불가리아 주요 경제뉴스 (20 - 27 April 2012)

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT (20 - 27 April 2012)

 

Sections/headline briefs:

 

MACROECONOMY:

       Bulgaria's economy will grow by 1.2% in 2012 - Citigroup

       Bulgaria with lowest labour cost per hour in EU – Eurostat

       Bulgaria eyes gas supplies from Azerbaijan via South Gas Corridor

       IMF mission to visit Bulgaria in May 2 - 9

 

 

INVESTMENTS:

       Bulgaria to be joined in big initiative of Saudi Arabia’s king for investments in agriculture

       Bulgaria Saw Fourfold Growth of Chinese Investments 2011

       China 'Interested' in Concession of Bulgarian Black Sea Port Varna

 

 

COMPANIES AND INDUSTRIES:

       Bulgaria's Kozloduy NPP to invest EUR 266mn own funds in planned modernization

       Bulgaria to Launch 600 MW of Renewable Energy Capacities in 1 Year

       HSBC Estimates Bulgaria's Belene N-plant Construction Costs at 10.35 Bln Euro

       EBRD to provide up to EUR 150mn financing for energy efficiency in Bulgaria

       Sales of Bulgarian blue-chip battery producer Monbat fall 12.8% in Q1 2012

       Bulgaria’s general insurance market shrinks in Jan-Feb

       Rosenergoatom, EDF to extend Bulgaria's nuclear power plant lifespan

       Bulgarian software developer Telerik acquires US-based NimblePros

       Bulgarian telecom BTC posts 2.3% y/y rise in revenues in Q1

 

 

Articles:

 

MACROECONOMY:

 

Bulgaria's economy will grow by 1.2% in 2012 - Citigroup

Bulgaria's GDP growth will slow to 1.2% in 2012 as a result of recession in the eurozone, according to Citigroup projections, cited by Capital daily. Economic growth will accelerate to 2.5% in 2013. Citigroup analysts expect that staying within the budget gap target of 1.3% would be difficult, despite the restrictive fiscal policy adopted. The institution sees budget deficit of 1.9% by year-end and government debt rising to around 19% of GDP in 2012, from 16% in 2011. Parliamentary elections next year may postpone structural reforms in the country. Economic recession and longer debt crisis in Europe also threaten to impact economic growth in Bulgaria. Local and other international institutions have also cut their forecasts for Bulgaria's economy. Earlier this month, the IMF downgraded its projection for economic growth in the country to 0.8% in 2012. The EC also expects GDP growth to reach 1.4% this year, compared to 2.3% in the autumn forecast. Bulgaria's finance ministry cut the projection for GDP growth in 2012 to 1.4% (down from 2.9% previously) and lower than the registered in 2011 1.7% economic growth.

 

Bulgaria with lowest labour cost per hour in EU – Eurostat

The total labour cost per hour in Bulgaria, which includes all wage and non-wage costs paid by employers, rose by 12.9% y/y in 2011 but remained the lowest among the EU member states, according to preliminary estimates of Eurostat. The rate of increase accelerated from 6.9% y/y in 2010 but slowed from 16% registered in 2009 when the labour cost per hour stood at EUR 2.9. In 2011, the hourly labour cost amounted to EUR 3.5 in Bulgaria as compared to an EU average of EUR 23.1. The estimate covers enterprises with more than 10 employees. Neighbouring Romania has the second lowest labour cost per hour (EUR 4.2 as of 2010). The highest hourly labour costs were estimated for Belgium (EUR 39.3). 

 

Bulgaria eyes gas supplies from Azerbaijan via South Gas Corridor

Bulgaria may supply up to 1 billion cubic metres of gas annually from Azerbaijan via the South Gas Corridor after 2014 when the gas interconnections are expected to be constructed, the press office of the government announced, following a meeting between PM Boyko Borisov and the President of Azerbaijan, Ilham Aliyev. The South Gas Corridor connects Turkey, Greece and Italy envisages gas deliveries to Europe along the southern direction - from Azerbaijan, Iraq and Syria. Bulgaria will be the first EU member state to get natural gas from Azerbaijan through the southern gas corridor, according to the press release. 

 

IMF mission to visit Bulgaria in May 2 - 9

A mission from the IMF will arrive in Bulgaria on May 2 to discuss recent economic developments and prospects with the Bulgarian authorities, IMF's Resident Representative in Bulgaria and Romania, Tonny Lybek, said. The mission, part of IMF's regular 2012 staff visit, will be headed by Mrs. Catriona Purfield and will disseminate its conclusions at the end of the visit. 

 

INVESTMENTS:

 

Bulgaria to be joined in big initiative of Saudi Arabia’s king for investments in agriculture

The opening of the Saudi market for the Bulgarian business and investments in Bulgaria were among the major topics discussed at today’s meeting between the agriculture ministers of Bulgaria and Saudi Arabia – Miroslav Naydenov and Fahad Balghunaim, FOCUS News Agency envoy reported. The Saudi minister has assured that Bulgaria would be included in the big initiative of the King of Saudi Arabia, Abdullah bin Abdul Aziz, for investments in the agricultural sector. Saudi Arabia has a state investment company in charge of the agriculture and more precisely – of the food safety, disposing of a budget of USD 800 million.

 

Bulgaria Saw Fourfold Growth of Chinese Investments 2011

Bulgaria observed a fourfold growth of Chinese investments in 2011, according to Chinese Ambassador to the country, Guo Yezhou. "Until the beginning of 2011, Chinese investment in Bulgaria was USD 16 million, while at the end of 2011 it reached USD 70 million," Guo has revealed, as cited by Xinhua. He added that Chinese investment in Bulgaria is currently concentrated in the areas of agriculture, automotive, renewable energy and environmental protection. According to Guo, Bulgaria's exports to China increased by 42% year on year in 2011, while the first two months of 2012 saw a 100% increase year on year. On Monday, the envoy participated in a a scientific conference on China's development, jointly organized by the Federation of Bulgarian-Chinese Friendship and the Bulgarian Anti-Fascist Union.

 

China 'Interested' in Concession of Bulgarian Black Sea Port Varna

Chinese investors are interested in the concession of Bulgaria's largest Black Sea port, Port Varna, announced China's Ambassador to Bulgaria, H.E. Guo Yezhou. Ambassador Guo was in Varna Wednesday, where he announced that Chinese companies could participate in the concession of Port Varna, after meeting withVarna Mayor Kiril Yordanov. His Excellency stressed that the topic about Port Varna is always on the agenda of the bilateral meetings of the Bulgarian and Chinese leadership. The Bulgarian government has already sounded out Germany and other countries in its search for a concessionaire of Port Varna. Last week the management of Port Varna announced that in 2011, Port Varna, consisting of two complexes – Port Varna-East in the city of Varna and Port Varna-West near the town of Devnya some 22 km inland – processed a total of 9.15 million metric tons of cargo, goods, and raw materials, thus achieving record results. On a different note, the Chinese Ambassador noted that there are still few Chinese tourists in Bulgaria, and recommended that Bulgaria should work to become more popular as a tourist destination in China. He said that keeping in mind that there about 60 million Chinese who travel internationally as tourists each year, Bulgaria would do very well if it attracted even one percent of them. Ambassador Guo visited the Dr. Petar Beron Mathematics High School in Varna, which is one of the few high schools in Bulgaria that teach Chinese.

 

 

 

COMPANIES AND INDUSTRIES:

 

Bulgaria's Kozloduy NPP to invest EUR 266mn own funds in planned modernisation

Bulgaria's nuclear power plant Kozloduy will invest EUR 266mn in the planned extension of the lifespan of its two operating nuclear units, Capital daily reported, citing Alexander Nikolov, CEO of the power plant. The plant will use own resources to fund the extension. Kozloduy NPP signed a EUR 16mn contract with a consortium between Rosenergoatom Russia and French EDF for execution of the first phase of the extension involving survey and evaluation of the state and equipment at the two operational units. The term of the contract is 18 months. The modernisation of the units will be performed in the period 2014-2018. Upon approval of the extension by the nuclear regulatory agency, the fifth and sixth unit will be granted new licenses valid till 2037 and 2039, respectively. On a separate note, the plant announced the start of the annual overhaul at the fifth unit, which will therefore me closed by the end of May. The second unit (6th reactor) is operating at full capacity. The power plant in the Danube town of Kozloduy closed four 440 MW generators, two of which in early 2003 and two in the last day of 2006 and now operates only two 1,040MW units. 

 

Bulgaria to Launch 600 MW of Renewable Energy Capacities in 1 Year

Around 350 MW of renewable energy capacities have been launched in the country since July 2011, according to Energy and Economy Minister Delyan Dobrev.Speaking at a Tuesday conference titled "Green Energy", Dobrev explained that the capacity was expected to reach 500-600 MW by July 2012. He added that new, possibly lower, prices of energy from renewable sources would be in force at that point. Dobrev noted that the current renewable capacities of the country amounted to over 1000 MW and vowed double-digit percentage growth in installed capacities. The Energy Minister specified that the efforts of the government were focused on encouraging investments in small installations powered by solar energy and biomass, as well as hydroelectric power plants. Dobrev further insisted that the best place to build new capacities was near residential units in order to reduce transmission losses. He stressed that Bulgaria had overfulfiled the interim targets set by the EU for electricity generation from renewable energy losses but refused to cite concrete figures.

 

HSBC Estimates Bulgaria's Belene N-plant Construction Costs at 10.35 Bln Euro

HSBC, which Bulgaria has hired to advise the construction of a second nuclear power plant in the country, estimated the project costs at 10.35 billion euro ($13.6 billion), a report by the global banking group indicated. Bulgaria decided to halt the construction of the 2,000 megawatt (MW) power plant Belene at the end of March, choosing instead to add a new 1,000 MW unit to its existing nuclear power station in Kozloduy. The project's levelised electricity cost is estimated at 74.9 euro per megawatt hour or $98.4 per megawatt hour, the HSBC report published on the website of Bulgarias energy ministry on Monday showed. Levelised electricity cost is the ratio of the net present value of total costs to the net present value of the corresponding expected plant output until the end of the project's operational life. HSBC's estimates are based on assumed project debt-to-equity ratio of 60/40. Speaking before reporters in Parliament on Monday, Bulgaria's energy minister Delyan Dobrev said the electricity generated by a similar capacity in Turkey costs over 120 US dollars/MWh, whereas the output of such a plant in Romania is far cheaper than the level that would have been achieved by the Belene plant, the state-run Bulgarian News Agency reported.

 

EBRD to provide up to EUR 150mn financing for energy efficiency in Bulgaria

The EBRD announced extension of up to EUR 150mn credit line to Bulgarian banks to help increase the energy efficiency and competitiveness of local enterprises. The initiative of the government aimed at addressing the energy intensity of the Bulgarian economy involves also a grant component of up to EUR 150mn made available from EU Structural Funds. The EBRD financing will be allocated to SMEs, which wish to invest in energy saving technologies, as well as small scale renewable energy projects such as solar thermal and heat pumps. The first six credit lines under EBRD's finance facility amount to EUR 52mn and will be extended to Allianz Bank Bulgaria, DSK Bank, MKB Unionbank, ProCredit Bank Bulgaria, Raiffeisenbank Bulgaria and UniCredit Bulbank. Jean Marc Peterschmitt, EBRD Managing Director for Central and South-Eastern Europe, said that the facility is e first co-financing instrument alongside EU Structural Funds targeting sustainable energy investments in the SME sector. It is expected to help SMEs reduce their energy consumption and carbon foot print. Bulgaria's energy intensity is more than five times higher than the average for the EU, the EBRD noted. 

 

Sales of Bulgarian blue-chip battery producer Monbat fall 12.8% in Q1 2012

The net consolidated sales of Bulgaria's largest car battery producer Monbat (including Monbat Recycling) increased by 9% y/y to BGN 19.2mn (EUR 9.8mn) in March 2012, the company announced on its website. The pre-tax profit of the company surged 29% y/y to BGN 2.2mn. In the first quarter of the year, net sales dropped by 12.8% y/y to BGN 48.7mn and pre-tax profit plunged 47.5% y/y to BGN 3.6mn. The company expects to turn to growth in Q2 and explains the weaker results, posted in Q1, with lower demand on the EU market a drop in the lead price. 
The net consolidated sales of Monbat increased by 12.9% y/y to BGN 213.2mn (EUR 109mn) last year and its pre-tax profit rose by 6.7% y/y to BGN 21.3mn. In December 2011, sales went down by 16% y/y and its profit fell by 13.7% y/y. Monbat is part of Bulgaria's blue-chip index SOFIX. 

 

Bulgaria’s general insurance market shrinks in Jan-Feb

Bulgaria's general insurance market shrank by 4.9% y/y as of end-February as total gross premiums reaching BGN 213mn (EUR 108.9mn), data from the financial supervision commission showed. The claims on general insurance contracts shrank in half to BGN 97.7mn. Bulstrad Vienna Insurance group was a leader on the general insurance market wish a 16% share as of end-Feb. Second ranked Lev Ins with 13.5% and the third largest insurance, in terms of gross premiums, was DZI(part of KBC group) with 11.4%. Unlike the general insurance market, the life insurances segment expanded on the year by 8.3% to BGN 45.2mn. Life insurance claims rose only marginally - by 0.1% y/y to BGN 17.3mn. Allianz Bulgaria Life was the largest insurer (21.2%) in the life insurance market as of end-February, followed by DZI (17.2%) and Bulstrad-Life (13.4%), taking second and third place, respectively. 

 

Rosenergoatom, EDF to extend Bulgaria's nuclear power plant lifespan

Bulgaria's nuclear power plant Kozloduy has signed a contract with a consortium between Rosenergoatom Russia and French EDF for extension of the life span of the two operating nuclear units of the plant by 20 years, the press office of the government announced. The consortium will execute the first phase of the extension involving survey and evaluation of the state and equipment at the two operational units. Upon approval of the extension by the nuclear regulatory agency, the fifth and sixth unit will be granted new licenses valid till 2037 and 2039, respectively. The power plant in the Danube town of Kozloduy closed four 440 MW generators, two of which in early 2003 and two in the last day of 2006 and now operates only two 1,040MW units. 

 

Bulgarian software developer Telerik acquires US-based NimblePros

Software developer Telerik acquired US-based software development service provider NimblePros, the company announced on its website. The value of the deal has not been disclosed. NimblePros's entire team will be joining Telerik as part of its Enterprise Services Group, which helps customers and partners maximise the value of their investments in Telerik technology. Following the expansion, Telerik's employees will reach 550, located in eleven offices across the US, Bulgaria, Canada, United Kingdom, Germany, Australia and India.

 

Bulgarian telecom BTC posts 2.3% y/y rise in revenues in Q1

Bulgarian telecom services provider BTC, trading as Vivacom, registered a 15% annual increase in revenues from mobile services to BGN 93.2mn (EUR 47.6mn) in Q1 2012, the company announced on its website. Fixed services revenues however dropped by 5.6% y/y to BGN 124.5mn. Total sales revenue thus rose by 2.3% to BGN 218.7mn in Jan-March. The net profit of the telecom declined to BGN 10.25 (EUR 5.24mn) in Q1 2012 from BGN 10.7mn reported in the same period previous year. Vivacom is the second largest telecom in the country in terms of revenue, according to company's estimates. The client base exceeds 4 million. Some 2.3 million of them use telecom's mobile services, up 28% y/y in Q1. Vivacom also ranks second in terms of satellite TV services. In 2011, the consolidated net profit of BTC declined by 92.7% y/y to BGN 8.4mn due to discontinued operations, reduction of the revenues from fixed line services and lower retail prices.

 

 

 

 

 

Reported by:

Georgi Iliev

KOTRA Sofia

Korea Trade-Investment Promotion Agency

Commercial Section of the Embassy of the Republic of Korea