불가리아 주요 경제뉴스 (8 – 15 July 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (8 – 15 July 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Ø  Bulgaria's Export Grows by 47.2%

Ø  Bulgaria's foreign trade gap contracts 73.4% Y/Y in January-May

Ø  EIF, Five Banks Sign Guarantee Deals for 400 Mln Euro Loans to Bulgarian SMEs

 

INVESTMENTS:

Ø  Fraport to invest EUR 173.8mn in two seaside airports in 2-3 years

Ø  Canadian Company Announces Bulgarian Solar Park Investment

Ø  Greece's Fourlis To Invest 70 Mln Euro in Bulgaria, Greece, Turkey

 

COMPANIES AND INDUSTRIES:

Ø  Bulgaria's Machine Building Reached 95% of 2008 Exports in 2010, Still in Crisis 

Ø  Canada's EurOmax discovers new gold deposit near Breznik  

Ø  Bulgarian lavender producers fear demand drop

Ø  German Firm Gehrlicher Completes Bulgarian Solar Plant

Ø  Ivimeks bids to construct EUR 40mn waste processing plant

Ø  Bulgaria ICT Market Value Drops 5.3% in 2010 – Computerworld

Ø  Bulgaria's BTC net profit dips in H1 2011

 

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria's Export Grows by 47.2%

Bulgaria's export increased by 47.2% for the first five months of the year, announced some from the National Statistical Institute. From January to May the export totaled to 15.69 billion levs. In May only the export was for 3.2 billion levs or by 35.7% more than for the same period last year. The general tendency is thus preserved of Bulgarian export growing quicker than the import does. In May import grew by 19% and reached 3.8 billion levs. For the first five months of the year import along with transport expenses and insurances totaled 17.38 billion levs - by 25% more than for the same period last year. As a result, the current account deficit for these five months was 1.682 billion levs which was by 1.487 billion levs less than the balance for the first five months of 2010. 

Bulgaria's foreign trade gap contracts 73.4% Y/Y in January-May

Bulgaria's foreign trade deficit plummeted 73.4 per cent on an annual basis in the first five months of 2011 to 622.8 million leva, equal to 0.8 per cent of the country's gross domestic product (GDP), the National Statistics Institute said on July 11 2011. Exports rose 47.2 per cent on the year to 15.69 billion leva by the end of May, while imports totalled 16.31 billion leva, up 25.45 per cent. In May alone, the country's exports went up by 35.6 per cent compared with a whopping increase of 72.5 per cent in January. Imports grew 18.8 per cent against 37.11 per cent in January. The slowdown in exports was observed in all types of products. The statistics institute, however, has released detailed information only about trade with countries outside the European Union, with general data, including trade with partners in the bloc, to be published next month. The largest volume of exports by nominal value, of 1.806 billion leva, was registered in fuels, followed by semi-products (goods classified by type of material), which were worth 1.468 billion leva, and machine building, which amounted to 705.8 million leva. As to imports, the country recorded the most significant increase in purchases of fuels from third countries, which added 46 per cent year-on-year to 1.158 billion leva. Second came imports of chemical products, which rose 48 per cent to 436.9 million leva.

 

EIF, Five Banks Sign Guarantee Deals for 400 Mln Euro Loans to Bulgarian SMEs

The European Investment Fund (EIF) signed guarantee agreements with CIbank, ProCredit, Raiffeisenbank, UniCredit Bulbankand United Bulgarian Bank allowing them to extend up to 400 million euro ($565 million) in new loans to Bulgarian small and medium enterprises, the EIF said on Thursday. The agreements are signed as part of the European Union's Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative, the EIF said in a statement. Following the agreements, the banks will offer financing at preferential conditions to over 3,400 SMEs across Bulgaria looking to start-up or expand their businesses, helping to increase the competitiveness of the Bulgarian economy," the EIF said.

 

 

INVESTMENTS:

Fraport to invest EUR 173.8mn in two seaside airports in 2-3 years

Fraport Twin Star Airport Management is to invest some BGN 340mn (EUR 173.8mn) in the country’s two Black Sea airports in Varna and Burgas in the next 2-3 years, state news agency BTA reported quoting Fraport CEO Dirk Schusdziara. The investments will cover the construction of four new aprons, the upgrade of the luggage conveyors, the construction of new administrative buildings and the expansion of the two airports' terminals. The capacity of the Burgas airport will reach 2.7mn passengers and that of the Varna airport will be 1.8mn passengers. The company will also carry out a BGN 40mn upgrade of the Varna airport runway. The investment programme is to open 1,500 new jobs. Schusdziara said also that the number of passengers serviced by the Burgas airport rose by 20% y/y to 533,392 in H1 while those in Varna reached 380,196, up by 2% y/y. Fraport Twin Star Airport Management, a 60/40 joint company of Fraport and local BM Star, operates the two Black Sea airports under a 35-year concession contract since 2006. 

 

Canadian Company Announces Bulgarian Solar Park Investment

P2 Solar, Inc., based in Surrey, British Columbia, Canada, has announced it has executed an option agreement to develop a 7.3 WM solar power farm in Bulgaria. The "shovel-ready" project with a 20 year gross revenue of USD 76.5 M is located in southwestern Bulgaria near the Greek border and has land secured, all required permits are in place and a 20 year government power purchase agreement (PPA), is signed, according to P2 Solar. The company has recently appointed a Bulgarian consultant who has been working with management to identify potential solar projects. It has had a team working in Bulgaria for the months of June and July reviewing numerous opportunities and is now performing due diligence and technical analysis on the 7.3MW project site. The project is slated to be constructed on a 35+ acre parcel of land perfectly suited for a PV solar farm. "We are excited with this 7.3 MW solar project and will be performing due diligence with our engineering team and legal counsel during the next three weeks in order to finalize the project details. Our team has been working hard to secure projects in line with our company mandate and Bulgaria should become a big part of that with its enormous potential for solar power development, " Raj-Mohinder Gurm, CEO ofP2 Solar, Inc., is quoted as saying. In its statement, the Canadian company points out that Bulgaria has emerged as one of Europe's most lucrative solar energy markets because of the country's strong solar irradiation and government feed-in-tariff program. It also says developers are seeking new opportunities in central and south-eastern Europe after Spain and Germany, the global industry leaders in photovoltaics (PV), have cut or plan to curtail incentives. P2's management has laid out a three phase program from 2011 to 2013 with an aggressive mandate to develop 100 MW of sustainable, renewable PV solar powercapacity by the end of 2013. The company's areas of focus are the regions of India, Europe and Canada and the company is currently working to identify and execute potential PV solar projects in these regions.

 

Greece's Fourlis To Invest 70 Mln Euro in Bulgaria, Greece, Turkey

Greece's Fourlis, which holds a franchise for several markets in the region for the development of IKEA and Intersport stores, plans to invest some 70 million euro ($99 million) in expansion in Bulgaria, Greece and Turkey, Greek media reported. The investment programme includes the opening of the first IKEA store in Bulgaria in the fall of 2011, the purchase of a lot in the Greek city of Ioannia and the expansion of the company's subsidiary Intersport Atletic in Turkey in the next 5-8 years, online news provider Capital.gr reported. The expansion in the neighbouring markets is part of Fourlis' strategy to maximize revenues abroad and raise their share in overall revenues to 50% from 20%, Capital said.

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's Machine Building Reached 95% of 2008 Exports in 2010, Still in Crisis

Bulgaria's machine-building sector is still facing a serious crisis, which will probably continue well into 2012, according to Iliya Keleshev, head of the Bulgarian Branch Chamber for machine building. Keleshev told Radio K2 Friday that the Bulgarian machine building industry, which employed 143 000 people in 2008, has been seriously hurt by the economic crisis after 2009 and many of its sectors are still struggling. Back at the end of 2009, Keleshev estimated in an interview for Novinite.com (Sofia News Agency) that Bulgaria's machine building lost 29 000 jobs in one year. on Friday, he pointed out that in the past two years, the machine building plants in Bulgaria have started to rehire workers but at a slow pace. In his words, about half of Bulgaria's machine building industry is export-oriented, and has been doing increasingly well in 2010 and 2011, while the other 50% of the firms who traditionally produce for Bulgaria's domestic market continue to be in trouble. Bulgarian machine building exports grew by 38.5% in 2010 compared with 2009, which is seen as indication that the export-oriented plants have overtaken substantially those producing for the domestic market, whose output in 2010 was only about 51% of the output in 2008. "Let's not forget that in machine building was the only sector of the Bulgarian economy which experienced an uninterrupted growth from 1989 till 1999," Keleshev said, stressing he is really concerned about a large share of the Bulgarian machine-building sector. "Some of the firms which were leaders in certain subsectors no longer exist. There were bankruptcies last year, and more are going on at present. Those producing for the domestic market are reduced to an output on the technological minimum, they don't have enough orders, and their optimism for 2011 has evaporated," he stated. In his words, it is unrealistic to hope that Bulgaria's machine building industry can reach its 2008 output in 2011, especially the sector producing machines for the construction firms has seen a staggering decline. Sectors such as machines for hydraulics, however, enjoy growth but face another crucial issue – the shortage of qualified labor, Keleshev declared.

Canada's EurOmax discovers new gold deposit near Breznik

Canada's mining company EurOmax Resources said on July 7 2011 it had discovered a new gold deposit 80 metres below an existing gold and silver field near the western Bulgarian town of Breznik. The results are the first breakthrough of the geological drilling in the recently discovered large geophysical anomaly south of the current outlined resource, the company said. The samples show that the hole intersected 3.03 grams a tonne gold, 8.9 grams a tonne silver and 2.01 per cent zinc from a depth of 238 metres. In May, EurOmax applied for a commercial discovery certificate for the project, which is the first step towards obtaining a concession for mining. EurOmax has two Bulgarian units, Marten and Trace Resources, which have been exploring for precious metals since 2006. Since 2009, the assets of Trace Resources are managed by Marten.

 

Bulgarian lavender producers fear demand drop

Tarnichane. Bulgaria, one of the world's top lavender oil producers, is eyeing booming prices this season but fears a slump in output could lead the cosmetics industry to drop its product in the long run, AFP reports. "There is a continuing tendency for rising lavender oil prices. Over the past three to four years the price of lavender oil jumped three times," distillery owner Filip Lissicharov told AFP at the start of the lavender picking season Friday. Slumping production in traditional lavender oil leader France has shot Bulgaria to the position of top producer according to Lissicharov, whose Enio Bonchev Production company is one of Bulgaria's largest lavender oil exporters. "Bulgaria has imposed itself as the world's number one lavender oil producer over the past few years," he rejoiced. "Our biggest market is France itself!"

 

German Firm Gehrlicher Completes Bulgarian Solar Plant

Gehrlicher Solar AG, a German company, has completed its first Bulgarianphotovoltaic project, a 1.2 MW project located west of Sofia. The photovoltaic plant in Kosharevo near Breznik is expected to generate around 1.4 million kW/h of energy annually. The 1.2 MW photovoltaic plant will receive a feed-in tariff rate of 35.75 euro cents per kWh, the PV Magazine reported. The German solar company completed construction on the project in June. It is expected to be grid connected shortly. Spread across 1.9 hectares, Gehrlicher says it installed a total of 4 968 Sunowe modules, 54 SMA inverters and GehrTec Base, its in-house substructure for ground-mounted systems. Bulgarian investor group GSG Studena OOD owns and operates the photovoltaicplant. Meanwhile, Gehrlicher was responsible for the project planning engineering, construction and technical operation. "We were able to realize this first large-scale project within a few weeks, even before the reduction of compensation by July 1. As a result, the solar park will receive feed-in compensation of 35.75 cents per kWh," Gerald Kumerle, technical director of the Business Unit Ground-Mounted Systems, is quoted as saying. He believes that even with the reduced tariffs (24.83 cents per kWh), solar projects will be profitable in Bulgaria. "We are planning to expand the Kosharevo Solar Park in the course of the coming months to exceed three MWp and already have additional projects in the double-digit MWp range in the pipeline," he said.

 

Ivimeks bids to construct EUR 40mn waste processing plant

Local company Ivimeks has filed a proposal with the local government of the southern city of Yambol to build a plant for processing solid household waste, Dnevnik daily reported. The investment is estimated at EUR 40mn, which Ivimeks will fully cover. The facility will have capacity to process 120 tonnes of household and hazardous waste per day to produce construction materials. Also, it will generate electricity and heat. The project may open 40 jobs. 

Bulgaria ICT Market Value Drops 5.3% in 2010 – Computerworld

Bulgaria's information and communication technology (ICT) market contracted 5.3% to 4.32 billion levs ($3.1 billion/2.2 billion euro) in 2010, local media reported. Revenue on the telecommunication services market shrank 5.8% to some 3.2 billion levs in 2010, IT business monthly Computerworld said in its latest issue. Revenue on the information technology segment posted a 2.84% drop to 1.2 billion levs last year. According to Computerworld, the Bulgarian unit of Telekom Austria, Mobiltel, posted the highest revenue of 1.1 billion levs in the telecommunication services sector.

 

Bulgaria's BTC net profit dips in H1 2011

Bulgarian Telecommunications Company (BTC), operating under the Vivacom brand, saw its net profit plummet more than twice to 19.2 million leva in the first half of 2011, the company's consolidated report showed on July 13. BTC blamed the result on the lower income from services and the decline in property sales. The company's asset sales plunged to 1.3 million leva in the period from 34.2 million leva in the first six months of 2010. Total revenue came in at 434 million leva, down from 506 million leva the previous year. Its mobile service revenue went up 17 per cent year-on-year, partially offsetting the 13.7 per cent drop in revenue from land-line services. BTC's shareholders will meet on July 29 to vote on the distribution of 40.42 million leva in dividends for 2010, or 0.14 leva a share.

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea