Publication: The Sofia Echo
Provider: Sofia Echo Media
Date: July 13, 2007

Bulgarian investment in the neighbourhood
Elitsa Grancharova
Bulgaria’s EU accession opened the doors for some local companies to start investing in neighbouring countries, as well as in other countries in the south-eastern part of the continent.

A local manufacturer of households appliances and fast moving consumer goods Ficosota Syntez is planning to invest 31.5 million leva (16.1 million euro) in expanding its capacity. The company already operates three production facilities in Ukraine and in 2008 is planning to build another plant in Ukraine in co-operation with a local partner.

Ficosota will also increase the number of its local production units from three to six. Production activity will remain concentrated in the north-eastern Bulgarian town of Shoumen; the company exports to Romania, Moldova, Serbia, Macedonia, Albania, Kosovo, Montenegro and Bosnia and Herzegovina.

Ficosota’s management expects to increase sales by about 60 per cent to 115 million leva and to double its gross profit to 12 million leva in 2007, IntelliNews agency reported on July 11.

Another Bulgarian company Kaolin, involved in mineral extraction, has recently acquired 50.8 per cent of Papernianski, the second largest quartz sand mine in Ukraine. The enterprise also operates one of the biggest quartz sand deposits in the Balkans in Serbia, estimated at more than 30 million tons.

Kaolin is exploring more than 30 deposits and has 10 processing plants in Bulgaria, Serbia and Ukraine, IntelliNews reported on July 9.

The net sales of the company increased by 37 per cent year-on-year to 50.9 million leva. The firm cashed 61.8 million leva from a public offering in April 2007 and said it would use the funds for debt repayments and new investments.

Local sunflower oil and margarine producer Bunge, which has a production facility in Kaliakra, is planning to build a new factory. Bunge Bulgaria will relocate its Kaliakra sunflower oil production to Hungary but it will not move out of Bulgaria, company executive director Tsvetan Iliev said.

“We hold 25 per cent of the sunflower oil market in Bulgaria and we are not going to pull out,” he said. However, about $80 million has to be invested in modernising the plant in Dobrich to meet the EU requirements and such investment is practically irrecoverable, he said.

Strategically, according to Iliev, the best place for production is on the Danube banks between Bulgaria and Romania, where the global giant plans to build a modern factory within a couple of years. The Bulgarian bank is a more suitable location for construction, Iliev said.

Bunge will continue buying sunflower seed in Bulgaria and also plans to expand its warehouses. The company buys about 80 000 tons of seed annually.

The facilities in Dobrich may also be used for production of biofuel in future, Iliev said.

Bunge acquired Kaliakra’s previous owner Cereol in 2003. The capacity of the plant is 300 tons a day, compared with up to 2000 tons in Hungary. The relocation of production will not affect the price of sunflower oil, Iliev said.

In the field of the construction industry one of the biggest Bulgarian companies, Dinevi&Co, started a partnership with the Romanian firm Venid Construction. The contract is for a 6.5 million euro holiday village project in Romania, as reported by The Sofia Echo on July 6.

The complex is in the Black Sea resort Mamaia and is Dinevi&Co’s first, but is it not likely to be its last, investment project abroad. It has a built-up area of 7 000 sq m, Dinevi&Co’s press officer said. All the apartments have been sold already and the purchasers are mainly Romanians.

The two companies, who developed the project jointly, plan to build four more holiday villages on Romania’s Black Sea coast in the next two years.

Dinevi&Co, established in 1989, has built around 20 hotels and holiday villages in Bulgaria, a large proportion of which are located in Sveti Vlas on the Black Sea coast. It also builds gated apartment compounds which have gained popularity in Bulgaria in the last few years, SeeNews agency reported on July 2.