The Bulgaria 2011 Review: Industry

Business » INDUSTRY | Author: Ivan Dikov |January 6, 2012, Friday // 20:11
Bulgaria: The Bulgaria 2011 Review: Industry The first ever automobile produced by Litex Motors and Great Wall Motors near Bulgaria's Lovech was rolled out in November. Photo by Litex Motors

Bulgaria's Industrial Production in 2011

In spite of the continuing steady growth of Bulgarian exports since 2009, in 2011 Bulgaria's industrial sector did not demonstrate very exciting results, with the major developments focusing on the fate of (formerly) state-owned industrial giants from the communist period.

Bulgaria's industrial production grew by more than 5% each month in the first half of the year on an annual basis but the month-on-month growth was much more modest – usually about 1-2%, and slowing down towards the end of the year. Bulgaria's exports to both EU and non-EU countries kept rising but the growth slowed down by the third quarter, reaching about 30% for the first nine months of 2011.

Bulgaria - Major EU Industrial Polluter Despite Small Economy

In November, Bulgaria was ranked among EU's biggest industrial polluters by size of economy alongside Romania, Estonia, Poland, and the Czech Republic, according to a report of the European Environment Agency (EEA). The study, compiled on the basis of data for 2009 including carbon dioxide (CO2) emissions, shows Germany and Poland as the biggest industrial polluters in the EU, followed by Britain, France, Italy, Romania and Spain.

22% of Bulgaria's SMEs Have Export Potential - EconMin

In October, the Economy Ministry unveiled a national export portal online, revealing that, out of a total of 315 000 small and medium-sized enterprises in Bulgaria, only 70 000 had export potential.

Privatization: Controversial and Falling Short of Targets

When 2011 kicked off, Bulgaria's center-right GERB government made it clear it wanted to raise BGN 450 M from privatization by the year's end, putting on the table several communist era "giants" – cigarette-maker Bulgartabac, Bulgaria's largest military plant VMZ Sopot, and construction company Technoexportstroy – as well as some smaller companies and state minority stakes in power utilities.

The controversial sale of cigarette maker Bulgartabac made the state budget EUR 100.1 M, or appr. BGN 200 M, i.e. the mininum asking price, from Russian state bank VTB. Another BGN 12 came from the sale of "Industrial Construction Holding" to a local private investor Vodstroy 98. The government's 33% stake in power utility EVN was purchased by EVN itself on the stock exchange for BGN 93 M, and in a similar scenario, the majority shareholder Arsenal 2000 paid BGN 15.1 M for the state's 36% share in the Arsenal Kazanlak military plant.

This drove the rough total the Borisov Cabinet made from privatization in 2011 to about BGN 320 M, well below the target, with the added political inconvenience of the controversiality of the major deals.


Behemoth's Death - Bulgaria's Steel Giant Ends with 26-year-old

In April, the fourth attempt for the sale of Bulgaria's bankrupt steel-making giant Kremikovtzi was "successful" – if one is to play it loose with the word. In a scandalous purchase, the vastly mismanaged factory (originally privatized in 1999), was purchased by a brand-new firm called Eltrade owned by a 26-year-old figurehead, Lachezar Varnadzhiev, for the initial price of BGN 316 M (nearly EUR 162 M).

"Eltrade company" was established on March 8, 2011 and its capital was a mere BGN 20 000. Eltrade and Varnadzhiev were later said to be figureheads for Nadin - N, a well established scrap dealer. Vladimir Todorov, a member of Nadin's board, was present at the auction.

The site and assets of Kremikovtzi, built in the 1960s, were offered for sale four months after the behemoth was sent into liquidation. The first two auctions of Kremikovtzi failed to attract any bidders in 2010. The price started at BGN 565.5 M, which according to trade unions and analysts was far below the market price. The third tender for the mill's production capacities was held in February 2011, but fell through.

The smelter shut down some of its furnaces in 2009 due to lack of raw materials after Ukrainian tycoon Konstyantin Zhevago canceled a deal with the plant. It was previously owned by Pramod Mittal, the younger brother of ArcelorMittal Chief Executive Officer Lakshmi Mittal.

The sprawling communist-era behemoth near Sofia was declared bankrupt after years of struggle with dire economic conditions, and multiple controversies about mismanagement and financial draining. Its former CEO Alexander Tomov was sentenced to nine years in jail by a Sofia city court for selling off plots of land owned by Kremikovtzi at well below the market price.

At the time of its re-sale, the total debts of Bulgaria's former largest steel-maker amounted to BGN 1.9 B, whereas the market value of all of its assets has been estimated at BGN 837 M. Kremikovtzi, one of Bulgaria's biggest companies, provided jobs for over 5 000 people and its future was a politically sensitive issue.

Its sale – even though its fate will now focus on scrap production – was still hailed as "good news" by syndicates because some of the funds were used to cover BGN 60 M in unpaid workers' salaries.

Bulgaria's privately-owned First Investment Bank said it had extended a loan of EUR 59 M to the buyer of the country's biggest steel mill Kremikovtzi despite the controversy surrounding the deal. The Eltrade Company wired to the Bulgarian Bank for Development, BBD, the amount for the purchase of Kremikovtzi only two days later.

"I am pleased with the sale of Kremikovtzi," Bulgarian Economy Minister Traicho Traikov declared, saying he had met representatives of the buyer. Asked whether all of Kremikovtzi's assets will be used for scrap, Traikov pointed out that some 20% of the steel mill's territory, which is the most technologically advanced and environmentally safe part of it will be revived.

In a follow-up development in July, an offshore company, registered on the British Virgin Islands, acquired the buyer of Bulgaria's biggest steel mill. "Bessian Management Limited" bought "Eltrade company", owned by 26-year-old Lachezar Varnadzhiev for BGN 20 000. "Bessian Management Limited" is in its turn controlled by another offshore company – "Bun Sekretarial Limited", based in Cyprus.

Bulgaria's privately-owned First Investment Bank (FIBank) later said it had provided all the funding for Kremikovtzi steel mill, amounting to nearly BN 320 M. Just before that the bank issued a EUR 20 M bond, which allowed it to boost its credit portfolio by more than BGN 320 M, which is exactly the price of Kremikovtzi sale deal. Thus, the pride of Bulgaria's communist era industry, Kremikovtzi, is now destined to be scrapped – literally.

Copper Producer Aurubis to Pour EUR 40-50 M in Bulgaria by 2014

In June, copper smelter Aurubis announced a EUR 44.2 M investment in the expansion of its copper plant near Bulgaria's Pirdop by 2014. The company said it invested EUR 400 M in the plant since it took it over in 1997. In October, French firm Air Liquide signed a new contract with Aurubis Bulgaria for the supply of additional quantities of gaseous oxygen. Aurubis said it will pour an extra EUR 10 M into the expansion of its facility near the central Bulgarian town of Pirdop. Aurubis Bulgaria employs 780 people. It produces over 500 metric tons of copper annually that is exported mostly to other Balkan states. Aurubis AG, Hamburg is the largest copper producer in Europe and the global leader in copper recycling.

Bulgaria's Major Lead and Zince Smelter: Kremikovtzi 2?

In April, the lead production facility in the Lead and Zinc Complex in Bulgaria's Kardzhali got closed down over its management's failure to comply with environmental regulations.

The Lead and Zinc Complex in Kardzhali (LZC ; OTZK), the leading Bulgarian non-ferrous metals producer, has repeatedly come under criticism for polluting the local environment and the nearby city by releasing excessive amounts of sulfur dioxide. The problem was especially acute in the fall of 2009.

As early as the fall of 2010 the Bulgarian Environment Ministry warned that it will shut the Lead and Zinc Complex if it registered more than two instances of pollution within one month. Back then, the factory had more than 24 such cases, and the Ministry said that in addition to endangering the health of 40 000 people living in the city of Kardzhali, the plant was about to bring upon Bulgaria an EU fine.

In January 2011, amidst renewed pollution, Environment Minister Nona Karadzhova gave the factory management an ultimatum to cope with the problem.

In September, the Administrative Court in Kardzhali confirmed a fine of BGN 60 000 imposed on Bulgarian lead and zinc smelter, OTZK, over its noncompliance with the integrated environmental permit.

In December, Ivanka Karakoleva, a local syndicate leader, warned that the Lead and Zinc Complex (OTZK) based in Bulgaria's southern city of Kardzhali might eventually be shut down altogether. Karakoleva alarmed the media Wednesday that the Kardzhali Lead and Zinc Complex has shut down its manufacturing operations because of planned repairs, and its 300 workers had been forced to take paid leaves until January, 2012. The metallurgical workers at OTZK are afraid that the major Bulgarian lead and zinc smelter might have the fate of Bulgaria's one-time steel-making giant Kremikovtzi

In 2010, Valentin Zahariev, chair of the Intertrust Holdings AD, the Bulgarian metal producer that controls the complex, who is usually described as one of the richest Bulgarian "oligarchs", announced the construction of a new lead plant near the Bulgarian city of Kardzhali will be completed by the end of 2013.

Intertrust has five metallurgy and engineering plants in neighboring Serbia, and the Gorubso mines at Madan, in Bulgaria. The company exports 85% of its output, mostly to Italy, Germany, Austria and Turkey. In the summer of 2009, the lead and zinc plant was shaken by a strike of its workers who demanded timely payment of their salaries.

BGN 400 Minimum Monthly Wage Set in Bulgaria's Metallurgical Industry

In April, the minimum monthly salary in Bulgaria's metallurgy sector was increased from BGN 350 to BGN 400, according to a new collective labor contract, against the backdrop of a universal minimum salary reaching BGN 290 in the fall.

Cigarettes & Tobacco

Bulgartabac: End/Start of the Smoky Quagmire

As in Kremikovtzi's case, 2011 saw a sort of an end to the Bulgartabac sage. The third attempt to privatize the Bulgarian cigarette-making giant Bulgartabac Holding turned out to be successful – at least for those who bought it, and who technically remain unknown.

Strong Performance before Sale

In March 2011, data showed Bulgaria's state cigarette maker Bulgartabac Holding completed 2010 with a net profit of BGN 20 M. Bulgartabac's 2010 profit wass 16.5 times larger than it was in 2009. In 2010, 80% of the produce of Bulgartabac Holding was exported, compared with 53% in 2009, and only 31% in 2008.

In the first quarter of 2011, Bulgartabac registered a net profit of BGN 2.17 M. For the same period in 2010, Bulgartabac had a net loss of BGN 2.3 M. The main reason behind the better performance this year is a 64% growth of revenue from cigarette sales, as well as 41% growth of revenue from export. In addition to its growing exports, the Bulgartabac Holding Group occupied 37% of the Bulgarian domestic tobacco market.

10 Potential Bidders Vie for Bulgaria's Bulgartabac

Ten companies, including four top-notch investors, had purchased public procurement documents for acquiring a majority stake in Bulgaria's cigarette maker Bulgartabac by June. The four major companies were British American Tobacco, Japan Tobacco International, Philip Morris Bulgaria and South Korea's KT&G Corporation. The other six candidates were Bulgarian law firms Kambourov & Partners and Dzhingov, Guginski, Kiuchukov and Velichkov; Bulgarian-based King's Tobacco; Austrian-based CB Family Office Service and BT Invest GmbH, and US-based Science Capital management LLC.

A majority stake - 79,83% - in Bulgaria's state cigarette producer Bulgartabac Holding, whose management had been harshly criticized in recent years, was put on sale on April 26 after years of procrastination. The Bulgartabac Holding Group features two cigarette plants – Blagoevgrad-BT and Sofia BT – and a tobacco processing plant, Pleven-BT. The consultant for the Bulgartabac sale, Citigroup Global Markets Ltd, was picked by the Bulgarian government in February 2010. The two less profitable cigarette plants of Bulgartabac holding – in the cities of Plovdiv and Stara Zagora – were sold in 2009 through the Sofia Stock Exchange – for BGN 31 M and BGN 18 M respectively.

Bulgarian Govt Sells Cigarette Giant Bulgartabac to VTB (i.e. Whoever Is Behind It)

In October, Bulgaria's Privatization Agency formally "seal the deal"by transferring 79.83% of Bulgarian cigarette maker Bulgartabac to Russian state-owned bank VTB for the price of EUR 100.1 M.

The transfer completed the highly controversial privatization deal of the Bulgarian tobacco giant which was concluded relatively quickly after VTB remained the sole bidder for what once was the pride of the Bulgarian cigarette-making industry with vast markets in the former COMECON.

The formal new owner of Bulgartabac is BT Invest, a firm registered in Austria owned by VTB, which now has 5 881 380 shares (almost 80%) of Bulgartabac, the Privatization and Post-privatization Control Agency announced. The deal was finalized after the buyer paid 20% of the EUR 100.1 M selling price (a mere EUR 100 000 more than the minimum price set by the Bulgarian government in the privatization tender) on the day of the signing of the purchase papers, and has now paid the remainder of the sum.

The Privatization Agency said that the money the state got from the sale of Bulgartabac will be directed into the state budget, and will then be fully transferred into the so called Silver Fund, a state retirement fund set up in 2008 in order to cover future pension system deficits caused by Bulgaria's aging population.

The "real" Bulgartabac buyer remains unknown because it is believed that the Russian state bank is acting as an intermediary. BT Invest, the formal buyer registered in Austria, is formally owned by VTB Capital, a company based in Cyprus and owned by the investment department of the Russian bank VTB. VTB, however, is believed to be working for an unknown client whose identity it did not wish to reveal.

This situation has fueled various speculations about who really bought Bulgartabac, with guesses including certain influential Bulgarian political and business circles.

A still unnamed "Russian investor" is the real buyer of Bulgaria's cigarette maker Bulgartabac, and there is no covert Bulgarian entities in the deal, according to the head of the Privatization Agency Emil Karanikolov. At a Parliament hearing in September, the top Bulgarian privatization official refuted numerous media reports and allegations by political figures that a Bulgarian entity connected with Bulgaria's Corporate Commercial Bank, believed to finance the media group of mogul Irena Krasteva, and Vinprom Peshtera as the mysterious buyer, which in turn are believed to be tied with the ethnic Turkish party DPS (Movement for Rights and Freedoms).

The Bulgartabac privatization contract bans the resale of the holding in the next ten years, a condition which can be skipped through a change in the ownership of BT Invest, analysts say.

Austria-registered BT Invest, behind which stands Russia's second-biggest bank VTB, remained the only bidder for the Bulgarian tobacco monopoly after British American Tobacco and Austria-based CB Family Office Service dumped the sale in the last round of the tender.

The deal sparked protests by Bulgartabac workers, who oppose the sale of the cigarette maker to the only remaining bidder in the public procurement procedure and insist that the Governing Board rejects the offer.

The Privatization Agency head revealed that according to the consultant for the deal, Citigroup, a fair price for the 80% share of Bulgartabac would be anywhere between EUR 82.7 M and EUR 122.8 M. According to Karanikolov, the guarantees on properties, production facilities, financial transactions and commercial brands with a total worth of EUR 450 M will ensure that the new owner of Bulgartabac will comply with the clauses of the privatization contract. Bulgartabac's properties are estimated by Colliers International to be worth EUR 42 M.

Since 100% of the capital of VTB Capital is owned by the Russian bank VTB, it cannot be considered an off-shore company, Karanikolov said. "There are definitely no Bulgarian players in VTB Capital," the head of the Bulgarian Privatization Agency claimed, refuting allegations that DPS MP Delyan Peevski, the head of the Corporate Commercial Bank Tsvetan Vasilev, and Vinprom Peshtera, an alcohol producers, have a share of 25% in VTB Capital. Vinprom Peshtera itself, through its subsidiary Kings Tobacco, is already the owner of Bulgartabac's two former plants in Plovdiv and Stara Zagora.

Karanikolov did admit, however, that the Russian state bank VTB can sell BT Invest, rather than selling Bulgartabac, at any given moment, and that will not constitute a breach of the privatization contract. Karanikolov claimed also that the Bulgarian government has a great leverage over the new owner of the Holding as the Privatization Agency is entitled to change the guarantees under the privatization contract at any time, which even allows it to ban the owner from terminating the production of a certain brand of cigarettes.

In August, reports said that Ivan Savvidi, one of the wealthiest Russians and a member of parliament, closely linked to former President and current Prime Minister Vladimir Putin, is the buyer of the Bulgarian cigarette maker. Savvidi owns Rostov tobacco company Donskoy Tabak, a subsidiary of Rostov-based Agrokom Group, which was in the past among Bulgartabac business partners.

In July, Tsvetan Vasilev, the head of Bulgaria's Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva, denied he is interested in the privatization of the country's state tobacco giant Bulgartabac Holding. Before the privatization Corporate Commercial Bank held 8.11% in Bulgartabac. The bank, which is believed to finance the media group of mogul Irena Krasteva, holds nearly half of the money of strategic state-owned companies. In September, Russian media reported that VTB is considering the sale of individual assets of the holding.

Overall, in spite of all vows by Bulgarian Prime Minister Boyko Borisov and his ministers to "watch" for the fair implementation of the Bulgartabac deal and some other supposedly soothing declarations, many in Bulgaria remained convinced that the tobacco giant had been handed over as part of a backstage political deal to a circle around the leader of the ethnic Turkish party DPS (Movement for Rights and Freedoms) Ahmed Dogan, believed to be linked to Tsvetan Vasilev's Corporate Commercial Bank, the Vinprom Peshtera winery, and Irena Krasteva and her son Delyan Peevski's New Bulgarian Media Group.

In November, the new owner VTB appointed a brand new board of Bulgartabac, with Alexander Romanov, one of the top executives of VTB Capital, a subsidiary of the Russian Foreign Trade Bank (VTB), becoming the chair.

King's Tobacco to Invest BGN 45 M in New Cigarette Plant

In August, King's Tobacco, a private Bulgarian cigarette-maker linked to the Vinprom Peshtera winery, announced a BGN 45 M investment into a new cigarette plant in Bulgaria's Plovdiv. In 2008, King's Tobacco bought through the Sofia Stock Exchange two of the smaller production facilities of Bulgarian state cigarette maker Bulgartabac – the cigarette plants in Plovdiv and Stara Zagora – for a combined total of some BGN 50 M. The new production facility will add 400 jobs and a 60% increase of the company's production capacity, and is to be opened in 2012.

Greek Tobacco Plant Opens Doors in Bulgaria's Sandanski

In January, Bulgaria's Economy Minister Traicho Traikov and Greece's then Deputy Prime Minister Theodoros Pangalos opened a new tobacco processing plant in the Bulgarian town of Sandanski. About EUR 9.5 M have been invested in the new plant of the Greek Leaf Tobacco company and it will provide jobs for 600 people. About EUR 4,5 M have been invested in the first Leaf Tobacco plant in Sandanski, which opened doors in 1996.

Engineering and Machine-Building (Excl. Car Manufacturing)

Bulgaria's Machine Building Reached 95% of 2008 Exports in 2010, Still in Crisis

Bulgaria's machine-building sector is still facing a serious crisis, which will probably continue well into 2012, Iliya Keleshev, head of the Bulgarian Branch Chamber for machine building, declared in July.

Bulgarian machine building industry, which employed 143 000 people in 2008, has been seriously hurt by the economic crisis after 2009 and many of its sectors are still struggling. Back at the end of 2009, Keleshev estimated that Bulgaria's machine building lost 29 000 jobs in one year. In the past two years, the machine building plants in Bulgaria started to rehire workers but at a slow pace.

About half of Bulgaria's machine building industry is export-oriented, and has been doing increasingly well in 2010 and 2011, while the other 50% of the firms who traditionally produce for Bulgaria's domestic market continue to be in trouble. Bulgarian machine building exports grew by 38.5% in 2010 compared with 2009, which is seen as indication that the export-oriented plants have overtaken substantially those producing for the domestic market, whose output in 2010 was only about 51% of the output in 2008.

Swiss-Based Engineering Giant ABB Reaches 1 000 Employees in Bulgaria

In July, the Bulgarian subsidiary of Swiss-based engineering manufacturer ABB Group has marked the employment of its 1000th employee in Bulgaria. ABB Bulgaria managed to accomplish the doubling the number of its employees within two years, thus securing jobs to a significant number of people, even in regions with a high unemployment rate. At present, ABB Bulgaria has a major role on the Bulgarian market of power and automation equipment, supplying solutions for energy efficiency.

ABB operates in Bulgaria through three companies in six locations, the main focus being on production. The three ABB manifacturing plants situated in Bulgaria's Petrich, Sevlievo and Rakovski. They products and components, acting either as key suppliers to other ABB factories within the ABB Group, or delivering ABB products to end customers.

Johnson Controls Celebrates 10 Years in Bulgaria

In November, Johnson Controls, a global leader in automotive seating, interiors and electronics, celebrated 10 years of operations in Bulgaria.Since the opening of the local branch in 2001, the Sofia development center of Johnson Controls has developed more than 120 electronic devices. In 2012, the company plans to grow its Sofia based operations further. The Sofia team consisting of 550 engineers and specialists provides project management, software development, product testing, hardware design and prototyping, mechanical engineering services, global IT and purchasing support to the whole Johnson Controls Automotive Experience and its customers in the automotive industry.

Bulgarian Tunnel Construction Industry Holds Global Forum

In October, the Bulgarian Association of Geotechnical and Tunnel Construction hosted a forum of the International Tunneling and Underground Space Association. The Bulgarian Association of Geotechnical and Tunnel Construction was founded December 2010 in an effort to unite and defend the interests of the sector in the country and to forge international ties.

Bulgarian Company Builds 3rd Largest Tunnel in Germany

In June, Bulgarian company "Adval" JSC and the German Ed. Z?blin AG held the grand opening of the third largest tunnel in Germany. Being 8314 meters long, the "Blessberg" tunnel is the longest of 22 railway tunnels, which make up the new high speed section of the German Railways "Deutsche Bahn", between the cities of Erfurt and Ebensfeld. "Adval" JSC was founded in 1993. The company specializes predominantly in tunnel construction and strengthening structures."Adval" participates in tunnel construction work in Germany, Spain, Greece and Bulgaria. Since 2008, the company has been working as a main contractor in the metro construction in the city of Sofia.

LED Factory Launched in Bulgaria's Godech

In February, a factory for the production of light-emitting diodes (LED) was opened in the western town of Godech.

BASF Mulling Bulgaria for Major Industrial Investment

Unconfirmed reports said in November that German chemical corporation BASF is surveying five countries as the potential location of a major new industrial plant. Bulgaria is in competition with Romania, Slovakia, the Czech Republic, and the Former Yugoslav Republic of Macedonia for the potential BASF investment. BASF is expected to pick one of the five states by the end of the first quarter of 2012 for an investment probably in the range of EUR 5 M – 50 M.

Bulgarian Danube Shipyard Workers Changes Owners

After its workers protested because of delayed pay in January 2011, in February the Rousse Shipyard Jsc based in Bulgaria's Danube city of Ruse was bought by a somewhat mysterious business group of five companies.

The Rousse Shipyard was founded in 1881. In April 1999, it was was privatized by Rousse Shipyard Beteiligungsgesellschaft mbH – Germany. The new unnamed shareholders of the Danube shipyard have declared their intention to continue to develop the basic activities of the plant – shipbuilding and ship repairing.

In April, the Rousse Shipyard JSC ompleted a BGN 60 M capital hike and underwent a management reshuffle.  In August, the shipyard in Bulgarian Danube city of Ruse built a sea-faring ship for 3.5 months instead of the usual 12-month period. The ship, called "Frisian Ocean", had been commissioned by Dutch company Boomsma Shipping BV.

Bulgarian Machine Building Plant Invests to Boost Production Capacity

In August, the "Dynamo" factory in the Southern Bulgarian city of Sliven, a leading producer in the automotive and machine-building industries, announced plans to invest over BGN 0.5 M to boost production capacity and meet the high requirements of the market. Currently "Dynamo" sells over 90% of its production on international markets outside the EU - the US , Russia and Ukraine.

Ayala's IMI Buys Out EPIQ Assets in Bulgaria, Mexico, Czech Republic

In May, Integrated Micro-Electronics Inc. (IMI), the electronics manufacturing services unit of Philippines-based company Ayala, bought out EPIQ NV's assets in Bulgaria, Mexico, and the Czech Republic for an estimated EUR 43 M in total. EPIQ is composed of 10 entities in 7 countries - Bulgaria, Czech Republic, France, Germany, Italy, Mexico, China. Epiq Electronic Assembly is the Bulgarian division of the electronics and electro mechanical systems subcontracting group, Epiq NV. EPIQ's Bulgarian facility is located in the town of Botevgrad northeast of Sofia and employs about 2000 people.

Car Manufacturing (At Last)

Bulgaria Back on Global Car Production Map

The really good news for Bulgarian industry in 2011 came from the car manufacturing sector. Sixteen years after Bulgaria's last failed attempt to revive its automobile industry, the first car under the Great Wall badge assembled was rolled out in November at the new factory near the town of Lovech, Northern Bulgaria.

Cars produced by China's Great Wall and Bulgaria's Litex Motors already hit the Bulgarian market in October this 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.

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 provided 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. This may also be the last chance for the revival of the local automobile industry after in mid 1990s Rover set up a joint venture with the Bulgarian Daru Group in Varna, which failed because of a weak market strategy, high prices, and a stronger competitor in the face of Skoda.

In December, 2011, Litex Motors said it at aims at selling 2 000 vehicles in 2012. The Litex Motors factory will formally be inaugurated at the beginning of 2012, featuring the latest top-notch equipment for car manufacturing. Litex Motors currently employs over 120 people, the average age of its engineers being 25, and the average age of the assembly line operators – 19, with all employees going through special training, with the total employment figure at the Lovech plant planned to reach 2 000 people.

Bulgarian Designer Deyan Denkov Author of Renault Frendzy Design Concept

In July, it was revealed that a Bulgarian exterior designer, Deyan Denkov, is the author of the design concept of Renault's latest concept car, the Renault Frendzy. Denkov, a native of Yambol in Eastern Bulgaria, has been working for Renault since 2007.

Electric Vehicles

Bulgaria Set for Boom in Electric Cars, Converted Vehicles Industry, Production

The large-scale industrial conversion of conventional cars into electric vehicles is expected to become Bulgaria's new major industry, a special report of (Sofia News Agency) found in July.

The development of Bulgaria's electric vehicle industry is expected to experience a boom in 2012, according to Iliya Levkov, Chair of Bulgaria's Electric Vehicles Industrial Cluster (EVIC).  EVIC, a 100% Bulgarian NGO designed to spur cooperation and coordination between various actors in order to help initiate the industrial production of electric cars in Bulgaria, was formed in November 2009, when a number of industrial manufacturers from the machine building sector, communications and oil industry, and top universities and research institutions came together.

The Bulgarian Electric Vehicles Industrial Cluster has just reached an agreement with Avtomotor Korporatsiya, the official importer of Citroen, for the industrial conversion in Bulgaria of two Citroen models – Berlingo and Jumper – into electric vehicles – a deal described by Cluster Secretary Ivan Kostov as "revolutionary."

According to EVIC, only a handful of countries in the world in addition to Bulgaria, such as the USA and Italy, have the experience and capacities for the industrial conversion of conventional cars into electric vehicles.

With a number of initiatives in an early stage, EVIC Chair Iliya Levkov expects decent results from Bulgaria's electric car industry in the near future – some 15 000 conventional cars are supposed to be converted by the end of 2012, in addition to hundreds of new electric vehicles. This will still be a small number out of 3 million registered cars in Bulgaria but a snowball effect is expected to follow once industrial conversion is introduced in Bulgaria.

In February, Bulgaria's Economy Minister Traicho said the government hopes the country will be able to assume a leading innovation role with respect to the development and use of electric cars, speaking at an international conference in Sofia Thursday entitled "Electric Cars – Challenges to New Mobility".

He revealed that the Ministry of Economy, Energy, and Tourism has formed a working group working out options to stimulate the introduction, purchase, and use of electric cars in Bulgaria. Back in January, Japan's Toshiba Corporation offered Bulgaria a large-scale project in the field of renewable energy, "smart electricity grids" and electric cars.

In October, Traikov announced that 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.

Several electric cars made abroad can already be seen on the streets in the Bulgarian capital Sofia.

In November, South Korea's Ambassador Chun Bi-ho announced a Korean company is considering investment opportunities for the production of electric cars in Bulgaria's Black Sea city of Varna, South.

In April, UK electric car company Zero Carbon 2020 Ltd said it planned an assembly line for electric vehicles in Bulgaria's Stara Zagora with an initial capacity of 100 cars, to reach 5 000 in 2015. The production was said to start in 2011 but had failed to materialize as of December. The initial investment is estimated at BGN 6.5 M, and if the market reacts well, it is planned to reach EUR 10-12 M.


Bulgarian Pharmaceutical Giant Sopharma Rises but Remains Controversial

All throughout 2011, Sopharma remained one of the not so many fully Bulgarian-owned industrial producers with international ambitions. This has been true regardless of controversial reports of Sopharma's favorable ties with the government and health authorities.

Bulgaria's largest pharmaceutical company Sopharma registered its highest profit in 11 years. In 2010, Sopharma AD had a profit of BGN 40.5 M, according to data released in April 2011. Sopharma's 2010 revenues amounted to BGN 238.5 M, which is a 12% increase year-on-year.

30% of Sopharma's sales in 2010 were on Bulgaria's domestic market but the major factor for its revenue growth was its export to foreign markets which grew 19% compared with 2009. Sopharma's 2010 gross expenditures amounted to BGN 193 M, an increase of 10% year-on-year. Sopharma's own capital is BGN 296 M, which is a 16.6% increase in 2010 year-on-year. In 2010, the pharmaceutical company's export to Russia increased by 20%, and to Ukraine – by 28%.

In the first quarter of 2011, Sopharma registered total revenues of BGN 60.0 M (a 13% increase year-on-year), total expenditures of BGN 45.3 M (16% more year-on-year), and net profit of BGN 13.1 M; its sales amounted to BGN 57.8 M, a 12% increase compared with the first quarter of 2010. In April, Sopharma announced a universal increase of the salaries of its employees, with all 1 830 employees getting a flat salary increase of BGN 60.

Sopharma owner and CEO Ognyan Donev made clear his expectations that Sopharma will expand its business operations in the Baltic states, Poland, Belarus, Ukraine, Serbia, and Turkey, and will be watching closely the market situation in Greece.

In 2010, Sopharma started building an EUR 8 plant in Serbia, and a larger EUR 35 M (BGN 70 M) production facility in Bulgaria's Sofia; in addition to these projects, in 2011 the company plans to complete the modernization of its facilities in Ukraine.

In 2011, Sopharma made two acquisitions of pharmacy chains in Belarus. Sopharma acquired Belorussian pharmacy chain Tabina through its Latvia-based subsidiary Briz, it said on April 13 2011 in a statement to the Bulgarian Stock Exchange. Sopharma bought 99% of Tabina's capital, which has 14 pharmacies operating under the Doctor Do brand. Tabina, with a staff of 75, registered a turnover of EUR 3.78 M in 2010.

In January 2011, Sopharma's subsidiary Briz bought another Belorussian pharmacy chain, Interfarm, which runs 19 pharmacies. The Sopharma statement made it clear Briz now has a portfolio of 33 pharmacies in Eastern Europe with an annual turnover of EUR 7.5 M, which has made it the third largest pharmacy chain in Belarus.

India's Elder Pharma Targets EU through Bulgarian Subsidiary

Drug maker Elder Pharmaceuticals based in Mumbai, India, announced in 2011 that it will be starting to sell Indian brands in the EU through its Bulgarian subsidiary Elder Biomeda AD.

Back in April, Elder Pharmaceuticals, ranked 28th among India's 300 largest companies, said it plan to start manufacturing up to six of its products at the facility of its Bulgarian arm ''Elder Biomeda AD'' to market them in Europe. In 2010, Elder Pharmaceuticals increased its stake in its Bulgarian subsidiary Elder Biomedia AD from 61% to 92.2% through its wholly owned Dubai subsidiary Elder International FZCO.

Elder Biomedia makes ointments, capsules and tablets and employs about 300 people. Indian company Elder Pharmaceuticals first purchased a share, 51%, of Bulgarian company Biomeda 2000 Ltd in 2007, subsequently increasing its stake. Biomeda itself was started as a Bulgarian-German company for the manufacturing of herbal medicinal products in December 1989.

Chemical Industry

Bulgarian Fertilizer Plant Neochim Revamped, Reopened

In November 2011, one of the largest Bulgarian fertilizer factories Neochim Plc restarted production after being shut down for repairs for two months. Neochim , the successor of the chemical plant in the southern town of Dimitrovgrad founded in 1951, has been fully revamped. For the first time since it was opened in 1987 the nitric acid facility of the Neochim plant will be powered with hydrogen instead of the nitrogen and hydrogen mix previously used, he added.

Bulgaria's Oldest Cosmetics Producer on Sale for BGN 10 M

In March, Bulgaria's oldest and largest cosmetics producer "Alen Mak" was put on sale for about BGN 8-10 M. The Plovdiv-based Alen Mak ("Scarlet Poppy") factory, in financial trouble for some years, is one of the iconic brands of Bulgaria's communist period. It was the last state-owned cosmetics factory to be privatized – in 2002 it was sold for USD 5.5 M to the Swiss company Effekten und Finanz.

Bulgaria's Industrial Zones: Still a Far Cry

In spite of the great hopes that emerged in 2010 for the development of new major industrial zones in Bulgaria with Chinese participation – especially the Bozhurishte Industrial Zone near Sofia – 2011 saw little tangible results in that respect, at least on the outside.

In August, reports claimed that the Bulgarian capital Sofia plans to build a new industrial park near the dead steel-maker Kremikovtzi, which is located north of the city – unlike Bozhurishte in the west. Reports also mentioned a parallel but smaller project planned for the fall near the Iskar Train Station in the northeast of the city.

In March, a new industrial project was announced – a new industrial and logistics zone will be set up in Bulgaria's Black Sea city and port of Burgas by the local municipality administration and the state-owned "National Company Industrial Zones." The new industrial zone will be called "Logistics and Industrial Park – Burgas" EAD, and will be located on the territory of Industrial Zone "Burgas-North".

Bulgaria's National Company Industrial Zones was established in 2009 to provide for developing industrial zones at several major locations around Bulgaria at the junctions of key transport corridors, close to ports, airports, and industrial and city centers.

Three of those eight zones are considered to be already completed: Free Zone Ruse (37 hectares in area), located at Bulgaria's main Danube port, with French manufacturer Montupet a major investor with a car parts factory. Free Zone Vidin (30.8 ha), located at another Danube Port, and Free Zone Svilengrad (7 ha), close to key crossings on the borders with Turkey and Greece, have also been developed.

The future and "in progress" projects include industrial zones at Burgas (27 ha) and Varna West (109 ha), both at Bulgaria's major Black Sea ports and large cities; and Karlovo (58 ha) and Telish/Pleven West (200 ha), close to major inland industrial centers. The jewel in Bulgaria's industrial crown, however, is expected to become the future industrial zone in Bozhurishte, right outside of Sofia, with an area of 191.4 ha, which is to be managed jointly with the Chinese Province of Zhejiang, and is to attract major Chinese companies wishing to invest and trade in Europe.

Construction Materials and Ceramics

Ideal Standard Completes Merger of Bulgarian Subsidiaries

The two affiliates of Ideal Standard International that operate in the Bulgarian town of Sevlievo were formally merged in one company. The merger between Ideal Standard Bulgaria and Ideal Standard Vidima was completed on January 31, 2011. Thus, as of February 1, 2011, the two subsidiaries of Ideal Standard in Bulgaria are in a single company known as "Ideal Standard Vidima" Jsc. Officials announced that the reason behind the decision was to simplify the legal structure of Ideal Standard International in the countries where such procedure was possible. It is one of the largest private employers in Bulgaria with a total of 3 300 employees.

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

In November, the Bulgarian subsidiary of German company Knauf was 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. 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.


Mining Makes 5% of Bulgaria's GDP

In April, the corporate members of the Bulgarian Chamber of Mining and Geology declared optimistic forecasts. Almost half, 45%, of the Bulgarian mining companies saw 2010 as more successful than 2009, while 35% it declared it was basically the same.

The greatest problems for the Bulgarian mining sector are the lingering effects of the economic crisis, the inefficiency and bureaucracy in state institutions, unfair competition, and flawed legislation. Bulgaria's mining industry accounts for about 5% of the country's GDP, employs directly 30 000 people, and indirectly supports the employment of another 120 000. In 2010, the export of metals and metal concentrates was worth over EUR 2.5 B, marking a growth of 10% for the first half of 2011.

Canadian Co Dundee to Concession Bulgaria's Krumovgrad Gold Mine

In February, the Bulgarian cabinet gave on a 30-year concession the gold mine near the town of Krumovgrad to Toronto-based mining company Dundee Precious Metals.

The final decision was to offer the concession to "Balkan Minerals and Mining," a subsidiary of Dundee. The gold mine is located in the Krumovgrad municipality on lands of the villages of Guliya, Dazhdovnik, Zvanarka, Kaklitsa, Malko Kamnyane, Ovchari and Sarnak.

In exchange for the 30-year concession, the company is making the commitment to invest over BGN 114 M and extract an average of 850 tons of ore a year of ore. The Krumovgrad municipality is to receive 30% of the concession payments. The project to extract gold from the Krumovgrad mine suffered many setbacks and underwent a number of court battles.

In 2010, the Canadian company had to abandon plans for a gold mine near Bulgaria's Krumovgrad using cyanide technology after a Bulgarian court ruled against the cyanide gold extraction at the other mine operated by one Dundee's subsidiaries in the country, Chelopech Mining. The ruling came about after locals and environmentalists expressed concerns over the technology.

The company plans to process the gold concentrate extracted in Bulgaria outside the country. At the beginning of 2010, the Toronto-based company acquired a smelter in Namibia, which could be used for the purpose. According to statements made in 2010 by Dundee officials, the project provides for a USD 100 M investment, which is less than the previous plans for investing USD 120-150 M including a cyanide installation.

The Company's operating interests include its 100% ownership of Chelopech Mining EAD, its principal asset being the Chelopech mine, a gold, copper, silver concentrates producer located east of Sofia, Bulgaria, a 100% ownership of Namibia Custom Smelters (Pty) Ltd., a concentrate processing facility located in Tsumeb, Namibia, and a 100% interest in Deno Gold Mining Company CJSC, its principal asset being the Kapan mine, a gold, copper, zinc, silver concentrates producer located in southern Armenia.

In December, the company's final feasibility study showed Dundee Precious Metals' investments in a controversial project for a big open-pit gold mine near the Bulgarian town of Krumovgrad will pay back in just a little more than three years. A group of European Commission experts are expected to come from Brussels and examine the situation on the field over environmental concerns of the locals.

Bulgarian Mines Break Coal Production Record in January-August 2011

Bulgaria's state-owned Mini Maritsa Iztok EAD (i.e. Maritsa East Mines Jsc) achieved a record production of coal in the first eight months of 2011.

A total of 20.62 million metric tons of lignite coal were extracted by the Maritsa East Mines in January-August 2011, improving the previous best result for the first eight months of any given year, which was the production of 16.60 million metric tons of coal in 1996. The January-August 2011 coal output marks an increase of 7 million metric tons year-on-year, and is 500 000 metric tons more than the goal set by the company for the respective period. This way the mines are preparing to meet the demand by the several large-scale thermal power plants in the Maritsa East energy complex, including Maritsa East 2 EAD, Contour Global Maritsa East 3, AES Galabovo, and Brikel EAD.

Glass Industry and Sisecam

Turkish Co Sisecam Invests Further

In February, Turkish company Sisecam launched its 5th facility in Bulgaria - a factory for automobile glass in the northeastern city of Targovishte estimated at USD 25 M, creating 130 new jobs. The factory will make automatic and non-automatic side windows and heated back windows with an annual capacity of 1.3 million square meters and a turnover of USD 20 M.

Ahmet Kirman, CEO and chair of the board of Sisecam, pointed out that the investments of the Turkish company have turned the Bulgarian city of Targovishte into a center of glass production in the Balkans, and have provided direct employment to 1440 people, while also facilitating small and medium-sized enterprises working with the company on the local level.

This is the fifth manufacturing facility of the Turkish glass giant, after the factory for household glass launched in 2005; for flat glass launched in 2006; the mirror line and the line for appliance glass from 2007. A total of 1 500 workers will be employed at the five facilities.  In 2008, "Sisecam" had frozen the project for automobile glass manufacturing over the shrinking of the European market.

In July 2011, the Turkish industrial giant Sisecam said it was going to invest USD 60 M more in its production facility for household glass in Bulgaria's Targovishte through its subsidiary, Trakiya Glass Bulgaria. The new investment will expand the existing household glass production line launched in 2005, and will add a second production line in Sisecam's glass factories in Targovishte, which taken together are the largest glass plant in the Balkans. A total of 200 new jobs will be opened with the new investment, Trakiya Glass Bulgaria HR head Krasimir Kanev said.

Turkey's glass producing giant Sisecam is not worried by potential competition in Bulgaria by the Chinese state-owned company China Luoyang Float Glass Group, Sisecam CEO Ahmet Kirman said. China Luoyang Float Glass Group first declared its interest in in investing in the former glass factory in Bulgaria's northeast city of Razgrad in 2008, and while the investment has not gotten through yet, it remains highly likely that it will be realized.

In April 2008, the Vice President of CLFG, Li Wei, announced the Chinese holding was going to invest at least EUR 80 M in the former "Diamond" factory in Razgrad, which was shut down in 2000 over financial troubles. In 2007, its assets were bought by the Plovdiv-based firm Via Properties, with which the Chinese company is planning the investment. CLGF is a state-owned company, and ranks third largest in the world in production of flat glass. The plant in Razgrad is expected to employ 300 wokers.

Should the Chinese investment in Razgrad become a fact, there will be two large-scale foreign-owned glass producers in Northeast Bulgaria, which could lead to competition for both European markets and local labor. Turkey's Sisecam appears to be in a stronger position since it already has a strong foothold in the region, and its existing and planned investments appear to be much more massive.

Consumer Products

Finnish Investment to Make Bulgaria World's Top Ski Producer

Bulgaria will be making between 15% and 20% of the total annual production of ski in the world thanks to the investment in a local factory by Finnish company Amer Sports, it emerged.

In March, world ski producer, Finnish company Amer Sports, received a "Class A" investor status from the Bulgarian government for its project to expand the ski factory in Bulgarian mountain resort Chepelare. By the end of 2011, Amer Sports invested BGN 40 M in the ski plant in Chepelare, which already employed 640 people. The Finnish company Amer Sports has a market share of about 30% on the global ski market.


Sofia Yet to Get Waste Plant... At Some Point

By the end of 2011, Bulgaria's capital Sofia failed to get approval of EU funds for its long-overdue waste-recycling plant from the European Commission.

In May, there were reports that the approval will come "in weeks" but in November an EC official made it clear that will not happen until some time in 2012. Sofia Deputy Mayor for Ecology Maria Boyadzhiyska says there is a new 2.5-year deadline for the plant, not 2 years. The ground breaking date remains unknown and has already been delayed by a year and a half.

The public procurement order for one of the installations - for green and food waste compost, had been terminated over a year after it was announced because there has been just one bidder offering a price exceeding the BGN 40 M slated for it.

The EC is yet to make a decision on the financing of the main component – the waste treatment plant. Several months ago, Brussels stated there is a need of a new study to see if it can be build for less money than the already contracted BGN 209 M with the consortium of Bulgarian company Stanilov and German company Heilit.

Meanwhile, the amount of waste deposited at the Suhodol landfill is down by 33% over recycling being introduced in Sofia and reduced consumption, according to the Deputy Mayor.

BGN 50 M Waste Recycling Plant Launched in Bulgaria's Varna

A waste recycling plant, an investment worth about BGN 50 M, was formally inaugurated at the Bulgarian Black Sea city of Varna, in June. The recycling factory of Ecoinvest Assets, a consortium, is located in the village of Ezerovo, 10 km east of Varna. It has a built-up area of 16 000 square meters, employs 40 people, and is supposed to function for at least 25 years. It can process 140 000 tons of waste annually. The factory was built in just 3 months by Recycling Bulgaria, a Bulgarian company, in partnership with Germany company Eggersmann Anlagenbau.

Bulgaria's Monbat Opens EUR 13 M Recycling Plant in Romania

A EUR 13 M factory of Monbat Recycling, a subsidiary of Bulgarian company Monbat, in Romania was inaugurated in June by the Prime Ministers of Bulgaria and Romania Boyko Borisov and Emil Boc. Monbat Recycling SRL, whose plant is located outside of Bucharest, is an investment of Bulgarian car battery producer Monbat, part of the Bulgarian Prista Oil Group, one of the largest machine oil and battery producers in Eastern Europe.

Monbat's factory in Romania has been operating since February 2011. It is the second recycling plant of Monbat, after the company based in Bulgaria's Montana opened a recycling facility located in the town of Indjija, northern Serbia, in September 2010.

Monbat's factory in Romania is a greenfield investment, meeting all latest EU requirements. It has the capacity to process 40 000 tons of batteries per year, and 22 000 tons of lead, which is then used for production of car batteries in Monbat's other factories.

Monbat is one of the few large-scale Bulgarian investor abroad together with its parent company, Prista Oil. In 2010, Monbat's consolidated sales amounted to BGN 161 M, with 95% of its produce going for exports, Germany being the company's largest market.


Bulgaria's Furniture Industry Loses Forever 20% of Pre-Crisis Volume

The Bulgarian furniture industry will lose permanently about 20% of the volume it had before the crisis, Stefan Ganev, executive director of the Bulgarian Chamber for Wood-Processing and Furniture Industries revealed in August.

Because of the decline in construction of new homes and new hotels, Bulgaria's domestic furniture market has declined by about 50% since the start of the economic crisis three years ago, the Chamber estimates. Ganev has forecast that even after the crisis is fully overcome, there will hardly be a substantial growth in Bulgaria's domestic market because of the devastating construction slump.

Bulgarian Mattress Maker TED-BED Conquers Europe, Sets Eyes on Asia

Bulgaria's largest mattress producer TED-BED Jsc has registered impressive results on the European markets, and has directed its attention towards new export destinations such as South Korea and Taiwan, the company announced in April.  In the first quarter of 2011, TED-BED registered a 150%-growth of export sales compared with the same period of 2010, while its production capacity has tripled. TED's collection Sensi Scandia attracted enormous interest for a second time at the Salone Internazionale del Mobile expo, which took place between April 12 and April 17, 2011, and was attended by over 300 000 people. In 2009, TED-BED Jsc invested about EUR 11 M in its new manufacturing plant near Plovdiv, which was opened in 2009. It employs about 300 workers.

Food & Drinks

Bulgaria's Budget Makes BGN 300 M from Brewing Industry

Bulgaria's brewing industry brings the state budget some BGN 297 M annually, the Chair of the Bulgarian Brewers' Union and General Manager of Heineken Zagorka Ruud van den Eijnden revealed in November.

The total added value of the Bulgarian beer production and distribution is estimated at BGN 219 M, Ruud van den Eijnden said at the Fall Beer Fair of the Brewers Union in Bulgaria. He further revealed that Bulgarian breweries employ directly 3 000 people, and the respective distribution firms – 8 000.

The 2011 Fall Beer Fair was part of a triple celebration of the Bulgarian Brewers' Union – 130 years of brewing industry in Bulgaria; 20 years of the Brewers' Union in Bulgaria, and 55 years of brewing science research in Bulgaria.

Bulgaria's Oldest Brewery Sells Malt Production to French Co

In August, French company Malteries Soufflet acquired the malt production of Bulgaria's oldest commercial brewery "Kamenitza."

Bulgaria's oldest commercial brewery Kamenitza was established in Plovdiv by the Swiss Germans Rudolf Frick and Friedrich Sulzer in 1876. It became a large and modern factory in 1879/1881 with the help of another Swiss expert, Christian August Bomanti. Production began in 1882 in the Kamenitza area near the city and continues today, its successor being the Kamenitza brewery.

Kamenitza AD, which was until last year part of Interbrew, renamed InBev after the merger of Interbrew and AmBev, is the second biggest brewery in Bulgaria. It has 780 employees. Anheuser-Busch InBev sold its operations in seven countries in Central Europe and the Balkans, including Bulgaria, to private-equity firm CVC Capital Partners in December 2009.

Coca-Cola Announces New Bulgarian Investments on Its 125th Birthday

In May, Coca-Cola Hellenic announced new investments in Bulgaria's capital Sofia amidst the celebrations of Coca-Cola's 125th birthday.

Sofia has been selected from among 14 other cities in Europe for the setting up of a United Center for Human Resource and Financial Services of Coca-Cola; the center will be opened in the fall of 2011, and will employ 200 Bulgarians.

Bulgaria is the first country in the former Communist bloc where Coca-Cola has been produced – since 1965. The representative offices of Coca-Cola formally enter Bulgaria in 1992. Coca-Cola has three plants in Bulgaria – in Bankya, Kostinbrod, and Targovishte. It employs directly 1 300 people in Bulgaria, and is the largest soft drinks producer in the country.

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

Bulgaria's domestic wine sales increased by 16.7% in the first nine months of 2011 year-on-year, the Executive Agency on Vine and Wine announced.

Atotal 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. 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.

Bulgaria's Food Safety Agency Closes 900 Non-Compliant Sites

In the ten months since its establishment in February 2011, the Bulgarian Food Safety Agency (BABH) conducted 190 000 inspections of food producers and traders, which resulted in the closure of 900 non-compliant stores and production facilities.

For BABH's ten months in operation, its inspectors have seized a total of 84 tons of meat and dairy products and 120 000 eggs beyond sell-by dates. BABH also seized close to 6000 liters of non-alcoholic drinks because they did not meet quality standards or were produced by unregistered companies.

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Tags: The Bulgaria 2011 Review, industry
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