불가리아 주요경제뉴스 (5 - 12 August 2011)

 

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (5 - 12 August 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Ø  Bulgaria’s Economic Growth Will Slow down

Ø  June Industrial Production Grows 2.2% Y-Y

Ø  Construction output drop decelerates to 3.8% y/y in June 2011

Ø  Industrial production growth slows to 0.8% y/y in June 2011

Ø  Electronics, IT, Outsourcing Harbor Greatest Potential in Bulgaria - Finance Ministry

Ø  Bulgaria's Jan-May Exports to EU Up 49% Y/Y

Ø  New car sales rise 21.4% y/y in Jan-Jul 2011

Ø  Bulgaria's End-2020 Wind Power Capacity Seen at up to 3,500 MW - EWEA

 

INVESTMENTS:

Ø  Cabinet mulls investing EUR 20.5mn in Balchik airport

Ø  EVN Bulgarian Unit Invests over 1.16 Mln Euro in Pazardzhik Region in H1

 

COMPANIES AND INDUSTRIES:

Ø  Unilever buys ice-cream producer Darko

Ø  Privatisation body opens sale procedure for 35.78% state stake in Arsenal

Ø  Rompetrol To Open Five Petrol Stations in Bulgaria by End-2011

Ø  Bulgarian Machine Building Plant Invests to Boost Production Capacity

Ø  High sugar costs prompted by lack of production, overpricing in Bulgaria - analysis

 

 

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria’s Economic Growth Will Slow down

The collapse of the stock exchange market in the USA will have negative repercussions for the Bulgarian economy. We rely on exports while the world economy witnesses recession again. This, however, was not a surprise. The Industrial Capital Association in Bulgaria warned that this was a tangible possibility during the debates about raising the minimum wage in Bulgaria this winter. Regrettably what we see now is happening according to the worst scenario. It is not clear yet that a second economic downturn is in store for us, although it is sure that economic grows will be slowed down. With this in view I recommend more prudence in fiscal policy and more common sense during the election campaign. 

 

June Industrial Production Grows 2.2% Y-Y

In June 2011, the industrial production index, based on seasonally adjusted data, dropped 1.5 per cent from May 2011, showed National Statistical Institute preliminary data. The working day adjusted index grew 2.2 per cent from June 2010. The June output in the extracting industry lost 14.2 per cent from previous month, generation and distribution of electricity, heating and gas, 3.1 per cent and the processing industry, 0.4 per cent. A more considerable decrease was reported in the production of chemical products (8 per cent) and of rubber and plastic products (5.3 per cent). A growth was observed in timber production (12.6 per cent), pharmaceuticals (7.5 per cent) and tobacco products (7.4 per cent). Based on working day adjusted data, the processing industry gained 4.5 per cent on an annual base, while the extracting industry lost 5.4 per cent, and the generation and distribution of electricity, heating and gas dropped 2.8 per cent. The production of intermediate goods picked up by 5.8 per cent, and of investment products by 1.6 per cent, while the production of energy lost 1.5 per cent.

 

Construction output drop decelerates to 3.8% y/y in June 2011

Construction output declined by 3.8% y/y in June, according to preliminary data of the statistical office. The contraction narrowed from 16.9% y/y in May and 22.1% y/y in April. The construction of buildings dropped by 5.3% y/y as compared to 7.2% y/y in May. Civil engineering works went down by 22% y/y in June speeding from 21% y/y in May. In seasonally adjusted and working-days-adjusted terms, total construction output contracted by 0.5% m/m and 2.6% y/y, respectively. 

 

Industrial production growth slows to 0.8% y/y in June 2011

The industrial production index increased by real 0.8% y/y in June slowing significantly from revised 9.1% y/y in May, preliminary data of the statistical institute showed. The extraction industry and the utilities turned to decline of 6.1% y/y and 3% y/y, respectively (as compared to 22.4% y/y and 12.9% y/y growth in May) and the expansion of the manufacturing decelerated to 2.6% y/y from 7.7% y/y a month earlier. Food industry performance continued worsening for a second consecutive month and the production of chemical products, metals, machines, electronic and optical devices showed slowing growth rates. The apparel industry posted a small decline after growing by 15% y/y in May, and the production of vehicles (excluding cars) and cars parts dropped by double-digit rates. The number of branches, which posted annual growths in June, dropped to 16 (out of 27) as compared to 20 in May. In seasonally-adjusted terms, the industrial production declined by 1.5% m/m while working-day-adjusted data showed an increase of 2.2% y/y, both worsening as compared to relevant May data. The industrial turnover index increased by nominal 14.4% y/y as exports and domestic turnover went up by 21.6% y/y and 9.8% y/y, respectively. 

Electronics, IT, Outsourcing Harbor Greatest Potential in Bulgaria - Finance Ministry

Electronics, IT, and services outsourcing are the sectors of the Bulgarian economy that harbor the greatest growth potential, states the major conclusion of a fresh study by Bulgaria's Finance Ministry. The report of the Economic Analysis and Forecasts Directorate of the Finance Ministry in Sofia released Monday studies the performance of the real economysector in Bulgaria in 2008-2010. In addition to stressing the importance of improving production efficiency in Bulgaria, the paper also emphasizes that during the economic boom of the pre-crisis years both investments and labor had not focused on the most productive sectors of thereal economy in the country. According to the Bulgarian Finance Ministry, the services are the sector of theBulgarian economy that has suffered the least from the global economic and financial crisis. The analysis, which uses data from Amadeus, Eurostat, and the UN, finds that – in addition to IT, electronics, and services outsourcing – other sectors with substantial potential for growth in Bulgaria are the production of tobacco productsand foods, agriculture, freight truck transport, air transport, chemical industry and the production of pharmaceuticals in particular, and machine-building.

Bulgaria's Jan-May Exports to EU Up 49% Y/Y

In the period January - May 2011 the Bulgarian exports to the EU increased by 48.7% compared to the corresponding period of the previous year and amounted to BGN 9.6 B. The data was released by the National Statistics Institute, NSI, Tuesday. The main trade partners of Bulgaria were Germany, Romania, Italy, Greece and Belgium, that formed 67.2 % of the total exports to the EU Member states. The most significant growths were observed in the exports to Malta, Portugal, Denmark and Belgium. The most notable falls were registered in the exports to Slovakia. In May 2011, the exports to the EU increased by 38.5% compared to the corresponding month of the previous year and exceeded BGN 2 B. Bulgarian imports from the EU in the period January - May 2011 increased by 24.3% compared to the corresponding period of the previous year and amounted to BGN 10.1 B at CIF prices. The most significant growths were reported on the imports from Malta and Latvia. The largest decreases were observed in the imports from Finland and Portugal. In May 2011, the Bulgarian imports from the EU Member States increased by 22.1% compared to the corresponding month of the previous year and amounted to BGN 2.3 B at CIF prices. The foreign trade balance of Bulgaria (export FOB - import CIF) with EU in the period January – May 2011 was negative and amounted to BGN 532.5 M. At FOB/FOB prices (after elimination of transport and insurance costs on imports) the trade balance was also negative and amounted to BGN 13.4 M. The exports of Bulgaria to the EU distributed according to the Standard International Trade Classification, increased in all sections in the first fifth months of 2011, compared to the corresponding period of the previous year. The largest growths were recorded in the sectors "Crude materials, inedible (except fuels)," "Chemical and related products" and "Manufactured goods classified chiefly by material." The largest growths on imports from the EU were reported in the sectors "Crude materials, inedible (except fuels)," "Animal and vegetable oils, fats and waxes," and the lowest - in the sector "Mineral fuels, lubricant and related materials.

 

New car sales rise 21.4% y/y in Jan-Jul 2011

New car sales increased by 21.4% y/y to 13,003 units in Jan-Jul, according to data of the local car importers association quoted by Dnevnik Daily. The upward trend continued for a ninth month in a row slowing marginally from 21.7% y/y in H1. The sales of new passenger cars went up by 19.6% y/y to 12,277 units in Jan-Jul. The market leader was Volkswagen with a share of 11.8% in Jan-Jul, followed by Ford (9.1%) and Toyota (8.4%). The car dealers have sold a total of 711 new trucks (up by 79.1% y/y) while the sales of new buses plunged by 67.4% y/y to only 15 since the beginning of the year. The dealers have sold 254 motorbikes in the year-to-date readings, which is by about 5% more as compared to one year earlier. Sales of new cars, buses and trucks in Bulgaria fell by 25% on the year to 20,085 in 2010, as the market was still facing a slump in demand due to the financial crisis. Sales in the last two years plummeted 65.3%, after rising for nine straight years. 

 

Bulgaria's End-2020 Wind Power Capacity Seen at up to 3,500 MW – EWEA

Bulgaria is seen harnessing wind power to produce 8.2 terawatthours of electricity from an installed capacity of 3,500 megawatts by the end of 2020, a top-end scenario developed by the European Wind Energy Association indicated. Under the baseline scenario for Bulgaria, which generated 0.8 terawatthours (TWh) of wind power in 2010, annual output is seen at 7.0 TWh by end-2020 with installed capacity forecast at 3,000 megawatts (MW) versus 375 MW at present, the association said in its Pure Power/Wind Energy Targets for 2020 and 2030 report issued on Monday. The EU member country of 7.36 million will have to be adding 263 to 313 MW of wind power capacity between 2011 and 2020 to meet the targets set in the baseline and top-end scenarios, respectively, the report indicated. If Bulgaria achieves the baseline output target, wind energy will cover 18.4% of domestic demand, a share that would reach 21.5% if the top-end scenario pans out. According to the report, final electricity consumption in Bulgaria is expected to decrease to 38.2 TWh by 2020 from 39.7 TWh in 2008. Bulgaria is targeting a 21% share of renewables in electricity consumption in 2020, according to the country's National Renewable Energy Action Plan submitted to the European Commission.

 

INVESTMENTS:

Cabinet mulls investing EUR 20.5mn in Balchik airport

Transport minister Ivailo Moskovski has informed the cabinet on its meeting last week that the investment in the repair of the Balchik airport will reach at least BGN 40mn (EUR 20.5mn), investor.bg reported. The cabinet plans to transform the military airport to handle the tourists arriving for summer holidays on the northern Black Sea coast and renovate it until May next year. However, the investment in the airport should be approved by the EC. The facility is located some 50 kilometres from the civil airport in the northern Black Sea city of Varna, operated by Fraport Twin Star Airport Management (a 60/40 joint company of Germany’s Fraport and local BM Star) under a 35-year concession contract since 2006. Recently, Fraport signed a contract with the local arm of Germany’s Max Boegl Bauunternehmung for the repair of the runway at the Varna airport, which is expected to cost BGN 40mn and should be completed by the end of February 2012. 

EVN Bulgarian Unit Invests over 1.16 Mln Euro in Pazardzhik Region in H1

EVN Bulgaria Elektrorazpredelenie said on Monday it invested in the first half of the year over 2.26 million levs ($1.65 million/1.16 euro) to upgrade its power grid in the region of Pazardzhik, in southern Bulgaria. EVN Bulgaria Elektrorazpredelenie upgraded power lines and cables with a total length of more than 22.3 kilometres and set up two new substations, the company said in a press release. The planned investment programme for the entire territory served by EVN Bulgaria in 2011 amounts to 113.1 million levs, the company added. EVN Bulgaria Elektrorazpredenie supplies electricity to over 1.5 million customers in southeastern Bulgaria. It is licensed to purchase, distribute and sell electricity to households and corporate clients. EVN Bulgaria Elektrorazpredenie is co-owned by Austrian power utility EVN AG, which holds 67%, and the Bulgarian state which has a 33% stake.

COMPANIES AND INDUSTRIES:

 

Unilever buys ice-cream producer Darko

Unilever, producer of broad range of consumer products, has bought the production facilities, the distribution network and the trade marks of the local ice-cream producer Darko from Balkan Accession Fund, investor.bg informed. Darko, based in the capital city of Sofia, is the country’s second largest ice-cream maker with sales revenues of EUR 7mn last year. The price of the deal has not been announced yet. The concentration should be approved by the antitrust regulator. 

 

Privatisation body opens sale procedure for 35.78% state stake in Arsenal
The state privatisation agency has opened a procedure for the sale of the 35.78% state stake in the military plant Arsenal, the institution informed on its website. only candidates, which produce or trade with military equipment, will be allowed to take part in the one-stage competition. The bidders should have generated sales of more than BGN 40mn (EUR 20.5mn) last year. Arsenal manufactures small guns and a range of automatic assault rifles as well as technological equipment, munitions, chemicals, and hunting equipment. The majority stake in the plant, located in the southern town of Kazanlak, is held by its management-and-employees team. The privatisation agency tried unsuccessfully to sell the said stake in 2005 at a floor price of BGN 55mn (EUR 28mn). 

Rompetrol To Open Five Petrol Stations in Bulgaria by End-2011

Fuel trader Rompetrol Bulgaria plans to open five new petrol stations in the Southeast European country by the end of the year, it said on Monday. The company opened its 58th petrol station in Bulgaria, ten kilometres from the border with Greece, Rompetrol Bulgaria said in a statement. Rompetrol Bulgaria is a member of Dutch-based oil company Rompetrol Group whose main asset is Romanian oil refinery Rompetrol Rafinare. Rompetrol Bulgaria was set up in 2002. Its main rivals on the local market are the local units of Russia's Lukoil, Austria's OMV and UK-registered Royal Dutch Shell.

 

Bulgarian Machine Building Plant Invests to Boost Production Capacity

The "Dynamo" factory in the Southern Bulgarian city of Sliven, a leading producer in the automotive and machine-building industries, plans to invest over BGN 0.5 M to boost production capacity and meet the high requirements of the market. A new phosphate coating line is scheduled to go online in August, marking the completion of the first stage of the plant's investment program for 2011, according to a media statement of the company. The second stage will include the introduction of a fully-automated production line for galvanic coatings, as well as purchasing CNC metal cutting equipment. The company will use its own funds to implement the investment program. Currently "Dynamo" sells over 90% of its production on international markets outside the EU - the US , Russia and Ukraine. "Dynamo" has boasted that its "brushless alternator" type DEA 450 has been a real breakthrough for the factory as it has become an integral part of the production of transport equipment for the US Army because of its advantages to analogical products. Half of the output of the Sliven-based plant is used for primary integration in motor vehicle manufacturing, while the remaining half goes to the so-called aftermarket ofauto parts. "Dynamo" has reported a growth in orders in the aftermath of the automotive industry crisis. The latest investments of the plant constitute a response to the expanding market needs in the sphere.

 

High sugar costs prompted by lack of production, overpricing in Bulgaria - analysis

Bulgaria has been observing a spike in sugar prices because of the lack of manufacturing of the product in Bulgaria, the high costs on the international markets and the overpricing in the country, an analysis by the Economic Analysis and Forecasts Directorate shows. The analysis, ordered by Finance Minister Simeon Dyankov, focuses on the pricing of sugar in the country and the reasons for the increase to 2.5 leva a kg in 2011 from 1.6 leva a kg in 2010. "After January 2011, the price per kg of sugar producers for the end-consumer has increased by nearly one lev, which is in sharp contrast to trends observed in previous years," the ministry said in a statement. The spike is even higher when taking into account the rise in oil and sugar on the global market, which means that much of the overcharge had been provoked by retail chains in the country. Price formations in the sector have also been impacted by restrictions imposed by the European Union on member countries following the reforms in the sugar industry, which further weigh on incentives and opportunities for sugar production in Bulgaria. The report will be presented to the Commission of Protection of Competition to check if there is a cartel agreement between sugar traders, mass-circulation daily 24 Chassa reported.

 

 

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea