불가리아 주요 경제뉴스 (5 - 13 May 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (5 - 13 May 2011)

 

Sections/headline briefs:

 

MACROECONOMY:

Ø  Raiffeisen Research: Bulgaria's Domestic Market Shows Fragile Signals of Recovery, but Feeling of Insecurity Lingers

Ø  Industrial production grows 6.1% y/y in March 2011

Ø  Exports growth speeds in March 2011

Ø  Bulgaria's foreign trade turnover records EUR 47m surplus in Q1 2011

 

 

INVESTMENTS:

Ø  Bulgaria Turkey Plan Sofia-Edirne Bullet Train

Ø  Bulgaria sees hi-tech as lure for foreign investors

Ø  Investments in Energy Generation from Biomass Expected to Exceed 1,000 Million Leva in Next Three Years

 

COMPANIES AND INDUSTRIES:

Ø  Sales revenues of drugmaker Sopharma rise 15% y/y in Jan-Apr 2011

Ø  Bulgarian metal ore exports up 208% in March

Ø  Bulgaria's Interservice Uzunovi Plans To Build 32 Mln Euro Urban Solar Park

Ø  Dundee Precious Metals Borrows $14.5 Mln for Bulgarian Mine, Mill Expansion

Ø  Construction output falls by 18.3% y/y in March 2011

Ø  M-Network to invest in GPON network, to cover up to 60% of population by 2014

Ø  Bulgaria's new vehicle sales increase 24% Y/Y in Jan-Apr 2011

Ø  Lidl Bulgaria Adds Three Stores to Network

 

 

Articles:

 

MACROECONOMY:

 

Raiffeisen Research: Bulgaria's Domestic Market Shows Fragile Signals of Recovery, but Feeling of Insecurity Lingers

There are fragile signals for recovery of Bulgaria's domestic market, but the feeling of insecurity remains, according to a monthly economic review of Raiffeisen Research released at the end of April. A number of economic sectors indicate positive development, while the state of many others continues to be determined by momentum and insecurity, the bank analysts argue. "In the first two months of 2011 the rate of growth of industrial production accelerated to double-digit values. Industrial turnover advanced considerably in both the external and the domestic market," the analysis reads. "Construction production continued contracting. Meanwhile, for the first time since the end of 2007, in the first quarter of 2011 a year-on-year increase of the area, for which building permits were issued, was recorded." "Domestic demand showed signs of improvement, as for January-February trade turnover realized a positive real growth rate (3.2 per cent year-on-year). In March inflation accelerated to 5.6 per cent year-on-year and on a monthly basis it was 0.6 per cent. The deceleration compared to February was due to seasonal factors and a certain normalization of the prices on the international markets of foods." "Unemployment decreased by almost 10,000 people and reached 9.52 per cent. Nevertheless, its level remains high. A more pronounced recovery of the labour market could be expected in the end of this year and the beginning of next year," the analysts think. "The consolidated state budget accounted a surplus of 8.6 million leva in March as a result of higher budget revenues and lower expenditures." "Bad and restructured loans to companies declined by 49 million leva in March. The same indicator for consumer loans increased by 24 million leva, and for mortgage loans - by 59 million leva." "The saving behaviour of households remained almost unaltered - in March their deposits increased by 212 million leva. This indirectly affirms the slow improvement of consumer confidence," analysts believe. Raiffeisenbank (Bulgaria) Chief Economist Kaloyan Ganev commented that the domestic market recovery, which is still uneven and benefits only part of the economy, will slowly continue to gain speed in the coming months. The positive influence of export, however, will gradually wane considering the high starting level last year. According to Ganev, a clear indication of sustained recovery cannot be expected before the better performance of business extends to the labour market as well. 

 

 

 

 

 

Industrial production grows 6.1% y/y in March 2011

The industrial production index increased by real 6.1% y/y in March, decelerating from revised 15.4% y/y in February and 10.1% y/y in January, preliminary data of the statistical institute showed. The slowdown was due to a significant deceleration of the growth rates of the manufacturing to 6.8% y/y from 22.5% y/y a month earlier. The manufacturing of food, beverages and tobacco declined in March after posting high growth rates in February and the increase of the textile and clothing as well as the chemical products slowed significantly. The expansion of the utilities sector also slowed to 5.5% y/y in March from 6% y/y in February while the extraction industries turned to growth of 3.3% y/y as compared to 1.4% y/y contraction in February. The number of branches, which posted annual growths in March fell to 14 (out of 27) as compared to 20 both in February and in January. In seasonally-adjusted terms, the industrial production added 0.1% m/m while working-day-adjusted data showed an increase of 5.1% y/y. The industrial turnover index increased by 29% y/y, indicating a further reduction in the inventories accumulated in the previous months. Exports and domestic turnover went up by 57.9% y/y and 14.2% y/y, respectively.

 

Exports growth speeds in March 2011

Exports increased by 49.9% y/y to BGN 3.3bn (EUR 1.7bn) in March, according to preliminary data of the statistical office. The growth rate accelerated from revised 46.6% y/y in February. In March, the exports growth to EU countries (56.1% y/y) was faster than those to non-EU member states (41% y/y). At the same time, total imports expansion continued slowing to 19.7% y/y from 36.1% y/y in February due to lower purchases from both EU and non-EU countries. The foreign trade balance remained negative at BGN 33.2mn in March but narrowed both in monthly (from BGN 60.9mn in February) and in annual comparison (from BGN 584.3mn in March 2010). The trade with the EU countries remained on surplus in March and the gap with non-EU countries almost halved. 

 

 

Bulgaria's foreign trade turnover records EUR 47m surplus in Q1 2011

Bulgaria's foreign trade turnover ended up in a surplus of BGN 92 million (USD 67.6m/EUR 47m) in the first quarter of 2011 compared with a deficit of BGN 1.1 billion in the corresponding period of the previous year, National Statistics Institute (NSI) data shows. Exports soared by 55.6% on the year to BGN 9.304 billion in the period, while imports stood at BGN 9.212 billion, up 29.9%. The exports were mainly driven by stronger sales of fuels, raw materials of the mining industry and specific products derived from raw materials. The highest increase, of 136%, was registered in the exports of fuels, which totalled BGN 1.05 billion in money terms.

 

 

 

INVESTMENTS:

Bulgaria Turkey Plan Sofia-Edirne Bullet Train

Bulgaria and Turkey are planning the launch of a bullet train between Sofia andEdirne, according to Suleyman Karaman, Director General and Chairman of the Board of the Turkish State Railways. Karaman told the Bulgarian National Radio, BNR, transport ministers of the two countries recently held talks on the project, saying Turkey is ready with the project and is waiting for the Bulgarian side. "Bulgarians are applying effort according to their possibilities. We insist on the realization of the project ASAP, because the high-speed train will facilitate transport between Turkey and Europe," the CEO says. Karaman explained the deadline is estimated somewhere in the next five years, pointing out the bullet train launch between Edirne and Istanbul is coming in the very near future, by the end of 2011, with two thirds of the 280-km railroadalready finished. The railroad will be used for both passenger and cargo trains. It is part of Turkey's ambitious project to have a direct railway connection between Central Europe, Turkey and the Middle East.

Bulgaria sees hi-tech as lure for foreign investors

Bulgaria is pinning its hopes on sectors with high value-added, such as hi-tech, pharmaceuticals and argiculture, to lure foreign investment back into the country, the government revealed Tuesday. Foreign direct investment in Bulgaria has fallen sharply in the wake of the global economic and financial crisis, dwindling to 1.64 billion euros ($2.6 billion) or just 5.0 percent of gross domestic product (GDP) in 2010 from 6.55 billion euros or 19.2 percent of GDP in 2008. In the past, much of that foreign investment has been channelled into sectors with relatively low value-added, such as construction, real estate, trade and finance, Economy Minister Traicho Traikov said. But in a new strategy paper revealed on Tuesday, Traikov said the government hoped to make sectors with higher value-added more attractive to foreign investors in order to turn the tide, as other countries in the region, such Poland, the Czech Republic and Hungary have already done. "Foreign investment should recover in 2011 and that will give us a chance to reposition ourselves in the right direction," Traikov said. The minister said there was already a noticeable shift in investors' focus to sectors such as car parts, pharmaceuticals and electric appliances. The government hoped to help further boost that trend and encourage more investment in sectors such as electronics, information and communication technologies, outsourcing, farming, food industry, transport, healthcare, balneology, pharmacy and chemicals, said the head of the Invest Bulgaria Agency, Borislav Stefanov. Currently, these sectors contribute only around 30 percent to Bulgarian GDP. In a bid to boost that ratio, the government would help foreign investors by financing infrastructure and personnel training, Stefanov said. Bulgaria stands to profit from the fact that "investors see it as a gateway to the European Union," AT Kerney consultancy expert Michael Weiss said. He urged the government to make the most of Bulgaria's geographical position on the crossroads between Asia and Europe.

 

Investments in Energy Generation from Biomass Expected to Exceed 1,000 Million Leva in Next Three Years

Investments in the production of heating energy, power and biogas from biomass can exceed 1,000 million leva in the next three years, Agriculture and Food Minister Miroslav Naydenov said Thursday, opening a conference on "Investment in Biomass" hosted by Sofia. Naydenov said that until now the biomass had not been a priority of the Agriculture and Food Ministry, so that the competitive advantage provided to other sources of energy led to the current situation "where the Bulgarian agricultural land is burgeoning with photovoltaic and other such facilities". Naydenov said the production of biomass is a big niche which has so far stood unused. "This changes with the latest amendments to the Renewable Energy Sources Act," he said. The more than 100 projects for biomass facilities in Bulgaria are expected to create more than 1,000 jobs, he said. Deputy Chairman of the Agriculture and Forests Committee in Parliament, Emil Dimitrov, said that in its previous shape the Renewable Energy Sources Act created a serious imbalance to the detriment of biomass. Dimitrov said that utilizing biomass is extremely important because, together with all the other benefits, it will create more than 30,000 jobs in wooded areas and also in the most depopulated regions. Deputy Agriculture and Food Minister Georgi Kostov said that the total forest stock in Bulgaria as at the end of 2010 was 643 million cu m of standing trees. The average annual forest growth is 14.4 million cu m. Timber produced in Bulgaria in 2010 stood at 5.6 million cu m.

 

 

COMPANIES AND INDUSTRIES:

 

Sales revenues of drugmaker Sopharma rise 15% y/y in Jan-Apr 2011

The sales revenue of leading local pharmaceutical producer Sopharma increased by 15% y/y in Jan-Apr, the company said in a note, posted on the website of the local stock exchange. Export sales have expanded by 24% y/y since the beginning of the year while those on the domestic market have declined by 3%. In April only, total sales went up by 20% y/y, including 34% exports growth and 5% domestic market decline in annual terms. The net non-consolidated profit Sopharma rose by 3% y/y to BGN 13.2mn (EUR 6.7mn) in Q1 on sales revenues growth of 13.5% y/y to BGN 53.7mn as export sales expanded by 21% y/y while those on the domestic market declined by 2%. The company plans to raise sales by some 12% in 2011, which is about the same expansion like in the previous two years. 

Bulgarian metal ore exports up 208% in March

Exports of metal ores from Bulgaria rose by 208 per cent year-on-year in March 2011, according to data from the National Statistics Institute (NSI). The major ores products exported from Bulgaria are copper, zinc and lead. Leading companies in the sector are Asarel Medet, Gorubso Madan, Aurubis Bulgaria(former MDK Pirdop) KCM Plovdiv, Kardjali OCK, and Chelopech Mining, the report said. Additionally, energy exports soared by 148 per cent annually, while total industrial exports increased by 58 per cent year-on-year, Investor.bg reported. In February, industrial exports increased by 40 per cent on an annual basis and in January by 66 per cent. Total exports increased by 47 per cent in February and a by a record 72 per cent in January 2011. Strong growth in exports during March was also observed in other sectors such as food products (71 per cent), tobacco (76 per cent), paper and cardboard (57 per cent), basic metals (88 per cent), as well as computer and communication equipment, and electronic and optical products (54 per cent). Pharmaceutical products also registered an increase of exports of 20 per cent, Investor reported.

 

Bulgaria's Interservice Uzunovi Plans To Build 32 Mln Euro Urban Solar Park Bulgarian trading company Interservice Uzunovi plans to build an urban solar park worth 32 million euro ($46.1 million), local media reported on Tuesday. The project calls for the mounting of solar panels on parking lots and rooftops, Pari business daily quoted the company's executive director Krasimir Uzunov as saying. He did not elaborate on the future park's location and installed capacity. We plan to build the whole project by the end of June 2012," Uzunov said. Pari said Interservice Uzunovi has recently completed a 5.0 megawatt-peak (MWp) photovoltaic park worth 15 million euro, including 12 million euro invested in equipment. The park is located in the village of Ravna Gora, near the Black Sea city of Varna. Varna-based Interservice Uzunovi, set up in 1990, has a fixed capital of 9.0 million euro and long-term assets worth 27 million euro.

 

Dundee Precious Metals Borrows $14.5 Mln for Bulgarian Mine, Mill Expansion

Canada's Dundee Precious Metals said on Tuesday it and its wholly-owned Bulgarian subsidiary Chelopech Mining signed a $14.5 million (10.1 million euro) loan agreement with Raiffeisenbank Bulgaria. The proceeds from this loan will be used to further assist in the financing of the Chelopech $150 million mine and mill expansion in Bulgaria, which is currently underway and will double mine and mill output to 2.0 million tonnes of ore per year, the Canadian company said in a statement. "This completes $81.25 million in long term debt financing that was originally anticipated when we started the debt raising process," Dundee Precious Metals (DPM) President and CEO Jonathan Goodman said in the statement. The loan agreement with Raiffeisenbank concludes $81.25 million in long-term debt financing arrangements for the Chelopech expansion, which started with $66.75 million financing with the European Bank for Reconstruction and Development and Bulgaria's Unicredit Bulbank, agreed last year. The Raiffeisenbank loan, which is guaranteed by DPM and secured by a share pledge, is repayable in 10 equal semi-annual instalments, starting in June 2013 and carries an interest of LIBOR plus 3.25% until project completion and LIBOR plus 2.80% thereafter. "The Raiffeisenbank loans are subject to a cash sweep which obligates Chelopech to prepay up to an aggregate amount of 30% of Chelopech surplus cash flow rateably to Raiffeisenbank and Unicredit. This mandatory prepayment is limited to the equivalent of two years of Raiffeisenbank and Unicredit loan repayment," the statement said. Chelopech Mining produces copper-gold-silver concentrate at the mine located in the village of Chelopech some 70 kilometres east of Bulgaria's capital Sofia. Dundee Precious Metals (www.dundeeprecious.com) is engaged in the acquisition, exploration, development and mining of precious metals. In addition to the Chelopech project, it recently got 30-year concession on a gold mine near Krumovgrad, in southern Bulgaria. It has a smelter in Namibia and also owns a 95% interest in the Kapan Mine in Armenia. Since 2004, it has been engaged in mineral exploration activities in Serbia.

 

Construction output falls by 18.3% y/y in March 2011

Construction output declined by 18.3% y/y in March, according to preliminary data of the statistical office. The contraction continued accelerating from revised 13.1% y/y in February and 12.2% y/y in January. The decline in construction of buildings sped to 13.9% y/y after narrowing in the past several months. Civil engineering works went down by 24.2% y/y in March as compared to 18.4% y/y in February, 12.5% y/y in January and 9.2% y/y in December. In seasonally adjusted and working-days-adjusted terms, total construction output contracted by 3.1% m/m and 19.1% y/y, respectively.

 
M-Network to invest in GPON network, to cover up to 60% of population by 2014

M-Network, the subsidiary of the country’s largest wireless operator MobilTel running the two newly-acquired local Internet service and cable TV providers Spectrum Net and Megalan Network, plans to invest in the construction of Gigabit Passive Optic Network (GPON network) in more than ten years, Dnevnik Daily informed quoting M-Network CEO Nikolay Kichev. The company will launch the network on May 16, 2011 in the capital city of Sofia. It plans to extend the network to Plovdiv, Varna and Burgas by the end of the year and then to Stara Zagora and Shumen, but may also add other cities. The GPON network of the company is to cover 50-60% of the population by 2014. M-Network will offer through the GPON network digital TV, landline telecom and internet services. Also, Kichev said that M-Network may acquire other internet providers meanwhile, according to Standartnews.

 

Bulgaria's new vehicle sales increase 24% Y/Y in Jan-Apr 2011

Sales of new motor vehicles in Bulgaria rose by 24% year-on-year in the first four months of 2011, figures of the Association of Car Manufacturers and Authorised Representatives (ACM) show. Bulgarians purchased 6,911 motor vehicles in the January-April period, up from 5,560 in the corresponding period of 2010. A total 2,023 motor vehicles were bought in April alone, emerging as the best-selling month so far this year. According to Ivan Antrov, brand manager at Toyota Balkans, the market revival was mainly driven by the more advantageous deal terms, favourable leasing offers and preferential terms for financing the purchases. Sales of passenger cars and light commercial vehicles went up by 22% to 6,496 units in the four-month period, accounting for the bulk of the sales, while sales of lorries soared 133% to 412. The number of new buses bought in the country, however, slumped to four from 31 in 2010. The motorcycles segment also registered a slight decline in the period, with deals totalling 72 compared with 44 a year earlier. Volkswagen remained the most popular brand with 774 deals and a market share of 11.92%, followed by Ford with 610 and a share of 9.92%.

 

Lidl Bulgaria Adds Three Stores to Network

Discount retailer Lidl Bulgaria on Thursday added three supermarkets to its network, raising its store count to 40, it said. The new supermarkets are located in the towns of Sevlievo, Lukovit and Pavlikeni, in northern part of the country, Lidl Bulgaria, part of German group Lidl, said in a statement. With the latest expansion, Lidl Bulgaria operates in 31 towns across the country of 7.3 million people. Lidl Bulgaria began operations in November of last year. Lidl group runs over 9,000 supermarkets in 25 European countries.

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea