불가리아 주요 경제뉴스 (2 – 9 September 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (2 – 9 September 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Ø  Industrial production growth regains speed in July 2011

Ø  Bulgarian Economy Brightens up

Ø  Bulgaria's EU exports soar 44%

Ø  Bulgaria Reports Surplus in Foreign Trade with EU in First Half of Year

Ø  Bulgaria's economy moves down in global competitiveness ranking

 

 

INVESTMENTS:

Ø  Bulgaria's Amilum to invest 51M leva in capacity expansion

Ø  Energoni to invest EUR 766.9mn in wind, solar installations in 15 years

 

COMPANIES AND INDUSTRIES:

Ø  Construction output drop speeds to 14.4% y/y in July 2011

Ø  Maritsa East Mines raises output by 51.4% y/y in Jan-Aug 2011

Ø  Bulgarian Wines Set off to China

Ø  Bulgarian Mines Break Coal Production Record in January-August 2011

Ø  Copper miner Asarel Medet gets 15-year copper-gold ore extraction concession

Ø  BT Invest seeks antitrust approval to acquire Bulgartabac

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

Industrial production growth regains speed in July 2011

The industrial production index increased by real 4.7% y/y in July speeding from revised 1.6% y/y in June, preliminary data of the statistical institute shows. However, it is still much lower as compared to some 9% y/y in May and April. The extraction industry and the utilities turned to growth again (up by 9.6% y/y and 7.2% y/y, respectively) after the one-off declines in June (5.4% y/y and 3.3% y/y, respectively). The expansion of the manufacturing accelerated slightly to 3.9% y/y from 3.7% y/y a month earlier. Food industry continued contracting for a third consecutive month though at a slowing rate and the production of chemical products and pharmaceuticals showed slowing growth rates. The manufacturing of rubber and plastic products as well as textiles turned to decline. At the same time, the performance of the manufacturing of apparel, paper, mineral products, metal products, and car parts improved. The number of branches, which posted annual growths in July, rose to 20 (out of 27) as compared to 17 in June. In seasonally-adjusted terms, the industrial production added 1.5% m/m while working-day-adjusted data showed an increase of 6.2% y/y, both improving as compared to relevant June data. The industrial turnover index increased by nominal 14.8% y/y as exports and domestic turnover went up by 19.1% y/y and 12.3% y/y, respectively.

 

Bulgarian Economy Brightens up

The share of grey economy in Bulgaria is shrinking. According to data from a survey conducted by Visa Europa, for the first half of 2010 the grey economy made 37.7% of the GDP of Bulgaria and in the second half of the year its share decreased by 5.2% to 32.5 %. In terms of money it means that the share of the grey economy for last year amounted to 11 billion euro from total 34 billion euro of the GDP. According to Visa, the main part of money in the grey economy comes from undeclared incomes or tax evasion through declaration of lower than real profit. Cash in hand sustains the grey economy, the survey reads. Cash payment is vital for the existence of grey economy because it is easy to use and difficult to trace. According to the survey, increasing the share of electronic payment by 10% will reduce the grey sector share by at least 5%. 

 

Bulgaria's EU exports soar 44%

Bulgaria's exports to the European Union rose by 43.6 percent in the first half of 2011 compared to the same period of last year, the national statistical institute said Thursday. Between January and June, Bulgaria exported to the EU goods worth 11.6 billion leva (5.9 billion euros, $8.3 billion), preliminary data showed. Bulgaria's trade deficit over the first half of the year was 1.2 billion euros, compared to 1.9 billion euros in the same period of 2010. on a monthly basis, Bulgaria's trade deficit shrank slightly to 301.3 million euros in June from 313.6 million euros in May as both exports and imports dropped. Bulgaria wrapped up 2010 with a trade deficit of 3.6 billion euros.

 

 

Bulgaria Reports Surplus in Foreign Trade with EU in First Half of Year

Bulgaria reported a foreign trade surplus of 31.8 million leva at FOB/FOB prices in trade with the EU for January-June 2011, the National Statistical Institute said Thursday, releasing preliminary data. The FOB exports - CIF imports balance was negative and stood at 508.1 million leva. In the first half of the year Bulgaria increased its exports to the EU by 43.6 per cent year-on-year to 11,600 million leva. Imports from the EU grew by 20.5 per cent, amounting to 12,100 million leva at CIF prices. Bulgaria's main foreign trade partners in the EU are Germany, Romania, Italy, Greece and Belgium, which account for 67.6 per cent of this country's exports to EU member states. The greatest growth in exports was to Malta, Portugal, Denmark and Belguim. Exports to Slovenia decreased the most. Imports increased the most from Malta and Latvia, and dropped from Finland and Portugal. Compared to the first half of 2010, Bulgaria increased exports to EU member states in all sectors in January-June 2011. In June exports to the EU increased 23.1 per cent compared to the same month in 2010 and exceeded 2,000 million leva. Imports from the EU grew by 3.8 per cent and exceeded 1,900 million leva at CIF prices.

 

Bulgaria's economy moves down in global competitiveness ranking

Bulgaria has slipped three rankings to 74th place in the 2011 survey of 142 competitor nations, according to the World Economic Forum's Global Competitiveness reports presented in Davos, Switzerland. According to the report, state institutions with an influence on the business environment have improved their performance, but the condition of private sector companies has deteriorated in terms of technological readiness, level of business development, innovation and other indicators. The survey was carried out on the basis of the global competitiveness index, calculated by the World Economic Forum, which reflects the micro-and macroeconomic aspects of competitiveness. The annual survey by the Geneva-based organisation is based on 12 main criteria which influence competitiveness, namely institutions, infrastructure, macroeconomic environment, health care and education, stock market efficiency, labour market efficiency, financial market development and market size, technological readiness, level of business development and innovation. Bulgaria was ranked as one of the "economies driven by efficiency, at an intermediate stage in economic development - between underdeveloped economies that rely on its resources for its development and developed states in which growth is based on innovation." Bulgaria was placed in that category together with 27 countries, including Serbia, Montenegro, South Africa, Thailand, Latin American and Pacific countries. The country's lower rank resulted from its deteriorating performance in terms of stock market efficiency, technological readiness, level of business development, infrastructure and innovation. At the same time, institutions, financial markets, market efficiency, labour, education and training got higher marks in the survey.

 

INVESTMENTS:

Bulgaria's Amilum to invest 51M leva in capacity expansion

Bulgaria's starch manufacturer Amilum will invest 51 million leva in the construction of a new production facility, the country's Economy Ministry said on September 8 2011. Construction works on the project, which will create 15 jobs, are expected to be completed in a year and a half. The investment is aimed at boosting the company's dextrose output to 100 tons a day, with an option to further increase it to 300 tons. Amilum Bulgaria, based in the northeastern town of Razgrad, is part of Belgium's Amilum group, which is in turn a subsidiary of Tate & Lyle, a global leader in the starch industry. The group has production facilities in nearly 30 countries in Europe, the Americas and Southeastern Asia. In 1993, the sale of the unfinished starch factory in Razgrad was the first privatisation deal in Bulgaria. The Belgian company then paid $20 million for the asset. Amilum Bulgaria specialises in the production of fructose syrup, sweeteners and starches.

Energoni to invest EUR 766.9mn in wind, solar installations in 15 years

Local energy company Energoni plans to invest BGN 1.5bn (EUR 766.9mn) in wind and photovoltaic power installations in the country in the next 15 years, Bloomberg reported citing company’s chairman Maksim Dimov. Energoni expects to raise BGN 1bn in secondary share offering. It intends to build 2,271 MW wind capacities and 400 MW photovoltaic installations. The company holds three licenses to construct two wind parks with 200 MW capacity each and a solar park of 120 MW capacity. one of the wind parks will be located near the northern village of Dobrin and its first section of 54 MW capacity is to be ready next year while full capacity will be reached in 2015. The investment is estimated at BGN 550mn. The second BGN 550mn wind plant will be located near the capital city of Sofia. Also, Energoni will build BGN 130mn solar park near the southwest city of Pernik by 2013. The shares of Energoni are traded on the local stock as of August this year after the administrative court rejected the decision of the state financial regulator as of April 2010 to ban the public trading of Energoni. The commission blocked the public offering on concerns over the value of its main asset. Several auditors have shown different opinions with respect to the above value and the financial commission has warned investors that they will have to prepare their own assessments. Currently, Energoni is the largest company traded on the local stock exchange in terms of market capitalisation (BGN 1.7bn). 

 

 

 

 

COMPANIES AND INDUSTRIES:

 

Construction output drop speeds to 14.4% y/y in July 2011

Construction output declined by 14.4% y/y in July, according to preliminary data of the statistical office. The contraction sped from revised 3.7% y/y in June but decelerated when compared to 16.9% y/y in May and 22.1% y/y in April. The construction of buildings dropped by 9.8% y/y as compared to 5.3% y/y in June. Civil engineering works went down by 20.7% y/y in July decelerating from 21.9% y/y in June. In seasonally adjusted and working-days-adjusted terms, total construction output contracted by 0.9% m/m and 13.2% y/y, respectively. 

 

Maritsa East Mines raises output by 51.4% y/y in Jan-Aug 2011

State-owned coalmine Maritsa East, located in the southern part of the country, has extracted 20.6mn tonnes of coal in Jan-Aug, which is by 51.4% more as compared to a year earlier and exceeds the plan by 2.5%, the company said on its website. The coalmine expects to extract some 28-29mn tonnes of coal this year as compared to annual plans for 27.25mn tonnes. The target for next year is more than 32mn tonnes of coal to match the requests of the operating coal-fired power plants in the region. Maritsa East Mines, part of the state-run Bulgarian Energy Holding, provide inputs to four thermo-power groups in the region (Maritsa East II, Contour Global Maritsa East III, the newly-inaugurated AES Galabovo and Brikel) with a total production capacity of above 3,300MW. Last year, Maritsa East beat its output target by 8%, extracting over 26.1mn tons of coal. 

 

Bulgarian Wines Set off to China

China shows interest in Bulgarian wines. Asian businessmen research the produce. Real wine export deals for the largest market in the world are expected next year, Krassimir Krastev from Vini Sliven told the Standart. Chinese experts tour vineyards and cellars and sample wines. They take only small amounts of wine to test them on their home market. For the time being Russia is the largest export market for Bulgarian wines. According to data from the Wines and Vines Implementation Agency, about 22 million litres of wine have been exported since the beginning of the year which is a growth of 1.1% compared with the same period of 2010.

 

Bulgarian Mines Break Coal Production Record in January-August 2011

Bulgaria's state-owned Mini Maritsa Iztok EAD (i.e. Maritsa East Mines Jsc) achieved a record production of coal in the first eight months of 2011. A total of 20.62 million metric tons of lignite coal were extracted by the Maritsa East Mines in January-August 2011, improving the previous best result for the first eight months of any given year, which was the production of 16.60 million metric tons of coal in 1996. The January-August 2011 coal output marks an increase of 7 million metric tons year-on-year, and is 500 000 metric tons more than the goal set by the company for the respective period. "The motivation and team work of over 7 200 employees improved the previous highest production," Mini Maritsa Iztok said in a statement. The company announced that since the start of 2011 so far it has dug up, transported, and deposited more than 66 million cubic meters of earth mass, a 57% increase year-on-year. This way the mines are preparing to meet the demand by the several large-scale thermal power plants in the Maritsa East energy complex, including Maritsa East 2 EAD, Contour Global Maritsa East 3, AES Galabovo, and Brikel EAD. By the end of 2011, the management of the Maritsa East Mines originally planned to extract 27.25 million metric tons of coal, and to dig up 94.9 million cubic meters of earth mass. Taking into account the record output in the first eight months, however, the company expects it will produce at least 28-29 million metric tons of coal in 2011. With all thermal power plants in Bulgaria having submitted their orders for 2012, Mini Maritsa Iztok EAD forecasts the production of over 32 million metric tons of coalnext year. Much of the increase is due to the launch of the AES Galabavo TPP, a massive investment of the US energy giant AES, into a 670 MW facility opened in the spring of 2011.

Copper miner Asarel Medet gets 15-year copper-gold ore extraction concession

The government has granted a 15-year concession for extraction of copper-gold ore to copper miner Asarel Medet, investor.bg reported. The company should invest at least BGN 38mn (EUR 19.4mn) in next five years. The average annual extraction should reach 2.7mn tons of ore and the concession payment is expected at BGN 2.8mn per year. About three months ago, Asarel Medet completed an investment programme worth more than BGN 150.8mn. 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. 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 Asarel Medet.

 

BT Invest seeks antitrust approval to acquire Bulgartabac

Austria’s BT Invest GmbH has asked the state antitrust commission to allow the acquisition of tobacco holding Bulgartabac and its subsidiaries, the regulator says on its website. The watchdog expects the concentration to affect the tobacco and cigarettes markets in the country and invites all interested parties to send opinions by September 15. Recently, the privatisation agency approved the offer of BT Invest GmbH for the purchase of the 79.83% state stake in Bulgartabac at the price of EUR 100.1mn. The contract should be signed by Sep 15.

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea