B. Data on Best Prospects for Agriculture and Industry Sector Exports: AGRICULTURE A. Rank: first B: Name of sector: Soybean Meal C. ITA or PS&D code: 0813100 1993 1994 1995 1000 metric tons D. Total market size: 93 79 75 E. Total local production: 11 10 2 F. Total exports 0 0 0 G. Total imports 81 69 10 H. Total imports from the U.S.: 0 0 0 I. Exchange rate: N/A Comments: U.S. has excellent opportunities over the foreseeable future for soybean sales. Bulgaria produces only a small portion of its needs and the crop is not well suited to local conditions. Only one small bean processing plant beans exists and as livestock recovers, demand will increase. Currently, imports are from Latin America. Assuming the competitiveness of U.S. products, American soybeans should be on the Bulgarian market. A. Rank: second B. Name of sector: corn C. ITA or PS&D code: 0440000 1993 1994 1995 1000 metric tons D. Total market size: 1756 1067 1200 E. Total local production: 1742 983 1200 F. Total exports: 196 0 0 G. Total imports: 110 84 0 H. Total imports from the U.S.: 110 47 0 I. Exchange rate: N/A Comments: Like soybeans, corn is a primary component of animal feedstuffs. Unlike soybeans, when the crop is strong, Bulgaria is able to produce nearly enough corn to meet its needs. However, under drought conditions, - a not uncommon occurrence - there is a definite need for significant imports. Moreover, as the livestock sector recovers and as production is based on more careful economic calculations; numbers of animals will grow and rations will contain higher energy component content. Therefore, there are good prospects for imports. There is no reason why the United States should not be able to export corn to Bulgaria. A. Rank: third B. Name of sector: tobacco C. ITA or PS&D code: 1211000 1993 1994 1995 metric tons D. Total market size: 47600 29400 30000 E. Total local production: 65947 45575 35000 F. Total exports: 29700 15200 20000 G. Total imports: 13000 9170 9000 H. Total imports from the U.S.: 0 0 0 I. Exchange rate: N/A Comments: Tobacco is a major agricultural crop in Bulgaria. However, the type of tobacco produced is oriental and as a consequence not competitive with the flue-cured, (Virginia), tobacco produced in the United States. The current trend is toward American type cigarettes which require blending U.S. type tobaccos. The Bulgarian state monopoly industry has recently been broken up and there is considerable interest on the part of Western firms to form joint ventures with individual enterprises which were part of the old monopoly. As the industry matures as part of a market economy, there should be opportunities for U.S. tobacco exports, provided they are competitive. A. Rank: fourth B. Name of sector: Rice C. ITA or PS&D code: 1993 1994 1995 metric tons D. Total market size: 26000 26000 27300 E. Total local production: 10837 6700 7035 F. Total exports: 34237 10000 10500 G. Total imports: 49900 28800 30240 H. Total imports from the U.S.: 0 0 0 I. Exchange rate: N/A Comments: Bulgaria is normally a net importer of rice. As income grows and eating habits become more diversified due to greater exposure to non-traditional foods, consumption should grow. There is no reason why the United States can't obtain a share of the market if our products are competitive. The exceptionally large exports and imports shown for 1993 are attributed to illegal trade. A. Rank: fourth B. Name of sector: Cotton C. ITA or PS&D code: 1993 1994 1995 metric tons D. Total market size: 30017 38000 38000 E. Total local production: 4617 8000 8000 F. Total exports: 0 0 0 G. Total imports: 25100 30000 30000 H. Total imports from the U.S.: 0 0 0 I. Exchange rate: N/A Comments: The United States has a potential market in Bulgaria for cotton. Traditional trade patterns with former Soviet Union suppliers such as Uzbekistan have been broken. Unfortunately, the Bulgarian industry does not have enough orders, especially from foreign countries to keep its mills going at anything close to capacity. Should the situation regarding hard currency customers improve - and especially if the traditional suppliers in the former Soviet Union are unable to satisfy needs, there may be sales opportunities. 6. High Value Food Products, (HVP) High value food products are those which are not basic grains. This catchall category includes fruits, vegetables, meat and dairy products and processed food products of all kinds. There are few opportunities for exports of fresh produce since it can be obtained much cheaper domestically or in nearby countries. There may be very limited possibilities for high quality beef for steaks for the handful of hotels catering to Western business persons. Milk is chronically in short supply thus powdered milk may be a possible sales item. The best opportunities are those special processed food products which currently can be sold in the European Union. If it can be sold there, it probably can be sold in at least small quantities in Bulgaria. 7. Animal Genetic Materials. Bulgarian livestock genetics stocks and artificial insemination are government matters and are likely to remain so for the foreseeable future. Bulgarian specialists are very well aware of the high quality of U.S. animal genetic material however resources are poor and the financial means for such purchases is a problem. When the situation in Bulgaria normalizes, and breeding institutes are in a position to purchase genetic material, they will most certainly consider the United States as a key source. GENERAL COMMENT: Assuming Bulgaria develops slowly but steadily, sales in the next few years are still likely to be limited for all the above products - unless the USDA is in a position to offer soft credit terms. The key limiting factor is the lack of hard currency to pay for the purchase. For all of the above commodities, there are third country competitors who are able to offer competing products. Unfortunately, even if the quality of such products may be lower, the lower price causes the Bulgarians to purchase from the foreigners in order to save hard currency. INDUSTRY A. Rank of sector: 1 B. Name of sector: Telecommunications equipment C. ITA code: TEL 1993 1994 1995 D. Total market size; 97.0 117.0 137.0 E. Total local production: 12.0 10.0 12.0 F. Total exports: 5.0 3.0 5.0 G. Total imports: 90.0 110.0 140.0 H. Total imports from the U.S.: 1.65 2.5 6.0 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: The Bulgarian telecom system is archaic and inadequate but with an EBRD/EIB/World Bank infrastructure loan of USD 150 million, Bulgaria is beginning to modernize its system. The USD 150 million is only the first installment of a more than one billion dollar project lasting 10 years. The satellite ground station component has already been won by an U.S. firm; additionally, as the core telecom project sectors proceed, demand for all telecom product sectors will expand. U.S. firms are highly regarded in the telecom field. While contracts will be open to foreign sources, contracts will require local sourcing of standard telecom products where available. A. Rank of sector: 2 B. Name of sector: Electric Power Systems C. ITA code: ELP 1993 1994 1995 D. Total market size: 82.5 87.5 93.0 E. Total local production: 4.0 4.5 6.0 F. Total exports: 1.5 2.0 3.0 G. Total imports: 80.0 85.0 90.0 H. Total imports from the U.S.: 3.0 5.0 10.0 10.0 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: Bulgaria is highly import dependent on fuels and poor in energy utilization. Bulgaria has a single nuclear facility with operational safety and waste storage problems. The major coal-burning facilities which account for over 50% of generating capacity, are in need of modernization. Project financing for the upgrade of the nuclear facility has been provided by EBRD/EIB/PHARE (USD 122 million); nuclear safety (USTDA/EC PHARE); nuclear power equipment (U.S. firms); and major consultancy work under U.S. Trade and Development Agency supported feasibility studies; growth rates in this sector will be disproportionally high due to awards in any given year. A. Rank of Sector: 3 B. Name of sector: Computers and Peripherals C. ITA code: CPT 1993 1994 1995 D. Total market size: 77.62 95.0 113.0 E. Total local production: 0.50 0.0 0.0 F. Total exports: 11.11 15.0 22.0 G. Total imports: 88.23 110.0 135.0 H. Total imports from the U.S.: 5.50 7.0 9.0 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: Bulgaria has strong demand in the private, commercial, sectors as well as in specialized areas of the economy such as banking and government for new and upgraded ADP equipment. U.S. products have high product recognition; most U.S. firms easily supply from their European outlets or can obtain local agents and distributors. Along with the radical transformation of the economy, many enterprises are themselves bringing their operations into higher efficiency with ADP equipment. Greatest growth in Bulgaria has been in the small-medium sized entrepreneur and in the service sector. Sales to these clients can be expected to be strong over the coming years. A. Rank of sector: 4 B. Name of sector:Computer Software C. ITA code: CSF 1993 1994 1995 D. Total market size: 6.5 9.5 13.0 E. Total local production: 1.5 2.5 3.0 F. Total exports: 0.2 0.3 0.5 G. Total imports (1): 5.0 7.0 10.0 H. Total imports from the U.S.: 4.0 6.0 8.5 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Notes: (1) Figures for imports are estimates based on interviews with major importers as no reliable statistical information is available. Comments: U.S. has a strong reputation in software products. Demand is increasing for sophisticated and specialized software especially in the medical, tourist, engineering, banking, finance, and transport sectors. Basic systems/applications software is on the market and existing distributorship and dealers are in place. While new intellectual property rights laws are in place, some concerns still exist as to illicit usage of basic software, but less so for specialized packages. A. Rank of sector: 5 B. Name of sector: Medical equipment C. ITA code: MED 1993 1994 1995 D. Total market size: 41.20 43.60 N/A E. Total local production: 6.50 5.60 N/A F. Total exports: 5.30 4.94 N/A G. Total imports: 40.00 43.00 45.0 H. Total imports from the U.S.: 0.46 0.56 1.0 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: The Bulgarian Ministry of Health has began an ambitious program of wide-ranging health care reforms aimed at decentralizing and privatizing the health care system. The top priority in this reform is the introduction of national health care insurance and in turn generating revenues to address the modernization of hospitals and other facilities for primary care; health manpower development; disease prevention and health promotion. In the area of critical health services, equipment and training needs are for emergency care; maternal and pari- natal care; abortion and reproductive health; and blood transfusion centers. International funding through the World Bank is planned to support emergency health care centers; for the rehabilitation of 67 secondary centers. For cancer care, there is a strong demand for specialized clinics and equipment for detection and care, especially for women. A. Rank of sector: 6 B. Name of sector: Food Processing and Packaging equipment C. ITA code: FPP 1993 1994 1995 D. Total market size: 67.6 N/A N/A E. Total local production: 14.0 N/A N/A F. Total exports: 6.4 N/A N/A G. Total imports: 60.0 69.0 N/A H. Total imports from the U.S.: 1.5 1.8 2.4 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: This is a major sector of the Bulgarian agro- business, especially processed fruits and vegetables. Many food processing enterprises are targeted for privatization and modernization by government in the next several years. Traditionally, Bulgaria is a major supplier of fresh fruits and vegetables such as apples, cherries, strawberries, grapes, tomatoes, cucumbers at least 3-4 months annually and products thereof i.e. wines, juice concentrate, tomato paste, pulps etc. Private sector investments have already taken place in small capacity drying/dehydrating equipment and/or freezing equipment. Majority of the small private companies within the meat processing, sausage and poultry processing are interested in medium to small capacity processing equipment. Small scale bakeries are opening around Bulgaria and considered to be a prospective market for machinery. A. Rank of sector: 7 B. Name of sector: Pollution Control Equipment C. ITA code: POL 1993 1994 1995 D. Total market size: 12.0 15.0 20.0 E. Total local production: 0 0.5 0.9 F. Total exports: N/A N/A N/A G. Total imports: 8.0 N/A N/A H. Total imports from the U.S.: 1.2 2.0 3.5 I. Exchange rate: 1993: 1USD=27.7 BGL 1994: 1USD=52 BGL Comments: Increasing concern for environmental issues is expanding the Bulgarian market for pollution control equipment. Central concerns are with hazardous wastes, waste water systems, the Black Sea coastal regions, and individual industrial pollutants such as those damaging to the ozone. International funding is playing an increasing role as well as a major USTDA study on hazardous wastes. Greater resources will be devoted to this sector in response to growing concerns for the environment. Furthermore, pollution control equipment imports are duty free. A) Rank of sector: 8 B) Name of sector: Automotive Parts & Service Eq. C) Three-letter ITA Industry Sector Code: APS 1993 1994 1995 D) Total Market Size: 14.2 4.2 5.7 E) Total Local Production: N/A N/A N/A F) Total Exports: 4.3 0.8 N/A G) Total Imports (USD million): 18.5 5.0 36.8 H) Imports from the U.S.A. 0.5 0.9 1.5 I) Exchange Rate Used: 1993:USD 1 = 27.7 BGL 1994:USD 1 = 52 BGL Comment: Most Bulgarian vehicles are over 5 years old and in need of dire repair; basic auto parts, accessories, and engine tune-up products. While the majority of vehicles are of East Bloc origin, a significant number of vehicles are West European, Japanese, and of U.S. make. These vehicles are poorly served by local dealers and generally lack much of the same parts, service, and accessories available in the U.S. Finally diagnostic equipment/analyzers as well as car wash facilities are in demand.