BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 16 – 23 APRIL 2010 )
Sections/headline briefs:
MACROECONOMY:
· Bulgaria may see investment status hiked despite larger deficit
· Brussels expects reforms from Bulgaria
· Bulgaria only EU country with no public-financed cardiac pacing
· UniCredit Forecasts 2011 Recovery for Bulgarian Economy
· Bulgaria fails to absorb EU ecology money
· Brussels to give Sofia hard time over environment
· Environment ministry completes assessment of waste-processing plant in Sofia
· Bulgarian businessmen to cooperate with Pakistan's Gujrat
· Works on Belene nuclear power plant to go on after strategic investor selection
· Bulgarian business believes corruption levels go down
· Bulgarian foreign minister to visit USA, western Balkans, Syria
· Greeks move their money and business to Bulgaria
INVESTMENTS:
· Spanish Electra to build 100 MW wind power park in central Bulgaria
· Harvard graduate heads Bulgaria's Investment Agency
· Russians to build power plant in Bulgaria
· Largest Bulgarian shopping center 'The Mall' opens in Sofia
· Waste water treatment plants opened in Sevlievo, Lovech
COMPANIES:
· Bulgarian company TED takes part in world's largest furniture expo
· U.S. Honeywell opens European system centre in Sofia
· Dutch company sets up logistics hub in Bulgaria's Sevlievo
· French company Saint-Gobain Weber builds 2nd factory in Bulgaria
THE CRISIS:
· Bulgaria to remain in the grip of stagnation in 2010 – IMF
· Crisis snapshot: profits drop 21% as 115,000 jobs go March 2010
· Bulgaria business demands tax amnesty to battle crisis
MACROECONOMY:
Bulgaria may see investment status hiked despite larger deficit
Moody's said that in spite of the higher-than-expected deficit for last year, Bulgaria still stands a chance of an upgrade over the medium term, as it is implied by its "positive" rating outlook.The 2009 budget deficit came in at 3.7% of the gross domestic product (GDP), versus a projected 1.9%. Moreover, Bulgaria is seen to close the current year with a deficit of some 3%. However, the government may hop a notch up from its current Baa3 rating, the lowest investment-grade rating given for "moderate credit risk", upon successful fiscal consolidation and sustainable growth, according to the agency.The wider deficits were attributed to spending under contracts inked by the previous government, which however, according to Bulgaria's current administrators, are mostly one-off expenses. If this turns out to be the case indeed and also the deficit is materially slimmed in 2011, the "positive" outlook may result in an upgrade, opined Kenneth Orchard at Moody's.What could prove a challenge for the Bulgarian government is the eroded confidence in the fiscal transparency and the statistical reliability in the wake of the revised figures, Kenneth Orchard said. Also, in the agency's view, Greece's problems might affect Bulgaria's economy given the ties between the banking sectors of the two countries.Yet, Bulgaria boasts the third-lowest debt ratios in the EU as well as a sound maturity profile. This year, its debt-to-GDP should stay below 20% and interest payments-to-revenues at some 2.6%, a way below the median for the Baa rating zone. Last year's deficit is also below the EU and Baa medians of 5.9% and 4.9%, respectively, Moody's said.
Brussels expects reforms from Bulgaria
Brussels expects Bulgaria to overhaul its public sector, health care, and pension system, said deputy prime minister and finance minister Simeon Djankov. At their meeting in Madrid on Sunday, EU finance ministers agreed the pension system reform will be one of the benchmarks in the Europe 2020 strategy, Djankov told Darik Radio. As part of a set of 60 measures to shore up the economy, the Bulgarian government should submit by the end of May pension reform proposals with the national tripartite cooperation council -- a structure which brings together government, employer and employee representatives. Under the first scenario, which is backed by the National Social Security Institute (NSSI), the pension years of service will be gradually increased from 34 to 37 for women and from 37 to 40 for men. The retirement age will stay intact but without enough years of service pensioners will get smaller pensions. The other two options involve increase in the pension age.
Bulgaria only EU country with no public-financed cardiac pacing
Bulgaria is the only EU Member States in which the expenses on insertion of artificial pacemakers are not covered by the public health insurance system. Such a device costs between 3,500 and 16,000 leva, and without it a patient is doomed to die, said Dr Svetoslav Yovev of the St Ekatherina Hospital, President of the Bulgarian Association for Artificial Cardiac Pacing and Cardiac Electrophysiology. only in Bulgaria and Albania people are still dying for lack of money for this type of treatment," he added. The death toll among heart patients in Bulgaria due to this problem approximates 19,000 annually.At a symposium on artificial cardiac pacing and cardiac electrophysiology, organized by the Bulgarian Association in Sofia over the weekend, leading cardiologists issued a formal appeal that pacemakers and their implantation be fully covered by the National Health Insurance Fund. The appeal was backed by the Bulgarian Medical Association and by the representatives of the European Association for Cardiac Pacing and Electrophysiology who attended the forum.In recent years, as few as some 1,800 single-chamber pacemakers, some 350 dual-chamber pacemakers, six to eight defibrilators and some 60 implanted cardiac resynchronization devices have been implanted in Bulgaria. Compared to the rest of the Balkans and to the rest of Europe, Bulgaria ranks last in the number of per capita implants.In a number of cases, an implanted pacemaker helps restore the heart and obviates the need of a heart transplant which, apart from being riskier, is dozens of times more expensive. Thus, the refusal to cover the costs of cardiac resynchronization therapy, apart from being inhuman, is financially unjustified, cardiologists commented. Prof. Goran Milasinovic, President of the European Association for Cardiac Pacing and Electrophysiology, who was a special guest at the symposium, recommended that Bulgaria create a register of heart patients in need of pacemaker implantation and of patients in whom such devices have been implanted, so as to improve the therapy and reduce mortality.
UniCredit Forecasts 2011 Recovery for Bulgarian Economy
Recession in Bulgaria is to continue at least until the end of 2010, analysts from the Italian UniCredit bank, which owns the Bulgarian Bulbank, forecast.Bulgaria's recovery will be seen at the end of the year, at the earliest, and even in 2011, with the Gross Domestic Product (GDP) remaining negative until then.The research further shows a positive trend in Bulgaria's export and reserve of goods, however, households continue to restrict their consumption.The recovery of the Bulgarian economy still depends on many factors such as activation of the country's key trade partners, increased desire for riskier investments by the European developing markets, and the speed of applying reforms in the country.Data about the payment balance shows that the recovery, accompanied by increased export, has begun, according to the bank's experts.Regarding households, in addition to low consumption, unemployment would be the top challenge for the recovery.The UniCredit Group economists see the slump in the housing market as the main reason for the recession where prices have gone down 30%. However, in many regions, the real estate market shows trends of stabilization. In the Black Sea Region, where prices were the highest during the construction boom, the price decrease was and is still lower than other parts of the country, showing the market there will need more time to become rebalanced.The analysis points out that the strongest sides of the Bulgarian economy are: no need of aggressive measures for fiscal consolidation compared to other developing markets, strong commitment to carry out structural reforms, still unused potential for economic growth by better management of EY funds. The week sides are: large external debt carried by private businesses, and slower dynamics of adjustment over the fixed rate of the local currency.
Bulgaria fails to absorb EU ecology money
Publication: Banker Weekly English
Only six local projects under LIFE+ programme have been approved so far Bulgaria certainly speaks more about EU funds than any other member state. Everyone knows about the billions of euros that Brussels has earmarked for Sofia, with the help of which according to local rulers (both from the current and previous cabinets), Bulgaria will become a kind of paradise on earth. However fairy tales are one thing, reality - quite another. A month ago it became clear that since 2007 our country has absorbed only 2.5% of all the 6 billion-plus funds envisaged by the EU. It is true, that this figure is nearly ten times more the jaw-dropping 0.28%, reported by former Deputy Prime Minister Plugchieva in February 2009, but given that the deadline of utilization of these funds expires in 2013, the situation is not at all satisfactory. Furthermore, the absorption rate under other EU programmes for dozens of millions of euros is also far from perfect and there are some programmes that get almost no media coverage in Bulgaria. This is the case with "LIFE +", which specializes in environmental innovation and preservation of biodiversity. Projects applying for funding may be submitted by any public or private organization, government institution or NGO. The total budget of the programme for 2007-2013 is EUR2.14 billion distributed among all the countries of the Community. Specific amounts for each country are to be determined each year and the budget for Bulgaria in 2009 was close to EUR5.4 million. In 2008 this sum came to EUR4.47 million, while a year before that - to EUR4.02 million. Unfortunately, much of this money has not entered Bulgarian economy. So far, the European Commission has approved only six local projects in this area - one in 2007 (when a total of 24 proposals were submitted) and five in 2008 (out of 12), which jointly got funding for EUR4.88 million. This situation is not strange at all, because, as opposed to operational programmes, "LIFE +" is under the direct management of the Commission. The final decision for selecting and funding of a project proposal is taken by a committee composed of representatives of all member states while national authorities have the sole task of bringing all the projects together and then submitting them for evaluation and approval. Admittedly, thus avoiding the many corruption schemes all too well known in the reports from Brussels as "bad practices", which have caused the suspension of grants under several European programmes. It is also worth noting that the implementation of only three out of the six contracts approved under LIFE + programme has begun. A week ago Makmetal Holding and Sofia Municipality presented one of the projects which aims to build a plant processing old TV sets and PC tube monitors. It's total cost comes to about EUR1.8 million, out of which EUR500,000 will come as an EU grant. The company will be located in Kremikovtzi and is to start work in early 2011. "It is envisaged that the facility can handle between 80 and 100 monitors an hour," said Irina Vasileva, director of waste development activities at Makmetal. Company's Executive Director Philip Alexiev said the company plans to build a plant for processing of old refrigerators to extract the chlorofluorocarbons (CFCs) from them, which can also expect certain financial assistance from the EU. The remaining two projects under the LIFE + programme are being implemented by the Bulgarian Society for the Protection of Birds. In mid-March environmentalists presented the "Life for Burgas Lakes" project, with a total budget of EUR1,775,006 , 75 percent of which represent the grant from the European Union. Partners of the organization are the Municipality of Burgas and Black Sea Salt AD, while the aim of the project is to provide long-term and self-sustained protection to the lakes Vaya, Mandra and Atanasovsko as well as to the diversity of species there. In parallel to this, the plan is to create management mechanisms for the protected areas under Natura 2000: Mandra-Poda, Vaya Lake and Atanasovsko Lake, which are part of the second most important bird migration route in Europe - Via Pontica. The work on the organisation's second project - "Protection of Imperial Eagle and Saker Falcon" was launched early in 2009 and will continue until the end of 2013. It is for over EUR2 million. From this sum LIFE + provides a total of EUR1.5 million. The initiative envisaged fitting satellite transmitters of the latest generation to seven royal eagles to provide scientists with valuable information on the movement of birds and the threats they face. Thanks to the GPS-system it has been found that in the last two months of 2009 three of the Imperial eagles were killed as a result of poaching or power lines incidents. In summer 2010 satellite transmitters will be placed on other seven birds. Probably much of the 2009 funds will remain unabsorbed. According to information from the Ministry of Environment and Water only four projects have been submitted, and judging from the results in previous years, there would be no wonder if none of them gets approved. The final decision of the European Commission which projects to finance should be made clear by the end of August. Meanwhile, in early May the procedure for projects for 2010 will be opened. The good news is that those who want to participate in the programme will be able to receive free technical assistance from Dutch experts for the preparation of documents in accordance with the requirements of the EC. Let's hope that this time, at last, Bulgaria will be able to absorb all the money set aside for it, which, according to preliminary expectations, will amount to EUR6 million. The BANKER BOX The programme "LIFE +" is aimed at supporting activities in protection of nature and biodiversity. It includes three main components: 1. Nature and Biodiversity - the share of the financial aid is up to 50% of all eligible costs, but in exceptional cases it may reach 75%. 2. Policies and environmental management - the main objectives are related to climate change, improving water quality and combating air pollution, etc. Grants here are limited to 50% of a project's costs. 3. Information and communication - dissemination of information and raising people's awareness on environmental issues, including measures to prevent forest fires. Funding from the programme can reach up to 50 percent of total costs. The European Commission is set to give priority to projects for halting biodiversity losses.
Brussels to give Sofia hard time over environment
Publication: Banker Weekly English
The case against Bulgaria in the European Court of Justice due to the problems with the capital city's waste and the storage of baled garbage, cannot be avoided, said Minister of Environment, Nona Karadzhova, after meeting with EU Environment Commissioner Janez Potocnik. She said the decision of Brussels to initiate the case was not justified because the state had done everything necessary regarding the problem and would provide evidence of this. Mr. Potocnik, however, was unequivocal that penal proceedings will be filed next month and the court will decide whether any sanctions should be imposed. Possible penalties could be really "stiff" At the end of 2009, Deputy Environment Minister Evdokia Maneva calculated that Bulgaria may be asked to pay BGN50,000 per day until it solves its waste management problems. As a matter of fact, the decision of Brussels to take action against Sofia has its logic. Whatever measures the Government may have taken, the facts are facts. After five years of promises for the building of a waste processing plant in Sofia, such a facility has still not started functioning. According to the latest schedule, installations have to become operational in 2012, but the problem is that even the contractor has not yet been selected. Not to mention that most of the accumulated baled garbage since 2005, whose volume comes to tens of thousands of tonnes, still remains at the sites in Kremikovtzi. It is true that bales are now gradually transported to different landfills in the country, but Brussels is more concerned that their period of storage expired in 2008 and since then they have been constantly polluting the environment. Regardless of the outcome of the proceedings in this case, however, large penalties will inevitably be imposed on Bulgaria because it has still not built its network of regional landfills for municipal solid waste. Of all the 56 landfills that according to the country's EU Accession Treaty should have been ready by July 16, 2009, only 27 are now operating. Moreover, the capacity of five of them is already running low and will need to be further expanded. This is the case with the Shumen site where on April 9, they started building a new depot. Back then, Deputy Minister Maneva admitted that the landfill could not be built before the end of 2012, because there was a significant delay with the preparation of the technical sketches. According to the plan of the Ministry of Environment and Water, only four sites will be put into exploitation by the end of this year - in Kardzhali, Botevgrad, Zlatitsa, and Kostinbrod while for 2011 another thirteen have been scheduled for launching. A year later, the remaining facilities have to be ready, including those in Varna, Veliko Tarnovo, Stara Zagora and Pazardzhik. However, the deadlines will be hard to meet, given that the construction of a landfill takes at least 3 to 4 years and some of them are still in the initial process of designing. Along with the issues around the unsolved waste problems, penal proceedings against the country are under way because of construction activities in the protected areas under NATURA 2000. The threat of further sanctions did not seem to worry the Cabinet. According to Minster Karadzhova there is no way for the state to demolish all buildings constructed in protected areas, and such extreme measures could be applied only against structures that have none of the necessary permits. "Despite the series of legal actions due to the indiscriminate construction near the Black Sea and country's mountains, we can speak only of demolition where there is illegal construction. We cannot remove buildings of bona fide possessors, even if we have doubts about the way permits have been received," said Mrs. Karadzhova and explained that if the Commission decides against Bulgaria, the country will have to pay its fines. It turns out that ordinary citizens will again have to pay for the peace and quite of selected businessmen basking hidden in villas and hotels surrounded by unspoilt nature. After the meeting between Minister Karadzhova and Commissioner Potocnik it turned out that Sofia's request to have and extended period within which its heating companies can operate without desulfurization (FGD) installations will not be accepted by Brussels. And it cannot be the other way around, since the EU now seems to be the world's most ardent protector of environment. It is interesting with what face Bulgarian rulers went to Brussels to ask for such compromises that will cause huge damages to the nature. Not only that Brussels didn't fine the country for its absolute carelessness in this case, but as it seems local politicians want to continue working the old way. The explanation of the Environment Minister was that the Government has made the request because of the unions and power distribution companies, but we should not omit the fact that this matter is also concerns the companies of businessman Hristo Kovachki: Brikel, the thermal power plants in Bobov Doll, the Maritsa 3 TPP in Dimitrovgrad as well as the heating companies in Sliven and Pernik.
Environment ministry completes assessment of waste-processing plant in Sofia
The environment ministry has completed the assessment of the project for the construction of a waste-processing plant in the capital city of Sofia and will send it for approval to the EC in near terms. The project is valued at BGN 359.4mn (EUR 183.8mn), of which BGN 256mn financing from the country's environment operational programme (85% EC funds and 15% state budget funds) and the remaining BGN 103mn will be secured by the Sofia municipality through a loan from the EIB. The project comprises construction of installation for mechanical biological treatment of household waste, installation for composting biodegradable waste, depot for residual waste and building all infrastructure facilities: road, water pipelines, and electricity installations. The completion of the project will ensure reduction of landfill waste in Sofia municipality by 60%. It will open 100 new jobs. Construction works should be completed by 2012. We remind that the EC has started a procedure against the state for breach of EU waste law as a result of the inadequate household waste disposal facilities in the capital city. The EU Commission has filed a lawsuit in the European Court of Justice after several official warnings to comply with the law.
Bulgarian businessmen to cooperate with Pakistan's Gujrat
Bulgaria’s Chamber of Commerce and Industry (BCCI) and its counterpart from Pakistan’s city of Gujrat have signed a cooperation agreement.The agreement was signed at a business forum held Tuesday in Sofia by the presidents of the two chambers, Tsvetan Simeonov from the BCCI, and Muhammad Imtiaz Ahmed from the GCCI.Pakistan’s Ambassador to Bulgaria, Mrs. Kasar Ahsan Igbal, was also part of the 17-member Pakistan delegation.Yuliyan Balchev from the InvestBulgaria Agency presented to the Pakistani businessmen the opportunities for investments in Bulgaria.Jalal Hassan from the Punjab Board of Investment and Trade has invited Bulgarian businesses to invest in the developing energy sector and infrastructure of Pakistan. The Pakistani delegation has pointed out that the investments in their country’s economy could be used as a base for access to the Chinese market.The BCCI Chair Tsvetan Simeonov said he hoped to see a boost of Bulgaria’s trade relations with Pakistan over the coming years. He emphasized the unfortunate fact that the Pakistani delegation had to be downsized because Bulgaria applied certain clauses of the Schengen agreement.
Works on Belene nuclear power plant to go on after strategic investor selection
The construction of the 2,000 MW nuclear power plant in the Danube town of Belene will continue after the selection of a strategic investor, economy and energy minister Traycho Traykov said. The statement implied that the government had rejected the proposed financing from Russian state nuclear energy company Rosatom worth EUR 350-450mn this year and EUR 1-1.5bn next year, which was to be repaid at a later stage by the selected strategic investor. At the end of March, state-run Bulgarian Energy Holding (BEH) said that six companies had submitted ｅxpressions of interest to consult the plant construction project and expected to select a winner and sign a contract by mid-June. The consultant is to prepare a project development plan and also update its financial aspect. Afterwards, it should prepare a procedure for investor selection. In February 2008, Russian AtomStroyExport (part of Rosatom) signed a EUR 4bn contract to build the plant, but later estimated that the construction and the launch of the two units will cost up to EUR 6bn.
Bulgarian business believes corruption levels go down
The cases of corruption and malpractice in Bulgaria's ministry of regional development have decreased within the ruling of the incumbent cabinet, 200 representatives of companies and 50 mayors and their deputies assure. The data is from a research made by GfK and commissioned by the ministry of regional development. According to the business corruption is the factor that impedes mostly their work (28,3%), followed by delayed state payments (20,1%), the lack of urban development plan (10,9%) and bad infrastructure (10,1%). The main problems in the work of business companies with the state administration are the incompetence of the civil servants and the unclear laws. In the opinion of business representatives the bad condition of Bulgarian roads won't improve in the next 5 years.
Bulgarian foreign minister to visit USA, western Balkans, Syria
Foreign Minister Nikolay Mladenov is paying a working visit to the United States from 28 April to 4 May, the ministry spokesperson Vessela Cherneva said at the regular briefing Thursday [ 22 April].On April 28 Mladenov, who is currently taking part in the informal meeting of NATO foreign ministers in Tallinn, Estonia, will take part in the Atlantic Council Gala Dinner in Washington. on April 29 Mladenov will deliver a lecture at the Centre for Strategic and International Studies in Washington.In New York Mladenov will take part in the eighth Review Conference of the Parties to the Treaty of Non-Proliferation of Nuclear Weapons. He will also confer with UN Secretary General Ban Ki-moon.From New York Mladenov will leave for Skopje - the first stop in his planned tour of the Western Balkans. There he will meet with his Macedonian counterpart, the prime minister and parliamentarians. In Skopje he will also unveil an exhibition titled "Sofia's Roofs" of BTA photographer Bistra Boshnakova. Mladenov will also visit Tetovo.On 6 May the Bulgarian foreign minister will leave for Belgrade where he is scheduled to have official meetings. He will also meet with representatives of the Bulgarian community in Dimitrovgrad.The next stop will be Montenegro (10 May), followed by Kosovo (May 11), Bosnia and Hercegovina (12 and 13 May) and Albania (14 May).Mladenov will also be part of the official delegation accompanying Prime Minister Boyko Borissov on his official visit to Syria on 24 and 25 April.
Greeks move their money and business to Bulgaria
,,Greeks withdraw their savings from the local banks and deposit them in banks in Bulgaria. At the same time, over 2,000 Greek companies have been registered in Bulgaria due to the better tax system and conditions for business development," stated Bulgaria's Minister of Economy, Energy and Tourisn, Traycho Traykov during a lecture in the American University in Blagoevgrad. ,,The reason for the Greek invasion in the banks in Bulgaria is the stable economic situation in this country and the crisis which has seriously overcome Greece as well as the higher deposit interest in Bulgaria. The relations between Bulgaria and Greece develop in an excellent way," Minister Traykov underlined.
INVESTMENTS:
Spanish Electra to build 100 MW wind power park in central Bulgaria
Spanish energy holding Electra announced plans to build a 100 MW wind power park in the central part of the country and has already bought 5,000 decares of land, local financial and business news portal Investor.bg reported. The company started activities in Bulgaria about six months ago. In December, it said it had earmarked a total EUR 650 M for the acquisition and development of renewable energy projects in the country by 2012, mainly wind-energy projects. A total 700 new jobs will be created. Electra operates wind parks with a total capacity of 480 MW in southern Bulgaria , a 10 MW unit for electricity production from biomass in the central part of the country and a biodiesel production factory with an annual capacity of 30,000 tons near the northern Danube city of Vidin . The company announced plans to place its equity on the Spanish stock exchange by end-2010 and invest all raised funds from the IPO in Bulgaria.
Harvard graduate heads Bulgaria's Investment Agency
Mr. Borislav Stefanov, who has received his higher education at the prestigious Harvard University and has so far served as deputy head of the investment agency, has been nominated to head it, after incumbent chief, Stoyan Stalev, tabled resignation for personal reasons. The news was announced by energy and economy minister Traycho Traykov.
"Mr Stefanov is a well-educated man with broad experience, and he also works well with representatives of the business," Mr. Traykov said."We have prepared some amendments to the regulation with the Investment Encouragement Act aimed at bringing more investments to the economy, which will be submitted for discussion in Plenary Hall soon," he said also.
Russians to build power plant in Bulgaria
Russian Business group SINTEZ plans to built a 200-megawatt power plant in Bulgaria. According to the consortium's press office quoted by the electronic issue Big Power, the options for the power plant's construction have been discussed at a meeting of SINTEZ CEO Andrey Korolyov and Bulgaria's deputy minister of economy and energy Maya Hristova in Sofia. If constructed, this will be SINTEZ's second power plant on the Balkans after the one built in Skopje.
Largest Bulgarian shopping center 'The Mall' opens in Sofia
The largest shopping center in Bulgaria known as ‘The Mall’ was inaugurated in Sofia Tuesday night.The Mall is located at 115 Tsarigradsko Shose, one of the major Sofia boulevards. Its 66 000 square meters of commercial space make it the largest shopping center in the country.The Mall, which features 185 stores of top Bulgarian and global brands, restaurants, a parking lot with 2 800 spaces, the first Carrefour hypermarket in Sofia, and an ‘Arena’ cinema complex, was opened by Bulgarian Prime Minister Boyko Borisov and Sofia Mayor Yordanka Fandakova.The opening was attended by representatives of the Restis family from Greece, which is the owner of ‘The Mall’ through its international real estate private equity group Assos Capital Ltd. High-ranking executives of the Garrefour Group and the Marinopoulos Group were also among the guests.The new shopping center was formally opened for clients on Wednesday, April 21, 2010. According to the owners, The Mall is aimed at offering “a new lifestyle to a wide range of consumers – from teenagers and yuppies to family couples with kids and elderly people.”Sofia’s newest mall has created a total of 1 500 new jobs; 400 of these are at store of Carrefour, the largest retailer in Europe and the second largest in the world.The Carrefour hypermarket at The Mall is the chain’s first in the Bulgarian capital Sofia, and the largest Carrefour store in Bulgaria. It is located on an area of 9 000 square meters, and offers over 50 000 products.The new shopping and entertainment center also has an Arena Cinema Complex with 10 halls and a total of 1 800 seats, a bowling center, and a gym,Its restaurants and fast-food establishments include Fancy, Archiv, Nordsee, Burger King, KFC, BMS, Subway, Afreddo, Patafritas, Gyros and Olive Oil & Oregano, Kate, Due Cavalieri, Starbucks, Lavazza, Caffeine, Flo Café, and Fashion Victims.The top global fashion and cosmetics brands represented at The Mall include Zara, Massimo Dutti, Bershka, Stradivarius, Pull and Bear, Peek&Cloppenburg, GAP, HUMANIC, Sephora, Douglas, New Yorker; Marks & Spencer, Esprit, Nike, Adidas, Etam, Seven Seconds, Palmers, Benetton, Motivi, Elizabeth, Puma, Terranova, Oviesse, Calliope, Andrew’s man, Mexx, Guess, Capasca, Sisley, Camel, Deichmann, Furla, Max Mara, Geox, Lacoste, Marlboro Classic, Playlife, Intersport. It also features electronics stores such as Technopolis, Multirama, Orange, Inmedio.The Mall is located on six levels, three of which are underground. It has been designed by architect Ilian Iliev from ‘Planning Studio’, the construction was carried out by the GEK TERNA Group, and the property is managed by Colliers International Bulgaria.
Waste water treatment plants opened in Sevlievo, Lovech
Prime Minister Boyko Borissov, Environment and Water Minister Nona Karadjova and EU Funds Minister Tomislav Donchev officially unveiled waste water treatment plants in Sevlievo and Lovech (both in Northern Bulgaria) on Thursday. The facilities were financed under the EU ISPA programme. The Prime Minister said in Sevlievo that the building of such environmental facilities has two positive effects. on the one hand, they serve to protect the environment, and on the other hand, this is the best anti-crisis measure as companies are engaged in specific construction work and new jobs are created.The Sevlievo plant is worth 13 million leva. In celebration of Earth Day (April 22), the Prime Minister and the Environment Minister planted two birch trees in the area of the plant.The plant in Lovech, worth 18.7 million euro (36.6 million leva), will service a population of over 50,000. Seventy-five per cent of the funding came from the EU and the remaining 25 per cent from the national budget. The facility will treat 16,000 cubic metres of water daily
COMPANIES:
Bulgarian company TED takes part in world's largest furniture expo
Bulgarian producer TED has taken part in the largest furniture expo in the world, Salone Internazionale del Mobile in Milan, Italy.TED-BED Jsc, which is famous in Bulgaria for its TED mattresses, is the only Bulgarian company invited by the organizers to participate in the expo.At the Salone Internazionale del Mobile in Milan, TED presented its new collection of beds branded as Sensi Scandia. The new brand is yet to be presented on the Bulgarian market.“The invitation to participate in the expo on part of the organizer iSaloni Milano is a great honor for our company, a real recognition for our team and our work to develop unique high-quality products. We had the opportunity, together with world-famous and leading companies, to demonstrate the capabilities of a Bulgarian furniture producer,” said Dora Andreeva, marketing manager of TED.“Established furniture companies such as Legget & Platt, Hilding Anders, Jensen, Bedfactory, Tempur, Cocomat, Scapa, Revor Bedding, Recticel, have expressed their respect for a Bulgarian producer that dared to be innovative in a financially hard year,” she stressed.The Sensi Scandia collection of TED-BED Jsc is inspired by a Scandinavian type of bedroom furniture. It has been developed by TED in cooperation with partners from Germany, the Netherlands, and Denmark. They are made of environment friendly materials.The Bulgarian furniture maker TED has presented its new products at three other major expos in Europe since the beginning of 2010 – in Frankfurt, Koln, and Stockholm.TED-BED Jsc is the largest mattresses producer in Bulgaria. Its production facilities have an area of 24 000 square meters, making it one of the three largest mattresses maker in Europe.The company has a distribution network of 900 stores in Bulgaria, and exports its products to the UK, Switzerland, Belgium, Germany, the Netherlands, Croatia, Slovenia, Slovakia, Estonia, Latvia, Lithuania, Ireland, Ukraine, Greece, Romania, and Macedonia.
U.S. Honeywell opens European system centre in Sofia
U.S.-based company Honeywell will open its service centre for Europe in the Bulgarian capital city of Sofia today (Apr 20), financial and business news portal Investor.bg reported. The company will produce in Sofia its digital system Experion PKS, which is a high-tech product for management and automation of uninterruptible processes in refineries, heating utilities, chemical plants, etc. It has been certified in all European countries. The production site is located near the Sofia international airport on 1,650 sqm of land while office areas cover some 1,700 sqm. Honeywell set up a local subsidiary in 1993. The company's annual turnover averaged some USD 10mn in recent years, of which USD 2mn from export sales. Turnover is forecast to increase to USD 50mn for 2009, some USD 45mn of which will be from exports. The new system centre may raise turnover to USD 85mn with exports accounting for 90% of total. The investment in the project has not been unveiled yet.
Dutch company sets up logistics hub in Bulgaria's Sevlievo
Dutch logistics company Jan de Rijk has opened its largest international office in the central Bulgarian town of Sevlievo.Jan de Rijk plans to invest at least EUR 3 M in its logistics hub in Sevlievo over the next three years, the Pari Daily reported.The Dutch logistics company has 27 offices, 15 of which are international. It has created 142 new jobs in Sevlievo at the administration and the transport services provided by its new center.The company management is quoted as saying that it intends to develop further its base in Bulgaria, and has praised the taxation policies of the Bulgarian government.Jan de Rijk Logistics Bulgaria registered a 2009 turnover of BGN 12 M, and plans to reach a turnover of BGN 36 M in 2010. The Dutch company provides logistics services to large multination corporations including producers of food, tobacco products, and pharmaceuticals.
French company Saint-Gobain Weber builds 2nd factory in Bulgaria
French company Saint-Gobain Weber started Wednesday the construction of its second factory in Bulgaria.The ground-breaking ceremony for the factory located near Izvorsko village, Aksakovo Municipality, close to Varna, was attended by Bulgaria’s Regional Development Minister Rosen Plevneliev.The second factory to be built by Saint-Gobain Weber in Bulgaria will also be producing dry construction mixes.Saint-Gobain Weber entered the Bulgarian market in 2001. In 2004, it opened its first storage facility, and in 2005 it acquired the Bulgarian maker of dry construction mixes Metakol stationed in the city of Ruse.The first factory built by Saint-Gobain Weber in Bulgaria was inaugurated in April 2009 by then Bulgarian PM Sergey Stanishev. It is located near the town of Kostinbrod outside of the capital Sofia. The company’s total investment in it was EUR 10 M, and it created 20 jobs.The French company Saint-Gobain Weber is active in 60 countries worldwide, and specializes in the production of construction materials and providing innovative energy saving solutions. It has about 200 plants around the world.
THE CRISIS:
Bulgaria to remain in the grip of stagnation in 2010 – IMF
Stagnation in the Bulgarian economy will persist through 2010, according to forecasts by experts of global rating agency Fitch and the International Monetary Fund (IMF). The IMF lifted its 2010 outlook for Bulgaria’s GDP to 0.2% growth, regional IMF representative for Bulgaria and Romania Tony Libek told SeeNews. The IMF previously expected the Bulgarian economy will contract by 2.5% for 2010. Libek said there is obviously light at the end of the tunnel, adding that recovery hinges on exports. The IMF expects Bulgaria’s current account deficit will shrink to 6.3% of GDP versus 9.4% of GDP at the end of 2009. The IMF identified soaring unemployment as one of the toughest challenges for the Bulgarian economy. The jobless rate is expected to hit 9.2% of the workforce by the end of this year. For 2011, the IMF expects the Bulgarian economy will expand by 2%. Fitch forecast the Bulgarian economy will notch up zero growth for 2010, said Michael Steinbarth from Fitch's Financial Institutions team. The agency also predicted Romania will be one of a handful EU countries to pull off economic growth for this year. In its financial stability report published on Tuesday, the IMF singled out government debt as the severest threat the financial system is faced with.
Crisis snapshot: profits drop 21% as 115,000 jobs go March 2010
Construction, real estate and financial services bore the brunt of the downturn in 2009 and remain in its grip in 2010, showed the first-quarter breakdown by the National Revenue Agency (NRA). The quarrying industry and commerce ranked among the five sectors whose profits were worst hit by the market meltdown, while transportation and agriculture ranked in the top five by the sharpest drop in turnover. As a result, budget revenue collected by the NRA between January and March 2010 collapsed by BGN 843 million from the same period of last year as another 115,000 people joined the ranks of the unemployed, according to NRA data. The revenue agency will be collecting by May 5 employers’ second-half outlooks as it ponders an increase in the value-added tax (VAT) to 22% from the current 20%. Finance minister Simeon Djankov said last week that before drawing up a more precise forecast about implementation of its revenue targets, the Bulgarian government will carry out a poll in the business community. Company owners and managers from the crisis-struck sectors polled by Dnevnik are mostly bearish about their business prospects this year. only the quarrying industry keeps its fingers crossed for a recovery in the second half but just a modest one. The NRA last autumn also attempted to seek feedback from companies but only polled big taxpayers and gathered scanty information. This is the first time the revenue agency has published a breakdown by sectors. The statistics compares tax revenue collected in the first quarter of 2010 and the corresponding period of 2009; social security costs; revenue from personal income tax. The corporate tax comparison reveals that the quarrying sector generated 49% smaller revenue from the year-ago period. Tax receipts slipped 37% year-on-year from the finance and insurance sectors, commerce, the auto market and real estate. Profit tax revenue tumbled by 21% on average for the private sector overall. Company turnover was also ravaged by recession, with the finance sector suffering a 24% increase and construction down 22%. on a brighter note, some sectors pulled off increases, with the quarrying industry bringing in eight times more VAT revenue, translating into a matching growth in sales.
Bulgaria business demands tax amnesty to battle crisis
The Bulgarian business has asked for forgiveness of tax liability as a means to counteract the economic crisis.The announcement was made Thursday at the extraordinary meeting of the Consultative Council of the National Revenue Agency (NAP).The Council is comprised of 50 representatives of the biggest branches of the Bulgarian economy.Bulgaria’s Finance Minister Simeon Djankov and the Executive Director of NAP, Krasimir Stefanov, also attended the meeting.On Thursday, the business representatives asked for tax amnesty of the undeclared revenues of their legal business and have suggested that all transfers to offshore zones be taxed.This last measure is said to be a good practice in France and Spain which have already introduced 25% taxation of the offshore transfers.According to the Bulgarian business, the endorsement of the measure will ensure greater economic transparency in the country.At the meeting an agreement was reached that Bulgarian branch organizations will submit a preliminary revenue forecast, including expected taxes, by May 5.NAP presented on Thursday statistical data of the budget revenues for the first quarter. The value-added tax revenues of the Bulgarian government have dropped by about BGN 800 M when compared to those of 2009.The construction business, tourism and the mining industry have been most affected by the financial crisis, according to experts.Bulgaria’s Finance Minister Djankov, however, said that the country is starting to come out of the crisis. Forecasts are that in the second quarter of the year the drop will stop and there will be a growth in the economy.Two weeks ago Djankov announced that VAT company refunds for the first three months of the new year amount to about BGN 400 M, and that an amount of around BGN 308 M remains to be refunded to private businesses.The fewer state revenues at the beginning of 2010 have urged the Borisov government to seek emergency measures to raise money or to cut state spending in order to alleviate the situation of the state budget.