불가리아 주요 경제뉴스 (14 - 21 October 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (14 - 21 October 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

• Bulgaria's Jan-July Tourism Revenue Rises to 1.54 Bln Euro

·         EBRD projects Bulgaria's GDP to grow by 1.6% y/y in 2011, 2.3% y/y in 2012

·         Retail sales in Bulgaria to grow 26% by 2015 - Business Monitor International

·         Bulgaria's finance ministry lowers GDP projection to 2.8-2.9% next year

·         Bulgaria Slips in Global 'Doing Business' Index

 

 

INVESTMENTS:

• Turkish Rubber Products Maker Teklas Opens 5.1 Mln Euro Plant in Bulgaria
• Lufthansa Technik Sofia to Reinvest 26 Million Levs

 

COMPANIES AND INDUSTRIES:

·         Bulgaria to Launch 2nd Refinery in Pleven                                                                            

·         Air Liquide Contracted to Supply Extra Volumes of Oxygen to Copper Smelter Aurubis Bulgaria                                                                                                                                            

·         1st Bulgarian Electric Cars to Be Made in Lovech in 2012                                                     

·         INTERVIEW - Italy's Espe Sunparc Eyes Solar Park Projects in Bulgaria, Setting Up Two Units in Romania

• El Bat inaugurates EUR 8mn car batteries treatment installation in Dolna Banya
• Bulgarian Brewer Kamenitza Plans 7.1 Mln Euro Investments in 2012
• Maritsa East Mines to invest EUR 12.6mn in mining technology repair

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria's Jan-July Tourism Revenue Rises to 1.54 Bln Euro

Bulgaria's tourism revenue rose to 1.54 billion euro ($2.13 billion) in the seven months through July, up by 5.2% on the year, the country's economy ministry said. In the January-August period tourist arrivals in Bulgaria totalled some 4.7 million, up by 5% from a year earlier, economy ministry data showed. Visitors from the EU accounted for 67.8% of all foreign arrivals. They numbered 3.18 million, which is 1.2% higher than in the same period a year earlier.

 

EBRD projects Bulgaria's GDP to grow by 1.6% y/y in 2011, 2.3% y/y in 2012

The EBRD has revised further down its growth forecast to real 1.6% this year from 2.3% in its July projection, 3.1% in its May projection and 2.6% in its January projection, according to the latest Regional Economic Prospects report. GDP growth is to accelerate to 2.3% next year (down from 3.7% projected in July and 3.6% projected in May). EBRD explains the deterioration for next year with lower export demand and impacts from the ongoing crisis in Greece. In all countries of EBRD-operation, the GDP will increase by an average of 4.5% this year (down from 4.8% projected in July and 4.6% projected in May but up from 4.2% in its January forecast) and 3.2% next year (down from 4.4% forecast in July). The institution expects the average inflation to accelerate to 3.5% this year (down from 4.2% in its July report and 4.6% projected in May) from 3% in 2010. The fiscal balance is expected to narrow to 2.5% of GDP in 2011 (as compared to 2.6% of GDP in its July report). The CA is expected to turn to surplus of 1.6% of GDP this year as compared to a deficit of 1.5% of GDP in its July projection and 1% of GDP gap last year. The net FDI flows will deteriorate to 1.5% of GDP this year (4% of GDP in its July projection and 4.1% of GDP in 2010). EBRD comments that the main risk for the country is the emerging of spill-over effects in terms of trade, investment and the financial sector because of the tight links with the eurozone countries. The Bank believes that the government will continue its efforts to reduce the fiscal deficit and will maintain the currency board arrangement and will pursue entry into the ERM II mechanism.

Retail sales in Bulgaria to grow 26% by 2015 - Business Monitor International

Bulgaria will record growth in retail sales between 2011 and 2015 given the expected increase in households' income, the concentration of the country's population in towns and cities and the price war between retailers, according to global research outfit Business Monitor International (BMI). Electronics, new motor vehicles and medicines are forecast to see the largest increases in retail trade while sales of food are expected to record a decline. The country's overall retail sales will grow by 26 per cent to 18.58 billion leva in 2015 against 14.75 billion leva at the end of 2011, according to BMI. The improvement will be chiefly driven by people living in urban areas in view of the expected rise in their number, despite the decreasing population in the country as a whole. According to BMI, an additional incentive for higher sales will be the rise in income of people in towns and cities. The reason for the expected bumper sales of electronics is the "limited distribution of digital products". The market researcher projects that sales in the segment will advance to 2.35 billion leva in 2015 from 1.87 billion leva in 2011. Sales of new vehicles are seen to go up by 10 000 units to about 32 000 in 2015. Medicines are forecast to register a 24 per cent spike in retail sales to 420 million leva in 2015. Food will continue to have a significant share on the retail trade market, but the segment will see a five per cent decline within the next four years, BMI said. Despite the anticipated deterioration on the food market, the so called modern trade (food retail chains) is forecast to record buoyant growth, as the segment is yet to develop.

 

Bulgaria's finance ministry lowers GDP projection to 2.8-2.9% next year

Finance minister Simeon Dyankov said that the ministry has lowered the GDP forecast to 2.8-2.9% next year as compared to 4.1-4.2% projected in the spring, investor.bg informs. The reduction is based on worse economic expectations for the European economy. Also, minister Dyankov said that the 2012 project budget is conservatively based on economic growth of just 2% and therefore changes will not be needed. GDP dropped by 5.5% in 2009 and then recovered by 0.2% last year, 1.5% y/y in Q1 this year and 2.2% y/y in Q2 2011. According to latest available data, the economy has been growing in the past five quarters. The latest forecasts of the ministry point to economic growth of up to 2.8%. The ministry has also revised the inflation forecast down to 2.5% this year from earlier expectations for 3.7% and expects it to decelerate further to 2-2.2% next year. 

Bulgaria Slips in Global 'Doing Business' Index

Bulgaria has been ranked 59th among 183 countries in the Doing Business 2012 report, compiled by the International Finance Corp (IFC), the World Bank's private-sector lender. Bulgaria was placed 51st in the Doing Business 2010 and 2011 ranking, which indicates the business environment in the country is deteriorating. Bulgaria has moved up and down in comparison to other countries in 9 of the total of 10 sub-indexes. The index shows that it has become harder to register a property in Bulgaria, as the country's ranking has dropped 3 places to 66. The protection of investors has worsened in 2012, according to the ranking, in which Bulgaria is 2 places down in comparison to 2011 and is currently 46th. The Trading Across Borders and Enforcing Contracts conditions in Bulgaria, however, have improved slightly– to 91st and 87th respectively. In stark contrast to previous years Bulgaria's sharpest fall is in the Starting a business topic, where the country has slipped 6 places down to 49. Its worst ranking is in the Dealing with Construction Permits and Getting Electricity categories, where it stands at spot number 128 and 133 respectively.

It takes 23 procedures and 120 days to build a warehouse in Bulgaria with official costs totaling 317% of GDP per capita, the report says. The Getting Electricity category has been introduced this year in the index to measure the ease or difficulty businesses face in getting an electricity connection. According to the report in Bulgaria one needs a total of 130 days to obtain a permanent electricity connection. (The measure captures the median duration that the electricity utility and experts indicate is necessary in practice, rather than required by law, to complete a procedure.) The Paying Taxes index shows that Bulgaria has improved due to the country's tax policy. The total tax rate, which measures the amount of taxes and mandatory contributions payable by the business in the second year of operation, expressed as a share of commercial profits for Bulgaria stands at 28.1% against an average of 40.4% for Eastern Europe and Central Asia. Among all 10 topic rankings, Bulgaria's performance is best in Getting Credit - 8th place, with no change in comparison to 2011. Morocco showed the biggest improvement as a place to do business this year, leading a surge of business-friendly reforms in Africa and Eastern Europe. The World Bank's annual "Doing Business" report again ranked Singapore as the world's easiest place to do business, followed by Hong Kong, New Zealand, theUnited States and Denmark. But South Korea and Iceland broke into the coveted top 10 rankings, edging out Sweden and Saudi Arabia.

 

INVESTMENTS:

 

Turkish Rubber Products Maker Teklas Opens 5.1 Mln Euro Plant in Bulgaria

Turkish automotive rubber products maker Teklas opened a 10 million levs ($7.1 million/5.1 million euro) plant in Bulgaria, its second in the country, the government said. The plant, located in Kardzhali, in the south of the country close to the Turkish border, will have its own research centre which will aim to diversify production, the Bulgarian government said in a statement on Saturday. The plant will hire 250 workers. Teklas opened its first plant, worth 10 million euro, also in Kardzhali in 2006. Teklas (www.teklas.com.tr) supplies extruded and brake hoses, injection moulding parts and windscreen wipers to major carmakers such as Porsche, Ford Group, General Motors, Renault and Toyota, among others.

 

Lufthansa Technik Sofia to Reinvest 26 Million Levs

The Bulgarian branch of Lufthansa Technik, the world's leading aircraft maintenance provider, has decided to reinvest some 26 million levs in the expansion of its on-ground overhaul and maintenance facilities at the Sofia Airport. This became clear from a statement of Mr. Bernd Freckmann, CEO of Lufthansa Technik Sofia, who received a Class-A Investor Certificate from Bulgaria's Economy and Energy Minister Traycho Traykov. In Freckmann's words, the expansion is expected to open two hundred new job positions for highly-qualified specialists. 
He went in to say that the expansion will turn Lufthansa Technik Sofia into the company's largest aircraft maintenance facility in Europe. This has been the second time that Lufthansa Technik Sofia is certified as a Class A Investor by the Bulgarian government since 2008. Over 400 professionals provide maintenance and overhaul to over twenty passenger airplanes a year at Lufthansa Technik Sofia. With this recent facility upgrade, the German investments to Bulgaria for the past fifteen years have reached 2.7 billion euro, said German Ambassador to Sofia, Matthias Hopfner. Minister Traykov said that the government was in talks with a potential investor over the construction of a new pilots training center in Sofia.

 

 

COMPANIES AND INDUSTRIES:

Bulgaria to Launch 2nd Refinery in Pleven

The refinery Plama in Bulgaria's northern city of Pleven is going to reopen in December 2011. The news was reported by Darik radio, citing Finance Minister, Simeon Djankov, who spoke during a meeting with the company-owner which purchased the refinerylast year. Plama will make mainly lubricants, while fuels will be a side production. The first facility to start functioning there is a vacuum installation in which BGN 20 M have been invested. The expected capacity in the first year is 300 000 tons, and plans are for it to reach 700 000 tons. The owner, Angel Stefanov, says Plama will be a brand name. According to Stefanov, the goal is to reinstate the leadership position of therefinery in the production of light base lubricants in Europe. Three more installations will open in Plama in the next year. There will be also an industrial park which will attract production from about 50 companies from Europe and Asia. The refinery will provide about 500-600 job openings. Djankov applauded the owners for their effort to reopen the facility and promised State help. He said the moment to launch production in Pleven was right because many refineries on the Balkans either stopped or drastically reduced production

Air Liquide Contracted to Supply Extra Volumes of Oxygen to Copper Smelter Aurubis Bulgaria

French Air Liquide has signed a new contract with copper smelter Aurubis Bulgaria for the supply of additional quantities of gaseous oxygen, the company said in a statement Thursday. Aurubis will pour an extra EUR 10 M into the expansion of its facility near the central Bulgarian town of Pirdop. Under the new 15-year agreement, Air Liquide will supply an additional 350 tons of oxygen to Aurubis as of 2013. The French industrial gas company currently supplies 800 tons of oxygen a day to the copper production plant. Aurubis AG, Hamburg is the largest copper producer in Europe and the global leader in copper recycling. Aurubis' Pirdop-based plant has a capacity to produce around 1 million tons ofcopper cathodes per year. "This is the first important step of our new investment programme for environmental protection and increasing productivity, "Aurubis Bulgaria 2014". I am very pleased with this agreement, said Nicolas Treand, CEO of Aurubis Bulgaria.

 

1st Bulgarian Electric Cars to Be Made in Lovech in 2012

The Litex Motors plant in the northern city of Lovech will have all the needed base and technology to start manufacturing the first series of Bulgarian electric cars in the spring. The announcement was made by Bulgaria's Economy and Energy Minister,Traicho Traikov, who spoke Tuesday during a conference in Sofia, titled "Electric Vehicles as a Factor for Sustainable Urban Development." Several electric cars made abroad can already be seen on the streets in theBulgarian capital Sofia while the Electromobil Industrial Cluster informs they can transform a regular vehicle into an electric one for the fee of BGN 8 000. Earlier plans included manufacturing of electric cars in the city of Stara Zagora as well. "The European Union adopted a strategy for developing vehicles that do not pollute the environment and Bulgaria reiterated its desire to participate in this process. The sector guarantees high added value and competitiveness, cleaner urban environment and higher quality of live," Traikov says. The Minister explained the State is to secure road infrastructure to the Lovech plant since it is a class A investment while a work group of experts from different ministries is discussing a package of incentives for the electric car industry and their use by consumers such as exemptions from the Value Added Tax (VAT) for the purchase ofelectric cars, elimination of registration fees, traffic and parking privileges. Traikov further said there is a project in place for building charging stations forelectric cars in Sofia, Plovdiv and Varna. Great Wall Motor Company, one of China's biggest automotive manufacturers, signed a joint venture (JV) deal with Bulgarian diversified holding company Litex Commerce in the presence of Chinese Vice President Xi Jinping and Bulgarian Prime Minister Boyko Borisov at the end of 2009. The plant will have an annual production capacity of 50,000 units and assemble four different models – a sports utility vehicle (SUV), a pickup and two passenger car models, which are expected to be sold in European Union countries.

 

INTERVIEW - Italy's Espe Sunparc Eyes Solar Park Projects in Bulgaria, Setting Up Two Units in Romania

Espe Sunparc Srl, an Italian company specialising in the design, installation and management of solar farms, is in talks to carry out solar park projects in Bulgaria with a combined capacity of 5.0 to 10 megawatts, the company's sales managing director said. The company has also secured permits for solar parks in Romania where it is incorporating two new units, Andrea Griggio told SeeNews in an emailed interview. We have only recently started to approach the Bulgarian market. At the moment our staff there consists of four people. And there's also a team of Italian coordinators following the Bulgarian projects," Griggio said. We believe Bulgaria is a key emerging market as far as photovoltaic [PV] energy is concerned. There's a lot of potential. The national feed-in tariff and, more generally, the legal framework are clearly defined." Espe Sunparc was recently born as a horizontally-integrated undertaking between Espe srl and Silfab Spa, founded by Franco Traverso, an Italian PV pioneer from the early 1980s, and international parners PanAsia Solar Ltd. and Sino-American Silicon Products Inc. Another Southeast European market on Espe Sunparc's radar is Romania. Espe srl, Espe Sunparc's co-founder, has already been present in Romania's hydro power sector for a decade. Espe Group owns five hydro power plants there and recently invested 22 million euro ($30.5 million) in a hydro power project in Sapanta, in northern Romania. That is why the company already has a solid base in Romania and enjoys solid reputation there too," Griggio said. The two new units in Romania - Espe Sunparc Renewables and Espe Sunparc Development, are based in Timisoara. Espe Sunparc Renewables will be in charge of facility operation while Espe Sunparc Development will deal with permitting procedures. We have already got permits for 9.0 MW of ground-mounted PV systems. Our 2012 development plans include 80 MW of PV power plants as engineering, procurement, construction and management contractors."

El Bat inaugurates EUR 8mn car batteries treatment installation in Dolna Banya

The local company El Bat inaugurated an installation for preliminary treatment of used lead car batteries in the village of Dolna Banya, investor.bg reports. The investment is estimated at EUR 8mn. The installation is the final part of the construction of production capacities for car batteries recycling and works under the best EU and world practices. The overall capacity is to process 80 tons of car batteries per day. The plant has opened 200 new job positions.

 

Bulgarian Brewer Kamenitza Plans 7.1 Mln Euro Investments in 2012

Bulgarian brewer Kamenitza said on Wednesday it plans 14 million levs ($9.9 million/7.1 million euro) investments in 2012. "Kamenitza's leading position proves that our strategy for development through investments and innovations is the right one, and that this is the direction in which the company should go," Kamenitza's general manager Dragan Radivojevic said in a company press release. The company did not provide details about the planned investments. Kamenitza invested a total of 18 million levs in its breweries in Plovdiv and Haskovo, both in the south of the country, in 2011, it said in a statement.

 

Maritsa East Mines to invest EUR 12.6mn in mining technology repair

State-owned coalmine Maritsa East, located in the southern part of the country, and the local arm of Siemens signed a contract for the repair of the mining technology, investor.bg reads. The project will start next month and should be completed in two years. Its value is estimated at EUR 12.6mn, of which 70% will come from the EBRD under the EBRD-managed fund for the decommissioning of the four 440 MW closed reactors at the Kozloduy nuclear plant. The remaining 30 % are own resources of the company. The project is part of a EUR 21.5mn package, comprising a total of three projects, agreed between Maritsa East Mines and the EBRD in June 2009. 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea