불가리아 주요 경제뉴스 (18 - 25 November 2011)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (18 - 25 November 2011)

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

• Bulgaria’s FinMin may revise GDP, budget deficit, inflation forecasts for 2012
• Bulgaria’s foreign debt drops 1.6% y/y to EUR 36.12bn at end-Sep 2011
• Foreign tourist number in Bulgaria to remain at previous winter level -chamber
• Bulgaria, Turkey to sign political agreement for gas link construction
• EC to provide additional EUR 185mn to Bulgaria for nuclear units closure

 

INVESTMENTS:

 

• Businesses project 20% drop in investments in industry in 2011 K
• Knauf Gets 'Class A' Investor Status in Bulgaria with EUR 16 M Plant

 

COMPANIES AND INDUSTRIES:

 

• EurOmax Intersects 66.7 M at 1.23 G/T Gold at Trun Gold Project in Bulgaria
• MRSK reportedly interested in local power distribution assets of E.ON
• Bulgaria's Zagorka to build EUR 1m green warehouse

 

 

 

 

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria’s FinMin may revise GDP, budget deficit, inflation forecasts for 2012

Bulgaria’s finance ministry is likely to lower its 2.9% GDP growth forecast for 2012, amending its budget draft, since next year’s outlook has worsened, daily 24 Chasa reported quoting unnamed sources from the ministry. Finance minister Simeon Dyankov has already said that next year’s projected budget revenues could be collected at 1% GDP growth as well. According to the daily, however, the economic growth estimate for 2012 could be revised down to 0.9%. Under the draft, next year’s budget targets a deficit of 1.35%/GDP but according to experts quoted by the daily a 2%/GDP fiscal gap is a more realistic scenario. The finance ministry could as well change the inflation outlook for next year. The government may consider raising inflation in order to boost domestic consumption and compensate deteriorating exports. Bulgaria’s annual consumer price inflation accelerated to 3.5% in October from 3.3% a month earlier.

 

Bulgaria’s foreign debt drops 1.6% y/y to EUR 36.12bn at end-Sep 2011

The gross external debt declined by 1.6% y/y and 0.1% in a month to EUR 36.12bn as of end-September, according to preliminary data of the central bank. The foreign liabilities of the public sector fell by 1.4% y/y. The private sector reduced its foreign debt by 1.6% y/y still as a result of the activity of the banking sector (contraction of the short-term deposits of foreigners and the short-term loans of the local banking system). The total foreign debt accounted for 92.2% of the full-year GDP projection as compared to 101.8% of GDP a year earlier. The short-term debt, covering liabilities with original maturity of one and less than one year, went down to 29.7% of the total as compared to 29.8% a month earlier and 31.1% a year earlier. The credits on demand accounted for 24.4% of the total external debt (the same as at end-Aug but slightly down from 24.9% in annual comparison) and 61.4% of them were reported as inter-company loans. The share of total inter-company loans, which are not included in the short-term debt statistics, accounted for 40.6% of the total external debt, up by 0.1pps in a month and 0.3pps in annual comparison. IntelliNews comment: The ratio of foreign reserves to short-term debt improved to 121.5% at the end of September as compared to revised 121.3% a month earlier and 111.7% at the end of September last year. It is still weaker compared to more than 120% at end-2007 and about 300% in 2002-2004. Foreign debt is likely to continue declining in the near future until banks see prospective local projects to finance. In this case, local lenders may reverse the trend to export excess liquidity abroad, which is to push the economic growth up.

 

 

Foreign tourist number in Bulgaria to remain at previous winter level –chamber

The number of the foreign tourists this winter is expected to remain at its last year’s level, the chairman of the tourist chamber Tsvetan Tonchev said for investor.bg. However, the number may increase as a result of last-minutes arrivals and also depends on the weather. The visitors from the UK and Russia are to account for the largest share and the chamber also expects high tourist number from neighbouring countries. The total revenues from foreign tourist visits this winter is expected at some EUR 300mn and the prices are to remain the same as last winter. 

 

Bulgaria, Turkey to sign political agreement for gas link construction

The governments of Bulgaria and Turkey will sign a political agreement for the construction of a gas interconnector between the two countries to declare that the project is of strategic importance, Bulgarian economy ministry informs in a note on its website. The capacity of the pipeline is to reach 1 to 3bn cubic metres of natural gas annually and it may increase twofold. The length of the interconnector, which is to transport Caspian gas to Europe and secure cheaper supplies through a LNG terminal, is estimated at 77 kilometres. The investment value has not been disclosed but according to Bulgarian economy and energy minister Traycho Traykov it is relatively small. 

 

EC to provide additional EUR 185mn to Bulgaria for nuclear units closure

The EC will propose to the Council of the EU and the European Parliament to approve additional aid in the amount of EUR 185mn for the closure of units in the nuclear plant in Kozloduy in the period 2014-2020, the economy ministry informs on its website. The financing is part of the EUR 500mn aid, which is to be disbursed to Bulgaria, Lithuania (EUR 210mn) and Slovakia (EUR 105mn), and is part of the budget of the Europe 2020 Strategy. The funds may be used for the decommissioning of nuclear units only. The EC has allocated EUR 2.8bn for the decommissioning of units in Bulgaria, Lithuania and Slovakia, of which Bulgaria has received EUR 550mn and additional EUR 300mn until 2013. We remind that the power plant in Kozloduy closed four 440 MW generators, two of which in early 2003 and two in the last day of 2006. At present it operates only two generators of 1,000MW capacity each. The programme period for Bulgaria expires in 2020. 

 

INVESTMENTS:

 

Businesses project 20% drop in investments in industry in 2011   

Bulgarian businesses active in the industry sector project a 20 per cent annual decline in investments this year, according to the results of an investment business survey conducted by the National Statistical Institute (NSI) among manufacturers in the second half of October. Firms that took part in the survey contribute 90 per cent of the annual turnover of the sector. Businesses expect that the largest share of investments will be channelled into energy and sewerage-related sectors (44 per cent), followed by sectors that produce intermediate goods (27.3 per cent) and food (10.9 per cent). Investments in industry are seen to rise by 17.4 per cent in 2012 compared to the current year. About 43 per cent of the respondents do not plan to earmark funds for purchases of long-term assets in 2012. Domestic firms project that mechanisation and automation of existing production processes, as well as introduction of new production technologies, will attract the largest portion of investments next year, 34.6 per cent. Investments in production capacity are seen to account for 27.9 per cent of the total, while investment in replacement of existing equipment are projected at 24.4 per cent. Nearly 27 per cent of the participants in the survey are reluctant to assess how expectations for production demand and profits could impact investment decisions.

 

 

Knauf Gets 'Class A' Investor Status in Bulgaria with EUR 16 M Plant

The Bulgarian subsidiary of German company Knauf has been granted "Class A" investor status by the Bulgarian government for its investment into a new factory. Knauf Bulgaria EOOD is expanding its manufacturing in Bulgaria with the opening of a third plant, an investment worth EUR 16 M set to create 30 new jobs. The Class A investor status provides certain benefits for the respective investor on part of the Bulgarian government. Knauf's new Bulgarian plant will be producing gypsum plasters some of which will be unique for all of Europe; it will be located in the village of Mednikarovo,Galabovo Municipality, near Bulgaria's thermal power plant complex Maritsa East. "The intention of Knauf Bulgaria to expand its production is a proof that serious companies already operating in Bulgaria see a potential for their development here," Bulgaria's Economy Minister Traicho Traikov declared as he presented the Class A investor status certificate to Knauf Bulgaria Manager Ingrid Jancker. The new factory will have an annual output of 110 000 metric tons. Bulgaria'sEconomy Minister praised the investment as innovative since it is going to use as a raw material refuse from the sulfur purification installations at the Maritsa Eastthermal power plants. "This is an crucial direction for the development of the economy – energy efficient production that utilizes all by-products," Trajkov pointed out, stressing that Knauf's new factory for gypsum plasters can take advantage of EU funding under Operational Program Competitiveness. Knauf's total investments in Bulgaria already amount to about EUR 100 M, with two other factories – in Vidin, which was bought from the Bulgarian state in 1997, and in the village of Mednikarovo, Galabovo Municipality, which was inaugurated in 2010.Knauf's two existing plants employ a total of 190 people in Bulgaria.

 

 

COMPANIES AND INDUSTRIES:

 

EurOmax Intersects 66.7 M at 1.23 G/T Gold at Trun Gold Project in Bulgaria

Canada's EurOmax Resources Ltd. on Monday announced results from the eight latest drill holes at its 100% controlled Trun gold project in Bulgaria. "Results include 66.7 meters at 1.23 grams per tonne gold (219 feet at 0.036 oz per ton gold) including 14.8 meters at 2.28 grams per tonne gold (49 feet at 0.067 oz per ton gold) from drill hole MTC-1192, a step-out hole drilled at the Ruy target located at Big Hill in the northern part of the Trun Property," the company said in a press release. Earlier this year, EurOmax announced an intercept of 87 meters at 2.14 grams per tonne gold from drill hole MTC-1174 from the Ruy target, a 500 metre wide gold-in-soil anomaly. Drill hole MTC-1192 is located approximately 50 metres northwest of MTC-1174. "In early September, we decided to increase this year's drill program from the originally planned 4,000 meters to over 10,000 meters in order to follow up on extremely encouraging drill results on multiple newly identified gold zones at Trun," Quinton Hennigh, technical advisor to EurOmax, said. "We are very pleased with these new results, which validate that decision, and look forward to more results over the next few months." EurOmax has three core properties in Bulgaria, Serbia and Macedonia.

 

MRSK reportedly interested in local power distribution assets of E.ON

Russia's state energy holding MRSK is interested in purchasing the local assets of the Germany's energy company E.ON in Bulgaria, investor.bg informs quoting Russia's newspaper Kommersant. The Russian daily claims that in addition to the 33% state stake E.ON will also put for sale its 59% share in its local subsidiaries. Investor.bg underlines that E.ON and MRSK have neither confirmed nor rejected the information.  We remind that in September, Monitor Daily informed that E.ON is reportedly considering selling its power distribution company in the country. It would buy the residual 33% state stake in the forthcoming privatisation tender (the state plans to sell its stake by the end of this year) and will then sell the full-stake in the power distribution company. The information has not been officially confirmed by the company. E.ON Bulgaria controls the power distribution network in northeast Bulgaria supplying electricity to 1.1mn consumers, which according to Kommersant corresponds to an 18% market share. 

 

Bulgaria's Zagorka to build EUR 1m green warehouse

Bulgarian brewery Zagorka, a unit of Dutch brewing group Heineken, will invest BGN 2 million (USD 1.4m/EUR 1m) in the construction of a warehouse, the company said on Tuesday. The facility will be built on an area of 3,000 sq m and will be certified under the Building Research Establishment Environmental Assessment Method (BREEAM), the world's foremost environmental assessment method and rating system for buildings. Construction works are expected to be completed in April 2012. The facility will be Heineken's first warehouse built and designed under BREEAM globally and the first such building in the country. It will be equipped with fast-closing doors, reinforced insulation system for collecting and using rainwater and mostly natural lighting. The temperature in the warehouse will be maintained without cooling and heating systems but with the help of the fast-closing doors, improved insulation, natural ventilation and forced air circulation. Zagorka will also ensure the efficient use of natural daylight by using LED technology and Solar Tube system, which will reduce electricity consumption. Expenditures for drinking water will also be lowered through the installation of a system for collecting and using rainwater. The warehouse will also have a Building Management System (BMS), which will control the lighting, ventilation and fire protection systems so that energy consumption is minimal.

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea