Construction

489 companies reported activity in construction industry in 2004. Of these, 376 were micro firms, with less than 10 employees. At the same time, total industry revenues were 251.57mn BGN, up 153.5% year-on-year, which implies sound growth in construction activity in the region of Stara Zagora in 2004. 230 companies in the industry have earned profit higher than 1,000 BGN, while 20 companies reported end-year profit of over 100,000 BGN In 2004, 48 companies reported net sales revenues of over 500,000 BGN.

New road rehabilitation and construction attracted most of the investment in 2005. All sections of the new Trakia motorway that run across the region will be opened in June 2006. The construction of the motorway is expected to reach the city of Stara Zagora in 2007. Construction of the motorway is co-financed by the state budget and a EUR 240mn loan extended by the European Investment Bank.

PSI AD is currently conducting the motorway construction works in the region of Stara Zagora. The company is part of Construction Holding Company Trace Group AD. Jointly with the other company in the holding, Road Construction Company Trace AD, the three companies reported a total of 79.36mn BGN in net sales revenues in 2004, thereby taking the top three positions in the industry ranking. Total profit earning reported by the three in 2004 was an estimated 878,000 BGN 29 other companies have also reported construction business, with 11 of these having earned some profit in 2004 as well.

The top company ranking in terms of net sales revenues, conducted by Bulgarian Chamber of Commerce and Industry and released each year over the last seven years, puts PSI AD 89th on the national list. At end-2005, PSI acquired full majority over the capital in Road Maintenance, Stara Zagora EOOD, paying 1.25mn BGN.

The rehabilitation of a section of the road linking South with North Bulgaria (The Pass of the Republic) was finished in 2005. The rehabilitations of the 45-km long section of the Kazanlak - Stara Zagora road and of the by-pass road near Stara Zagora (worth EUR 12mn, 75% of these provided by EU ISPA Program) were also completed in 2005, along with rehabilitation of some sections of the fourth-class road network in the region.

Peshtostroy EOOD takes top position on the company list in terms of annual profit growth (almost 1.4mn BGN reported profit earning in 2004). Furthermore, the company was nominated by the Regional Tax Office, Stara Zagora in the Taxpayer of the Year national contest.

The company is dealing with the insulation construction activities, being ranked 4th on the industry list in terms of net sales revenues earned. At end-2005, Peshtostroy EOOD won a tender and purchased the building of the National Art Gallery in Stara Zagora for 2mn BGN The building will be turned into a modern business and shopping centre.

General construction business was reported by 120 companies in the region. Due to the industry`s expansion, new housing and business (office, hotels) construction continued over 2005. Construction land lots in the city center and outskirts (including some of the nearby villages) are most demanded by investors. In the general construction sub-sector, the largest production volumes have been reported by: State Company Construction and Rehabilitation, Vito - 95 OOD, Bulet EOOD, Kazanlak, Zavodski stroezhi - Maritsa-East AD, Nikon EOOD, Akrab EOOD, Montage Engineering AD, Stubel - M OOD, each of these having reported net sales revenues in 2004 of over 2.4nm BGN.

It is expected that general construction activity will preserve a relatively high growth due to the rising real estate prices. Furthermore, the greenfield construction of four new market chains, with total area of 68,000 sq.m, is also expected to retain the high growth prospect in the sub-sector in 2006. Also upcoming is the construction of new industrial building facilities in the region.

Construction of industrial building facilities using moving sections of steel and concrete is presently being employed by ZSK Borui AD. The company produces the components itself, which means that a production of a storage place with area of 1,200 sq.m. would be built up within 10 days, thus thoroughly suiting investor interest.

The growth in construction industry over 2006 will be sustained due to the start of the construction activities of the new waste water treatment station in Stara Zagora, to be completed in 2007. The total investment is estimated at EUR 15mn (excl. VAT), with 75% of the total investment provided by EU ISPA program, 15% are EIB loan, while the remaining 10% are national co-financing. Part of these funds will go towards financing the modernisation of the water sewage system in Stara Zagora.

There was also a significant investment activity in public construction works (renovation of town squares and parks, road and pavement reconstruction) by municipal administrations in Stara Zagora, Kazanlak (an estimated 499,000 BGN) and Radnevo in 2005. The completion of construction works of the new Regional Museum building in Stara Zagora, currently implemented by The State Company Construction and Rehabilitation (DP STROITELSTVO I VAZSTANOVYAVANE) is to cost an estimated 1.75mn BGN. The state company is also main contractor in the construction works of the Opera house in Stara Zagora, however there is no precisely estimated project cost made, nor are there financing sources yet secured.

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