불가리아 주요 경제 뉴스 ( 13 - 20 FEBRUARY 2009 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 13 - 20 FEBRUARY 2009 )

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Bulgarian economy grew by 6% in 2008 - official estimate

·        Report suggests huge fall in demand for Bulgaria products abroad

·        Bulgarian steel output may decline by 15% in 2009

·        Bulgarians spend big money on pills

·        Bulgarian Lev – the Balkans’ strongest currency

·        Sofia eyes BGN 10.8m from privatisation auctions

·        Atomstroyexport warns of delays, climbing costs at Belene

·        Gaz de France is withdrawing from NPP "Belene"

·        Private investors offer to build new nuclear reactors at Kozloduy

·        Ivaylo Kalfin talks oil and gas supplies from Nigeria

·        PHARE and ISPA funding for Bulgaria to be unfrozen

·        Machine builders brace for 30% drop in revenue

 

 

INVESTMENTS:

 

·        Maritime Shipping to invest USD 200 M in ships

·        Swiss wind farm investment in Bulgaria town Kazanlak

·        Dimitrov negotiates the construction of a wind park in Bulgaria

·        Sofia water utility to invest € 123 М in 2009-2013

·        Dundee’s Bulgarian unit to build USD 160 М gold, silver installation in Chelopech

·        Israel's Cinema City International to wrap up € 85 M mall project in Bulgarian town of Ruse in early 2010

·        Bulgarian-Israeli JV MD Investment to build €16 M retail centre in Plovdiv

·        Germany's Schenker starts construction of €10.2 M logistics terminal in Bulgaria

·        Piccadilly to invest € 40 M

·        Investors rework Gran Plaza construction terms

·        Elcabel to build new business centre in Bourgas

·        FDI in Bulgaria shrink by 17% in 2008

 

 

COMPANIES:

 

·        Sofia Airport's profit up by 39% in 2008 despite Global Crisis

·        Bulgarian electronics retailer Technopolis sees its market share rising to 40% in 2009

·        37 countries at Agra 2009

·        Firms from 20 states partake in machine building, transport expos in Sofia

·        Copper firm Aurubis goes ahead with Bulgarian plans

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

·        Bulgarian industry enters recession

·        Bulgaria PM: Country already suffers negative crisis effects

·        Crisis skips six sectors

·        Bulgarian Industrial Association wants anti-crisis council

·        Thriftiness helps in times of crisis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

 

Bulgarian economy grew by 6% in 2008 - official estimate

Bulgaria's economy grew by six per cent in 2008 to 66.1 billion leva, the country's National Statistics Institute (NSI) said in a flash estimate on February 16, but the growth rate shrank drastically in the last quarter of the year.Fourth-quarter gross domestic product (GDP) growth was 3.6 per cent, according to the NSI estimate, but the figure could rise because of the conservative approach used by the statistics board in making the estimate. NSI says that flash estimates, which it launched earlier in 2008, are still an experimental practice and should not be interpreted as official preliminary data concerning the level and growth rate of the Bulgarian economy.In the second quarter, the statistics board's estimate of 6.3 per cent growth was trumped by the 7.1 per cent final figure, while the third-quarter estimate of 5.6 per cent was well below the 6.8 per cent final figure.Even so, the final fourth-quarter data will fall short of the seven per cent growth rate that the Bulgarian economy recorded in the first nine months of the year. With the impact of recession in bigger markets finally making an impact on Bulgaria, the Cabinet looks likely to miss its 6.4 per cent economic growth target.In 2007, when the Government target was the same, Bulgaria's economy grew by 6.2 per cent.NSI's available data showed the agriculture sector grew by 20.6 per cent in the fourth quarter, boosted by the bumper harvest that followed the drought- and flood-ravaged one in 2007. However, agriculture only accounts for 3.7 per cent of GDP. Industry, which forms a quarter of the GDP, shrank by 0.1 per cent.The services sector, which makes up the bulk of the Bulgarian economy, grew by 3.2 per cent.NSI will release preliminary data for fourth-quarter and full-year economic growth on March 11.

Report suggests huge fall in demand for Bulgaria products abroad

 

A report put together by Bloomberg on ‘Eastern European failed capitalism' has suggested that there is a growing lack of demand for Bulgarian products in Western Europe, Bloomberg reported Monday.The article used the Bulgarian company Neochim as an example stating "Less than a year ago, Neochim was reaping the benefits of expanded trade following Bulgaria's 2007 entry into the European Union. The company reported a 5 percent gain in sales and a 71 percent increase in profit in last year's first quarter." "Now, ‘the entire plant is closed,' says spokeswoman Milena Nikolova. The 58-year-old factory, founded by the former communist regime near the rugged border with Turkey, sent its entire 1,500 workforce home for an indefinite unpaid furlough last month after demand in Western Europe, the destination for most of Bulgaria's goods, evaporated." the article continued. The report concluded "Eastern Europe's past is the Iron Curtain. The next year may resemble the Rust Belt."

 

 

 

Bulgarian steel output may decline by 15% in 2009

 

Steel output in Bulgaria is forecasted to decline by at least 10 - 15% in 2009. However it could be steeper, if operations at ailing steelmaker Kremikovtzi are not restarted soon.Exports and imports of steel are also expected to decrease by some 15%. In addition, projects in the steel using sectors may be delayed as tightness in the credit markets restricts the availability of finance, an analyst at Bulgarian Investment Advisors, a local consultancy firm tells Steel Business Briefing. However demand for steel from infrastructural projects - such as the Trakia, Sofia – Kalotina, Shipka and Varna – Rousse motorways, as well as railway construction - could slow the decline. Steel production in 2010 should increase modestly with EU-funded infrastructure projects, totalling Ђ6bn, expected to fuel demand for steel. The steel industry will also be looking to expand exports to stimulate production, Bulgarian steel processor Helios Metalurg informs SBB.
Steel production in Bulgaria decreased by over 30% year-on-year in 2008 to 1.33m tonnes. The main causes were a slump in demand due to the global economic crisis and the - as yet unresolved - crisis at the country’s largest steelmaker Kremikovtzi. The construction, automotive parts production and shipbuilding industries were the sectors hardest hit by the demand slump.

 

Bulgarians spend big money on pills

 

Good health is the human's greatest treasure. But we, the Bulgarians, often forget this truth. Big alcohol consumption, for instance, brings over 60 ailments. And Bulgarians rank among the first in alcoholism in the EU. No wonder money spent on medicine increases every year. In 2008 the Bulgarians spent over 1.6 billion levs (1euro=1.95levs) on medication and in 2013 the expenses on drugs will be over two billion, experts believe.

Bulgarian Lev – the Balkans’ strongest currency

The national currencies of the Central and Eastern European countries are under serious pressure. They have been displaying some fearful balances over the last few months of devaluation, Frankfurter Allgemeine Zeitung reported. Shortly after the recent lion’s leap of the Czech Koruna’s exchange rate, it suddenly crashed down, losing 20 percent of its value. The Serbian Dinar and Turkish Lira went through similar devaluation, losing 23 and 27 percent of their value. Russia’s Rouble and Hungary’s Forint scored a steep 32-percent downfall in exchange rate. Not to mention the Romanian Leu, Polish Zloty and Ukrainian Hryvnia, all of which went through devastating downslides of 39, 44 and over 50 percent respectively. The Bulgarian Lev was the only currency that to this day displays relative stability, the edition comments. Since 1997 when Bulgaria adopted its currency board, the lev was at first attached to the Deutsche Mark, and then the euro. Its current value against the euro is 1.95583. Bulgaria’s currency board is still able to resist the pressure of devaluation, Frankfurter Allgemeine reads. But then, seeing the weakening currencies of Bulgaria’s neighbours, a question arises automatically: “For how long?”, the author comments. 

 

 

 

 

 

Sofia eyes BGN 10.8m from privatisation auctions

The Sofia Municipal Privatisation Agency (SMPA) is hoping to generate this year BGN 10.8 million through the sale of municipal properties and firms, as revealed by a report currently examined by council commissions and submitted by the director of the agency’s supervisory committee Danail Kirov (GERB). The list of potential privatisation targets features Municipal Bank, Sofia Properties, Galatea2000 (which runs children’s camps), construction company BKS Center, and about 200 properties, most of which public toilets and power distribution points. The number has been kept to a minimum due to the financial crisis, which has pummeled the property market, and the proceeds are not expected to amount to much, Kirilov commented. He added that the municipality was in need of privatisation revenues and was consequently putting up properties for sale. The only firm likely to be sold is BKS Centre, with the procedure already in motion and the auction set to take place in March with a starting price of BGN 5.2 million. The company has practically no assets and some of the few that it has are subject to restitution claims. The only bit of interesting information concerns the group’s sub-contracting activities in the construction of the subway, SMPA director Ivan Dimitrov explained. It remains to be seen whether it could spark any interest in the current adverse circumstances, he added. Municipal Bank will not be put up for privatisation until the municipality and minority owner Hristo Kovachki are done negotiating over the controlling stake. The other two companies, Sofia Properties and Galatea2000, will await the city council’s decision stipulating which plots will be separated from their capital and what will be left for sale. It is highly unlikely that any auctions will be conducted this year, Dimitrov stated. Other properties for sale include a parking lot owned by Metropoliten, buildings, shops and malls belonging to marketplace operators, as well as plots in the possession of Sofia Properties and Galatea2000. “Most of the properties are leftovers from last year. We haven’t been able to sell them since 70% of our auctions have failed to attract any bidders”, Kirilov explained. He added that property and firm auctions drew an average of 1.68 prospective buyers.

Atomstroyexport warns of delays, climbing costs at Belene

Russian group Atomstroyexport has warned of rising costs and potential disturbances in the construction schedule for nuclear power plant Belene unless Bulgaria signs speedily an amendment to the building agreement.The news was distributed by Russian news agency Novosti, which cited information published on the company’s website. The agency reminded that the agreement was signed in November 2006, while the amendment relates to the supply, volumes and cost of the equipment to be delivered this year.The additional provisions in the agreement between the Russian company and the Bulgarian National Electric Company (NEC) aim to ensure that work on the project remains uninterrupted even in the event of unconfirmed financing, Novosti explained. The amendment will also refer to equipment due for delievry this year by French Areva and German Siemens. Atomstroyexport and NEC are caught in a disagreement over the calculation of the increased construction costs. The Russian group has already asked for more money based on the inflation rate in Bulgaria according to Eurostat data published in 2008, as per the agreement reached. Atomstroyexport won the contract and agreed to build the two 1000-megawatt reactors at Belene for EUR 3.9 billion. NEC insists that indexing be done on the basis of Eurostat inflation data for the European Union, not for Bulgaria. The plant’s technical design is 14 months behind schedule, so a delayed signing of the amendment will not irreparably cripple work on the project, NEC’s board member Ivan Atanasov commented. He explained that Atomstroyexport’s proposition to calculate the increase in equipment costs on the basis of the Russian inflation index is unacceptable.

Gaz de France is withdrawing from NPP "Belene"

The Belgian company Elektrabel, a part of the GDF Suez, France-based energy supplier, decided Wednesday to abandon the project for the construction of Bulgaria's second nuclear power plant at the Danube town of Belene.The news was announced late Wednesday night by the GDF Suez press office, as cited by the Pari Daily.Elektabel was negotiating with the German management holding company RWE for cooperating in the building of the Belene nuclear plant.The Belgian company explained that it wanted to concentrate on its own projects in France, Great Britain, Romania, and Abu Dhabi.
RWE confirmed Elektrabel's withdrawal, and said it would continue to develop the project as planned.In December, the German energy company RWE and Bulgaria's state owned national electricity company NEK signed the agreement, with which RWE joins the project for the construction of Belene Plant.Under the contract, RWE will receive a share of 49% of the Belene plant in exchange for a capital payment of EUR 1,275 B, a premium of EUR 550 for NEK, and a loan of EUR 300 M for the purchase of equipment and other expenditures.The Belgian company Elektrabel was RWE's main competitor for the Belene tender. After its bid lost, the RWE management invited it to join in the project under its leadership.Sources familiar with the Belene Nuclear plant project have said the global financial crisis had made raising funding extremely difficult, which may cause a delay in the plant start-up, originally planned for 2013-2014.

Private investors offer to build new nuclear reactors at Kozloduy

Economy and Energy Minister Petar Dimitrov has said that there is a private interest for a substantial investment for the construction of units 7 and 8 at Bulgaria's sole nuclear power plant at Kozloduy on the Danube River."The Bulgarian government will not allocate any new funds for the creation of new reactors at Kozloduy. If this happens at all, it will happen exclusively with private investment. I will not disclose any specific names for the moment, but one of the world's biggest nuclear energy companies has shown interest in Kozloduy nuclear power plant," Dimitrov said, as quoted by Stroitelstvo Gradut weekly."We hope to export 18 million MWh of electricity in 2030, but with two more reactors at Kozloduy, we could export up to 33 million," Dimitrov said.However, the estimated power grid infrastructure operational in 2030 is calculated to facilitate no more than 15 million MWh, so the entire grid infrastructure has to be redesigned and expanded.Although that would be an expensive undertaking, Dimitrov said that power shortages in Turkey, Croatia and Macedonia made the investment worthwhile.

 

Ivaylo Kalfin talks oil and gas supplies from Nigeria

 

Bulgaria may start importing oil and gas from Nigeria. Bulgarian Foreign Affairs Minister Ivaylo Kalfin, a member of our delegation sent there, informed the Nigerian side of Bulgarian government’s efforts in finding alternative sources of oil and gas supplies for the country. He pointed out Nigeria as a potential supplier.Nigeria produces 10% of the total OPEC output and rates fourth in natural gas reserves.The leader of the Nigerian delegation, the country’s Foreign Affairs Minister Odzo Madukwe, said they’d been planning a gas pipeline through Sahara to the Mediterranean sea, pointing out the project was opened for Bulgarian companies, too.

PHARE and ISPA funding for Bulgaria to be unfrozen

Bulgaria's Deputy Minister of Finance Dimitar Ivanovski announced that a procedure of unfreezing 197 million euro in payments for contracts under PHARE had been launched. The announcement came following an official lunch with Deputy PM in charge of EU funds absorption Meglena Plugchieva and EU member states ambassadors. The money will be portioned out among contracts that had been signed prior to 29 June 2007. The future of the contracts signed past that date remains unclear. "We have detected major irregularities in a number of contracts worth 12,5 million levs (1 euro = 1.95 levs) in total. This is money we will surely have to pay back to Brussels," Ivanovski said. The sum total of the frozen PHARE funds is 323 million euro. There are also high hopes for restoration of payments under ISPA."We expect the final decision as to this will come out by the end of March," National Road Infrastructure Fund Director Yanko Yankov said during a Logistics and Infrastructure discussion which was attended by Minister of Transport Petar Mutafchiev.

 

Machine builders brace for 30% drop in revenue

Bulgaria’s machine building companies will see revenue slide by 10 to 30% year-on-year in the first quarter as most of them flinch under shrinking markets in the aftermath of the crisis, said Iliya Keleshev, chair of the industry chamber. Speaking at a meeting with industry managers, Keleshev explained the Russian and Ukrainian markets are practically shut at the moment. In one of a string of proposed urgent measures to cushion the blow of the economic turmoil, machine builders urged keeping if not cutting power rates for industrial consumers by the end of the year. Saying the energy regulator was in charge of power tariffs, Deputy Energy Minister Yavor Kuyumdjiev noted the machine building industry was in a good position at the moment, with prices of main energy raw materials such as coal and gas set to gradually fall by the end of 2009. one of the most daunting issues the industry grapples with is banks’ reluctance to lend. The crisis has had a hard toll on metal cutting tools manufacturers, said Iliya Keleshev. For example, orders for Silistra-based ZMM Stomana have grinded to a halt. on the other hand, hard material products producer Ceratizit Instrument, tools and machines manufacturer IZ Dinamika and optical elements and systems maker Optix are faring relatively better, according to Keleshev. His optimism was quashed by Mariyana Pecheyan, who owns IZ Dinamika owner VSK Kentavar, saying the crisis will hit full force at the end of March as the firm has received no orders for the following months.

 

 

 

 

 

INVESTMENTS:

 

Maritime Shipping to invest USD 200 M in ships

KG Maritime Shipping became a private company in August 2008 and since then we have undertaken lots of measures to strengthen its position, Kiril Domuschiev, president of the company explained for Pari daily. We reduced the running costs more than twice, got rid of all inefficient vessels older than 25 years and planned to buy new ships. Now is the to buy as prices are by 50% lower compared to last summer.

Swiss wind farm investment in Bulgaria town Kazanlak

 

Switzerland's leading energy company Alpiq will invest 80 million euros ($103.4 million) to build a wind energy park in Bulgaria to increase its renewable energy production, the economy ministry said on Wednesday. Construction of the 50 megawatt (MW) park near the town of Kazanluk in central Bulgaria will start in the coming months and is expected to begin electricity production in 2010, the ministry said in a statement.Bulgaria's installed wind power capacity totals 70 MW, generating just over 1 percent of its electricity consumption. The Balkan country gets about 43 percent of its power from coal and 40 percent from nuclear energy.It plans to increase the share of renewable energy to 16 percent by 2020 as part of European Union efforts to curb greenhouse gas emissions from fossil fuels and expand "green" energy production.U.S. energy company AES Corp.has recently announced plans to build a 270 million euros wind park on Bulgaria's Black Sea coast with a capacity of 156 MW by the end of 2009.AES has said it wants to build a second wind park of a minimum 100 MW capacity in the north of Bulgaria.Austrian power utility EVN also plans to build a 50 MW wind farm on the Black Sea coast.Bulgaria along with other ex-communist eastern European countries, which rely mainly on coal and nuclear energy for their electricity production, are lagging behind their western neighbours on meeting the EU's clean energy goals.The bloc wants 20 percent of energy demand to be sourced from renewables such as solar, wind, wave, hydro and biomass by 2020, versus 8.5 percent now.

Dimitrov negotiates the construction of a wind park in Bulgaria

According to preliminary calculations a wind-park with 120-150 megawatts power can be constructed in Mirkovo municipality. This was clarified today after a meeting of the Economy Minister Petar Dimitrov and George Bises - project manager of GE Energy Infrastructure - Energy.The company has investment intentions for the construction of wind-energy park in Mirkovo municipality.We identified the Mirkovo region as extremely interesting regarding wind potential, Bises announced at the meeting.Last year representatives of GE have made two visits in Bulgaria, in order to conduct initial research in the region.The research activities of the wind potential in the region will continue in 2009 as well.According to the secondary research of the wind potential and the presence of terrains, the investment can be realized within the limits of 200 to 800 million Еuro.

 

 

Sofia water utility to invest € 123 М in 2009-2013

 

Sofiyska Voda, the water and sewerage network operator in the Bulgarian capital, will pump over BGN 240 million (USD 156m/EUR 123m) in its grid through 2013, news outfit profit.bg reported. The utility will spend some BGN 50 million a year in the five years ahead. The company’s investment plan is aimed at boosting efficiency while meeting customer expectations, as well as the Sofia municipality’s and the energy regulator’s requirements. Sofiyska Voda pumped BGN 25.4 million in its network last year, or twice lower than this year’s investment price tag. Of the earmarked investment for 2009, BGN 19 million will be spent on water supply, BGN 14 million will go for sewerage network construction, over BGN 10 million will be put into waste water treatment and some BGN 5 million will improve customer servicing and back other corporate activities.

 

Dundee’s Bulgarian unit to build USD 160 М gold, silver installation in Chelopech

 

Chelopech Mining, the local unit of Canadian mining company Dundee Precious Metals, will build an installation for end gold, silver and copper metals within 36 months, Alex Nesto, head of investment projects at the company, told a news conference today as cited by state news agency BTA. The capacity will be able to process up to three million tonnes of ore from the Chelopech mine in western Bulgaria. The investment totals USD 160 million (EUR 125.4m), of which the state will provide 25%. After the mine’s depletion, the installation could process imported concentrate. The investor will most likely ink a public-private partnership deal with the state by the end of March. Chelopech Mining’s management said it did not plan any job cuts. The company employs 900-950 who earn an average BGN 1,300 (USD 848/EUR 664) a month, Nesto added as cited by BTA. Dundee also owns the Krumovgrad gold mining development project in Bulgaria.

 

Israel's Cinema City International to wrap up € 85 M mall project in Bulgarian town of Ruse in early 2010

 

Bulgarian investment company Real Estate Services Bulgaria (RESB), owned by Israel's Cinema City International, said on Tuesday it plans to wrap up a shopping mall project worth more than 85 million euro ($107.4 million) in the Bulgarian city of Ruse, on the Danube River, in the spring of 2010.Construction of Mall Rousse began last June, the company said in a statement."It would be unrealistic to claim that the financial crisis is not having a serious effect on the real estate sector and, in particular, investment in retail/entertainment centres. on the other hand, we should acknowledge the fact that only professional investors with long-term commitments remain on the market," RESB operations director Nadya Rangelova said in the statement.The mall will have a 60,000 square metre footprint and total built-up area of 51,000 square metres, including lettable area of 36,000 square metres and parking for 1,000 cars. Some 60% of the total retail space has already been leased out, the company said. With the Mall Rousse project, RESB total investments in Bulgaria will exceed 300 million euro. The company built the Mall of Sofia shopping mall in the capital Sofia back in 2006 which it later sold to a group of commercial investors comprising GE Real Estate Central & Eastern Europe, part of General Electric, and Irish real estate and investment advisory group Quinlan Private. RESB is due to open a shopping mall in Bulgaria's second largest city of Plovdiv this March. It is also building a shopping mall in the city of Stara Zagora, in central Bulgaria, and an office building in Ruse. RESB is fully-owned by cinema theatre operator Cinema City International. Cinema City International operates over 100 multiplexes with 1,000 cinema theatres in Europe and Israel. In Bulgaria, it plans to open six multiplexes with 55 cinemas in the next two years.

 

Bulgarian-Israeli JV MD Investment to build €16 M retail centre in Plovdiv

 

Bulgarian-Israeli joint venture MD Investment will build a 16 million euro ($20.12 million) food and electronics retail centre in Bulgaria's second largest city of Plovdiv, a company official said on Wednesday. Bulgarian construction firm Yazov holds a 50% stake in MD Investment, Yazov financial director Miroslav Yazov told SeeNews. The design work should be completed by September with construction expected to wrap up in 2011. The one-floor retail centre will be built on a 3.7 hectare site on the Plovdiv ring road. Yazov, established in 1991, is active in construction and trade in construction materials. The company is currently developing one residential scheme and one mixed-use residential/office project worth a combined 82 million euro in Plovdiv.

 

Germany's Schenker starts construction of €10.2 M logistics terminal in Bulgaria

 

German logistics company Schenker on Tuesday kicked off the construction of its second logistics terminal in Bulgaria worth 20 million levs ($12.9 million/10.2 million euro). The terminal, located in Bozhurishte, close to the capital Sofia and some 50 kilometres from the border with Serbia, will be completed by the end of 2009 and will have an annual capacity to process 200,000 tonnes of goods, Schenker country manager for Bulgaria Helmut Schweigchofer told reporters prior to the ceremony marking the start of construction.The terminal will be built on a total area of 48,000 square metres, including 3,000 square metres of logistics space, 3,000 square metres of offices and a 2,000 square metre warehouse for the reloading of cargo shipments. The terminal will also have a railway platform.The terminal could be expanded at a later stage, Schweigchofer said without elaborating. Schenker opened its first logistics terminal in the country near the Sofia airport last year. The Bulgarian unit of the company has branches in Sofia, Plovdiv, Varna, Burgas, Ruse and Sevlievo. Its turnover last year rose 20% to 56.6 million levs.

 

Piccadilly to invest € 40 M

 

Piccadilly chain has 18 supermarkets and 2 small corner shops in nine towns in Bulgaria. The company holds 15% of the food trade in hypermarkets. Turnover in 2008 was EUR 150 million, which is a rise by 25%, executive director Alexander Champarevich said in an interview for Pari daily. In 2009, expectations are for 40-percent growth, EUR 40 million investments, and taking a leading position on Bulgarian market.

 

Investors rework Gran Plaza construction terms

Investors in the biggest sports and leisure facility in the region of Ruse, on the Danube, are renegotiating construction agreements, said Plamen Bobokov, board chair of lubricants producer Prista Oil, one of the firms in the public-private partnership developing the project. The start of construction works on the complex has been postponed to the beginning of March from January. “It is not the quickest but the wisest that wins in such circumstances,” Bobokov commented, alluding to the turbulence on the global financial and economic scene. The complex will be built indeed and is poised to become the city’s most state-of-the-art building, Bobokov added. Prista Oil partners on the project with local construction company Densi Story and the municipality. The joint venture Project Ruse will pour BGN 70 million over two and a half years to build a multi-task sports hall, a shopping mall, a five-star hotel and office, sprawling on a 140,000 sq m area.

Elcabel to build new business centre in Bourgas

Due to the development of Bourgas, cable producer Elcabel from the outskirts now finds itself in the centre of the town. For that reason, the owners plan to move production and the patch of land located on 180,000 sq. m to be turned into multifunctional business centre. The new plant will be built on 200,000 sq. m six kilometres from the town. The plant has invested over BGN 22 million in new equipment.

FDI in Bulgaria shrink by 17% in 2008

Foreign direct investment (FDI) in Bulgaria amounted to EUR 5,430.2 million (16% of GDP) for in the period January - December 2008, compared to EUR 6,516.9 million (22.6% of GDP) for the period January - December 2007, preliminary data of the Bulgarian National Bank (BNB). The attracted Equity Capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January - December 2008 amounted to EUR 3,008.9 million, which was 55.4% of the foreign direct investment. It decreased by EUR 652.3 million compared to that attracted in the same period of 2007 (EUR 3,661.2 million). The receipts from real estate investments of non-residents amounted to EUR 1,397.3 million compared to EUR 1,813 million for January - December 2007.The attracted equity capital on privatization deals with non-residents (that have acquired over 10% of the equity in a Bulgarian enterprise) reported in January - December 2008 did not increase, compared to an increase of EUR 86.5 million in January - December 2007. The attracted equity capital on non-privatization deals totaled EUR 3,008.9 million in the reporting period, compared to EUR 3,574.8 million for the same period in 2007.The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers' credits and debt securities) was positive, amounting to EUR 1,909 million in January - December 2008, compared to a net other capital amounting to EUR 2,443.7 million in the same period of 2007. It decreased by EUR 534.7 million compared to that attracted in the same period of 2007.The Reinvested Earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January - December 2008 are estimated at EUR 512.3 million compared to EUR 412 million in the same period of 2007, preliminary data show. They increased by EUR 100.2 million in comparison with the same period in 2007.By country, the largest investments in Bulgaria for the reporting period were those of Austria (17.3% of the total foreign direct investment), the Netherlands (15.9%) and Germany (11.1%).By branch, the largest investments for January - December 2008 were in Financial intermediation (EUR 1445.1 million), Real estate, renting and business activities (EUR 1398.8 million) and Wholesale and retail trade (EUR 807.6 million).According to preliminary data in January - December 2008 Direct investment abroad increased by EUR 460.8 million compared to an increase of EUR 200.3 million in January - December 2007. The equity capital invested abroad in 2008 amounted to EUR 500.6 million, compared to EUR 202.3 million in January - December 2007.

 

 

COMPANIES:

 

Sofia Airport's profit up by 39% in 2008 despite Global Crisis

 

Despite the raging global financial crisis, the Sofia International Airport registered an after-tax profit of BGN 30,4 M in 2008, which is a 39% increase compared to the 2007 levels. The news was announced Monday by the Airport's CEO, Plamen Stanchev, as quoted by the Pari Daily.The airport fees revenue in 2008 was about BGN 66 M, which is a 12% compared to 2007. The commercial activity at the airport brought a profit of BGN 120,4 M, which is a 12,8% growth. In 2008, Bulgaria's largest airport serviced 3 230 696 passengers, which is 17,6% more than the number of passengers in 2007. Stanchev pointed out that this was a remarkable increase in light of the continuing global financial crisis, which has affected international travel. In his words, in the last five years the number of passengers at Sofia Airport had been growing by about 20% per year. In 2008, the Sofia Airport serviced 48 626 flights - an increase of 12%. The total volume of transported goods and mail was 18 647 tons - 6,7% more than in 2007.

 

Bulgarian electronics retailer Technopolis sees its market share rising to 40% in 2009

Bulgarian consumer electronics retail chain Technopolis expects its market share to increase to 40% at the end of 2009, its president Bozhidar Kolev said. We expect a rise of at least two-three percent, we should reach 40% this year," Kolev told SeeNews in a recent interview. The company sees its sales in 2009 unchanged from the previous year as it expects that the Bulgarian retail market will remain stagnant due to the global financial turmoil. However, the market has a potential to grow once the crisis ends in one or two years, Kolev said. We had an annual sales growth of 20% in 2008," Kolev said. The company's sales rose 30% to 331 million levs ($213.8 million/169.2 million euro) in 2007, he added. In the next three years Technopolis plans to expand its network in Bulgaria but has no intention to expand outside the country. Technopolis will stick to its plans to open four hypermarkets annually, Kolev said. the company has 21 hypermarkets and plans to raise their number to 30 to 35 in three or four years. By 2011, it plans to set foot in the southern town of Haskovo and in the northern towns of Gabrovo, Lovech and Razgrad. Technopolis also plans to open new hypermarkets in the capital Sofia, the country's second largest city of Plovdiv and in Burgas and Varna, both on the Black Sea. The retail chain recently launched the construction of a 12 million levs hypermaket in Sofia, which is expected to be ready in October and open 120 jobs. The hypermarket will cover a total area of 3,500 square metres and have a parking lot for 117 cars, and another, underground one, for 128 cars. The project is funded through own funds and bank loans. We are working with three banks," Kolev said. Technopolis plans also to set foot in the town of Veliko Tarnovo, in northern Bulgaria, this year. It has already called a tender for a construction firm to build a hypermarket there. The investment in Veliko Tarnovo will be smaller compared to the one in Sofia. It cannot be estimated because the project is still at an early stage." In 2008 Technopolis invested more than 20 million levs in the expansion of its retail chain and opened 250 jobs. The total investments of the company, founded in 2001, exceeds 126 million levs. It has a staff of more than 1,900. Technopolis is the authorised dealer of JVC and LG brown goods, Candy, Hoover, Beko, Sang and Taurus and Haier air conditioning systems. Technopolis (www.technopolis.bg) also imports Sony, Philips, Canon, Indesit and Ariston products. Technopolis competes with Technomarket, owned by UK-based Equest Investments Balkans, Bulgarian companies Zora and Densi, and Germany's Metro, in the market of 7.6 million people.

37 countries at Agra 2009

The International Agricultural Exhibition AGRA has been attracting Bulgarian and foreign agricultural companies for 18 years. Over the years, it has accumulated experience, reputation and acclaim, emerging as the most successful agrarian forum in Southeastern Europe, viewed by experts as a showcase for new achievements in farming and agriculture and setting a benchmark  for  trends in the sector.The 18th edition of AGRA officially opened in Plovdiv on February 18 and will continue until February 22. Its launch was attended by Agriculture and Food Minister Valeri Tsvetanov, Bulgarian National Radio reports.This year, according to organisers, a total of 851 companies from 37 nations will participate. 2009 also marks the first year when the European Commission will participate in the exhibition with a separate kiosk.Experts from the Directorate's General for "Health and Consumers’ Protection" and "Agriculture and Rural Development" will educate visitors about the goals of the exhibition, its purpose, the Common Agricultural Policy, CAP,  EU policy in the sector, the conditions and standards required for qualification of EU funds and current standards required for quality and safety.AGRA aims to incorporate and introduce science and new technology into the manufacturing sector, and the manufacturers in turn with the end users – the consumers.
The International Agricultural Exhibition is a useful platform for obtaining useful and updated information in the sector. The business meetings, seminars, conferences and presentations held between manufactures, farmers, producers, clients and guests are meant to contribute to improving the effectiveness of the forum.

Firms from 20 states partake in machine building, transport expos in Sofia

 

Over ninety companies from eleven different states are participating in the international machine building exhibit, Mach Tech Expo, which was opened in Bulgaria's capital Sofia Wednesday. The event is taking place in the Inter Expo Center in Sofia until February 21, and is attended by Bulgarian producers and importers of metal-cutting and metal processing devices, steel casting, welding equipment, laser systems for metal processing, roadworks and construction machines, trucks, forklifts, and trucks. one of the most interesting items on the expo is the robot bar-tender which is made by the Swedish company Motoman. The Expo is the first of its type in Bulgaria, and is organized by the manager of the Inter Expo Center, Bulgarreklama, and the Bulgarian Machine Building Branch Chamber. Another parallel and related exhibition is also taking place between February 18 and February 21 in the Inter Expo Center in Sofia, on "Transport and Logistics" featuring participants from 20 states presenting their technological solutions in freight transport and courier services.

 

Copper firm Aurubis goes ahead with Bulgarian plans

Global copper smelter Aurubis will stick to its Bulgarian investment plans in spite of the global financial turbulence and its grim results for the first quarter of the financial 2008/2009, the company’s communications head, Michaela Hessling, told Dnevnik. Aurubis, which renamed following the merger of Norddeutsche Affinerie and Cumerio, owns a copper plant in Bulgaria’s central town of Pirdop. While demand for primary copper is weakening, the cathode copper market is holding up relatively well, with Europe needing 4.3 tonnes annually, a million of it imported from South America, the company said. Thus it is imports and not production on the continent that should be reduced, according to Hessling. The Pirdop facility, which ships the bulk of its produce to southeast Europe, last year cut anode copper output to treble cathode copper capacity. It is now working at full throttle and there will be no reduction provided that things do not mess further up, Aurubis said, adding it will continue to keep a close eye on economic developments in the region in order to adjust market policies if necessary. Aurubis rounded off first-half 2008/2009 with a loss of EUR 124 million, blaming it on the sharp drop in copper prices over the past six months, with a tonne trading at USD 3,196 on the London Metal Exchange on Thursday against around USD 9,000 in early 2008. Its Bulgarian unit exports around 90% of its output, mostly to Turkey, Greece and the Black Sea region. on the domectic market, it sells semi-manufactured metal products to Sofia Med.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

 

Bulgarian industry enters recession

 

Gross added value of industrial sector in Bulgaria dropped by 0.1% in the last quarter of 2008, National Statistical Institute reported. Tertiary sector grew by 3.2% and agrarian branch – by 20.6%. Thus, the growth of gross domestic product (GDP) for the last three months of 2008 was only 3.6% – twice less than that in the last two years.
These figures draw back the economic growth of the whole 2008 to 6%. For the last year, the highest value added rise is registered in agriculture (23.4%), followed by tertiary sector with 5.7% and industry (3.9%). The good results in agriculture are due to the inertia. Economic growth is usually the highest in the fourth quarter of the year but data state clearly that the global crisis is having its impact on Bulgarian economy, Kamen Kolev, deputy president of Bulgarian Industrial Association (BIA), commented for Pari daily. Gross domestic value in the first quarter of 2009 will increase by 1-2% in the opinion of Georgi Ganev while from the Centre for Liberal Strategies expect 4% annual growth.

Bulgaria PM: Country already suffers negative crisis effects

 

The Bulgarian Prime Minister Sergey Stanishev admitted Wednesday that the country is already seeing the first negative effects and signs of the global financial crisis, the Darik radio reported.Stanishev spoke at the official opening of the economy forum, titled "Bulgaria's Development in Conditions of Global Financial Crisis," held Wednesday in Sofia.The PM pointed out that lack of industrial orders, diminished demand, reduced loan granting form banks were just some examples of the crisis' effects in Bulgaria, adding that the Cabinet had already implemented some of the measures from its anti-crisis action plan such as offering funds to small and medium enterprises through the Bulgarian Bank for Development.Stanishev also spoke about the importance of the fight against corruption and improving the effectiveness of the judicial system as a way to gain more of the foreign investors' trust and achieve better results in the absorption of the EU funds.The PM vowed BGN 27 M to be provided by his Cabinet to employers to help them maintain job positions plus an additional BGN 190 M for creating 50,000 new job opportunities. The government is also going to slate additional funds for the increase of retirement pensions and State assistance to disabled people.Stanishev underlined the importance of the Bulgarian Currency Peg for the stability of the financial system and said the Peg will continue to exist until Bulgaria is accepted in the Euro zone.Other high ranking participants in the Forum include the Bulgarian President Georgi Parvanov, the Speaker of the Parliament Georgi Pirinski, Sofia's Mayor Boyko Borisov and many others.

 

Crisis skips six sectors

 

Analysts from MKB Unionbank forecast that at least six branches in Bulgaria will not be influenced by the crisis: food industry, distribution of medicines and cosmetics, technologies and communications, purification and recycling sector, renewable energy sources, and road construction. Good projects in these branches will more easily get financing in 2009 despite the tough crediting. Credits will grow only by 5% year on year.

Bulgarian Industrial Association wants anti-crisis council

 

The Bulgarian Industrial Association (BIA) announced Wednesday its ideas for new measures to tackle the effects of the global financial crisis on Bulgaria, in addition to the anti-crisis package it proposed on November 12, 2008. The BIA is suggesting that the dormant Economic Growth Council be transformed into an Anti-Crisis Economic Crisis as part of the Prime Minister's Office, which should meet at least once a month as well as in cases of emergency. The Bulgarian industrialists demand that the government's anti-crisis measures be directed at all economic entities since in their view the practice of propping up certain enterprises with special benefits was unfair, and led to the creation of new corruption niches and practices. The BIA believes that Bulgarian financial institutions must improve their horizontal coordination, and to track down all payments due to the National Revenue Agency. It also puts forth measures aimed at improving the absorption of EU money as these funds are seen as critical in times of crisis. These include extending the deadline for review operational programs project up to 30 days, speeding up the evaluation procedures, increasing the amount of the advance payments to up to 30%, limiting the participation of non-EU subcontractors, and subsidizing export-oriented sectors and construction.

 

Thriftiness helps in times of crisis

The crises that have hit the country over the last 12 years made people in Bulgaria very thrifty. Despite the serious ads and the easy credits given until recently, indebtedness of population is one of the lowest on the Balkans. Latest data of the central bank show that household savings cover 1.2 times the credits taken. At the beginning of 2009, individual deposits were 12.7 million which makes a deposit and half for each citizen. The number of credits is about four times less – 2.9 million or one loan to every third person.Specialists interpret this as a positive fact giving additional stability to society. Average savings per capita amount to BGN 2,889 while average credit is BGN 2,381.
Bankers are unanimous that Bulgarians are in a better position on the threshold of the crisis that is awaiting them. The greatest problem in the other countries was not the bankruptcies of companies but the social bankruptcy of large group of the population, bankers commented for Pari daily. In their opinion, it is this stability the savings give that will restore consumption. Some analysts, however, comment that the fight for deposits will deteriorate the whole system and turn depositors into interest-hunters. In the opinion of Stoyan Alexandrov, president of D Bank, the current deposit race will bring only problems.Others, on the contrary, think that high interest rates of deposits lead to the increased savings.