Agriculture remains riskiest sector for fourth consecutive year

A total of 240 Bulgarian companies filed for bankruptcy last year, a 31 per cent mark-up on the previous year, according to the annual report of French credit management specialist Coface, presented in Sofia on February 27.

The agriculture and forestry sector topped the ranking, accounting for 22.5 per cent of declared insolvencies, followed retail trade with 15.83 per cent and the construction industry with 6.25 per cent.

Constructions are already among the top three most hazardous industries in Bulgaria, but it is expected to become even more so this year, Coface said. The number of bankruptcies in the sector will rise by 50 per cent in 2008, primarily due to ongoing massive unsound investment in holiday properties along the Black Sea coast and in the mountains, Kamelia Popova, managing director of Coface Bulgaria, said.

The sector is also the riskiest in Central and East Europe and that the number of Bulgarian bankruptcies is likely to reach regional levels soon.

The transport and warehousing sector, finance, insurance and consultancy also registered a considerable number of insolvencies. The service sector as well as wholesale trade and food and beverage production are also cited as vulnerable activities.

Chemicals, non-ferrous metals and the pharmaceutical industry were deemed the lowest risk industries because they are export-oriented. They have also been the target of large investment aimed at modernisation. Companies in these segments were also more likely to have forged long-term trust-based relationships with their partners.