블가리아 주요 경제뉴스( 29 AUGUST – 4 SEPTEMBER 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 29 AUGUST – 4 SEPTEMBER 2008 )

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Excellent Bulgarian-Chinese relations can be useful for development of China-EU contacts

·        370 000 second hand cars to be purchased in Bulgaria in 2008

·        Sales of new cars: more than business

·        Domestic automobile market neglects the oil shock SUV sales in Bulgaria rose more than twice since 2006

·        Bulgaria GDP to Reach BGN 72 B in 2009

·        Bulgaria's real estate boom stumbles as demand slumps

·        34% increase of real estate in Sofia

·        Bulgarian social minister wants 50% of the budget surplus

·        PM: Half of budget surplus to be spent on social projects

·        10% of Bulgaria's budget surplus goes for infrastructure

·        Income and property of rich Bulgarians under investigation

·        Green light for the "Belene" project

·        Employers call for foreign workers import to be eased

·        Bulgaria and USA sign annex in logistics

·        Bulgartransgaz to call pipeline construction tenders for �23.2 M by Sept 2009

• EIBank consults business for appropriation of EU funds

·         Over 80% of Bulgarians are not interested in EU funds

·        Bulgaria closes � 51.6 M sale of Bobov Dol TPP

·        France's Mecamidi, Bulgaria's Finance Engineering to build 9.2 MW hydropower plant in Bulgaria

·        January – July profit of the banking system in Bulgaria at BGN 842 M

·        Bulgaria's industrial producer prices post highest hike in EU in July

·        OLAF lends a helping hand to Bulgaria

·        Lasting increase of household income in the last 10-12 years

·        War over grapes prices

 

INVESTMENTS:

 

 

·        Trade-industrial parks to grow throughout Bulgaria

·        Greenfield Bulgaria to invest over � 40 M in retail park in Targovishte

·        Israelis invest � 150 M in Razlog

·        New business building to be constructed in Burgas

·        Bulgaria's Iris to build �30 M business park in Danube Port of Ruse

·        Spain's Hercesa to spend over �500 M on first Bulgarian project

·        Bulgaria Foreign Investments down by 12,8%

·        Media Systems AD to invest � 2 M

·        The German Ixetic to invest in Bulgaria

·        Moldavian Topaz to build solar-panel plant in Bulgaria

·        Fraport invests over � 70 M in Bulgarian airports

 

 

 

COMPANIES:

 

 

·        China's Sany expands in SEE, aims to become one of world's top 3 building machines suppliers

·        German retailer Lidl starts construction of Bulgarian outlets

·        Bulgaria signs memorandum of understanding with VoestAlpine

·        Russian Uralchem interested in Himco

·        Nestle moves ice cream production from Romania's Bucharest to Bulgaria's Varna

·        Fourth BalPEx exhibition starts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Excellent Bulgarian-Chinese relations can be useful for development of China-EU contacts

 

The excellent relations between Bulgaria and China can be useful for the development of contacts between China and the European Union, Deputy Prime Minister and Foreign Minister Ivailo Kalfin said after his meeting with Chinese Minister of Foreign Affairs Yang Jiechi., the Bulgarian Foreign Ministry said.This is the first visit by a Chinese foreign minister to Bulgaria in the last 13 years.Chinese companies are showing interest towards the construction of infrastructure projects in Bulgaria, it emerged at the meeting of the two foreign ministers.Trade between Bulgaria and China exceeds 1,000 million US dollars, Kalfin said observing that Bulgarian exports to China have been increasing in recent years. "Of course, there still is a considerable imbalance in our two-way trade but we have considered some tangible opportunities for a growth in Bulgarian exports to China," he said.Bulgaria will do its utmost to make best use of EXPO 2010 which will be held in Shanghai," Kalfin said.The Bulgarian and Chinese delegations discussed how to facilitate the carriage of goods between Europe and China via Bulgaria and covered cooperation in education and sports.Yang thanked to Kalfin for Bulgaria supporting the Chinese position in regard to Taiwan and Tibet. He expressed gratitude for Kalfin's praises of the organization of the 2008 Summer Olympic Games in Beijing and of the visit of Bulgarian President Georgi Purvanov to China during the Olympics.Yang invited Kalfin to visit China next year when Bulgaria and the People's Republic of China are going to mark the 60th anniversary of their diplomatic relations.Kalfin and Yang considered the two countries' cooperation within the framework of the Asia-Europe Meeting (ASEM) which will hold its seventh summit in Beijing at the end of October this year.Later the two foreign ministers will discuss international relations, global problems and topical themes concerning international policy. "Minister Yang Jiechi's opinion on international policy issues will be very useful to me because China is one of the important players in international relations," Kalfin said.Before his conference with Kalfin, Yang had a nearly an hour-long meeting with Vice President Angel Marin, the Bulgarian Foreign Ministry said. Marin and Yang discussed Bulgarian-Chinese relations expressing satisfaction with the traditional friendly ties between the two countries and with the intensive political dialogue conducted at all levels. They considered possibilities for even more active economic cooperation between Bulgaria and China, in particular in the area of investments and trade.Marin and his guest appreciated highly the recent meeting between the heads of state of the two countries. They both attached much importance to the forthcoming participation of President Purvanov in the seventh session of ASEM, as well as to the expected exchange of summit-level visits. According to Marin and Yang, the meetings and visits will contribute to expanding cooperation between Bulgaria and China not only in the economic and political area, but also in the humanitarian sphere - in education, culture and sports.Vice President Marin confirmed Bulgaria's consistent and principled policy for single China. It was recalled that Bulgaria is the second country in the world that recognized the People's Republic of China. According to Marin and Yang, the celebration of the 60th anniversary of Bulgarian-Chinese diplomatic relations next year provides a good opportunity to deepen the ties between the two countries. The sides shared the desire for planning and holding jointly a number of events in celebration of the jubilee. Marin congratulated his Chinese guests for the excellent organization of the Summer Olympics. In his words, the Olympic Games in Beijing were not only an exceptional international event but also sent important messages to all people on the planet. He wished China success in the holding of World Expo 2010 in Shanghai.Marin extended an invitation to his Chinese counterpart Xi Jinping to visit Bulgaria at his convenience. Yang thanked for the invitation and invited Marin to visit China. He extended gratitude for Marin's friendly attitude to China and its people.Yang described Bulgaria's sympathy and assistance after the devastating earthquake in Sechuan Province on 12 May 2008 as a clear ｅxpression of friendship.

370 000 second hand cars to be purchased in Bulgaria in 2008

Bulgarian citizens will purchase around 370 000 used cars by the end of the year. This is a prognosis of the Association of automobile producers and their authorized dealers in Bulgaria. "118 119 second hand cars have been purchased in the first six months of the year", the executive director of the Association Stefan Hadjinikolov announced. The share of sales of such automobiles is 85% against 15% for new cars, BNES writes.Up to this moment 35 495 new cars have been sold in Bulgaria from the beginning of 2008. 32 844 of these are automobiles. "There is an increase of sales by 18,2% in comparison to the previous year", Hadjinikolov said. 2651 trucks and buses have been sold - the increase in sales here is 65,7%. 41% is the increase of the sales of motorcycles.  

Sales of new cars: more than business

The sales of new cars show the economic development of a region. Varna auto show-room taking place from August 30 to September 7 attracted the attention to a secondary peculiarity of the market with new automobiles in Bulgaria - its development in the country. Purchases there are less compared to the capital but with a tendency to grow. The sale of new cars is not simply business, it shows the economic development and perspectives in a given region. Sale statistics of new cars is published every month by the Association of Automobile Manufacturers and this year it shows a rise by 20% nationwide. But figures of companies that are not its members are not included. About 54% of all new cars have been purchased in Sofia. Varna, Plovdiv and Bourgas are the other big towns with new car park. Data shows that Varna is on the way to take second position after Sofia and before Plovdiv in number of new cars sold but Plovdiv still occupies the second place concerning luxury vehicles. Varna is a big town with great regional importance. There are more wealthy people and lately there is a tendency of levelling the purchases of individuals to that of companies. This can be explained with the strongly developed small and medium-sized businesses like HoReCa, services etc. and the construction of the new service complex, Valentin Marinov, manager of Peugeot's Finskom Dealer in Varna, said.

 

 

 

 

 

 

Domestic automobile market neglects the oil shock SUV sales in Bulgaria rose more than twice since 2006

 

Bulgarian consumers obviously tend to ignore the topical issues of reducing harmful emissions and fuel consumption. While SUV sales in Western Europe steeply went down after the oil shock, in our country they rose and reached almost 5,500 in the firsts even months of 2008, up from some 2,700 for the same period of 2006. Moreover, a considerable part of the sales in that segment remain outside of official importers' statistics data because they are effected by private automobile retailers. Market leaders in the segment are: Toyota with 624 sales, Nissan (587 sales), Chevrolet (584 sales), and Mistubishi (450 sales). Lada also has stable participation with 450 sales since the beginning of the year, 448 of them - of the Niva SUV. No substantial shifts have occurred in the overall market distribution. Opel has remained the most sold model due to the competition between its eleven distributors and the advantageous leasing terms. Toyota is second, followed by the German producer Volkswagen which is constantly improving its sales in Bulgaria. Romania's low cost Dacia continues to sell very well, and after presenting its new hatchback Sandero can already aim to get into the Top 5 list. In the luxury segment the Big German Three - Mercedes (with 2.5% of the total new car sales in our country), BMW (1.88%) and Audi (1.62%) are far ahead all the other brands.

 

Bulgaria GDP to Reach BGN 72 B in 2009

 

The Bulgarian Gross Domestic Product (GDP) is expected to reach BGN 72 B in 2009, compared to the current GDP, estimated at BGN 65 B, according to the Bulgarian Finance Minister Plamen Oresharski.Oresharski spoke Friday at the meeting of the leadership of the Bulgarian Socialist Party (BSP), the trade unions and the ministers of the Economy, Health and Social Policy.Oresharski explained that the highest rates of increase in the GDP would be in the areas of education and health care. The Value Added Tax (VAT) is expected to remain 20%, while inflation will stabilize and go down to one-digit levels, according to the Finance Minister.Oresharski also stated that in 2009, the maximum insurance levels were going to go up, according to the 8-10-12 formula discussed at the Triple Coalition's meeting in Bansko.The Cabinet's policy for the 2009 budget will be focused on the elderly and the young Bulgarians. Measures against the "gray economy" are also going to be undertaken.According to Oresharski, in 2009, Bulgaria was going to keep its rate of high economic growth while the mortgage crisis in the US would not have a significant influence on the Bulgarian economy.

Bulgaria's real estate boom stumbles as demand slumps

 

Bulgaria's real estate boom is turning to bust as its key British and Irish property buyers are now discouraged by financial difficulties at home and the ugly concrete views outside their windows.According to a study by the Bulgarian Properties real estate agency, which works exclusively with foreign clients, holiday property sales in Black Sea and mountain resorts dropped 40 percent in the first half of 2008 compared to 2007."The withdrawal of British and Irish buyers from the Bulgarian market was prompted by the financial crisis in their countries but also by the bad infrastructure and the excess of concrete here," said Dobromir Ganev of the Property Association in Varna on the Black Sea.Many areas of great beauty have been scarred, as elsewhere, by sprawling developments built for a quick speculative gain while the money flowed in.Between 20 and 30 percent of newly-built apartments on the coast have no chance of finding a buyer over the next two years, said Ganev.Prices that soared to 1,000 euros (1,477 dollars) per square metre (yard) last year now look fanciful and empty hotels in the southern Sunny beach resort are being sold as vacation flats for as low as 500 euros per square metre, agents said.Meanwhile, properties offered for sale doubled this year compared to 2007, according to Lachezar Iskrov, head of the National Real Estate Association.Foreign investment in property dropped 17 percent to 727.1 million euros over the first half, central bank data showed, in line with an overall downturn in foreign funds coming into the former communist country.According to Simeon Peshov, president of leading building company Glavbolgarstroy, British and Irish holidaymakers who had hoped to make a quick profit, were giving way to construction companies planning shopping malls and industrial sites instead.This trend was not necessarily negative, said Ilian Vasilev of Deloitte Bulgaria, even if there is some pain to take in the short term."A decline in speculative investment will have a sanitising effect on the economy," he said.Investment in the property sector, which accounted for between 30 and 40 percent of gross domestic product in the past few years, brought an immediate profit, according to political and economic analyst Tihomir Bezlov."Real estate for Bulgaria was like oil and gold (for other countries)," he said.It also brought other problems, among them concerns that the industry was being used to launder money from criminal proceeds.Bulgaria's authorities have had to admit they cannot prove where the money that fed the construction boom came from."More and more often we come to a point where we see how money, that we have reasons to believe came from criminal activities, is wired through foreign banks and returned here in the form of investment," Bulgaria's investigation service chief Boiko Naidenov said during a conference in May.The breakneck construction boom that scarred the Black Sea countryside has also chased away Bulgarian holidaymakers who instead seek summer hotspots in neighbouring Greece and Turkey.The number of Bulgarians who spent their holidays abroad went up by 42 percent in the first half of 2008 compared to last year, while those who travelled to Greece went up by 111 percent.According to the government, more than a million Bulgarians visited Greece and Turkey during the first five months of 2008.

34% increase of real estate in Sofia

The price of houses and apartments increased by 34% in Sofia, although they are lower than the average levels in the region, ProntoSofia writes referring to information of the Italian weekly Economy. According to the issue the average price of square meter is 900-3000 Euro. The magazine describes the real estate deals in Bansko, candidate for the Winter Olympics in 2014, as "very interesting".Buyer expenses vary between 23,45 and 25,1% (agencies' commissions, notary, VAT, municipal tax). Purchase and resale cost about 24,7%-26,6%, the issue claims. It reminds that people that are not residents of Bulgaria still cannot buy land terrains.In the first half of the year the quantity of real estate, bought by Italians has increased by 16,7% compared to last year. Taking the average price of 195 thousand Euro, the magazine calculates the total investment of Italians in this sphere to 6 billion Euro.

 

 

 

Bulgarian social minister wants 50% of the budget surplus

50% of the budget surplus for 2008 to go to the social field, which includes education and healthcare, insisted the Bulgarian minister of labor and social policy Emilia Maslarova. It is anticipated 25% of the surplus and 50% of the revenues from the privatization to be put aside in th “Golden fund”. However, so far there is no final decision of the government, explained Maslarova. In July and August teams of the social ministry have conducted 5100 check-ups in nearly 4800 places and enterprises, informed the social minister. “What makes impression is that over 65% of the violations are according to the law for safe and healthy labor conditions and around 35-36% are under the labor law. In 90% of the checked enterprises everybody is secured on the minimal insurance level around 130 EUR”, said Maslarova.The social minister insisted on changes in the sanctions for employers who do not insure on the full wages. The average level of unemployment for 2009 to be 5.5% is set in the aims of the social ministry.

PM: Half of budget surplus to be spent on social projects

The government has amassed a comparatively large budget surplus due to its prudent fiscal policy, and it will be spent transparently, Prime Minister Sergei Stanishev told journalists on Monday. Nearly half of the surplus will be earmarked for social purposes, and some of it will be spent on infrastructure projects. Stanishev and Labour and Social Policy Minister Emilia Maslarova gave a news conference on topical social problems. The government is preparing a social package to be implemented this autumn, which will cost nearly 210 million leva in financing from the budget surplus, Maslarova said. This social package does not include the Christmas bonus paid to pensioners, which, according to Stanishev, is expected to be larger than the 100 leva paid last year. Stanishev did not specify the amount of the surplus as a percentage of GDP expected at the year's end, but said the measures would be implemented without violating the National Budget Act. The surplus will be above the projected 3 per cent of GDP. The spending of the surplus will be discussed first by the Council of the ruling coalition on Friday, and then by the National Assembly, the prime minister said. The heating allowance to poor households will increase by 60 per cent to 282 leva, Stanishev said. The heating allowance will be available to 360,000 households now that the threshold is up by 20 per cent. Also, the families entitled to a heating allowance will get a one-off payment of 100 leva to maintain the purchasing power they had in winter in recent years.The one-off aid for first-graders is rising from 120 leva to 150 leva. Maslarova said 483,000 pensioners will each get 100 leva in one-off aid. Between 3,000 and 5,000 pensioners will be entitled to a free holiday in the country's resorts this autumn. Contributory pensions will be updated from October on the basis of the average monthly contributory income for 2007, set at 398 leva. This will amend the injustice of the last nearly eight years when an old method was used in computing pensions, leading to inequalities between people with equal contributions and length of service. This update will apply to some 1.2 million pensioners, who will get an average raise of 8.5 per cent.

 

 

 

10% of Bulgaria's budget surplus goes for infrastructure

At least 10% of the resources from the budget surplus will be spent for the realization of infrastructural projects, announced Angel Naydenov, chairman of the parliamentary group of the Bulgarian socialist party (BSP) after a session of the party's executive board.According to Naydenov, at least 10% of the surplus should go for the field of security. Two thirds of the funds of the budget surplus will be for social activities, including the healthcare and education sectors. The remaining funds will be for the municipalities.The deputy minister of education Kircho Atanassov announced that by the end of October a completely new law on the public education should be ready. one of the novelties in it will be elementary education to be completed after seventh grade. It is also expected an external assessment after 6th grade to be introduced. The experts are considering from next year a center for a year-round education of talented children from the National Olympic teams to be established in Sofia, informed also Kircho Atanassov.

Income and property of rich Bulgarians under investigation

Tax collectors are starting investigations of rich Bulgarians.People that have not declared substantial sums risk not only the payment of the sums plus interest but also being sued for misrepresentation of tax declarations.For the misrepresentation of substantial income in extreme quantities - over 3000 levs, they risk a 5-year sentence in prison.Inspectors have already been instructed to start checking whether rich people have declared their income, they have paid their taxes, as well as if their income is commensurate with their belongings.In case there are discrepancies between the way of life and the income, rich people will have to pay their taxes and fines and in case big sums are have been misrepresented, they risk lawsuits and effective prison-time convictions.If it turns out a citizen has not declared income over 12 000 levs, the sanction is 3-8 years of prison plus confiscation of property. Owners of apartments costing over 100 thousand Euro and cars over 80 thousand will be inspected.

Green light for the "Belene" project

September 3, 2008 is the official start of the atomic electric plant "Belene" project.According to the Minister of the Economy the "Belene" project is probably one of the biggest energy projects in Bulgaria at the moment.There are similar projects of such caliber only in three countries in the EU - Finland, Romania and Bulgaria, Petar Dimitrov comments.The procedure for a choice of strategic investor will end in September, probably by September 15 we expect to see their offer, which is already analyzed to a certain degree, the energy minister announced.The choice will take place next. The actual construction and the start of the reactors must end by March 2009-2013 for the first block and March 2010 - July 2014 for the second block.

Employers call for foreign workers import to be eased

Sofia. At their meeting with Bulgarian Socialist Party officials employers have called for the foreign workers import system to be eased, Focus News Agency reported. Bulgarian Industrial Association Chairman Bozhidar Danev thinks Bulgarian workers have to be squeezed by efficient foreign workers. He believes Bulgarians are 7-8 times less efficient.

Bulgaria and USA sign annex in logistics

 

The governments of the Republic of Bulgaria and USA signed an annex in the field of logistics to the agreement on cooperation in the area of defence between the two countries, the press centre of the Defence Ministry said on Tuesday.The document was signed by Lieutenant General Galimir Pehlivanov, Deputy Chief of the General Staff of the Bulgarian Army in charge of operations and training, and Major General Paul G. Schafer, Director for Strategy, Policy and Assessments with the European command of the US Army.The ceremony took place at the building of the General Staff of the Bulgarian Army. The annex regulates procedures in the field of logistics, provision of medical assistance, etc.

Bulgartransgaz to call pipeline construction tenders for �23.2 M by Sept 2009

 

Bulgarian state-run gas transmission system operator Bulgartransgaz will call tenders for construction of high-pressure pipelines in three Bulgarian towns under a 23.2 million euro ($34 million) project co-financed by the European Bank for Reconstruction and Development (EBRD), the bank said on Monday. Bulgartransgaz will use the proceeds of the grant funds provided by the EBRD-administered Kozloduy International Decommissioning Support Fund and its own financing for the project, EBRD said in a statement. Bulgartransgaz will also contract the building of gas pressure regulation stations in the Danube towns of Silistra, Kozloduy and Oryiahovo. Breakdown figures were unavailable. The tendered works will include delivery of some 150 kilometres of steel pipes and fittings for a gas pipeline, as well as delivery of valves for high-pressure gas pipelines and other equipment. The decommissioning support fund has been accumulating financing for projects in support of Bulgaria's energy sector since the country closed down the first pair of 440-megawatt reactors at its Kozloduy sole nuclear power plant in 2002. The second pair was closed down at the end of 2006.

 

EIBank consults business for appropriation of EU funds

 

Balkan Services has signed an Agreement for cooperation with Economic and Investment Bank /EIBank/ with managing director Petar Andronov, targeted at providing consultancy services for customers for preparing and managing projects, co-financed with grants from the Structural Funds and other funds of the European Community. The initiative is focused on small and medium sized enterprises and municipalities.
Balkan Services is obliged to identify for EIBank’s clients the relevant operative programs, to assist them into preparation of documentation, and to inform them of EIBank’s specific services.

 

Over 80% of Bulgarians are not interested in EU funds

 

Over 80% of Bulgarians do not have any interest in the cohesion and structure funds of the EU show data of an MBMD research. Operative programs are not widely recognized. Small companies, 46% of them, do not have information about opportunities to apply for the Competitiveness and Human Resources programs. There is a change for the better with municipalities where 80% of the answers are that they are familiar with all the possibilities for financial aid. 70% of the non-government section also evaluates their awareness highly. The business, however, is in a very weak position with only 42% positive responses. The demands are for better and wider information in all stages of the application process. There is an increase of projects being filed - 24% for municipalities and 20% for non-government organizations.

Bulgaria closes � 51.6 M sale of Bobov Dol TPP

Bulgarias Privatisation Agency wrapped up one of the hardest deals, said executive director Todor Nikolov after endorsing the sale of 100 pct of coal-fired power plant in Bobov Dol on September 1, 2008.The power plant was sold without real bidding more than a month ago to Consortium Energiya MK, controlled by local energy and mining tycoon Hristo Kovachki.The buyer is expected to pay the deals price of 100 mln Bulgarian levs ($74.9 mln/51.6 mln euro) by the end of the year.The buyer can pay 10 pct of the price in compensatory papers.The new owner is obliged to buy out 1.7 million tonnes of local coal annually through 2011. It has committed to invest 35 mln euro ($50.7 mln) in the TPP within five years. The owner should bring the power station in line with the eco norms set in its pollution prevention and control permit. Kovachki hopes he would get the green light from Brussels to restart unit 2, which was unplugged from the grid in end-2007 over eco concerns. The unit will be outfitted with eco equipment but no sooner than in the next two or three years as this requires sizable investment, Kovachki said. The new owner can add two units of 200 MW each to the Bobov Dol TPP.The deals price is more than 38 mln levs ($28.4 mln/19.6 mln euro) lower than the one agreed in 2006 with the Greek company PPC. The Greek buyer offered 71 mln euro ($102.9 mln) but the deal fell through due to disagreement on some of the clauses in the sell-off contract.

France's Mecamidi, Bulgaria's Finance Engineering to build 9.2 MW hydropower plant in Bulgaria

 

France's Mecamidi, in cooperation with Bulgarian diversified company Finance Engineering, plans to wrap up the construction of a 9.2-megawatt (MW) hydropower plant in the EU newcomer by September 2009, Bulgaria's energy regulator said on Wednesday. Finauto, a unit of Finance Engineering, has applied for a 35-year licence for power generation with the State Commission for Energy and Water Regulation (SCEWR), the regulator said in a statement on its website. The licence will enable Finauto to sell the electricity output of the new plant. Construction, to be carried out by Mecamidi at Arda river in southeast Bulgaria, was scheduled to start in July 2008. No investment figures were available. Mecamidi has completed several hydropower projects in Bulgaria, which joined the European Union in 2007.

January – July profit of the banking system in Bulgaria at BGN 842 M

The profit of the banking system in Bulgaria stood at 842 mln leva (430 mln euros) on 31 July 2008, which is 233 mln leva (38.2%) up from a year ago.Total assets reached 66.9 bln leva (34.2 mln euros). This is 1.2 billion leva (1.8%) up compared to the preceding month and 18.4 billion leva (37.9%) up year-on-year, the Bulgarian National Bank said.
Two banks are responsible for nearly half of the monthly hike. Last month's increase is attributed to credits and advances financed by deposits and capital mainly. A decline in securities and cash is registered. The five largest banks held 57.5% of the total assets of the banking system at the end of July, there is no change in their market share compared to June. Loans and receivables (including financial leases) account for 79% of the system's balance figure. Loans and advances are up 2.4% in July, the hikes are only on the corporate segment (2.9%) and retail expositions (3.7%). The portfolio of corporate loans and retail expositions is up 52.4% y/y. Attracted funds, the main source of funding for the banking system, are up 1.6% in July, which is a similar growth pace to those of assets. The hike comes from institutions, other than lenders, (538 mln leva) and individuals and households (480 mln leva). Deposits are still the largest part of resources (36%). The balance sheet aggregate total capital rose y 2.8% (197 million leva). Issued capital is up by 90 mln leva, as a result of shareholders' support in three lenders institutions. Total capital is u 38% y/y.

Bulgaria's industrial producer prices post highest hike in EU in July

Bulgaria's industrial producer prices in July rose by 2.9% on the month, Eurostat reported Tuesday. It was the highest increase among the 27 EU countries, the report said. Industrial producer prices in the euro zone rose by 1.1% in the same period, while in the EU as a whole they increased by 0.9%, the report said. It said that in June the prices increased by 1% and 1.4% respectively.

OLAF lends a helping hand to Bulgaria

The European Anti-Fraud Office (OLAF) will assist Bulgaria with the "black list" of companies that have misused European funds. The experts from Brussels will advise the authorities to establish criteria by which the fraudulent companies will be included in the list.Vice PM Meglena Plugchieva announced the news after her meeting with ambassadors of EU states to Sofia. "The criteria for the "black list" must not discriminate any company but it should be clear who are the persons behind the name of the company who misuse the funds. And they should not be allowed to be involved in public procurement", said Plugchieva.The ambassadors asked Vice PM Plugchieva about the functioning of the new National Agency "Road Infrastructure". The diplomats recommended to speed up the work on infrastructure projects carried out on EU funds.

Lasting increase of household income in the last 10-12 years

In the last 10-12 years the income of households mark a lasting tendency of nominal increase, data by the National Statistic Institute shows, BNR (Bulgarian National Radio) announces. only in the period 1999-2007 the income of an average person in a household increases from 1502 to 3105 levs, or almost two times.In this period the real income of households increases by 24,3%, which for the first time in 2007 surpasses the level of 1995 and marks a real increase of 2%.In the period 1999-2007 the expenses of households follow the tendency of the dynamic changes in income. After 1999 starts a process of gradual decrease of the relative share of expenses for food to 44% of all expenses, as this tendency continues in the next years and in 2007 reaches its lowest point for the observed period - 37,5%.Inflation in 2007 (December 2007 compared to December 2006) measured with the index of consumer prices, is 12,5%, as this is the highest accrued yearly inflation in the last 10 years, the analysis points out.In the end of 2007 the biggest price increase is registered in foods (20,8%). The biggest increase of the prices of consumer commodities is in August (3,1%), while deflation is measured in June (-0,4%) and in March (-0,1).

War over grapes prices

 

A real war could be waged in the wine-growing regions and the reason lies in grapes purchase prices. The Bulgarian wine growers insist that the cost of a kilogram of grapes should go up by 0.3 levs (1 euro=1.95 levs) because of this year's drought. The crop will be poorer this year than it was in 2007. The expenses on growing vines will considerably increase due to the hailstorms and the need of additional irrigation of the plants. The wine-growers insist that the state should take measures to restrict the cheap import of grapes from Macedonia in order this sector of Bulgarian agriculture is revived. They insist on the introduction of guaranteed minimum purchase  prices of grapes. The wine-growers said that they would rather sell their production in Greece than sell it in Bulgaria if the prices in our country don't double.Greece shows interest in buying Bulgarian grapes, farmers from Blagoevgrad said. We are paying the most expensive grapes in Europe, whole-sale dealers retorted.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

 

Trade-industrial parks to grow throughout Bulgaria

Property developer Investra will construct trade-industrial parks to accommodate trade, retail and office spaces throughout Bulgaria. They will be built on different-sized plots, varying from four to 15ha, Bulgarian-language daily Dnevnik reported on September 1. All large Bulgarian cities will have such parks, including Sofia, Plovdiv, Varna, Bourgas, Rousse, Stara Zagora, Pleven and Blagoevgrad.The first trade-industrial park will be constructed in Plovdiv. The area that was bought for the construction is bordered to the north by the main road connecting Trakiya Highway with the city; on the south it is bordered by a road that services many already-existing industrial zones. The Plovdiv park will be on about 50 000 sq km and will have more than 700 places for car parking and 80 spaces for freight vehicles.Sofia-based Investra will put about 20 million leva into the construction of the trade-industrial park in the northern city of Pleven. Pleven mayor Naiden Zelenogorski and Investra executive director Georgi Roussev concluded the deal at a working meeting on September 1 2008.The company bough 2.5ha of land at the entrance to Pleven in the direction of village of Opanets, near the Metro store that is currently being constructed. Construction of the park is expected to begin in 2009.

Greenfield Bulgaria to invest over � 40 M in retail park in Targovishte

 

Real estate investment company Greenfiled Bulgaria will invest over 40 million euro ($58 million) to build the first retail park in the town of Targovishte, a company official said on Tuesday. "Around 20% of the money is our own investment," Valeri Vasilev, managing partner in Greenfield Bulgaria told SeeNews on the sidelines of a news conference presenting the project.Part of the money will be secured through a loan from the United Bulgarian Bank and still another part - from an unnamed international investment fund with which Greenfiled Bulgaria has been working, he added.The retail park will be located at the beltway of the northeastern Bulgarian town which is part of the major road linking the capital Sofia with the city of Varna at the Black Sea coast in the east. Nearly 20,000 motor vehicles pass each day at this road section in both directions.Targovishte Park will cover 92,814 square metres, including a two-storey shopping centre of 15,000 square metres and a hypermarket of 5,000 square metres.We have already bought the land. Twenty percent of the stores have already been leased," Vasilev said. Construction works are scheduled to begin in March next year. The retail park is expected to open in March 2010. We chose Targovishte because this is the last Bulgarian administrative centre without such a commercial area," Vasilev told the news conference. London-based architecture studio Chapman Taylor has dafted the design of the project. Greenfield Bulgaria is a real estate company, investing in Bulgaria and Romania. The company was set up by Bates Imoti Bulgaria - a joint venture of Bates Bulgaria and Imoti Bulgaria.

 

 

 

Israelis invest � 150 M in Razlog

Israeli investors will put 150 million euro in the construction of a huge holiday village near Razlog, southwestern Bulgaria. Foreign experts have already discussed the project with Razlog Municipality Mayor, Lyuben Tatarski. The vacation complex will spread over 150 000 sq.m. Half of  the village will be occupied by family houses linked by streets designed after a fashion of a typical 18-century Bulgarian town. The other half will be a business zone with a luxury five-crown hotel, a congress centre, a casino, etc.
The village will be powered with solar energy.

 New business building to be constructed in Burgas

A new business building will be built in the eastern part of Burgas, according to the electronic issue Burgasinfo. The project named "Omega center" will a have total area of 12,6 thousand square meters.The complex will be located near boulevard "Stefan Stambolov" and will have two underground and five ground levels.56 parking places are to be constructed on the first underground level.The second underground level and the first ground level are for 24 stores and a cafe-bar.The connection between the two levels is realized by a passenger and a cargo lift as well as a staircase.The preliminary plans of the architects are that the building will be finished by April 2010.

Bulgaria's Iris to build �30 M business park in Danube Port of Ruse

 

Bulgarian real estate developer Iris plans to build a 30 million euro ($43.6 million) business park in Bulgaria's key Danube port of Ruse by 2010, the company's executive director said on Wednesday. Iris plans three buildings with a combined built-up area of 32,000 square metres to house businesses operating in the services sector, Miglena Dimitrova told SeeNews from Ruse. The business park will create up to 1,800 jobs. Iris, a former textile factory, has reinvented itself as real estate business to take advantage of the growing demand for office space in the European Union newcomer. Iris is also involved in a 100 million euro project for a shopping mall in Ruse, along with Israeli companies Ocif Group and Cinema City International. The mall will be adjacent to the Iris office development. Bulgarian construction firm Densi and real estate firm Prista Port have also announced plans to invest 99.6 million levs ($75.2 million/51.7 million euro) in a joint project for a shopping centre, hotel and sports hall in Ruse.

Spain's Hercesa to spend over �500 M on first Bulgarian project

 

Spanish real estate developer Hercesa plans to invest more than 500 million euro ($732.6 million) in building a residential complex in Bulgaria's capital Sofia, its first in the Black Sea country, a senior company official said on Monday. The complex, which Hercesa plans to start building in late 2008 or in early 2009, will have a built-up area of 240,000 square metres upon completion in 2015 or 2016, Hercesa general director for Bulgaria Nikolina Nikolova told reporters on the sidelines of a news conference. We chose Bulgaria because the market there still has potential to grow," Nikolova said. Spanish real estate companies Riofisa, Martinsa-Fadesa and a large number of other foreign companies have invested in or unveiled projects in Bulgaria in the past few years, lured by prospects for high growth after the country's entry in the European Union in 2007. Outside Spain, Hercesa is active in Portugal, Romania, the Czech Republic, Poland, Morocco, Ecuador, Mexico and Panama.

 

Bulgaria Foreign Investments down by 12,8%

 

The direct foreign investments in Bulgaria are down by 7,5% during the second trimester of 2008 compared with the same period of 2007 and by 12,8% compared with the first half of the previous year.The data has been announced Friday by the Bulgarian National Statistics Institute.The net amount of the direct foreign investments for the first trimester of 2008 is EUR 115,562 M while their net amount for the first half of the current year is EUR 180,670.During the second trimester of 2008, the most investments have been made in the construction area, however, investment in real estate register a decrease.According to experts, direct foreign investments are generally down in the beginning of each year and the reduction is usually compensated by the year's end.In 2008 however, the negative trend could deepen due to the global finance crisis and the decrease in bank crediting. In 2007, the net amount of direct foreign investments in the country reached the record EUR 5,2 B. 60% of them were invested in the area of tourism and real estate. Currently many British investors have withdrawn from the market leading to beliefs that the forecast for a 10% increase of the direct foreign investments in 2008 might not become reality.

Media Systems AD to invest � 2 M

Media Systems AD, located in Stara Zagora, reported profit of BGN 500,000 for the first half-year of 2008, the executive director Encho Enev announced. The expectations of the managers are the positive financial result to reach BGN 1 million by the end of the year. This is a realistic prognosis as the fourth quarter is the busiest time for the production process. The company plans to invest EUR 2 million in new production lines.

The German Ixetic to invest in Bulgaria

The German company Ixetic will open a plant for automobile spare part in Bulgaria. The investment is expected to reach BGN 36.5 million for a three-year period. The plant will be built in Rakovski Industrial zone near Plovdiv on 12,000 sq. m. It will manufacture elements for vacuum and hydraulic automobile pumps and will open over 250 new working positions. The whole procedure in getting permission took only three months.

Moldavian Topaz to build solar-panel plant in Bulgaria

Russian-Moldavian joint-stock company Topaz will build a solar-panel plant worth $20 mln (13.8 mln euro) in the northern Bulgarian town of Pleven, it was reported after a meeting of company officials and the local government.Bulgaria has 2,700 usable sunlight hours per year which makes the country very attractive for solar power production, said Topaz CEO Mikhail Vladov. The company will build four production units in Silistra, Targovishte, Shumen and Pleven.The project will be implemented by a multinational consortium and in collaboration with the National Institute on Ultrasensor Mediation and Phenomenology of the Bulgarian Academy of Science. It will be financed by the U.S. government through the company Sangri Solar. Firms from Spain, Austria and Italy also expressed interest in the project.Topaz, a unit of the former Russian military production complex, runs more than 100 machine-building and medical equipment companies.

Fraport invests over � 70 M in Bulgarian airports

A total of 72 million Euro will be the investment of "Fraport twin star airport management" in the construction of new terminals at the Varna and Burgas airports. This was announced by the chief technical director of the Karl May company at a press conference today, Moreto.net writes.The conceptual design of the buildings is already completed and an auction for the project team is forthcoming.The construction works are expected to start in the middle of 2009, while the terminals should be ready before the tourist season f 2011.The concessionaire forecasts 7 million Euro for the project of the two buildings and its management.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

China's Sany expands in SEE, aims to become one of world's top 3 building machines suppliers

Shanghai-listed Sany Heavy Industry Co will expand in Europe, including the continent's southeast, aiming to become one of the world's top three suppliers of heavy construction machines within five years, a company official said on Tuesday. We think in 2012 we could be second or third one. I think third one [in terms of revenue, after Caterpillar and Komatsu] is more realistic," Xingliang Feng, managing director of Sany Germany, which is in charge of European operations, told SeeNews on the sidelines of a news conference in Sofia. By that time Sany will be leading in 15 categories, now it is leading in three to five categories, he added. Sany produces machines for handling concrete, and road construction, excavating, pile driving, port service and other machines. It manufactures the world's largest 66-metre concrete pump truck. The company officially launched sales in European Union newcomer Bulgaria on Tuesday and unveiled plans to set up a warehouse base in the Balkans. It provided no details on the location and no timeframe for the project. Sany aims to raise sales to $15 billion (10.3 billion euro), under the current exchange rate of the U.S. dollar against the yuan, in 2012 from around $2.0 billion for 2007, said Feng. We should be one of the 500 largest companies in the world [by 2012]," he added. Feng is not concerned about the effects of the global credit crunch on the operations of Sany. Last year we had a 80% increase in sales and this year we also have approximately 80%. If it was not for the crisis, we should have had 100% increase in turnover," said Feng. Our business is so situated - if some branches could be affected the whole revenue can not be affected," he added. Sany Germany will become the company's marketing development base for Europe, the Middle East and Africa, said Feng. It has set foot in all larger countries in Europe and is currently building a production plant at its European headquarters in Cologne, Germany. The assembling facility will be built on an area of 25 hectares and is scheduled to open in 2009. Sany has bought an additional 20 hectares for further expansion, said Feng, but declined to quote a figure for investment and give more details. Along with establishing production in Europe, Sany is also expansing its service network with a logistics centre in Antwerp, Belgium, and warehouses across Europe in countries like Spain and Sweden. This year we will have sales of around $82 million in Europe alone," said Feng without quoting comparative figures. Sany is also preparing to become the first Chinese company to manufacture construction machines in North America. It is investing the total of $160 million in the United States and India and last year it forecast that production in the two plants would begin by the end of this year. At home, Sany, based in the central province of Hunan, competes with Xugong Group Construction Machinery Co, China's largest construction equipment maker.

German retailer Lidl starts construction of Bulgarian outlets

German retailer Lidl will start building a pilot outlet in the city of Lovech, Northern Bulgaria, said the company. Work on another five outlets will begin by the end of 2008 to be followed shortly be the launch of construction of as many Lidl stores. The retailer hopes to have 10-12 operational outlets here by 2010. The company will also invest in a distribution center. It has bought the site for the center but did not specify the location. Lidl is part of Schwarz Unternehmensgruppe which already has a retailing business here through the Kaufland chain. Market research outfit Planet Retail recently said the discount retailers are expected to own 4% of the Bulgarian grocery market. The local retail market will soon welcome a further two new entrants, Penny Market and Plus.

Bulgaria signs memorandum of understanding with VoestAlpine

The Bulgarian government will sign a Memorandum of understanding with the Austrian metallurgy giant “VoestAlpine” on 8 September. This announced the Bulgarian minister of economy and energy Peter Dimitrov. The document will determine the obligations of the Bulgarian state and the Austrian company, if it decides to construct a steel-making plant in Bulgaria. Bulgaria is competing with Romania, Turkey and Ukraine for the large scale investment worth over 5 billion euro, which the giant wants to make in Eastern Europe.If “VoestAlpine” decide to construct their plant in Bulgaria, as early as this year we should sign an investment agreement, explained Peter Dimitrov. He refused to comment on where exactly the industrial zone would be situated if Bulgaria is the chosen country and he didn't confirm the words of his deputy Yavor Kujumdjiev, that the plant will be situated at the region of the Burgas lake.If the Austrian company choses Bulgaria, a tender procedure will be announced since there is already interest from other, smaller companies, which would like to implement their activities in the industrial zone, which “VorestAlpine” will construct, added the economic minister. According to him Turkey and Ukraine have advantage to Bulgaria and Romania for “VoestAlpine”'s choice since they do not have limitations in the noxious emissions.

Russian Uralchem interested in Himco

The Russian company for the production of nitrogen fertilizers Uralchem has shown interest in the purchase of the fertilizers's plant HIMCO in Vratsa, Bulgaria, informs dnevnik.bg.At a working meeting last week, representatives of the Russian company have acquainted MPs from the region, the regional governor and the mayor of Vratsa with their investment intentions.The Russians have announced that till 8 September the first stage of the deal – the purchase of “HIMCO Heating Plant” - should be finalized. There is a procedure going on at the moment on buying and transferring the shares of the current owner “New HIMCO” to the future buyer. “Ultrahim” has claimed readiness to transfer 80 Russian specialists at the plant in Vratsa which to work in the possible starting operations. The intentions of the Russians are for an initial start of 25% of the “HIMCO” power, which could secure 500 new work places in the region. The aim is in two years the fertilizers' plant to work at full capacity.In order HIMCO to start working, the company-buyer has planned investment, the value of which has not been specified in advance. It is expected, however, completely new working lines to be bought and installed and new purification systems to be used. The installment of purification mechanisms is obligatory since their availability is required by the Ministry of environment. The Russian company “Uralchem” is the second largest in Russia, which produces nitrogen fertilizers. The company has altogether eight plants, part of which are in Eastern Europe. Over 60% of the production of the company is realized at the markets in Western and Eastern Europe, Latin America, Asia and Africa. 

 

 

Nestle moves ice cream production from Romania's Bucharest to Bulgaria's Varna

Nestle announced Tuesday has decided to move most of its production of ice cream destined for Romania from its factory in Bucharest to its factory in Bulgaria's Varna.
The transformation is part of the company's plan to optimize its production in Southeast Europe.Its Nestle Ice Cream factory in Varna was selected because of its good geographic location (fewer than 200 km away from Bucharest), and because the company has invested EUR 6 M in it during the last two years.As a result, the factory has a modern production base, and is certified according to all EU standards. It has the capacity to supply the markets in Bulgaria and Romania, and to maintain the present exports in third countries.

Fourth BalPEx exhibition starts

The fourth edition of BalPEx real estate exhibition will take place in Inter Expo Center in Sofia between October 10 – 12. More than 300 projects from different segments will be presented on an exhibition area of 4,000 square meters. More than 150 companies, among which leading Bulgarian and foreign construction and investment firms, property agencies, financial and credit organizations will be presenting their businesses to individual and corporate clients. The segment of home properties will dominate the presentations this year as well – with over 50% of exhibitors belonging to this sector. This year there will be more office, commercial and logistics centers projects. The following residential complex projects will be presented for the first time: Zelenica in Sofia, Residencia Botanica and Prestige in Sofia's Boyana neighborhood, Vista Park in the area of Kambanite, VIP Complex Pavlovo, St Anna and St Stefan complexes in Sofia and many others. Pravetz Golf and SPA Club will also be presented for the first time. The projects includes a gold course, a hotel and adjacent properties. European Trade Center Sofia will also make a debut during BalPEx. The event sponsors are RE/MAX, Bulgarian Properties, Home for You and Hercesa International.