불가리아 주요 경제뉴스 (26 August – 2 September 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (26 August – 2 September 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

·         Bulgaria's 2011 Income from Foreign Tourists to Reach EUR 2.7 B    

·         Industrial PPI growth decelerates to 8.4% y/y in July 2011 

·         Budget deficit down 41.5% y/y in Jan-Jul 2011   

·         2010 Foreign Direct Investments in Non-Financial Sector Increase by 8.2% Y/Y

 

 

INVESTMENTS:

·         Kings Tobacco to invest BGN 45mn in a new factory

 

 

COMPANIES AND INDUSTRIES:

·         Bulgaria Oldest Brewery Sells Malt Production to French     

·         Co EUR 100.1 Mln Offered for State-Owned Shareholding in Bulgartabac     

·         EVN To Launch 51.1 Mln Euro Cogeneration Plant in Bulgaria Sept 2    

·         Bulgarian Solarpro Holding posts EUR 2.7m profit for H1 2011     

·         IKEA to open first Sofia store on Sep 20      

·         Number of active companies in Bulgaria drops 8.6% y/y in 2010      

·         Offer of BT Invest for purchase of 79.83% in Bulgartabac approved

 

 

 

Articles:

 

MACROECONOMY:

Bulgaria's 2011 Income from Foreign Tourists to Reach EUR 2.7 B

Bulgaria's total 2011 income from foreign tourists will reach EUR 2,7 B, according to estimates from the National Tourism Board, an NGO. Thus, in 2011, Bulgaria's income from foreign tourists will grow by 4.5%, while the total number of foreign tourists who visited the country will be 14% greater. Earlier estimates put their total number at over 6 million. At the same time, the total income from Bulgarian tourists will reach BGN 1.5 B, or about EUR 770 M, the Board has estimated, as cited by bTV. The highest increase in the number of visitors has been registered by the tourists from Russia, Slovakia, the Czech Republic, Hungary, and Poland, while the increases of the numbers of British and German tourists are smaller. The tourism experts are pointing out to a growing trend of tourists from Romania and other Eastern European / former communist bloc countries traveling to Bulgaria for their vacations by car. This has led them to insist on notable improvements of the roads and other infrastructure.

Industrial PPI growth decelerates to 8.4% y/y in July 2011

The industrial producer price index (PPI) increased by 8.4% y/y in July, decelerating from 10.1% y/y in June, statistics office data showed. In monthly terms, producer prices rose by 0.7% after the 0.1% rise in June. The price growth of food products decelerated slightly to 18% y/y, from 18.7% y/y in the previous month. The mining and quarrying industry rose by 3.3% y/y and the metal extraction inflation continued accelerating to 24.4% y/y from 14.2% y/y in June. The price increase in heating, electricity, and gas supply dropped to 1.3%, compared to 11.7% y/y registered in June. The broader index including export sales accelerated slightly to 9.4% y/y in July from 9% y/y in June and 9.2% y/y in May. 

Budget deficit down 41.5% y/y in Jan-Jul 2011

The general budget posted a deficit of BGN 720.5mn (EUR 368.4mn) in the first seven months of the year, down by 41.5% y/y, according to data published by the finance ministry. It accounted for 1% of the projected full-year GDP as compared to 0.84% of GDP at the end of June 2011 and 1.7% at the end of July 2010. Total budget revenues increased by nominal 4.5% y/y to BGN 14.1bn in Jan-Jul, which accounted for 53.9% of the forecast for the whole year. The increase was mainly due to higher revenues from indirect taxes, which added 13.5% y/y. Total expenditures increased marginally by 0.6% y/y to BGN 14.9bn in Jan-Jul or 52.7% of the projected expenditures for 2011. Current expenditures rose by 2.5% y/y and capital expenditures dropped by 17% y/y. Finance minister Simeon Dyankov expects the budget deficit to run below the target of 2.5% of GDP this year while according to the EC spring forecasts, the budget deficit will reach 2.75% of GDP this year. 

2010 Foreign Direct Investments in Non-Financial Sector Increase by 8.2% Y/Y

Foreign direct investments in non-financial sector at 31.12.2010 amounted to 22,119,000 euro or by 8.2 per cent more as compared to 2009, preliminary data of the NAtional Statistical Institute showed Tuesday. The largest volume of foreign investments were reported in industry - 8,204,000 euro and in the services sector (wholesale and retail trade; repair of motor vehicles and motorcycles; transport, communication and services; accommodation and food service activities) - 4,213,000 euro. The foreign direct investments in these sectors increased by 28.7 per cent and 24.1 per cent respectively, compared to 2009. In 2010 these activities made up 56.1 per cent of the total foreign direct investments, increasing in relative share by 8.3 percentage points over the previous year. Foreign direct investments in construction reached 1,292,000 euro or 4.6 per cent more as compared to 2009. The largest volume of investments on tangible fixed assets, were invested in Industry - 4,908,000 leva and in the services sector (wholesale and retail trade; repair of motor vehicles and motorcycles; transport, communication and services; accommodation and food service activities) - 3,610,000 leva. In 2010 these activities formed 52.2 per cent of total expenditure on fixed assets, or 0.5 percentage points more than the previous year. The investment in fixed assets in the construction sector reached 1,236,000 leva. The relative share of investments for machines and equipment increased by 1.5 points, and reached 37 per cent compared to the previous year. However, the expenditure for the purchase of land decreased by 2.6 points and the costs incurred for the acquisition of buildings and structures construction equipment - by 2.3 points, which formed 6.7 per cent and 47.1 per cent of total investments of tangible fixed assets.

 

INVESTMENTS:

 

Kings Tobacco to invest BGN 45mn in a new factory

Local company Kings Tobacco will invest BGN 45mn in the construction of a new factory with a total area of 74,000 square metres, according to a note posted on the website of the company. The manufacturing facility will comprise department for tobacco processing and cigarettes production and warehouses. The construction of the new factory is expected to be completed in 2012. Kings Tobacco, owned by Sigma Consulting, runs a cigarette factory in the country’s second largest city of Plovdiv, which was previously owned by Bulgartabac. It accounts for 15% of the local market. 

 

COMPANIES AND INDUSTRIES:

 

Bulgaria Oldest Brewery Sells Malt Production to French Co

The French company Malteries Soufflet is acquiring the malt production of Bulgaria's oldest commercial brewery "Kamenitza." Kamenitza announced Monday they were selling their malt factory in the northern city of Pleven and renting long-term the facility in the southern city of Haskovo to the French business. The decision is motivated by "the goal of steady growth," and is based on a "strategic assessment of the operations of the Bulgarian company." The buyer, Malteries Soufflet is part Soufflet Group, and is the second largestmalt producer in the world and leader on the Old Continent. Without the latest acquisition – Kamenitza, the company had 21 malt factories in 9 countries. Part of the deal with the Bulgarian brewery includes the agreement that all 38 employees at the two malt factories are to keep their jobs. In addition, Kamenitzais to sign a long-term contract with Malteries Soufflet for the purchase of malt for its breweries in Plovdiv and Haskovo. "Malt production had never been a priority activity for our company. The strategic deal with Soufflet Group will allow us to focus our resources and potential on beer production, marketing, and sales," the Bulgarian Dnevnik daily writes, citing representatives of Kamenitza's management. The annual production capacity of the factories of Malteries Souffler is over 1.8 million tons. Soufflet group is the largest private company in France for the purchase ofgrain and has a capacity of 3.668 million of tons in France and over 1 million tons globally. The company is specialized in grain processing. It owns 38 factories inFrance and across Europe. Its sales for 2009 amount to EUR 3 B. Bulgaria's oldest commercial brewery Kamenitza was established in Plovdiv by the Swiss Germans Rudolf Frick and Friedrich Sulzer in 1876. It became a large and modern factory in 1879/1881 with the help of another Swiss expert, Christian August Bomanti. Production began in 1882 in the Kamenitza area near the city and continues today, its successor being the Kamenitza brewery. Kamenitza AD, which was until last year part of Interbrew, renamed InBev after the merger of Interbrew and AmBev, is the second biggest brewery in Bulgaria. It has 780 employees. Its diverse brand portfolio includes international Stella Artois, Staropramen andBecks and Local Kamenitza, AstikA, Burgasko, Pleven, Slavena. Anheuser-Busch InBev sold its operations in seven countries in Central Europe and the Balkans, including Bulgaria, to private-equity firm CVC Capital Partners in December 2009.

EUR 100.1 Mln Offered for State-Owned Shareholding in Bulgartabac

Vienna-based BT Invest GmbH submitted a binding offer of 100,100,000 euro for the purchase of 5,881,380 shares, constituting 79.83 per cent of the capital of Bulgartabac Holding AD, Sofia, the Privatization and Post-privatization Control Agency said in a press release on Monday. The company proposed to purchase at least 5,000 tonnes of Bulgarian tobacco for each of the following five years and to invest 2 million leva in the first year after the acquisition and 5 million leva in the second year after the transaction. The tender commission together with the consultant Citigroup will examine the participant's proposal in substance. BT Invest remained the only bidder for Bulgartabac after British American Tobacco said it was withdrawing from the privatization procedure on August 1 "for reasons of commercial and strategic character". On Monday, the Bulgartabac Holding shares rose 2.24 per cent to 27.50 leva. The price offered by BT Invest is slightly over 34 leva per share.

 

 

EVN To Launch 51.1 Mln Euro Cogeneration Plant in Bulgaria Sept 2

Electricity company EVN Bulgaria said on Tuesday it will launch on September 2 a cogeneration plant worth 100 million levs ($74.1 million/51.1 million euro) in Bulgaria's second largest city of Plovdiv. The project is developed by EVN Bulgaria Toplofikatsia and German engineering group Siemens, the power distributor said in a statement. Construction works on the cogeneration plant, which will have a combined capacity of 50 MW, started in September last year. EVN Bulgaria Toplofikatsia is licensed to produce heat and electricity and to distribute heat energy. It supplies heat to over 35,000 customers in Plovdiv and Asenovgrad. EVN Bulgaria (www.evn.bg), part of Austrian group EVN, is the electricity distributor for Plovdiv and the region of southeast Bulgaria, supplying electricity to some 1.6 million customers.

 

Bulgarian Solarpro Holding posts EUR 2.7m profit for H1 2011

Bulgaria's Solarpro Holding booked a BGN 5.3 million (USD 3.9m/EUR 2.7m) profit on consolidated operating revenue of BGN 25.5 million for January to June 2011, the photovoltaic firm said on August 30. No comparative figures for 2010 are available because the company has recently separated its operations from the energy business of mineral extracting and processing firm Kaolin. Solarpro pinned the high revenue on the engineering, construction and delivery of photovoltaic power plants in the region. The company so far has installed capacities of more than 30 megawatts and another 40 MW are in the make. The solar equipment maker's costs stood at BGN 21 million up to June, including spending on materials of BGN 9.3 million. Payments to contractors amounted to BGN 2.8 million and salary costs totalled BGN 1.6 million. Long-term bank loans came in at BGN 15.8 million, while short-term loans stood at BGN 16.7 million. Solarpro Holding is part of local business conglomerate Alfa Finance Holding. Bulgarian businessman and publisher of Dnevnik daily and Capital weekly, Ivo Prokopiev, is shareholder in Alfa Finance. Solarpro's stock are listed on the Bulgarian Stock Exchange and last traded at BGN 0.46 a share.

 

IKEA to open first Sofia store on Sep 20

Swedish furniture maker IKEA will open its flagship outlet in Sofia on September 20, targetting about 1.5 million shoppers in the first year of operation, Greek firm Fourlis, which holds the franchise licence in Greece, Cyprus and Bulgaria, said. The direct-mail distribution of 750,000 copies of the company's catalogue will start on September 2. The catalogue prices are valid until August 2012. The catalogue will reach customers in Plovdiv, Pazardjik, Pernik and Kyustendil as well. The furniture manufacturer said it targetted a 10% market share in the first year but gave no revenue forecasts. Furniture sales in Bulgaria are estimated at between BGN 450 million (USD 328m/EUR 230m) and BGN 550 million a year but there is no official statistics. The Sofia store will cover 29,000 sq m and will offer 7,500 products. The store has a parking lot for 1,200 cars. The chain will open a second store in the Black Sea city of Varna, but the project is at an early stage. IKEA is the largest furniture trader in the world with 324 stores in 38 countries. Last year the company generated a turnover of EUR 23.8 billion.

 

Number of active companies in Bulgaria drops 8.6% y/y in 2010

The number of active non-financial companies in Bulgaria decreased by 8.6% y/y to 315,819 in 2010, compared to a 25% annual increase reported in 2009, preliminary data of the statistics office showed. A total of 1,934,544 were the employed persons, of which 625,812 or 32.3% were employed in the industry sector, 185,453 or 9.6% in the construction sector (down by 2pps compared to 2009) and 531,921 or 27.5% were working in the trade sector (up by 1pps y/y). The number of companies in the industry sector dropped by 3.3% y/y to 32,964 in 2010 due mainly to a decrease in the number of manufacturing companies from 32,177 in 2009 to 30,635 in 2010. The value added in the sector at factor costs reached BGN 12.4bn (at current prices) and registered an increased share of the mining and quarrying (by 1.7pps), electricity, gas and heating (by 0.5pps) and water supply (by 0.4pps), while the relative share of manufacturing decreased by 2.6pps. The number of construction companies also contracted by 10.5% y/y to 21,118. Companies active in the wholesale and retail trade on the other hand increased marginally by 0.3% y/y to 143,688. The share of wholesale trade (except motor vehicles) in the value added in the sector rose by 4.8pps y/y, while the share of retail trade dropped by 4.3pps y/y. Companies in the services sector increased by 2.1% y/y and constituted 27.4% of total active companies in the country. Some 30.6% or 591,358 in total was the number of the employed in the sector in 2010. 

Offer of BT Invest for purchase of 79.83% in Bulgartabac approved

The privatisation agency has approved the offer of Austria’s BT Invest GmbH for the purchase of the 79.83% state stake in tobacco holding Bulgartabac (BSE: 57B), according to a note published on the website of the agency. The offered amount for the stake was EUR 100.1mn and the contract should be signed by Sep 15. As recalled, BT Invest GmbH remained the only bidder in the competition for the privatization of the state tobacco company as London-based British American Tobacco (BAT) sent an official letter informing that it withdraws from the race due to trade and strategic reasons and Austria’s CB Family Office Service GmbH failed to purchase information memoranda within the set deadline. In April, the agency officially launched the privatisation procedure for Bulgartabac sale and said it expected to select a winner by the beginning of September 2011. The state controls 79.83% in Bulgartabac and the remaining part is floated on the local bourse. 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea