Battered by a sharp deterioration in domestic demand, Bulgaria’s furniture manufacturers are facing an up to 40% slide in sales, according to Kalin Simeonov, chairman of the wood processing and furniture chamber.

Speaking at the World of Furniture exhibition running at Sofia’s Inter Expo Center, he said that furniture demand has shrank by 50% since the end of 2008, when the market was still alive and kicking.

Unlike wood processors, which were hit by the crisis as early as mid-2008, furniture makers pulled off a 5% increase in sales for the year, hoping to dodge a decline in 2009.

A survey by local pollster Barometer showed that the furniture industry could have scaled up its output by 15% if the crisis had not erupted, building on robust demand propped by blossoming construction and mortgage home purchases.

Thus, while around 70 percent of company executives had lined up fresh investment in end-2008, now many have put their plans on the rocks, Simeonov said.

But as furniture makers see no signs of an upcoming rebound, the wood processing industry is experiencing tepid growth. Struck by the downturn in mid-2008 when the market grinded to a complete standstill, the sector posted a slight recovery in the recent months. Companies based in the southern Rodopi region say foreign demand is perking up, with orders tricking in from Greece, Israel and Iraq, among other markets.

(Dnevnik)

Bulgarian brewer Astika, a unit of Kamenitza, the Bulgarian division of the world's largest brewer Anheuser-Busch InBev, unwrapped plans for a new bottling line that should double its capacity in the southern town of Haskovo.

In mid-July, the company said it will pump BGN 30 million at the facility by the end of the year.

The brewing industry is one in just a handful of sectors of the Bulgarian economy that has so far managed to steer away from the economic storm, enjoying steady investments. Between January and June, companies poured upwards of BGN 40 million to ramp up production, sustaining last year’s levels. Kamenitza tops the list with over BGN 13 million.

(Dnevnik)

Seven years after the introduction of supplementary pension insurance for Bulgarians born after 1959, account holders got zero return from their payments, show figures of the Financial Supervision Commission (FSC).

Rocketing inflation pressed investments by supplementary pension funds to their lowest since calculations began in 2004.

Analysts put the finger of blame for the negative return reported for September on the stock market collapse, which obliterated a vast amount of funds’ investments. But company executives claim the negative yield will be compensated as the markets go back to their feet because they were triggered off by asset writedowns. No fund has slipped below the threshold yield set on a quarterly basis by the FSC.

The bottom cap for universal funds, which are obligatory for Bulgarians born after 1959, is fixed at -11.45%. Occupational funds must yield -13% to comply with the regulations. The thresholds are based on the median result posted by funds in the past 24 months. Thus, September’s threshold covers the points of the wildest rallies to the sharpest stock market declines.

Universal schemes reported an average yield of -8.4% for September, with occupational funds posting -10% and voluntary -11.2% as the benchmark SOFIX index of the Bulgarian Stock Exchange (BSE) tumbled almost fourfold from its end-September 2007 value.

(Dnevnik)

Bulgarians are progressively lapsing into poverty, taking bank loans to pay for the bare essentials, according to a research by the Sociology Institute of the Bulgarian Academy of Sciences (BAS).

The debt list is topped by heating, electricity, water bills, taxes and social security contributions.

Duhomir Minev, professor at BAS, called for an overhaul of the country’s social policy and a revision of official statistics and poverty lines.

A poll of 1,000 people conducted by the researchers revealed that almost 20 percent of the population live below the poverty line and the trend is deepening.

“Common people started to feel the pinch back in 2007 but politicians acknowledged the crisis only after it swept into the banking sector,” Minev explained.

The local currency dominates the loans taken by Bulgarians, the bulk of them drawn between 2006 and 2008. Most Bulgarians tapped into consumer loans, followed by credit cards and mortgages. The majority of the debtors have monthly incomes of up to BGN 600. Most credits range between BGN 5,000-10,000.

More than half of the polled said their household budget has shrank after they took a banking loan.

However, only 3% of the debtors fail to pay their dues, the report said.

(Dnevnik)

Following a wave of greens’ protests over the last years against what they claim to be illegal construction powering ahead in Irakli area and Strandja and Pirin mountains, the European Commission (EC) on Thursday issued a stern warning to end the anarchy.

Brussels launched four infringement procedures against Bulgaria, calling for a suspension of building works on three sites and an immediate assessment of the environmental damage wreaked on the areas.

Three of the procedures concern violation of environmental legislation in the Irakli-Emine area, on the Black Sea coast, which is part of the Natura 200 eco network of conservation sites, as well as in national park Pirin and in Strandja. The fourth one has to do with incompliance of Bulgarian Natura 2000 legislation with European regulations.

Nona Karadjova, Bulgaria’s environmental ministry, declined to comment on the matter until she has seen the letters.

Sofia has two months to respond and Brussels may continue the procedures if it is not satisfied with the results. In the worst-case scenario, Sofia could face trial in the Court of European Communities in Luxembourg and be imposed tough sanctions.

In a separate, fourth letter, the Commission accuses Bulgaria of improper implementation of the Habitats and Birds Directive, which requires the state to assess the impact of all plans and projects that could endanger protected areas. Last year the EC kicked off an infringement procedure against Bulgaria regarding the same directives, claiming the state has consented too many investment projects that could harm the habitats in Kaliakra, on the northern coast.

(Dnevnik)