BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 23 – 30 APRIL 2010 )
Sections/headline briefs:
MACROECONOMY:
· Berlusconi: South Stream is a good guarantee for Bulgaria
· Foreign demand for Bulgarian welded pipe said to be strong
· Bulgarian cabinet vows to modernize defence industry
· More Bulgarian exporters show signs of recovery
· WB concerned over Greece impact on Bulgaria
· Danske Bank: Bulgaria, Romania and Hungary most exposed to Greece
· Bulgaria business climate brightens up in April 2010
· Politicians, experts debate future of Bulgarian nuclear plant project
· Reuters: Bulgaria rejects Russian loan for nuclear plant
· Bulgarian, Syrian ministers discuss electricity export
- Bulgaria expects to receive EUR 70 M from CO2 quotas
· Bulgaria Economy Minister takes business delegation to Israel
- Bulgarian local authorities take over mineral water springs
· Israel shows interest in Bulgarian mineral water
- Factbox: Bulgaria's most popular spa resorts
INVESTMENTS:
· Bulgaria and Qatar to make $ 500 million joint venture
· EBRD will help finance a 115 M euro project for nine hydro power plants in Bulgaria
· EBRD may lend EUR 47 M to non-ferrous metals plant KTsM
· Bulgaria grants top investor status to wind park, pipes plant
· Bulgaria's Ecobulpack invests EUR 1.6 M in waste treatment plant
· Bulgarian drug maker Sopharma starts sales in Austria
COMPANIES:
· LG Electronics Q1 2010 share on Bulgaria's cell phone market rises to 13%
· Wind energy giant Suzlon targets Bulgaria growth
· 23 Month waiting list for construction permit for Bulgarian wind park
· Plovdiv International Fair director: Bulgaria's participation in Expo 2010 Shanghai might fail
· Three companies vie for EUR 187.4 M railroad project
· Bulgarian cement plant Devnya gets quartz sand concession
· Winslow Group resumes EUR 102.3 M residential project in Sofia
THE CRISIS:
· Bulgaria FinMin: Balanced April budget to signal end of Crisis
· The best anti-crisis measure is to absorb European funds: agriculture minister
· Bulgaria jolted by Europe’s second hardest crash in lorry sales
· Crisis squeezes lending growth over 20 times in 18 months
· Bad credits eat up bank profits
· Crisis obliterates Bulgarian millionaires
Reported by:
Evgeni Mitev
Research Manager, KOTRA Sofia
Korea Trade-Investment Promotion Agency
Commercial Section of the Embassy of the Republic of Korea
MACROECONOMY:
Berlusconi: South Stream is a good guarantee for Bulgaria
South Stream gas pipeline is a good "guarantee that countries like Bulgaria, Romania and Italy, will not be left without gas supplies", as it previously happened due to the conflict between Russia and Ukraine," stated Italian PM Silvio Berlusconi in the company of his Russian counterpart Vladimir Putin who visited Milan on Monday. In his turn PM Putin specified that the big infrastructure projects which enhance Europe's energy security should not be delayed.
Foreign demand for Bulgarian welded pipe said to be strong
Demand for Bulgarian welded pipe from foreign markets is strong and prices for the product are expected to continue rising until at least June, a representative of Bulgarian Metal Tubes (BMT) tells Steel Business Briefing.Hot-rolled welded pipe prices have increased by some GBP 200/tonne in the last two months on account of rising prices for hot-rolled coil, which are largely expected to continue increasing, with many welded pipe buyers keen to purchase material while they can get it at a lower price, SBB is told.Orders for Bulgaria’s welded pipe are especially strong from Germany, Hungary, Poland, Romania and Lithuania, but purchasing within the domestic market remains low. BMT tells SBB this is due to the reliability and financial strength of foreign buyers and the attractiveness of Bulgarian prices which are lower than those in their own markets.
“We have sold everything for April and May production but only to foreign buyers,” BMT says. “People in these countries have money so they want to invest now in cheaper material before it grows in price,” it continues. Current prices for hot-rolled welded pipe are GBP 540/t ex-works but are expected to rise to GBP 650/t for June production.The installation of BMT’s new rolling mill, set to increase output by 600-700 t/month, has been delayed and is now expected to be completed by the end of the year. The company’s production capacity is 24,000 t/y.
Bulgarian cabinet vows to modernize defence industry
The government will do its best to ensure development and modernization of the defence industry, said [on] Thursday [29 April] Svetoslav Spasov, secretary of the Interdepartmental Council on the Issues of the Military Industrial Complex and the Mobilization Readiness of the Country and political adviser to the prime minister.Before 10 November 1989 some 150,000 people were employed with the defence industry, compared with 15,000 now.The Interdepartmental Council's official website was presented at the Council of Ministers on Thursday.Defence Minister Anyu Angelov said that an updated wartime plan and budget, and a final decision on the level and need for contingency reserves and wartime stockage will be drafted by the government midterm. According to him, stocks exceed by far the needs of the army and of other defence structures.The Defence Ministry and the armed forces use up as little as 5 per cent of Bulgaria's military defence output, admitted Angelov. The remaining 95 per cent are exported.Currently some BGN 2.5 M are allocated for research activities in the area of defence, said Spasov. According to him, a tax could be levied on sales and exports of Bulgarian arms manufacturers with the proceeds going into a scientific research fund under the Defence Ministry.Economy, Energy and Tourism Minister Traycho Traykov said that an interdepartmental group will be set up to draft a strategy on Bulgaria's military industrial complex. He also said that Bulgaria's annual military exports total USD 140 M in recent years against USD 800 M in peak years.
More Bulgarian exporters show signs of recovery
Another two Bulgarian firms shipping the bulk of their produce abroad gave out signals they might be getting the upper hand over the market upheaval. Fertiliser maker Neochim and vet products maker Biovet expect to scale up sales by 50% and 10%, respectively, in 2010. Biovet was in positive territory also in 2009, whereas Neochim saw sales slide thanks to dampened demand and pressure from the January 2009 gas crisis. The low base enables the company to make forecasts about stronger growth this year. Recovering foreign demand and market expansion are expected to shore up both Biovet and Neochim for 2010. Neochim says ammonium nitrate sales could surge by approximately 60% to BGN 130 million—BGN 140 million. The product accounts for some 90% of the company’s turnover. The share of exports should increase to 40-45% of total revenue from a critically low 10% in the recession-stricken 2009. Biovet plans to launch a foray into new markets such as China and other parts of Asia as well as Australia and Africa. The company will also work to grow its foothold in the rapidly expanding markets in Central and Eastern Europe. Biovet exports around 90% of its produce, nearly 60% of this in Europe. The company booked sales of BGN 116.7 million and a profit of BGN 5.6 million for 2009, up a respective 12% and 10% year-on-year.
WB concerned over Greece impact on Bulgaria
The World Bank is closely following developments in Greece because of possible implications in neighboring countries, including Bulgaria, a senior World Bank official has said."We are monitoring the situation in Greece very closely because it has important links with a number of countries in the region in the Balkans through different channels," Philippe le Houerou, World Bank Vice-President for Europe and Central Asia, told a news conference.He pointed out that Greek banks were active not only in the Balkans but also in Bulgaria."We do hope the situation will improve rapidly ... seen from the side of our partner countries where we have programs," le Houerou said.Greek banks hold nearly a 30% of the Bulgarian banking market, a 20% share of the bank loans and one-third of all deposits and called on the Bulgarian central bank to use the available tools to keep the deposits in Bulgaria.Some of the biggest lenders in Bulgaria are managed by Italy's UniCredit, Greece's National Bank of Greece, Hungary's OTP and Austria's Raiffeisen.Other Greek banks present in Bulgaria include EFG Eurobank, Piraeus, Emporiki and Alpha Bank.Experts have warned that Bulgaria, the European Union member boasting one of the the bloc’s smallest budget deficit, risks seeing its banks sucked under by the fiscal sins of neighboring Greece,Last month Bulgaria's central bank assuaged fears over funds outflow from Greek bank subsidiaries in the country to headquarters in Greece, saying this is part of the free movement of capital.
Danske Bank: Bulgaria, Romania and Hungary most exposed to Greece
Bulgaria, Romania and Hungary are the eastern European nations whose financial markets are most exposed to contagion from the Greek debt crisis, Lars Christensen, chief analyst at Danske Bank, was quoted by Bloomberg as saying. ,,Given the seriousness of the situation, we recommend that investors stay away from the central and eastern European markets for now," Christensen wrote in a report yesterday. Foreign analysts are warning that Bulgaria might suffer a spillover from the Greek turmoil in the financial sector as Greek banks control nearly 30% of its market and could be forced to draw back resources from their Bulgarian units any time. Furthermore, the Greek woes might affect trade relations between the two countries. Greece is a core market for Bulgarian exporters and a prolonged recession could stifle Bulgaria's export growth. Bulgaria's credit default swap (CDS) currently stands at 235 basis points, which is lower than cash-strapped eurozone countries such as Spain and Ireland. The figure has more or less withstood pressure from the Greek crisis, which escalated at the beginning of the year, even though the International Monetary Fund (IMF) in its latest outlook places Bulgaria among the countries most dependant on Greek developments.
Bulgaria business climate brightens up in April 2010
Managers’ expectations in all sectors of the Bulgarian economy improved the strongest since January, with business conditions perking up 4.4 points in the fourth month after a modest drop in the third, flat in the second and around 3% increase in the first, show data of the National Statistical Institute (NSI).“It’s only by a fraction, but we’re starting to bottom out,” finance minister Simeon Djankov says in a statement. The upswing has spilled into all sectors of the economy including industry, construction, retail and services. Executives in the industrial sector are most upbeat about business conditions, keeping fingers crossed for a rise in output and for more favourable environment both at home and on foreign markets. Average workload capacity in the industrial sector rose to 68.9% in April, the highest since the end of 2008. “I’m sure this rebound is fueled by the steps we made to quickly pay off debts to businesses and out decision to retain the flat tax rate no matter that this is bad on the fiscal front,” Djankov adds. on the flip side, insecurity remains, with approximately 15 percent of the respondents in the industrial sector planning to continue staff downsizing. Despite the soaring number of customers with overdue payments, the building sector companies expect orders will bounce back in the next here to six months. Retail and services executives have also changed into pink glasses, but both sectors are much more pessimistic about economic stability than the industrial sector.
Politicians, experts debate future of Bulgarian nuclear plant project
The participants in a discussion on the future of the Belene N-plant project held Monday [ 26 April] in Parliament, rallied round the need to put diversification at the core of Bulgaria's energy policy, including the decision it should make about Belene. Entitled "The Belene N-Plant project and European energy security: the Bulgarian dilemmas", the event was organized by MEP Nadezhda Neynski and brought together experts, MEPs, Bulgarian politicians, and diplomats.The Belene N-Plant project should be put up to discussion and it is necessary to reiterate all facts and consider all important questions relating to the project, Neynski said in her opening remarks. She stressed that GERB's [Citizens for Bulgaria's European Development] government is now faced with a number of questions, including the project's actual costs, possible financial claims if it is cancelled, the future electricity market, the Bulgarian position on Russia's proposal to finance the project and the project's impact on the environmental safety of the Belene region.Neynski stressed that all issues related to the project may be reduced to one single question: "Is there any conceptual policy behind the project?" According to her, there are three main aspect which should be considered - the project's profitability, energy safety, and the project's geopolitical impact.A former European Parliament rapporteur on Bulgaria, MEP Geoffrey Van Orden said that the Bulgarian Government should take a decision regarding the N-plant project sticking to the principle of maximum diversification. He believes that the Nabucco gas pipeline project is a possible alternative and will allow for deliveries of Caspian gas.He stressed that Bulgaria may become an energy hub on the Balkans, but needs a clear energy strategy based on diversification, to achieve this.Van Orden said that Bulgaria should be compensated for the closure of the four units of the Kozloduy N-Plant and should be treated on an equal footing with other states. The shut-down of Units 3 and 4 until 2013 will cost 860 million euro, he recalled.Union of Democratic Forces leader and Blue Coalition Co-Chair Martin Dimitrov said that the Belene N-Plant project should be put on hold until a national energy strategy is adopted. According to him, the ill-advised spending of 2,000 million leva is not a reason for spending another 10,000 million leva in the same way. The project should be suspended until a strategic investor is found, he added. Those who are responsible for squandering the money spent so far should be held to account, Dimitrov said.Angel Dimitrov of the Association for Foreign Policy commented that Russia's breakthrough in Belene would have a geopolitical impact and would "evoke imperial reflexes." He noted that the Belene project will "burden the Bulgarian society both economically and politically." He recalled that Turkey is building its own nuclear power plant and will consequently stop buying Bulgarian electricity.Ognyan Minchev, director of the Institute for Regional and International Studies, said that there could be no energy security if energy sources are not diversified. "Any claims that opposition against the Belene project is opposition against Russia are not justified, since there are concerns about an energy monopoly which is already formed and not about the fact that it is Russian," Minchev said, explaining that all energy resources in Bulgaria come from Russia anyway.Vladimir Kazanchev, an atomic energy expert and senior adviser with the Russian Embassy in Sofia, stressed that the Russian financial offer for Belene carries no commitment for Bulgaria's budget. Some say that by taking the offer Bulgaria will make Belene a Russian project but that it is simply not true: it will remain Bulgarian even with Russian financing, Kazanchev argued.Deputy Economy, Energy and Tourism Minister Maya Hristov [Khristova] said that right now Sofia is looking for European co-participation in Belene and not for Russian funding.Two other participants in the discussion, Ambassador James Warlick of the United States and Jorge Fuentes of Spain, were adamant that the Sofia decision should be transparent and based on market and security considerations.Ambassador Warlick said that the government should consider the implications for energy security and make its decision transparently and openly so that Bulgarian people will know where their money goes. He stressed the importance of safety and said that Bulgaria's decision will have implications for the energy security of all Central and Eastern Europe.Ambassador Fuentes, whose country currently holds the EU Presidency, said that any decision should prioritize security, diversification, and the market position of Bulgaria. He said that his country will follow closely the Bulgarian debate on the issue and offer advice. He added that Bulgaria's action should comply with the EU policy and stressed the importance of encouraging good relations with Russia.Construction for the original N-plant project on the Belene site began in 1987, but was discontinued in February 1990 for lack of funding. The project was first suspended by Parliament after ecologist protests in mid-1991 and then finally abandoned as "technically unsound and economically unviable" by Council of Ministers Decision on 21 May 1997. The project was revived by Council of Ministers Decision on 19 December 2004.An agreement on design, construction and commissioning of Bulgaria's second nuclear power plant (with two Russian-made third-generation light water PWR AES92 VVER-1000 Model B466 reactors, each of 1,049 MWe rated capacity, total installed capacity 2,000 MWe) was signed with Russia's AtomStroyExport JSC (part of Rosatom) in Sofia on 18 January 2008.Work on the facility has now been put on hold for lack of funding after Germany's RWE Power AG, selected as a strategic partner in a 49-51 joint venture with the state-owned National Electric Company to build and operate the facility, withdrew from the project in October 2009.Russia has offered to provide up to 2 billion euro for continuing the project activities until a strategic investor is selected and transfer thereto its initial technical share in the project. Bulgaria has not accepted the proposal.
Reuters: Bulgaria rejects Russian loan for nuclear plant
Bulgaria has for now rejected a Russian offer to fund its Belene nuclear power plant and will instead focus on finding a strategic investor for the project, Economy and Energy Minister Traicho Traikov said on Wednesday, cited by Reuters. In February, Moscow offered to provide up to 1.9 billion euros to recession-hit Bulgaria to keep the troubled project rolling and Sofia then agreed to pave out details of a financing deal. But both the European Union and the United States have since reminded Sofia about its already heavy dependence on Russian gas and oil and encouraged the Balkan country to seek Western investors for the nuclear project. "After a strategic investor for Belene is chosen, the offer of the Russian partners might be included in the financial structure of the project," state news agency BTA quoted Traikov as saying. "We have already informed our Russian partners," he added. The new centre-right government, elected last July, has questioned the need for Belene as Bulgaria did not need so much power capacity for domestic use and because of the project's costs, which it said could reach 10 billion euros ($13.32 billion). The cabinet put the project on hold after German shareholder RWE pulled out last November and said it will be carried out only if backed by strategic investor, pointing out that Bulgaria will not spend more public funds on it. It is reluctant to abandon Belene altogether due to the hundreds of millions of euros already invested in it and the compensation it would have to pay to the Russian contractor -- state-owned Atomstroyexport. State power utility NEK, which oversees Belene, will pick in June a consultant to help it organise a tender for investors and structure the financing for the plant in June. Traikov had earlier explained the decision to possibly take a Russian loan by saying the project could lose its appeal if it was entirely frozen in the coming year, during which Sofia hoped to find a strategic investor. Russian officials have said they might seek a majority stake in the plant for the funding, an option Sofia has rejected as unacceptable.
Bulgarian, Syrian ministers discuss electricity export
Economy, Energy and Tourism Minister Traycho Traykov held talks in Damascus on April 25 with Syrian Minister of Electricity Ahmad Qusay Kayali, Minister of Economy and Trade Lamia Mari Assi and Minister of Tourism Sadallah Agha Al-Qala, Traykov's Ministry said in a press release Monday [ 26 April]. Traykov was a member of the Bulgarian Government delegation led by Prime Minister Boyko Borisov which paid an official visit to Syria on April 24-25.Traykov and Kayali discussed the shortage of electricity in the Arab Republic and the possibility for Bulgarian companies to participate in the trade in electricity on the Syrian market. At the moment Syria imports electricity from Turkey. Bulgarian companies may also join engineering projects for developing the Syrian power grid, says the press release.The talks with the Minister of Economy and Trade, Lamia Mari Assi, focused on the willingness of the two countries for the Bilateral Commission for Economic Cooperation to resume its activity and thus provide a fresh impetus in the development of the relations between Bulgaria and Syria. Traykov and Assi agreed that the mixed commission will hold a session in the autumn.The participants in the meeting Traykov and Al-Qala noted that in Syria Bulgaria is popular as a destination for balneo tourism and affordable seaside holidays. The two countries can attract tourists with their rich cultural heritage, the sides found.
Bulgaria expects to receive EUR 70 M from CO2 quotas
“Bulgaria’s 133 installations were allowed to emit six million tonnes of CO2 into the atmosphere in 2009. Given a price of 10 or14 euro per tonne, I expect that the Bulgarian companies will receive about 70 million euro after selling the quotas they have spared,” Environment and Waters Minister Evdokia Maneva said. “We have already informed the enterprises about the options of selling their unused CO2 quotas,” she added. The industries have already filed their pollution reports for 2009, showing the economic downturn has hit their output and the emitted greenhouse gases dropped 17 percent to 31.7 million tonnes compared to a year earlier. With very few exceptions, almost all installations will have excess quotas for 2009. Analysts have said the industries in the recession-stricken Bulgaria may opt to sell their permits to raise funds and help their balance books.
Bulgaria Economy Minister takes business delegation to Israel
Bulgaria’s Minister of Economy, Energy, and Tourism, Traicho Traikov, is on a formal visit is Israel Tuesday.Traikov has been invited to Tel Aviv by his counterpart, Israel’s Minister of Industry, Trade, and Labor, Binyamin Ben-Eliezer. He is accompanied by representatives of Bulgarian firms dealing with energy, IT, food production, tourism, marketing consulting, infrastructure engineering.In Tel Aviv, Traikov is going to open a joint business forum with the participation of 20 Bulgarian and 50 Israeli companies organized by the Federation of Israeli Commerce Chambers and the Executive Agency for encouraging small and medium-sized enterprises.In addition to Ben-Eliezer, Traikov is also going to meet with Israel’s Minister of National Infrastructure, Uzi Landau, and Ori Yogev, Chair of the Consultative Committee of the National Economic Council of the Israeli government.According to data of the Bulgarian Economy Ministry, Bulgarian-Israeli trade amounted to USD 124.6 M, with a positive USD 14.6 M balance for Israel; this is the first time in ten years the bilateral trade balance was negative for Bulgaria.Israeli investments in Bulgaria amounted to EUR 29.4 M in 2008, and EUR 4.7 M in the first half of 2009.In 2009, Bulgaria was visited by 106 356 Israeli tourists, while 8 568 Bulgarians visited Israel.
Bulgarian local authorities take over mineral water springs
The Bulgarian state is going to transfer control of some 60% of the country’s mineral water spring to the respective municipalities for a period of 25 years.Of the 102 mineral water springs in Bulgaria, some 60 are not being utilized by the state or private concessionaires, announced Asen Lichev, head of the Water Directorate at the Environment Ministry.“The centralized model of governance is inefficient, and it is indicative that this mineral water is being wasted, and not being put to good use. only 40% of the mineral water in Bulgaria is utilized,” Environment Minister Nona Karadzhova has said.The local authorities are going to be given the responsibility only for mineral water springs falling with one single municipality which have not been offered on concession yet.Once they gain control over the springs, the municipalities will be able to offer them on concession but the quantities of water received from each spring will have to be approved by the Environment Ministry.
Israel shows interest in Bulgarian mineral water
The State of Israel has shown interest in the supply of Bulgarian mineral water to Israel by tankers in order to enrich the range of water brands on the Israeli market, officials from Bulgaria’s Ministry of Economy, Energy and Tourism informed. This emerged during the visit of Bulgaria’s Minister of Economy, Energy and Tourism, Traycho Traykov to Israel on Tuesday. The question was brought up by Israeli Minister of National Infrastructure Uzi Landau. Minister Traykov negotiated with Israeli Minister of Industry, Trade and Labour, Binyamin Fuad Ben-Eliezer that the two countries would encourage companies from Bulgaria and Israel to work together on innovative projects in the fields which are priorities of the two countries.Among the sectors with a big potential for cooperation between Bulgaria and Israel are hi-tech and services, modern agriculture and agricultural systems, medical equipment, information technologies, security systems, infrastructure, etc, sources from Bulgaria’s Ministry of Economy, Energy, and Tourism reported.
Factbox: Bulgaria's most popular spa resorts
Source: Reuters
Bulgaria is among the richest countries in Europe in terms of geothermal resources, boasting hundreds of mineral springs and dozens of spa resorts, some of which were founded by the Romans.The Black Sea country is now trying to revive its traditions in balneotherapy, neglected since communism collapsed 20 years ago, and attract tourists from the Balkans, Russia, Israel, Germany, the Scandinavian countries and beyond. Following is a list of the most popular spa resorts.
VELINGRAD
Tucked away in the western Rhodope mountains, far from the commotion of the big cities, Velingrad has been crowned the Spa Capital of the Balkans and for a reason -- it has 80 mineral springs, the hottest one pouring water at some 93 degrees Celsius.The springs vary in their chemical content which makes their mineral water beneficial fo treatment of different medical conditions varying from kidney stones to gout.The combination between the mineral water and the clean mountain air which has made Velingrad a favorite place for many Bulgarian, as well as Russian tourists, is also a renowned resort for prophylactics of respiratory ailments.The town, 150 km (93 miles) southeast of capital Sofia, boasts several four- and five-star hotels, and among them two which are certified by the European Spas Association.
SANDANSKI
Its proximity to the Bulgarian-Greek border, the abundance of mineral springs and the mild climate has made Sandanski a popular tourist destination for both Bulgarian and Greek visitors.The town, lying at the foot of the Pirin mountain in the southwestern part of the Balkan country, is only 125 km south of capital Sofia, and some 150 km north of the Greek port of Thessaloniki.There are more than 80 low-mineralized springs in the region whose temperature varies between 42 and 81 degrees Celsius. The warm weather makes outdoor bathing possible throughout the whole year.Sandanski is also considered one of the best places for treatment of pulmonary diseases and especially bronchial asthma.
HISAR
Situated in central Bulgaria, Hisar is a crossing point between capital Sofia and the seaside. It was once a Roman settlement where a legion guarded the mineral springs.The town, using water from the 22 springs in the region, has been specialized in treatment of different kidney, gastric and urinary infections.Older hotels in Hisar have been completely renovated in recent years, smaller ones have popped up and the town is now trying to recover its position as a leading balneotherapy resort.
POMORIE
Known for centuries for the healing power of its medical mud and mineral springs, Pomorie is now one of Bulgaria's leading spa resorts.Situated at the Black Sea coast, 400 km east of capital Sofia, and only 20 km off the Black Sea city of Burgas, for decades Pomorie has been combining successfully balneotherapy and seaside tourism.It is best-known for treatment of sterility, rheumatic and skin conditions.
INVESTMENTS:
Bulgaria and Qatar to make $ 500 million joint venture
Bulgaria's cabinet approved the Memorandum for cooperation between Bulgaria's Ministry of Economy, Energy, and Tourism and Qatar's Ministry of Business and Trade and proposed to Bulgaria's Parliament to ratify the Memorandum. The document was signed on March 23, 2010 during the official visit of Bulgaria's PM Boyko Borissov to Doha, the press-office of the Council of Ministers informed.The Memorandum envisages that the Qatari investment service and National Company Industrial Zones EAD establish a joint venture with a capital of at least US$ 500 million. The task of the joint venture is to facilitate the investments in the fields of agriculture, real estate trade, tourism, the financial sector and other sectors suitable for investments.
EBRD will help finance a 115 M euro project for nine hydro power plants in Bulgaria
The European Bank for Reconstruction and Development (EBRD) will invest 75 million euro in the construction of nine small hydro power plants on the Iskar River, Dnevnik daily reported on April 26 2010.The total cost of the project amounts to 115 million euro. The facilities will be built in the Svoge and Mezdra municipalities. The contract was formulated between the EBRD and the Svoge hydro power plant.Two facilities are already completed, one at Svrajen and the other at Lakatnik, as part of phase one, the report said."We have achieved very positive results, by having them operational and linked to the grid. At the time of a global economic downturn, we are hoping on continued co-operation with EBRD over the next few years," Sergio Bortolotti, president of Petrolvilla Group, said after the documents were signed.Petrolvilla owns 90 per cent of the Svoge plant, while the remaining 10 per cent belong to the municipality.The project's total cost is estimated at 115 million euro. All nine hydro power plants will be constructed by the end of 2014. The combined output capacity will be 25.6MW with an annual output of about 145 million kWh, Dnevnik said.The investment will create 500 jobs over the next five years.
EBRD may lend EUR 47 M to non-ferrous metals plant KTsM
The EBRD is considering providing a long-term secured loan of up to EUR 47mn to local non-ferrous metals refinement plant KTsM, located near the southern city of Plovdiv , EBRD said on its website. The loan will support a complete reconstruction and modernisation of the lead production line and selected upgrades to the zinc process, which will significantly improve overall performance through reduction of energy consumption, the yield improvement and reduction of maintenance and other production costs in both lines. The total project cost is estimated at EUR 94mn. The remaining part of the financing will be most likely provided by commercial banks. KTsM is the largest lead and zinc smelter on the Balkans, producing LME-registered high-grade metals and alloys. At the beginning of 2009, KTsM received a first-class investment certificate for a BGN 301mn (EUR 153.9mn) project for modernisation and expansion of its production capacities. The upgrades were scheduled to be completed until October 2011.
Bulgaria grants top investor status to wind park, pipes plant
Bulgaria’s Economy Ministry has awarded two foreign investment projects “Investor Class ‘A’” status.The two projects were awarded by Minister of Economy, Energy and Tourism, Traicho Traikov, in the presence of German Ambassador to Bulgaria, Matthias Hoepfner.The first awarded project is “Wind Park Lozenets” of the firm IWC Bulgaria VP 5 headquartered in the northeastern Bulgarian city of Dobrich, which is a subsidiary of the German company IWC GmbH (“Innovative Wind Concepts”). IWC is a joint venture of Siemens Project Ventures (SPV) and Windkraft Nord AG.The Lozenets project provides for the installment of 59 wind power generators with a total electricity production capacity of 140 MW.The wind energy park will be located on leased plots near the villages of Lozenets, Zementsi, and Zagortsi in the Krushari Municipality. It is forecast to produce about 350 000 MWh of electricity per year, and to be completed in 2013.The total investment in the Lozenets park is BGN 440 M; the money comes from the funds of the German investors and from bank credits. Pipelife Bulgaria is the second company which was awarded an “Investor Class ‘A’” status for its project to build a factory for plastic pipes in the town of Botevgrad, northeast of Sofia.The first two lines of the new factory will be launched in May 2010; the Botevgrad plant will be the 30th production facility of the parent company Pipelife.The factory will be producing pipes for water supply and sewerage systems, water transport, gas and electricity systems. The total investment in it amounts to EUR 32.4 M.Pipelife is a joint venture of Belgian chemical and pharmaceutical producer Solvay and Austrian construction materials producer Wienerberger. It produces plastic pipes, fitting and pipe systems, and has operations in 27 European countries and the USA.
Bulgaria's Ecobulpack invests EUR 1.6 M in waste treatment plant
Bulgarian commercial packaging recovery association Ecobulpack said on Thursday it has invested 3.1 million levs ($2.1 million/1.6 million euro) in a waste treatment plant near the northern city of Targovishte.The installation has an isntalled capacity for processing of 60,000 tonnes of waste per year, Ecobulpack said in a statement.The waste treatment will take place on a area of 10,000 square metres, while the sepation unit covers 1,000 square metres.The new waste treatment facility will create 30 jobs.Ecobulpack serves 80 Bulgarian municipalities with a combined population of two million.A total 110 companies are shareholders in Ecobulpack which has a capital of 487,800 levs.
Bulgarian drug maker Sopharma starts sales in Austria
Bulgarian blue-chip drug company Sopharma has announced plans to start sales in Austria as part of its expansion plans.Nivalin, a plant-based medicine that treats neurological diseases, has become the first Bulgarian medicine to be registered in Austria, a real breakthrough on what is considered to be one of the most conservative markets in Europe. In Austria the medicine has been registered under the trademark Nivaject.The news comes nearly a year after the company announced plans to sell in the United States its anti-smoking drug Tabex, a Sopharma trademark. For this purpose the company became a shareholder in a newly set up US company Extab.In order to distribute Tabex in the US, the company needs the approval of the most stringent drug regulator in the world, the Food and Drug Administration (FDA).
COMPANIES:
LG Electronics Q1 2010 share on Bulgaria's cell phone market rises to 13%
LG Electronics said on Thursday it had a 13% share on Bulgaria's cell phone market in the three months to March 2010, up 25% from the previous quarter."This result is a notable success as LG reported lower sales on this segment globally," the company's local unit said in a statement.The company targets a market share of 15% on Bulgaria's cell phone segment at the end of 2010, up from 10% last year when it was the third-ranked player on the local market, LG Electronics marketing and sales manager for Bulgaria Dimitar Valev told SeeNews last year.LG's local sales of consumer electronics jumped 45% on the year through March, the company said, providing no figures. This compares to a 20% annual rise in the company's first-quarter global sales on this segment to $4.5 billion (3.4 billion euro)LG Electronics' consolidated operating income rose 2.6% on the year to $462 million in the first quarter.LG Electronics (www.lge.com), headquartered in South Korea, is a global leader in consumer electronics, mobile communications and home appliances, employing more than 82,000 people worldwide.LG Electronics opened its trading unit in Bulgaria in March 2006.
Wind energy giant Suzlon targets Bulgaria growth
Wind turbine giant Suzlon has revealed that it has formed a joint venture with Volkswind Bulgaria in a bid to increase its growth in the Bulgarian wind energy market.Suzlon’s European wing, Suzlon Wind Energy, the subsidiary of the wind turbine manufacturer has entered into an agreement with Volkswind Bulgaria GmbH, which is a subsidiary of Volkswind GmbH, Suzlon informed Wednesday."This marks the beginning of a long-term partnership with Volkswind Bulgaria GmbH, and is a very important step in our strategy to expand our project development activities into new regions," Suzlon Wind Energy A/S CEO Erik Winther Pedersen said.Pedersen added that Suzlon already has a 13 MW project under construction in Bulgaria for a leading industrial client, and he believes that the new relationship with Volkswind will help grow Bulgaria's wind industry even more."Suzlon's existing infrastructure and experience from already erected turbines in Bulgaria will be beneficial for the development process. We are looking forward to building successful projects with Suzlon," Volkswind Bulgaria GmbH Director Malte Huchzermeier said.Volkswind Bulgaria is one of the leading Independent Power Producers (IPPs) in Europe. With over 40 wind farms it is also one of the largest operators of wind farms in Germany.Bulgaria offers one of the most attractive wind markets in Eastern Europe, and is expected to achieve 500 MW of wind energy capacity by the end of 2010, with a target of more than 3,000 MW by 2020, it said.
23 Month waiting list for construction permit for Bulgarian wind park
The average waiting time to procure a permit for construction of a wind park in the European Union is around 42 weeks, the European Wind Energy Association (EWEA) said in a report on its website.Bulgaria fares considerably better than average, as the time required for consent is just 23 months while Finland enjoys the most "relaxed" regime, with a waiting period of only eight months. The Finns are followed by Austria (10 months), Romania (15 months) and Italy (18 months).According to the EWEA report, the EU comparisons shows that Finland, Italy, Belgium and the UK are among the fastest countries in which to obtain a permit, whereas Spain and Portugal are among the slowest. Differences in waiting times can be explained by the idiosyncrasies of each case and are not uniform, but among the factors thought to explain the variations are red tape, the number of authorities to be consulted and the lack of clear administrative guidelines for developers, the report said.The data was disclosed by the EU-funded project, Wind Barriers, coordinated with EWEA.The countries whose system could be described as perhaps the most cumbersome in the EU are Spain with (57 months), Greece (50 months) and Poland (43 months) respectively."If Europe is serious about reaching 20 per cent renewable energy by 2020, some member states need to streamline their consent procedures for wind farms," Justin Wilkes, EWEA policy director, said in the report."There are a number of actions all member states could take: creating a one-stop shop approach for contacting the different authorities, writing clear guidelines for developers, and introducing better and streamlined spatial planning procedures. Implementation of the Renewable Energy Directive provides a real opportunity for targeted action in certain EU countries," he said.
Plovdiv International Fair director: Bulgaria's participation in Expo 2010 Shanghai might fail
Bulgaria's participation in the international exhibition Expo 2010 Shanghai, China, might fail, Plovdiv International Fair Executive Director Bogomil Bonev says in an interview with FOCUS News Agency. He notes the state should fulfill its commitment and secure financing for Bulgaria's participation in the exhibition, which will be officially unveiled on May 1. ,,The problem is in the Ministry of Economy, Energy and Tourism. We have information that the experts in the ministry, though working bureaucratically, gave a proposal to Economy Minister Traykov that the Council of Ministers should adopt a decree and allocate the money. The proposal was lying on his bureau for a month and a half. Now we have information that there is some stirring there. There is a letter of coordination for the decree, but the Finance Ministry did not give a statement, which means an absolute failure for Bulgaria, because Bulgaria is a country and Bulgaria will be advertised and the fair is just an executer. It cannot do anything of the country does not want to take part," says Bonev. 1,000 people an hour visited the Bulgarian stall at Expo 2010 in Shanghai, China, on Sunday when the pilot opening of the exhibition took place, Plovdiv International Fair Executive Director Bogomil Bonev says in an interview with FOCUS News Agency. More than 200 million people are expected to visit the exhibition this year. It will be officially unveiled on May 1. However, Bulgaria might not have a stall there, because the money allocated - some BGN 1,2 million - is insufficient. This is not the entire sum the Council of Ministers approved, but the remaining BGN 4 million has not been transferred yet. In addition, the management of the Plovdiv International Fair ensured USD 650 from China for Bulgaria's presentation. The Bulgarian stall spreads on 320 square meters. For comparison, Romania allotted EUR 20 million for its presentation and the area of its stall is 2,000 square meters.
Three companies vie for EUR 187.4 M railroad project
A total three companies will continue in the tender competition for rehabilitation of the railroad between the southern cities of Plovdiv and Burgas. The bidders are two consortiums led by local Energoremont Holding and Glavbolgarstroy respectively and France 's TSO Chemin du Corps de Garde. The latter competes for one of the three segments of the railroad project. Eight companies participated in the tender but the remaining five failed to meet the tender conditions. The value of the project is estimated at BGN 366.5mn (EUR 187.4mn), 64% of which will be provided by the country's transport operational programme and 36% are national co-financing. The winner should be selected by September. The project comprises three segments: Mihaylovo-Kaloyanovets (total length of 21km and deadline for completion 19 months), Stara Zagora-Yambol and Zavoy-Zimnitsa (120km, 38 months), Tserkovski-Karnobat and Karnobat-Burgas (122km, 43 months).
Bulgarian cement plant Devnya gets quartz sand concession
One of the major Bulgarian cement producers Devnya Cement has been granted a 35-year concession for extracting quartz sand from the Cheirite deposit near Varna.The Bulgarian Cabinet granted Wednesday the concession to Devnya Cement after the company conducted the search and exploration of the quartz sand deposit located in Avren Municipality close to the Black Sea coast.Devnya Cement plans to invest BGN 787 000 for the exploitation of the deposit in the first five years. It plans to extract about 80 000 metric tons of sand per year.The Bulgarian government is going to receive BGN 1.23 M per year as part of the concession deal; 30% of the revenues will go to the Avren Municipality.
Winslow Group resumes EUR 102.3 M residential project in Sofia
Locally-registered Winslow Group resumed construction works on residential complex Winslow Gardens in the capital city of Sofia, estimated at more than BGN 200mn (EUR 102.3mn), local media reported. Raiffeisenbank Bulgaria extended financing of BGN 38mn (EUR 19.4mn) and the investor will provide BGN 52mn. Construction started two years ago and the first phase, representing half of the complex, is to be finalised by the spring of 2011 as compared to initial plans for completion by the middle of this year. The project holds a first class investment certificate. Winslow Gardens will be located on some 42 decares of land with a total built-up area of 123,000 sqm, including underground facilities. It will comprise residential and business areas, sport facilities and restaurants. The project is run by the global investment unit of Deutsche Bank RREEF with a stake of 88% and by the locally-registered company Winslow Developments with 12%.
THE CRISIS:
Bulgaria FinMin: Balanced April budget to signal end of Crisis
Bulgaria Finance Minister, Simeon Djankov, has backed economic data from April to show that the country is starting to recover from the financial crisis.Djankov, speaking Wednesday on Nova TV, said that April will be the first month of 2010 in which the budget will be balanced after 3 months of growing deficits. He added that if it is shown that the growth of the budget deficit has been curbed, the country will have a “good year”.Djankov continued by boasting that Bulgaria now has a higher credit rating than not only Greece but also than Portugal. “We have an excellent fiscal policy and we expect production to increase,” he added.Regarding foreign investment, Djankov said that he expects a continuing decrease in 2010 due to the “severe crisis in Greece and the bad position of Romania.” He concluded that it is important to “wake up the construction sector to pull others forward.” He also noted that exports have grown for 5 consecutive months, while imports have declined, which is good for balance.
The best anti-crisis measure is to absorb European funds: agriculture minister
The EU has allocated EUR 16 million for four state fishing ports and the absorption of the money is to start by the end of the year, Minister of Agriculture and Food Miroslav Naydenov told journalists in the coastal town of Sozopol, cited by FOCUS - Burgas Radio. Working groups are about to set up two more state finishing ports. one of them is the former military port in the town of Balchik and the other one is in Asparuvoho quarter in the city of Varna, the minister said. Sozopol is the first state port to be registered and it is within the structure of Fishery Resources at the Ministry of Agriculture and Food, he added. The construction of four state fishing ports is one of the anti-crisis measures, because they are established with European, not national or municipal, money. More than 820 million has been absorbed since the beginning of the year. And these are only direct grants. In addition, there are projects under the rural development program. At its latest meeting the Council of Ministers decided to exempt the municipalities submitting projects under the rural development program from value added tax… The best anti-crisis measure is to absorb the European funds, the minister said further.
Bulgaria jolted by Europe’s second hardest crash in lorry sales
Denmark and Bulgaria have suffered the steepest drop in lorry sales, according to the European Automobile Manufacturers' Association (EAMA). Between January and March, the Scandinavian country sold 387 lorries with a combined weight of over 16 tonnes, down 64.8% on year-ago levels. In Bulgaria, there were only 52 transactions, a 63.9% year-on-year decrease. Bulgaria is also ranked by EAMA as the market that enjoyed the second strongest growth in bus sales for the quarter, selling 30 units (+87.5%), second only to Slovenia (+89.3%). The upswing was propped by a major transaction with 20 Mercedes buses purchased by Karat S, the concessionaire for parts of Sofia’s public transport network. The real picture comes to light in March when just a single bus was sold, down 75% from the corresponding month of 2009. In the three months through March, Bulgaria sold 760 vans, minivans, lorries and buses, which represents a 30.1% fall from the same period of last year.
Crisis squeezes lending growth over 20 times in 18 months
The global economic turmoil has slowed down lending growth in Bulgaria more than 20-fold within 18 months, showed the latest figures by the Bulgarian National Bank (BNB). As at end-March, business and household loans ticked up 2.3% year-on-year compared with 47.8% as at end-September 2008. In the wake of the crisis, the Bulgarian credit market almost skidded to a halt thanks to waning lending activity, tougher requirements for borrowers and softer appetite to take on debt by both firms and households. Over the 18 months, the increase in overdue credits accelerated more than fivefold, reaching 222% at the end of March 2010 for loans with payments more than 90 days overdue and restructured loans. This is a formidable rise from 43.6% in September 2008. At the same time, the banking sector’s capital surged by nearly BGN 2 billion, or 25.5%, to BGN 9.5 billion as at end-February 2010. The capital adequacy of the Bulgarian banking system was 17.04% at the end of last year, with a capital buffer of BGN 2.754 billion accumulated through retained profits and capital increases. In 2009, all banks scrapped dividend payouts on their prior-year profits, stashing away almost BGN 1.4 billion. The sector’s combined profit sank by 91.4% for almost a year and a half to BGN 95 million from BGN 1.1 billion at the end of September 2008.
Bad credits eat up bank profits
The bad credits eat up bank profits, the data of the Bulgarian National Bank (BNB) show. The share of the credits overdue for 90 days is 7.8% end-March, 2010. As a result of this, the expenditures of the banks on depreciation of assets grows. Despite the made in the first trimester of 2010 depreciation of assets for 285 million levs (1euro=1.95levs) as to March 31 the profits of the banks is 170 million levs. "The bank system in Bulgaria keeps its stability and finishes the first trimester of 2010 with an improved liquidity, with profit and increased assets," the BNB underlines. "Compared to December 2009, the gross capital adequacy is increased from 17,04% to 18,24%. The assets of the bank system amount to 71,4 billion levs. The BNB made a contribution to the state budget of 354 million levs," stated BNB Governor Ivan Iskrov in Bulgarian Parliament after he submitted the annual report of the BNB for 2009. "The BNB has not lost a single lev in 2009 despite the problems on the international markets. All the reserves of the BNB are managed at a high liquidity," stated Mr. Iskrov.BNB Governor described as speculations the allegations that the Euro Zone may be disintegrated."Do not be afraid of Greek scenarios, have your trust in the BNB," Ivan Iskrov concluded.
Crisis obliterates Bulgarian millionaires
The number of Bulgarians receiving annual income of over BGN 1 M has dropped threefold as a result of the economic crisis.Only 28 people in Bulgaria said they received more than BGN 1 M when filing their tax forms for 2009, the National Revenue Agency announced.In comparison, a total of 87 Bulgarians declared income of over BGN 1 M in 2008.The National Revenue Agency has reminded that April 30, 2010, is the final date for filing tax returns for 2009.