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Transport and Logistics in Bulgaria

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Transport and Logistics in Bulgaria Investing in your future EUROPEAN UNION OP “Development of the Competitiveness of the Bulgarian European Regional Economy” 2007-2013 Development Fund Project “Promoting the advantages of investing in Bulgaria” BG 161PO003-4.1.01-0001-C0001, with benefi ciary InvestBulgaria Agency, has been implemented with the fi nancial support of the European Union through the European Fund for Regional Development and the national budget of the Republic of Bulgaria. TRANSPORT AND LOGISTICS IN BULGARIA CONTENTS 1. Introduction 4 2. Overview of Bulgaria 10 3. Overview of the Transport& Logistics sector 14 4. Cost of Doing Business& Human Resources 45 5. Success Stories 53 Easy Access to Markets Bulgaria is ideally located to provide easy access to Turkey, and the Middle East 4 Easy Access to Markets the markets in Europe, Russia, the CIS countires, BULGARIA is a member of the EUROPEAN UNION which stands for FREE MOVEMENT OF GOODS FIVE PAN-EUROPEAN CORRIDORS pass through the country TRACECA (TRAnsport Corridor Europe – Caucasus – Asia) links Bulgaria with Central Asia 5 Time and Distance Bulgaria offers easy access to the EU, Russia and the CIS countries, and the Middle East at the same time City Sofi a Belgrade Budapest Distance Days by Distance Days by Distance Days by (km) truck (km) truck (km) truck European Union Munich 1 097 3 773 2 564 1 Antwerp 1 711 4 1 384 3 1 137 2 Milan 1 167 3 885 2 789 1 Piraeus 525 1 806 2 1 123 3 Russia and CIS Moscow 1 777 5 1 711 5 1 565 5 Kiev 1 021 4 976 3 894 3 Middle East Istanbul 503 1 809 2 1 065 3 Kuwait City 2 623 12 2 932 13 3 165 13 Tel Aviv 1 551 8 1 880 9 2 167 9 6 Source: InvestBulgaria Agency analysis Emerging markets’ region Bulgaria is an entry to the growing markets of South east Europe Bulgaria has strategic central positioning on the Balkan peninsula The region is one of the last regions with potential for rapid growth The economies have grown in size from USD 468 bln to USD 655 bln between 2005 and 2010 3% 5% 3% 12% 4.4 М 21.5 М 5% 4% 1% 8% 3.8 М 7 М 6% 12% 0.6 М 3% 6% 5% 5% 2 М 3 М 4% 10% 71 М GDP/capita growth Volume of import goods growth 2003-2010 Population Source: IMF 7 Business Costs and International Agreements Bulgaria is a favourable place to do business… Lowest costs of utilities and fuels in Europe Lowest price for rents of industrial and offi ce space in Europe 10% corporate tax rate - the lowest in Europe Competitive labour costs About 3 000 university students graduate from transport and logistics related majors per year …and applies favourable tariff and tax regulations Bulgaria applies the EU tariff arrangements covering a market of more than half of the world’s population, including EFTA, Russia, Turkey, the Middle East and North Africa Bilateral treaties for avoidance of double taxation with 68 countries, including all EU countries, Norway and Switzerland, Russia and the CIS countries, Turkey, the Middle East and North Africa 8 Sources: National Revenue Agency, National Customs Agency, energy.eu, Eurostat, InvestBulgaria Agency research and analysis Infrastructure Bulgaria has established a very comprehensive infrastructure… 6 Motorways, some under development 230 Railway stations with capability for loading/unloading cargo 4 international airports 2 major seaports on the Black Sea 4 major river ports on the Danube 60 industrial zones, some under development ... that is constantly being improved 70% of allocated road, rail and industrial zone infrastructure development funds are available Over EUR 2 bln will be invested in Bulgaria under the Operational Program Transport The 5 main motorways will be completed, the max speed supported by the railway tracks will reach 160 km/h Ship transport conditions in critical areas on the Danube river are improving Construction of several freight villages is planned Sources: Operational Programme Transport, Ministry of Transport, Information 9 Technology and Communication Overview of Bulgaria Bulgaria has experienced rapid economic growth over the last years coupled with strong fi scal performance: South-East Europe – a 122 million inhabitant, high growth market EU – Bulgaria offers the lowest cost, zero tariff access to a €800 million market Russia/CIS, Middle East and North Africa Bulgaria offers a combination of political and macroeconomic stability and incentives for doing business: Stable parliamentary democracy, EU, NATO and WTO member Bulgaria’s currency is fi xed to the Euro under a currency board arrangement Lowest tax rate and one of the lowest labour costs in the EU coupled with special incentives for investors EU funding – more than €10 bln in EU funds over the next years 10 Overview of Bulgaria Bulgaria: Summary Statistics Population: 7.4 million Labour force: 4.6 million Urban Population: 73% Capital: Sofi a Time zone: EET (UTC+2) Summer (DST): EEST (UTC+3) Total area: 110 879 sq. km Land area: 108 489 sq. km Water area: 2 390 sq. km Climate: temperate Languages: Bulgarian (offi cial) 85.2% Turkish 9.1% Roma 4.2% English, German, Russian, French: widely spoken Religions: Christian Orthodox 76% Muslim 10% Other 14% Currency: Lev (BGN) Fixed exchange rate: €1 = BGN 1.95583 Corporate income tax: 10% Personal income tax: 10% VAT (standard): 20% Government type: Parliamentary Democracy Supreme legislative power: Unicameral 240-seat National Assembly Executive state body: Council of Ministers, head: Prime Minister EU member since 2007 NATO member since 2004 WTO member since 1996 Source: Bulgarian National Bank, National Statistical Institute 11 Overview of Bulgaria Bulgaria has exemplary macroeconomic fundamentals 2011 Economic Snapshot: Government debt and government defi cit in Bulgaria, GDP (€ in bln): 36 Romania, Poland and EU 27 Exports (€ in bln): 16 (% of GDP), 2010 80.2 Net FDI (% of GDP): 4.1 GDP growth (2012F, %): 2.8 54.9 Unemployment (%): 9.2 Infl ation rate (%): 3.0 31 Government defi cit (% of GDP): 3.1 16.3 Government debt (% of GDP): 16.3 Debt Current account balance (% -1.3 Bulgaria Romania Poland EU 27 of GDP): Deficit Long-term credit ratings: Moody’s: Baa2 stable S&P: BBB stable -3.1 Fitch: BBB stable Source: Bulgarian National Bank, Eurostat, sovereign rating companies’ websites -6.6 -6.9 -7.8 The Bulgarian economy had a constant growth of above 6% in the period 2000-2008 The economy stabilized in 2010, with real GDP growth of 0.2%, which is forecasted to recover to 2.8% in 2012 The budget defi cit in Bulgaria is one of the lowest in Europe 2011 - 2.1% There are no currency fl uctuations due to a currency board, introduced in 1997 – the Bulgarian Lev is pegged at 1.95583 to the Euro Bulgaria has the second lowest government debt of GDP in the EU27 in 2010 Bulgaria is the only European country with an increased credit rating by Moody’s since the beginning of 2010. 12 Overview of Bulgaria Silistra Danube Vidin Ruse Dobrich 48 071 167 585 Razgrad Pleven Montana Vratza Shumen Varna Veliko Turnovo Targovishte 88 670 343 704 Lovech Gabrovo Burgas Sofi a Sofi a Distrikt Sliven Pernik 1 2291 591 Stara Zagora 212 902 Black Sea Plovdiv 160 108 338 153 Yambol Kjustendil Pazardzhik Haskovo Blagoevgrad Smolyan Population Kardjali Airport Port Agriculture 5% GDP Breakdown Industry 32% Services 63% Metals 16% Oil products and electricity 14% Еxports Food 8% Breakdown Мachines and equipment 17% Other raw materials 20% Consumer goods 25% 13 History – Establishment and Development The long transportation and logistics sector 1919 First mail-plane from Several Roman roads 1883 - 1885 Sofi a to Varna crossed Bulgaria: Via Orient Express Pontica, the Roman operates on Bulgarian road to Cilicia and Via territory Militaris, the last being located on the current trans-European Corridor 10 1922 First commercialair 1889 transportation SCHENKER services at Sofi a 1866 opens its fi rst Airport The fi rst railway track (224 offi ce in Sofi a km) started operation between Ruse and Varna 14 History – Establishment and Development history is a strong base for… 1975 - 1980 1989 SOMAT, a Bulgarian The sea trade fl eet transport company, has 109 ships becomes European Top carrier with a fl eet of over 4000 trucks 1989 The length of railways in Bulgaria is 4300km. 1975 - 1980 62% are electrifi ed, SOMAT reaches from which places Bulgaria Europe to Asia, the seventh among the Middle and the Near European and North East regions as well American countries as to North and Sub- (source: AT Kearney) Saharan Africa 15 History – Establishment and Development …the bright future of the industry 2007 The EU Accession leads to liberalization 2006 of EU customs control Fraport Twin Star & EU transfers for undertakes the improvement of the airports of Varna and infrastructure 1991 - 1995 Burgas for a 35-year Major European/global concession sector companies enter in Bulgaria, such as DHL Willi Betz, In Time 2006 Sofi a Airport, the largest passenger and cargo airport in Bulgaria, 2005 opens a Second Tishman International opened an offi ce in Terminal constructed by Sofi a in recognition of the high potential STRABAG. Since 2006, for commercial and residential real estate a new runway system investment in Bulgaria and the surrounding has been operating. The region. It is currently managing the whole reconstruction, development of the Sofi a Airport Center development and extension amounted to EUR 210 mln 16 History – Establishment and Development in Bulgaria 2011 2010 There are 60 Bulgaria’s foreign industrial zones in trade increases 12 Bulgaria times in the last 20 years 2010 Yana Intermodal Terminal opens near 2005 - 2010 Sofi a, at the crossroad LIDL and Kaufl and of 3 pan-European open logistics centers corridors , serving the in Bulgaria with total European and the capacity of 68 000 Central Asian markets sq.m.
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