Category Archives: International investment news

FinMin after IMF Visit: Bulgaria Not Perfect, but Among the Best in EU

Posted on by
Reply

 Bulgaria

Bulgaria‘s finance minister has voiced satisfaction

Bulgaria‘s finance minister has voiced satisfaction with the conclusions of the latest IMF mission, though conceding that the situation was not very rosy.

IMF concluded its mission to Bulgaria on Thursday, urging the country to increase its fiscal reserve and steer clear of reducing it.

The Washington-based lender also demanded that the country implement bolder structural reforms, reform the pension system and take steps for curbing the rising unemployment rate.

According to Ms. Purfield, IMF Mission Chief for Bulgaria, Bulgaria‘s growth continues to slow, mostly reflecting external headwinds.

The IMF meanwhile approved of the government’s plans to float a eurobond issue this year.

It also confirmed its spring World Economic Outlook, which reduced the 2012 economic growth projection for Bulgaria by almost half. The country’s gross domestic product growth is expected to reach 0.8% in 2012 and 1.5% in 2013.

IMF Upbeat about Bulgaria due to Euro Area Recovery in H2

Bulgaria‘s growth continues to slow, mostly reflecting external headwinds, but there is room for optimism due to the expected euro area recovery in the second half of the year, IMF mission chief for Bulgaria has said.

“Real GDP growth is projected to reach 0.8% in 2012, which is lower than our previous forecast. Growth is expected to rise moderately to 1.5% in 2013, which shows we have taken into account the forecast for the euro area,” IMF mission head Catriona Purfield said in an interview for Capital daily after the end of the mission visit to Sofia.

The projected growth also reflects the expected euro area growth recovering in the second half of the year, which will allow exports to regain their position as the major driving force behind Bulgaria‘s economy, she pointed out.

Mrs Purfield singled out stronger EU funds absorption by Bulgaria and prudent policy as the key incentives for attracting more foreign direct investments and boosting growth.

Deposits in Bulgarian banks

Asked about the consistent rise in deposits in Bulgarian banks, Mrs Purfield said people are uncertain about their future, mostly because of external headwinds, and are seeking to safeguard their savings.

“The banking system remains well capitalized, liquid, profitable, and well supervised, which is why I think that it is doing very well amid the ongoing crisis,” she pointed out.

The IMF mission chief for Bulgaria stressed tapping international markets to secure funds to cover both future rollover needs and bolster the reserve would be a good option.

Mrs Purfield reiterated that at this juncture Bulgaria should increase the fiscal reserve, and to avoid steps that would reduce it.

“Strong fiscal buffers will ensure Bulgaria‘s resilience and safeguard this resilience going forward,” she said.

An International Monetary Fund (IMF) mission visited Sofia during May 2–9, 2012, to discuss economic developments and government policies with the Bulgarian authorities.

While the IMF projected gross domestic product growth of 0.8% in 2012 and 1.5% in 2013, the European Commission revised sharply downwards its forecast for Bulgaria‘s economy, estimating it is to grow just 0.5% this year.

According to Brussels the European Union economy is in a “mild recession,” with a recovery “forecast to set in slowly from the second half of the year on”.

The European Union executive previously estimated that the economy of the Balkan country will grow 1.4% this year due to worsening growth prospects in key trading partners across Europe and stagnant domestic demand.

Last month Bulgarian analysts and institutions unanimously cut their growth forecast for 2012 to just below 1.5% instead of the previously forecast 2-3%, citing slumping exports and stagnant domestic demand.

The central bank BNB estimated Bulgaria‘s economic growth to slow-down to 0.7% in 2012, citing the sovereign-debt crisis in the euro area.

Bulgaria‘s economy expanded by 1.7% in 2011.

 

 

 

Bulgaria Expects 20% Increase in Russian Tourists 2012

Posted on by

Bulgaria

Tourism and Property business in Bulgaria 2012

Bulgaria expects to see an approximately 20% increase in Russian tourists this year, according to the country’s Minister of Economy, Energy and Tourism, Delyan Dobrev.

Dobrev pointed out that Russian tourists with Schengen visas can now visit Bulgaria, which would boost the Bulgarian tourism sector.

“We expect a significant growth, especially on the Russian market,” the Minister said.

Tourism is likely the sole economic sector in Bulgaria that is growing in times of crisis, Dobrev observed.

“Over the past several years, we have seen growths between 5% and 8%. I hope we would have a similar growth this year,” Dobrev declared in the city of Veliko Tranovo, when the international Cultural Tourism fair is taking place.

On Saturday, the Economy Minister also stated that Bulgaria will back the South Gas Corridor project. He explained that the project would bring about both higher energy safety and diversification.

Bulgaria Named Cheapest Tourist Destination for Brits

Bulgaria is the least expensive tourist destination for Britons, the cost index from Post Office Travel Money has revealed.

A basket of 10 typical holiday items – including lager, sun-cream and a three-course meal – costing just GBP 42.79 in the Balkan country, 4% less than last year.

The second least-expensive destination was Turkey where the items at the resort of Marmaris cost GBP 54.22 – a decrease by 22% compared with 2011 prices. The third place goes to Portugal (GBP 56.46.)

The pound is currently stronger than many rival currencies and Britons will receive as much as 14 per cent more cash for their summer 2012 trips to Europe compared with last year, according to the survey.

“Resort prices and currency exchange rates are always changing, so it is worth doing some research to check the latest position before booking a holiday. It is also worth considering how you plan to spend your holiday cash,” Post Office Travel Money head Andrew Brown has commented, as cited by The Daily Mail.

Brown has explained that the index includes the price of one meal and big cost differences may emerge if one decides to eat out every night.

“For example, according to our research, eating out for seven nights in either Bulgaria or Portugal will cost less than £175 but over £280 in Spain, France or Malta,” he has said.

Property Prices in Bulgaria Expected to Stabilize in 2012

Bulgarian property prices are largely expected to be unchanged in 2012 as real estate markets around the country remain at a standstill, brokers say.

Average prices in the capital city Sofia were around EUR 735 per square meter during the first quarter of the year, from EUR 730 in the last quarter of 2011, according to Bulgarian Properties real estate agency.

The agency says this is a sign of the market stabilization even though the decline in residential property prices in Bulgaria is still visible. The extent of the decline is shown by figures which reveal that at the beginning of last year prices were 11% higher than now – about EUR 830 per square meter.

Brokers expect that the number of transactions in 2012 would remain at similar levels as has been seen over the last year.

The agency does not expect a significant decline in prices and transactions during the traditionally strong spring season, although the country’s economic environment remains highly uncertain.

Brokers say that prices in major cities were relatively stable, but because of the decline in demand, prices had fallen in Bulgaria.

 

EUR 120 M ‘Sofia Ring Mall’ to Be Completed July 2013

Posted on by

Sofia

Sofia‘s largest shopping center

The future Sofia Ring Mall – which is to become Bulgaria’s largest retail and entertainment destination together with the closely located store of IKEA Bulgaria – is to be completed by July 2013.

The EUR 120 M shopping center will provide to its customers views towards the city and Vitosha Mountain and a lot of green areas.

This has been announced at a news conference in the Bulgarian capital Tuesday featuring representatives of the two Greek investors Fourlis Group and Danaos Group as well as the project consultants Colliers International.

They have pointed out that the expansion of Sofia ring road, which is scheduled for the fall of 2012, will provide safe and easy access for the some 1.5 million residents of Sofia.

Sofia Ring Mall will be competed 2013

Sofia Ring Mall is scheduled to be completed by July 2013 and its opening is planned for the fall 2013.

It will feature a tenant mix of over 200 stores, including fashion and sport stores, entertainment facilities, a 10-screen cinema multiplex. More than 25 000 sq meters of gross leas-able area are slated to anchor tenants and more than 20 000 sq meters to fashion brands. In total Sofia Ring Mall will have 69 000 square meters of gross leas-able area, and 172 000 square meters of gross building area on 3 retail floors.

One of the biggest advantages of Sofia Ring Mall is that it’s a unique cluster of “big box” operators working in synergy with a classical “shopping mall” mix, making it and all-in-one offer catering all needs of visitors, the investors say.

The total investment of the project, including the land and the infrastructure which involves green spaces and assisting roads on the side, is exceeding 120 million EUR.

Some of the tenants that have already made contracts for retail space at the Sofia Ring Mall include Piccadilly; Yavor Furniture; Mr.Bricolage; Cine’Grand; Technomarket; Public.

Strategic advantages of Sofia Ring Mall

During the presentation of the project Liberis Moschovitis, General Manager of Sofia Ring Mall, highlighted the regional character of the development and the new experience that will be offered to the visitors.

He noted that “the new retail destination in Sofia has been created to provide the important tenants mix, especially with the combination with IKEA making it a new retail destination in the country.”

“One of the strategic advantages of Sofia Ring Mall is its strategic location, convenient and easy access. Moreover, the successful concept “all under one roof” makes the classic shopping in the city very special experience among the big open spaces, a lot of green area and entertainment places”, said Iglika Yordanova, manager “Commercial area” in Colliers International.

Sofia South Ring Mall EAD, a joint stock company owned by two major investors Fourlis Group & Danaos Group, is a company, active in the investment, lease and management of the commercial center Sofia Ring Mall.

Top Brands, New Formats Stir Bulgaria’s Retail Market

Posted on by

Bulgaria

Colliers International for Bulgaria

A few major retail openings and flexibility in formats have signaled the first signs of recovery on Bulgaria‘s retail market, according to a survey by Colliers International.

IKEA in Bulgaria

The opening of furniture giant IKEA, which took place in September 2011, has stimulated the competition in this segment, being a major determining factor for the price and product policy of many operators on the market, the report says.

New supply is dominated by three schemes under construction – Sofia Ring Mall, Paradise Center and Bulgaria Mall. Cumulatively, those three projects will deliver to the market in Sofia in 2012/2013 approximately 180,000 sq. m.

Colliers experts comment that each of the new projects is trying to add new features and points of attraction that will add “flavor” to the traditional retail functions of a shopping mall, such as variety of leisure amenities, amusement parks, synergies with retail giants.

The Food retails in Bulgaria

There is a considerable demand for retail space in central and residential areas on streets with high pedestrian and/or vehicle traffic. This demand comes mostly from the food retailers, which continue their expansion mainly through convenience formats.

The fashion segment in Bulgaria

The fashion segment was stirred by the expected opening of H&M, stores in Bulgaria in the first half of 2012.

“The entry of one of the long-awaited brands in Bulgaria is a proof, that the international fashion brands see a good prospect for development on the market,” Colliers report comments.

The retailer has already secured locations in prime shopping malls in Sofia, Varna and Burgas and is expected to grow the number of stores in some of the main cities.

During 2011 several international retailers entered the Bulgarian market – the British brand Peacocks, Patrizia Pepe, Pimkie, Calvin Klein, Quiz – all of them through local or regional franchisees.

The average vacancy level in Bulgaria during the second half of 2011 in the shopping malls in Sofia is around 6%. This represents a slight increase from the first half of 2011, when the average vacancy level was around 4%. The Mall, Serdika Center and Mall of Sofia enjoyed stability with a vacancy level in the range of 2-3%, while the rest of the operational malls faced higher vacancy in some cases reaching a double digit rate (Sky City Centre).

Rental levels in shopping centers and malls in Bulgaria remained relatively stable during the second half of 2011. They vary depending on the type of retail facility and location. In large shopping centers in Sofia the rents are approximately EUR 32 /sqm/, while in the shopping centers in secondary cities the rents are between EUR 20-22/ sqm/ month.

 

Bulgaria Govеrnment Confirms Plans for VAT Cut by Mid-2013

Posted on by

Bulgaria

Bulgaria‘s tax policy

Bulgaria‘s government has voiced, yet again, its willingness to lower the 20% value-added-tax by the end of its term, which expires next year.

“The VAT level is likely to be changed at the end of 2012 or the beginning of 2013,” Bulgaria‘s Deputy Prime Minister and Finance Minister, Simeon Djankov, told the morning broadcast of Nova TV on Tuesday.

The news comes as Croatia and Cyprus increased their value added tax as of March 1 in a bid to cope with the crisis and rake in more revenues in the budget.

After a series of U-turns Bulgaria‘s government decided at the end of May 2010 to scrap plans for an increase of the 20% value added tax in a bid to plug a budget gap that has thwarted the new EU member’s efforts to join the euro in the near future.

Representatives from all business sectors cautioned that the hike in the value-added tax in Bulgaria should be a last-ditch measure, introduced only together with an overhaul in government expenditure and structural reforms.

Hungary has the highest VAT rate in Europe at 27%. The lowest VAT rate in the European Union – 15% – is in force in Luxembourg.

‘Unknown Bulgaria‘ to Feature in ITB Berlin Travel Show 2012

The Ministry of Economy, Energy and Tourism, which organizes Bulgaria‘s participation in the ITB exhibition in Berlin from 7-11 March, will present the country as “The Unknown Bulgaria“.

Bulgaria will be represented at a 423 sq m pavilion through 42 tourist companies and municipalities.

The focus of Bulgaria‘s participation will be on the presentation of the latest developments in balneology, SPA and wellness and cultural tourism and the promotion of the EDEN (“European Destinations of Excellence”) destinations.

In the course of the exhibition, Bulgaria‘s Deputy Minister of Economy, Energy and Tourism Ivaylo Marinov will attend a Silk Road Ministers meeting organized by the UN World Tourism Organization (UNWTO) and will meet with Ernst Burgbacher, Parliamentary State Secretary at the German Federal Ministry of Economics and Technology.

The schedule of ITB Berlin 2012 also includes a special press conference on Bulgaria which will take place at the ICC Congress Center in Berlin on March 08.

Bulgaria and Romania are coordinators on priority axis 3 of the strategy which aims to promote tourism and multicultural dialogue.

Pavegen Renewable Energy Installation Unveiled in Bulgaria, Sofia

An innovative installation featuring Pavegen tiles, which capture kinetic energy from footsteps and convert it to electricity, was inaugurated Monday evening by Economy Minister Traicho Traikov.

The installation has been placed in front of the the National Theater “Ivan Vazov” in downtown Sofia, Bulgaria.

“The energy that can be generated by an innovative technology like Pavegen is practically inexhaustible, but the cost of this energy is also important,” Traikov noted.

Traikov pointed out that the distance between his office at the Ministry of Economy, Energy and Tourism was 250 steps that could generate around 1.5 KW of electricity.

He also drew attention to the fact that if all Bulgarians walked over at least one Pavegen slab, the move would generate as much energy as the output of the Tsankov Kamak hydroelectric power plant per hour.good for bulgaria investment

 

Bulgaria Among 2012 Best Value Breaks – UK Ranking

Posted on by

Bulgaria

Bulgaria as 4th best value destination

Bulgaria has been ranked as the fourth best value break of 2012 in UK Post Office holiday barometer.

A cup of coffee costs as little as 96p in Bulgaria, while a three-course evening meal for two adults (including a bottle of house wine) in local restaurant averaged at GBP 15.04.

The annual Post Office Worldwide Holiday Costs Barometer monitors the price of eight popular tourist items in 40 holiday destinations worldwide – including dinner for two, light refreshments and sun cream.

Sri Lanka and Spain came out on top as the cheapest overseas holidays.

Spain has overtaken Portugal to become Europe’s cheapest holiday destination, narrowly beating the Czech Republic and Bulgaria and over a third cheaper than Turkey.

Thailand is the cheapest Far Eastern destination – although just GBP 5 divides Thailand, Vietnam, Malaysia and Indonesia.

Bulgarian PM Lauds Expansion of Ski Areas

 

Bulgarian PM Boyko Borisov vowed to continue to support skiing and winter toursm in Bulgaria Sunday, when he was present at the Alpine Skiing World Cup race in Bansko.

“You can see by the way that people greet us here that they are happy with the way we have fulfilled our commitments to winter sports,” bragged Borisov.

World Cup Race in Bulgaria

Sunday he visited the World Cup race with Bulgarian President Rosen Plevneliev and Minister of Sports Svilen Neykov.

“Bulgaria has given over BGN 5 M for skiing this year – including International Ski Federation races, and children ski schools,” said Borisov.

In addition, the Bulgarian PM stressed that Bulgaria needs to expand its winter resorts.

“We have to support the livelihood of people here, to boost tourism to Bulgaria, to ensure quality service for all who come to Bansko and elsewhere, so I hope we can convince environmentalists that an expansion is feasible,” said he.

The Bulgarian Parliament has to vote on second reading controversial amendments to the bulgaria Forestry Act, which will make it much more easier for companies to develop and construct in protected areas.

The bill was rushed through cabinet and parliament after the Vitosha Ski company, which operates facilities in Vitosha near capital Sofia, refused to open the new ski season, on grounds that the bulgaria state allegedly blocked its investment plans.

Environmentalists have slammed the legislative amendments as pandering to Vitosha Ski and the interests of Tseko Minev, who also has a stake in Bansko company Yulen.

In the past week, a check by Bulgaria‘s Agency for State Financial Inspection uncovered a number of irregularities in Minev’s deals with the state, including awarding contracts without due public procurement procedures. It is time to visit bulgaria

 

Bulgaria Opens Great Wall Car Plant, Hopes for Great Chinese Investments

Posted on by

Bulgaria

Bulgaria opens cars factory

Bulgaria has formally launched of mass production of cars under the Chinese Great Wall badge by Litex Motors near the northern city of Lovech.

The car manufacturing plant near Lovech comes to life seventeen years after Bulgaria‘s last failed attempt to revive its automobile industry.

The first car of the Chinese company Great Wall assembled near Bulgaria‘s Lovech was rolled out in the middle of November 2011.

With the opening of its new plant in Bulgaria, Great Wall Motors becomes the first Chinese automaker to assemble cars in the European Union.

A joint venture of Bulgarian and Chines companies

The joint factory of Litex Motors, a Bulgarian company, and Great Wall, located at the village of Bahovitsa near Lovech was launched Tuesday, February 21, in the presence of Bulgarian Prime Minister Boyko Borisov and China’s Ambassador to Bulgaria Guo Yezhou, as well as Ms. Wang Feng Ying, General Manager and Executive Director of Great Wall Motor Co.

During the opening Bulgaria‘s PM Borisov declared he had the promise of Chinese Prime Minister Wen Jiabao that China will invest (BGN) 1 B (Borisov mentioned the sum of 1 B without specifying the currency) in the region of Lovech, including in a bus manufacturing plant.

The Chinese investments in Bulgaria

“Yes, we are all glad that Bulgaria will be producing cars. The investments have come from our friends. We’ve talked to the Prime Minister of China, and I received promises for the investment of 1 B until the end of 2013,” Borisov stated at the opening of the plant of Litex Motors and Great Wall near Lovech.

He further noted he was glad that Chinese cars for the European market will be produced in Bulgaria.

“There is no way I can’t be happy that I am the Economy Minister in a moment when the car manufacturing in Bulgaria is restored. Thank you for this emotion,” said Traicho Traikov, Bulgaria‘s Minister of Economy, Energy, and Tourism.

He emphasized his hopes that the Great Wall Motors project will turn out to be a boost for the Chinese investments in Bulgaria.

“It’s no accident that the Bulgarian government provided BGN 2.4 M for the road to this factory, I hope this wonderful ceremony costs less,” Traikov joked, referring to the infrastructure aid granted under Bulgaria‘s Investment Encouragement Act.

Great Wall CEO Wang Feng Ying thanked the Bulgarian government for supporting the Litex Motors project, and declared that Bulgaria will be a starting point from which the Chinese car manufacturer will start entering the European markets.

Cars produced by China’s Great Wall already hit the Bulgarian market in October last year through a network of twelve representative show rooms across the country.

Voleex C10 sedan, Hover H5 SUV and Steed pickup are the three different vehicle models, which Chinese car maker Great Wall Motor Co and Bulgarian company Litex Motors will produce in the town of Lovech, Northern Bulgaria, at very competitive prices.

Expectations are for a furore not least because of the cars’ low prices. 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.

The total initial investment is around EUR 97 M, potentially reaching EUR 300 M if the project is successful. The Chinese company has secured 10% of the money, the remainder was forked out by Litex Motors, owned by petrol businessman and owner of Litex football club Grisha Ganchev.

The cars are expected to be sold under the Great Wall badge, boosting the firm’s output from around 400,000 at present.

The project is considered to be nothing short of a coup for Bulgaria, which does not currently produce any passenger vehicles, though it does have a modest but successful automotive components industry.

 

Bulgaria’s Tourism Industry Looks Forward to Successful Summer

Posted on by

Bulgaria

Bulgaria‘s Tours operators

The Association of Bulgarian Tour Operators and Travel Agents has forecast a successful summer season for the country’s tourism industry.

Bulgaria oldest international tourism expo

Based on booking requests for the 2012 summer, the Bulgarian tour operators made it clear they have high hopes for the summer tourist season, speaking at a public discussion as part of the 29th Vacation and Spa Expo, Bulgaria‘s oldest international tourism forum, in Sofia.

Representatives of the tour operators’ association further noted that the 2011-2012 tourism season for Bulgaria‘s winter resorts is hard but is still expected to reach last years levels of profit.

The last winter season brought Bulgarian winter resorts revenues totaling EUR 204 M, while the Bulgarian summer tourism industry usually makes 10 times as much.

“The new Tourism Act does not encompass electronic trade when the tourist products are purchased online,” Bayko Baykov, chair of the board of the Association, said when it came to discussing the problems for Bulgaria‘s tourism industry.

The tour operators and travel agents have also complained of the government’s failure to eliminate the gray economy in the tourism sector.

Bulgaria’s EconMin Vows BGN 26 M for Tourism Advertising in 2012

Bulgaria‘s investment in tourism advertising grew by 121% in 2011 compared with 2009, Minister of Economy, Energy, and Tourism Traicho Traikov has announced.

Speaking at the opening of the 29th Vacation and Spa Expo in Sofia – Bulgaria‘s oldest international tourism forum – Traikov said the total 2012 investment for advertising Bulgaria‘s tourism products will reach BGN 26 M, which is an increase by BGN 4 M year-on-year.

The total funding comes from both Bulgaria‘s national budget and EU Operational Program “Regional Development.”

According to Traikov, “Bulgaria is emerging as one of the most competitive winter tourism destinations against the backdrop of the general downturn in Europe.”

He reminded that four World Ski Cup contests are set to take place in Bulgaria‘s Bansko over the next two weeks.

“This is happening for the first time, and it is a great recognition for Bulgaria after the success of the World Ski Cup in 2011 in the same resort,” stated the Bulgarian Economy Minister who is known as an ardent skier himself.

He also said that Bulgaria’s Pamporovo, which hosted a European Ski Cup contest last week, is seeing up to 20% more foreign tourists year-on-year.

Traikov expects a good season for Bulgaria‘s summer tourism as well, stressing the rising number of charter flights to the Bulgarian summer resorts as well as Bulgaria‘s recent decision to waive visa requirements for the holders of Schengen visas.

On Thursday, he also emphasized Bulgaria‘s rich cultural heritage – consisting of over 40 000 cultural monuments and 7 historical periods.

Bulgaria’s INVESTORS OF THE DECADE 2001-2011

Posted on by

Bulgaria

The biggest investors in Bulgaria

Bulgaria‘s largest English-language media Novinite.com (Sofia News Agency) and Novinite.bg were announced to readers from around the world, the  new initiative – “ Investors of the Decade” 2001-2011!

“Investors of the Decade” will be a special survey to be published by Novinite.com (Sofia News Agency), Novinite.bg, The Sofia Morning News, and Bulgarian Business Adviser at the end of January 2012.

The most successful decade in Bulgaria

“ Investors of the Decade” will focus on a “Who is Who” of the top investors in Bulgaria during the most successful decade in Bulgarian history in terms of attracting investment.

The “Bulgaria - Investors of the Decade” survey will present  the CEOs of key investors in Bulgaria.

Bulgaria‘s investment trends

Will bring to our attention expert opinions of top economists and financiers about Bulgaria’s investment trends, advantages, and potential.

Will talk to top government officials about the future of Bulgaria’s investment policies.

What is more, “Investors of the Decade” will be a permanent project of Novinite.com (Sofia News Agency), Novinite.bg and Bulgarian Business Adviser with the ambition to become a useful guide for readers from around the world.

All are welcome to help make Bulgaria‘s investment potential better known and better understood!

The  “Investors of the Decade” initiative is a wonderful opportunity for you to present your history of success or your ambitions in Bulgaria.

Solvay Sodi : Bulgaria Presents Wealth of Business Incentives

Posted on by

Bulgaria

 

Bulgaria advantages the chemical industry

Bulgaria has a lot of advantages, benefiting the chemical industry business, according to the Solvay Sodi CEO Eric Vander Vorst.
In an exclusive interview for the “Investors of the Decade – Bulgaria” Business Survey of Novinite.com (Sofia News Agency) and Novinite Bulgaria, Eric Vander Vorst, lists these advantages as a favorable geographic location (in the case of Solvay Sodi – the export hub through the port of Varna West for the Balkans, Mediterranean regions, Middle East and Asia) along with richness in raw materials, low labor costs, and lower direct taxation.
The CEO, however, points out that low labor costs are often accompanied by low productivity and sometimes under-equipped contractors, and stresses on words of the new Bulgarian President, Rosen Plevneliev that “it is not enough to have lower taxation in order to attract investments,” but “it is also required to guarantee predictable and stable investment environment, to have a clear long-term vision for economic development and lower the administrative burdens.”

Bulgaria‘s government

According to Vander Vorst, the government of the Citizens for European Development of Bulgaria party, GERB, is cautiously managing its budgets in times of financial crisis and is doing appreciable efforts so that the country has avoided financial disasters as some of its neighbors.
Nevertheless, the Solvay Sodi CEO does point a major disagreement with the Bulgarian Ministry of Finance, regarding its decision to raise excise duties on fuels used for cogeneration.
“This is a precedent in Europe, where on the contrary governments are developing cogeneration privileges. To my view, it is also an ecological nonsense since gas is noncompetitive in Bulgaria. On this aspect, which is burdening our costs by several %, we would like to reach an understanding and reasonable solution from the government,” Vander Vorst says in the interview.
He praises the Environmental Ministry for being strict, but also pragmatic and supporting the chemical business when searching for the best technical solution.

The future of the chemical industry in Bulgaria

The CEO voices hope that the chemical industry will have a future in Bulgaria, quoting the Minister of Economy, Energy and Tourism Traicho Traikov, who, in the sector strategy on attracting investments, presented in the beginning of November last year, had said that the chemical industry is one of the priority sectors for investments. The Solvay Sodi Head stresses that he agrees with Traikov that there is an unavoidable consolidation of the chemical industry in Europe and in neighbors to Bulgaria where only the best will prevail.
“This for sure is a card to play for Bulgaria,” Vander Vorst explains all while pointing out that the chemical industry is a promising and still developing sector of the economy, which is creating a large number of jobs.
“For example, Solvay Sodi & subsidiaries directly employ over 670 people and indirectly (as subcontractors) – around 1300. We are currently also modernizing the fluorite installations and technologies in Chtiprovtsi, that we acquired last year. I believe that more stable fiscal rules would make the Solvay group probably more willing to invest in Bulgaria,” the CEO concludes.