불가리아 주요 경제뉴스 (28 October – 4 November 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (28 October – 4 November 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

Bulgaria's Business Climate Worsens by 0.7% October 2011 

2 Major Bulgarian Papers Merge to Form 'Capital Daily'

Bulgaria's industrial PPI grows 6.6% y/y in Sep 2011

 

 

INVESTMENTS:

Korean Firm Mulls Making Electric Cars in Bulgaria's Varna

Lukoil mulls buying above 20 MW wind power parks in Bulgaria – report

Bulgaria’s investment agency expects FDI at EUR 1bn this year

US Company Invests BGN 30 M in Green Energy in Bulgaria

First Step In Building A New Agro-photovoltaic Park Near The Town Of Targovishte

 

 

COMPANIES AND INDUSTRIES:

Bulgaria's Medica sales revenue rises 34% Y/Y in Q3 2011

Bulgaria's Wine Market Grows by 17%, Exports - 3%
Bulgarian Metal Industry Expected to Grow at Rate Similar to 2010

Sopharma’s domestic sales slip 1% in Jan-Oct

Bulgaria's road infrastructure agency starts EUR 81.8mn road repairs in 2012

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria's Business Climate Worsens by 0.7% October 2011

Bulgaria's total business climate indicator marks a decrease by 0.7% in October 2011 as compared with the previous month, according to the country's National Statistical Institute. The managers who have been asked to analyze the present business situation of the enterprises in the industrial and service sectors have been more moderate in their assessments, the Institute points out. The composite indicator "business climate in industry" drops by 1.8% compared to September. Despite of some increase of orders from abroad, the total production assurance with orders within Bulgariaøs industry keeps its level from the latest months. The average capacity utilization from July to October drops by 2.6% to 69.4% . The managers are still optimistic about the development of their industrial enterprises within the next 3 to 6 months, even though the difficulties related to the uncertain economic environment and the insufficient demand are still considered serious. In October 2011, the composite indicator „business climate in construction" preserves approximately the level from the previous month. There is no change in the managers' opinions regarding the present and the expected business situation of construction enterprises. However, the inquiry reports on a decrease in construction activity as compared to the previous month and the expectations about the next 3 months are more unfavorable. A further decrease of personnel is also expected. The production assurance with orders within the construction sector is assessed to be 4.8 months, as there is a decrease of 0.8 months in comparison with the assessment from July. At the same time, the expectations about new orders over the next 6 months are more reserved. The main factor limiting activity in the branch remains the uncertain economic environment, although its influence decreases by 6.6% over the last month. For a third consecutive month, Bulgaria's composite indicator "business climate inretail trade" stays at long-term average level. The balance indicator of the present business situation of enterprises drops by 3.9% due to a shifting of the managers' assessments to the more moderate opinions similarly to industry. However, they remain optimistic about the development of their businesses as the expectations about sales and orders placed with suppliers over the next 3 months increases. In October, the composite indicator of „business climate in service sector" drops by 0.7 % as compared to the previous month. That is due to the managers' more moderate assessments and expectations about the business situation in enterprises. The present demand for services slightly decreases as compared to September, as the expectations about the next 3 months do not foresee change in demand. The uncertain economic environment and the competition in the branch continue to be the most serious factors limiting the activity of the enterprises in the service sector.

2 Major Bulgarian Papers Merge to Form 'Capital Daily'

Two the popular Bulgarian daily newspapers – mainstream paper "Dnevnik" and the economic newspaper "Pari"are to be merged into a new newspaper, Dnevnik's publisher Economedia announced. The announcement comes a month after Economedia made a deal for the transfer of the Pari daily into its portfolio from its owner, the Swedish company Bonnier. Thus, the print edition of Dnevnik and Pari will be merged into the new paper, "Capital Daily", which is essentially renaming the paper after Economedia's weekly "Capital". The first issue of Capital Daily will be come out on Monday, October 31, 2011, the day after Bulgaria's presidential and local elections. "Our strategy is to united the readership of businesspeople and decision-makers through three products under the "Capital" brand – the Capital weekly, theCapital Daily, and capital.bg, and to redirect the Dnevnik brand through its web platform dnevnik.bg towards all active Internet users," explained Economedia CEO Liliya Apostolova. Because of the merger, Dnevnik's current editor-in-chief Velislava Popova will become the editor-in-chief of dnevnik.bg, the website of Economedia's current daily. Stanka Tosheva, who is the current editor-in-chief of the Capital weekly, will be in charge of the Capital weekly, the Capital Daily, and capital.bg. Aleksey Lazarov will be appointed managing editor of Capital weekly; Ivan Mihalev – of capital.bg; Ivan Bedrov, the current deputy editor-in-chief of the Pari daily, will be the new managing editor of Capital Daily. The mission of the Capital Daily will be to provide quality business content directed at decision-makers, Economedia said, adding that the print edition of thenewspaper will be published "every working day, on 24 pages, pink paper, and with a modern design." Capital Daily's content will be uploaded at capital.bg; the print layout will be available in a pdf format for only for paid subscribers of Capital Daily and capital.bg. The existing subscribers of Dnevnik and Pari will keep their subscription, said Economedia, which is one of the major players on the Bulgarian newspapermarket.

 

Bulgaria's industrial PPI grows 6.6% y/y in Sep 2011

The industrial producer price index (PPI) increased by 6.6% y/y in September, the same rate as in August, statistics office data showed. In monthly terms, producer prices increased by 0.8% after a 1.1% m/m drop in August. The prices of the mining industry increased by 4.6% y/y slowing from 7.7% y/y in August on metals extraction. The price growth of manufacturing also decelerated but only marginally to 9.1% y/y from 9.4% y/y in August. However, the above deceleration was compensated by higher growth of the utilities prices in September (1.8% y/y, up from 0.6% y/y in August). In terms of final use, the price growth decelerated in intermediate and consumer non-durable products while all other groups faced higher price growth in annual terms in September than in August. The broader index including export sales accelerated to 8.6% y/y in September as compared to 7% y/y in August but is still lower than 9.4% y/y in July. 

INVESTMENTS:

Korean Firm Mulls Making Electric Cars in Bulgaria's Varna

A Korean company is considering investment opportunities for the production ofelectric cars in Bulgaria's Black Sea city of Varna, South Korea's Ambassador Chun Bi-ho announced. His Excellency was in Varna Wednesday together with representatives of theKorean Trade Investment Agency (KOTRA). He explained, as cited by BNR, that the undisclosed Korean firm in question first intends to assemble electric cars in Varna, and would them potentially go for manufacturing their parts their as well. Chun did not reveal more details about the potential investment in electric cars but announced that Korean firms are involved in talks for potential participation in the concessions of Port Varna, one of the two major Bulgarian Black Sea ports.

Lukoil mulls buying above 20 MW wind power parks in Bulgaria - report

Russia’s oil major Lukoil may enter into agreement to purchase wind-power parks in Bulgaria through LUKErg Renew, a joint company (50%/50%) with Italy’s ERG Renew (part of ERG Group), according to sources of Russia’s RIA Novosti quoted by investor.bg. Lukoil is reportedly into negotiations to buy wind power installations with production capacity of above 20 MW. The investment may reach EUR 50mn. The deal is to be closed by the end of this year or early next year. LUKErg Renew was established in May to run wind and solar energy projects in Bulgaria and Romania and later in Ukraine and Russia. Lukoil is currently building a 1,25 MW solar power park near the southern Black Sea city of Burgas at the price of EUR 4mn, which should be completed by the end of this year. Lukoil owns the country’s oil refinery in Burgas Lukoil Neftochim and the petrol retailer Lukoil Bulgaria. 

 

Bulgaria’s investment agency expects FDI at EUR 1bn this year

Head of the state investment agency Borislav Stefanov said for investor.bg that the FDI inflows in the country may reach EUR 1bn this year, down from EUR 1.6bn last year. FDI flows to the country reached EUR 225.6mn in Jan-Aug as compared to EUR 926.5mn a year earlier. Stefanov reminds that the investments in the last two months of each year are usually higher. 

 

US Company Invests BGN 30 M in Green Energy in Bulgaria

ContourGlobal of the USA, who bought 73 percent of Bulgaria’s major thermal power plant Maritsa Iztok 3 from Italian Enel this summer, mulls the construction of a new power facility with a capacity of 600 MW. The news came from company’s CEO Joseph Brand. Within the coming two years the new owner of Maritsa Iztok 3 will invest 30 M leva in green technologies and, according to a plan, it will fully comply with all modern EU requirements, Brand said. The funds will be outlaid for the improvement of the environment, said Minister of Energy and Economy Traicho Traikov. “We are proud that we made this investment in Bulgaria in times of the global economic crisis,” Josef Brand added. 

 

First Step In Building A New Agro-photovoltaic Park Near The Town Of Targovishte

The first step for construction of new agro-photovoltaic park was taken near the village of Buhovtsi, Targovishte municipality. It will be a part of a pilot project for a solar park located on 330 acres. Procon Solar Bulgaria Ltd., a subsidiary of the German company Procon Solar, will invest 50 million euro on three photovoltaic units with total capacity of over 13 megawatts. The installation of the solar panels is scheduled to be completed by Spring 2012. Thirty local people will have a permanent job on the construction works project. Project partners for the agro-photovoltaic park are Targovishte municipality and the Institute of Soil Science in the town of Pleven who together will provide scientific monitoring of the soil and biodiversity. Fertile plots of land were purchased for the construction of the solar park were bought from by farmers for 500-750 euro per acre, four times the market price. When asked why fertile land is being used for solar power plants the investors said that the law on agricultural land in Bulgaria is too old and does not take account of the technological developments. Veselin Stanchev, the project manager explained, "with this agro-photovoltaic project, the land under the park, covering 330 acres, is de facto is not sealed with concrete. The panels are on stands, which are put into the ground and we will actually use the area for planting grass fodder." Agro-photovoltaics are a new trend in the sector of renewable energy. Solar plants for electricity generation are sufficiently well-known but the secondary use of the areas underneath the solar panels for organic farming is a new topic Professor Vassilev, the Institute for forage crops in Pleven explained. The systems are easy to maintain and are guaranteed for 25 years. By 2020 the German company Procon Solar intends to expand its operations near Targovishte and build a biomass plant and a wind farm. This will fulfill the concept of Targovishte's becoming a green energy hub.

 

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's Medica sales revenue rises 34% Y/Y in Q3 2011

Bulgaria's pharmaceuticals and medical supplies producer Medica recorded a 34 per cent year-on-year rise in sales revenue to 4.7 million leva in the third quarter of 2011, the company said on October 27 2011. In the first nine months of the year, its sales revenue stood at 12.7 million leva, an annual increase of 31 per cent. Medica's profit fell by six per cent on the year to 454 000 leva in the quarter. The company's bottom line made up 1.14 million leva in January-September, growing 4.4 per cent year-on-year. Sales of pharmaceutical products increased by 19 per cent in annual terms in the nine-month period, while medical supplies recorded a 48 per cent rise. Its exports soared 90 per cent to 4.6 million leva, accounting for about a third of total sales. Medica is part of the group controlled by Doverie Obedinen Holding and major drug maker Sopharma (BUL:3JR). Apart from production of medical supplies and bandages, the company has made significant investments in a plant for pharmaceuticals.

Bulgaria's Wine Market Grows by 17%, Exports - 3%

Bulgaria's domestic wine sales have increased by 16.7% in the first nine months of 2011 year-on-year, the Executive Agency on Vine and Wine has announced. According to its data based on information from the Bulgarian wine producers and distributors, a total of 58.5 million liters of wine were sold in Bulgaria in January-September 2011, up from 50.1 million sold in the same period of 2010, an increase of 8.4 million liters. At the same time, Bulgaria's wine exports grew by 2.6% year-on-year in the first three quarter of 2011, the Agency said. Bulgaria's wine exports in January-September reached 34.2 million, an increase of almost 900 000 liters compared with the 33.3 million liters of wine exported in the first nine months of 2010. Russia remains the top destination for Bulgaria's wine exports, with 15.5 million liters, or 45.3% of the total amount. Romania comes in second with 6.5 million liters in the reporting period. Poland, the UK, the Czech Republic, Belgium, Germany, Hungary, and Mongolia are other primary destinations for Bulgarian wine exporters.

 

Bulgarian Metal Industry Expected to Grow at Rate Similar to 2010

Production in Bulgaria's metal industry is expected to grow this year at a rate similar to last year's, Bulgarian Association of the Metallurgical Industry Executive Director Politimi Paunova told BTA. The total volume of steel produced in 2010 increased by some 2 per cent from 2009. Non-ferrous metallurgy reported a growth of some 4.5 per cent in the production of electrolytic copper, lead and zinc. Still, the sector has yet to recover to the pre-crisis levels of production in 2008, Paunova said. Investments in Bulgaria's metal industry already top 3,000 million leva. Last year the country exported 5,342,000,000 leva's worth of metal products, accounting for 18 per cent of the merchandise export and 16 per cent of the total export. In 2008, the peak year for Bulgarian metallurgy, the respective figures were 6,094,000,000 leva, 20 per cent and 15 per cent. The metal industry is exceedingly export-oriented, as many as 85-90 per cent of the metal output is exported. Last year metallurgy employed 13,200 persons, down from 21,900 in 2008. The monthly wage in the sector averaged 1,021 leva in 2008 and 1,129 leva in 2010. The economic crisis and the shut-down of Kremikovtzi has affected adversely the performance of ferrous metallurgy, Paunova noted. The production and export of rolled ferrous metals has plummeted, changing Bulgaria's status from net exporter to net imporer. The foreign trade balance of metallurgy as a whole, however, is still in a surplus (over 3,000 million leva for 2010) because of the fine performance of non-ferrous metallurgy and the successful development of the manufacturers of copper, lead and zinc and rolled ferrous-metals.

 

Sopharma’s domestic sales slip 1% in Jan-Oct

Domestic sales revenue at Sopharma declined by 1% year-on-year during the first ten months of 2011, October being the only month to escape a contraction, the Bulgarian pharmaceutical company announced yesterday. Nevertheless, Sopharma managed to achieve growth of 1% in total revenues thanks to the 2% rise in foreign sales. Shareholders in the company are about to gather for an extraordinary meeting, where they will vote on a resolution to award chief executive Ognyan Donev a bonus amounting to 1% of 2010 profits. There is also a proposal to allow him to distribute at his discretion 2% the profits among senior managers. Sopharma’s consolidated 2010 results show earnings of BGN 42.5 million (USD 30m/EUR 22m), meaning that Donev stands to collect BGN 424,000 and is set to distribute close to BGN 850,000 among the company's top echelon.

 

Bulgaria's road infrastructure agency starts EUR 81.8mn road repairs in 2012

The state road infrastructure agency informs on its website that it will start the repair of 234 kilometres roads in the spring of 2012. The indicative value of the project is estimated at BGN 160mn (EUR 81.8mn) and will be financed with EU funds under the country’s regional development operational programme. The rehabilitation of 616 kilometres of roads has already started under the above programme. 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea