings, completed over a period of three months, show. In three separate large-scale, segmented rankings, the newspaper singled out the best performers in production, distribution and services. The rankings were prepared by the independent market analysis and research agency CBN-Pannoff, Stoytcheff. Total revenue was the decisive indicator. The winners were announced at an official ceremony in Sofia on May 18. All rankings clearly show that Bulgaria has overcome the crisis in production. In 2001, the combined revenue of the 100 largest producers in the country equalled 39.6% of GDP. Five years later, the same indicator amounted to 50.5% of GDP. The increase is by 111.7%, or EUR 6.7 billion, which is almost twice the growth rate of GDP. The total revenue of the 100 largest producers was EUR 12.7 billion in 2006, compared with EUR 9.6 billion the year before, which is a growth by 33%. The leading sector is metallurgy, followed by chemical industry and energy. Lukoil Neftochim of Bourgas is at number 1.The combined revenue of the Top 100 companies in distribution for 2006 was EUR 10.6 billion, up 22.9% from 2005, when it was EUR 8.6 billion. Oil and gas is the number one industry in this ranking, followed by consumer goods and raw material distribution. LUKoil Bulgaria, headed by general director Valentin Zlatev, is at the top.The 100 largest service companies in Bulgaria had total revenue of EUR 5.7 billion for 2006, compared with EUR 4.9 billion for the previous year, representing a 17-percent growth. Telecommunications is the leading sector in this ranking with total revenue of EUR 1.45 billion, and the number one performer is mobile operator Mobiltel. The sectors of industrial services and consumer services rank second and third, respectively. Construction firms make up 34% of the Top 100 performers in services, the data show.
Bulgarian food - most expensive in EU
The skyrocketing food prices in Bulgaria rank the country the first in the EU in terms of a price shock. After being crowned for highest estates prices growth, now Bulgaria sets the record of fastest growing food prices, food sells 22% dearer. To compare, food prices grew 5 to 7% in the old EU member states, shows the analysis of the European Commission, quoted by the Financial Times Deutschland. The same paper reads that Germans spend 14% of their income for food while Bulgarians have to spend 36%. Food market values will not drop soon, analysts forecast and recommend that the Bulgarian Government should take urgent measures to support the poor and curb profiteering practices on the market. The paper will be discussed at the summit of the EU presidents and prime ministers on June 19-20.
Meat prices increases over the oil
Increasing the prices of oil and stuffs that are used in the meat industry are main reason for the coming rising of prices of meat and meat production with about 10%, chief marketing expert with meat manufacturers’ association Magdalena Mladenova told Focus News Agency. She explained that the unexpected rising of fuel prices affects the transport expenses. In her words it is expected in the third quarter of the year the price of pork meat to be increased with 10% in the European Union.
Bulgarian wine sector to bag �18 М in EU funding this year
The EU has earmarked EUR 18 million for vine conversion in Bulgaria in 2008, Rositsa Goranova, executive director of the Executive Agency on Vine and Wine (EAVW) says, as cited by BNA. The specified amounts should be appropriated up until 15 October, as over 2, 400 hectares of vineyards should be restructured. Back in 2007 Bulgaria produced 1, 796 million hectoliters of wine, including homemade quantities. The country’s wine export last year ran up to 1, 125 million hectoliters with bottled wines dominating the market (81%). Bulgaria has been exporting wine mainly to Russia (65%), Poland, the UK, Germany, the Czech Republic, Sweden and Lithuania. There are 203 legally operating wineries in Bulgaria. Wine import has seen a 22% growth on yearly basis, reaching up to 150, 000 hectoliters (against 123, 000 hectoliters in 2006), with Macedonia, Spain, Russia, Chile, Romania, France and Italy being the major importers.
Bulgaria offers excellent natural conditions for wine growing
Bulgaria joined the EU with two approved regions producing regional wines - the Thracian Valley and the Danubian Plain - and 51 areas producing quality wines, Rossitsa Goranova, Executive Director of the Vine and Wine Executive Agency, said on Monday in connection with the international competition Sommelier of Europe 2008.In 2007, Bulgaria managed to defend in the EU three traditional designations of Bulgarian wines - guaranteed designation of origin, guaranteed and controlled designation of origin, and noble sweet - and ten additional wine designations, including "young", "premium", "reserve" and "special selection".Bulgaria offers excellent natural conditions for growing international and local varieties of wine grapes, Goranova said. Among red wines, the Pamid variety has the largest share, at 16 per cent, followed by Cabernet and Merlot, at 14 per cent each, Gumza, at 4 per cent, and Broad-Leaved Melnik Vine, at 3 per cent. Among white wines, the most widely grown varieties are Rkatsiteli, at 14 per cent, Dimyat, at 7 per cent, Red Misket, at 6 per cent, Muscat Ottonel, at 5 per cent, and Chardonnay, at 3 per cent. Goranova listed as traditional local varieties Mavrud, Gumza, Broad-Leaved Melnik Vine, Pamid, Dimyat and Red Misket.There are 203 registered wine cellars in Bulgaria. Wine production in 2007, including home-made wine, totalled 1,796,000 hectolitres, Goranova said. Wine exports in that year totalled 1,125,000 hectolitres, with bottled wines accounting for 81 per cent of the total. The major markets for Bulgarian wines are Russia (65 per cent), Poland, the United Kingdom, Germany, the Czech Republic, Sweden and Lithuania.The prospects for Bulgaria are restructuring and conversion of vines using European subsidies. The purpose is to improve competitiveness by producing wines of better quality, Goranova said. The budget allocated for Bulgaria for the 2007-2008 campaign is 18 million euro. The money is to be absorbed by October 15, 2008, by restructuring over 2,400 ha of wine grapevines, Goranova said. According to her, the future of the vine sector in Bulgaria lies in the production of quality wines from a specific geographical region.
Japanese Ambassador: Bulgaria must popularise nature beauties
Bulgaria should work more for the popularisation of its natural beauties, Japan's ambassador to Sofia, Tsuneharu Takeda, said during a meeting with Vidin regional governor Krustio Spassov.According to Mr. Takeda, Bulgaria could attract a great number of Japanese tourists by promoting its historical monuments and nature.During his visit to the Danube town, the ambassador also highlighted the importance of planned infrastructure projects and expressed his readiness for support.Mr Takeda also visited a milk processing plant in Vidin and commented Bulgarian diary products are highly valued in Japan."About 24 million Japanese eat Bulgarian yoghurt daily," the ambassador pointed out.
Bulgaria pharmaceutical market one of the most promising in CEE
The Bulgarian pharmaceutical market has emerged as one of the most promising in Central and Eastern Europe (CEE), as reported by Business Wire, a US online media, one of the global leaders in commercial news distribution.Business Wire cites a report published on the Research and Market's website, announcing the addition of "Bulgaria Pharmaceuticals and Healthcare Report Q2 2008" to their offering. The revised rankings of the report position Bulgaria in the joint second place, alongside the Czech Republic, out of the 16 regional markets surveyed in CEE. For the previous period Bulgaria was ranked third along with Hungary. The ranking is partially attributed to the European Union (EU) membership gained at the start of 2007, which has facilitated the access for foreign products. However, the report points out that chronic lack of funding in the healthcare sector will continue to obstruct the government's attempt to modernize and improve services. In the meantime, the pharmacy association in Bulgaria is contemplating litigation against the government over new legislation tightening pharmacy ownership. Due to the above-mentioned negative influences, the report predicts that generic drugs, presently accounting for over a quarter of the market by value, will continue to gain shares, which would be further supported by the strong local generics industry. Likewise, the report forecasts that, although relatively modest at present, the development of the over-the-counter market will become quite significant in the near future, due to increasing health awareness among consumers, integration of the sector, and strong advertising. According to the Research and Market's report, the Bulgarian medical devices market is one of the least developed in Eastern Europe, but due to healthcare system improvement there is a solid base for market development. Foreign firms will continue to enjoy the benefits of Bulgaria's EU membership and the favorable business climate. Imports - mainly from Germany and the US - will remain the majority of the market, with prominent foreign companies becoming more and more directly involved in the pharmaceutical market by the acquisition of domestic ones.Consequently, some of the larger local companies are now in a position to offer strong export portfolios and have implemented good manufacturing practice. Companies mentioned in the report include: Actavis Bulgaria (formerly Balkanpharma), Biovet, GlaxoSmithKline, Merck & Co, Novartis, Pfizer, Sanofi-Aventis, Sopharma Research and Markets is a Dublin based company, considered a major source for international market research and market data.
Number of people hired under employment contracts at 2.45 million at the end of March
A total of 2.45 mln people worked under employment contracts in Bulgaria as at the end of March 2008, data of the National Statistical Institute (NSI) show. The figure represents an increase of 13,000, compared to February and a rise of 65,000 compared to the end of 2007. The average monthly salary in the country stood at 484 leva in the first quarter of the year. The figure marked a 6.1-percent quarter on quarter increase increase. The average monthly salary in the services sector rose by 2 leva in the first quarter of the year compared to the last quarter of 2007. The monthly salary in the private sector grew by 36 leva over the period. The highest paid employees in the first quarter of the year worked in the fields of Financial Brokerage and Electricity, Gas and Water Supply with an average salary of 1,153 and 818 leva, respectively. The lowest paid employees worked in the fields of Hotels and Restaurants and Agriculture, Hunting, Forestry and Fishing with an average monthly salary of 315 and 348 leva, respectively. The average monthly salary went up by 95 leva, or 24.4%, in the first quarter of 2008, compared to the year-ago period. The increase stood at 25.4% and 24.3% in the public and the private sector, respectively. The salary in the budget sector rose by 93 leva, or 23.1%.
Bulgaria to fund new roads with Iraqi debt, budget surplus
The construction of the Trakia and Maritsa motorways may be funded with some of the debt that Iraq is expected to repay by the end of June 2008, prime minister Sergei Stanishev said on Tuesday. Bulgaria and Iraq have agreed the repayment of $360 mln in debt. The remaining 80% of Iraq's $1.86 bln debt towards Sofia have been written off. The construction works may also be funded from the structural reserve and the budget surplus, said Stanishev. No money is budgeted by the government for the Trakia project in 2008. The motorway will figure in next year's budget bill, said the prime minister. The additional funding for the Maritsa motorway is needed to speed the launch of one of the road sections. After the Portuguese-led consortium tapped for the Trakia concession contract failed to raise the necessary funding, there is reason to now pursue state public financing to make sure the motorway is finished as soon as possible, said Stanishev. He added this will not be difficult as all design work is completed and the private land needed for the project has been taken for public use. Additional funding will ensure that a 40 km section of the Maritsa motorway – from the Bulgarian-Turkish border to Haskovo, is ready by mid-2009. The funding for the remaining 68 km to Orizovo is expected to come under the Transport operative program.
The fake goods Land
Bulgaria is the only EU state member that is in world's top 10 by fake goods. This was announced after the EC report about the caught fake goods by custom services in the Union during 2007.According to the document the biggest amount of fake staff - round 60% continue to comes from Chine, followed by Turkey, India and Georgia.The researches show that Bulgaria had produced 1,65% from the ceased fake goods in the previous year.The specialists are positive that a serious reaction is needed.
Bulgaria to call tenders for �58.8 M upgrade of water utilities in Sofia in July and August
Bulgaria will call tenders in July and August for contractors under a 58.5 million euro ($91 million) programme for upgrading the water supply and sewerage system of the capital Sofia, the Environment Ministry said on Monday. The programme, called Integrated Water Project for Sofia, is due to be completed by the end of 2010, the ministry said in a statement. The project is designed to help improve the city's water supply and sewerage system in compliance with the standards of the European Union, which Bulgaria joined in 2007. EU ISPA pre-accession programme provides 75% of the project funding, 15% is financed with a loan from the European Investment Bank to Bulgaria, and the Bulgarian government is contributing the remaining 10%.
Prognosis: 1 USD = 1.13 Levs
The US dollar will slide to 1.13 levs by Christmas (1euro=1.95levs). After that, exchange rates will slowly start rising, to reach 1.30 levs in the end of 2009. This is the economic prognosis embedded in Bulgaria's state budget for 2009, which the leaders of the ruling coalition discussed at their conference at Katarino Spa Complex just a week ago and which will today be submitted to the cabinet for approval. The financiers, who drew up this prognosis, had been using financial analyses by such respected institutions as the World Bank and the International Monetary Fund. And analyses showed that the US dollar would continue sliding down. Therefore, rushing to buy now would not be a good idea and people better ignore the currently low exchange rates, financiers advised. In the first week of May the "greenbacks" did score a rise to 1.28 levs per dollar, however, for the past ten days, the rates dropped again to 1.23 - 1.24 levs per US dollar.
INVESTMENTS:
US Ambassador: USA invested $600 M in Bulgaria for 18 Years
In the last 18 years the American Agency for international development had invested in Bulgaria round $600 million. This was informed by the US Ambassador to Bulgaria John Beyrle, by the time of the international press conference on theme ‘Democracy that give result'.The Ambassador calculated that the US Government invested per $10 every year in each Bulgarian citizen.The local experience in the development of the democracy may be favorable for the Western Balkans, the diplomat added.
70 SEE entrepreneurs and investors attend a conference in Sofia
More than 70 entrepreneurs and investors from Southeast Europe will take part in the starting in Sofia second regional conference on the topic “Find the capital you need to go ahead”.The forum is organised by the Center for entrepreneurship and management development and aims to help the small and medium business to find capital for its successful development. Guest at the conference will be the chairman of the Association of the business angels in USA John May – author of the book “Every business needs an angel”.
Russia's MIAN to invest �35 M in office building in Bulgarian capital
Russian real estate company MIAN is building a 35 million euro ($55 million) office building in Bulgaria's capital Sofia, due to be completed by the end of 2009, the project consultant said on Monday. The building will have a built-up area of some 25,000 square metres and will also accommodate cafes and restaurants, Hristina Dimova, project manager of Bulgarian real estate consultant Forton International, told SeeNews. MIAN (www.mian.ru) has chosen to invest in the project because of the favourable location of the land plot in Sofia, Dimova said. At the beginning of 2007 the Russian company said it has bought the plot for 10 million euro. Occupation in Bulgaria's office market is expected to grow by some 20% yearly by 2010 after only 160,000 square metres of office space were taken up in 2007, Forton said last week. Earlier this year, however, Bulgaria's unit of Italian banking group UniCredit said yields on investments in the country's office sector will drop from last year's levels of 7.5% to some 6.5% by 2010. Bulagria's real estate market has flourished in recent years mainly due to domestic and foreign investors' expectations for high yields after the country's accession to the European Union in 2007.
ABB to build $20M plant in Plovdiv
Swiss concern ABB gave the go-ahead to a project to build a $20 million (12.92 million euro) plant near Bulgaria’s second largest city Plovdiv, the concern said in a May 15 statement. The plant will become an internal supplier for ABB, which will manufacture automated components in other factories of the concern. The plant will spread on 35 000 sq m. Construction works are slated to start in October this year and to be completed by summer 2009. The new plant is expected to create 500 jobs by 2011. The project is expected to support ABB’s growth in the automated products’ segment, as well as expand its scope of low-voltage products. ABB is leader in the manufacture of energy and automated equipment for the needs of the electricity distribution network and industry. The concern is present in more than 100 countries and has 110 000 people on the payroll. The concern is the main shareholder of Sevlievo-based ABB Avanguard AD.
Energy most appealing sector for investors
Energy will be the most attractive sector for professional investors in 2008, along with financial brokerage and construction of infrastructure, a Pari daily inquiry among leading brokers and financial analysts shows. Usually, seasoned players count on companies, in which considerable funds are invested, or on sectors with high potential for development. However, amid low liquidity and fear of losses on the capital market, traditions may change. In times of global liquidity crisis, even companies with enormous potential may not find sufficient demand and may thus remain underestimated for a long period, Geno Tonev of Yug Market Asset Management said. The market is already following a new logic and investor behaviour gets more unpredictable, Georgi Biserinski of KD Securities said. Thus, it can be difficult to say which investment will yield the best payoff, he said.
Despite the unclear situation, energy stands out as one of the most promising sectors of the economy. Demand on a worldwide scale is very high and rising, which makes the sector very attractive to investors. Companies in infrastructure construction are also very interesting, the investor community said. This is mainly because of the funds that are going to be transferred by the EU on various infrastructure projects. Financial brokerage is another promising market segment because of its high potential for development, analysts said. In their opinion, despite the crisis in the first months of the year, the market will continue growing.
E.ON testing wind potential of turbine locations on Bulgarian sea coast
E.ON Bulgaria, the owner of the Varna and Gorna Oryahovitsa regional power distribution companies, has started to install wind north of Varna, on the Black Sea, to test the wind potential of the area, said board member Reinhard Aschendorff. The company has earmarked locations along the Northern Black Sea coast for the construction of three wind parks, said the E.ON official. If the test results are up to par, the pilot projects will be developed into fully-fledged wind parks, said Aschendorff. The company expects to emerge as the nation's biggest wind power producer. In 2008, E.ON Bulgaria intends to reinvest the 2007 net profit of 21 mln levs to improve and expand the transmission grid, said board chairman Manfred Paasch. The two divisions of the company had contrasting fortunes in 2007. E.ON Bulgaria Networks posted a profit of 42.57 mln levs while E.ON Bulgaria Sales slumped to a loss of 21.728 mln levs. By 2010, the power distributor plans to launch the 7.4 mln lev Topola substation near Kavarna, the 5.5 mln lev Galata substation near Varna and a 7.5 mln lev substation in Veliko Tarnovo. A further 2 mln levs will be invested in substations in other locations. Some 80 wind turbines have been deployed so far along Bulgaria's Northern Black Sea coast, most of them located in the Dobrich region. Other locations include Balchik, Kavarna and Shabla. Mitsubishi Heavy Industries is developing in partnership with local company Inos 1 the 2,700 ha Kaliakra Wind Power park. The project will cost over 90 mln euro.
Japan interested in growing vegetables in Bulgaria
We should investigate if there are farmers, who would like to start growing vegetables typical for Japan.This informed the regional governor of Plovdiv Todor Pavlov after his return from a visit in Japan. The Japanese government has expressed readiness to supply subsidies in this direction. Todor Pavlov has discussed with representatives of the Japanese business also other opportunities for expansion of the trade relations between the two countries. Agreements for additional export of rose oil and wine have been contracted with the chairman of the Trade chamber in Okaiama, Mr. Okazaki. “Preliminary research shows the manufacturing of products from Bulgarian rose (rose oil and jam) as the field of mutual business interest. Japanese companies are also interested in wine production”, pointed out Todor Pavlov.
Japanese-Bulgarian JV to launch 35 MW wind park in July
Kaliakra Wind Power, a joint venture of Mitsubishi Heavy Industries (MHI) and Bulgarian company Inos 1, plans to launch a 35 megawatt (MW) wind farm worth 53 million euro ($82.6 million) at the Black Sea coast on July 1, the company's executive director said on Tuesday.A government commission should issue a permit to the facility to join the grid, which is due to happen in early June, Kaliakra Wind Power's executive director Georgi Petkov told SeeNews. "The deadline is not changed, as of July 1 we will be fully operational and linked to the power grid," he added.The investment exceeded the initial estimates which had put project costs at some 92 million levs ($73.3 million/47 million euro). Kaliakra Wind Power financed the project with a $50 million loan from the Japan Bank for International Cooperation (JBIC) and Mizuho Bank, using certiicates for reduction of carbon dioxide (CO2) emissions as collateral in 2007. Japanese Nikkei business daily reported at that time that this was the first such financing plan in the world.The Kaliakra project will reduce carbon dioxide emissions by about 80,000 tonnes a year, as part of consumers of electricity generated by thermal power plants will switch to power generated by the new wind farm earning emission credits, Petkov said. "The emission credits will be purchased by the Japanese Carbon Fund under a government agreement," he added. Kaliakra Wind Power is in the process of completing the documents under which it will sell credits to the Japanese Carbon Fund under the Joint Implementation mechanism of the Kyoto Protocol. "However, after the two governments, of Bulgaria and Japan, approve the project, it should also be approved by U.N. This could take a couple of months," Petkov said. The Kyoto Protocol requires industrialised nations to reduce greenhouse gas emissions, allowing nations to sell their excess credits resulting from the development of environmentally friendly technology to other countries. Under this mechanism, companies also can buy and sell emission credits. Financial institutions have been cautious about extending loans for carbon dioxide reduction projects because of profitability concerns. However, the infrastructure for the trading of carbon credits has been put into place and such financing could become more common in the short term.Kaliakra Wind Power has signed long-term contracts to sell its output to NEK.
Bulgarian company Pellets and JV to invest up to �12 M in biomass plants
Bulgarian company Pellets and Bulgarian-UK joint venture Bulgarian Renewable Energy Company plan to invest up to 12 million euro ($18.7 million) in the construction of three production units for biomass pellets, Pellets' chief executive officer said. Together [with Bulgarian Renewable Energy] we are developing a project for the use of biomass in the production of pellets," Nadia Ivanova told SeeNews in a recent interview. We are planning to invest 3.0 million euro in the first production unit which will have a capacity to produce 2.5 tonnes of pellets per hour, or an annual capacity of some 12-15,000 tonnes," Ivanova said. The company has already bought the land where it plans to build the facility - near the town of Yablanitsa in northern Bulgaria. It has also contacted equipment suppliers and signed preliminary contracts for supplies of raw materials. We have preliminary deals for the supply of 1.5 times more raw material than we would actually need, as we need to be on the safe side," Ivanova said. She added that the company hopes to raise the money for the first plant by the end of the year. It is seeking investors for close to 1.0 million euro for the project. The remainder will be secured through a bank loan. The construction of the plant will take about a year. Parallel to this project, the company is developing projects for the construction of two other pellet production plants. one of the possible locations [for the two plants] is in southern Bulgaria and the other is in central Bulgaria where there are great resources of raw materials," Ivanova said, adding that the projects are still in an initial stage. The capacity [of each of the other two plants] will be most probably identical [to the first one], up to 5.0 tonnes per hour," she said. The investment in each of the plants is estimated at some 4.0-4.5 million euro, depending on their capacity. The launch of the plant in Yablanitsa iis expected to step up the development of the two other projects. First, we need the first plant to start operations and generate profit. According to our estimates, this will take three-four years after its launch," Ivanova said. The company plans to sell the pellets in the country as transportation is cheaper and less risky and there are prospects before the development of the local market. This market in Bulgaria is not very well developed, Ivanova said, adding that hotels and big office buildings are now starting to use this way of heating. "There is interest but the high cost of the equipment is still a holdback, even though it [the investment] can be recouped very fast." once the company's first plant starts operations, it is estimated to have an 80% market share, she added. This is a virgin territory on which we are stepping."
Bulgarian-Macedonian JV embarks on �18 M investment
Bulgarian-Macedonian joint venture Sofurban plans to open by the end of the year a factory for road paving elements as part of an 18 million euro ($28 million) investment in the European Union newcomer, a senior company official said on Tuesday. Sofurban, a 50/50 joint venture of Macedonian floor and paving tiles producer Urban Invest and its Bulgarian distributor Balkan Dnepar, planned to complete the construction of the four million euro factory by the end of 2007. The initial deadline had to be extended after Sofurban failed to buy the premises where it wanted to deploy the factory and had to seek another building.We have bought a building and a site," Balkan Dnepar CEO Georgi Manolkov told SeeNews. We are currently reconstructing the building and have contracted the equipment. The factory for concrete products will open by the end of this year," he said. A boom of construction activity in Bulgaria in the last few years has left many new buildings without proper infrastructure like sidewalks and passageways and Sofurban is seeking to fill in the gap. The factory will have an initial output capacity of 100,000 square metres of paving elements per year which it plans to triple at a later stage. The company also plans to start production of engineered stone, a type of material made by combining resin and pigments with stone aggregate to achieve a mixture very like natural stone, as second part of its investment. The second plant will open no earlier than 2009," said Manolkov, but gave no timeframe.
Bulgaria's International Fair-Plovdiv says will invest over �50 M in expansion
Bulgarian operator of industrial exhibition halls International Fair-Plovdiv plans to invest more than 50 million euro ($77.9 million) to expand outside of the home city of Plovdiv, its CEO said on Monday. In order to expand our capacity to the full and to be able to react flexibly to the market, we need to have our units in Sofia and Varna," Georgi Gergov said in an interview with local daily Monitor. Gergov said the city of Varna, on the Black Sea coast, was a suitable location for specialised events because of its strong business and tourist potential, while Sofia was appropriate for organising VIP fairs. Gergov did not provide a timeframe for completing the investment and was not immediately available to comment. The international fairground, located in Bulgaria's second largest city of Plovdiv, operates exhibition area of 138,000 square metres. It organises two major events, the International Consumer Goods and Technologies Fair in the spring and the International Technical Fair in the autumn, and hosts around 40 smaller exhibitions annually.
Government to provide Plovdiv fair with 8.5 ha site near Sofia airport
A state-owned 8.5 ha land plot in the area of the Sofia International Airport may be contributed to the assets of the Plovdiv international fair, said sources from the economy ministry. The information was confirmed by the economy ministry. The state owns 51% in the Plovdiv fair with the remainder held by a joint venture between Georgi Gergov and the Plovdiv municipality in which the local businessman has the majority stake. Last week, economy minister Petar Dimitrov said the capital of the fair will be raised with the addition to its balance sheet of sites in Varna and Sofia. At the time the official said there was still no conceptual design for the development of the sites. on Monday, Dimitrov said he had asked the transport ministry to transfer the title for the plot near the airport to the economy ministry but added that did not necessarily mean it will be listed among the assets of the fair immediately. The location of the site in question is suited not only for congressional tourism but also for logistics, office pace and lodging. Land prices in the vicinity have reached 300-350 euro/sq m, valuing the land plot at at least 60 mln levs. Gergov told Dnevnik he had requested sites with strategic location: in proximity to the Sofia and Varna airports and at roads linking Sofia and Plovdiv. He said the sites should be built up over the next five years. At last week's opening of the Plovdiv fair, he said that at least 50 mln euro will be invested in the Sofia branch of the company. Transport minister Petar Mutafchiev confirmed that his ministry has indeed received the request of the economy ministry. He said he had inquired about the position of the airport and has been told that it has no plans for the development of the site. The plot will be transferred to the economy ministry and reclassified as private state property only after the consent of the EIB which is funding the construction of the new airport terminal. The intention of the government to bulk up the assets of the Plovdiv fair comes in the absence of any existing investment plant for the sites or guarantees for the future private investment.
New factory for car springs opens in Bulgaria's Plovdiv
A new factory for pneumatic car springs was opened Monday close to Bulgaria's city of Plovdiv, plovdiv24.com reported.The �8 M investment is owned by the Turkish consortium Aktas Group. It is located in the Kuklen Industrial Zone southeast of Plovdiv. The factory is also going to produce air bags for trucks and buses. The construction has continued for a year and a half, and an extension with a second factory unit is already being planned. The factory was opened with a performance by the famous Bulgarian jazz singer Yelduz Ibrahimova.The Turkish consortium Aktas Group is among the leading Turkish companies in the auto industry. It was founded in 1938, and has over thirty subsidiaries around the world.
Toyota service center to open in Gabrovo
Ventsi, the authorised Toyota distributor for the Gabrovo and Veliko Tarnovo regions, said it will invest 2.2 mln euro in a new auto service center in Gabrovo. The 3,100 sq m complex, located in the northern industrial zone of the city, will house offices, warehouse, service shop and a retail outlet for auto accessories. The service center should be operational by the end of '08. The company plans to launch a Toyota dealership in Veliko Tarnovo this Sept.
Galchev Holding to build logistic centre in Sofia
Bulgaria's Galchev Holding will start the construction of a commercial and logistic centre in Sofia in early 2009. The project will be located in the northern part of the city, facing Iliyantsi Blvd, where the group owns a 3-hectare plot. An administrative building has been erected there to house the holding's all 20 companies.The centre will have a total floorage of 20,000 sq. m, part of it will be used as a showroom for construction materials. The investment will amount to at least EUR 8 million. Construction works are expected to be completed in two years.Galchev Holding operates in three fields: construction and trade, investments, and tourism and sports. According to preliminary data, the holding's turnover amounted to BGN 54.84 million in 2007. The profit increased 31%, year on year, to BGN 2.489 million.
Israel to invest in Varna Medical Centre
A state-of-the-art medical diagnostic centre will be set up in Varna with 100 per cent Israeli investment, Israel's newly appointed Honorary Consul in Varna, Prof. Krasimir Metodiev, said on Monday. He said that the centre will be operational in 2009. Prof. Metodiev said that Israel also plans to invest in an oil refinery on the banks of the Danube near Silistra (Northeastern Bulgaria). The Consul, who is also Chairman of the International Medical Association in Bulgaria, said that over 120 Bulgarian doctors have specialized in Israel with full scholarships since 1991. Five doctors have already gone in 2008, with two more expected to join them in September.Israeli Ambassador to Bulgaria Noah Gal Gendler was present at the Consul's investiture ceremony.
Israel invested over $1 Billion in Bulgaria
The Israeli investments in Bulgaria exceed $1 billion, informed the Israeli Ambassador to Bulgaria Noah gal Gendler on Tuesday, May 20 while visiting the city of Shumen (North - Eastern Bulgaria). He pointed out that the Israeli businessmen are content and find no obstacles to invest in the country.The problem they see is the shortage of qualified work hand. The Ambassador explained that big part of the Israeli companies were registered in London, Poland, the Czech Republic and that's why the exact amount of the money cannot be calculated.He gave as an example the registered in Poland Israeli company, which constructs three malls in the country, each one on the amount of 40 million EUR.The stock exchange between the two countries goes up to $150 million. The numbers are not so impressive, believes the Ambassador.
Mechel to raise investments in Toplofikatsia-Rousse
Russia's mining and steel company Mechel, owner of 49% of the capital of Toplofikatsia-Rousse, will invest in the heating company some BGN 3.240 million by the end of 2008, Andrey Nikolaev, executive director of Toplofikatsia-Rousse, said. A total of 138 construction projects, which started back in 2005, will now be finished. The heating company will add about 500 new subscribers. The price of heating energy sold by Toplofikatsia-Rousse to the population depends on consumption and the price of coal, Nikolaev said. For the five months in which the Russian company has owned a stake in the heating company, important steps have been undertaken to improve its work. The crisis with coal delivery has been overcome, Nikolaev said. Mechel has signed a preliminary contract with majority shareholder Slovenske Elektrarne for the purchase of its share in the Rousse-based company. The Russian company is the first and as yet, the only metallurgy enterprise from Central and Eastern Europe to offer its shares on the New York Stock Exchange.
Bulgaria's largest Mall opens in Varna in June
The largest mall in Bulgaria will be opened in the Black Sea city of Varna on June 12 with a four-day program including music performances and fashion shows. Mall Varna has a total all-out build-up area of 70 000 square meters, including 33 000 square meters of commercial space. Its 150 stores have already been contracted for the maximum period of ten years. The mall in Bulgaria's Sea Capital will also have a parking lot with 800 spaces, a children's center named Capella Play, and an ice skating facility called Avangard Ice, as well as eight movie theaters. The facade of the five-storey building of Mall Varna will be illuminated by a unique light show changing the light color every thirty minutes.The Mall Varna was constructed by the Bulgarian Interservice Uzunovi Jsc. In the fall of 2007 it was bought by the Scottish Miller Developments, a subsidiary of Miller Group.The price of EUR 120 M was record for the purchase of a commercial center in Bulgaria. This is also the second largest real estate deal in the country.
Rollplast to invest � 30.7 M in window plant
The local company Rollplast is to invest about BGN 60mn (EUR 30.7mn) in construction of a plant for production of windows in the western town of Kostinbrod , some 15 kilometres away from the capital city Sofia . The first stage of the investment is to be completed by the end of this year. Production is expected to start in 2010. The project will open more than 500 job positions. Rollplast was established 8 years ago. It runs another smaller production unit in Sofia and employs some 400 workers at present. Most of its production is sold on the domestic market but the company plans expansion to Ukraine , Austria , Belgium , Italy , Greece , and Romania
Golf and wine tourism with strong potential for Bulgaria
Over 300 million EUR could potentially be invested in golf courses in Bulgaria if the state provides private investors with plots suitable for golfing.This statement was made by Krassimir Gergov, Chair of the National Tourist Board at the Fourth International Meeting of Bulgarian Media in Madrid, Spain.If in 5 years golf courses were not built on the plots provided by the state, such plots would be automatically recalled, Gergov specified.Gergov gave the example of Turkey where the yearly profit from a golf course is over 5 million EUR with the strong possibility for the same amounts to be reached in Bulgaria.He further announced that this fall, from September 24 to 28, Bulgaria would host the International Golf Tournament Bulgaria Open. The tournament will take place at the Black Sea Ram golf course in Balchik and is expecting golfers from over 20 countries. In the fall the Black Sea Ram is already going to be an 18-hole course making the international tournament possible.According to statement made by Poli Karastoyanova, Executive Director of the National Tourist Board, tourism in Bulgaria creates 15% of the Gross Domestic Product, providing 300 000 job opportunities and realizing over 3 billion EUR of yearly revenue.Other presentations at the Media Meeting included those of Plamen Mollov, Chair of the National Viticulture and Wine Chamber and Nikoly Vassilev, Minster of State Administration.Mollov presented the possibilities for development of wine tourism in Bulgaria. He gave the example of the Melnik wine, which was known as Winston Churchill's favorite one. Churchill used to order 500 bottles of it each year.Vassilev presented in front of the media its Agency's transliteration project providing for a unified spelling of Bulgarian geographical and other names in Latin.
Burgas Dockyards to invest � 23M in capacity upgrade
Port Burgas Dockyards is to invest EUR 23mn in capacity upgrades at its facilities in the southern Black Sea city of Burgas , CEO Veselin Statev reveals for Dnevnik Daily . The dockyard is specialising in bulk cargo transports. The project includes an option for constructing an additional wharf. Burgas Dockyards is majority owned by local Industrial Holding. A year ago, the company announced plans to build a new commercial port valued at EUR 11.8mn. About 70% of the dockyard customers are foreign-registered operators from Greece , Turkey , Cyprus , Israel , Syria , and Germany.
COMPANIES:
Belgium company 'Electrabel' to build NPP Belene
Bulgaria showed interest in strategic partnership with Belgian company ‘Electrabel' for the construction of NPP ‘Belene'. That was announced by Bulgarian Economics and Energy Minister Peter Dimitrov after a meeting with representatives of the Belgian company. Minister Dimitrov added that except as an investor in the NPP ‘Belene' project, ‘Electrabel' declared interest in participation in the hydro-energy project ‘Gorna Arda' on Arda River and projects on Danube river. The Minister accented on the fact, ‘Electrabel' is going to unite with the French ‘Gas de France'.Meanwhile the German RWE company also applies for 49% ownership of NPP ‘Belene'.
Large companies to double their income
The total income of the top 100 producers in Bulgaria will reach EUR 25 billion within the next three years, which is a 100-percent rise, Lyudmil Stoychev, manager of CBN-Panoff,Stoytchev&Co, said. This is the agency that made the Top 100 rankings of Bulgarian producers, distributors and service companies requested by Pari daily.
The leaders in the rankings were distinguished at a special ceremony in Grand Hotel Sofia on Monday evening. The event was attended by top representatives of Bulgarian large business. The total income of the 300 companies featured in the three rankings is EUR 29 billion. This is half the income of Bulgaria's business, statistics show. Information for the rankings was taken from companies' annual financial reports.
SMEs to buy electricity on free market
All small and medium-sized enterprises (SMEs) with a turnover of up to BGN 19.5 million and a staff of 50 people or less will buy electricity on the free market from July 2008. They will have to pay a 20-percent higher price than now. According to the Energy Act, currently such firms use the regulated market quota and pay electricity at the price for households. From July 1, however, the State Energy and Water Regulatory Commission (SEWRC) has decided to reduce the quota by some 3 billion kWh of electricity. That is actually the quantity used by the whole light industry in Bulgaria. The aim is for Bulgaria to achieve nearly full liberalisation of the energy sector, in line with EU's requirements, SEWRC's chairman, Konstantin Shushulov, said. Forcing companies onto the free market in the middle of the year will affect their operations. The increase will be felt mainly by the very small firms. Our output will appreciate by at least 30% if we have to buy electricity on the free market, Mariana Kukusheva of the Federation of Bread Producers and Confectioners, said. It is not right for beer and cigarette producers and big five-star hotels to buy electricity at the household price, the chairwoman of the Association of Electricity Traders, Rumyana Georgieva, pointed out. Nevertheless, the free market has its advantages, too. The electricity agreed on it may be 7 to 12% cheaper than on the regulated market. To achieve this, however, companies have to learn how to project the electricity they will need and optimise their consumption. on the free market, they can also choose their supplier.
22 products awarded gold medals in Plovdiv
Five medals were adjudged in the perfumery and cosmetics section. The jury awarded Alen Mak's Achromin cream, products of the Shoumen-based Lavena, Rosa Impex Plovdiv, Refan and Kokona-Smolyan. Products made by three Bulgarian companies were distinguished in the section furniture and home construction materials. The same number of medals was awarded to textile, clothing and leather goods producers. Two medals were given in the section home appliances, hotel, restaurant and bar equipment. The central competition committee and the committees judging the different categories involved representatives of the Bulgarian Standartization Institute (BSI), branch unions and business organisations. The main jury was presided by Ivelin Bourov, Chairman of BSI.
Large majority of participants satisfied with Plovdiv Fair
98% of the Plovdiv Fair guests are satisfied with their visit. only 1,4% did not find the companies they have been looking for.The data comes from a sociological research conducted by "Alpha Research". Even though preliminary, the results show that the business forum has been useful to the visitors.77% of the satisfied visitors are specialists with 31% of them being company owners and another 27% are representatives of high level management.The strongest interest was generated by new products, technologies and machines displayed at exhibits of furniture, cosmetics, construction materials, yachts, water sports and water sports equipment, appliances, hotel and restaurant equipment, food, textile, clothes and leader articles.76% of those interviewed state that becoming informed about new trends in their area has been the main goal of their visit. Other motives include investigating offers and meeting business partners, all of the above corresponding to the exhibitors' main goals.91% of the visitors plan to attend the Spring Fair in 2009.Among exhibitors 70% see favorable potential for deals resulting from the Fair while 67% are satisfied with their participation this year.
FIB raised its profit by 50%
Regarding development rates and market shares, FIB ranks fifth in terms of attracted deposits from citizens. The bank reports a 46% growth of this indicator vs 2007. More than 40,000 clients took advantage of the bank's promotional terms for deposits and the money attracted under them exceed BGN580MN. This information bespeaks of the high quality of services and the clients' trust in the financial institution. At the same time, the increase of citizens' deposits, or the so-called primary attracted resource, creates long-term perspectives for expansion of its market presence. Currently, FIB is sixth in terms of assets, which total amount is BGN4.07BN, accounting for its 6.84% market share. The bank reported a 32.88% growth of assets vs the same period of 2007. According to the size of attracted deposits from individuals and companies - BGN2.84BN - FIB ranks sixth again, with a 7.37% market share. The bank's share in crediting is a little bit over 7.1 per cent. Extended loans totalled BGN2.86BN, marking a 53.1% rise within a year. FIB is sixth in terms of corporate and consumer crediting as well, and fifth in terms of housing loans. FIB is a leader in the sphere of international payments. According to SWIFT data, the bank has a 7% market share of transborder transfers and a 10% market share in foreign trade crediting, which makes FIB the leader on the domestic market according to this indicator. It is one of the banks which has issued the greatest number of debit and credit cards. Their number exceeded 612,000 in end-March.
Equest Balkan Properties may sell City Centre Sofia shopping mall
Equest Balkan Properties, the real estate investment fund of UK-registered Equest Capital Management, has indicated that it is considering plans to sell the City Centre Sofia shopping mall in Sofia to improve its cash position and reduce debt exposure.Equest purchased the shopping mall, one of the largest retail complexes in the city, in 2006 for �94m in cash. The mall comprises 24,000 sq metres of sales area with over 80 shops including a hypermarket and a six-screen multiplex cinema.Equest explained that it is also considering selling its stake in the Sedika Forum project as well as a property in the Serbian capital, Belgrade. Equest purchased the three-star Sedika Hotel at the start of 2006 for around �10m, with plans to invest �64m to develop a 30,000-sq-metre office and retail complex at the site. Construction work is scheduled to start in summer 2008.The City Centre Sofia shopping mall is one of the largest assets in Equest’s Bulgarian portfolio. The fund explained that the vacancy rate at the popular shopping mall is less than 3%, and that in 2007 the mall achieved a return on investment of 8.3%. Since opening in 2006, the shopping mall has been visited by an average of 7m people a year, Equest says.Equest is one of the largest investment funds operating in Bulgaria, alongside private equity investors Gramercy (US). Equest’s investments in the country include the stakes in the Familia retail chain, three waste management companies in Sofia, automobile distributors and several property developments.According to a valuation report prepared by property consultants CB Richard Ellis, the value of Equest’s portfolio in Bulgaria reached �152m at end-2007. In addition to Bulgaria, Equest has made investments in Serbia, Romania and Macedonia. The fund’s total portfolio is estimated at �373.5m.Last year Equest purchased 67% of the project company in charge of completing the Super Borovets mountain ski resort. Investment costs in the project have been estimated at �500m. Construction work began in October last year and is scheduled for completion in 2012.
Austrian packaging company Mayr-Melnhof to shut down Bulgarian unit
Austrian board and packaging company Mayr-Melnhof (MM) Karton plans to close down its cardboard manufacturing unit in Bulgaria and relocate its production to its other units in an effort to maintain high profitability, the group has said. "In this connection production will be shut down at the Bulgarian cartonboard mill in Nikopol and transferred to more cost efficient high performance mills of MM Karton," the group said in a statement posted on its website. Mayr-Melnhof reported a 4.9% year-on-year drop in its consolidated net profit for the first quarter of the year to 27.3 million euro due to non-recurring effects, it said. First quarter sales were 7.5% up on the year to 452.9 million euro. The Austrian group said further it spent 22.6 million euro on wound up activities at the Bulgarian plant in the first quarter of the year. The group bought the factory in the town of Nikopol, in northern Bulgaria, in May 2002. The plant has an annual capacity of 60,000 tonnes. Persistently high prices of raw materials and increasing inflation-triggered slackening of private consumption is slowing the economy in Western Europe, the group said adding that it will rely on additional productivity gains and price discipline to support high profitability. "Within this context the expansion program for high performance sites is intensified by concentrating volumes and investments on these units," it said.
Energy 21 mulls entering Bulgarian market by year-end
Czech Energy 21, specialised in production of renewable energy, plans to start activities in the country by the end of the year. The company opened a subsidiary in Slovakia a month ago and plans to launch operations in Spain as well. Energy 21 eyes both acquisitions of companies or green-field projects in Bulgaria . Energy 21 runs two small solar power generators in the Czech Republic and is building another one. It also mulls biofuel projects in Poland and Romania and construction of hydropower plants in Ukraine .
ENEL reports �1 B net income
Italy's Enel reported a net income exceeding EUR1BN for the first quarter of 2008. In Bulgaria, the energy company owns Maritsa Iztok 3 TPP. The result is 6.5% up compared to the same period of 2007 when the holding gained EUR943MN. The company's other financial indicators have grown significantly for the period January - March 2008, too. Revenues are up 55% compared to a year earlier and already exceed EUR15BN. The gross operating margin increased 47.7% and now amounts to more than EUR3.4BN. Net financial debt is up 2%, reaching EUR57BN. "The continued strength of margins in the Italian market, together with growth in international operations, lead us to forecast full-year operating results higher than those of 2007", Fulvio Conti, CEO of Enel, remarked. Enel is Italy's largest energy company and second in Europe in terms of installed capacity. In the first quarter of 2008 the holding plants generated 57.9 TWh of electricity, of which 16.2% from nuclear plants, 27.5% from renewable sources, and 56.3% from thermal plants.
Mobiltel customers number 5.1 million at the end of March
The number of Mobiltel customers rose 13.7 per cent year-on-year to 5.1 million at end-March, the company said on Tuesday.The company's market share remains stable at a level of 51.0 per cent at the end of the first quarter of 2008, compared to the first quarter of 2007. The penetration rate of mobile services in Bulgaria rose to 130.0 per cent from 113.5 per cent for the same period of last year.At the average number of minutes of talks, the growth of 27.5 per cent partially compensates lower prices and restricts the drop in the average revenue from a customer to 9.4 euro in the first three months of 2008, compared to 9.9 euro in the same period of 2007, says the financial statement of Telekom Austria Group, which owns Mobiltel.Mobiltel January-March 2008 revenue went up 8.9 per cent to 154.4 million euro. The operational profit of Mobiltel increased 16.0 per cent to 52.8 million euro.
Lakshmi Mittal to pay $ 1.2 B for Kremikovtsi
ArcelorMittal is to pay US$ 1.2 billion for Kremikovtsi steel, The Economic Times reported. According to the edition, the company owned by Lakshmi Mittal, the older brother of the current owner of Kremikovtsi, Pramod Mittal, is about to win the purchase of Kremikovtsi. The deal could be declared within a month. Lakshmi Mittal's offer envisages the payment of US$ 200 million working capital and additional US$ 500 million to be used for the modernization of the steelworks. Another US$ 500 will be paid back to the creditors of the plant.A day earlier, Lakshmi Mittal transferred 30 million euro to Kremikovtsi for payment of wage arrears and for current needs. Kremikovtsi officials informed they had paid the salaries for March and April of all 8,000 workers as well as the due money for social benefits and food."The transferred 30 million euro do not guarantee that Lakshmi Mittal will acquire the company," Bulgaria's Minister of Economy and Energy, Peter Dimitrov commented. According to Minister Dimitrov, ArcelorMittal cannot acquire the ownership of Kremikovtsi this way. The steel has to be declared bankrupt which is expected to happen in June after a sitting of Sofia City Court.
The second bidder for Kremikovtsi is Vorskla Steel connected with Ukranian billionaire Kostyantin Zhevago. The parameters of his offer announced by the trade unions provide 10 million euro for salaries, 90 million euro for the steelworks and 30 million euro deposit to the Bulgarian Ministry of Environment as a guarantee for the implementation of the environmental programs of the plant.
120 banks eye Bulgarian market
The number of foreign banks interested in the Bulgarian market has reached 120. There have been 28 new entries in the list so far in '08. The notification received by the Bulgarian central bank does not necessary mean that the respective bank will indeed start doing business here. The roster features powerhouses like Credit Suisse, ABM AMRO, JP Morgan, Merrill Lynch and Goldman Sachs. The single passport rule allows EU-registered banks to operate in any of the community markets without the need to apply for a local banking licence.
Arab sheikh opens bank in Bulgaria
Sheikh Tariq Bin Faisal Al Qassimi would like to open a bank in Bulgaria. He is the owner of Emirates Investment Group and a member of the ruling family of Sharjah, UAE's third largest emirate. The Sheikh declared his interest in investing in Bulgaria on a meeting with Bulgarian Minister of Economy and Energy Petar Dimitrov. The bank of his emirate is called Emirates Investment Bank and it is to offer a full range of financial services. The other sectors Sheikh Tariq intends to put some money in are local road construction, tourism and real estate but for now he did not wish to engage with any promises of how much or when he will invest. "We are yet to examine the projects and decide which are of interest to us," he explained. "I am all prepared to fully cooperate for realizing the investment ambitions of Emirates Investment Group," minister Dimitrov stated in turn. Sheikh Tariq has already hired the local financial consulting company BenchMark Group to advise him on the implementation of his Bulgarian projects. "We already have presence in other EU countries, but find Bulgaria a much more suitable market," Sheikh Tariq commented.
ANALYSIS:
Why investing in Bulgaria worths?
Author: Financial Mirror
Bulgaria is one of the fastest growing property markets in Europe offering investors low property prices, continued strong capital growth and high rental returns.Executives at a property exhibition taking place in Larnaca and Nicosia thios week are expected to argue that Bulgaria also provides investors with one key element above many other European investment hotspots; "value for money".Dwayne Holt, Nikolay Pavlov and Nimet Kama, CEO of Platinum Global, will be speaking at presentations at the Golden Bay Hotel in Larnaca on Wednesday and at the Europe Hotel in Nicosia on Thursday, where they will explain how for a relatively low outlay investors can buy high quality well managed properties offering great returns over the medium term, and with Bulgaria really only starting in its investment cycle, these trends should continue well in to the future.Foreign direct investment in Bulgaria reached more than EUR 1.6 bln in 2004, leaving behind developed countries like Italy, Greece, Austria and Portugal. The amount of confidence shown by both institutional and retail investors is down to the very positive economic indicators emanating from the country. High prices and over-development in much of the Mediterranean means investors are looking at Europe's next favourite destination, Bulgaria. It offers properties at some of the lowest prices in Europe, and benefits from favourable weather and a low cost of living. This low cost alternative for holiday makers is proving to be immensely popular with tourists and tourist numbers have increased by 20% for the last four consecutive years. Bulgaria is also regarded as one of the best investment destinations in Europe with strong capital growth rates made possible by extensive EU investment in infrastructure and tourism. Against this backdrop of positive, targeted government and EU investment, real estate prices are proving remarkably resilient to the global credit crunch. Bulgaria is the first country in central and eastern Europe to establish a national Real Estate Market Index, REMI, which shows property prices have been increasing considerably for the last four years, and are anticipated to continue rising steadily by 15% in the upcoming years. These capital growth rates are unheard of in more established markets such as Spain and Portugal.According to the WTO forecasts, 12 mln tourists will visit Bulgaria in 2020, which will make it the most promising destination in the eastern European region. Continued development of the tourist infrastructure such as airports and rail are accommodating the large increase in demand from major tour operators in the area and will ultimately allow for a 50% increase in capacity over the coming years. Bulgaria has 370 km of coastline boasting some of the best beaches in Europe and a summer that lasts from April to October.The country has an impressive scenery of mountain ranges and breathtaking views with many lakes, waterfalls and caves, which remain unspoilt, despite the rise in tourism. It has a rich, diverse history and large numbers of architectural treasures. A unique element about Bulgaria's geography and climate is that it can accommodate an all year round tourist season with both the Black Sea coast and the numerous ski resorts located in the southerly mountain ranges.A typical sea village, Aheloy, keeps in tune with what is a fascinating national treasure of natural landscapes blending perfectly with a charming sea. It has 5,000 inhabitants and is 3km from Ravda and 6km from Sunny Beach and Nessebar. There is a small stone beach and a quay for boats. Aheloy is also famous for its beautiful fruit gardens and vineyards and is a unique mixture of preserved green sites, calm and pleasant sea and sandy beaches. By contrast Bansko is a charming and historic city at the foot of the north-eastern part of the Pirin Mountains, with a population of about 9,500. Positioned 6km south of Razlog, 60km south-east of Blagoevgrad and 160km south of Sofia, Bansko is a climatic mountain resort, famous for ski sports because the location of the city allows favorable conditions for skiing from the month of December to April. The ski tracks have a length of 65km from 1,100m to 2,550m above sea level while the ski facilities rival many western European resorts, but at a third of the price, while extensive new development is currently underway in the neighboring villages which will vastly increase capacity and ultimately make the Bansko region one of the most sought-after ski destinations in Europe.