불가리아 주요 경제뉴스 (27 May - 3 June 2011)

 

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (27 May - 3 June 2011)

 

Sections/headline briefs:

 

MACROECONOMY:

·         Bulgaria's Meat, Milk Exports on the Rise

·         Earnst & Young Rank Bulgaria 32nd in Renewable Energy Attractiveness

 

 

INVESTMENTS:

·         Irish Island Renewable Energy to Build Wind Park in Bulgaria

• Chevron to invest EUR 30mn in gas exploration in northeast Bulgaria

 

 

COMPANIES AND INDUSTRIES:

·         American AES Launches Bulgaria's Galabovo TPP 

·         Bulgarian Cigarette Company Tables EUR 1 M Profit Q1 

·         Construction of two Hemus Motorway segments to start in two months 

·         Copper miner Asarel Medet completes EUR 77.1mn investment

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria's Meat, Milk Exports on the Rise

Bulgaria's exports of protein-rich agricultural produce such as meat and milk is growing, according to Deputy Agriculture Minister Tsvetan Dimitrov. Speaking on Monday, Dimitrov reiterated Ministry data showing that 17% of the Bulgaria's exports in 2010 came from agricultural products, and that it grew by 20% in 2010 year-on-year. Bulgaria's foreign trade in agricultural products registered a positive balance of USD 1 B in 2010, he said in the northern town of Troyan at a conference on meatproducing agriculture. "There is a global shortage of high-protein foods, and a growing demand for these products; this is a market niche where Bulgarian producers can find their place," the deputy minister said. Over 80% of Bulgaria's agricultural export goes to the rest of the EU at present, which, according to Dimitrov, demonstrates its quality and safety. He further said that upon Bulgaria's EU accession in 2007 only 1% of the Bulgarian farms met the EU requirements, while four years later their share has reached over 50%, and by the end of 2011 all the remaining farms are expected to follow suit. In 2010, Bulgaria's government provided BGN 109 M in agricultural subsidies, while in 2011 the money slated for subsidies is BGN 130 M.

 

Earnst & Young Rank Bulgaria 32nd in Renewable Energy Attractiveness

Bulgaria has been ranked among the most attractive countries in the world for investments in renewable energy projects, a report from the US auditing and consulting company Ernst & Young showed. The top three in the ranking are China, the US, and India while Bulgaria is among the top 35, according to the attractiveness indices. This is the first time Bulgaria is included in the report along with Morocco, Taiwan, and Chile. The report points out the last several months were not only very tumultuous for the Middle East and Northern Africa, but confusing for the world renewable energymarkets by directing the attention once again to the need of security of energy supplies and oil prices volatility. The earthquake-triggered serious damage at the Fukushima Nuclear Power Plant, NPP, in Japan is also noted as grounds for increased expectations towards the renewable energy sources. "China has reached its highest index position yet, due mainly to diversification of its renewables portfolio with an increased offshore wind and CSP focus. This broadening scope as new technologies become commercially viable illustrates a key trend seen elsewhere with offshore wind in Taiwan, UK and the Nordics, and CSP in Morocco, the US and India. The US stays in second position. President Obama has voiced support for renewables, but Republican opposition in Congress is causing a stalemate. Utility scale solar projects seem immune to this, but lack of liquidity in power offtake arrangements remain the major barrier to new utility scale wind projects," the report reads. Ernst &Young further note that "European government budget cuts and reductions in feed-in tariffs are causing cell prices to fall, yet rising commodity costs are squeezing solar manufacturers' Bulgaria is 32nd, ahead of Austria, Chile and the Czech Republic. The Ernst & Young experts point out Bulgaria's natural resource potential is being hindered by policy barriers.

INVESTMENTS:

Irish Island Renewable Energy to Build Wind Park in Bulgaria

Irish company Island Renewable Energy will build a wind park in the Northern Bulgarian Suhindol municipality. The project, which may be launched after, wind measurements and a feasibility study, involves a 90-megawatt wind farm with 30 wind turbines valued at EUR 130 M. The investment is to be made by Island Bulgaria Ltd., a subsidiary of the Irishcompany. The new wind power park will cover an area 50 decares and is expected to be operational in 2014. Its construction will secure temporary jobs for 50 people and 10 more jobs will be created after it is ready, according to Darik Finance. Plamen Chernev, Mayor of Suhindol, commented before the Bulgarian Telegraph Agency that there is an option for a solar park to be added to the turbines.

 

Chevron to invest EUR 30mn in gas exploration in northeast Bulgaria

Economy minister Traycho Traykov said that the US oil company Chevron has won the competition for shale gas deposits exploration near Novi Pazar in the northeast part of the country, according to Dnevnik Daily. Chevron will invest EUR 30mn in the gas exploration project. Chevron is expected to sign the contract in two weeks. Minister Traykov said also that the shale gas deposits in the country are ranging between 300bn and 1trn cubic metres, according to preliminary estimates of interested in exploration companies. Bulgaria’s total annual consumption amounts to 3bn cubic metres, 90% of which are imported from Russia. The authorities have opened two more tenders for shale gas exploration in the same region and the offers should be submitted by the end of June 2011. 

COMPANIES AND INDUSTRIES:

 

American AES Launches Bulgaria's Galabovo TPP

The new Termal Power Plant, TPP, "AES Galabovo" is being launched Friday near the southern Bulgarian city of Stara Zagora. The project cost is estimated at EUR 1.2 B. The investor is the American energy giant "AES" with its CEO, Peter Lithgow, stating the company is prepared to slate as much funds as needed because the TPP is a strategic facility for Bulgaria. Initially the first two units will work at 70% of their capacity, while full capacity will be reached at the end of the year. The price of the electric power will be the highest so far for energy produced by coal from the local Maritsa Iztok (Maritsa East) mine. AES Galabovo, formerly Bulgaria's state-owned Maritsa East 1 TPP, is a 670-MW thermal plant; it is the first major power plant to be built in Bulgaria in the past 20 years. 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 eleven months; on the other hand, the delay caused AES to pay compensations to NEK. The State Commission for Energy and Water Regulation, DKEVR, has promised that this additional income of NEK will be taken into account when determining the new electricity prices as of July 1, 2011, in order to compensate the end consumers.

Bulgarian Cigarette Company Tables EUR 1 M Profit Q1

Bulgarian state cigarette producer Bulgartabac registered a net profit of BGN 2.17 M for the first quarter of 2011. For the same period in 2010, Bulgartabac had a net loss of BGN 2.3 M. The main reason behind the better performance this year is a 64% growth of revenue from cigarette sales, as well as 41% growth of revenue from export. Beginning of May the Bulgarian government announced a privatization bid forBulgartabac, having stated it is looking for a strategic investor. This comes after years of failed plans to privatize the companies. In Bulgaria Bulgartabac holds some 37% of the market, down from some 80% in the 1990s. The company's strategic goal is to keep that percentage around 30% until 2017. During 2011 the company will develop and launch a new export brand named "Global."

 

Construction of two Hemus Motorway segments to start in two months

The construction works on two sections of the Hemus Motorway linking the capital city of Sofia to the northern Black Sea city of Varna will start in two months, regional minister Rosen Plevneliev said as quoted by investor.bg. The total length of the segments is 16.5 kilometres. The financing will reach BGN 100mn (EUR 51.1mn) and is secured by EU funds under the country’s transport operational programme and the state budget. The total length of Hemus Motorway is to reach 433 kilometres, about 280 kilometres of which remain to be built. 

Copper miner Asarel Medet completes EUR 77.1mn investment

Copper miner Asarel Medet has completed an investment programme worth more than BGN 150.8mn (EUR 77.1mn), the economy ministry informed in a note on its website. The programme included a new copper extraction and electrolysis facility worth around BGN 40mn, a new ore transportation technology worth over BGN 100mn, which reduces gas emissions by 41% and raises transport efficiency by 24%, a drainage water purification station worth BGN 6.356mn, and a 3 MW hydropower plant worth around BGN 4.5mn. The investments in modernisation, ecological projects and energy efficiency at Asarel Medet have exceeded BGN 500mn since 1999. Asarel Medet is located 90 kilometres southeast of the capital Sofia, near the town of Panagyurishte. The company extracts about 40,000 tons of copper per year, accounting for half of the copper production in the country. VA Copper Invest Ltd. controls 68.58% of the Asarel Medet. 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea