불가리아 주요 경제뉴스 (17 - 24 June 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (17 - 24 June 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

Ø  Bulgaria Exports 2,200 MWh of Electricity to Greece as Emergency Aid

Ø  Bulgaria remains the poorest country in the EU

Ø  Bulgaria Opens Tender for 15 Km Section of Struma Motorway

Ø  Foreign debt falls 3.1% y/y to EUR 36.1bn at end-April 2011

 

INVESTMENTS:

 

Ø  INTERVIEW - Aurubis Bulgaria Launches 44.2 Mln Euro Investment Programme

Ø  Bulgaria Vivacom to Invest BGN 600 M to Expand Network

 

 

COMPANIES AND INDUSTRIES:

Ø  Smartphones double market share in Bulgaria 

Ø  Kapital 100: Bulgaria's largest companies enjoy 16% revenue growth in 2010 

Ø  Wienerberger Paints Gloomy Forecast for Bulgaria Market

Ø  Bulgaria's construction output falls second-fastest in EU in April

Ø  INTERVIEW - Michelin Sees Market Share, Sales Revenue in Balkans Rising in 2011

Ø  Bulgartabac Reports BGN 6 Mln Profit in 2010

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria Exports 2,200 MWh of Electricity to Greece as Emergency Aid

Bulgaria exported 2,200 megawatt hours (MWh) of electricity to Greece in emergency aid following a strike at the biggest power producer in its southern neighbour, state-run news agency BTA reported. The Bulgarian Electricity System Operator (ESO) carried out the exports on Monday and Tuesday at the request of the Hellenic Transmission System Operator (HTSO) and in line with an agreement for mutual assistance between the two operators, BTA reported. Greece requested the aid after workers at the Greek Public Power Corporation, DEI, went on strike. In October and November Bulgaria received from Greece 1,250 MWh in power aid. Bulgaria will be compensated for the difference between the latest shipments and the amount it owed Greece according to a mutually agreed schedule.

Bulgaria remains the poorest country in the EU

Bulgaria’s Gross Domestic Product (GDP) per capita expressed in purchasing power standards (PPS) was the lowest among all member states in 2010, preliminary estimates of Eurostat showed. It amounted to 43% of the average for the area, slightly lower than Romania’s, which stood at 45%. Bulgaria’s GDP per capital expressed in PPS outperformed those of neighbouring Serbia (35%) and Macedonia (35%) but remained lower than the one of Turkey (48%) and Greece (89%). GDP was the highest in Luxembourg - 183% above the average, followed by the Netherlands and Denmark - 34% and 25% above the average, respectively. The figures for GDP per capita, expressed in PPS cover the 27 EU Member States, three EFTA countries, four candidate countries and three Western Balkancountries. 

 

Bulgaria Opens Tender for 15 Km Section of Struma Motorway

Bulgaria opened a tender for the construction of a 15 kilometre section of the local Struma motorway which links Sofia with the Greek border, the country's Road Infrastructure Agency said. Potential candidates to build the section between the town of Sandanski and Kulata, on the Greek border, can buy tender documents by August 8 and file their offers by 15 p.m. local time (1200 GMT) on August 18, the agency said in a statement. The bids will be opened on August 19. The Struma motorway has a total length of 173.28 kilometres and is part of pan-European transport Corridor IV. The government has said it plans to complete it by 2013. So far, 40 kilometres of the motorway have been built. Earlier this month nineteen candidates filed offers to build a 16.78-kilometre section of the motorway, linking the village of Dolna Dikanya and the town of Dupnitsa.

 

 

Foreign debt falls 3.1% y/y to EUR 36.1bn at end-April 2011

The gross external debt declined by 3.1% y/y and 0.7% in a month to EUR 36.01bn as of end-April, according to preliminary data of the central bank. The foreign liabilities of the public sector fell by 2.8% y/y while the private sector reduced its foreign debt by 3.1% y/y. The total foreign debt accounted for 94.3% of the full-year GDP projection as compared to revised 95% in March 2011 and 103.2% a year earlier. The short-term debt, covering liabilities with original maturity of one and less than one year, rose to 29.6% of the total compared to 28.2% at end-March and 31.3% a year earlier. The credits on demand accounted for 24.4% of the total external debt (down from 24.6% at end-March and marginally up from 24.3% a year earlier). Some 61.4% of them were reported as inter-company loans. The ratio of foreign reserves to short-term debt decreased to 112.13% at the end of April from 113.5% s month earlier but improved from 108.4% at end-January, and 103.36% at April-2010. It is still much weaker compared to more than 120% at end-2007 and about 300% in 2002-2004.

 

 

INVESTMENTS:

 

INTERVIEW - Aurubis Bulgaria Launches 44.2 Mln Euro Investment Programme

Hamburg-based copper smelter Aurubis launched on Tuesday a 44.2 million euro ($63.6 million) investment programme, which aims to raise both the productivity and the environmental safety of its Bulgarian-based plant, a top company official said. In this project we are planning to increase the production by 21% from the current level to more than 600,000 tonnes and meanwhile the production maybe should improve slightly," the executive director of Aurubis Bulgaria, Nicolas Treand, told SeeNews on the sidelines of the ground-breaking ceremony in Pirdop, 80 kilometres east of Bulgarian capital Sofia, where the plant is based. The project is expected to be completed by the beginning of 2014, he added. Under the investment programme, 26 million euro will be allocated for increasing the plant's productivity and efficiency and the rest will go to improve its environmental performance. Last year, Aurubis Bulgaria produced 308,000 tonnes of anode copper and 221,000 tonnes of cathode copper. I think we should remain more or less stable this year [in terms of production]", Treand added. Treand explained that only 5.0% of the plant's output is sold in Bulgaria, while everything else is sold either within the group or on external markets. Most of the cathodes that we produce are used in the group and we are selling also in the region of the Black Sea - to customers in Serbia, Turkey, Romania and also in Bulgaria, but in Bulgaria we have a very small market," he said, adding that the share of exports depends on market demand. Primary copper is a very stable production but the product division is moving up and down so we have to adapt," he said. Aurubis (www.aurubis.com), which emerged after Germany's Norddeutsche Affinerie took over Belgian copper group Cumerio in 2008, operates in Germany, Belgium, Bulgaria, Italy, Switzerland, Britain and Slovakia.

 

Bulgaria Vivacom to Invest BGN 600 M to Expand Network

Bulgarian telecoms operator Vivacom plans to invest BGN 600 M over the next three years to develop its fibre-optic internet network and improve its services, the company said. Currently the company is the largest ISP in Bulgaria with over 350 thousand ADSL subscribers. According to the company CEO Bernard Moscheni that gives the company a market share of 26-27% in the country.

Vivacom has opted for Fiber to the building technology, or FTTb, which means that the company chose the active fiber optic infrastructure, which goes to the building in which the users live. The maximum achievable download bandwidth is 100 megabits per second. The company's main rival in the sector is Bulgaria's first and biggest mobile operator M-Tel, part of Telecom Austria Group, which wrapped up the deal for the acquisition of cable operators Megalan Network and Spectrum Net in the middle of January this year. Vivacom dominates the fixed-line segment in the country with 2.9 million phone lines, which accounts for 97% of the market, but it has been losing customers at an alarming rate in recent years, due to the spread of mobile communications and alternative telecoms in the country. The company will begin to expand its network from Sofia and plans to stretch over 3000 km fiber optic only within the city. To this end it will invest about EUR 92 M by the end of the year in a bid to cover about 90 thousand households in Sofia and two other Bulgarian cities. The next step will be to expand outside the capital, which is scheduled for first quarter of 2012. The company's ultimate goal is to provide optical coverage of about 1 million households by 2014. Hong Kong telecoms and media tycoon Richard Li inherited control of Vivacom in March last year as part of the acquisition of AIG Investments, a unit of the troubled US insurance group which spans asset management and private equity investments. The unit was renamed Pinebridge Investments ahead of the takeover by Li's Pacific Century group. US insurance giant AIG bought 90% of the company's shares in August 2007 for EUR 1,4 B, later launching an offer to buy out the remaining shares. The Lebanese company Oger Telecom will take over Bulgarian Vivacom in the short term, according to unconfirmed reports in the local media from the middle of April this year. Oger is owned by elite Lebanese family Hariri, which has included two PMs of Lebanon, Rafik and Saad, the first of whom founded the company. Oger is directed by his older brother Mohammed Hariri, who has embarked on a project for expansion in Europe. Oger Telecom is expected to buy 25% of Vivacom, in addition to taking over its operative management. Oger will also have the option to buy the majority of the shares within a year. The deal is reported to be "extremely complicated." The buyer will not be paying much for the shares, but instead will be obliged to pay Vivacom's loans to various banks, which amount to over EUR 1.3 B. Vivacom - formerly know as the Bulgarian Telecommunications Company (BTC) - has gone through a number of controversial privatization deals. The majority share of the company is at present held by Viva Ventures, a subsidiary of London-based equity fund Advent International.

 

COMPANIES AND INDUSTRIES:

 

 

 

 

Smartphones double market share in Bulgaria

The share of smartphones of Bugaria's mobile phone market has doubled in a year, with sales growth in the first quarter of 2011 reaching almost 70%, data by market researcher IDC showed. The segment offset the falling sales of conventional handsets, which accelerated in light of the overall decline in demand for electronics in the last two years. Data by mobile operators further proved that sales of smartphones were rapidly growing, leading to an increase in demand for various mobile Internet plans offered by local telecoms. Sales of smartphones rose by 68.3% in the country to 90,000 units in the first three months of the year, accounting for 27% of the overall sales of cell phones against 14% in the same period of 2010. Sales of traditional handsets saw a decline of 25.6% to 240,000 units in the period. Nokia remained the most popular brand in the smartphone segment, accounting for 50% of overall sales. Second came BlackBerry of Research In Motion with an 18% share, followed by Apple's iPhone with 8%.

 

Kapital 100: Bulgaria's largest companies enjoy 16% revenue growth in 2010

Bulgaria's largest companies registered a combined 16 per cent growth in revenue in 2010, according to the Kapital 100 annual ranking drawn up by business weekly Kapital. Bourgas-based oil refinery Lukoil Neftochim cemented its top spot as the nation's biggest company with revenue of 5.46 billion leva in 2010. Runner-up was Lukoil Bulgaria, the local retail division of the Russian oil giant. Third came Pirdop-based copper plant Aurubis, replacing the National Electricity Company, which dropped to fourth place. The companies' results were chiefly bolstered by the increase in oil and copper prices. The major reason behind the improvement in the performance of most companies in the fifth edition of the Kapital 100 ranking, however, was the strong level of exports, which jumped 33 per cent from the previous year. Exports mainly contributed to the results of local metallurgical plants, engineering companies, grain traders and international transport firms. Among Bulgaria's top 10 companies were also mobile operator Mobiltel and the Bulgarian Telecommunications Company (BTC), operating under the Vivacom brand.

 

Wienerberger Paints Gloomy Forecast for Bulgaria Market

Wienerberger, the world's leading maker of bricks, expects its business in Bulgariaand Romania to shrink. Even though the figures for the second quarter are good, we expect the markets in the United States, Romania and Bulgaria to stagnate, the company chief financial officer CFO Willy Van Riet told the media on Wednesday. The Austrian company, which opened its completely modernized factory in the Bulgarian town of Lukovit in the summer of 2008, continues to consider smaller acquisitions, Van Riet said at a press conference in Vienna. The world bricks manufacturer invested EUR 25 M in the renovation of the old factory known as "Uspeh Lukovit" ("Success Lukovit") in the small Bulgarian town to turn it into the most modern of its type in the Balkans. The Wienerberger AG factory in Lukovit is located 120 km away from Bulgaria's capital Sofia. At the time of its launch it was the first factory of its type to meet the very latest EU standards for energy efficiency, environmental protection, and safe working conditions. The project for the new factory was created in Vienna. The modernization started in September 2006.

 

Bulgaria's construction output falls second-fastest in EU in April

Bulgaria's construction output shrank by 22.8 per cent year-on-year in April, the second-steepest annual decline among European Union member countries in the period, data by the bloc's statistics bureau Eurostat showed. Slovenia was the sole country to fare worse than Bulgaria in the period, registering a drop of 27.3 per cent. Euro zone members observed an average annual decrease of two per cent in April, while construction output in the EU countries slid 1.2 per cent. In monthly terms, construction output in the euro area edged up 0.7 per cent, but went down 0.9 per cent in the EU. The biggest annual rise of 18.7 per cent was reported by Poland, followed by Sweden with 8.1 per cent, Germany with 4.5 per cent and France with 3.8 per cent.

 

INTERVIEW - Michelin Sees Market Share, Sales Revenue in Balkans Rising in 2011

French tire maker Michelin expects its market share and sales revenue in the Balkans to rise this year, a senior company official said. Michelin's operations in the Balkans include Bulgaria, Romania, Serbia and Croatia. We hope our market share in the Balkans to continue to rise this year and this expectation underlies our strategy. However, the exact size of the increase depends on the economic crisis, which, as we can see, is not yet over," Michelin regional sales manager Bulgaria, Dimitar Spasov, told SeeNews on the sidelines of a news conference in Sofia last week. He declined to provide comparative market share figures for last year, saying that they will be published in August. The company's market share globally stood at over 15% in 2009. In Southeastern Europe (SEE) Michelin is also active in Albania, Bosnia and Herzegovina, Macedonia and Montenegro. In 2005, Michelin Romania became a regional centre coordinating the production and commercial operations of the company for the Balkans and the other SEE countries. Regarding the Balkan countries, Spasov said he expects Michelin's sales revenue too to increase this year, but declined to provide specific figures for each country, saying Michelin does not provide a breakdown. Our sales revenue on the Balkans was several percent higher than in 2009 and we expect the upward trend to continue this year as well," Spasov said. Sales revenue in the region, however, is still far from the pre-crisis period before 2008, Spasov said, adding that he expects it to stay below this level this year as well. Spasov singled out Romania as the country with the biggest growth potential among the four mainly because of its bigger market. Romania has a three times bigger market and somewhat better economic characteristics. It is our best performer and that is why we have our regional base there, as well as three tire production plants," he said. Michelin's three plants in Romania are tire makers Victoria Floresti and Silvania Zalau and metal cord producer Romsteel Cord. Michelin's main competitors on the SEE markets are U.S. Goodyear Tire & Rubber Co., Japan's Bridgestone Corp. and Germany's Continental. Michelin has 70 production facilities in 18 countries and marketing operations in more than 170 countries.

 

Bulgartabac Reports BGN 6 Mln Profit in 2010

Bulgartabac Holding AD reported a 2010 net profit of 5,825,000 leva, which is an 82.26 per cent increase on-year. The tobacco holding released the figures after a General Meeting on Thursday. The General Meeting decided that 10 per cent of the profit (582,531 leva) will be set aside for reserves and 80 per cent of the remainder (4,194,225 leva) will be paid as dividends. The members of the Board of Directors will get 5,280 leva in profit sharing each. The shareholders will also get a dividend at the expense of undistributed profit for past years (a total of 18,596,011 leva) and the Additional Reserves Fund (30,193,124 leva). The gross per-share dividend totals 7.192 leva. Bulgarbatac had operational revenue of 42,077,000 leva, including 21,433,000 leva from tobacco sale last year. on June 22, the Bulgartabac shares were selling at an average of 36.425 leva on the Stock Exchange. In April, the Privatization Agency announced putting up for sale 79.81 per cent (5,881,380 shares) of Bulgartabac Holding through a public tender. Ten companies purchased bidding documents, including Djingov, Gouginski, Kyuchoukov & Velichkov AD, Kambourov & Associates AD, Kings Tobacco EAD, British American Tobacco Ltd (of London), Japan Tobacco International S.A. (of Switzerland), CB Family Office Service GmbH (of Austria), BT Invest GmbH (of Austria), Philip Morris Bulgaria EOOD, Science Capital Management LLC (of the United States), and KT&G Corporation (of South Korea).

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea