BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 26 FEBRUARY – 5 MARCH 2010 )
Sections/headline briefs:
MACROECONOMY:
· Bulgaria to tighten licencing regime for green energy producers
· World Bank offers assistance for Bulgaria road infrastructure
· Brussels gives second chance to delayed Ispa projects
· Bulgaria tax authorities discuss Swiss bank data with Germany
· Bulgaria, Kosovo strike energy cooperation deal
· IMF projects Bulgaria's budget deficit at 1,8% in 2010
· Bulgaria to export wine for Russia by ferry
· Bulgaria wine producers win 12 international awards
· EU energy commissioner supports quest for Bulgaria NPP investor
· EC releases EUR 2.3 B for energy projects
· Bulgaria innovations forum attracts government support
· Government accounts for quarter of IT market
· Bulgaria can be regional IT leader
· Outsourcing industry in Bulgaria on the rise
· German and Austrian shoe retailers storm Bulgarian market
INVESTMENTS:
· Railway infrastructure investments aim at improving cross-border connections
COMPANIES:
· Road Construction Equipment wins EUR 15.5mn contract for Sofia water project
· Big Bulgarian companies have a chance at attracting Polish investors
THE CRISIS:
· Finance Minister: Bulgaria to overcome economic crisis in 9 months
· Construction sector keeps collapsing
· Financial crisis forces Bulgaria landlords into flexible rents
· Bulgarian computer market down by 21% in 2009
Articles:
MACROECONOMY:
Bulgaria to tighten licencing regime for green energy producers
The State Energy and Water Regulatory Commission (SEWRC) has drafted a more stringent procedure for obtaining a licence for electricity production from renewable energy sources. SEWRC plans to issue licences only after investors present bank agreement for the project financing and a preliminary contract with the National Electricity Company (NEC) and distribution companies for connection to the grid. The proposals, which would be put up for public consultation next Tuesday, are aimed at increasing guarantees for the projects successful completion. At present investors are required to present only a letter of intent from a bank or another financial institution to finance the project. SEWRC is also proposing whenever an assessment of environmental impact assessment (EIA) or other environmental permits are required, these documents to be directly attached to the application for a licence. Currently, investors may only submit a statement that the relevant environmental expertise had been carried out.
World Bank offers assistance for Bulgaria road infrastructure
Bulgaria’s Prime Minister, Boyko Borisov, and the Director of the World Bank for Central Europe and the Baltic countries, Peter Harold, held talks regarding road reconstruction and modernization.The information was reported Saturday by the Cabinet’s press center.Borisov, Harold, and the permanent representative for the WB in Bulgaria, Florian Fichtl, discussed assistance in the areas of analysis, consultancy and investments to help modernize road infrastructure in Bulgaria – one of the top, strategic priorities of the government.Peter Harold’s Department includes 10 EU Member States and Croatia. He was appointed to the post on January 25 and this is his first visit to the Region.
Brussels gives second chance to delayed Ispa projects
The European Commission (EC) plans to be flexible with deadlines for absorption of financing under the Ispa pre-accession programme, said Regional Policy spokesman Ton van Lierop. With the original deadline expiring at the end of 2010, Bulgaria is facing seeing upwards of EUR 500 million slip through its fingers unless it completes the project in time. Van Lierop said Brussels will most probably push the deadline until 2011 and even until 2012 for some projects. Schemes financed by the EC with more than EUR 100 million stand the most chances to get an extension. In Bulgaria, these include the second bridge on the Danube, Lyulin highway and the renovation of the Plovdiv-Svilengrad railway, which has been at least two years behind schedule. The EC is expected to come up with a final decision within a month. The bulk of Bulgaria’s troubled projects have to do with water and sewage systems construction in the major cities such as Sofia, Varna, Balchik, Smolyan, Shoumen, Kyustendil, Sliven and Rousse. For almost all of these projects, Bulgaria has only absorbed less than 50% of the financing, with Kyustendil, Sliven and Sofia trailing all with absorption rates of 11%, 13% and 14%, respectively. The delay on the three expensive projects -- the Danube bridge, Lyulin and the railway -- is pegged on contractors, land expropriation procedures and numerous price hike demands.
Bulgaria tax authorities discuss Swiss bank data with Germany
Bulgarian National Revenue Agency (NAP) officials are in Germany Friday to investigate Bulgarians who have not paid tax on money in their Swiss bank accounts.The NAP Director, Krasimir Stefanov, is holding talks with his German counterpart with the aim of obtaining information about deposits made by Bulgarians in Swiss banks and banks in Lichtenstein over a tax evasion probe.In mid-February Bulgaria approached Germany, following the latter's intent to buy a stolen disc containing names of thousands of people with Swiss accounts who may have evaded taxation.Stefanov says that Bulgaria currently intends to find out how useful the information would turn out and only then will offer money for it. He told Darik radio that several “businessmen” had called NRA to inquire about the probe. According to unconfirmed reports, about 10 people have already proposed to cut a deal with the tax authorities in order to avoid prosecution.
Bulgaria, Kosovo strike energy cooperation deal
Bulgaria and Kosovo signed Friday a memorandum for cooperation in the energy and mining sectors.The document was signed in Sofia by Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, and Kosovo’s Minister for Energy and Mines, Justina Shiroka-Pula.It provides for the creation of a joint expert group to focus on matters of mutual interest such as renewable energy, mining, hydro power stations.The Kosovo Energy Minister has expressed her hope that this would be beginning of a long-term cooperation with Bulgaria, and thanked Bulgaria for being among the first countries that recognized the independence of the Republic of Kosovo.
IMF projects Bulgaria's budget deficit at 1,8% in 2010
The International Monetary Fund expects Bulgaria’s budget deficit to stand at 1,8% of gross domestic product this year, which totals nearly BGN 1,2 B.The Washington-based global lender forecasts this year’s inflation at 2,2%, economic growth at 0,2%, and the current-account gap at 5,5%, Bas Bakker, the IMF’s mission chief, said at a press conference on Monday at the end of a two-week visit.“The global recovery is now boosting Bulgaria’s exports,” Bakker said. “Domestic demand is expected to decline further and the investment boom continues to unwind and consumption suffers from the decrease in employment.”Bulgaria, which joined the EU in 2007, posted the smallest budget deficit among the 27 member states last year, when the economy shrank 5.1%, according to the finance ministry. The country expects to be the only EU nation to balance its budget in 2010.Bakker warned that meeting the 0,7% deficit target this year will be “challenging” and was cautious in his comments on plans to reduce the valued-added tax rate from 20% to 18%.“Fiscal discipline will remain an important pillar supporting macroeconomic stability,” he said.Officials from the International Monetary Fund (IMF), arrived in Bulgaria on February 18 to examine the country’s readiness to join ERM II, a currency stability test for euro hopefuls.The experts visited Sofia at the invitation of Bulgaria's Minister of Finance Simeon Djankov who has discussed the issue during his formal trip to Germany and Luxembourg at the beginning of February.In Bulgaria IMF officials held meetings not only with heads of public institutions, but also with representatives of the business and trade unions.A positive assessment for the state of Bulgaria's economy is believed to help the country in its application for ERM II, according to sources from the government.There have been months of speculation over when the former communist state would formally apply to the bloc's exchange-rate mechanism, the so-called Eurozone waiting room.Countries must be members of ERM II for two years before they can formally join the eurozone. Bulgaria believes that it could be ready for euro entry by 2013.The Greek crisis has triggered fears about the stability of the eurozone and concerns that it may end up foiling Bulgaria's aspirations to join the euro in three years, despite the country's budgetary rigor.Bulgaria is believed to be among the countries most at risk from potential spillovers from Greece after banks invested in central and eastern Europe. The country is more susceptible to contagion risk from than neighboring Romania or Turkey, because Greek banks control 28 percent of the Balkan country’s market.Joining the exchange-rate mechanism would bring Bulgaria closer to the umbrella of the euro region and the protection of the European Central Bank and is conditional on whether the new government will succeed to restore Brussels trust.The lev is already linked to the euro in a currency board that keeps the Bulgarian currency at 1.9558 to the euro. Joining the exchange-rate mechanism may allow the lev to fluctuate by as much as 15 % around a central band, though the central bank has said it will leave the lev tightly pegged to the euro through the duration of the two years.
Bulgaria to export wine for Russia by ferry
Bulgarian wines will be carried directly to Russia by the ferryboat line Varna-Caucasus, the National Vine and Wine Chamber announced. Thus, the obstacles created by Ukraine in the last years will finally be avoided.. on March 15 at Vinaria exposition in the city of Plovdiv will be organized a meeting between wine producers, shipping agents, the Russian and the newly chosen Bulgarian sea transport company. At the meeting will be specified the details on the amounts of wine to be exported to Russia, the schedule of the ships and the freights. The first boxes with Bulgarian wine will leave for Russia in a month, when the new Russian ferry "Slavyani" will start its regular service between the coastal city of Varna and Caucasus.
Bulgaria wine producers win 12 international awards
Bulgarian wine producers celebrated on March 3, winning a total of 12 awards at the prestigious Vinalies Paris Internationales exposition.There were some 3 500 entrants, from all parts of the wine-producing world. International juries comprised of wine experts and well-known personalities carried out tastings and adjudications over the 5-day French event.Bulgarian wine producers carried off 4 Gold medals and 6 Silvers. The winning wines included 9 red, 2 white, and 1 rosé. This last was made with the Syrah grape, a variety that originated in France.The Bulgarian gold medalists included Katarzyna Estate, Minkov Brothers, and Villa Lyubimets. Other producers represented included Domaine Boyar AD, Dragomir Winery Estate and Rumelia Wine Cellar.The Paris exposition was founded to encourage independent wine producers to market their products internationally, and to provide a quality benchmark that would benefit both the producer and the buying public.
EU energy commissioner supports quest for Bulgaria NPP investor
EU Energy Commissioner Guenther Oettinger has stated that he will support Bulgaria in its bid to find an EU investor for the Belene Nuclear Power Plant.Bulgaria PM Boyko Borisov and Bulgaria President Georgi Parvanov have held talks Monday with EU Energy Commissioner Guenther Oettinger, during his two-day visit to Bulgaria.Oettinger is in Bulgaria for Tuesday’s international forum ‘Energy security in the wider Black Sea region: an approach to public-private partnership’.Parvanov told Oettinger that the Bulgarian institutions have a common position on energy policy and that they are following the EP discussions closely on the promised extra EUR 300 M compensation for the decommissioning of the Kozloduy Nuclear Power Plant. He also added that any suggestions from MEPs that Bulgaria should create a nuclear waste storage facility in order to keep the used nuclear fuel from the plant there were “unacceptable”.Oettinger mentioned Bulgaria’s potential to assist in strengthening the energy security of Europe and said that he will support the efforts of Bulgaria to find an EU investor for Belene NPP. He also expressed support for the policy pursued by Bulgaria for connecting the gas networks of the countries of Southeastern Europe.Parvanov concluded by reiterating Bulgaria’s priority to support the construction of the Nabucco pipeline, and continue to work towards the realization of South Stream project. In this regard Oettinger stressed that the EU supports the implementation of any project that increases diversification of transport corridors for energy resources to the EU.After meeting with Parvanov, Oettinger held talks with Borisov on Nabucco, the South Stream and other energy projects. Borisov stressed that the country has ratified the intergovernmental agreement on the the Nabucco project and stated that its implementation is crucial to diversify gas supplies.
EC releases EUR 2.3 B for energy projects
The European Commission allocated 2.3 billion euro for the energy sector, mainly for gas and electricity projects, the EC said in a media statement.The sum is meant for a total of 32 gas and 12 electricity projects in the EU over the next twelve months. Bulgaria will be among those to benefit with the support of projects for reverse flow and the Nabucco project to diversify gas imports.Three projects involving Bulgaria were approved by the Commission: Nabucco would receive up to 200 million euro; the project to link Bulgarian and Greek gas grids was allocated up to 45 million euro; and a similar interconnection plan with Romania was given up to 8.9 million euro."I discussed the issue with President [Georgi] Purvanov about some ideas he has and we have agreed to remain in touch also through the services of the Commission and the Bulgarian authorities," European Commission President Jose Manuel Barroso said on February 24 in Brussels in relation to the energy investment plan.At the Brussels meeting, Barosso and Purvanov had discussed how the bloc's 2020 development strategy could be applied to Bulgaria."We have specifically discussed energy security and solidarity where I believe Bulgaria has an important contribution to give also to the European Union," Barroso said.The gas projects are a priority for the EC. Reportedly, there is a total of four billion euro surplus in the EC budget, money which the commission wants to implement in order to "stimulate the economy and create new jobs" the report says.In December 2009, one billion euro was released for pioneering projects, for the conservation of harmful emission and their storage underground, while 565 million euro were given for wind parks.
Bulgaria innovations forum attracts government support
The government vowed all-out support for research and development during Bulgaria’s Sixth Annual Innovations Forum, which took place in Sofia Monday.The Innovations Forum is organized by the Applied Research and Communications Fund, a Bulgarian R&D institute, in cooperation with the Economy Ministry and the World Bank mission in Bulgaria. The Forum is entitled: “Science, Technological Development, and Innovations: Policies for Growth and Development during the Next Decade.”The Mechanics Institute of the Bulgarian Academy of Sciences, the “CAD/CAM/CAE in Industry” Laboratory of the Technical University in Sofia, received the awards of the forum in the research organizations category.The companies which got awards for their technological development projects are the AMK Drives and Controls, Bianor Services, Tehkeramika, and Dissy.OPAK Engineering received the award in the category for a firm with under 50 employees in the “National Competition for Innovative Enterprises” of the Economy Ministry. Smartcom Bulgaria received the award in the category of medium-size and large company of the same competition.During the Annual Innovations Forum, Bulgaria’s Economy Minister, Traicho Traikov, said the government’s National Investment Fund already had BGN 5 M allocated for innovative projects, and that in March the government will start the procedure under the EU operational program “Competitiveness.”Bulgaria’s Prime Minister, Boyko Borisov, admitted during the forum that Bulgaria was falling seriously behind in the innovations and R&D sector.“Google invested more money into innovations than the entire EU,” Borisov said adding that his government, just like the EC, was well-aware that this situation needs to be rectified.Borisov announced that “one of the largest companies in the world” was interested in investing in Bulgaria, and that he hoped these plans would materialize in the coming months because of Bulgaria’s very good tax and social environment for investment.He also said he hoped American companies with interest in Bulgaria would invest USD 200-300 M in the Bulgarian economy in the short run.Borisov’s appearance at the Innovations Forum did not go without a joke as he asked the organizers what was the material award for the prize winners, and was told the price was “a photo with the Prime Minister.”Florian Fichtl, the permanent representative of the World Bank in Bulgaria, said during the forum that the education system was the key prerequisite for a knowledge-based economy. He pointed out that the Bulgarian education was not based on competition, and as a result the level of scientific research is lower in Bulgaria compared to other EU states, which in turn led to a weak connection between research and development and the real economy.
Government accounts for quarter of IT market
The Bulgarian state administration signed over 270 contracts for hardware, software and information technology services during 2009. The deals accounted for between 20% and 25% of the IT business in Bulgaria, according to analysts CBN Bulgaria, as cited by Pari.bg. According to the analysts' data, government spending on services exceeded hardware purchases for the first time. The survey showed that one Bulgarian IT company received a total of EUR 5,5 M in 2009, under the provisions of the Public Procurement Act (PPA). The top 10 technology companies by volume of tenders won, received between them 55% of all government contract funding. The top 10 companies in terms of the number of successful bids, carried out 32% of all state contracts, with 17 contracts being the largest number won by any single company in 2009.
Bulgaria can be regional IT leader
This was said by the USA s Ambassador in his speech titled "The new economic partnership between Bulgaria and USA: Glance in the Future." According to him Bulgaria need to invest in the IT field, including in cooperation with USA companies. "With 20,000 certified IT specialists your country is on 3rd place in the world per capita and on 8th by the number", said the Ambassador, James Warlick. He also added that small but clever investment in the nanotechnologies will have multifold pay back effect. He announced also that in result of the first American-Bulgarian public-private partnership for IT and innovations three projects will be reviled soon.
Outsourcing industry in Bulgaria on the rise
Outsourcing companies are poised to create more than 2500 jobs in Bulgaria in 2010, Call Point New Europe said, cited by Investor daily on March 4 2010.The Bulgarian outsourcing firm Call Point said that this particular sector has created 20 per cent more jobs in Eastern Europe in 2009 than in 2008.Reportedly, growth in Bulgaria is stronger than the average growth for Eastern Europe, and this trend is likely to continue because the country "offers good potential, quality services and low cost", Filip Ugrinov, CEO of Call Point New Europe told Investor.Ugrinov reckons that in Bulgaria the outsourcing industry could employ as many as 40 000 people in a few years, while the current figure stands at about 5000.According to data from the AT Kearney consulting agency, "Bulgaria is the most appealing country in Europe at the moment". The criteria the agency cites are "salaries, infrastructure, taxes and financial attractiveness".Reportedly, Bulgaria comes ahead of Romania in these criteria, apart from "work force", where Romania scores considerably better.
German and austrian shoe retailers storm Bulgarian market
The German shoe retail chain Deichmann plans to open 8 news stores in Bulgaria in 2010, the company informs.3 of the new stores will be located in the capital Sofia. Deichmann came to Bulgaria in the spring of 2009 and now has 4 stores in the cities of Burgas, Gaborovo, Plovdiv and Targovishte.Meanwhile, the shoe chain Humanic also announced plans to expand its business on the Bulgarian market with the opening of its first 2 stores in the newly built “Serdika Center” and “Carrefour Tsarigradsko” shopping malls in Sofia.Humanic is part of the Austrian Lеder& Schuh International.
INVESTMENTS:
Railway infrastructure investments aim at improving cross-border connections
The EU railway infrastructure investments aim at improving cross-border connections and building new connections with neighboring countries on the Pan-European corridors, Desislava Georgieva, Director of Strategic Investment and Investment Projects in the state-run National Railway Infrastructure Company (NRIC), says in an interview with FOCUS News Agency. The infrastructure projects that will be co-financed under Transport OP will streamline the major domestic railway system and achieve interoperability so that the domestic transport capacity could be integrated into the region’s transport capacity. Thus freight operators will be able to offer services within a scale they choose, says Georgieva.
COMPANIES:
Road Construction Equipment wins EUR 15.5mn contract for Sofia water project
Local Road Construction Equipment, part of Bulgaria’s largest road construction entity Holding Patishta, has won a EUR 15.5mn public procurement contract in cooperation with VIK Sofia 2009 from the environment ministry, Investor.bg reads. The two companies should construct water pipelines and sewage collectors under the integrated water cycle project of the capital city of Sofia . The work should be completed in 14 months. Holding Patishta is specialised in road, railroad, bridge, and underground construction. It comprises 20 road construction companies.
Big Bulgarian companies have a chance at attracting Polish investors
Polish pension and investment funds will be interested in investing in big Bulgarian companies with region-wide business success, even better with presence in Poland, Voicheh Sadovsky from UniCredit CAIB Poland told Dnevnik in an interview. The interview was prompted by a recent cooperation agreement in the field of custodian services between the Polish Central Depository and UniCredit Bulbank. The agreement will open the way for Bulgarian companies to list on the Warsaw stock exchange. Pharmaceuticals company Sopharma, for example, is big enough, Sadovsky said, adding that its business is “anti-cyclical” and the company is already known in Poland. According to Sadovsky individual investors are not likely to invest in Bulgarian companies, but pension and investment funds are.The main reason for potential interest from pension funds is the limit on their investments in foreign securities. They are allowed to buy foreign stocks worth up to 5% of their assets. However, if these securities are traded in Warsaw, they are not treated as foreign investment but for local, for which the limit is 40% of the assets. This is a major advantage for investors, Sadovsky noted.
THE CRISIS:
Finance Minister: Bulgaria to overcome economic crisis in 9 months
Bulgaria is going to overcome the effects of the economic crisis in three stages over the next few months, according to Finance Minister Simeon Djankov.Speaking in the southern city of Pazardzhik Friday night, Djankov said that in 2-3 months the Bulgarian economy was going to start registering growth. In stage two, which is to be in 4-6 months, the state revenue is expected to go up. In stage three, the Finance Minister expects that in 6-9 months the unemployment will stop rising.Djankov re-confirmed his intention to work for the decrease of the value-added tax from 20% to 16% in the long run.He has promised spectacular results from the “Owls” operation conducted by several state institutions in order to crack down on tax evasion. Djankov said Operation “Owls” would continue for two more months in two directions – tackling tax evasion by physical persons, and cracking down on businesses evading the payment of excise taxes and dealing with contraband.The Finance Minister explained he would evaluate the results that he instituted in the National Revenue Agency no earlier than six months. He pointed out that over 1 000 customs officers had been fired over their incompetence, and promised numerous inspections of casinos and other gambling outlets.Djankov also expressed readiness to go up to 10 years back in time and inspect the so called “economic files” with tax evasion investigations over various suspicions. His remark was in response to a statement earlier in the week by President Georgi Parvanov.However, the Finance Minister explained that for this to happen, it would have to be requested by the Parliament first.
Construction sector keeps collapsing
The construction sector didn't change for better during the first 45 days of 2010, experts comment. Over the last three months of 2009, the monthly decrease of the volume of construction work in the European Union ranged between 0.4 and 0.6 percent. The gravest problems were registered in Slovakia, Bulgaria and Romania, where the shrinkage ranged between 4% and 7% on a monthly basis. France has kept its pace, and certain growth has been registered in Slovenia and Sweden only, but it is of some 2 percent. It is expected the shrinkage of the EU construction sector to exceed 7%, with the East European countries at the head, Bulgaria included. The shrinkage there is seen exceeding 25 percent. Russia, too, faces serious difficulties since in 2009 the construction projects that were frozen there due to lack of money reached 30% of the total buildings under construction. The newly built areas that were ready for use in Russia were by 20 million sq m less as compared to 2008. According to data by the Regional Development Ministry, in 2009 Bulgarian construction sector will register a drop of 38% year-on-year as a whole, while the housing construction only will shrink by 60% year-on-year. The construction companies' central register shows that at end-2009 the juridical persons were by 1,500 less than a year ago. The number of the employed in the sector has decreased by more than 200,000, and it is expected in 2010 a further 30,000-40,000 people to leave their present posts in the system. Construction entrepreneurs comment that nobody has expected such a grave collapse. According to them, there are many bankrupt companies, mainly small and mid-sized ones, as well as a significant number of unfinished buildings. one of the reasons for this is the poor design, and the second one pertains to the fast investments and lack of professionalism. All these obstacles turned the frozen construction projects into a tougher problem. According to unofficial data, some 40% of all buildings under construction are now frozen or just small and insignificant activities are carried out there just to maintain readiness for finishing the project when the money comes. And there is one more thing - besides being an ugly sight, the unfinished buildings are extremely dangerous to all the people that pass along them everyday. The toughest time for the construction sector is yet to come, experts are explicit on the point. In Mart and April this year the bulk of the contracts will expire and will be paid, while new big orders are not emerging. The state cannot invest as it used to before since its economy is not working well enough, and there is neither budget revenues, nor enough public orders. And the private investors don't dare to invest since they are afraid they will not be able to realize their production. The branch representatives now anchor their hopes on the European funds and infrastructure projects, which need many subcontractors. However, we are yet to see whether this will come to the rescue of the remaining branch companies. We will have a more complete picture of the situation this autumn when it will become clear how many orders there will be and which among the companies have managed to sustain the crisis.
Financial crisis forces Bulgaria landlords into flexible rents
The financial crisis has made landlords in Bulgaria much more flexible, enabling clients to sign 3 month rental contracts, according to real estate company Address.According to Address 11% of the rental deals made in January and February involved 3-month contracts rather than the usual 1 year contracts.However, 2010 has allegedly seen a slight rise in rental prices from 2009, with the upper end of the market seeing prices between EUR 500-700 a month again.Address also reported that lots of tenants have left the rental market as they attempt to take advantage of the ever decreasing sale prices of real estate.
Bulgarian computer market down by 21% in 2009
The Bulgarian computer market declined by 21,5% during 2009, according to data published by technology industry analysts IDC. The general economic crisis was the root cause of reduced sales demand in both the business and personal computer sectors. This was true even for the final quarter of the year, which is traditionally a stronger period because of Christmas sales. The decline in Bulgaria was even more marked than the average for Central and Eastern Europe. Local factors included a squeeze on available credit, and a general decline in purchasing power, whether personal or commercial. Lack of confidence in the market also played a negative role, according to Evelin Stoev, chief analyst at IDC Bulgaria, who suggested that the Bulgarian government should intervene with investments to assist an upturn in the market. Even the popular laptop sector saw a significant decline in sales, registering a drop of 16,2% over the year. Sales of desktop computers were hardest hit, dropping by 29,5% during the course of 2009. The volume of server sales, however, fell by only 8,2%.