불가리아 주요 경제뉴스 (4 - 11 February 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (4 - 11 February 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Ø  Construction sector marks 12.4% annual decline

Ø  Manufacturing sector in Bulgaria dips slightly in December 2010

Ø  Bulgarian Energy Minister: Belene Nuke Game Gets Tougher

Ø  Drugs market rises 9% last year

Ø  New passenger car sales rise 26.2% y/y in January

Ø  Sales of desktop computers in Bulgaria shrink 29% in 2010

Ø  Bulgaria's PC Market Grows 3.8% in 2010 – IDC

 

INVESTMENTS:

 

Ø  Evaluation of Lv 300 Mln Plus Projects in Water Sector Almost Completed

Ø  Italian-Bulgarian consortium signs contract for Plovdiv-Burgas railroad repair

Ø  Cabinet starts procedure for concession of Burgas seaport

Ø  Dundee Precious Metals receives 30-year concession for gold mine in Krumovgrad

Ø  Bulgarian firms to get 200M euro for energy efficiency projects

 

COMPANIES:

 

Ø  Toshiba to open regional representative office for operations in CEE, MENA

Ø  British company to assemble electric cars in Stara Zagora

Ø  Turkey's Sisecam to open fourth plant near Turgovishte

Ø  Bulgartabac's privatisation lures 10 investors

Ø  Bulgaria's Electric Utility CEZ launches Battery-powered Cars in Sofia

Ø  Third Auction for Bankrupt Kremikovtzi Steel Mill Assets Fails

Ø  LG Electronics Bulgaria Eyes 10% Rise in Monitor Market Share

Articles:

 

MACROECONOMY:

Construction sector marks 12.4% annual decline

 

The construction sector has shrunk by 13 per cent in December 2011, as opposed to the previous month, the National Statistics Institute said on February 7 2011. As a whole, construction dipped by 12.4 per cent on an annual basis from 2009 levels, the report said. In December 2010, infrastructure construction declined by 2.1 per cent from the preceding month, while general and real estate construction went down by 12.3 per cent. It is building estate construction, or rather the relative lack of it, as a result of the global economic crunch, that is predominantly responsible for the overall decline in Bulgaria. Infrastructure construction on annual basis increased by a meagre 0.1 per cent, but real estate construction levels retreated by 19.0 per cent in 2011, the report said.

 

Manufacturing sector in Bulgaria dips slightly in December 2010

 

The index of industrial production registered a one per cent decrease in output in December 2010 on the previous month, the National Statistical Institute (NSI) said in a media statement on February 7 2011. Production in the mining industry decreased by 7.1 per cent, while manufacturing production dropped by 4.3 per cent. The production and distribution of electricity as well as gas output increased by 3.2 per cent, the report said. on annual basis, industrial production increased by 5.2 per cent in December 2010 from December 2009, the report said. An annual increase of 7.9 per cent was also recorded in the manufacturing sector.  A decline of 0.8 per cent was reported in the energy and gas production sector and of 0.3 per cent in the mining industry, the report said.

 

Bulgarian Energy Minister: Belene Nuke Game Gets Tougher

 

The Bulgarian Economy and Energy Minister, Traicho Traikov, vowed once again to never accept an unfavorable deal regarding plans to build a second Nuclear Power Plant (NPP) in the Danube town of Belene. Traikov spoke for the media Wednesday in the heels of Monday statements of Prime Minister, Boyko Borisov, he was ready to scrap the project over the current terms proposed by the Russian side. Traikov confirmed Borisov's accusations the previous cabinet did not agree with the Russians on the inflation index, pointing out the former rulers chose to leave the tough negotiations to their successors. The Minister declared he had 15 years of experience in concluding major deals and unlike professional politicians, who only know how to give advice, he would not allow the State to incur losses. According to Traikov, hints the Russian state energy company Rosatom may drop its project to build Belene, such as the publication of the French daily La Tribune, are an obvious attempt to exert pressure on Bulgarian authorities. "The game is getting tougher, so expect more and more rumors and tales," the Minister concluded.

 

Drugs market rises 9% last year

 

The drugs market in the country increased 9% to above BGN 2bn (EUR 1.02bn) last year (including BGN 1.6bn sales of drugstores and BGN 275mn of hospitals), according to information of IMS quoted by Dnevnik Daily. The number of packages sold fell by 2% but the decline was due to the higher number of pills in one package. The sales of original products increased by 7.8% in terms of packages and by 15% in value terms. The sales of generics decreased by 4.5% in terms of packages but rose by 3.5% in value terms. Revenues from the sale of food additives rose by 4%. Drugs revenues increased 8.1% in 2009 while packages sold went down by 0.7%. IMS expects the market to grow by 6% in 2011 driven by sales in drugstores while sales in hospitals will remain flat. The number of drugstores has fallen to 3,900 in 2010 as compared to 4,300-4,500 in the previous years. IMS forecasts that their number will decrease by 100 this year. 

 

New passenger car sales rise 26.2% y/y in January

 

New passenger car sales increased by 26.2% y/y to 1,464 units in January, according to data of the local car importers association quoted by Dnevnik Daily. The upward move sustained for a third month in a row. In the passenger segment, Volkswagen had largest market share of 13.46%, followed by Toyota with 9.48% and Peugeot (9.02%). New truck sales reached 79 in January, almost tripling on an annual base. Sales of new cars, buses and trucks in Bulgaria fell by 25% on the year to 20,085 in 2010, as the market is still facing a slump in demand due to the financial crisis. Sales in the last two years plummeted by 65.3%, after rising for nine straight years. 

 

Sales of desktop computers in Bulgaria shrink 29% in 2010

Sales of desktop computers in Bulgaria dropped by 29.4% in 2010, according to data of market researcher IDC confirming the trend of user migration to portable devices. The demand for cheap laptops continues to be the main driving force in this market, IDC said. According to the company, laptop sales increased by 23.3% in 2010, which offset the sharp fall in desktops. Thus, the whole PC market expanded by 3.8% last year, although in the fourth quarter sales decreased by 0.5% on an annual basis. Market recovery will not begin until businesses and the public sector start investing in new computers. The end of 2010 witnessed some uplift, which is likely to fully materialise at the end of 2011, in tune with the overall economic upturn, said Evelin Stoev, senior analyst at IDC. According to the company, about 50% of all the computers sold last year in the country were of the HP, Acer or Dell brands.

Bulgaria's PC Market Grows 3.8% in 2010 – IDC

 

SOFIA (Bulgaria), February 9 (SeeNews) - The Bulgarian personal computer market grew by 3.8% last year, international information technology researcher IDC said on Wednesday. Despite the positive result the computer market has not yet recovered from the economic crisis, IDC said in a statement. Sales of portable computers rose by 23.3% in 2010, even exceeding the pre-crisis levels of 2008. on the other hand, demand for desktop computers plunged by 29.4%, dragging the whole market down," IDC said. In the last quarter of 2010 the computer market declined by 0.5% on the year. The top three vendors - HP, Acer and Asus - had a combined share of nearly 50% of the market at the end of the last quarter of 2010 as consolidation intensified. The market recovery will not happen while the business and the state remain cautious about investment in new computers. There was some stir up at the end of 2010, but we expect this [the recovery] to happen towards the end of 2011, together with the overall recovery of the economy," senior analyst in IDC Bulgaria Evelin Stoev said in the statement.

 

INVESTMENTS:

 

Evaluation of Lv 300 Mln Plus Projects in Water Sector Almost Completed

 

Sofia, February 10 (BTA) - The evaluation of projects of the value of over 300 million leva in the water sector has almost been completed, Environment Minister Nona Karadjova told journalists on Thursday. She took part in the second annual conference: Infrastructure and Services in the Water Sector on Thursday. Although there are delays, funds within Operational Programme Environment will be absorbed and the building up of waste water treatment plants will improve the conditions of the rivers, Karadjova explained. By the end of next week the contractor on the project for National Water Strategy is expected to present an analysis of the goals and alternative strategies for the development of the water sector, Minister Karadjova also said. They will be presented before the public, industry-wide associations, suers, water supply and sewerage companies and municipalities for opinion.

 

 

Italian-Bulgarian consortium signs contract for Plovdiv-Burgas railroad repair

 

The consortium between Italy’s Generali Costruzioni Ferroviarie (GCF) and Bulgarian Trace and SK-13 and the state Railway Infrastructure signed the contract for rehabilitation of the railway between the country’s second largest city of Plovdiv and the Black Sea city of Burgas in southern Bulgaria, Trace informed through the local stock exchange. The consortium offered the lowest price (BGN 380mn, EUR 194mn) in the tender for the reconstruction of the 290-km railroad stretch. The rehabilitation of all the three sections of the railroad should be completed in 165 weeks at latest. The project is financed by the EU cohesion fund under the country’s transport operational programme. once the reconstruction of the railroad stretch is completed, trains will be able to travel at an average speed of 130-160 km/h compared to the current 80 km/h.

 

Cabinet starts procedure for concession of Burgas seaport

 

The government decided to launch a procedure for the concession of the Black Sea port in the southern city of Burgas, the government press office informed quoted by investor.bg. The maximum term of the concession agreement will be 35 years. The investment in the facility should exceed EUR 12.46mn in the first seven years of the contract. Priority in the selection procedure will be given to commitments to cover the loan of the seaport granted by the Japan Bank for International Cooperation. So far, bankrupt steel mill Kremikovtsi was the main customer of the port, which is used for bulk cargo. 

 

 

Dundee Precious Metals receives 30-year concession for gold mine in Krumovgrad

 

The council of ministers granted a 30-year concession to Balkan Mineral and Mining, the local subsidiary of Canadian company Dundee Precious Metals, to develop a gold mine in Krumovgrad in southern Bulgaria, Dundee informed on its website. Recently, the company received a positive grade from the Bulgarian environment ministry for the Krumovgrad gold extraction project. It plans to invest USD 100mn in the Krumovgrad mine, the gold reserves of which are estimated at 25 tonnes. Dundee also owns in Bulgaria the Chelopech mine, the largest gold deposit in Europe that is still in production. Dundee is engaged in the acquisition, exploration, development, mining and processing of precious metals properties.

 

 

Bulgarian firms to get 200M euro for energy efficiency projects

 

Bulgaria will start accepting applications from local companies seeking EU funding for energy efficiency projects by mid-2011, Economy and Energy Minister Traicho Traikov said. The projects will be given 200 million euro under the competitiveness operational programme, which displayed a very low level of absorption in 2010. The funds will be provided under a new scheme, which will see the EU co-finance the purchases of energy efficiency equipment and installations for decentralised production of green energy. Currently, the Economy Ministry and the European Bank for Reconstruction and Development (EBRD) are preparing the list of products and materials that are considered eligible for purchase. "By the end of the month we expect to sign a memorandum with the EBRD to finance the energy saving scheme," Traikov said.

 

COMPANIES:

 

Toshiba to open regional representative office for operations in CEE, MENA

 

Japan’s Toshiba plans to open regional representative office in Bulgaria to cover its operations in the CEE and MENA countries, the economy ministry informed in a note on its website. This would be the second such office of Toshiba in Europe, the first being in the UK. Neither deadlines have been announced, nor the location of the office. So far, Toshiba is involved in the construction of a 10-MW photovoltaic energy installation near the southern city of Yambol, and a joint production of components and assembling of energy system invertors. 

 

British company to assemble electric cars in Stara Zagora

 

UK electric car specialist Zero Carbon 2020 will launch an assembly line for electric cars in Bulgaria’s city of Stara Zagora, the company’s founder and CEO, Jamie Roberts, said on February 10 at an electric vehicle forum in Sofia. The first cars will be rolled out in the second or third quarter of 2011, Roberts said. Initially, the line will have a capacity of some 100 cars, but its output will reach about 5000 vehicles by 2015, creating more than 350 jobs. Roberts said his Bulgarian project had the backing of Prime Minister Boiko Borissov. "We are a company offering niche products and have no ambitions for mass production," Roberts noted, adding that his plans for Bulgaria envisaged assembling an urban model, developed jointly with Swiss electric car maker Rinspeed, and a sports car. Zero Carbon 2020, founded in 2006, has so far launched two models with an annual production of not more than 20 units. Jamie Roberts has inspired Barry Shrier, chief executive of UK-based Liberty Electric Cars, specialised in converting conventional vehicles into electric cars, to study opportunities for setting up shop in Bulgaria. His company re-engineers existing brands by outfitting them with electric motors, batteries and all the necessary components.

 

Turkey's Sisecam to open fourth plant near Turgovishte

 

Turkish glass maker Sisecam, the owner of Trakia Glass Bulgaria, will open on February 7 2011 its fourth plant near Bulgaria's northeastern town of Turgovishte, the company said. The new facility, worth $25 million, will produce motor vehicle glass, which will be sold on both the domestic market and foreign markets. Sisecam has already sealed agreements with car manufacturers such as Audi, Ford, Renault and Peugeot, as well as with the future Bulgarian-Chinese plant near the town of Lovech. The plant will have an annual production capacity of 1.3 million sq m of glass and will employ 130 people. The facility is expected to generate a turnover of $20 million a year. Since 2005, Sisecam has invested $405 million in its production facilities near Turgovishte. The company had plans to complete its fourth plant by the end of 2008, but the project was put on hold because of financial difficulties.

 

Bulgartabac's privatisation lures 10 investors

 

About 10 strategic and financial investors have expressed interest in the forthcoming privatisation of tobacco group Bulgartabac Holding, Economy Minister Traicho Traikov said on February 9 2011, but declined to name them. According to unofficial information, among the potential bidders are companies from Bulgaria, South Korea and Greece. The sell-off method - a sale on the stock exchange, an auction or a competitive procedure - has already been determined and will be announced next week, Traikov said. The transaction is expected to be finalised by the middle of 2011. In late 2009, he said the Government's stake in Bulgartabac would be placed for sale at a starting price of about 100 million euro.

Bulgaria's Electric Utility CEZ launches Battery-powered Cars in Sofia

Experts to discuss current energy issues at a conference in Sofia. Four or five electric automobiles may start rolling in Sofia's streets to test the market of battery-powered vehicles and the existent recharging facilities. This became clear from a statement of Mr. Stefan Apostolov, Business Development Manager, CEZ Bulgaria. The electric utility has already signed partnership agreements with the Sofia Municipality and the Electromobiles Industrial Cluster. The first electric automobiles will be used by CEZ and the Sofia Municipality. The first recharging facility in Sofia is being developed by CEZ and the Electromobile Cluster, and it will be fully functional in a few months. To outline the perspectives for development of these innovative means of transportation, Sofia's Hilton Hotel will host the international conference "The electric automobiles - the challenges of a new mobility" on February 10-11. The Standart is a media partner of the initiative. Bulgaria's PM Boyko Borissov, Economy Minister Traycho Traykov and EC Vice-President Antonio Tajani are expected to attend the forum, among businessmen and developers of electric automobiles. 
Kristiyan Kosturkov

Third Auction for Bankrupt Kremikovtzi Steel Mill Assets Fails

 

Sofia, February 7 (BTA) - The third auction for the sale of part of the Kremikovtzi steel mill failed because no buyer showed up, trustee into bankruptcy Tsvetan Bankov told journalists. All assets once involved in the plant's core production operations were up for sale. The starting price for the third auction was set at 395 million leva. A new bidding procedure for the sale of the same self-contained part of the mill - the production site and the site in front of the mill - is expected within two months but with a starting price set at 80 per cent of the evaluation. Several minutes before the time limit for the submission of bids expired, the director of Viktoria Commerce Shoumen, Georgi Manchev, submitted an offer of 396 million leva. Minutes later, he explained that the Bulgarian Development Bank did not accept a confirmation of a 10 per cent down payment and Manchev desisted from participating in the auction. Taking a question, he said that he would take part in the forthcoming bidding procedure if the investor attracted by the company did not withdraw. In his words, the investor is a financial institution from Russia. No buyers showed up on November 5, 2010 at the second attempt to auction off the production site of the company with all assets once involved in the core production operations of the steel mill. The first auction for the same assets was held September 13, 2010 but failed for lack of buyers. The offered assets had been evaluated at 565,517,510 leva, which was the starting price for the first auction. For the second auction, it was reduced to 452,414,008 leva, 80 per cent of the previous starting price. Following several unsuccessful attempts to sell and bring back to life the ailing steel mill, Kremikovtzi was declared bankrupt by the Sofia City Court on May 31, 2010. It owes creditors over 2,000 million leva.

 

LG Electronics Bulgaria Eyes 10% Rise in Monitor Market Share

LG Electronics Bulgaria plans to raise by 10% its share on the Bulgarian monitor market, it said on Thursday. "With our five new [light-emitting diodes] LED display models we plan to raise our market share by a further 10%," Danko Ivanov, IT and business solutions sales manager at LG Electronics Bulgaria, said in a company statement following a presentation of new products. According to company data, as of the end of September LG was the second biggest supplier of monitors in Bulgaria, controlling a 21% share of this segment. LG Electronics entered the Bulgarian monitor market in 2001. LG Electronics (www.lge.com), headquartered in South Korea, was set up in 1958. It is a global leader and technology innovator in consumer electronics, mobile communications and home appliances, employing more than 82,000 people in 82 representative offices globally. It has five business units - Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning and Business Solutions.