Transcript Bulgaria - right place for auto parts manufacturing

BULGARIA – THE NEW GATEWAY TO EUROPE AND
ASIA
Ivailo Kalfin
Deputy Prime Minister аnd Minister оf Foreign Affairs
June, 2008
Integration and proximity of markets

Bulgaria is on the
crossroad of the main
Pan European Corridors
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 EU membership and the
strategic geographic location
of Bulgaria provide easy
access to the leading regional
and world markets
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10
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Why Bulgaria – Political Relations with USA

For over 100 years the Republic of Bulgaria and the United States of
America have enjoyed diplomatic relations.

These relations are at their highest level since their establishment.

The high intensity of the political dialog is a proof of the strong partnership
between Bulgaria and the United States of America.
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Why Bulgaria – Political Relations with USA

Excellent political relations between Bulgaria and USA - reasons:
- Political stability due to Bulgaria's NATO membership /March 29th, 2004/
and the accession to the EU /January 1st, 2007/;
- Stable economic perspective and growing credit rating of Bulgaria and its
institutions;
- Common positions on various international issues;
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Why Bulgaria – Political Relations with USA
- Bulgaria and the United States of America stand together in the fight
against terrorism;
- Bulgaria actively participates in military missions and has a close security
partnership with the USA and other anti-terrorist coalition partners;
- Republic of Bulgaria demonstrates strong commitment to all international
obligations;
- Bulgaria is a reliable and predictable partner in the international arena.
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Why Bulgaria – Basic Economic Data

Stable economic environment

10 % corporate income tax (lowest in EU together with Cyprus); 0% for
manufacturing companies in areas with high unemployment

10 % personal income tax, flat rate

The lowest operational costs in Europe

Well educated and highly skilled labour force

22% of population hold university degree

45,000 Bulgarian students in Europe. Second largest group after China

Governmental support to priority investment projects

Excellent climate, natural scenery, food and hospitality
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Bulgaria is full of investment opportunities
waiting to be discovered…
Business opportunities
A.T. Kearney Global Retail Development
Index results

Industries with rapid annual growth
–
- Consumer credit up by 31,8%,
mortgages up by 75,4%
2nd in
world
Russia
- Media, Advertising, IT, Telecom (up by
20%)
5th
Ukraine
–
Bulgaria
Turkey
12th
13th

–
Real estate (up by 30%)
–
Pharma and healthcare (up by 50%)
Fragmented market
–
Slovenia
17th

Croatia
Source:
19th
A.T. Kearney Global Retail Development Index; Global finance
Retail (up by 20%)
- 4th in Europe and 12th in world in the
2007 A.T. Kearney GRD Index
7th
Latvia
Financial services
Opportunity for consolidation, M&A
activities
Seed financing, start-ups
–
Excess and growing demand for early
stage company financing
–
Opportunity for private equity funds
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…in its people Bulgaria has an invaluable asset
Well-educated and affordable labor force

2nd in the world in international IQ tests

47 universities with 32,000 students
graduating every year:
– 28% with business related degrees
– 63% with IT related degrees
Source:

Good language literacy (English,
German, French, Spanish and Russian)

Average monthly salary as low as 221
EUR

Legal minimum monthly wage in
Bulgaria is 113 EUR
PWC Bulgaria, The Sofia Echo, InvestBulgaria Agency – Value Scope Bulgaria, Sofica
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Bulgaria’s improving infrastructure is enhanced
by the access to the Black Sea
Good infrastructure

Access to the Black Sea and world
oceans through its 2 large ports and
470 km of waterways

4 international airports, 131 paved
airports and 4 heliports

7,300 km of railways and 20,000 km
of roads

EU-backed investments into
infrastructure development
– Access to 9.3bn EUR in EU
financing until 2013 (structural and
cohesion funds, funds for rural
development)

Source:
Three GSM operators and ADSL
internet
EBRD country factsheet, CIA The World Factbook, Wikipedia, InvestBulgaria Agency - Bulgaria Investment Guide 2007, www.enviropea.com
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Bulgaria is growing at a rapid pace while
keeping labor cost low ...
GDP growth comparison
Labor cost
EU 15
Bulgaria
6.1
6.2
6.6
7
EU 15
Bulgaria
30
6.2
6
25
23.3
24.0
24.7
25.2
25.7
5.0
5
20
4
2.8
3
2.3
15
2.7
10
1.6
2
1.2
1
5
0
0
2003
2004
2005
2006
2007
1.4
1.5
1.6
1.7
2.1
2003
2004
2005
2006 F
2007 F
Bulgaria’s accession into the EU will ensure long term sustainable GDP
growth
Source:
Bulgaria Investment Guide 2007, InvestBulgaria Agency, Eurostat
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... and its growth outperforms other countries in
the entire European Union also in the long term
Industrial growth forecast1)
(2007 – 2009)
GDP growth forecast
(2007 – 2009)
EU 27
Bulgaria
EU 27
200
7
6.2
GDP growth (%)
6
5
4
3
2.4
2.4
2
1
160
140
180.8
177.1
180
Industrial growth (%)
6.0
137.4
Bulgaria
143.0
120
100
80
60
40
20
0
0
2008
2009
2008
2009
Bulgaria has a stable forecast for GDP and industrial growth
Notes:
Source:
(1) Malta doesn’t provide information about industrial growth, year 2000 = 100%
Eurostat
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A lot has been achieved, our competitiveness is
continuously improving
World
Competitiveness
Yearbook 2008 –
overall position 39
World
Competitiveness
Yearbook 2007 –
overall position 41
54
41
38
Government
efficiency
Business
efficiency
Infrastructure
41
38
41
31
Economic
efficiency
48
39
29
Economic
efficiency
Government
efficiency
Business
efficiency
Infrastructure
Source: IMD, Centre for democracy research
Due to significant improvement of performance, Bulgaria moves in 2008
two places up in the global list of competitiveness
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Record inflow of FDI in 2006 & 2007, EUR m
Greenfield+Expansion
5 961
6 109
2006
2007
3 152
2 736
1 851
866
1999
1 103
2000
903
980
2001
2002
2003
2004
2005
Source: BNB, IBA
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Bulgaria leads CEE countries in terms of FDI to
GDP indicator
23.6
FDI to GDP, %, 2006 – 2007F
21.1
14.2
9.3
8.3 8.1
6.3
5.5
4.2 4.7
6.0
4.5
5.4
CZECH
REP
HUNGARY
Source: Bank Austria Creditanstalt
5.3
5.0
4.0
2.6
BULGARIA
7.5
7.1
3.6
3.0
1.7
LATVIA
2006
POLAND
ROMANIA UKRAINE
SERBIA SLOVAKIA SLOVENIA TURKEY
2007 F
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FDI stock by sectors, 1998 – 2007, EUR m
Real estate
5112.4
21%
Manufacturing
4679.0
19%
Finance
4619.8
19%
Trade
4019.1
17%
Construction
1602.4
7%
Electricity, gas and water
1515.6
6%
Telecom
1459.1
6%
Other
1259.0
5%
Source: BNB, IBA
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FDI stock by country,1996-2007, %, EUR m
Belgium &
Austria
the Netherlands
Greece
Un. Kingdom
Luxemburg
15%
11%
10%
9%
5%
3662.6
2687.2
2404.5
2140.4
1349.3
Germany
Cyprus
USA
Hungary
Italy
5%
5%
4%
4%
4%
1227.3
1199.1
1029.1
950.2
923.6
Source: BNB, IBA
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Top Foreign Manufacturing Investors
(between $24 & $580 m)
Investor
Sector
Solvey (Belgium)
Chemistry
Lukoil (Russia, Netherlands)
Refinery & Petrochemicals
production
Cumerio (Belgium, Netherlands)
Copper smelting
Miroglio (Italy, Germany)
Textile
Sise Cam (Turkey)
Glass Industry
Heidelberger Zement (Germany)
Cement Industry
Viohalco (Greece)
Metal products
Liebher Hausgeraete (Germany)
Refrigerators
Carlsberg (Denmark)
Brewery
EPIQ (Belgium)
Electronics
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Top US Investors in Bulgaria
Investor/investment amount USD
mln.
AES
(1 400)*
Bulgarian company
Activity
TEZ MARITZA EAST 1
energy
BTK AD
telecommunications
(ADVENT INTERNATIONAL) through VIVA
VENTURES
(433)
AMERICAN STANDARD
(240)
IDEAL STANDARD, VIDIMA
plumbing, sanitations
ALICO/CEN
(111)
POSHTENSKA BANKA
finance
BULGARIAN-AMERICAN ENTERPRISE FUND
(94)
BULGARIAN-AMERICAN CREDIT
BANK, USA
banking
HP
(52)
HP-Bulgaria
IT
HILTON INTERNATIONAL
(40)
HILTON SOFIA
hotel
KRAFT FOODS
(36)
KRAFT FOODS BULGARIA
food industry
ALKOA
(30)
ALKOA PACKAGING BULGARIA
packaging industry
BULGARIAN-AMERICAN PROPERTY
MANAGEMENT
(26)
BULGARIAN-AMERICAN PROPERTY
MANAGEMENT
real estate
SOCOTAB
(26)
SOCOTAB BULGARIA
tobacco
McDonalds
(23)
McDonalds BULGARIA
restaurants
NEWS INC.
(23)
BTV
television
SOROS FUNDS
(15)
EUROCOM CABLE
cable TV
Source:
InvestBulgaria Agency
*Project under implementation
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Sufficient acquisition of the EU funds is another
important priority for stimulating the economy
OP “Development of the Competitiveness”
1 601
23%
180
2%
1 234
15%
1 213
15%
1 800
23%
2 003
22%
OP “Human Resources Development”
ОP “Transport"
OP “Environment"
ОP “Regional Development"
OP “Administrative Capacity"
OP “Technical Assistance"
The Ministry of Economy and Energy runs Operational Program “Competitiveness”
with a Budget of EUR 1.2 billion






Priority 1: Economic development based on knowledge and
innovation activities (budget – EUR 246 million or 21%)
Priority 2: Increasing production efficiency and development of
favorable business environment (budget – EUR 593 million or 51%)
Priority 3: Provision of financial resources for business development
(budget – EUR 200 million or 17%)
Priority 4: Strengthening of the Bulgarian economy's position in
international markets (budget – EUR 87 million or 7.5%)
Technical support (budget – EUR 34 million or 3%)
Considerable financial support for SMEs
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Global companies are gaining insight in
advantages of doing business in Bulgaria
Examples of those who already have
discovered their opportunity in Bulgaria
YOUR
LOGO
HERE
“Very well educated, talented and committed workforce,
large talent pool, very competitive cost structure,
European culture, good English skills, short flight times
and almost no time difference from Western Europe…” Dr. Peter Kurpic, Senior Vice President NetWeaver
Foundation SAP AG
“The combination of existing and proven local expertise,
the excellent academic facilities and the strength of the
Bulgarian economy, made Sofia an ideal choice for
further investment in our global mixed-signal engineering
capabilities.” – Nelly Pergoot, Managing Director, AMI
Semiconductor (USA)
“Political and economic stability, the qualified labor force
and the cost structure” – Gilles Bernard, Executive
Director of EPIQ (Belgium)
“…among the reasons why HP had chosen Bulgaria were
the high level of education in terms of technical skills and
languages, good infrastructure and investor-friendly
legislation.“ – Tino Canegrati, HP Global Delivery
General Manager
The list of foreign companies in Bulgaria is growing quickly!
Source:
InvestBulgaria Agency – Bulgaria Investment Guide 2007, ValueScope Bulgaria, http://neveq.com
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THANK YOU FOR YOUR ATTENTION!
IVAILO KALFIN
Deputy Prime Minister and Minister of Foreign Affairs
www.mfa.government.bg
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