불가리아 주요 경제뉴스 (19 - 26 November 2010 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (19 - 26 November 2010 )

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

• WB: Bulgaria’s economy recovers driven by external demand
• InvestBulgaria Agency: FDI for Jan-Sep at 10-year low
• Turkey most preferred investment destination for Bulgarian companies
• Russia may withdraw from Belene project if final price is too low
• Job cuts set as prerequisite for World Bank railway rehabilitation loan

INVESTMENTS:

• CBRE: 19% of retailers target Bulgaria for expansion in 2011
• Novi Energii to invest EUR 14mn in two hydropower plants
• UAE, Saudi Arabia Interested in Investments in Bulgarian Agriculture

 

COMPANIES:

• Enel CEO: At least two bidders for Maritsa III coal power plant
• Car battery maker Monbat says pre-tax profit up 14%, sales rise 56% in Jan-Oct
• German Discount Retailer Aldi Eyes Bulgarian Market
• Eleven Bulgarian internet, TV providers merge into single company
• Russian holding Mechel acquires control over Bulgarian heating utility

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

WB: Bulgaria’s economy recovers driven by external demand

Bulgaria’s economy is recovering mainly on the back of stronger external demand, while domestic demand is still weak, the World Bank said in its Economic Report November 2010, Monitor daily reported. Bulgaria registered a modest growth in the third quarter, the first after six consecutive quarters of economy shrinkage, Kaspar Richter, Senior Economist in the World Bank's Europe and Central Asia Region and lead author of the report, said. The country should remove the structural barriers in order to further increase the growth and reduce the difference in the production between Bulgaria and the leading EU countries. Bulgaria could use the EU funds to improve the infrastructure and the quality of the human capital, as the global financial crisis led to cut in the private capital flow. The annual output growth in the EU10 increased to 2.2% in Q2 of 2010 from 0.6% in the previous quarter. The improvement was not only due to the base effect — the second quarter of 2009 was the trough of the crisis — but also due to a strong dynamism of the economies, as in quarterly terms the growth rose from 0.4% to 0.8%. The rebound in global trade and industrial production has lifted economic activity. European economies benefit from the upswing in trade, the return of confidence in financial markets in response to decisive policy action, low interest rates, and positive feedback effects between the real and financial sectors, the report read. Bulgaria, alongside the Czech Republic, Hungary and Slovenia, is expected to register a GDP growth of up to 2% in 2010, as the domestic demand will remain weak. 

 

InvestBulgaria Agency: FDI for Jan-Sep at 10-year low

Foreign direct investment (FDI) for the first nine months of the year has been at a 10-year low, investor.bg reported citing Borislav Stefanov, Executive Director of InvestBulgaria Agency (IBA). The investments attracted during the period are close to EUR 900mn and the majority of the largest investors are from the EU, followed by Russia and the USA, Stefanov added. In the current year the sectors that have attracted the most FDI are the industry and energy sectors whereas in the period 2006-2009, the most attractive sectors for foreign investors were financial services, real estate and construction, and trade. FDI in the banking sector dropped by 75% y/y in Jan-Sep, in real estate - by 50% y/y. The leasing sector even reported FDI outflow of BGN 200mn, Stefanov said.

 

 

Turkey most preferred investment destination for Bulgarian companies

Turkey attracted EUR 83.7mn in Bulgarian direct investments in the period from January 1, 2001 to June 30, 2010, thus making the country the most attractive destination in the region, investor.bg reported citing data from the central bank. Macedonia followed with Bulgarian investments of EUR 66.8mn. Romania ranked third attracting EUR 60.4mn, ahead of Serbia with EUR 54mn. In the 12 months to June 2010, Bulgarian companies invested mainly in Serbia, where they spent a total of EUR 8.4mn. Macedonia again ranked second with investments of EUR 8mn. Bulgarian companies invested a total of EUR 316.2mn in the region from Jan 1, 2001 to June 30, 2010, which accounts for a mere 1% of the foreign direct investments in Bulgaria in 2003 to 2009. Most of the Bulgarian companies investing abroad are publicly traded companies operating in the financial, tourism and retail sectors. 

Countries from the region	Bulgarian direct investments in the period from Jan 1, 2001 to June 30, 2010 (in EUR mn)	Bulgarian direct investments in the 12 months to June 30, 2010
Turkey	83.7	4.7
Macedonia	66.8	8.0
Romania	60.4	5.2
Serbia	54.0	8.4
Greece	51.3	1.6
Russia	31.0	4.8
Ukraine	30.8	4.8
Albania	20.5	0.7
Other countries	Bulgarian direct investments in the period from Jan 1, 2001 to June 30, 2010 (in EUR mn)	Bulgarian direct investments in the 12 months to June 30, 2010
USA	50.9	19.3
Switzerland	25.8	13.0
Austria	33.3	10.6

 

Russia may withdraw from Belene project if final price is too low

Russia may withdraw from the project for the construction of the Belene nuclear power plant in case the final fixed price of the project is less than EUR 6.4bn, actualno.com reported citing Sergey Kirienko, head of Russian nuclear company Rosatom, who spoke to Bulgarian journalists in Moscow. The project currently costs EUR 6.7bn and any delays would result in a further increase of costs, Kirienko added. Kirienko also confirmed that Russia will negotiate on controlling a stake of between 30% and 40% in the nuclear power plant. Kirienko is to visit Sofia on November 30, dariknews.bg reported. The final fixed price of the plant is expected to be determined during that visit.

 

Job cuts set as prerequisite for World Bank railway rehabilitation loan

The World Bank would extend a new BGN 710mn (EUR 363mn) loan for the rehabilitation of the country’s Railway Infrastructure Holding company and the national rail transport operator BDZ only under the condition that the two companies implement significant staff reductions, representatives of the railway sector trade unions said as cited by mediapool.bg. In order to comply with the World Bank’s requirements, Railway Infrastructure holding will have to reduce its staff to 8,500 from the currently employed 14,800. BDZ, on the other hand, currently employs around 14,900 and plans to lay off around 2,000 in 2011 and 2012. Local media reported recently that BDZ is trying to reschedule its debts to banks and suppliers, which amount to a total of BGN 220mn.

 

INVESTMENTS:

CBRE: 19% of retailers target Bulgaria for expansion in 2011

Almost one-fifth (19%) of retail chains said Bulgaria is on their expansion calendar for next year, according to a survey of real estate advisor CB Richard Ellis (CBRE), investor.bg reported. The research examined the attitudes and plans of 212 leading retailers for expansion in Europe, the Middle East and Africa in 2011. Bulgaria was ranked 14th among the top 20 target countries for retailers looking to expand their store networks. Germany remained the most attractive market for expansion, followed by Poland, France and Spain. The report revealed that over 50% of retailers are planning to open more than 10 stores in the EMEA region by the end of 2011, a jump compared to 12 months ago when just under half the retailers CBRE surveyed intended to open less than five stores during 2010. While, core Western European markets remain a popular target, representing seven of the top 10 country targets for expansion next year, many retailers are also preparing to expand into the emerging markets, accounting for half of the top 20 targeted countries. Renewed interest in the emerging markets is partly based on the expected bounce back in their economies. Some 41% of retailers are targeting at least one country in Central Europe, and 39% are targeting Southern Europe. Retailers prefer to operate their own stores, with only 11% having a clear preference for franchising, and half saying they prefer to operate their stores directly. 

Rank	Country	% of retailers targeting the country
1	Germany	41%
2	Poland	33%
3	France	33%
4	Spain	30%
5	United Kingdom	29%
6	Russia	28%
7	Czech Republic	28%
8	Italy	27%
9	Austria	27%
10	Belgium	25%
11	Netherlands	24%
12	Switzerland	23%
13	Hungary	22%
14	Bulgaria	19%
15	Romania	17%

 

Novi Energii to invest EUR 14mn in two hydropower plants

Novi Energii, majority owned by German PCC DEG Renewables, will invest EUR 14mn in the construction of two small hydropower plants in northwestern Bulgaria, investor.bg reported. The power plants will have an installed capacity of 3MW, each, and will be located in the villages of Eliseina and Rebarkovo, along the Iskar River. The construction works will create 200 new jobs, the company said. PCC DEG Renewables is a joint venture of PCC SE and German development bank DEG, part of the KfW Bankengruppe Group. Novi Energii will be awarded a “Class A Investor certificate", which will, apart from speedier procedures, allow for preferential land purchase conditions and other benefits.

 

UAE, Saudi Arabia Interested in Investments in Bulgarian Agriculture

Sofia/Abu Dhabi, November 23 (BTA) - The United Arab Emirates (UAE) and Saudi Arabia are interested in investments in Bulgarian agriculture, Agriculture and Food Minister Miroslav Naydenov said Tuesday. He was speaking after emerging from meetings in Abu Dhabi with his Saudi Arabian counterpart, Minister of Agriculture Fahd bin Abd al-Rahman bin Sulayman Balghunaym, and UAE Minister of Environment and Water, Rashid Ahmed bin Fahad.

Naydenov is paying a visit to the UAE, Qatar and Kuwait accompanied by a business delegation. The visit began on November 22 and is scheduled to continue until November 27.

The two Arab countries are interested in investments in grain production, vegetable production and stock breeding, Naydenov's ministry said. UAE and Saudi Arabia are ready to fund various projects in Bulgaria as they have a shortage of food and are large-scale importers, naydenov explained. He invited his Saudi Arabian counterpart to visit Bulgaria and to acquaint himself on the spot with the opportunities for investing in Bulgarian agriculture.

Naydenov is the only EU minister to participate in the ministerial on nutrition within the Gulf Cooperation Council (GCC) Ministerial Forum on Agricultural Investment in Abu Dhabi, attended by representatives of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the host country, the United Arab Emirates (UAE). The Food and Agriculture Organization of the UN (FAO) Director-General Jacques Diouf is also participating in the ministerial.

Diouf and Naydenov met and discussed Bulgaria's role in the production and export of agricultural produce.

On Wednesday Naydenov will visit Qatar at the invitation of Qatari Minister for Environment Abdallah bin Barak al-Meadadi. The two ministers will have a working meeting at which they are to discuss expansion of Bulgarian-Qatari cooperation in the field of agriculture, and more specifically in the production of grain, oliferous crops, sunflower seed processing, livestock breeding, processing of mutton and beef, food safety, as well as veterinary medicine and plant protection.

 

 

 

COMPANIES:

Enel CEO: At least two bidders for Maritsa III coal power plant

Italian energy group Enel SpA has at least two bidders for its Bulgarian coal-fired power plant Maritsa East III, investor.bg reported citing a statement by Enel’s CEO Fulvio Conti. Enel has been planning to sell its 73% stake in the Bulgarian plant by the end of this year in a bid to cut debt. The remaining 27% are held by state-owned National Electricity Company. Conti declined to disclose any further details, saying negotiations are ongoing. Russian state-owned Inter RAO might be one of the potential buyers, according to reports in the Russian media last week. We remind that in late-July, Austria's utility EVN, which owns power distributor EVN Bulgaria, confirmed it was holding talks for the acquisition of a majority stake in the Maritsa East III. US power producer AES and British utility International Power have also shown interest in the plant. A year ago, Enel completed a EUR 700mn modernisation programme, which increased the plant's electricity production capacity by 8.1% to 908MW, reduced sulphur dioxide emissions by 94% and extended the operational period of the four generators by 15 years.

 

Car battery maker Monbat says pre-tax profit up 14%, sales rise 56% in Jan-Oct

Bulgarian car battery maker Monbat said its consolidated pre-tax profit rose by 14% to BGN 17.4mn (EUR 8.9mn) in the first ten months of 2010, investor.bg reported. Consolidated sales increased by 56% on the year to BGN 148.2mn. In October alone, the company’s consolidated pre-tax profit went up by 2.2% y/y to BGN 2.1mn, as sales increased by 33% to BGN 19.8mn, speeding up its growth from the 40% annual rise registered in September. Monbat said that the company’s consolidated results for Jan-Oct include the results of Monbat and its recycling unit Monbat Recycling, which split from the car maker a few months ago. We remind that in April, MonBat said it would spin off its recycling operations in order to improve its efficiency and make its activities more attractive for foreign investors in case interest in the acquisition of the company emerge. Last week, Monbat, which is listed on the Bulgarian Stock Exchnage, filed a request with the country's financial watchdog to float its stock on another European bourse, without specifying the name of the stock exchange. The company also informed that it was in talks with the EBRD for receiving a loan of up to EUR 15mn for capacity expansion. 

German Discount Retailer Aldi Eyes Bulgarian Market

German discount supermarket Aldi, known for its aggressive price policy, is considering the possibility of stepping on the Bulgarian market, according to local media reports. The company has registered a subsidiary in Bulgaria through its Austrian chain, branded as Hofer, Trud daily reported. The news comes just days before German discount retailer Lidl opensits first stores in Bulgaria on November 25 2010 in a move that will heat up further the competition in the sector. The shops will be located in 11 cities - Sofia, Plovdiv, Varna, Stara Zagora, Pazardzhik, Sliven, Kurdjali, Petrich, Montana, Lovech and Gabrovo. At the beginning of the year German retailer Tengelmann decided to sell its discount retail chains in Romania and Bulgaria to its rival Lidl, which is part of Germany's Schwarz retail group. The price of the deal, which has already been approved by the regulatory anti-trust body, was not disclosed. Tengelman, the parent company of Plus, owns 96 and 23 stores in Romania and Bulgaria respectively. In 2007 and 2008 Plus sold its business in most European countries. For the last several years the chain has been active in Austria, Romania and Bulgaria, with divisions in those countries in May 2008 united under the name of Plus Eastern Europe. According to realtors the economic crisis in the past year has proved fertile for thediscount retailers stepping on Bulgarian soil in recent months and the country will see their boom in 2010. Three food discount chains are currently operating in Bulgaria; Kaufland, Penny Market and Plus. Kaufland is a part of the Swartz Group which also owns Lidl. It is a soft discounter that entered the Bulgarian market in 2006 in Plovdiv. Now it is strongly positioned on the market with more than 26 hypermarkets. Penny Market (Rewe Group) is another German soft discounter with an aggressive growth strategy for Bulgaria.

Eleven Bulgarian internet, TV providers merge into single company

At least 11 internet and TV providers, operating in 40 cities and 110 smaller settlements, will be merged into a single public entity, dubbed Bulgarian Telecom and Television (BTT). The company will bring together NetWorx Bulgaria, Digital Communications, Escom, Internet Communication Optic Network (ICON), Telnet, STV, Balchik Net, Optinet, Diana Cable TV, PowerNet and BOL.BG East. According to BTT, the company currently provides services to more than 150 000 users countrywide, available to nearly one million households. The deal is the telecom sector's largest merger in terms of number of companies involved. The enlarged company targets to expand its operations until reaching complete coverage nationwide, BTT said in a media statement. The company will develop its own brand and also plans to roll out new services, including mobile internet (GSM, 4G, WiFi). PowerNet's CEO, Dimitar Hinkov, has been appointed BTT's executive director, while NetWorx Bulgaria's head Emilian Dikov will chair the board of directors.

 

Russian holding Mechel acquires control over Bulgarian heating utility

Russian metals and mining holding Mechel has acquired full control over Bulgarian heating utility Toplofikatsia Rousse after purchasing the remaining 51% in the Bulgarian company from Slovenian Holding Slovenske Elektrarne (HSE) for EUR 52mn, HSE said in a statement. In 2007, HSE bought the full stake in the company in a privatisation deal and later the same year transferred 49% of the plant to Mechel. The total installed capacity of the electricity production plant stands at 400 MW. It accounted for 2% of the electricity production in the country last year. Mechel is one of Russia's leading mining and metals companies. The company is active in the segments of mining, steel, ferroalloys and power production. Mechel has subsidiaries in 12 regions of Russia, Kazakhstan, USA, Romania, Bulgaria and Lithuania. The majority shareholder in Mechel is company CEO Igor Zyuzin, who controls around 70%. In the first half of 2010, the net income of Mechel attributable to shareholders was USD 120.8mn, revenue from external customers was USD 4.33bn, EBITDA was USD 781mn.