불가리아 주요 경제뉴스 (25 March – 1 April 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (25 March – 1 April 2011)

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

Ø  Business sentiment deteriorates 4.1pps m/m in March 2011

Ø  Industrial producer price growth speeds to 12.5% y/y in February 2011

Ø  Renewable energy production reaches 15% of consumption in 2010

Ø  Bulgaria could lose part of EU funding for ecology - EC official

 

INVESTMENTS:

Ø  Power distributors to invest EUR 190.4mn in network upgrades this year

 

COMPANIES:

Ø  Bulgartabac expects 25% y/y cigarettes sales increase in Q1 2011

Ø  Rila Gas to invest EUR 55.8mn till 2015 to construct gas network

Ø  CMC di Ravenna files cheapest bid in tender for Maritsa Motorway segment

Ø  Discount retailer Lidl expands network to 30 stores

Ø  EurOmax to seek gold, silver mining concession for project in Breznik

Ø  AES Launches Bulgaria's Galabovo TPP in April

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Business sentiment deteriorates 4.1pps m/m in March 2011

The composite business sentiment indicator deteriorated by 4.1pps m/m to 15.13 in March, the monthly survey of the national statistics institute showed. The annual improvement slowed to 7.7pps as compared to 10.9pps a month earlier. The indicator was on positive territory in the past five months. In March, the sentiments in all surveyed sectors were more pessimistic than in February except for the retail business, which marked an improvement. All tradable sectors show clear inflationary expectations in line with the rising international prices of the resources. The managers from the services sector have moved from expectations for price cuts in February to keeping the levels in March. The latter may indicate that domestic demand has already bottomed out and is starting to recover. 

 

Industrial producer price growth speeds to 12.5% y/y in February 2011

The industrial producer price index (PPI) increased by 12.5% y/y in February, accelerating from 11.1% y/y in January, statistical office data showed. In monthly terms, producer prices went up by 1.1% as compared to revised 0.4% in January. The faster growth was due to the metallurgy, the chemical and food industries mainly reflecting the higher international prices of resources. The textiles price growth also accelerated. The price increase in energy products flattened at some 18% y/y on base effects after the administrative corrections of the prices of natural gas, heating and electricity as of July 2010 and is likely to gain speed in the months to follow on more costly fuels and planned upward correction in the natural gas price as of April 1. The broader index including export sales also accelerated to 13.8% y/y in February as compared to 12.1% y/y in January. 

 

Renewable energy production reaches 15% of consumption in 2010

Renewable energy production has increased by 67% to 5,509 GWh last year, which is 21% more than planned, according to a report of the economy and energy ministry, quoted by investor.bg. The amount accounted for 15% of the gross domestic consumption thus exceeding the 11% national target for last year and approaching the commitment for reaching a 16% share in 2020. At the same time, the gross domestic consumption of electricity has fallen by 1.6% in 2010. The installed wind and solar energy capacities have increased by 38.4% to 465 MW and fourfold to 21.4 MW last year, respectively. Hydropower plants accounted for the largest share in total renewable energy production with installed capacity of 1,919 MW for large ones and 241 MW (up by 12.6%) for smaller plants with capacity of less than 5 MW.

 

Bulgaria could lose part of EU funding for ecology - EC official

(ADPnews) - Mar 30, 2011 - Bulgaria is lagging behind with European Union (EU) funds absorption under the EU's environment operational programme and may fail to utilise the financing earmarked for water infrastructure in major cities, European Commission's (EC) official Carsten Rasmussen said. Rasmussen, who is deputy head of the department in charge of Bulgaria at the EC's Regional Policy Directorate General, put across his concerns at a news conference on management and development of strategic infrastructure in Sofia. According to Rasmussen, Bulgaria's environment ministry, which is in charge of the programme, and the regional development ministry, which oversees the country's water and sewage infrastructure, should take steps to accelerate collaboration with local municipalities on drafting projects and carrying out tenders. As at January 1, 2011, Bulgaria had absorbed a mere 9% of the EUR 1.8 billion (USD 2.5bn) earmarked under the environment operational programme, because of delays, management errors, lack of initiatives or administrative incapacity. In turn, environment minister Nona Karadzhova said the government aims to sign up projects for the entire financing under the programme by mid-2012, of which EUR 1 billion even this year.

 

 

 

INVESTMENTS:

 

Power distributors to invest EUR 190.4mn in network upgrades this year

The national power grid operator the National Electricity Company (NEC) is to invest BGN 178mn (EUR 89.6mn) in the improvement of its high voltage power network, economy and energy minister Traycho Traykov informed, quoted by investor.bg. At the same time the three power distributors in the country, majority controlled by CEZ, EVN and E.ON, will invest a total of BGN 200mn in the medium and low voltage networks. Lately, NEC has been delaying permits to green energy producers, which have applied to link their networks to NEC, due to insufficient capacity and requested renewable energy producers to wait until NEC upgrades its infrastructure in order to handle the soaring volumes of energy supply. The company estimated that it needs about BGN 150mn per year for network modernization. 

 

 

COMPANIES:

 

Bulgartabac expects 25% y/y cigarettes sales increase in Q1 2011

State tobacco holding Bulgartabac expects to raise cigarette sales by more than 25% to 4.43bn cigarettes in the first quarter of the year, investor.bg informed quoting CEO Ivan Bilarev and chairperson of the board of directors Aleksandar Manolev. Exports, which account for some 80% of all sales, will reach 3.55bn cigarettes in Q1 or BGN 62mn (EUR 31.7mn). The market share of Bulgartabac in the country has started to rise in March 2010 and is now approaching 37%. The company expects it to increase further. The cigarette producer intends to keep prices unchanged this year and will invest EUR 7mn in new production line in its factory in the capital city of Sofia. Its total investment programme will reach BGN 21mn this year. Bulgartabac is planning to enter new markets – Moldova, Slovenia, Croatia, Poland, Israel, South Africa, Jordan and countries of North Africa, as well as to return to the Japanese market. The consolidated sales revenues of the company rose by 18% to BGN 312.9mn last year. Exports expanded by 58% in volumes and by 86% in value terms. Its net profit surged to BGN 20.2mn in 2010 from BGN 3.4mn in 2009. The state plans to sell its 79.83% stake in the company; the procedure is expected to start shortly. 

 

Rila Gas to invest EUR 55.8mn till 2015 to construct gas network

Local Rila Gas, part of Italy’s Gruppo AcegasAps, plans to invest EUR 55.8mn in next three years to build a natural gas network in the southwest part of the country, investor.bg informed. The company will build a total of 372 km of network during the period or some 120 kilometres on average annually. The investment is part of the company’s strategy to supply gas in western Bulgaria, which is to finish in 2015. So far, Rila Gas has invested BGN 46mn (EUR 23.5mn) to build 134 kilometres of gas network in the region. Last year, Rila Gas launched its gas distribution network in Blagoevgrad. It plans to start supplies to Pernik and Vratsa in June and to Dupnitsa and Sandanski in September.

 

CMC di Ravenna files cheapest bid in tender for Maritsa Motorway segment

Italy’s La Cooperativa Muratori e Cementisti – CMC di Ravenna has proposed the cheapest price of BGN 133.1mn (EUR 68.1mn), VAT excluded, in the tender for additional planning and construction of the 31.4km segment of the Maritsa Motorway between Orizovo and Dimitrovgrad, the state road infrastructure agency informed through its website. The tender commission opened the price proposals of seven of the twelve bidders. We remind that a total of 44 companies and consortia purchased documents for the tender. The indicative value of the project is set at EUR 104mn. It will be financed under the country’s transport operational programme. The winner should build the segment 25 months after the contract has been concluded. Field works are to start at the end of June. Maritsa Motorway will link Trakia Motorway with the Turkish border. Its total length will reach 117 kilometres.

 

Discount retailer Lidl expands network to 30 stores

German discount retailer Lidl opened three new supermarkets thus expanding its network to 30 units located in 21 cities and towns all over the country, money.bg informed. All three new stores are located in the southern Black Sea city of Burgas, occupying sites of the Plus chain stores. In October 2010, Lidl, which is part of Schwarz Group, received permission from the Bulgarian anti-trust watchdog to buy the local chain of Plus, part of German Tengelmann. Plus operated 23 stores in the country. Lidl opened its first 15 stores in Bulgaria on November 25, 2010. Also, Lidl opened a BGN 56mn (EUR 28.6mn) logistics hub in Ravno Pole, near Sofia, in early October 2010. 

EurOmax to seek gold, silver mining concession for project in Breznik

Canada’s EurOmax intends to convert its gold and sliver exploration permit in Breznik (in southwest Bulgaria) into a mining concession and has prepared all necessary studies and plans, the company said on its website. Also, it will search for a partner to set up a join venture and develop a producing mine in Breznik. The company informed that the project contained an inferred resource of 2.4mn tons at a grade of 5.91g/t Au and 26.78 g/t Ag for 463,217 ounces of contained gold and 2,100,112 ounces of silver at the base case 2.0 g/t gold cut-off grade. EurOmax focuses on precious and base metals projects in southeast Europe. Besides Bulgaria, it has activities in Serbia and Macedonia as well. 
 
AES Launches Bulgaria's Galabovo TPP in April

US energy giant AES is going to launch its Bulgarian thermal power plant AESGalabovo by the end of April, after a delay of several months, but only with a part of its total capacity. AES Galabovo, formerly Bulgaria's state-owned Maritsa East 1 TPP, is a 670-MW thermal plant in which AES has invested some EUR 1.3 B. AES Galabovo is of strategic importance for the Bulgarian economy; it is the first major power plant to be built in Bulgaria in the past 20 years. only 420 MW of the total capacity of AES Galabovo will be launched in April 2011,Roy Reed, CEO of AES Galabovo told journalists Thursday. The units of the plant will reach their full production capacity by the end of 2011. Unit 1 of AES Galabovo was supposed to be launched in October 2010, and unit 2 – a month later. However, problems with a turbine delivered by French company Alstom Power delayed the launch, and led AES to terminate it contact with Alstom with their dispute now being tackled in an arbitration court in London. Meanwhile, the expenditures for including the additional production capacities of the new TPP were calculated in the electricity prices in Bulgaria by the National Electric Company NEK, which increased them by 3% for the end consumer in the last nine months; on the other hand, the delay caused AES to pay compensations to NEK. The State Commission for Energy and Water Regulation has promised that this additional income of NEK will taken into account when determining the new electricity prices as of July 1, 2011, in order to compensate the end consumers. CEO of AES Bulgaria Peter Lighgow pointed out Thursday that AES is proud of what it has achieved in Bulgaria. He said that as of Monday the plant will start receiving supplies of lignite coal from the state owned Maritsa East Mines.

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea