Bulgarian bicycle makers are expecting a 40 per cent jump in production this year, double the initial estimates for 2008, after receiving last week an official permission from Brussels to import parts without paying anti-dumping tariffs.

Even though no tariffs were paid to start with, producers had to deposit a bank guarantee, which is no longer required, Velomania spokesman Lyudmil Ouzounov told The Sofia Echo on March 24. Velomania manufactures bikes under the Drag brand.

"By taking back the bank guarantees now we will be able to produce much more bicycles, as well as to open many new working places," Ouzounov said. The bank guarantees deposited by manufacturers was around three million euro, which they expected to receive it back by the end of the week, Dnevnik daily reported.

Bulgarian bicycle manufacturers had to file a request with the European Commission to be given a dispensation to import parts without the prohibitive tariffs, Ouzounov said. Because the EU's executive body had to check their claims on location, the process took more than a year and permission was granted only last week.

The segment most affected by the decission is the low end of the market - bicycles sold for under 200 leva, or 100 euro. Around 30 to 40 per cent of the parts used for bikes in that category are imported from China.  "The more expensive the bike, the less Chinese parts it has," Ouzounov said.

As long as Chinese elements do not exceed 60 per cent of the bicycle price, Bulgarian makers would not have to pay the 48.5 per cent anti-dumping tariff.

Bicycle production in Bulgaria last year was 450 000, of which 100 000 sold locally. "Bulgaria is the only EU member state where most bicycles are local production," Ouzounov said. The rest of its production was exported mainly to the rest of the EU, as well as Russia, Serbia and Macedonia.

Bulgaria has six bicycle manufacturers - Cross, Leader-96, Maxcom, Robifir Bike, Velomania and Balkanvelo. Their industry union, the Association of Bicycle Producers in Bulgaria (ABPB) said it expected to make more bicycles in the future, given the increased focus on healthy living and environment in recent years.

Bulgaria's location gave it a competitive advantage over China, one of the world leaders in the sector, because it could ship to anywhere in Europe within one week, ABPB representative Evgeni Danev told The Sofia Echo.

Bicycles are also gaining ground as an alternative means of transportation in Bulgaria itself, with Sofia city hall allocating 5.3 million leva for building two new bicycle lanes from its budget for 2008.