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Aerolift Logistics Adapts to Bulgaria’s Growing Trade Deficit
“Bulgaria’s current business climate means a focus on imports for the Sofia based logistics firm”

Sofia, Bulgaria, February 8, 2006 – Bulgaria is an economy out of balance. The country’s 2005 foreign trade deficit amounted to a whopping 7.15 billion leva, or USD 4.38 billion. This amounts to roughly 17.3 per cent of the Balkan nation’s GDP, according to the Bulgarian National Statistical Institute (NSI) figures. >From 2004, this has spelled out a year-on-year 54% explosion of the trade gap. According to the NSI, Bulgaria’s imports increased in 2005 by 27.1% year-on-year, while at the same time exports rose by a mere 18.2%.

For international logistics companies in an economy like this, the key word is adaptation.

“To be frank, I think this trade discrepancy will keep on in the next three to five years,” says Ognyan Djarov, general manager of the Sofia based Aerolift Logistics, an Aeroceanetwork member. “Maybe we'll close the gap in eight to ten years” Djarov ponders. His prognosis for the Bulgarian economy though is fairly static. “This means the market structure will remain approximately the same, of course the market itself will grow together with demands of Bulgaria's economy,” said Ognyan.

Machines, equipment and vehicles made up most of the imports, accounting for 7.9 billion leva of imports whereas the main export commodities included ready goods, fuels and chemical goods. Only the import of alcohol and cigarettes shrank by nearly 17%, which is not unsubstantial. Yet during the same time exports went up overall by just a little more than 1%. A higher level of domestic demand is the blame for the import explosion.

“Though I'm working very hard to win export business, imports are still prevailing,” said Ognyan Djarov.

Aerolift is however not letting their import business get far too out of line with exports. “The ratio is about 60% to 40% in favor of imports.” Although their export business isn’t changing much at the moment, Ognyan Djarov would like to see more diversity in Aerolift’s import business as well. “Export lanes remain the same,” he expounds, “I strongly wish to add to my import lanes Far East countries, India, some Arab countries, and Africa.”

While Bulgaria’s main export partners were Italy (2.1 billion leva), Turkey (1.7 billion leva), Germany (1.7 billion leva) and Greece (1.6 billion leva), most of their Bulgaria’s imports came from Russia (4.1 billion leva), Germany (3.5 billion leva) and Italy (2.3 billion leva). Aerolift is already making inroads in many major import markets for Bulgaria. Djarov iterates, “My imports come from the UK, Italy, Germany, USA, and Turkey.”

The key for Aerolift Logistics, though, is Europe.

Ognyan sees the EU to be an ever growing force in Bulgarian trade. “In my view, Bulgaria's economy will be more and more dependent on European Union. As far as export is concerned, our country will export more to the EU countries such as Germany, the UK, Italy, and Greece, as well as Russia and other former Soviet republics such as Ukraine, Belarus, Latvia, Lithuania, Estonia, and Kazakhstan.”

True to their name, Aerolift Logistics has built their strength in international air cargo. Ognyan says that their freight breakdown would roughly be 60% airfreight, 30% overland freight, and 10% for ocean freight. But he sees future development in ocean freight as an essential. “I guess the increase of ocean freight will be a winning strategy for Bulgaria.”

Trade deficit aside though, Ognyan Djarov sees a brighter future for Bulgaria’s international transportation industry as a regional hub for the EU and nations whose commerce depend on the Black Sea. “Despite the delay in Bulgaria's freight policy, now our country starts to invest heavily in infrastructure projects, in the reconstruction and enlargement of our sea ports Varna and Bourgas, the building of new highways,” says Ognyan, “In view of Bulgaria's near accession to EU, Bulgaria will be a the gateway to Europe through its sea ports and auto routes. Due to its transit position in Southeast Europe, Bulgaria is expected to be one of the biggest logistics venues in Europe. No wonder, most of global players in logistics are investing heavily in Bulgaria.” Ognyan noted some of these big investors as DHL/Exel, M&M, Schenker / Bax Global, TNT, Royal Frans Maas, Cargolog Weiss, etc.

Yet building the Bulgaria’s transportation infrastructure is not enough. Ognyan Djarov sees Bulgaria’s fortunes directly related to quick action. “I really hope our country will be swift enough to meet these challenges and become a gateway to Europe for Eastern economies.”

Aerolift, a member of Aeroceanetwork, is an independent international forwarding company located in Sofia, Bulgaria’s capital and commercial center. Aeroceanetwork is a non-exclusive network for professional logistics companies and international freight forwarders in the major transportation markets of the world

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