Where the Pipe Routes Lead

issue 158 april 2015

AmCham Events:

U.S. Investors Outline Joint Projects in Stara Zagora

A Woman Elected AmCham President For The First Time

Bulstrad Life Vienna Insurance Group, EVS Translations Bulgaria, Harley-Davidson Sofia, NDB & Telelink Met With AmCham Community

Where The Pipe Routes Lead

American Chamber of Commerce in Bulgaria

Business Park Sofia, Mladost 4 Area, Building 2, Floor 6, 1766 Sofia Tel.: (359 2) 9742 743 Fax: (359 2) 9742 741 homepage: www.amcham.bg e-mail: [email protected]

editorial

Dear Reader,

An important event co-organized by AmCham raised the issue of economic development in various Bulgarian localities. The round table titled “U.S.-Bulgaria Economic Partnership for More Business Opportunities” presented prospects for joint business projects between the Stara Zagora Region and U.S. companies (see page 4).

This get-together of investors and local authorities showcased the potential for mutually beneficial arrangements that can improve the economic lot of smaller municipalities. The case of Stara Zagora seems promising so far. At the same time, notoriously forlorn towns such as Vidin, Montana, Silistra, or even regional powerhouses with solid business reputation such as Blagoevgrad, Haskovo and Pleven have been neglected by foreign investors. Some troubling numbers came from the Institute for Market Economy (IME) recently. According to the statistics, since 2010, Bulgaria has no region with a natural increase of the population and no municipality has more children than retirees. IME also reported that as a recent trend, foreign investment has ceased growing, with the exception of Sofia, where FDI exceeds 9,000 Euro per capita. Burgas boasts 5,000 Euro per capita and Varna’s is around 3,000 Euro. Yet that’s about it, because the rest of the country cannot even approach such per-capita ratios. In Bulgaria’s Northwest the situation is quite dire – the region of Montana reports just 21 Euro per capita in FDI.

It is no secret that regional economy possesses some tremendous unrealized potential – be it in unemployed who can fill in jobs, be it in unoccpied buildings and land, or stemming from low rents. After all, how many more new offices and factories can Sofia accomodate? The key, it seems, lies in the concerted efforts by local municipalities, NGOs and citizens to meet interested investors and attract them with preferential treatment and business guaran- tees. AmCham Bulgaria Magazine April 2015 Only then the tide may start turning.

Sincerely,

Milen Marchev

Editor-in-Chief page 1 contents

AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business opportunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American Chamber of Commerce in Bulgaria. Publisher Writers: American Chamber of Commerce in Bulgaria Boyko Vassilev, Marina Tzvetkova, Business Park Sofia, Mladost 4 Area Mina Georgieva, Panayot Angarev, Building 2, Floor 6, Sofia 1766, Bulgaria Yuliana Boncheva Tel.: +359 (2) 9742 743 Fax: +359 (2) 9742 741 Advertising e-mail: [email protected] AmCham Bulgaria: www.amcham.bg Nadejda Vakareeva, [email protected]

Editor-in-Chief AmCham Bulgaria Magazine: Milen Marchev Milen Marchev, [email protected]

Deputy Editor-in-Chief The AmCham Bulgaria Magazine reaches a broad audi- Christopher Karadjov ence of AmCham members, leading US, Bulgarian and international companies, US and Bulgarian decision-mak- Senior Editor: ers, all AmChams around the world. Irina Bacheva Subscription is free of charge. If you would like to sub- scribe to AmCham Bulgaria publications, please contact ISSN 1312-935X the AmCham Bulgaria office.

2 AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria amcham bulgaria

Board of Directors of the American Chamber of Commerce in Bulgaria President Ms. Krassimira Chemishanska Amgen Bulgaria Vice President Mr. Alex Nestor Individual Member Vice President Mr. Daniel Berg Eur opean Bank for Reconstruction Contents and Development (EBRD) Treasurer Ms. Petya Dimitrova Eurobank Bulgaria amcham events Members Mr. Plamen Zhechev Cisco Systems Bulgaria Mr. David Butts CMS Cameron McKenna EOOD U.S. Investors Outline Joint Ms. Diana Pazaitova Fama Consulting Mr. George Brashnarov Nemetscheck Bulgaria Projects in Stara Zagora Region ...... 4 Mr. Peter Lithgow AES Corporation Mr. Sergey Koynov Forton International Mr. Solomon Passy Atlantic Club Bulgaria Mr. Venislav Yotov AIG Europe Limited (Bulgaria Branch) amcham news Ex-Officio Member Mr. Thomas Bruns Senior Commercial Officer, U.S. Embassy Krassimira Chemishanska of Amgen Bulgaria Executive Director Mr. Valentin Georgiev

Becomes AmCham President ...... 7 3M Bulgaria EOOD . AA KRES EOOD . Abbott Products EOOD . AbbVie EOOD . Actavis Bulgaria . Adecco Bulgaria ltd. . Advance International Transport EOOD . AES Corporation . AFA OOD . AGORA-IN Ltd. . AHNtech Branch Bulgaria . AIG Europe Limited (Bulgaria Branch) . AIMS Human Capital . Air Berlin PLC & Co. Radoslav Rizov with Microsoft Elected Co-chair Luftverkehrs KG . Albena AD . Alfred C. Toepfer International Bulgaria EOOD . ALICO Bulgaria ZhZD EAD, a MetLife Inc. Company . All Channels Communication . ALD Automotive . Alliance One Tobacco Bulgaria . of Public Procurement Committee ...... 7 Allied Pickfords Bulgaria . Alpha Bank Bulgaria . America for Bulgaria Foundation . American College of Sofia . American English Academy . American Research Center in Sofia . American University in Bulgaria (AUBG) . Amgen Bulgaria EOOD . Amway Romania Marketing Srl . Anglo-American School of Sofia . AON Bulgaria . APOLO Ltd. . Arexim Engineering . Ashtrom International Ltd. . Association Srednogorie Copper Industrial Cluster amcham events . Astra Zeneca Bulgaria EOOD . AT Engineering 2000 Ltd. . Atlantic Club Bulgaria . Atos IT Solutions and Services EOOD . Attica Media Bulgaria Ltd. . August Research . Aurubis Bulgaria AD . Auto Bavaria Ltd. . AVON Cosmetics Bulgaria . AW-Tronics . Axway Bulgaria EOOD . Baker Tilly Bulgaria . Balkan Star Automotive AmCham, Aon Discuss Employee Benefits ...... 8 EOOD . Ballistic Cell Ltd. . Baxter Bulgaria EOOD . BC Serdon . Berlitz Schools of Languages . BG Radio . BICA International Ltd. . BMG Ltd. . BMW Vertiebs GmbH - Branch Bulgaria . BNP Paribas S.A. - Sofia Branch . BOYANOV & Co. . Braykov's Legal Office . British American Tobacco Bulgaria . Brown Forman Beverages Worldwide Sofia Branch LLC . bTV Media Group . Bulgarian American Enterprise Fund . Bulgarian AmCham Members Showcase Services ...... 10 Charities Aid Foundation (BCAF) . Bulgarian Executive Search Association . Bulgarian Property Developments EOOD . BulPros Consulting JSC . Bulstrad Life Vienna Insurance Group . Business Intellect Ltd. . Business Park Sofia EOOD . Carat Bulgaria . Castello Precast OOD . Center for the Study of Democracy . Chaos Group . Forty Candidates Take Part in the Cheque Dejeuner Bulgaria Ltd. . Chevron Bulgaria Exploration and Production EOOD . Cisco Systems Bulgaria . Citibank Europe Plc, Bulgaria Branch . Club 50 Plus . CMS Cameron McKenna LLP - Bulgaria Branch . Coca-Cola Third Round of “100 Jobs” Meetings ...... 12 Enterprises Services Bulgaria EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . COLLIERS International Bulgaria . Comverse . Congress Engineering Ltd. . Construction Management Group . Contitrans M Ltd. . ContourGlobal Maritsa East 3 AD . Credit Agricole Bulgaria EAD . Curtis / Balkan Ltd. . Dalkia Bulgaria EAD . Danailov, Mihaleva, Nedelchev & Co. . Delchev & Partners Law Firm . Deloitte analysis Bulgaria EOOD . denkstatt Bulgaria OOD . Deutsche Bank AG . Devin AD . DHL Express Bulgaria Ltd. . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . Dobrev & Lyutskanov Law Firm . Dr. I.S. Greenberg Medical Center . Drujba Glassworks SA . Dundee Precious Metals Inc. . DuPont Property Market Grows in Q1 ...... 14 Pioneer . EcoPack Bulgaria AD . Edenred Bulgaria . Ekoterm Proekt EAD . Ekotoi - Service Ltd. . Ekzotika EOOD . Electron Progress EAD . Elevat Ltd. Legal House . Eli Lilly and Company . Eltrak Bulgaria Ltd. . EMC Computer Systems Austria GmbH . Emerson Process Management . EnergoService AD . Engineeringservice Pipe Dreams...... 16 Sofia Ltd. . Enterprise Communications Group OOD . EOS Matrix Ltd. . Ernst & Young Bulgaria EOOD . EPAM Systems . EQE Control . ESRI Bulgaria Ltd. . Etap Adress . Eurobank Bulgaria . Eurohold Bulgaria . European Bank for Reconstruction and Development (EBRD) . European Trade Center EOOD . Evrika Commerce Ltd. . Expat Capital . Experian Bulgaria EAD . FairPlay International . Fama Consulting OOD . Flying Cargo By Marina Tsvetkova Bulgaria Ltd. - Licensee of FedEx . Force Delta Ltd. . Forton International AD . Foundation Glob@l Libraries - Bulgaria . Fox International Channels Bulgaria EOOD . GAEA - Green Alternative Energy Assets EAD . Galardo EOOD . Gasstroymontaj Jsc . General Electric International . Georgiev, Todorov & Co. . Geostroy AD . After The End of South Stream ...... 20 Geotechmin OOD . Geotrading AD . Gi Group . GIFTA . GlaxoSmithKline . Grand Hotel Sofia . GTC Bulgaria . Helios . Power Hewlett-Packard Bulgaria Ltd. . HILD Asset Bulgaria Jsc. . Hilton Sofia . Honeywell EOOD . IBM Bulgaria . ICAP Bulgaria JSC . Ideal Standard - Vidima AD . Incotex Group Ltd. . Industrial www.stratfor.com Holding Bulgaria . Informa Association . InterConsult Bulgaria Ltd. . Interdean Relocation Services . Interlang Ltd. . International Data Corporation (IDC) . Intertek - Moody . Intracom Bulgaria EAD . Investbank JSC . Investor BG AD . IP Consulting Ltd. . ITT Exelis . Japan Tobacco International Bulgaria . Jobs.bg EOOD . JobTiger Ltd. . Johnson & Johnson Bulgaria EOOD . Johnson Controls Electronics Bulgaria . Junior Achievement member news Bulgaria . Kalamaris group Ltd. . Kaliakra AD . Kamenitza AD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena Bansko . Kempinski Hotel Zografski Sofia . Kinstellar . KPMG Bulgaria OOD . LANDMARK Property Management AD . Lexim Sofia Ltd . Lindner Immobilien Management EOOD . Lirex BG Ltd. AmCham Bulgaria Magazine April 2015 The Deal on Home Working ...... 22 . M3 Communications Group, Inc. A Hill & Knowlton Associate . Maria Vranovska, MD, MBA . Mars Incorporated Bulgaria EOOD . Marsh EOOD . Maxi I AD . MB Communications . MBL| Part of the CBRE Affiliate Network . Megatron EAD . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . Microsoft Bulgaria . Miltech By Desislava Miteva, Country Manager at Regus Bulgaria Ltd. . Minstroy Holding Jsc . Mobiltel EAD . Monbat Plc. . Mondelez Bulgaria AD . Moten Sport . Moto-Pfohe Ltd. . Movex Relocations . Mr. Alex Nestor . Mr. David Hampson . Mr. Jean Talmon . Ms. Anelia Tatarova . Ms. Kalinka Kovatcheva . Ms. Margarita Radeva, CPA . Municipal Bank Plc . Musala Soft Anti-Terrorism Measures Workshop...... 23 AD . NDB Ltd. . Nemetschek Bulgaria . NEXTDOOR Ltd. . Nicholas Galabov . Novacon Bulgaria Ltd. . Novotel Sofia MHQ . Nu Boyana Film Studios . Office for Mining Industry and Metallurgy Ltd. . On Bulgaria Ltd. . Oracle East Central Europe Limited - Branch Bulgaria . Orak Group Europe Ltd. . Orbit Ltd. . Orkikem Ltd. . Panchim Ltd. . PANDA - IP Ltd. . Pedersen & Partners . Penev LLP . Penkov, Markov & Partners . new members ...... 24 Pfizer Luxembourg SARL Branch Bulgaria . Philip Morris Bulgaria EOOD . Philips Bulgaria Ltd. . PMB EOOD . PPD Bulgaria EOOD . Premier Luxury Mountain Resort . Premier Tours Ltd. . Prestige 96 AD . Progress CAD R&D Centre Ltd. . Provident Financial Bulgaria Ltd. . PSG Payroll Services Ltd. . PwC Bulgaria . Quadrant page Beverages JSC . Radisson Blu Grand Hotel . Red Devil Catering Plc . Regus Bulgaria Ltd. . Renault Nissan 3 ALD Automotive Bulgaria SRL . Right Rental Ltd. . RSM BX Ltd. . S&T Bulgaria . Sanofi - Aventis Bulgaria EOOD . Sb Accounting and Consulting . Schenker EOOD . Schneider Electric Bulgaria . SECTRON . Sensata Technologies . Shell Bulgaria EAD . Sherita M Ltd. . Siemens EOOD . SIENIT Holding . Sitel Bulgaria EOOD . Sodexo Evrika Commerce Ltd. Pass Bulgaria EOOD . Sofia Hotel Balkan . Sofita . Sogelife Bulgaria IJSC . Sopharma AD . Sopharma Trading JSC . St. Sofia Golf Club & SPA . Stanton Chase International Bulgaria . Steelcase International . Stefan Dimitrov, Norman Realestate Co. Ltd. . Sunfoods Bulgaria EOOD - Development Licensee of McDonald’s in Bulgaria Association "Informa" . Sutherland Global Services Bulgaria EOOD . SYNCHRON-S . Tavex EOOD . TBI Bank EAD . TechnoLogica EAD . Telelink EAD . TELUS International Europe . The Coca-Cola Company Bulgaria . Tishman Management Company EOOD . Titan Zlatna Panega Cement . TMF Services EOOD . Tocheva & Mandazhieva Law Office . Kinstellar Totema Engineering JSC . UniCredit Bulbank . UniCredit Leasing EAD . Unimasters Logistics Plc . Unique Estates . Unisys Bulgaria Branch . United Bulgarian Bank . VAPTECH Ltd. . Videolux Holding / Technopolis . VISA Europe . VIVACOM . VMware Bulgaria EOOD . VSK Kentavar - IZ Dinamika EOOD . VUZF University Xogito Higher School of Insurance and Finance . Walltopia Ltd. . Welcome to Bulgaria . Westinghouse Energy Systems Bulgaria Branch . World Courier Bulgaria Ltd. . World Transport Overseas Bulgaria Ltd. . WorleyParsons Nuclear Services JSC . Wrigley Bulgaria EOOD . Xerox Bulgaria Ltd. . Xogito . Yastrebets Hotel Wellness & SPA . Zlatina Ruseva-Savova, LL.M., MBA . Zobele Bulgaria EOOD amcham events U.S. Investors Outline Joint Projects in Stara Zagora Region • The companies presented their programs in various industries and services: electricity production, environmental protection, IT • AES stressed the importance of business for the development of local communities • ContourGlobal Maritsa East 3 focused on enhancing the operating environment with its transparent procurement procedures, anti-corruption practices and innovative business solutions

The opportunities for joint business projects between the Stara facilitate contacts between Sofia-based businesses and Zagora Region and U.S. companies were presented at the regional ones,” said Valentin Georgiev, the Chamber’s execu- “U.S.-Bulgaria Economic Partnership for More Business tive director. “We believe that the exchange of best practices Opportunities” roundtable co-organized by the American may contribute to the positive development of the business Chamber of Commerce in Bulgaria, the U.S. Embassy and the environment of Stara Zagora Region. Today’s roundtable U.S. Commercial Service in Bulgaria, and the Municipality of brings together economic experts and central and municipal Stara Zagora. The event was hosted at the Stara Zagora authorities on one side, and businesses, on the other side. Municipal Hall on March 12, 2015. The forum was supported This is key for the government-business dialog that can facili- by AES Bulgaria, ContourGlobal Maritsa East 3 and EY tate the creation of a better regulatory framework that in itself Bulgaria. can lead to better practical solutions to the issues investors have in the operation of their businesses.” “The regional business missions of AmCham Bulgaria aim to Stara Zagora’s mayor Zhivko Todorov welcomed some 100 guests, among them representatives from local companies and organizations interested in learning more about business opportunities with the United States. According to the mayor, business in the region needs a qualified and educated work 4 force. Deepened contacts with U.S. universities will help to educate the young and promising work force in the Stara Zagora region, he added. Stara Zagora Region among Economic Front Runners

The total amount allocated for development of Stara Zagora AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria The U.S. Commercial Service team presented key services for business. and the region has been amcham events

Upcoming Trade Expos in Europe and United States

z American Food Fair at the National Restaurant Association Show (Chicago, May 16-19)

z U.S. Food Showcase (Chicago, June 9-11)

z Summer Fancy Food Show (New York, June 28-30)

z All Things Organic – BioFach America/Natural Products Expo East (Baltimore, Maryland, September 17-19)

z America’s Food & Beverage Show and Conference (Miami Beach, Florida, October 26-27)

z ANUGA (Cologne, Germany, October10-14)

U.S. Ambassador Marcie B. Ries answers questions from media on the U.S. z Food Ingredients Europe (Paris, France, December1-3) investments in the region. 203 million Leva for 2007- 2015, explained Georgi Simeonov, ees, 99 percent are Bulgarians. The two companies provide 75 Stara Zagora Municipality, Director Directorate “Sustainable percent of jobs in the region. development and euro integration.” The money comes from European Union funding and national programs. Since 2007 “We believe that sustainable development involves investments many projects were completed: renovation of kindergartens in the regions, and that is why we invest a lot in our relationship and centers for the elderly and disadvantaged youth; rehabili- with them,” said Milen Raikov, executive director for tax and law tation of roads; and restoration of archaeological sites and at Ernst & Young. “For us this means giving support both for the monuments. successful implementation of foreign investments, and for the expansion of Bulgarian business abroad.” U.S. Ambassador Marcie B. Ries talked about positive developments in the region thanks to the two largest investors - AES Elitsa Nikolova, secretary for economic affairs, regional devel- Bulgaria and ContourGlobal. Both companies invested in opment and infrastructure with the Presidency of Bulgaria, youth development and local infrastructure. Of their employ- elaborated on the head of state’s priorities in improving the

Garry Levesley, CEO of ContourGlobal Maritsa East 3 elaborated on the com- The mayor of Stara Zagora Zhivko Todorov was delighted to welcome over 100 pany values as safety and anti-corruption. guests. AmCham Bulgaria Magazine April 2015

page 5 amcham events

business environment in the country by being actively involved in the legislative process and in international relations.

Petar Ganev, senior economist with the Institute for Market Economy (IME), elaborated on the economic standards gap between northern and southern Bulgaria. While there are signs of significant recovery in most areas, employment and investment activity is below 2008 levels, he said. The demographic situation continues to deteriorate: since 2010, there is no area showing population growth, nor does any area have a larger population of children than of people over 65 years of age, Ganev added.

The analysis of IME for Stara Zagora shows its economy ranks second after Varna, but its development trends are negative. Olivier Marquette, managing director for AES Bulgaria. The area has a relatively good state of health, infrastructure, taxes and administration. The state of the environment is poor due to carbon dioxide levels.

Growth in Bilateral Trade for 2013-2014

Thomas Bruns, U.S. Commercial Service attaché, along with his colleagues elaborated on the trends in U.S.-Bulgaria bilateral trade and investment. U.S. imports from Bulgaria in 2014 amounted to $605.2 million, while American exports to Bulgaria in 2014 were $358.9 million. Bilateral trade grew by $143 million, or 17.42 percent, for 2013-2014, U.S. Department of Commerce data show. Valentin Georgiev, AmCham elaborates on the regional business missions of AmCham. There was a 16-percent increase in agricultural exports from Overall, U.S. agricultural exports to Bulgaria amounted to $44 the United States to Bulgaria and a 13 percent growth from million, or about $80 million when imports through other coun- Bulgaria to the United States for 2013-2014. Total bilateral tries are added, with a $6-million annual growth. Bulgarian trade for 2014 grew by 14 percent, or by $19 million, in com- agricultural exports to the United States were $105 million with parison to 2013. a $13-million annual increase. AES Bulgaria and ContourGlobal Maritsa East 3 Local Community Initiatives The importance of the Corporate Social projects in Galabovo. Another large proj- the ones related to safety. By following Responsibility (CSR) programs for the ect of AES in Galabovo started in March: internationally recognized standards and development of local communities was the rehabilitation of the municipality’s principles, such as the U.N. Global the main point in the presentation of youth center, in which more than 4.4 mil- Compact’s Ten Principles, the company Olivier Marquette, managing director for lion Leva will be invested. This is the succeeds in achieving its goals in har- AES Bulgaria. He pointed out that the largest public-private initiative in the mony with other businesses and in line company is working actively with the region, according to Marquette. with its clients’ and partners’ expecta- municipality of Galabovo and neighbor- tions, as well as those of all of the other ing villages on ongoing programs aimed “Improving the quality of life of the local stakeholders. at improving the education level of local community is part of the values of AES residents. Marquette said that education Corporation,” the AES director pointed “Thanks to our highly qualified and moti- and improvement of various skills that out.” We want to be a good corporate vated Bulgaria team and thanks to our make people more competitive in the citizen and act with responsibility toward suppliers and counterparts, we can man- labor market are among the values the community and the environment. age our plant successfully and in a reli- underlying AES’s policy. That is our priority and a core value!” able way, in a manner consistent with 6 our global sustainability commitments to AES provides an average of more than In his presentation, Garry Levesley, CEO operate safely and efficiently and mini- 50,000 Leva annually for education ini- of ContourGlobal Maritsa East 3, mize impacts, manage our business tiatives in the region. In addition, the stressed the values that are foundations responsibly, enhance the operating envi- company works to improve the infra- of the company’s business model. They ronment and to grow well,” Levesley structure and has so far invested more include safety, anti-corruption and quality said. “The good understanding of com- than 3 million Leva in rehabilitation proj- of supplies. Levesley emphasized the mon interest based on values and ects. Since 2006 the company has company staff’s exceptional stringency achieved results is the basis for our suc-

AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria invested nearly 7 million Leva in social in observing the site’s rules, including cess and performance.” amcham news Krassimira Chemishanska of Amgen Bulgaria Becomes AmCham President

The AmCham Board of Directors elected at the position of the president Krassimira Chemishanska, General Manager of Amgen Bulgaria on April 1st, 2015. Peter Lithgow has stepped down from the position of a President of the Chamber. AmCham extends special thanks to Mr. Lithgow for his substantial contribution and dedicated service as president of the chamber, and wishes him success in his future endeavors.

Krassimira Chemishanska is a business leader in the pharmaceutical industry with more than 20 years’ experience on the Bulgarian market. She has held senior positions in pharmaceutical sales and marketing areas in several multina- tional R&D based pharmaceutical companies.

Since 2009 Krassimira is the General Manager of Amgen Bulgaria, responsible for opening the new Amgen affiliate, establishing Amgen’s operations, setting up the organization and developing the business in the country. She is member of the Regional Leadership team of Amgen for CEE and International leadership team in Amgen International.

Radoslav Rizov with Microsoft Elected AmCham Bulgaria Magazine April 2015 Co-chair of Public Procurement Committee Radoslav Rizov, Expert Projects & Programmes Esta Ert in service of Microsoft was elected as co-chair of the Public Procurement Committee at its meeting on April 1st, 2015. Mr. Rizov is a highly motivated professional with experience in public procurement and EU grant schemes. He has page worked with governmental institutions, local authorities, 7 NGOs and private companies in Europe and specifically in the Balkan region. Mr. Rizov expressed his willingness to bring his professional expertise and proactive approach to the Public Procurement and EU Funding Advisory Committee.

Radoslav Rizov, Microsoft (second left) takes the co-chair position from David The other chair of the committee is Zlatina Ruseva-Savova of Hampson who stepped down. the same name law office. amcham events AmCham, Aon Discuss Employee Benefits

What is the right communication on the employee benefits in every reputable organization? The answer to that question becomes more and more complicated and fundamental for every company. The key trends in that communication and the new tools for 2015 were elaborated at AmCham-AON business breakfast held on March 20, 2015, at the Radisson Blu Grand Hotel. There is an overall insecurity in the perception of the employees from what exactly their benefits package consist of 57 percent of those surveyed across the region believe that their employees have a high or very high level of understanding of their employee benefits.

Rumyana Bosseva, CEO of Aon, and Gergana Gancheva, ther 12 percent planning to do so. project lead with Aon, talked the details and trends within the z The main objective of these communications is to improve companies in Bulgaria and worldwide. AmCham HR Committee employee engagement; this is consistent with the previous co-chairs Zlatina Kushkieva and Dobromira Manasieva opened survey, where engagement, talent retention, and the need to the event by welcoming HR experts within AmCham member comply with legal requirements were the top three communi- companies. cation goals. z E-mail, face-to-face presentations and internal notices are Key findings: the three preferred communications channels across the region. z 73 percent of employers across the EMEA region (Europe, z In the future, many organizations are interested in using Total Middle East, and Africa) currently communicate their com- Reward Statements, online benefits portals and employee hand- pensation and benefits programs to employees, with a fur- books as ways to communicate benefits and compensation. z 35 percent of employers in EMEA have a budget of between 1,000 Euro and 10,000 Euro for compensation and benefits communications, while 56 percent have no dedicated budget for this, a slight increase on the previous survey (52 percent). 8 z 90 percent of respondents manage their benefits communications entirely in-house.

The study shows that taking benefits communications seriously, and having an eye to future developments, appears to be the key to reaching a company’s goals, especially focused on engagement and talent retention, but also to legal requirements. From left: Zlatina Kushkieva, co-chair, HR committee, Gergana Gancheva, AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria AON, and Rumiana Boseva, AON. Aon, the global talent, retirement and health solutions business amcham events

of Aon plc (NYSE: AON), initiated a survey in the end of 2014 countries report success from a fairly traditional range of com- to draw the picture of compensation & benefits communication munications channels, such as face-to-face presentations and practices in the EMEA region. Over 1,149 organizations across notices within the workplace, others are embracing multime- 28 countries participated in it. dia, email and online portals.

It is interesting to see that trends globally throughout EMEA are Interestingly, while the survey results as a whole present a very similar to those observed last year, including the fact that picture of widely-different communications practices, when surveyed organizations are moderately satisfied with the impact these more confident respondents’ answers are analyzed, we of their communication. Aon believes that this shows that can see that some approaches are shared by the most suc- employee communication appears to be stale in some of them cessful benefits communicators. Frequent communications and therefore strongly recommend a refreshed approach. and a willingness to embrace new communications channels were common among those who believe their benefits com- Furthermore, employee engagement is still a priority in many munications are understood by their employees. EMEA organizations when they communicate their compensation package: a goal that could be reached by developing new Sandrine Fleury, EMEA communication leader at Aon, said: support systems, which are more impactful according to Aon. “Over the past 3 years, companies gradually shifted their posi- It is clear from the findings that companies are aware of this tion on communicating benefits and compensation, from a need to develop new channels, especially multimedia ones, nice-to-have to a must-have element of HR strategy. In fact, in such as online portals in order to have a valuable return on EMEA, the current economic environment contributes to accel- investment. They have to take this into account, however, and erate the changes in social security and retirement systems, build stronger communication programs in order to gain we also observe a more diverse population of employees and impact. This is not always easy and requires time especially ageing workforce. As a consequence, benefits and compensa- because of to the fact that most of them handle benefits and tion programs are getting more complicated and expensive to compensation communications entirely in house. design and implement. Today more than ever, it is important that employers provide an effective communication to ensure It is important to note that within the EMEA region, communica- a good level of understanding and engagement, and make the tions preferences and behaviors range widely. While some most of their HR investments.” AmCham Bulgaria Magazine April 2015

page 9 amcham events AmCham Members Showcase Services

Telelink, Tsvetan Mutafchiev, CEO.

Five members of AmCham presented their services at the AmCham Meet New Members cocktail on March 24, 2015, held at the Hilton Sofia hotel. General managers of Bulstrad Life Vienna Insurance Group, EVS Translations Bulgaria, Harley-Davidson Sofia, NDB, and Telelink met with the AmCham community.

Solomon Passy, AmCham board member, Alex Nestor, vice president, and Valentin Georgiev, AmCham’s executive director, welcomed some 70 guests.

Svetla Nestorova, chair of the Managing Board and CEO of Bulstrad Life Vienna Bulstrad Life Vienna Insurance Group, Mrs. Svetla Nestorova, Chairperson of the Managing Board & Insurance Group, elaborated on the CEO. activities of one of the leading life-insur- complex, high-volume translations in the software distributor for Bulgaria of the ance companies in Bulgaria, established areas of legal, technical, automotive, most advanced solutions in the IT field in 1994. Bulstrad has long-standing tra- pharmaceuticals. from IBM Software, VMware, Citrix, ditions in providing safety, security and Veeam, Red Hat, was represented by 10 financial protection to its customers The first authorized dealership of the Bogdena Blagoeva, deputy CEO. through variety of attractive life-insur- legendary brand in Bulgaria - Harley- ance solutions suitable both for individu- Davidson® Sofia was presented by Tsvetan Mutafchiev, CEO of Telelink, al and corporate clients. Aristovoulos Tzelepis, dealer principal. talked about the company which is a A motor bike was on display in Mousalla leading system Integrator in Europe with Nikolay Yamaliev, general manager of Hall where the members and fans could a team of more 500 people. The firm EVS Translations Bulgaria, said his take photos. gained lots of experience participating in company provided language solutions the most important and complex ICT AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria and was specifically set up to complete NDB, which has been for 20 years the projects in the region and worldwide. amcham events

EVS Translations Bulgaria, Nikolay Yamaliev – General Manager. Harley-Davidson Sofia, Aristovoulos Tzelepis, Dealer Principal.

Bogdena Blagoeva, NDB Deputy CEO. Hilton Sofia hotel hosted the event. AmCham Bulgaria Magazine April 2015

page 11 amcham events Forty Candidates Take Part in the Third Round of “100 Jobs” Meetings demic background and merit.

BCAF’s pool of candidates varies from IT, Finance, Science, Business Studies, Law, Engineering to Media and PR, Medicine, Pharmacy, and Language Studies. The candidates achieved excel- lent academic grades during their studies at the Sofia University, the University of National and World Economy, the Technical University and the Medical University in Sofia.

So far AIG, AIMS, Amgen, AON, August Research, AVON, Engineering Services, Experian, Geotechmin, Hilton, Mobiltel, Philip Morris International, PPD, Proxiad, Unique Estates have supported the initiative. All companies willing to join the project can contact the organizers. Regus company meets with the candidates.

lmost forty (40) socially disadvan- Bulgaria, Hewlett-Packard, IBM, Mobiltel, The 100 Jobs project was developed in taged university students ran for PricewaterhouseCoopers, Regus, SITEL, 2014 by BCAF and Forton under the Amore than 20 available positions UniCredit Bulbank and VIVACOM at the umbrella of AmCham. The overall goal in the companies during the third speed American Corner Sofia. of the project is to employ 100 disadvan- dating event of the “100 jobs” initiative on taged young people in AmCham mem- April 8th, 2015. Ten AmCham member The candidates have been chosen by ber companies either as full time, part- companies participated: Comverse, EY BCAF based on their motivation, aca- time employees or as an internship.

Sergey Koinov, AmCham BoD member welcomes AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria the audience. Vivacom meets with the candidates.

analysis

Property Market Grows in Q1

ccentent ggrowthrowth in the number ooff inquiries A similar trend was reregisteredgiste for mort- fforor QQ11 2015 compared to 2014. There is ggageage loans.loans. InIn contrast to the crisis a significant growth in purchases of yearsyears, when Bulgarians refusedr to fall investment - from 4-5 percent to about into debt for a long period of time, for The residential property market started 15 percent now, according to the com- some time there is a tendency for strongly in 2015 - a growth of deals and pany. Blagoevgrad and Pleven are gradual growth of mortgage lending. mortgages on an annual basis, although among the most active markets. The trend is most tangible in Sofia and the period January - March is tradition- the biggest cities whose residents ally lagging behind in comparison to More deals, more clearly feel more confident in their October - December of the previous mortgages income. year. The leading consulting companies expect the tendency to remain steady In Q1 2015 there is a 9-percent growth In Q1 contractual mortgages reached until the end of the year and the housing in the deals compared to the first quarter 5,770, which marks an increase of 42.5 market to go up permanently. of last year, according to data of the percent year-on-year and a decrease Registry Agency. of 90 percent compared to last quarter. A clear and visible difference exists With the inclusion of legitimate mort- between the markets in Sofia and the Once again Sofia stands out as the leading gages, their total number reaches over rest of the country. The housing market in property market in the country with impres- 8,000, marking an increase of 40.5 the capital has been revived much faster sive annual growth of deals by 31 percent. percent year-on-year and a decline of due to the stable economy and low Sofia has emerged as the leading mort- 18.6 percent compared to last quarter. unemployment. Urban markets and gage market of the country in the context of especially Sofia develop quite well, com- more secure and higher incomes. The Address agency indicates that fewer 14 mented for Investor.bg Polina Stoykova mortgages in the first quarter increased by properties are sold at discount. In 30 of Bulgarian Properties agency. Moreover, 47 percent compared to the first three percent of the deals made by the agen- Bulgarians are quite active in purchasing months of the previous year. cy there was no discount, and their property in the ski and seaside resorts. share increased by 10 percent com- The main interest is in Sofia, Plovdiv, In regional cities (Sofia excluded) the pared to the same quarter of 2014. In 10 Varna, Bourgas, Stara Zagora and Veliko real estate deals have been finalized percent of the deals the price was higher Tarnovo, said Stoykova. with almost 15.3-percent growth year- than the originally announced. This on-year, but 28.5 percent less compared refers to the really high-quality proper- AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria Address Real Estate reports a 40-per- with the previous quarter. ties in top locations, though.

analysis Pipe Dreams The route of Turkish Stream, which is meant to replace South Stream and allow Russia to give up gas transit through Ukraine, is becoming clearer By Marina Tsvetkova The news that Greece may receive a loan of between 3 billion Euro and 5 billion Euro from Moscow next week, which was spread by Germany’s Spiegel, has rein- vigorated the interest towards the Turkish Stream project. If this information proves true, the two states are going to sign an energy agreement that will allow Greece to receive advance payment for joining the new gas megaproject. A source from within the ruling party Syriza told the pub- lication that such a deal could “turn the flow” for Greece. Following a trip to Moscow in early April Greece’s Energy Minister Panagiotis Lafazanis said that his visit had cleared the path to signing a number of agreements between Russia and Greece in the energy sector. The main pillar in the energy cooperation between the two states would be Greece’s Prime Minister of Greece Alexis Tsipras (L) talks with the head of the Russian energy giant Gazprom, Alexei support for the implementation of the Miller (L) during their meeting in Athens, Greece, on 21 April 2015. The main issue of the discussion will be the new pipeline that will bring natural gas from Turkey via Greece to Central Europe. The investment for Turkish Stream project, which would pass the construction of the Greek section of the pipeline is estimated at 2 billion euros and its implementation will through Greek territory. improve the supply safety for the Greek market, create new work positions and upgrade geopolitically the country. The first 660 km of the new Russian Sea bottom directly in the European part 180 km long; the landing point will be in Turkish Stream gas pipeline for the deliv- of the country. The offshore part will be the region of Kayakoy, the gas delivery ery of gas to Europe will pass on the bot- built by Gazprom and the shorter onshore point for Turkish consumers will be in tom of the Black Sea along the corridor section will be built in partnership. The Luleburgaz, and the exit point of the pipe- originally intended for South Stream; the first stretch of Turkish Stream is expected line will be at the Turkish-Greek border in next 220 km will pass along a new route to be put into operation by the end of the region of Epsila. towards the European part of Turkey. 2016. Analysts say that the terms are Such at least are the initial plans achievable, but the main problem is find- Gazprom is ready to deliver 47 billion announced by Russia’s energy giant ing financing in the conditions of sanc- cubic meters of natural gas per year to Gazprom. That will allow the company to tions and falling oil prices. Europe through Turkish Stream and com- keep some of the investment made in the plete the construction of the first line of South Stream project to Bulgaria, which The new gas pipeline will be called the pipeline by December 2016. The was suspended last year. For the last Turkish Stream on the insistence of capacity of the offshore gas pipeline from three years Gazprom has invested $4.66 Russian President Vladimir Putin and will Russia to Turkey will be 63 cubic meters Billion in it. The 3,600-km South Stream have the capacity for 63 billion cubic a year. had to be completed in 2016, reaching meters of gas. Analysts comment that Austria, Italy and the Balkans. Gazprom Ankara’s aim is to become the main tran- Various Turkish sources estimate Turkish holds 50 percent of the project, together sit country for oil and gas from the Middle Stream at about $19 billion, of which $18 with Italy’s (ENI 20 percent), France’s East, Caucasus and Russia to Europe. billion will be invested in the route under EDF and Germany’s Wintershall, which is That will allow Bulgaria’s southern neigh- the Black Sea and the rest of the amount, 16 a subsidiary of Germany’s BASF (15 per- bor to safeguard its energy security while in the onshore section. Specialists how- cent). collecting transit fees. ever note the estimations are approxi- mate. As of today, the route of Turkish Stream, Project are still drafts which has to replace South Stream and A total of 910 km of the route will pass allow Russia to give up gas transit through In the beginning of the year Gazprom and under the Black Sea, of which 660 km will Ukraine, has become clearer. Gazprom Turkey agreed on the onshore section of repeat the route of the canceled South has agreed to Turkey’s proposal that the Turkish Stream for further survey and Stream project. The 260-km onshore sec- AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria gas pipeline should be laid on the Black engineering. The onshore section will be tion will pass through Turkish Thrace and analysis

reach the Turkish-Greek border. In addition, Ankara is in talks with Israel. Back then the Russian media suggested An offshore pipeline is planned to con- that Austria would also join in. The param- Gazprom has announced plans to begin nect Israel and Turkey; it will cost more eters of the additional routes of Turkish construction of the offshore section on than $2 billion and deliver 10 billion Stream through its territory will depend on October 1, 2015, while Turkey, which will cubic meters of natural gas a year. the decision of the European Commission, build the land stretch, will start on Dec. Construction can start as early as next though. 15. Turkish Stream is envisaged to year. become operational on Dec. 30, 2016. The EC in turn is waiting for the route of After the first stage of the project is put “Turkey is positioning itself as an impor- the gas pipeline to be specified before it into operation, supplies through Ukraine tant partner of the European Union in the comes up with a stand. The EC expects should to be entirely stopped. That will transit of energy resources. I guess that that the possible construction of the turn Turkey into the second most impor- some problems may arise but the fact is Turkish Stream gas pipeline will comply tant supplier of Russian gas after that the two sides have mutual interest. with the European regulations. The Germany. The more so that Turkey and Greece – as European services are currently analyz- well as the European Union – are inter- ing the information received so far on the Why Turkish? ested in all going on well,” said Deutsche project from the viewpoint of its viability, Welle’s economic analyst Andrey its regulatory and legal aspects, EC’s Turkey itself is a huge gas consumer: the Gurkov. spokesperson for energy Anna-Kaisa annual demand reaches some 50 billion Itkonen said. cubic meters. The European states in turn If all those projects are carried out in the are feverishly seeking alternative energy next three or four years, Turkey will She added: “In any case the EC expects sources to Russia, mainly in the Middle become a bridge between Europe and that all participants will respect and East and Caucasus. Producer countries the main natural gas producing coun- observe the applicable European rules – are also trying to reach the European tries. including those concerning public pro- market. In many of those projects, Turkey curement and access to the network. We turns out a bridge between Caucasus, the Déjà vu with EC’s blessing also expect that the obligations ensuing Middle East and Europe. The project for from existing gas agreements will be the Russian-Turkish gas pipeline across During a meeting in Budapest in early observed.” the Black Sea is still in embryo. April, the foreign ministers of Hungary, Greece, Macedonia, Serbia and Turkey In early April Russian President Vladimir “We want to keep our cooperation with confirmed the intention of their respective Putin said that Russia could build a pipe- Russia and with other countries, too, states to participate in Turkish Stream. A line to Bulgaria through the Black Sea based on reciprocal benefit. By starting joint declaration on Turkish Stream states that would be a branch of the planned the negotiations, we reached a non-bind- that all countries in the region are inter- pipeline to Turkey. He said Russia was ing agreement. We will create an energy ested in working together towards energy forced to cancel South Stream after hub on Turkish territory at the Greek bor- security and better gas supply. Bulgaria – under the pressure of the der that will satisfy our needs. In case of European Union – halted the preparatory demand from the European countries, “That is not only a vital energy issue but works. That made Russia look for other they will also have the possibility to an issue of national interest,” Serbia’s routes and it is currently working on the receive as much gas as they want,” Vice Premier and Foreign Minister Ivica so-called Turkish Stream, Putin said. He Turkey’s President Recep Tayyip Erdogan Dacic said. underscored that nothing had been decid- said early in 2015. Post-south stream options

Besides Turkish Stream, Ankara is work- AmCham Bulgaria Magazine April 2015 ing on several other projects, too. The list is topped by TANAP, which will deliver natural gas from Azerbaijan to Europe. Two other gas-producing countries – Iran and Turkmenistan – also want to join the pipeline arrangement. Gas from Iraq, though, may reach the Turkish border sooner than Azerbaijani gas. Ankara signed a 50-year agreement with Iraqi page 17 Kurdistan on oil and gas supply. TANAP will supply only a sixth of the total amount of gas to be conveyed through Turkish Stream. Turkey has a lot of industrial zones and natural gas – from an energy viewpoint – is very important for the country. In Bursa alone there are 30 industrial zones using natural gas. They employ nearly two million people. analysis

ed yet but he did not rule out the possibil- missioned by Rossiya Segodnya news Nezavisimaya Gazeta reported. ity that the stream may pass through agency, shows that 66 percent of Bulgaria too. Russia is looking for a route Bulgarians believe that the decision to Currently Gazprom’s access to money that will not meet opposition, a route that continue or terminate the South Stream from Europe is limited and the European will be cost-efficient and provide for long- project should be taken in Sofia and not in legislation does not allow a company to term and lasting cooperation. Brussels. Another 23 percent are of the own infrastructure and supply gas through opinion that the European Commission it at one and the same time. Bulgaria has to be part of has the final say. According to 64 percent the distribution of the of the interviewed the cancellation of The investment in two undersea pipes in natural gas South Stream will have a negative effect the Black Sea in connection with the can- on the Bulgarian economy. Although the celled South Stream project to a large that will pass via Turkish Stream if the revenue lost from the termination of South extent has been made already, but the project is ever carried out, Bulgarian Stream amounts to tens of billions of dol- current geopolitical conditions create a Foreign Minister Daniel Mitov said, com- lars, Bulgaria can still turn out to be in a risk to Russian state giant Gazprom, said menting on the declaration signed in winning position. Jonathan Stern of the Oxford Institute for Budapest by Greece, Serbia, Macedonia, Energy Studies. In the next four or five Hungary and Turkey on “a commercial The country is working on the exploration years the Russian concern will have to viable option of route and source diversi- of different gas fields in the Black Sea, as build the $55-billion Power of Siberia gas fication” for delivering natural gas from well as on projects for production of green pipeline for supplies to China and Turkish Turkey to the European countries. Daniel energy, which could make Bulgaria com- Stream (instead of South Stream, the Mitov defined the declaration signed by pletely independent from Russian energy offshore section of which was projected to the five countries as “a statement of supplies. At the same time the green cost $9 billion Euro, $4.6 billion Euro of political intent.” energy business may turn out a no less which has been invested already). The lucrative and safe alternative to natural company also plans to build the Altai gas According to Mitov the participation of gas. pipeline, which too will supply China. Bulgaria in the distribution of Russian gas from Turkish Stream that will replace Besides, the production of energy from Consequently, Gazprom will not be able South Stream through Bulgaria is neces- renewable sources is environmentally to participate in the construction of the sary not only because of the source diver- friendly and tourism will benefit a lot from new gas pipeline through the Balkans sification concept but because routes the fact that the pipeline has been moved, and Central Europe for the same reasons also need to be diversified. environmentalists claim. On the other as in the case of South Stream, Stern hand, natural gas is only a marginal said. “With the current discussion of ideas source of energy for Bulgaria, accounting about EU’s energy union there are many for 10 to 12 percent of energy consump- “I cannot quite make the difference projects existing and some of them com- tion. This share is unlikely to increase. between Turkish Stream and South peting. Our stand is that the European Gas is expensive and non-competitive as Stream, except for the name and the energy union should first take care of the compared to other energy sources, espe- small diversion of the route,” said US economic interests of member states, cially for heating. Consumption of natural Special Envoy for Energy Affairs Amos said Mitov and pointed out that most of gas in Europe is falling and the potential Hochstein. He called on the countries in the countries in the Budapest format were sources are many. Southeast Europe to instead build con- practically non-EU members,” Mitov nectors between their gas networks. The said. Too many conventions United States also advises the governments to focus on smaller projects for The idea stated in the declaration on The project for a gas distribution center in reducing their energy dependence on Turkish Stream is much more expensive Turkey announced by Vladimir Putin can Russia, instead of dealing with large gas than all other options, the foreign minister only be implemented if there is coinci- pipeline projects. added. Bulgaria and Romania have gas dence of many conditions. European infrastructure built and what is offered bureaucrats will have to accept the fact Russia will remain a very important gas now is a very expensive project that the that the transit of Russian gas through supplier to Europe, added Hochstein, but EC has no reason to back as such, he Ukraine will be terminated. The countries the region will remain exposed to risk underscored. in South Europe will have to demonstrate while looking for some magical solutions more independence. And the price of instead of developing separate small proj- Prime Minister Boyko Borisov pointed out Russian gas will have to be lower than ects for alternative routes and sources. 18 that Bulgaria’s priority was the construc- that on the gas market in Europe even One such project is the Trans Adriatic tion of a gas hub with four or five gas sup- after the profit of the Turkish intermediary Pipeline (TAP), which has to start supply- ply sources and that “to this day we have is taken into account. As for now, none of ing the region with gas from Azerbaijan by not received a written notice of termination these conditions is fulfilled. Besides, the 2020. With EU help, the interconnectors of the agreement (on South Stream) with EC is demonstrating lack of readiness for between Greece, Bulgaria, Romania, Bulgaria from the Russian side.” gas cooperation with Russia during the Hungary and Serbia, which can convey discussion of options for gas supplies to gas to Central Europe, are much more Meanwhile an inquiry conducted among the former participants in the failed South feasible and cheaper than the AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria 1,000 Bulgarians by ICM Research, com- Stream project, Moscow-based megaprojects.

analysis After The End of South Stream www.stratfor.com

The crisis in Ukraine, and in particular Russia's recent cancellation of the South Stream natural gas pipeline project, has had substantial ripple effects on the energy dynamics on the European continent. The Russians and Europeans both have put forth several potential replacements for the now scrapped pipeline, with Turkey likely to play a pivotal role either way.

Russia's Options

The first possible replacement for South Stream was unveiled at the same meeting in which South Stream was put to rest. While speaking with Turkish President Recep Tayyip Erdogan, Putin announced that Russia would pursue the construction of a natural gas pipeline with a capacity of up to 63 billion cubic meters Russian President Vladimir Putin (L) and his Turkish counterpart Recep Tayyip Erdogan (R) chatting before across the Black Sea to Turkey, with the a press conference in the new presidential palace in Ankara, Turkey in the end of last year. Putin and Erdogan possibility of a hub on the Turkey-Greece began a meeting in Ankara to discuss foreign policy as well as gas supplies to Turkey. Russia agreed to send border that could send natural gas to more gas to Turkey and charge 6 per cent less for the energy in 2015. Southern Europe. The project, which has costly as South Stream was projected to have lobbied Brussels to revise its posi- since been coined "Turkish Stream," be, and such high costs are infeasible tion on the project, and even Germany is would essentially be a rerouting of South given Russia's economic problems and trying to keep the option on the table in Stream through Turkey instead of its energy commitments in East Asia. the event of an understanding being Bulgaria. (The original South Stream project at reached on Ukraine. South Stream's res- least had a consortium of investors, urrection is unlikely, but it is still possible. From a political perspective, Turkish including ENI, EDT and Wintershall, Stream makes a lot of sense for Russia. though ENI was wavering as costs con- A final option for Russia would be not to Given the poor state of relations between tinued to rise.) A limited version of the pursue any South Stream replacements Moscow and the West, a high-cost pipe- project, such as an expansion of the and to instead rely on its existing pipeline such as South Stream that would be existing Blue Stream pipeline, which car- line network through Ukraine. What at the mercy of EU regulations is too risky. ries Russian natural gas to Turkey via the would make this option more likely is a However, a high-profile energy project Black Sea, could be more manageable further deterioration of ties with the with one of Russia's largest natural gas for Russia and would come with a smaller West, or a further weakening of the consumers — one that is outside the price tag ($3 billion to $5 billion for an Russian economy to the point that any legal confines of the European Union — expansion of about 5 bcm to 10 bcm). But new projects are out of Russia's reach comes with substantial benefits. Russia it would also have a smaller capacity to financially. Moscow may also go this would still have a supply route into Europe redirect supplies from Ukraine for con- route if it decides to direct its focus more that bypasses Ukraine, but it would also sumption in Europe. Turkish Stream is on energy projects in China and Japan, have greater influence to persuade thus the most likely option to replace including an expansion of the Power of Ankara not to participate in energy proj- South Stream. Siberia pipeline. 20 ects that threaten Moscow's interests. The latter is particularly important because It is also possible for Russia to reverse its Europe's Projects of Turkey's position on the Southern decision on South Stream. The political Corridor route, which would bring energy relationship between Moscow and the The Europeans have raised or revived from the Caspian region through Georgia West is at a post-Cold War low, but it is several projects in response to the can- and into Europe via Turkey. possible that ties — at least with the cellation of South Stream. These projects Europeans — can improve enough for fall into two broad categories: liquefied Building a pipeline with a capacity as high the project to be revived eventually. EU natural gas (LNG) terminals and the AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria as 63 bcm, however, could prove just as countries such as Bulgaria and Hungary Southern Corridor route. analysis

LNG Terminals close to those of the Lithuanian and chosen over Nabucco West for rights to Polish terminals ($300 million to $1 bil- 10 bcm of the 16 bcm of natural gas that The construction of LNG import terminals lion), but so far funding has not been will come online from Azerbaijan's Shah has long been an item of discussion secured to move them into the construc- Deniz II natural gas field in 2018. among Europeans as a way to dilute their tion phase. Greece and Croatia have Construction of TAP, which will have a reliance on Russia and diversify energy been unable or unwilling to put up the capacity of 10 bcm, is expected to cost supplies to more distant and commer- funds themselves, but the crisis with around $1.85 billion. cially minded suppliers such as Qatar. Russia could spark outsiders — either in Germany, France and Italy have made the European Union or others — to step Another reason the TAP project was cho- strides in building LNG terminals over the in to help. sen over Nabucco West is that the latter past decade. Yet Central and Eastern probably would have also necessitated European countries, which are typically Another issue when it comes to poten- another natural gas supplier to be viable much more dependent on Russia for their tially linking LNG importing countries to given its larger capacity, with Turkmenistan natural gas, have been much slower in those that were on the South Stream being a point of interest for the Europeans. developing LNG terminals. These coun- route (such as Bulgaria, Serbia and But there is currently no pipeline connec- tries are usually less willing or able to Hungary) is pipeline connectivity. tion between Azerbaijan and Turkmenistan finance the projects themselves, unlike However, several pipeline interconnec- across the Caspian Sea; Russia and Iran the wealthier countries in Western tors have been built recently throughout have objected to the creation of a Trans- Europe. Central and Eastern Europe. Linking Caspian pipeline on legal and environ- LNG terminals with pipeline interconnec- mental grounds, though their opposition There have been two recent exceptions: tors is a relatively inexpensive and quick is really about keeping Europe from hav- Lithuania debuted an LNG import termi- way for Europe to increase the security ing a larger alternative to Russian natural nal in November, and Poland will open its and reliability of its energy supplies. For gas. The governments in Azerbaijan and own LNG import terminal early next year. example, projections for the Greece- Turkmenistan could change their minds The terminals have given Lithuania and Bulgaria interconnector's total cost are — and there have been more meetings Poland greater leverage and flexibility in between 150 million and 200 million recently with EU and European officials to the energy sphere because they are no euros ($185 million to $250 million), 45 discuss the pipeline — but for now they longer solely dependent on Russia for million euros of which will be covered are wary of directly challenging Moscow. their natural gas supplies. They are also through EU financial support. Construction relatively low-cost projects; Lithuania of interconnectors is likely to increase in One other project that has recently been spent $325 million on its floating LNG the region, but countries will still require a discussed is the Azerbaijan-Georgia- import terminal, and Poland invested $1 reliable source of natural gas for them to Romania Interconnector (AGRI). The billion in its own. The drawbacks, how- be effective. AGRI project would involve a pipeline ever, are that the terminals have fairly from Baku to Georgia's Black Sea coast limited capacities — 4 bcm for Lithuania's Southern Corridor Projects as well as two LNG terminals — an and 5 bcm for Poland's — and that they export terminal in Kulevi, Georgia, and an are located on the Baltic Sea coast, The other major alternative for Europe to import terminal in Constanta, Romania. which is far from the European countries avoid transiting supplies through Ukraine The capacity of the project is 7 bcm, and that were on South Stream's route. is the Southern Corridor route, which the estimated cost would be 4 billion to 6 Barring a major expansion, the terminals would take energy supplies from Caspian billion euros. But AGRI faces the same are unlikely to be a viable substitute for countries (particularly Azerbaijan and limitations has Nabucco West. It is rela- South Stream for Southern Europe. Turkmenistan but also potentially Iran tively expensive and would require and Iraq) to Europe via Turkey or the Turkmenistan to participate because However, South Stream's cancellation Black Sea. Projects taking this route are Azerbaijan's natural gas is already slotted AmCham Bulgaria Magazine April 2015 has revived discussions of new LNG ter- attractive for European countries because for TAP. The need to build two LNG termi- minals in Southern Europe as well, par- they avoid Russia and Ukraine, but politi- nals further complicates the AGRI proj- ticularly in Greece and Croatia. As of May cal considerations and economic costs ect. there were plans for two new terminals in have long served as major obstacles. Greece: one by DEPA and one by New LNG terminals or projects involving Prometheus Gas. The DEPA project, One such project is Nabucco West, which the Southern Corridor route could be Aegean LNG, would be placed close to would involve construction of a 10-30 floated in the future, or current projects the borders with Bulgaria and Turkey and bcm pipeline from the Turkey-Bulgaria could be expanded, such as an increase would have an annual capacity of 3-5 border through Bulgaria, Romania, to the capacity of the TAP project. But page 21 bcm. The Prometheus Gas project would Hungary and Austria. (It would also with Russia pressuring Turkmenistan be near the port of Alexandroupolis and involve a connection to the Trans- and with neither Iran nor Iraq in a posi- would have a capacity of 2.5 bcm. The Anatolian Natural Gas Pipeline, which is tion — in either political or security Croatian terminal, known as Adria LNG, being built from Baku to the Turkey- terms — to be reliable suppliers, the would be located on the Adriatic island of Bulgaria border and is financed by main obstacle remains the sourcing of Krk and would have a capacity of 10 Azerbaijan.) The estimated cost of natural gas. A shift in any of these coun- bcm. Nabucco West is in the range of $5 billion tries could make the Southern Corridor to $10 billion, which was a main reason option more viable as an alternative to The estimated costs of these projects are the Trans-Adriatic Pipeline (TAP) was South Stream. member news

The Deal on Home Working Report reveals working from home carries huge costs for both worker and employer By Desislava Miteva, Country Manager at Regus Bulgaria

Business lounge at Regus offices. When times are hard, the cry always One thing you must do is to look at count. It’s the wrong target. You shouldn’t goes up to cut costs. It’s not the best those costs that are often thought of as be looking at headcount, but at produc- place to start. Over the past century or “fixed”. Take property, for example. If tivity. If people are sufficiently productive more, economists have come to realise you own your property, you can sell it – and in many cases you can calculate that in a downturn, if you cut and cut and lease it back to generate capital; if that an individual is a net source of again, your economy will simply shrink. you rent, you can still devise a commer- profit for the company – then why would In selective ways, you have to take cial plan that allows for a workable rene- you let them go? risks, and spend money in order to give gotiation. Regus has a number of high- an economy the capacity to recover and profile clients who have abandoned In order to make employees more pro- grow. fixed office space in favour of flexible ductive, you have to take them into your workspaces and found that not only do confidence and be prepared to embrace One problem is the language we use. they save money on overheads, they new working practices. Some people We should talk about saving money, not also make productivity gains, as people could do much of their work from home cutting costs. If you think only about cut- make better use of their time. or be closer to their customers – which ting, it is hard to be creative. And it is can mean they cost less in terms of possible to be creative about saving We always need to look at people. office space, not to mention their own money. More than possible, it’s essen- Sooner or later, most organisations in commuting time. tial. search of economies will look at head- Remote working is becoming ever more a reality of modern day work habits, with Regus is the global workplace provider employees and millennials fuelling Its network of more than 2,300 business centres in 104 countries provides conve- demand for more freedom to choose nient, high-quality, fully serviced spaces for people to work, whether for a few minutes their own work location. However, far too often remote working is simply syn- 22 or a few years. Companies like Google, Toshiba and GlaxoSmithKline choose Regus so that they can work flexibly and make their businesses more successful. The key onymous with home working regardless to flexible working is convenience and so Regus is opening wherever its 2.1million of whether this space is professional members want support –city centres, suburban districts, shopping centres and retail enough or equipped to perform even outlets, railway stations, motorway service stations and even community centres. basic work functions comfortably. Founded in Brussels, Belgium, in 1989, Regus is based in Luxembourg and listed on Research carried out by Regus in 2012 the London Stock Exchange. In Sofia, Regus has two locations – on 14 “Tsar revealed that makeshift home office Osvoboditel” Blvd., and on 53-55 “Totleben” Blvd. For more information, visit www. arrangements often do not provide work- regus.com ers with the necessary works surface AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria (21%) and, more importantly force them member news

into uncomfortable positions for long lent of a monthly salary. In addition to that workspace and 77% say that they periods of time (20%) with the risk of this, running and maintaining this space do not take out the appropriate insur- causing repetitive strain injury and dis- reportedly represents an expenditure of ance cover on this home workspace. comfort. $3400 a year or equivalent. It is not sur- The liability represented by not regulat- prising therefore that 49% of workers ing this workspace is enormous and just In addition to this, latest research by think that businesses encouraging staff a small investment in providing workers Regus shows that far too many busi- to work from home are just trying to shift with access to fully equipped workspac- nesses leave workers to set up their costs onto employees. es closer to home could help firms pro- own space, maintain it and take out any vide a low cost, fully compliant environ- relevant insurance or health and safety But what too many businesses do not ment for workers who need to reduce measures. In fact, while 61% of workers realise is that these makeshift offices their commute. Access to a near-by pro- globally say they have a home office, could turn into a liability as the legislation fessional workplace can help improve only half (51%) report this is a fully func- of many countries states that employee productivity while offering workers the tional and well equipped professional safety is the employer’s responsibility flexibility they demand. space. This confirms views that home when they are carrying out work tasks working is not ideal for concentration regardless of location. In the UK for Whatever the economic pressures, you and productivity. example, the HSE states that the busi- have to retain a long-term view. You ness is responsible for any accident have to give yourself the chance to Of those that are lucky enough to report caused by the equipment the business grow, to be in position to take advantage that their home office is fully profes- has supplied and suggests how to carry when markets pick up. sional, only a third (34%) say that their out a risk assessment for homeworkers. employer made the investment to kit out A leader’s job is to create and foster a the space. This is a significant saving for 79% of respondents confirm that most sustainable business for the long term. employers a fifth of workers report that companies that encourage their employ- That depends crucially upon making your setting up a fully functioning profes- ees to work from home do not cover all investments and divestments as selec- sional office costs roughly the equiva- the costs of creating and maintaining tive and strategic as each other.

Anti-Terrorism Measures Workshop The OSAC Bulgaria Country Council held its first workshop On March 24, 2015 on Anti-Terrorism Measures at Business Park Sofia. The Council’s interest for the workshop topic came from the increased number of terrorist incidents globally, recent events in Europe over the past year, and by continued interest in the results of the investigation into the 2012 Sarafovo Airport bombing and its impact on the private sector and Bulgarian society.

More than 50 participants from over 35 companies, educational institutions and an NGO were briefed on how terrorist organizations plan their attacks, and what measures could be taken to minimize the risk of being targeted and more effectively pre-

pared to response to such an incident. During the workshop an AmCham Bulgaria Magazine April 2015 OSAC chair Stefan Dimitrov. expert from the Bulgarian State Agency for National Security touched on how the cooperation with the private sector could be Department of State. The OSAC Council is comprised of 30 improved, and shared unclassified information about the Burgas private sector and 4 public sector member organizations that bombing which killed a Bulgarian bus driver and Israeli tourists represent specific industries or agencies. Today, the OSAC on July 18, 2012. Participants had the opportunity to learn from partnership encompasses ten federal agencies and over 4,600 the Commander of the Bulgarian Specialized Unit for Combating private organizations, from the business and academic com- Terrorism on current terrorism trends, as well as what to expect munities to non-governmental and faith-based organizations. from the Government emergency response to terrorist attacks. page Speakers also included security professionals from a number of The OSAC Bulgaria Country Council, launched in November 23 private companies. 2012, is one of 148 OSAC chapters around the globe attached to U.S. Embassies and consulates. This was the twelfth event The next event is planned for May, with the theme of “Security Bulgaria’s Country Council has organized, in addition to the Leadership for Non-Security Professionals”. regular services and consultations OSAC’s leadership provides the membership. For more information on OSAC, con- OSAC was established in 1985 under the Federal Advisory tact the Regional Security Office at the U.S. Embassy or visit Committee Act to promote security cooperation between the OSAC website or Linkedin group: OSAC Bulgaria Country American private sector interest worldwide and the U.S. Council. new members

chairs and upholstered furniture for Central Asia, with offices in Almaty hotels. (Kazakhstan), Belgrade (Serbia), Bratislava (Slovakia), Bucharest Contacts: (Romania), Budapest (Hungary), Istanbul Mincho Minkov Owner (Turkey), Prague (the Czech Republic) Bulgaria and Sofia (Bulgaria). Founded as a spin- ALD Automotive, being part of Societe Gabrovo 5300 off of the Central European practices of a Generale Group, with direct presence in 16, Hristo Botev St. London-based Magic Circle law firm, 39 countries and managing a fleet of over Tel.: 00359-66-80-67-66 Kinstellar operates as a single fully inte- 1 million vehicles is a global leader in full E-mail: [email protected] grated firm and delivers consistently high service operational leasing management. Web-site: http://www.evrika.co.uk quality services across all jurisdictions in ALD Automotive offers optimized mobility an integrated and seamless style. solutions, providing cost effective fleet management and consistently high level Contacts: of services. Some of the services we offer Diana Dimova, Partner are: Tel.: +359 2 904 83 51 Financing http://www.kinstellar.com Vehicle maintenance Address: 69 Bulgaria Blvd., Infinity Tower, Insurance 14th floor Tires management 1404 Sofia 24/7 breakdown assistance Association "Informa" is a non-profit Door to Door organization which provides postgraduate Reporting and Consulting studies in different occupations: Accounting, Marketing, Management, Contacts: Business Administration, Graphic Design, Klaudija Casar-Torkar etc. The organization is specialized in CEO organizing courses and supporting the Tel.: +359 (0)2 802 61 20 development of the young people in Address: 73, Al. Stamboliyski Blvd. Bulgaria, improving their social, profes- Based in New York, The Xogito Group is 1040 Sofia sional and intellectual development; stim- a digital development consulting firm. We ulating youth initiatives. Licensed in 2006, build, operate, and advise. Our mission is the training center has been approved in to help your business exceed your goals. numerous European projects in the field of Digital technologies are constantly chang- vocational training in agriculture, human ing to keep up with business needs and to resources development and other fields. create new ones. We help you think Conducts seminars and discussions in the through where you are technically and field of agriculture, economy and trade. In help you map out where you want to go its activities the association cooperates and how to get there. Data, RTB, with similar structures in the country and E-Commerce, AdTech – we approach your “Evrika Commerce Ltd.” is a Bulgarian abroad; organizes and conducts a variety needs within the larger technical land- furniture factory established in 1992, of sessions, workshops, exchange of scape in full accord with best practices, manufacturing classic and contemporary experience and other forms of information emerging trends and forward thinking furniture for the European markets. The exchange and cooperation between young solutions. We are long-time contributors to company is one of the leading furniture people and institutions of similar organiza- and supporters of open-source software manufacturers in Bulgaria, offering solid tions; assistance for professional orienta- (OSS), and are familiar with many OSS oak, cherry and beech furniture with tion and realization of young people. packages. Our OSS experience coupled exquisite design and style, hotel furni- with our up-to-date knowledge of architec- ture, furniture for restaurants and private Contacts: tures and technology help us to identify habitations, custom made furniture, Violeta Vladimirova and leverage the solution that’s right for French reproduction and Italian style CEO you. furniture with special antique finishing. Tel.: +359 2 480 8899 The company is ISO 9001:2008 certi- http://www.informa-bg.net Contacts: fied. The furniture is built with the most Address: 13, Laiosh Koshut Str. Constantine Spathis modern techniques incorporating the 24 1000 Sofia CEO principles of tradition and craftsmanship. 58, G.M. Dimitrov Blvd., Dianabad 90% of the company's production is Residential Complex, apt. 20, Izgrev exported to France, United Kingdom, District Belgium, Holland and Switzerland. The 1172 Sofia remaining 10% is realized on the Bulgarian market. The factory is specialized in the production of hotel furniture Kinstellar is a leading independent law AmCham Bulgaria Magazine April 2015 April Magazine AmCham Bulgaria - bedroom furniture, tables, cabinets, firm in Emerging Europe, Turkey and RIGHT TIME, RIGHT PLACE, RIGHT NOW

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