Business Review - 03/2016 by Business Review

INTERVIEW: Riva Ganguly Das, the Indian ambassador to Romania, tells BR in an exclusive interview that the Indian investment community in the country is not that visible, even though companies have projects in key areas such as IT and pharma » page 20

ROMANIA’S PREMIER BUSINESS MAGAZINE

MARCH, 2016 / VOLUME 20, ISSUE 3

Our patrimony: pièces de résistance Over 30,000 historical monuments nationwide expect better times, some need a little nip/tuck, some just better touristic promotion. New laws and lots of promises from national and local authorities are made, but the investment is insufficient to preserve the true value of these landmarks » page 12

REAL ESTATE OFFICE PROJECTS COVERING OVER 200,000 SQM ARE NOW IN THE PIPELINE IN CENTER-WEST BUCHAREST, CONFIRMING PREVIOUS FORECASTS THAT THE AREA WILL TURN INTO A NEW OFFICE POLE FOR THE CAPITAL. >> PAGE 6

www.business-review.eu Business Review | March 2016

EDitorial anda sebesi Editor-in-ChiEf

EDitorial 3 Contents 3 6

EDITORIAL REAL ESTATE

8 10 INDUSTRY REPORT

giving culture its heritage back The national heritage is probably the most precious part of the cultural identity of any country. It’s a little bit of history, culture, society, tradition. But above all it’s about real value that lasts in time, despite different and constant political, economic and cultural changes. We all value something: as individuals, community or society. We, Romanians, need to learn how to measure our value and be aware of it. We are able, as any other nation worldwide, to demonstrate talent in many fields of activity that are recognized internationally for their spirit of innovation and creativity. For all of these reasons, we decided to dedicate this issue of Business Review to one of the most impressive themes of any society - its heritage. “The heritage is the modern answer to this question: tell me what heritage you have and I will tell you who you are. However, this heritage isn’t the equivalent of the family you belong to, but the genealogy that you choose: heritage is part of the past that you identify with in the present,” said the anthropologist Vintila Mihailescu for Business Review. And this is probably the most important thing to remember for both the current and future generations. Heritage demands we take care of it, preserve it and put it in its right light – that of being appreciated. It makes us find financial resources – often large sums of money - to restore its value and to hand it down. According to the official data existing on the market, there are over 30,000 monuments nationwide and, since 2010, only 49 have been decommissioned, while 644 new ones have been put on the list. This means that there is a need for a collective and significant financial effort to restore them, which is a huge challenge for the local authorities, as for 2016, the budget of the Ministry of Culture is around EUR 171 million, or 0.1 percent of the country’s GDP. Last but not least, an efficient heritage policy begins with a vision of the future and not the preservation of the past, pundits say. Despite their cultural value, historic buildings can be real and profitable business opportunities for investors. According to ESOP Consulting, in 2015 and 2016 there was an increase in the number of investors interested in buying old historic buildings, from the prewar period, located in central areas, which they renovated to international standards, and introduced them back to the market. In the past three years, foreign and local investors have invested over EUR 100 million into this kind of properties. The same source says that, out of 2,058 historical buildings in Bucharest, a third is renovated or work in progress and have commercial potential. In addition, a centrally-situated property with valuable architecture is a medium to long-term investment, which keeps its value in time. For all these reasons, and probably many others I haven’t mentioned here, I think we all – public and private entities - have strong motivation to bring to life the old jewels of our patrimony. anda.sebesi@business-review.ro

12 COVER STORY 20 INTERVIEW 21 INVESTMENTS 22 TAX 24 START-UP TECH 26 HEALTHCARE 28 TOBACCO INDUSTRY 29 MOBILE 32 TELECOM 33 ENTREPRENEUR 34 MACROECONOMICS 36 HUMAN RESOURCES 38 COACHING 41 GREEN CORNER

Giving culture its heritage back Developers kick start oﬃce projects in center-west Bucharest Swanky address: premium residential market ready to soar Real estate growth to further boost furniture sales this year Breathing life back into our patrimony Enhancing the Indian business presence in Romania Romanian agriculture to get massive Indian capital New Fiscal Code rollout gives investors fresh hope #Uberexpansion in Romania New niche services boost Romanian private medical market Changes may place tobacco’s future up in smoke Fourteen Romanian companies attend Mobile World Congress in Barcelona Telekom Romania announces over EUR 180 mln investments in 2016 Olla Floral Art comes into blossom this year The private sector voice: What needs to change in Romania’s business environment Clash of generations raises concerns on Romania’s labor market Romanian coaching industry is ﬂourishing Publicis and Plantam fapte bune in Romania launches Green Endorsement campaign

issn no. 1453 - 729X publishEr Bill Avery EDitor-in-chiEf Anda Sebesi DEputY EDitor-in-chiEf Simona Bazavan Journalists Otilia Haraga, Romanita Oprea, Ovidiu Posirca, Natalia Martian, Andreea Tint, Oana Vasiliu copY EDitors Debbie Stowe, Eugenia Pupeza photo EDitor Mihai Constantineanu laYout Raluca Piscu publishEr Bloc Notes Media aDDrEss No. 10 Italiana St., 2nd ﬂoor, ap. 3 Bucharest, Romania lanDlinE Oﬃce: 031.040.09.31

ExEcutivE DirEctor George Moise businEss DEvElopmEnt DirEctor Oana Molodoi salEs DirEctor Ana-Maria Nedelcu salEs consultant Valeria Cornean EvEnts DirEctor Oana Albu markEting Adina Cretu, Marius Andronic proDuction Dan Mitroi Distribution Eugen Musat Emails editorial@business-review.ro sales@business-review.ro events@business-review.ro

www.business-review.eu Business Review | March 2016

4 nEWs

nEWsin brief auto

fmcg

Daimler hires 500 people for factory opening in april

romanian ibanesti cheese obtains Eu protection through pDo scheme

German auto group Daimler will open its Mercedez-Benz gearbox factory in Sebes in April, for which the company hired 500 people and invested EUR 300 million, Mediafax informs. The oﬃcial inauguration will take place on April 4th, after construction works had started in 2014. The unit will produce 9G Tronic gearboxes. Star Transmission, Daimler’s subsidiary in Romania, was established in 2001 through the opening of a production plant in Cugir producing gears, axles and machined components for engines, gearboxes and steering systems.

EnErgY romania wind production at 3year high in 2015 The electricity output from wind farms has constantly grown in Romania starting with 2013, on the back of massive investments. Total wind production reached 7GWh in 2015, from 6.2GWh in 2014 and 4.7GWh in 2013, according to data published by the Ministry of Energy. For biomass, total production amounted to 0.5 GWh last year, slightly above the level registered in the previous year. Meanwhile, the production from solar installations jumped from 0.4 GWh to 2 GWh in 2015. According to the ministry, wind held a share of 11 percent of Romania’s total electricity.

financE government to launch three grant schemes targeting over 4,000 companies The government is developing three grant schemes aimed at supporting companies by promoting exports, according to a statement released in March. The schemes are estimated to be available until December 2018 and attract over 4,000 beneﬁciaries. These are “Minimis” grants, which are non-refundable state aids given to companies over a period of three consecutive years and amount to a maximum of EUR 200,000 (EUR 100,000 in the case of road transportation companies). The three schemes are meant to cover costs of participation in international fairs and exhibitions (RON 113.27 million), trade missions organized abroad (RON 4.2 million), as well as costs of market and product research (RON 0.8 million.)

Romanian Ibanesti cheese (Telemea de Ibanesti) has been included on the European registry of products with protected designation of origin (PDO,) according to a press release from the European Commission. It is the ﬁrst Romanian product to be included on the list, with the Sibiu salami (Salam de Sibiu), and the Topoloveni plum jam (Magiun de prune Topoloveni) being on the protected geographical indication (PGI) list. The cheese can only be produced in the Gurghiu, Hodac and Ibanesti localities in Mures county, which are part of the Gurghiu valley, where the production method has been passed down through generations.

hr 26 pct of romanian employers hire more staff in 2016, says manpower study This year, seven percent of Romanian employers plan to reduce the number of employees in the next three months, while a little over a quarter (26 percent) want to hire more people and two thirds predict no changes in terms of workforce, according to a Manpower study on Workforce Hiring Perspectives. Employers in nine of the ten industries included in the study said they were expecting growth in terms of personnel between April-June 2016. Thus, 41 percent of employers from the manufacturing industry intend on hiring in the second quarter of this year. Excluding the constructions industry, this is the highest number among the industries, and has increased by 4 percent yearon-year, reaching over 26 percent.

pwc and george butunoiu to handle new recruitment round of private managers in soEs Professional services firm Pricewaterhouse Coopers Tax Advisors & Accountants and headhunting George Butunoiu Group, which provides headhunting services, will offer assistance services in the process of recruitment of private administrators for three state-owned enterprises (SOEs). The firms are tasked with finding private sector managers for the Management Company of Ownership in Energy (SAPE), Oltenia Energy Complex and Oil Terminal Constanta, according to Hotnews. The three enterprises are in the Ministry of Energy’s portfolio and the move comes within the frame of government ordi-

nance OUG 109/2011 concerning the corporate governance of public enterprises. The ordinance aims to recruit private management into state owned companies in order to increase independence and transparency.

lEgal bt group takes over capital partners Banca Transilvania Group announced mid-March that it took over investment banking consultancy Capital Partners, which was founded by Doru Lionachescu. The deal should be completed this month, and will see BT Securities, the group’s brokerage arm, take over Capital Partners. The new company will be called BT Capital Partners and will include the team from the former consultancy. Capital Partners was set up 10 years ago and has worked on deals with a combined value of more than EUR 2 billion. Capital Partners provides M&A services, corporate ﬁnance and real estate advisory. It also controls One United Properties, a real estate developer for residential projects in Bucharest.

macroEconomics romania is putting “hard won gains at risk,” imf warns Although Romania’s economy has advanced healthily last year, the “2016 budget inappropriately gives stimulus when consumption growth is already strong,” a report by the International Monetary Fund (IMF) warns, following the mission’s visit to Romania. Drawing attention that an election year is coming, a period when usually deﬁcitincreasing measures are taken, the IMF warns that “hard won gains are at risk of being reversed.” “Legislative initiatives in the ﬁnancial sector, such as the current version of the giving-in-payment law (datio in solutum), contain provisions that could threaten private property rights, undermine investor sentiment, and curtail credit provision to households and businesses,” the report goes on to show, recommending “stronger efforts to maintain prudent policies.”

inflation rate goes down to -2.7 in february 2016 Romania’s inflation rate went down to 2.7 percent in February 2016 after ending 2015 at -0.9 percent, according to the National Institute for Statistics. The monthly average inflation rate for the first two months of 2016 was -0.5, compared to 0.4 for the same period in 2015. Furthermore, according to the

month ahEaD april SMEs how-to, 4th Edition for the fourth year in a row, Business review is organizing SMEs how-to, an event dedicated to providing fresh and relevant information for the SMEs sector. the event will bring together entrepreneurs, policymakers and SME support organizations from the private and public sectors, and will provide owners, entrepreneurs and managers with information on accessing finance and cost saving solutions. april 1 Vote by mail Starting with April 1st, romanians living abroad will be able to register on the Electoral registry with the option to vote by mail. the distance voting system will be used for the first time during this fall’s parliamentary elections. april 21, frankfurt ECB monetary policy meeting the Governing Council of the European Central Bank will be meeting in frankfurt, Germany, to discuss its monetary policy. this will be the first such meeting after the ECB decided last month to increase its monthly purchases under the asset purchase program by EUr 20 billion. april Changes in rCA regulations the Authority for financial Supervision’s bill to change the rCA (car insurance) regulations is set to be adopted mid-April, and could mean higher prices for drivers with fines, especially those for speed or running a red light. the new regulations would also allow for the rCA to be paid for in instalments.

most rEaD www.business-review.eu 1 romanians strike back at Bernie Sanders over internet speed comment

2 nine out of 15 cities with fastest broadband internet in the world are in romania

3 Billionaire ‘Beny’ Steinmetz, shareholder in rosia Montana miner, wanted by romanian prosecutors

4 romania is 13th among global wine producers

5 ‘Son of Saul’, starring romanian actor Levente Molnar, wins oscar

www.business-review.eu Business Review | March 2016

consumer price index (CPI) prices went down in February 2016 by 0.24 percent compared to January 2016. The weight of goods and services for which a price fall was observed was 59.3 percent yearon-year, further adds INS.

monEY romania’s debt sales surge in 2015 with npl transactions totaling Eur 5 bln In 2015, non-performing loan (NPL) portfolios worth in excess of EUR 5 billion were sold on the Romanian market, a KPMG’s European Debt Sales Report shows. Though the year was slow to start, with a number of major deals failing, the year-end brought positive signs, with noteworthy deals closing. Examples include BCR which sold EUR 1.2 billion in bad loans held by corporate clients and SMEs to a consortium formed by Deutsche Bank, APS and IFC while UniCredit sold a EUR 400 million portfolio to Kredyt Inkaso. Other deals are on the way to being ﬁnalized and signed in the ﬁrst quarter of 2016, said Razvan Nan, associate director, deal advisory, KPMG Romania.

onlinE romania ranks last in Eu digital index Romania has an overall score of 0.35 and ranks 28th out of the 28 EU member states in the Digital Economy and Society Index 2016. More people have subscribed to broadband networks compared to last year, also thanks to its good quality, but low levels of digital skills and trust seem to be holding back the development of its digital economy. The use of Internet increased mainly thanks to a higher participation in social networks. Romania’s businesses on the other hand need to better exploit the possibilities offered by social media, on-line commerce and cloud-based applications. The share of users interacting with public authorities has increased but it is still the lowest in the EU.

propErtY skanska to build new 12,500 sqm hQ for lidl German grocery chain Lidl will open a new oﬃce building and a store in Bucharest in partnership with construction company Skanska. The class A project will be located in northern Bucharest and will comprise of two buildings with four and six stories, respectively. The construction works have started this January and should be completed by May 2017, according to estimates of the retailer. Lidl said its oﬃces will cover 12,500 sqm, while

nEWs 5 its store will span another 2,400 sqm.

afi Europe romania sees 8 pct rise in income in 2015 y-o-y AFI Europe Romania reported a net operating income (NOI) of more than EUR 40 million in 2015 from its income producing assets in Romania, according to a press release by the company. The results were 8 percent higher than the values registered in 2014. AFI Palace Cotroceni Shopping Mall in Bucharest, the company’s largest and most important asset, generated an NOI 3 percent higher compared to 2014, reaching close to EUR 31 million in 2015. During the last quarter of the year the shopping center brought in EUR 8 million for the company.

rEtail altex reports 30 pct turnover growth in 2015 Altex Romania saw an increase of 30 percent in its turnover in 2015, going from EUR 322 million in 2014 to EUR 433 million at the end of last year, according to company representatives. Moreover, of its sales of around 20,000 products per day, 20 percent came from online sales. In terms of the best sold products, black goods (TVs) took the top spot, followed by IT equipment, telecom and entertainment gadgets.

it retailer flanco proﬁt hikes 3.8 times in 2015 y-o-y Romanian IT retailer Flanco posted in 2015 a proﬁts 3.8 times higher than in 2014, reaching RON 8 million (EUR 1.8 million), according to company data. The company’s turnover also reached a record level of RON 777 million (EUR 174.3 million), 17 percent higher than the numbers registered during the previous year, of RON 663 million (EUR 148.7 million). For 2016, the company aims for a 20 percent advance in sales, on a market that is forecasted at a 12 to 14 percent growth.

tourism turkish businessman buys romanian tour operator prestige tours Mustafa Kadiroglu has taken over local tour operator Prestige Tours from Spanish investment fund GED Capital, Prestige Tours representatives oﬃcially announced this March. The value of the transaction has not been made public. Kadiroglu owns Calypso Tour which has partnered with the Romanian tour operator for its operations on the Turkish market for over two years. Following the takeover, the new owner plans to increase local business considerably and says that it expects its number of charter tourists to skyrocket from 6,000 last year to 20,000 in 2016, Turkey being the tour operator’s main destination.

Who’s nEWs br welcomes information for Who’s news. submissions may be edited for length and clarity. get in touch at simona.bazavan@business-review.ro

Dan bulucea currently country director of Google romania, will take over the new position of new business for the Asia Pacific region at Google, effective starting June. he will still be leading the romanian office until a new country director is appointed. Bulucea will be based at Google’s office in Singapore, and is in charge of developing new business opportunities in the Asia-Pacific region, from Japan, China or india to Australia and new Zealand. he has been developing Google’s presence in romania and the local strategy ever since the local office opened in 2010. Bulucea came to Google from Microsoft where he worked as business and marketing director between october 2006 and May 2010.

Yves caracatzanis will be the new general director of the renault romania group and dacia, replacing nicolas Maure, who will become the president of Avtovaz, russia, the company has announced. Caracatzanis, 51, is an engineer, a graduate of Ecole Centrale de Paris. he started his career with the consultancy ﬁrm Bossard Consultants, then at hewlett Packard. in 1992, Caracatzanis joined renault as head of the logistics organization project. in 2005, he became director of the renault Group engineering vehicle prototypes. in 2008, he participated in the creation of the group’s supply chain division (logistics), becoming its director in 2010. he has been the industrial and supply chain director for Eurasia since 2013.

cristina filip is the new managing partner of Pelifilip, after francisc Peli completed his mandate at the helm of the law ﬁrm. this change is the result of partner level elections

taking place every three years. francisc Peli will take over business development responsibilities within the ﬁrm. Cristina filip specializes in corporate work, including mergers and acquisitions, joint ventures and commercial contracts. She has been involved in numerous corporate transactions including M&A, joint ventures, private equity transactions, privatizations, corporate ﬁnance deals and corporate reorganization. filip holds an extensive background in the energy sector.

Jim kearney has been appointed by UPS as country manager for romania, hungary and Greece. Kearney takes over from tim helsen, who is assuming the position of UPS country manager in the netherlands. Kearny, who has been working with UPS for 27 years, will manage some 650 employees in his new position and will handle UPS’s operations, business development, and strategy across the three countries. Kearney started his UPS career in 1989 as a billing clerk in UPS’s UK ﬁnance & accounting department, based in London. Most recently, in 2013 he became UPS East Europe district Authorized Service Contractor director, working out of ireland. Kearney holds a professional accounting qualiﬁcation from the Chartered institute of Management Accountants (CiMA).

marius persinaru has been appointed Schneider Electric romania country president, taking over the position from florentina totth, who became the segment and strategic clients vice president for European operations. With over twelve years’ experience in the it&C industry and experience in sales, marketing and general management, totth has been part of the Schneider Electric romania management since 2010. Persinaru, has joined the Schneider Electric team after a 17-year career with Xerox.

www.business-review.eu Business Review | March 2016

6 rEal EstatE

Developers kick start office projects in center-west bucharest Several office projects are now in the pipeline in the center-west part of Bucharest, confirming real estate consultants’ previous forecasts that the area will turn into a new office pole for the capital. All in all, over 200,000 sqm of office space are scheduled to be completed in the area by the end of 2018, Br found out.

The road west: the proximity with the Polytechnic University and its nearby campus is one important selling point for center-west Bucharest

∫ simona baZavan Forte Partners, a consortium of real estate investors that begun works on the first phase of a EUR 100 million office scheme in the Grozavesti area of Bucharest this February, is the latest developer to start a project in this part of the capital. After real estate consultants have been talking for several years now of center-west Bucharest becoming a new “office pole” on the city’s map, now projects are finally in the pipeline. “Indeed, the center-west part of Bucharest or more precisely the Grozavesti-Politehnica area, is in full development. High demand for office space coming from IT&C companies for whom the proximity to the university campus is very advantageous, has boosted this development,” Mihai Paduroiu, head of office agency with CBRE Romania told BR. The proximity with the Polytechnic University and its nearby campus is one important selling point for the area, especially when considering that IT companies and BPO players are the

main potential future tenants. “What shapes up to be a new office pole in Bucharest could reach up to 20,000 employees. The nearby university will definitely make the area interesting for IT&C but we also expect to attract companies active in financial services,” Ramona Marusac, associate director

oﬃce agency with Colliers International told BR. As such companies ﬁnd themselves competing against one another to attract and retain employees, the easy access the area offers to public transportation such as the subway is another advantage central-west Bucharest boasts.

Thirdly, there is the area’s good track record. The investors’ increased interest in the area can also be explained by the fact that Afi Park, the office project developed by Afi Europe, one of the first office developers in this part of Bucharest, has been a successful one, Maria Florea, head of of-

office pipeline for center-west bucharest project

Developer

gla (sqm)

status

completion date

orhideea towers

CA immo

36,000

in construction

2017

the Bridge

forte Partners

36,000

in construction

2017

Business Garden

Vastint

41,500

Planned

2018

Afi Business Park (inox)

Afi Group

20,000

Planned

2018

orhideelor 46

forte Partners

37,000

Planned

2018

Pumac i&ii

Skanska

40,000

Planned

Cotroceni ofﬁce tower

Primavera development

25,000

Planned

Source: dtZ Echinox

www.business-review.eu Business Review | March 2016

fice agency-contractor JLL, told BR. The vacancy rate in the area is below the average, standing at 4.5 percent at the end of 2015 according to CBRE data and headline rents are in the area vary between EUR 12 – EUR 15/sqm/month, in line with levels elsewhere in Bucharest. Last but not least, other parts of the capital which have been highly sought-after by office developers are now getting crowded, thus favoring a shift to new spots, added Florea. Of the 325,000 sqm of office space which are scheduled to be delivered this year in the capital, about 60 percent are part of office projects located in the Barbu Vacarescu and Dimitrie Pompeiu areas, Mihaela Galatanu, head of research with DTZ Echinox told BR. This will change next year when CBRE estimates that 46 percent of new deliveries will be in the western part of the city. Forte Partners, CA Immo, Vastint and Skanska are the developers who have announced projects in the area and the first two have already begun works. Vastint secured a building permit for its office project at the end of last year while Swedish developer Skanska bought 2.1 hectares part of the former Pumac industrial platform this January. The availability in the area of former industrial platforms like Pumac is another factor that is making real estate investors consider the area, added Marusac. All in all, real estate consultants expect this increase interest in the area to take the form of over 200,000 sqm of office space to be delivered until the end of 2018. “If all the projects that have been announced for western Bucharest will be delivered over the next three years, then the modern office stock for this area (e.n. for the entire western Bucharest, not only center-west) could reach 583,000 sqm, up by 115 percent compared to the present level of 272,000 sqm,” said Galatanu. Further on, growth could be toned down by what could become a crowded area. “There is still land left that could be used for office development, but given the high number of projects that are scheduled for the next years and which in turn will lead to an abrubt increase of the office offer, developers have somehow become more reserved in considering centerwest as possible location,” concluded Florea.

Who’s started works EUR 60 million will go into the ﬁrst building of The Bridge, the oﬃce project Forte Partners has started in the area earlier this year. It will have a gross leasable area (GLA) of over 36,000 sqm and is scheduled for delivery in September 2017. Some 30 percent of this is covered by private equity and the developer says it is in advanced negotiations to secure a bank loan for the rest of the sum. So far, Forte Partners hasn’t signed any pre-lease but says it is negotiating

rEal EstatE 7 with several potential tenants from industries such as IT or financial services and shared service centers, said Geo Margescu, the CEO and founder of Forte Partners. After the first building will reach a pre-lease of about 50 percent, the company plans to start construction of the second building which will increase the project’s total GLA to over 56,000 sqm. The Bridge is developed on a 12,700 sqm plot of land which Forte Partners bought in 2014 from Spanish developer Hercesa and which is located close to the Carrefour Orhideea commercial center. Forte Partners shareholders include Ionut Dumitrescu (founder of Eurisko, a Romanian real estate agency sold to CBRE,) Geo Margescu (whose name is linked to projects such as Europolis Logistic Park, the headquarters of Millennium Bank and the Louis Blanc office building) and Jabra family (founders of Nova Brasilia business sold to Kraft Foods.) In the immediate vicinity, Austrian developer CA Immo is building another office project, Orhideea Towers. Asked about the competition, Margescu said there is room for both projects given the high interest potential tenants have in the area due to its good connectivity to the public transport network. The Austrian CA Immo started construction of the 37,000 sqm (GLA) Orhideea Towers in October last year and the developer says it is ready to move into the next phase in March this year. Investment will reach EUR 75 million and the two office buildings are set to be delivered in 2017. CA Immo already owns five office buildings in Romania with a gross leasable area of 106,000 square meters. When it comes to developers who are already present in the area, Afi Europe, the first to start an office scheme in this part of Bucharest, has reported positive results for its project. The AFI Park 4&5 office building has reached a 60 percent occupancy rate after signing a leasing agreement for 1,800 sqm with FotoNation, Afi Europe announced earlier this year. Over the next months the developer expects to fully lease the building, according to company representatives. AFI Park 4&5 (32,000 sqm GLA) is the last phase of AFI Park, a 70,000 sqm (GLA) office project located near the AFI Palace Cotroceni shopping mall (82,000 sqm GLA), AFI Europe’s flagship project in Romania. Among the new tenants in AFI Park 4&5 are companies such as Cameron, SII Romania and ORTEC Central & Eastern Europe. The developer boasts with the office park attracting mainly IT players. Other tenants in the project include Electronic Arts, Conglomerate TELUS International, UK-held Endava Romania, Microchip Technology, Sparkware Technologies and Cameron Romania, part of US Cameron Group. simona.bazavan@business-review.ro

apartment asking prices exceed Eur 1,000/sqm first time in 4 years Apartment asking prices increased by 4.5 percent on average this february m-o-m, thus surpassing the EUr 1,000/sqm threshold at national level for the ﬁrst time in four years, according to data from online real estate platform imobiliare.ro.

∫ simona baZavan By comparison, the increase stood at 2.1 percent in January. Apartment owners asked on average EUR 1,051/sqm for their properties at the end of February compared to EUR 971/sqm at the end of January and EUR 924/sqm in February 2015. Asking prices increased throughout the country, Bucharest leading the way with an average monthly increase of 3.3 percent this February (EUR 1,089/sqm) and a y-o-y hike of 5.3 percent, according to the same source. The average increase rate stood at 1.5 percent for “old apartments” (mostly apartments located in blocks built before 1990) reaching an average of EUR 1,044/sqm and 4.9 percent for new properties (EUR 1,123/sqm.) Elsewhere, prices increased this February (m-o-m) by 3.2 percent in Brasov (EUR 912/sqm,) 3 percent in ClujNapoca (EUR 1,186/sqm,) 1.9 percent in Timisoara (EUR 970/sqm,) 1.6 percent in Constanta (EUR 930/sqm) and 1.3 percent in Iasi (EUR 888/sqm). Real estate agents have been talking about an increased number of transactions with residential properties this

past month following uncertainties regarding the future of the Prima Casa state-guaranteed loan program and the ﬁnal outcome of the ‘passing to pay’ law. The program has a maximum guarantee budget of RON 1.5 billion (approximately EUR 330 million) for 2016, down by almost half against the previous year’s level. This has prompted many potential buyers to speed up the acquisition process, say real estate agents. Moreover, should the ‘passing to pay bill’ pass into its present form, it would the spell the end of the Prima Casa program altogether. The law would enable the discharge of mortgage-backed debts through transfer of the property to the creditor and is presently being reexamined by the Romanian Parliament. The increase in asking prices comes after, in 2015, some 11,000 housing units were delivered in Bucharest and the surrounding Ilfov County, a record in the last ten years, according to Mediafax which cites data from the National Institute of Statistics. Countrywide, about 47,000 housing units were delivered last year, up by ﬁve percent against the previous year, according to the same source. simona.bazavan@business-review.ro

www.business-review.eu Business Review | March 2016

8 rEal EstatE

swanky address: premium residential market ready to soar Some 550 new premium apartments are scheduled for delivery in Bucharest in 2016 and 2017, more than double the previous two years’ volume, according to data from real estate services ﬁrm dtZ Echinox. After years of tepid growth, there is now a clear upward trend, says the company.

Early start: 40 percent of the 550 premium apartments scheduled for completion until the end of 2017 have already been purchased

∫ simona baZavan Only 30 percent of the premium apartments delivered in the past two years in Bucharest are still available for sale while 40 percent of the 550 units scheduled for completion until the end of 2017 have already been purchased, according to DTZ Echinox data. The higher pipeline is partly the result of fewer projects being started in the years following the burst of the real estate bubble. On the other hand, now there is a clear increase in demand which started picking up last year and is fueling the overall optimism in this niche market, believes Mihaela Pana, partner residential agency with DTZ Echinox. “In 2015, we saw an increased appetite coming from both developers and buyers and this trend maintains in 2016. This year we see that the market starts to resemble the one we had in 2006 and 2007 when it comes to off-plan acquisitions. This already happens and there are projects that have been already sold up to 80 – 90 percent, despite the fact that constructions are in the structure building phase,” she explained. Not only that, but the market is once again bubbling to the point where such buy-

ers chose to sell the their properties in six months’ time at a proﬁt, she added. All these projects are in consecrated areas such as Primaverii, Kiseleff, Aviatorilor, Dorobanti, Herastrau or Aviatiei, in northern Bucharest. “What makes a residential development premium? Above all is the location. There are areas such as Primaverii where more than half of the per square meter price – which is the highest in Bucharest at EUR 3,500/sqm - is paid for the location alone,” explained Pana. The most active areas in terms of new developments are Herastrau, followed by Aviatiei and Floreasca, according to DTZ Echinox data. This is not surprising, given that over 100,000 people were working in this part of the capital at the end of last year, says the company. A lower development activity is recorded in Dorobanti, Aviatorilor and Kiseleff, mainly due to the low land availability and a higher number of buildings which are under monumental protection. Judging from the number of projects scheduled so far, the highest number of premium residential apartments available for sale - about 86 percent - are located in projects that are due to be completed in 2016. On the other hand, the availability of premium residential

units scheduled for completion in 2017 is lower, with only 48 percent being available for sale at the end of 2015. Developers investing in premium residential projects are local companies, the majority of whom have a long trackrecord in this segment. Confident in the market’s growth trend, they are mostly putting in their own funds for starting such projects. “For smaller projects of up to ten apartments, they invest their own money and, more recently, they can also use off-plan sales for financing,” explains Pana. Several of the projects now under construction and larger scale, meaning they feature around 100 units, but even in this case developers opt for similar financing plans. “Some may secure financing from the bank, but this is usually to be used only if needed. Overall, financing conditions remain cumbersome and many avoid dealing with banks,” she added.

more sophisticated buyers With prices ranging between EUR 100,000 for a one bedroom apartment of at least 75 sqm, and well above EUR 600,000 or EUR 700,000 for larger units, there are a limited number of potential buyers on the Bucharest premium market.

On one hand there are the end-users, mostly top-earning young families of both expats and locals, in their thirties and forties with up to two children. Secondly, there are the investors, for whom buying an apartment and renting it offers a better return than keeping their money in the bank. “Since last year we have seen this appetite to invest in premium apartments’ return for the ﬁrst time after about six, seven years. This also comes as banks have signiﬁcantly lowered interest rates, leading many to turn to real estate investments,” said Pana. The ratio between the two categories is somewhat equally split and they all prefer to buy the properties using own funds rather than bank loans. One difference is that investors are mostly looking at smaller apartments, usually one-bedroom units, with a price tag of between EUR 100,000 and EUR 400,000 which, at a monthly rent level starting at EUR 550 – EUR 600, offer a yield of about six to seven percent. Demand for renting such properties in areas like Aviatorilor and Herastrau is presently higher than the existing offer, given the limited number of projects delivered in the past years, she added. Larger and more expensive properties

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Mihaela Pana, DTZ Echinox on the other hand, are being almost exclusively bought by end-users as they offer investors less attractive yields. Demand is on the rise from both these categories and, while the overall enthusiasm and growth may have a bit in common with pre-crisis times, one signiﬁcant change is that today’s buyers are much more demanding and sophisticated than in 2006 or 2007, says Pana. For one they are no longer interested in large apartments but in smaller ones that make good use of the available space, hence the new preference for one-bedroom units, much unlike before.

rEal EstatE 9 Developers are taking note and adapting to this as the vast majority of the projects under construction presently feature such units. Some 60 percent of the premium apartments scheduled for completion in the next two years fall into this category. Moreover, compared with the stock delivered between 2014 and 2015, the number of one-bedroom apartments currently under construction is six times higher, shows DTZ Echinox data. “They also look at things such as the materials the developer uses, the quality of furnishings and the overall facilities the condominium offers. A buyer that is willing to pay EUR 500,000 for an apartment in 2016 thinks completely different from how one thought in 2006,” she adds. A signiﬁcant change is also the fact that buyers pay more attention to costs – such as utilities and costs with the maintenance of common areas something that didn’t necessarily happen in 2006 and 2007, she explained.

the new swanky addresses The luxury residential market is a par-

ticular one, with a rhythm of its own, say pundits. There are a limited number of prospective buyers, few developers and even more limited room for new developments in the already consecrated high-end residential areas of northern Bucharest. “After these two years we will draw the line and see that there will be limited potential left to develop similar projects in the same areas over the following period,” says Pana. So as these areas get even more crowded and land for new developments is becoming even scarcer, what new areas promise potential? “There will continue to be investments in this segment but the pole will somehow shift. Developers will move towards the Calea Floreasca and Barbu Vacarescu areas where there is potential for development and where presently there is plenty of available land,” she added. Not only that, but what makes this are of particular interest is the high number of oﬃce buildings and high concentration of corporate employees. Thereby, also a high number of potential buyers and tenants who, judging from the data

Yields by investment value

average sales prices for premium apartments neighborhood

average price (Eur/sqm)

Primaverii dorobanti Kiseleff Aviatorilor floreasca herastrau Aviatiei

3,500 3,000 3,000 2,000 1,950 1,900 1,800

Source: dtZ Echinox

average built surface for apartments with delivery in 2016-2017 type of apartment surface (sqm) 1-bedroom 2-bedroom 3-bedroom Penthouse

65 - 100 90 - 150 120 - 290 250 – 370

Source: dtZ Echinox

investment value (Eur)

monthly rent (Eur)

Yield

100,000 400,000 – 500,000

550 – 600 2,000 – 2,500

6 – 7% 6%

available today, will fuel further growth for the local premium residential market.

Source: dtZ Echinox simona.bazavan@business-review.ro

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10 inDustrY rEport

real estate growth to further boost furniture sales this year the romanian furniture market - estimated at over EUr 750 million - has resumed growth for a couple of years now and there are encouraging signs that the trend will maintain in 2016 as well, say industry representatives. As in the years before, the pick-up of construction works on the residential and office segments is the main engine behind this evolution, with an additional boost coming from increased consumer confidence. ∫ simona baZavan The overall positive evolution of the furniture market in 2015 made many local players feel like this was the year when they could finally ‘breathe’, Alexandru Rizea, the general director of local furniture manufacturer Lemet, told BR. The pick-up of the residential and office markets was and will continue to be an important growth engine for the local furniture market after years of decline in the aftermath of the real estate crash. “We are seeing an impressive growth of the number of real estate projects, especially in the mid-scale segment, meaning new apartments with surfaces of up to 100 meters and prices of up to EUR 100,000. This obviously has a direct impact on sales of furniture and decorations,” Dan Sucu, the president of the Mobexpert Group, one of the largest furniture players on the local market told BR. Some 47,000 new apartments were delivered in 2015 throughout the country, the highest level since 2010, according to data from the National Institute of Statistics. Real estate consultants are estimating that the growth will maintain in 2016 as well, further fueling the business of local furniture manufacturers. Another important factor behind this overall positive evolution has been and will continue to be the increased consumer confidence. “The VAT cut in

mid-2015 and the one this January, alongside salary hikes and the interest rate drop have increased the purchasing power. There is a certain consumer optimism after years of thinking that tomorrow will not get any better. This context encourages consumers to resume investing,” added Sucu. All this indicates that 2016 will be another positive year for the local furniture market, say industry representatives. “We expect to see further development of this positive trend - consumption will continue to grow because people have started to invest again in consumer goods, especially for medium term investments like furniture,” Akos Forras, the country manager of furniture retailer Kika Romania told BR, adding that overall, he expects the market to have in 2016 a similar dynamic to last year. Mobexpert Group’s head estimates this growth at 10 percent. And this positive outlook should reﬂect in companies’ 2016 results. “We closed 2015 with a 12.5 percent increase and I believe that for 2016, any result below 15 percent would be a non-performance given the present market conditions,” he added. The company plans to resume investments and open four large-scale stores as well the expansion of the Mobexpert outlet network this year. “We will also to continue to invest in the online business where we see great growth potential in the years to come,” said Sucu. After posting a double digit growth

furniture manufacturers in numbers Year

2014

2013

2012

Combined turnover (ron bln)

9.3

8.5

7.5

number of active companies

4,396

4,368

4,364

number of employees

63,224

61,129

58,175

2013

2012

Source: iCAP

furniture retailers in numbers

Photo: Kika

Year

2014

Combined turnover (ron bln)

4.3

3.9

number of active companies

3,525

3,444

3,378

number of employees

13,207

13,367

13,083

Source: iCAP

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inDustrY rEport 11

in 2015, Kika expects similar results for office segment soars ahead this year as well and says that it is With office space deliveries going up ready to invest in opening new stores over the past years and many compain addition to the unit it operates in nies in the process of relocating, the ofwestern Bucharest. Elsewhere, Lemet fice furniture segment has been posting too has budgeted growth. In 2015 it positive results for the past years. posted a EUR 63 million turnover “Since 2014, The Romanian office furniwhich was up by 9.4 percent y-o-y, and ture and fit-out market is experiencing it expects a similar evolution for this accelerated growth. 2015 confirmed it and we look at 2016 and 2017 to keep year. doing so,” Christophe Weller, managing more demanding customers partner of Corporate Office Solutions The average budget that Romanian (COS), told BR. This positive trend has also been recustomers are allocating for furniture acquisitions has been constantly grow- flected into the company’s turnover. ing over the past few years while at the COS posted an all-time record level of same they are also better informed sales of EUR 16.2 million in 2015 and and tend to invest in quality and com- plans to increase the level by 25 percent to EUR 20 million this year. “The delivfort, says Kika’s country manager. “Consumers are well informed, ery of a large number of Class A office don't have much time for shopping space in 2016, along with the wish of and therefore are looking for quality many companies to relocate to new faproducts, fast and efficient solutions cilities and the entry of newcomers in and, most of all, a fair value for money,” Romania offer this larger potential,” exadded Forras. The retailer says it has plained Weller. Indeed, a whopping level of some adapted to this by constantly upgrading and diversifying its services, be it 360,000 sqm of office space is schedprofessional counseling or comple- uled for delivery this year in Bucharest mentary services such as delivery, fur- as part of 17 office projects, say real estate consultants. This level is the highniture assembly or curtains’ sewing. The average purchase value in est since 2009 and is good news for Lemet’s stores has also been increas- companies offering office furniture soing on a yearly basis as the manufac- lutions. Growth also comes from comturer has been upgrading its product panies that are upgrading their office as lines from economy to premium. “The a means to attract and retain employees. furniture that is now being sold in the “The workplace is now considered as a Lem’s stores and which is being man- key element in developing and retainufactured in our factory in Brebu cov- ing talents and boosting employee eners all these segments and options,” gagement. Companies are fully aware said Rizea adding that the average pur- that the office space needs to be offering chase value for furnishing a kitchen its well-being to the employees, in order for them to perform better and feel customers make is about EUR 1,250. Mobexpert’s head also talks about happy at work,” he added. Some global an increased number of customers. trends in office design that are already “We have today customers who up until applying in Romania include a focus on now didn’t consider Mobexpert as a acoustics alongside the interior design place from where to buy their furni- itself and solutions to help employees ture. The fact that we produce locally maintain focus. Physical activity as well in our own factories two thirds of the as simply standing up can help bolster products we sell in our stores allows us creativity so the use of standing-height to adapt to the customers’ demands – furniture or ergonomic chairs designed smaller furniture pieces, better fitted for mobility are another trend. for apartments of up to 100 meters,” concluded Sucu. simona.bazavan@business-review.ro

Dan Sucu, Mobexpert Group

Christophe Weller, COS

top 10 furniture companies in romania based on 2014 turnover (ron) ranking

company

2014 turnover

2013 turnover

2012 turnover

Employees (2014)

county

Johnson Controls romania*

1,460,796,608

1,627,526,538

1,295,437,947

4,163

Arges

Aramis invest

567,145,182

546,503,795

505,910,724

2,845

Maramureş

taparo

306,231,076

299,763,728

270,592,611

891

Maramures

italsofa romania

303,210,340

311,734,360

318,003,800

1,344

Maramures

PGS Sofa&Co

257,961,859

186,181,163

147,936,797

984

Bihor

Ecolor

234,891,390

185,984,584

115,556,660

463

Cluj

Cotta international

203,586,977

208,276,868

200,974,123

628

Arad

Sortilemn

199,743,569

155,741,872

130,979,496

1,375

Cluj

Ada fabrica de Mobila

197,175,316

148,683,170

132,072,895

825

Bihor

Plimob

180,179,193

160,623,402

152,951,774

1,487

Maramures

Source: the national trade registry ofﬁce – onrC *the company produces car seats but is still included by onrC among furniture manufacturers

12 COVER STORY

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Photo: Craita Frunza/ Luminatory ceiling from Architects Union of Romania

Breathing life back into our patrimony

The new technocrat government has come with significant changes, among which is a special focus on what’s happening regarding our national heritage. It seems that collaboration between ministries and institutions has positively developed and they are trying to preserve and protect whatever is left nationwide by finding concrete solutions and hiring key-persons to make it work. BR dug the field with the specialists to find out what still stands and what’s going to be changed.

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COVER STORY 13

∫ OANA VASILIU To talk in concrete numbers, on the ofﬁcial and recently updated List of Historical Monuments there are 30,148 monuments nationwide. Since 2010, only 49 monuments have been decommissioned, while 644 new ones have been put on the list. From a structural viewpoint, the monuments are grouped according to their nature: architectural monuments, public monuments and funerary monuments and memorials. At the present time, Vlad Alexandrescu, the Ministry of Culture, announced almost 600 monuments which are in a collapse or pre-collapse state, but the situation might be much worse, as no one has made an oﬃcial inventory of the state of these sites.

The political promises According to the current National Defense Strategy for 2015-2019, one of the objectives of national security concerns promoting national identity through preservation and valorization of cultural and natural heritage. But how has it worked so far? After the terrible fire that took place on October 30, 2015, the political government was changed with a technocrat one. The current Minister of Culture, who has in his portfolio the national heritage among others, has made some significant changes and the promises are that he will continue to fight for saving and preserving what is Vlad Alexandrescu, the Ministry of Culture left of the monuments. For 2016, the budget of the Ministry of Culture is around RON 773 million (EUR 171 million), meaning 0.1% from the country’s GDP. Although it’s quite small, the amount has increased significantly from 2015, by almost 26 permonuments nationwide classified on the Historic Monument List cent. Regarding the national heritage and patrimony, in five months, Vlad Alexandrescu has managed to undergo some significant changes. The National monuments in Bucharest Institute of Patrimony has a new director, currently in charge, architect Stefan Balici from January 2016, while the institution is directly subordinated to the Ministry of Culture. Through this instimonuments in Cluj county tution, Romania is given funding for monuments that need restoration – but only for those which are state-owned or religious cult-owned and the budget is quite limited for the actual needs. For this year, the Restoration of Historical monuments in collapse or pre-collapse nationwide Monuments National Program’s budget is RON 50 million, and the amount doubled from last year, as Stefan Balici explained to Business Review. Currently, on the restoration list are 160 monufor the Restoration of Historical Monuments National Program ments, and for some of them, construction hasn’t started yet. Moreover, *according to the National Institute of Patrimony nationwide there are 50 active construction sites. But the major problem now is that the institute doesn’t have an emergency budget in order to make in an advanced state of degradation. him, the state should direct 0.2% of the rapid interventions on those sites “This would be similar to the National GDP, meaning EUR 342 million each where the buildings have collapsed. Pact for Defense, which was signed last year especially to the restoration of Vlad Alexandrescu decided to propose year by the major political parties at local heritage. “Basically, the pact to the president a National Pact for Pat- President Klaus Iohannis’ initiative,” started from the principle that we have rimony to direct funds for monument explained the minister in an informal in the National Defense Strategy the buildings that are collapsing or that are meeting with the press. According to patrimony as a national security objec-

30.148 2651 1791 600

only RON 50 million

tive and we should take proper care of it,” added Alexandrescu at the same meeting. The idea is that the pact should be applicable to anyone in charge of the institutions directly involved, regardless of the governing party. The initiative has come up after two historical buildings collapsed in Brasov county at the end of February and they didn’t have an immediate solution for restoring the sites. Moreover, Vlad Alexandrescu has proposed a new commission of 18 specialists for writing the new Code of Patrimony. This code has already been on the Minister of Culture’s list since 2007, but no further actions have been made until now. This commission gathers part of those who already worked on the drafts of the code, as well as other independent specialists. One important chapter of this Code of Patrimony will be dedicated to sanctions, while the legislation is too evasive at the present being. The minister also nominated another person, Irina Iamandescu, to rewrite the UNESCO file regarding Constantin Brancusi’s ensemble and hopes are that by 2017, Romania can re-propose the monuments on the world’s heritage list. Regarding this collaboration between institutions, an interesting situation came up in December 2015 in Cluj Napoca. Hintz House, also known as the Pharmacy Museum, which exists since 1573, being the first pharmacy in Cluj, was almost in the situation to close its doors as the owners wanted to sell it. Its value was estimated at EUR 2 million, notes local portal Gazeta de Cluj, and due to the importance of the place and the impressive collection which is hosted by the Pharmacy Museum, the Ministry of Culture decided to buy the entire building. After negotiations with both government and local authorities, the solution came from the city mayor of Cluj-Napoca, Emil Boc, who will buy the building in order to maintain the museum, as the Minister of Culture recently confirmed. “With diplomacy and negotiations, we managed to save the monument. Neither us, nor the government had the budget to buy the house, so we convinced the mayor to do it. This is how we want to collaborate with the local authorities because the ministry’s budget is so small that we can’t do many things,” explained Vlad Alexandrescu publicly.

The Patrimony seen through specialists eyes BR wondered how a specialist sees the current situation regarding the national patrimony so we talked with the restorer Elena Martin. “In Bucharest, and not only here, the state of conservation of these heritage buildings is evident, some silently disappearing from the urban landscape, others turn into pages of history of kitsch. What intrigues me personally is the unfortunate association between old and new buildings, which are very tall, with an inappropriate height. Neighborhoods become a

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14 COVER STORY

“The biggest losses are those modest houses forgotten by all of us who treasure hidden heritage; the biggest losses are actually represented by our inability to understand that in this way we lose our identity. I do not know which the biggest loss is, but we lose when we forget, we destroy, we are indifferent” says Elena Martin, restorer.

Among the potential tenants interested in such buildings are embassies, cultural institutions, marketing and advertising companies, consultancy firms, law firms, medical clinics, private educational institutions and other companies operating in the field of professional or personal services," says Alexandru Petrescu, managing partner ESOP Consulting / Corfac International. A pioneer on this market was the Romanian investor Ion Lazar, who renovated the old Glucose Factory and transformed the historical building

into an office building 20 years ago. The first tenant was Unilever, which signed a 15 years contract, explains the officials from ESOP. The ultimate property of this kind on the market is the one owned by FF Group Romania, located in the Magheru –Universitate area, with maximum visibility, with a total built area of 4,858 sqm. The building has two elevators, 24-hour security, CCTV, BMS, four pipe cooling systems with fresh air and central heating. Interior spaces are bright with a height of about 3 meters to the ceiling, specific to old villas, explains ESOP in the same press release. Also, Magheru One is an interesting case study for real estate. The building was renovated with a budget of EUR 20 million by S+B Gruppe, transforming it into a mix center, both office spaces and commercial areas. The building has 3,828 sqm and seven floors plus 80 parking spaces. Business Review also talked with

Photo: Mihai Constantineanu

Photo: Casa Mincu

Beautiful details

market. In the past three years, foreign and local investors have invested over EUR 100 million into these kinds of properties. For these properties, rent costs from EUR 12-18/sqm/month, specialists say. Among the investors are also specialized groups in real estate investments, such as NEPI, Global Vision, Iberia, Hercesa, S+B Gruppe. “Out of 2,058 historical buildings in Bucharest, meaning almost 926,100 sqm, a third, 277,830 sqm are renovated or work in progress and have commercial potential,” notes the ESOP Consulting ex-

Photo: Mihai Constantineanu

mix of new and old, cramped, bare, desperate to conquer each and every piece of land. Sure, Bucharest as well as other capitals needs to develop but I do not understand why this development practically swallows our history bite by bite,” explained the restorer to BR. When it comes to buildings which are under seismic risk, Elena Martin considers that a full package of measurements should be taken in order to prevent the collapse situations, with a special focus on the owner - if he doesn’t care about the monument, he/she should be sanctioned, otherwise they should be helped, if support is needed. Anthropologist Vintila Mihailescu makes some analogies for BR in order to explain what patrimony means. “In the countryside, in traditional societies, people still ask you “whose are you”. The question is relevant because it is still believed that this "whose are you" says something important about "who you are." The heritage is the modern answer to this question: tell me what heritage you have and I will tell you who you are. However, we should specify that this heritage isn’t the equivalent for the family you belong to, but the genealogy that you choose: Magheru One got its nip/tuck of over EUR 20 million heritage is part of the past that you identify with in the present being,” explains the anthropologist. “In these cir- “object” but also the context, the atmos- perts in a press release. cumstances, a piece of heritage does phere, the cultural and emotional sig"A centrally-situated property with not disappear along with its original nificance. ” valuable architecture is a medium to function; quite the contrary, it belong-term investment, which keeps its comes heritage if it has a present signi- The real estate business value in time. There is a good chance fication. Otherwise, a building, for According to ESOP Consulting, in 2015- of increasing the value of these propinstance, ceases to be heritage even 2016 there was an increase in the num- erties. As a trend, I noticed that in the though it is still functional. It becomes ber of investors interested in buying last two years larger buildings of over a non-time, in the same sense that we old historic buildings, from the prewar 1,000 square meters were chosen as an can talk about non-places: the social period, located in central areas, which investment, which required an inmemory, the identity significance, is they renovated to international stan- creased budget for renovation works, empty. Neglecting and destroying the dards, and introduced them to the which may serve mixed destinations. patrimony of a society can be considered as a condemnation to amnesia, thus leading to the dissolution of identity,” added Vintila Mihailescu. Asked the same question about the current situation of the monuments in Romania, the anthropologist declared that it is dramatic. “More dramatic is the fact that we don’t really know which is/were this patrimony. The patrimony is more than a sum of heritage objects listed; it’s almost a state of mind. This is why I prefer to name them “cultural passages,” which contain the physical

Stavropoleos Monastery

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COVER STORY 15

How the Brancusi ensemble didn’t get on the UNESCO list

Photo: Craita Frunza/ Attic from the Architects Union of Romania

“Paradoxically, an efﬁcient heritage policy begins with a vision of the future and not the preservation of the past. Consequently, a patrimonial policy - and not just a law for heritage should aim above all to stimulate the social memory by engaging in its common future construction” says Vintila Mihailescu, anthropologist.

Old attic becomes a new contemporary office space Brancusi’s Endless Column officials from the www.imobiliare.ro portal to find out what’s for sale and rent during this period of time. “Currently, there aren’t too many properties listed. We have 11 apartments in historical buildings and 18 villas for sale, respectively 27 properties for rent. What’s really impressive is the price, for example, we have a 15 room villa in the Unirii area which costs EUR 12,000 per month,” said Daniel Crainic, head of marketing & communications of www.imobiliare.ro “When it comes to investment, it depends on the purpose of the investment. What we should take into consideration is that at the end of a crisis period, the prices of the properties have split in half, and this happened also for these kinds of properties. Depending on the state of the building, the price, the geographic location, the investment is more likely to be profitable,” explained Daniel Crainic for Business Review.

to another time, provoke us to imagine the lives and the stories that were decanted into what we call "the personality" of a place. We believe that our readers from Carturesti bookstore situated in the heritage buildings come here also for the experience of discovering the space and for the immersion into other times,” adds Serban Radu. Asked about the disadvantages of having a business in such a building compared to rented spaces in shopping centres, Carturesti owner says that the most common are the ﬁgures related to traﬃc and the need to attract customers. In a mall, tenants have the security of a steady stream of customers.

Serban Radu, owner of the Carturesti Bookstore chain, opened up last year in an emblematic building, known as Chrissoveloni house, a new bookstore. “Jean Chrissoveloni, the owner, has invested in the restoration, while we were the ones who arranged the interior of the building, as previously agreed with him. I calculated that the team had exceeded 20,000 hours of work just for this project in 14 months and involved 75 people,” explained the owner to BR. “A heritage building adds texture to the living space of a brand. It leads us

Photo: Carturesti

The tenant’s perspective

editorial@business-review.ro

∫ OANA VASILIU Currently, Romania has seven sites listed on the UNESCO world heritage list, as follows: churches of Moldavia, Dacian Fortresses of the Orastie Mountains, historic center of Sighisoara, Monastery of Horezu, villages with fortified churches in Transylvania, wooden churches of Maramures and the Danube Delta. Several attempts have been made for other sites, but the most recent was in 2014, when the Ministry of Culture, with the support of the former Prime Minister, Victor Ponta, proposed the Constantin Brancusi ensemble from Targu Jiu (Dolj County) to UNESCO. However Romania withdrew the nomination almost last minute, in June 2015. Moreover, the decision came after the UNESCO committee suggested that the nomination is incomplete. But how had this happened in the first place? According to the national press, Romania has been trying to put the Brancusi ensemble on the world heritage list for 25 years now. The actual working file was started in 2011 and has cost, according to an investigation made by Romania Libera newspaper, over EUR 30,000. Former PM Victor Ponta also contributed to the file – in 2012, during the local elections, he used the ensemble’s symbols as marketing tools. A few months after the file was officially withdrawn, which happened in June 2015, Victor Ponta declared in a press conference at the opening of the academic year in Targu Jiu that “there

wasn’t enough political lobby. The committee was in Germany this year, they didn’t care about us. I thought that now Germany will love us, but they don’t,” the former prime minister explained the situation. The same investigation made by Romania Libera revealed also that one of the world’s specialists in Brancusi’s work, researcher Doina Lemny, who currently works in Paris at the Pompidou Centre, was disappointed by how the Ministry of Culture has handled this nomination. The Ministry asked her to write about the artist’s work – but they didn’t show her the final document. “I felt fooled,” declared Doina Lemny for the newspaper. Romanian mass-media has found the official document that was presented to UNESCO’s committee this summer. The language of the file is French, but according to all specialists and non-specialists, the text is poorlywritten and the information quality is poor and copy/pasted from public websites, even from Wikipedia, the free online encyclopedia. “I saw and I read the file regarding the nomination of the Brancusi ensemble to the UNESCO list. It’s a shame. If we can’t find a specialist in the entire Ministry of Culture who can write in proper French, then I’ll be the one who will rewrite the entire text,” declared the current Minister of Culture in an informal press meeting which took place recently. “Now we hired another specialist to take care of this specific file, Irina Iamandescu, who is fully in charge of reorganizing the information for the file,” added the minister of culture on the same meeting. On February 18, 2016, just before the commemoration of our great Romanian artist, Vlad Alexandrescu stated that the file will be completely rewritten, allocating adequate resources, including international experts and the necessary budgetary resources. “In these conditions, we expect as a possible formal submission of the file to UNESCO at the earliest in February 2018, with a submission for prior consultation with the World Heritage Centre in September 2017," wrote Alexandrescu on his Facebook page, where he makes most of the public declarations. Still, the subject is quite sensitive in terms of what to put on UNESCO’s list and which is the surface to be taken into consideration. The Constantin Brancusi Sculptural Ensemble at Targu Jiu pays homage to the Romanian heroes of the First World War. The ensemble comprises three sculptures: the Table of Silence, the Gate of the Kiss and the Infinity Column, on a 1,300 m (4,250 ft.) long axis, oriented west to east, passing through the city. editorial@business-review.ro

www.business-review.eu Business Review | March 2016

16 COVER STORY

Photo: Casa Mincu

Photo: Adi Balteanu

Study case: Assan Mill Study case: The Mincu (Moara lui Assan) House

∫ OANA VASILIU Owner*: the site is divided and unguarded, one part being in conservation (Solaris Company), and the other in liquidation (Graul Company), while the legal inheritors of the mill are still in litigation for the place. Address: Halmeu Street (former Silozului), no. 25 and Irimicului Street, no. 24 Date built*: The mill was built by Gheorghe Assan (1821-1866) and Ioan Martinovici (1820-1882) on a field bought by Gheorghe Assan from Epitropia Ghica, the property expanded by acquiring land from nearby residents. History of the mill*: Founded in 1853, Assan Mill is the first steam grain mill in Bucharest which was a reference moment for the Romanian industry development because of the technical instrumentation at the time of the construction and the technical and architectural quality of the stage construction buildings. The mill was a family business which, after Assan’s death, remained to his wife and then to their two children, who developed the factory. By 1895, nine other steam mills were available there. Soon after, in 1903, the mill was electrically equipped and the business was flourishing. Years later, in 1946, Assan mill had over 400 employees and had the latest technologies. Romania-insider.com portal writes that the Assan mill originally included 5.41 hectares, but it shrunk to 4.7

hectares as communist era blocks were built in the area. By that time, the property had already been nationalized – that happened in 1948. The same year, Basile Assan, then the sole owner of the Mill, was arrested, tortured and committed suicide while in Police custody. The Assan Mill compound served for production during the communist period, as a bread factory ‘Spicul’ and as the oil factory “13 December”. Current situation*: The main silo built in 1903 is kept with the original structure and decorations in brick and several other buildings dating from 1894-1950, in various states of degradation (from advanced degradation to ruin.) In the past years, a rushed semidemolition, two fires and a roof collapse has transformed the property into what can be seen now. The second fire, from June 2012, burned for 28 hours, Mediafax newswire notes – and the fire was set intentionally, as the official reports have revealed. Unfortunately, the building has been listed as a class A monument on the Historic Monument List since 2004, but it is located outside Bucharest’s protected area, which makes the situation difficult. Moreover, the surface of the mill has 47,000 sqm, and the land’s value is estimated to be EUR 1,000 / sqm. From the original buildings and settings, less than 20% has survived through the years. *information provided by Partnership for bringing Value to the Industrial Built Heritage in Romania Association

Owner*: Chamber of Architects in Romania

Address:

19 Pictor Arthur Verona

Street

Date built*: 1863-1877 by architect Gaetano Burelli Restoration completed in 2012, after two years of restoration; over 200 persons were involved, architects, restaurateurs and volunteers History of the house*: According to the official documents, the building had a unified design, characteristic of residential architecture in Bucharest during the second half of the 19th century. It initially took the form of an L-shaped, ground floor-only building, with one main volume reserved for the family and linked through a corridor to a secondary volume that held the annexes, notes Igloo architecture magazine. According to the Chamber of Architects in Romania (OAR), in 1890, Ion Mincu bought the house from Burelli and remodeled it. He redecorated the interiors, redid the facades and added an extra level to the annex volume. On this occasion, the facades were equipped with new frames for the windows and doors, belts and cornices, profiles and pilasters. Bronze chandeliers, "old sheepskin coats and Karamanlî rugs covering the waxed floors or hanging on the walls," paintings and wood-painted icons, stained-glass windows and mirrors with frames of maple sculpted in Arabian motifs, sofas and armchairs, oak paneling and ceilings crossed by wooden beams, walnut furniture and many other precious objects, were all making up the interior imagined by Mincu for his family's benefit.

The restoration process*: It was 2000 when the president of OAR, architect Sterban Sturdza, was looking for a new space for the institution he was in charge of. This is how he found the Mincu house. He convinced the descendants of the great architect to sell the building to them, although there was a pre-agreement with another company which wanted to build an office building there. Although its function changed as the house became an office building accompanied by spaces open to the public, the layout, surroundings and plant life were all preserved and capitalized on. The restoration intervention spanned across a lengthy period of time and, contrary to usual practices, began with the decorative elements. At the very start of the works, the original frescoes of the house were uncovered, having been coated over with Mincu's own redecorations. Once the coating was removed, they were cleaned and fixed after more than a century and now remain visible, marking an important stage in the material evolution of the house. All of the painted details were restored, along with the wooden paneling and woodwork elements. Every detail, including the furniture, still abides by the past image of the house, preserved in photographs in a monograph written by Nicolae Petrascu in 1928. The only interventions involving contemporary technologies are the isolations, ventilations and heating installations. *information provided by Igloo and the Chamber of Architects in Romania editorial@business-review.ro

www.business-review.eu Business Review | March 2016

COVER STORY 17

Restoring history Since 2015, one of the objectives of national security deals with promoting national identity through the preservation and valorization of cultural and natural heritage. BR talked with Stefan Balici, the director of the National Institute of Patrimony, to ﬁnd out what the strategy is for saving and preserving our local historical heritage. ∫ OANA VASILIU

CV:

What is the current situation of the heritage monuments from Romania? At the present we have almost 600 monuments which are in a collapse or precollapse state. This number represents only the sites that we have been informed about, so the nationwide situation could be much worse. Unfortunately, we don’t have complex statistics of what is really happening on the ﬁeld. This happens because we don’t have a concrete procedure in which the Counties Departments of Culture follow instructions and give details about these sites. I dare to say that we don’t know what’s really happening for almost 60 percent of the monuments from the Historic Monuments List (LMI). This is why we need an immediate action plan for making a complete inventory of the condition of these monuments in order to come up with concrete solutions and long-term strategies. Moreover, over the past ﬁve years, only 49 monuments have been decommissioned, while 644 new ones have been put on the LMI.

What about the private owners? Does the state help them to maintain their owned monuments? Unfortunately, no. According to the legislation regarding competition, any type of funding given to a private person or company represents state aid, which is anticompetitive if the procedure isn’t integrated into a program. After the consultations with the Ministry of Culture, we are also working on a Minimis scheme to try to help and ﬁnance these owners to protect our heritage, which will be further supported by the minister. What can you tell us about the initiative regarding the emergency heritage fund

Photo: Mihai Constantineanu

How does the Restoration of Historical Monuments National Program work? What is the budget? Basically, the interventions for any heritage site are made through this Restoration of Historical Monuments National Program. We ﬁnance substantial, long-term works, where the interventions are complex. For this year, the program’s budget is RON 50 million, and the amount doubled from last year. Currently, on the restoration list are 160 monuments, and for some of them construction hasn’t started yet. Moreover, nationwide there are 50 active construction sites.

October 2000 - present: lecturer at University of Architecture Ion Mincu Bucharest September 2001 - present: associate architect at OPUS - Atelier de arhitectură specialized in restoration September 2006 - present: founder at Arhitectură. Restaurare. Arheologie Association January 2016 - present: director of the National Institute of Patrimony

announced recently by the Ministry of Culture in partnership with the National Institute of Patrimony? The initiative has come after representatives of the Ministry of Culture met in an emergency session to discuss concrete solutions for the collapse of the two heritage monuments from Brasov County: the fortiﬁed churches from Roades and Rotbav. The fund should be annually budgeted by the Romanian government in order to have continuity and real support if similar cases appear unexpectedly. Otherwise, the current funds for this type of intervention are insuﬃcient and, according to present legislation, we, the National Institute of Patrimony, don’t have any instrument to step in when an emergency intervention is needed. Recently, the Ministry of Culture has declared that he proposed a Heritage Pact to the president of Romania. What does this initiative represent? According to the current National Defense Strategy, one of the objectives of national security focuses on with promoting national identity through preservation and valorization of cul-

tural and natural heritage. Taking into consideration the fact that the president is at the helm of the Supreme Council of National Defense and that the president is the only one who can negotiate with all the political parties, we came up with this Heritage Pact. The speciﬁc purpose is to ﬁnd a funding solution for emergency situations and to make a concrete procedure which should be used no matter who will be in charge of these institutions. Some sanctions can be given to those who vandalize a monument, but the legislation is uncertain when it comes to those who don’t take care of their property and destroy it in order to sell the land on which it stands. Do you have a solution for these types of situations? The responsibility is clearly divided, but the owner usually has the primary responsibility. And if the owner voluntarily or not is performing activities that harm or damage a historical monument, he/she must be accountable to the criminal law. This is where all kinds of procedural impediments appear, starting from establishing possible damages. Due to the lack of evidence about the

real situation of the historical monuments, no one can decide who is right. I know concrete cases in which the judge asked to prove that the building was still there when the owner began the demolition. One of the chapters of the new Code of Patrimony will be dedicated to sanctions in order to try to regulate such situations. Recently the facades law was changed and some recommendations from the Ministry of Culture were made in order to draw a warning regarding the inadequate restorations. How can you stop the unprofessional work? It’s true that not all the restorations are made by the book. When it comes to facades, basically the major problem we are confronting concerns the thermal isolation. Due to the fact that a financial line for increasing the energetic performances of the buildings will be launched pretty soon, we initiated a dialogue with the Development Ministry to find the best solutions in order to protect the historical buildings and, at the same time, to make them eligible for funding. The key in these situations is communication and negotiations between the stakeholders and institutions. How about the intervention on those buildings considered a major seismic risk? As you may know, the Development Ministry is working on a concrete action plan regarding the rehabilitation of these buildings and we, together with the Ministry of Culture, have to be involved in order to find the best solutions for preserving the architecture and the historical value of those buildings and, at the same time, to make them safer. editorial@business-review.ro

www.business-review.eu Business Review | March 2016

18 COVER STORY Name: Architects Union of Romania Address: 48 Jean Louis Calderon Street

Name: Noblesse Palace Address: 7 Sﬁntilor Street Date built: 1881

Date built: 1898 Short description: The ﬁrst owner was a real estate investor, Aron Iacob, who, at that time had several buildings in the area. The architect’s name is unknown, but studies reveals that some details are similar with Caru’ cu Bere (1893 - 1895) and the Herman Rieber house (1903), made by the architect Zigfried Kofczinsky. Since 2010, the building is currently owned by the Architects Union of Romania and currently they proposed a project to expand it, forming a new section for a library. Inside, there’s a beautiful luminary which offers natural lighting.

Short description: The current Noblesse Palace was built in 1881 by the architect Alexandru Savulescu, and in 1903 was inhabited by the banker Leonid Berkovitz. Located downtown, built in eclectic style, the residence of the banker was where numerous meetings, banquets, evenings, house halls echoing music and good vibes were organized. The building has spacious rooms, different colored marble, stucco covered with gold leaf, with the ceiling painted with great art. Nowadays, the palace hosts exhibitions and events, as well as an interior design showroom.

Name: Stavropoleos Monastry Address: 4 Stavropoleos Street Date built: 1724

Name: Cesianu Racovita Palace Address: 5 C.A. Rosetti Street Date built: 1892 – 1902

Short description:

The church was built during the reign of the first fanariot prince, Nicolae Mavrocordat. During this time, the Greek hieromonk Ioanichie settled here, where he decided to set up an inn and a monastery. The inn was to ensure income to the monastery, a customary arrangement at the time. The inn burned down, but the small church remained. It was reconstructed and restored 200 years after it was built by Ion Mincu. The rich carved stone decorations adorning the pillars and the window frames, the fine portal, the colorful floral pattern of the exterior mural paintings are impressive testimony of the refinement of Brancovan art.

Short description: The building was designed by the French architect Jules Berthet for Nicolae Cesianu, a lawyer originally from Oltenia. The palace is built after the Renaissance model, which gave the highest importance to the first level, piano noble, ground floor being dedicated to the shops. On the first floor, the building has two saloons, the Red one and the Spanish one, with street-facing windows. The central saloon from upstairs has walls decorated with stucco work and oil paintings that recall the style of the French painter Jean-Antoine Watteau. The compositions depict elegant groups of men and women at picnic or playing the different instruments. The original decoration of the sumptuous lobby can still be seen today.

Name: The Choral Temple Address: 9-11 Sf. Vineri Street Date built: 1857 – 1867

Name: Coltea Church and hospital Address: 1 Bratianu Boulevard Date built: 1698

Short description: The Choral Temple is a copy of Vienna's Leopoldstadt-Tempelgasse Great Synagogue, which was built in 1855-1858 and designed by Enderle and Freiwald. The synagogue was devastated by the farright Legionaries, but was then restored after World War II, in 1945. The building was recently restored, after eight years of works. It still hosts daily religious services, being one of the few active synagogues in the city and in Romania.

Short description: Coltea Church, part of Coltea Settlements, is one of the largest architectural ensembles of the early 18th century. Coltea Church was founded by the Sword Bearer Mihail Cantacuzino, a scholar of his time, a well-educated and widely-travelled man, descendant of one of the wealthiest boyar families in Wallachia. Coltea church is a representative and extraordinary monument of Brancovan art, remarkable for the mastery of decorative art that combines Byzantine, Oriental and Italian Baroque inﬂuences.

www.business-review.eu Business Review | March 2016

20 INTERVIEW

Enhancing the Indian business presence in Romania Riva Ganguly Das, the Indian ambassador to Romania, tells BR in an exclusive interview that the Indian investment community in the country is not that visible, even though companies have projects in key areas such as IT and pharma. ∫ OVIDIU POSIRCA

CV:

The ambassador says that one of her priorities is the opening of the local market for Indian companies and, in the future, the setup of a chamber of commerce that could help them get more involved in the country. Furthermore, she says there are Romanian companies looking to invest in India, which is a champion in terms of the attraction of FDI. Why are Indian investors not that visible in Romania? They are small in numbers, let’s accept it. There aren’t too many Indian companies here, but they are present in a very important sector: IT - I think that India and Romania have natural synergies. You are outstanding in IT, we are top-class in IT. So, naturally, this is an area our companies have found it is beneﬁcial to do business in. We have two companies in IT here: Genpact and Wipro. Pharma is another sector where Indian companies are present. A lot of Romanians don’t know that Terapia, which is a very big Romanian company which has been around since 1921, belongs to India. It is owned by Sun Pharma. They have an excellent manufacturing unit in Cluj Napoca, making drugs for the Romanian market and also for exports. They employ more than 700 Romanians. We have a joint venture with a Belgian company in the textile sector. Dr. Reddy is also active in the pharmaceutical sector. It’s a question of a little more visibility and a little more activity. I have been here four months so I would deﬁnitely like to promote much more interaction between Indian and Romanian companies. What are your plans in Romania? I think there is a lot of potential in our economic and trade relations. Trade is also quite small. There are many areas where we can collaborate and cooperate. Romania has excellent technologies in many areas, and India has of course a lot of goods and services that we can sell here. I would try to do business events, and try to have more interaction among the business community.

Riva Ganguly Das joined the Indian Foreign Service in 1986. She is a Post Graduate in Political Science from Delhi University. Prior to joining the Foreign Service, she was a Lecturer at Delhi University. Her first posting was in Spain. She served as Consul General of India in Shanghai from 2008 to 2012. After her return from China, she headed the Public Diplomacy Division in the Ministry of External Affairs and she was in charge of the Latin America & Caribbean Division in the Ministry of External Affairs.

think it’s a matter of getting the information across to the right people.

I think the future looks good for us and we should be able to really upscale our relations. You mentioned plans to launch the Indian-Romanian Chamber of Commerce. What are the plans in this area? That is something I would like to do. Let’s see how it works out. We haven’t found a president yet for this organization. We have to create a critical mass ﬁrst.

What can you tell me about the Romanian companies that are encouraged to invest in India? There are many companies which want to do technology transfers, which want to invest into India. India has had a phenomenal success in FDI. We have had a 48 percent increase in FDI, beating all global trends where FDI is going down. So, India is ranked among the top countries for doing business and I

Romania-India trade April 2014 April 2015

March 2015 December 2015

Source: Embassy of India in Romania

USD 713.24 million USD 423.09 million

How is Romania looking, from a European perspective, from the point of view of the economy and the political area? From what I hear from our Indian companies, they are very happy here because Romania has an excellent workforce, high productivity. People speak English and you are part of the European Union, which is a big advantage. So as as far as that part is concerned, it’s a fantastic investment climate. Romania is growing at a phenomenal rate compared to the overall growth in the region so it’s a bright spot which I think Indian companies are recognizing. That is why big investments are coming in. Are there any new Indian companies looking to invest in Romania and in what sectors? What are the sectors in Romania that are attractive for ﬁrms with Indian capital? The main sectors for investment are in OCT, pharmaceuticals, including natural remedies and medical devices/services and, recently agriculture and animal farming. There has also been some investment recently in manufacturing and the leather industry. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | March 2016

INVESTMENTS 21

Romanian agriculture to get massive Indian capital Indian businessman A.S. Bindra is looking to start a massive investment in Romania, in the poultry sector. He wants to start construction works on a massive complex in Braila County this summer, which has a price tag of around USD 200 million.

Photo: Mihai Constantineanu

Planting growth: Indian investor eyes major investment in eastern Romania

∫ OVIDIU POSIRCA Bindra says he’s looking to create around 1,000 new jobs in Romania and, at present, his company, the IBS Group, is talking with lenders to get ﬁnancial backing for this project “I chose Romania because I was in the process of making an investment in the agricultural sector and I was looking at various countries. I looked at the Middle East, I looked at Africa, I looked at Bulgaria, Serbia, but then I came in contact with the Romanian Embassy in India. They gave me a lot of information about Romania and they said ‘Ok, before you make any decision, you must come and visit Romania’. So I came here along with my team, visiting Romania, and I found the people very nice, I found there is an excellent opportunity here in the sector given it still needs investments. The technologies are still behind the world. (...) My production here will get the stamp of the EU and I can go up to Central Europe, I can go anywhere,” said Bindra, in an exclusive interview for Business Review.

Envisaging a full production chain in the country... The businessman says he is thinking of creating an integrated business in Romania so that the entire production chain, including farmland and export operations, will be carried out within the group.

“This is an integrated poultry project. We are going to produce our entire feed, which requires about 2,200-2,500 hectares of land, where we are going to grow corn and soybeans, which is the basic feed for the chickens. Along with that, we are going to set up the broiler poultry production, which will produce 30 to 40 million broilers annually. It will have a slaughter house, all the laboratories, it will be the state of art,” said Bindra, adding that around 70 percent of the production will be exported to Europe and the Middle East, while the rest will be sold locally. “The investment, with the land and everything, will come to USD 200 million. The farm land will cost us about USD 60 million, because there will be some percentage of land we will buy and a certain percentage we will lease,” he added. Bindra has already appointed a Romanian at the helm of local operations and he has been assisted by MP Valeriu Steriu on his endeavor in the country. The businessman said that Steriu is a very nice man who has connections.

...needs signiﬁcant backing from banks Asked how he will ﬁnance this project, Bindra says he is taking into consideration more options, including bank loans, EU grants and even state aid. “An international big bank is already giving me a guarantee of about USD 200 million. So, with that guarantee, I am going to raise money here from the

local banks, and I have consultants who are making these arrangements,” said Bindra. According to the businessman’s plans, if all goes right, the construction works will start in June or July, and the whole production system should be operational in about 14 to 16 months. “During this process, I am also planning to acquire some poultry farms which are for sale. There are three which are on sale that are good, not with high technology. Some are near Bucharest, some in Ialomita County. Bindra said he has spoken to many government oﬃcials and they are all very helpful. He added he didn’t have any problems with the bureaucracy in Romania.

the long-term. He said that pharmaceuticals and even hospitals are the business segments that he could expand into going forward. Bindra is the chairman of the IBS Group. He is specialized in the agriculture ﬁeld and has been involved in business for over 40 years. This is the ﬁrst major planned investment of the group, which includes a company that handles livestock division called Hi-Tech Live Stock. The IBS Group, further comprises of the Abhinav Bindra Foundation, Abhinav Futuristics Limited, a distributor for sport shooting equipment. Under the group’s umbrella, there is also a joint venture with PizzaVito, the USbased chain of Italian pizza restaurants.

Exploring the sports and healthcare sectors

ovidiu.posirca@business-review.ro

The Indian businessman is optimistic about his future in Romania and said that if all goes well, he will explore other business areas such as sports and healthcare. Asked why he is looking into sports, which does not really have anything to do with agriculture, Bindra explained that he is doing this for his son, Abhinav Bindra, who is India’s sole gold medalist at the Olympics. His son is the Olympic shooting champion, claiming the 10m air riﬂe gold medal at the Beijing Games in 2008. Aside from sports, Bindra pointed out that healthcare looks promising in

Fast read USD 200 million, the planned investment in the poultry complex The first major investment of IBS Group Around 70 percent of the production will be exported Businessman planning to lease or buy over 2,000 hectares of land

www.business-review.eu Business Review | March 2016

22 TAX

New Fiscal Code rollout gives investors fresh hope With a new Fiscal Code rollout this year, the second one since 2004, investors say that although the new piece of legislation is more “pro-business” and contains some tax cuts, companies still struggle to talk with the tax administration agency ANAF, itself undergoing a massive modernization program. ∫ OVIDIU POSIRCA “Restructuring tax provisions in the main laws on tax compliance was a much-needed action. In the 10 years since the last consolidation of tax legislation, more than 100 amendments were made. Thus, the laws required restructuring so that taxpayers would better understand their liabilities and, at the end of the day, so as to enhance voluntary compliance,” Alin Chitu, tax partner at Tuca Zbarcea & Asociatii Tax, told BR. This point of view is largely shared by representatives of large foreign investors present in Romania.

The administrative burden is still in place, despite new Fiscal Code, say Austrian investors

Alin Chitu, Tuca Zbarcea & Asociatii Tax

Ionut Simion, AmCham Romania

For instance, Rudolf Lukavsky, commercial counselor at the Austrian Embassy in Bucharest, told BR that the new code has been welcomed by Austrian firms as it clarifies some provisions, though it’s not enough. “Due to the high number of changes, additional issues were raised which need solutions. A guideline is needed in order to implement the new provisions and additional clarifications are eagerly expected. As foreign investors do not usually balance their decisions regarding a country’s attractiveness on one or two factors, one has to see the broader picture,” said Lukavsky, who added that infrastructure, the skilled workforce and political stability are other factors that are taken into account. “Here, Romania still has room for improvement. Take for example the huge administrative burdens which have not been tackled by the new fiscal legislation at all. Moreover, investments require long-term planning and strategizing, which is particularly difficult if the economic framework is changed as frequently as it is in Romania,” said the Austrian official. Right now, companies are hoping that the new Fiscal Code, the Fiscal Procedures Code and the World Bankbacked ANAF reform will bear fruition and make it easier to do business. “Even if the Fiscal Procedures Code still needs to be improved, the new tax code is pro-business, clarifying techni-

cal issues that previously weren’t sufficiently regulated, bringing more transparency and stability to the business environment,” Ionut Simion, vice-president of AmCham and coordinator of the taxation committee of the organization, told BR. AmCham has over 400 member companies, which have created 200,000 jobs and around USD 20 billion worth of FDI in Romania. However, Simion stated that the government should make sure the budget deficit doesn’t run out of control as the economic growth is accelerating mainly due to higher domestic consumption. “With respect to the newly adopted fiscal code, the reduction of taxes will significantly impact the government deficit in the years to follow. According to the Fiscal Council, the estimated impact of the fiscal reform amounts to approximately 2 percent of GDP in 2016. The fiscal reform targeted, to a significant degree, measures that stimulated increase in consumption (by decreasing indirect taxes like VAT quota or excises,) and as a result, in the short term, it is expected that consumer prices will show a decreasing trend,” added the AmCham official. A signal of caution regarding public finances also came from the Foreign Investors Council, which has 120 member

companies that account for around two thirds of the total stock of foreign investment in the country. “This is important to investors because they are mainly interested in a stable, transparent and predictable fiscal environment. In this context, the FIC encourages authorities to maintain budgetary discipline to avoid macroeconomic imbalances that would require painful fiscal adjustments in the near future,” representatives of the organization told BR. Some of the changes that have been welcomed by investors include the tax rate cut for dividends from 16 percent to 5 percent and the changes in the regime of microenterprises. Starting this year, firms with a turnover of up to EUR 100,000 will be considered microenterprises. Up to now, this threshold was set at EUR 65,000. The increased tax deductibility for voluntary social expenses and the elimination of the construction tax, starting with 2017, are also welcomed, according to Lukavsky of the Austrian Embassy.

Key ﬁscal measures yet to be approved There are still some tax measures that have been requested by foreign investors for years now, but still haven’t been turned into legislation.

“In terms of measures with regard to the tax legislation, AmCham Romania signals the need for three key measures to be taken by relevant stakeholders: fiscal consolidation across groups of companies, capping social contribution to a maximum of five average gross wages, and elimination of the penalty for not declaring fiscal obligations as it is now stipulated in the Fiscal Procedures Code,” said Simion of AmCham. Furthermore, the FIC representative suggested that the earlier scrapping of the special construction tax would help companies, which are still struggling with the fiscal burden. “FIC carries out a biannual business sentiment index survey and the preliminary results of the latest round indicate that investors still consider the fiscal burden to be very high and we believe this is mostly driven by the burdensome documentation and new tax reporting requirements, especially on the VAT side. FIC would also like the concept of voluntary disclosure to be included in the Fiscal Procedures Code. Last but not least, FIC believes a more constructive and balanced dialogue is necessary between ANAF and taxpayers,” said the organization. From the Austrian perspective, Lukavsky says that companies are still finding it hard to get feedback from the fiscal authorities. “As mentioned before, overall concern exists regarding the still high bureaucracy and the time necessary to initiate or fulfill certain tax procedures. Response times for questions to be answered for VAT-registration in Romania (form 088) as well as other fiscal declarations were even extended instead of being reduced,” stated Lukavsky. ovidiu.posirca@business-review.ro

Time to comply (hours) Corporate Income Tax: 25 Labor Taxes: 80 Consumption Tax: 54 Total: 159 EU & EFTA average: 173

Source: Paying Taxes 2016 report by PwC and World Bank

www.business-review.eu Business Review | March 2016

24 START UP TECH

#Uberexpansion in Romania One year after starting operations in Bucharest, technology start-up Uber is looking to ramp up its business locally. The general manager of Uber in Romania, Nicoleta Schroeder, tells BR in an interview that Bucharest registered some of the fastest growth rates in the CEE. At the moment, the company is working with policymakers to update the legal framework for the car-hailing app, according to the GM, who added that Uber is not targeting the taxi industry. ∫ OVIDIU POSIRCA

CV:

What was Uber’s performance in the first year of operations in Romania? The response we have received so far has been fantastic. Over 70,000 people have downloaded the app locally and they have embraced the service that we offer. I am also really proud to say that Bucharest is one of the faster growing markets in Central and Eastern Europe. One way we think about growth, to put it into perspective, is how long it takes on average for a car to arrive to a user. So, when we first launched, that number was around 13 minutes, during the summer that number went down to 7 minutes, and today, on average, a car arrives in a bit under 5 minutes. Now, my goal for the next couple of months is to take down that number as far as possible. We would like the time to be on average 2 to 3 minutes, with the idea that as you grow this service, you offer a very convenient and simple service. Does Uber plan to expand in other cities across Romania? Well, definitely. I get this question a lot, a lot of people ask how we choose cities. Why was Budapest launched before Bucharest or why we just launched in Zagreb now and in Bucharest before and I think the answer is very simple. We use technology to determine demand, even in places where we are not currently present. So, through our app we are able to see how many people downloaded it in a certain city and how many people opened the app trying to get a car. When it comes to the next cities, yes, we would like to launch in Cluj, Timisoara and Iasi. These are the cities we would like to expand to in 2016. I don’t have concrete plans on when we are expanding, but of course we will communicate. Your father, Gelu Diaconu, was the head of the tax administration agency ANAF when Uber launched in Romania. Did this have any relevance in your hiring process? I understand this is a topic for some, and while I don’t want to dismiss it, I think it’s much more relevant to talk about what Uber is achieving in the market and what our plans are for the near future. We operate in 400 cities

Nicoleta Schroeder, 29, started off in consultancy and finance, working in the US for Accenture and John Hancock Financial Services. Afterwards, she returned to Romania where she managed her own FMCG business for five years, before joining Uber. Schroeder holds an MBA from Carnegie Mellon University - Tepper School of Business and graduated in Management and Economics from Clark University, in Worcester, Massachusetts.

globally, in over 60 countries and in every single country that we operate in, we abide by local laws and legislation. Every single person goes through the same recruiting process, which is standard globally. From my perspective, it’s much more important to talk about what we have accomplished and where we want to go. Uber provides the ride-sharing service, which in Romania is not regulated in any way. What happens with the operations from a legal perspective? First and foremost, the most important thing is to say that we want to be regulated. We are pro-regulation as a company. That’s one of our main goals. Our service doesn’t currently exist in any law and that’s not just true only here. That clearly was true everywhere we launched. I believe it is very important that legislation considers innovative digital services and ﬁnds the way they ﬁt in local legislation and updates the current laws that exist. And recently, we have seen a lot of traction in the European Union. Lithuania and Estonia both have proposals in Parliament that regulate ride-sharing.

Most likely, Estonia will become the first country in the EU to regulate ride-sharing. For us, that’s great because it sets a precedent. So, at this moment are you talking with any MPs to initiate a bill somehow and take this to the next level? We are talking with a bunch of stakeholders, together with different industry associations. We are talking with people from parliament, the government, the City Hall. There’s an entire industry part of this, we are not the only ones. From my perspective, the more the better. The more players there are, the push is going to be more significant. How does Uber operate in Romania from a tax perspective? From the perspective of Uber, we are complying in all the countries where we operate. We have 60 countries worldwide and we are not talking about virtual operations in those countries. We are talking about physical offices, with local subsidiaries. It is important to note that our driver partners are independent contractors. They are solely responsible for the taxes

they owe on the income that they get from Uber. We make that very clear, both verbally and in writing. This is part of the agreement that they sign with us before getting on the app. It’s also important to know that, unlike other tech companies, up to 80 percent of every single dollar that is done through our app, stays in the local economy, and goes to our driver partners. Also, recently we made a decision to start collaborating with the fiscal entities by bringing more transparency and making it easier for driver partners to be able to comply with their local fiscal obligations. Every single RON spent on our app is traceable. This is something unheard of in this industry, which is mainly cashbased. How do you perceive the taxi industry in Romania? Do you see them as enemies or competitors? Not at all. I think that there’s a place for everyone, first and foremost. There are 10,000 taxis in Bucharest or a million cars? If you ask me which one I am going after, it’s the one million number (registered in Bucharest e.n.), not the 10,000 taxis. I think that each option makes sense for someone at different points of the day. So, you can’t hail an Uber, there are many times when you need a ride at this moment and if a taxi is in front of you, it probably makes sense to take it. For me personally, if I need to get to Pipera, I always go by subway. No taxi and no Uber is going to get me there faster. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | March 2016

ADVERTORIAL 25

ADVERTORIAL

The Newest Bowling&Restaurant Concept of the Northern Bucharest trickSHOT brings the pleasure for quality cuisine and the passion for bowling, billiards and darts together in one place.

The special atmosphere built around the 8 bowling lanes, 13 pool tables and 3 dartboards continues with the same intensity in the restaurant area, in the café or on the terrace. The design of the location, with a discreet retro vibe, creates a relaxing atmosphere, being the ideal destination for company parties, whether they are organized for celebrating something or as a team building activity, for a birthday party or a kids’ party, given that each of the trickSHOT areas can accommodate any event set-up, depending on the customer’s requirements. The restaurant adapts to any event requirements, the team being ready to design and fix a wide range of meals depending on the client or the time of the day. The space is generous, the

restaurant has a capacity of 240 seats plus 300 seats on the terrace which offers the most beautiful view of sky, where, during the summer, you can have your week-time business meetings or long weekend-start talks. The café is the perfect place to start your day. The special furniture and thematic fit-out are a specially developed combination which is in tune with an extensive coffee and espressobased specials menu. When you get to trickSHOT, one of the first things that catches your eye is the open kitchen which allows you to see how different dishes are created, which is one of the elements that distinguishes it from other locations. The kitchen team is coordinated by Chef Leon, a master of ingredients with an experience of over 15 years in restaurants of Romania and abroad.

The trickSHOT concept is based on the most interesting of European recipes but also includes some of the favorite dishes that characterize American game rooms. For our most demanding customers Chef Leon can prepare seafood platters and exotic flavors specials. Here we offer you the opportunity to get closer and choose the piece of meat that you want us to cook on our charcoal grill for you. If you are dreaming about Italy, then you can watch our pizza master’s show and you will immediately understand why the crust has the traditional Italian taste and texture: the wood-fired oven! trickSHOT’s Pizza al forno is the real deal and helps us include 20 delicious varieties in our menu. The entertainment area is the hot spot of this location, mainly due to its

design but also due to state of the art facilities that the customers can enjoy, more specifically equipment from the leading manufacturers in the field, i.e. Brunswich. The trickSHOT story rewards the customer’s loyalty by revealing on the top floor of Promenada Mall the best location for bowling but also for having a charcoal cooked beef steak, an authentic Italian espresso or family Sunday brunch. This concept rewards with bonuses of up to 20% all the customers who choose this location for spending their free time! These advantages are offered for every order you make, without any draw!

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www.business-review.eu Business Review | March 2016

26 HEALTHCARE

New niche services boost Romanian private medical market The local private medical market is getting an additional uptick as increasingly specialized medical care is becoming available for Romanians. While patients are not yet spoiled in terms of choice, pundits in this industry claim Romania offers much better prices for some niche specializations compared to other countries abroad. ∫ OTILIA HARAGA REGINA MARIA: Fady Chreih, general manager

What is lacking: The interest of healthcare providers is shifting from the Capital to the country, according to Chreih. While Bucharest continues to remain an attractive investment area in private healthcare, there are positive signals from other regions. He adds that the Regina Maria has more and more patients who are coming to its Bucharest hospitals, where complex interventions are being carried out, from various parts of the country. “We have patients who are asking when we will open up in their city. We also plan to speed up development projects and rapidly expand the network to various parts of the country,” he says.

MEDICOVER: Adrian Peake, general director

New medical services: Recently, Regina Maria launched the Private Care clinic, introducing a new medical concept to Romania, which it views as the medical equivalent of private banking services. “Private Care means medicine tailored to the needs and lifestyle of the patient, which places focus on prevention and healthy living as a way of life. The main novelty on the market of private medical services is the specialist dedicated to the patient- the Case Manager, who coordinates all the necessary investigations and processes, both medical and non-medical, to solve the patient’s health problem,” says Chreih.

The Romanian medical services market: “The market of medical services in Romania is becoming more and more attractive for foreign investors because these growth rates cannot be found anywhere else in Western Europe at the moment. After Poland, we represent the most interesting market, we have the highest growth in the CEE, and this is the reason for the effervescence of some players. For instance, compared to pharma, the market of private medical services has increased much faster. This was also because in the public sector, no new hospitals and clinics were built, so this need was covered by the private sector,” says Chreih.

nosis and treatment for patients with the health industry. choledochal lithiasis, benign or malignant stenosis of the bile or postopera- The price of medical services in tive complications. Furthermore, the Romania compared to other counMedicover Hospital provides oncology tries: patients with tailored therapies for col- “There is a clear difference in costs beorectal cancer by using molecular biol- tween the Romanian private healthcare system and those of countries such as ogy tests. Medicover is also implementing a France or the UK. The costs in Romania new strategic direction at the Medicover continue to reflect the lower spending Hospital’s Maternity in Bucharest, with power of the local population compared to the French or British. As the local a focus on promoting natural birth. market continues to mature, and the The Romanian medical services Romanian economy continues on its market: upward trend, a slow balancing process “The local private medical services mar- will continue to bring us closer to Westket is currently in a full process of devel- ern EU countries on all economic levels. opment and consolidation. The annual However, this will take many years to growth rate of the private medical serv- complete,” says Peake. ices market is of approximately 12 percent, and it currently offers numerous GRAL MEDICAL: Robert Chitan, business opportunities. Foreign in- promotion and development divestors’ interest for Romania is increas- rector ing (…). In our sector, we can say that there is a significant expansion potential in all areas of the country, a fact clearly reflected in Medicover Romania’s long-term strategy,” says Peake.

What is lacking:

New medical services: In 2016, Medicover will invest in the expansion and diversiﬁcation of the range of services and in the use of new technologies. The private medical chain has already included the Petroleum Doctor new specialty at the Medicover Ploiesti clinic, dedicated to people working on marine platforms in the North Sea. Medicover’s Bucharest network also provides recent services such as ergospirometry at Medicover’s Plevnei clinic; colorectal cancer screening through colonoscopy; laparoscopic surgery of colorectal cancer in the Medicover Hospital. The Medicover Hospital in Bucharest now provides patients with ENTERORM, the most modern imaging method of investigation for the small intestine, as well as ERCP, a new method of diag-

“The Romanian healthcare system is currently facing numerous challenges, and patients’ needs for top quality services are signiﬁcant. The development of a favorable environment for both patients and medical personnel must represent a priority for Romania. Romanian physicians need the opportunity to practice medicine in their country, access to state-of-the-art technology and continuous professional development. Patients need access to services and New medical services: care of the highest quality,” says Peake. Gral Medical will launch a new service Specialization obstacles in Romania: for the corporate segment that will be Reaching a higher degree of special- mainly available in the new clinic ization in the private medical market is opened recently in the Northern part of only a matter of time, believes Peake. Bucharest. “We have a different type of “As the local market continues to grow at subscription, called the “Favor” suban accelerated pace, the public becomes scription, but we wish to unite classical increasingly aware of the available serv- services and the Favor service under a ices and strives to access the highest new prevention-oriented product,” says quality care possible. These growing Chitan. needs will, in time, lead to more specialAt the same time, Gral Medical will ized medical services becoming avail- introduce new innovative services in able to a growing number of people,” he the new radiotherapy section of the Onpoints out. cofort hospital. On the other hand, Peake mentions that the increase in foreign investments What is lacking: in the private healthcare system – be it “Even though very many interventions Medicover or foreign investors from the are being implemented which were U.S.A. or Western Europe – has brought missing ﬁve years ago, there is still room a visible rise in the quality standard of for those interventions concerning seri-

www.business-review.eu Business Review | March 2016

HEALTHCARE 27

ous eye aﬄictions (such as cornea trans- market: plants) and thoracic surgery,” says Chi- “The Romanian medical market, espetan. cially the private one, has evolved greatly over the past six years. If six Specialization obstacles in Ro- years ago, people had to go abroad to mania have access to high-tech procedures The major investments in generalist and revolutionary techniques, at the hospitals and less in those specialized moment, the Romanian medical marhospitals and the delay in reaching the ket is gaining ground in front of hospireturn on investment threshold are tals abroad. Many patients are opting for among the obstacles in front of special- the Ares centers instead of hospitals in ization, according to Chitan. Austria, Germany, Israel or Turkey,” says Plescan.

The price of medical services in Romania compared to other countries:

“We have managed to keep in Romania more than 30 percent of patients who In Romania, medical services offer congo for medical oncologic services ditions that often surpass those abroad, abroad, because we managed to offer and cost 30-70 percent less than in any the same conditions and technology at other European country, claims Plescan. prices that are 3-4 times lower,” says “For instance, uterine ﬁbroid embolization in Romania costs EUR 1,550 in the Chitan. Ares centers while in England it costs ARES EXCELLENCE CENTERS: Iu- GBP 9,500, in France they cost EUR lian Plescan, director of opera- 8,000, and in Germany EUR 9,000. Also, in Romania, the percutaneous closure tions of atrial septal defects costs EUR 7,500, while in Israel it costs EUR 15,000, in Turkey it costs EUR 12,000 and in Greece it costs EUR 17,000,” says Plescan.

ORTO-CLINIC: Valentina Contanu, MD, pediatric orthopedics

New medical services: This year, Ares will be consolidating the medical services that it introduced in Romania for the first time. Among these, atrial fibrillation can be completely treated using two procedures that can be carried out during the same intervention: ablation for atrial fibrillation and the implantation of the Wachtman device. “This intervention on a double therapeutic plan will become standard for atrial fibrillation in Romania,” says Plescan. Another procedure Ares will be consolidating is the implantation of the MitraClip device, the only non-surgical treatment of mitral insufficiency. “There are at least four extremely important medical interventions that are carried out in Romania only in the Ares Excellence Centers. (…) We managed to build a portfolio of 45 procedures, 9 medical premieres, and to become European Training and Excellence Center in two different therapies: uterine fibroid embolization and prostatic adenoma embolization. Therefore, this year we are striving to keep the leader position in our super-niche market and to continue the string of medical premieres,” says Plescan.

The Romanian medical services

New medical services: Orto-Clinic will develop in 2016 six excellence centers specialized in the following pediatric orthopedic directions: the varus-equin, hip luxation, scoliosis, premature and neuro-motors, surgery and recovery. The centers will be backed up by investments in each specialty area, from Imagistics to speciﬁc equipment for recuperation therapies, including kineto-therapy and hydrotherapy (especially for the medical recovery center,) according to Contanu. “In the incipient stage, the clinic will be developing two kineto-therapy recovery centers in the Southern part of Bucharest, to meet growing demand. Some patients living in the neighboring counties south of Bucharest are coming to the capital for recovery and this takes a lot of time and money,” says Contanu.

The Romanian medical services market: While it has seen an upward trend in

past years, both in terms of newlyopened medical units but also in terms of medical specializations, it is still an emerging segment and has to compete with developed markets, argues Contanu. “Romania sees the expansion and the development of several large players but, as we see it, there is stringent need for smaller clinics and medical specializations to address patients living in more remote areas or in need for post-treatment medical services,” says Contanu.

PONDERAS: Ana Maria Pascu, development director

What is lacking: “In our medical practice area, certain demand has emerged in neighboring areas outside large cities, such as Bucharest. We are thinking at developing such recovery centers in small areas, for which we have already started to look for staff specializing in kinesiotherapy. Of course, there are also physicians specializing in pediatrics in small cities but, after listening to our patients and doing research, we came to the conclusion that such centers specializing in medical recovery – post surgery, neuromotor kinesiotherapies stand for a real gap in the market,” said Contanu.

Specialization obstacles in Romania

New medical services: Ever since 2013, when it went through a thorough rebranding process and focused on avant-garde surgery, especially metabolic surgery, Ponderas aims to consolidate its position of leader in treating metabolic diseases (patients with obesity and associated disease like type-2 diabetes and high blood pressure).

What is lacking:

While investors are willing to find new If 6-7 years ago, the private medical niche specialized medical services, “the market was at an incipient stage, today red flag is the lack of support and infor- the medical sector is very well develmation from decision makers, either in oped and capable of offering patients the central administration or in the complex surgical and medical intervenhealthcare sector,” Contanu points out. tions the same as in the public state sysThe bureaucracy and lack of coherent tem, says Pascu. “We believe that highly paperwork in establishing and running accurate and top medical services are a business are also major holdbacks, she still missing because they are very exadds. In our practice, we also discov- pensive and require consistent investered that private medical businesses ments. For instance, robotic surgery should have more specialized staff. “A does exist in Romania, but there are not decade ago, when there were not so too many interventions carried out namany echography centers as today, the tionally using this minimally invasive number of diagnosed orthopedics defi- technique, because it is very expensive ciencies (such as congenital hip luxa- to maintain this equipment,” says Pascu. tion) was lower compared to these days when the market abounds with such Specialization obstacles in Roimagistic centers. It is a paradox we can- mania not understand, unless we blame it on “Investments needed in technology are the lack of enough medical knowledge. the main obstacle in introducing certain The practice authorizations should be medical services based on surgical techissued according to more rigorous crite- niques that require high precision. ria, since the medical equipment, no Moreover, a good school is needed to matter how technologically evolved, train doctors in using these avant-garde will not be able to replace competent technologies. I am referring here to human knowledge,” says Contanu. post-graduate studies,” says Pascu.

The price of medical services in Romania compared to other countries:

In terms of prices, the costs in Romania, “We can certainly make a comparison. I depending on many criteria- such as the will strictly refer to the Ponderas Center type of consult or medical intervention, of Excellence in Metabolic Surgery, doctor, clinic, specialization- are several compared to other similar centers in the times smaller compared to other coun- West and the United States. Although in tries, says Contanu. “A regular check-up Romania metabolic surgery can appear consult can cost in Romania around expensive because of the consumable EUR 30-50, while in other states, the materials, the costs of such intervenamount starts at EUR 200 and goes a lot tions in the West are three times higher higher, to EUR 500 and higher, if the pa- in England, for example, while across tient asks to be seen by a consultant the Ocean, metabolic surgery can be who is leader in their ﬁeld and who ﬁve times more expensive,” says Pascu. works at one of the prestigious private hospitals,” she points out. otilia.haraga@business-review.ro

www.business-review.eu Business Review | March 2016

28 TObACCO INDUSTRY

Changes may place tobacco’s future up in smoke Steen Hjortholm, managing director at Philip Morris in Romania, tells Business Review about the impact of the Tobacco Directive on the local market and explains the negative effect of the cigarette black market for the local industry. ∫ ANDA SEbESI

CV:

What are the main fiscal implications of the transposition of the Tobacco Directive at local level? The Tobacco Products Directive is a complex legislation, for which the objective is to improve public health by increasing awareness of the risks associated with smoking. This, combined with the effects of the new law which bans smoking in public places, could translate into a decrease of the cigarette market. As such, this will be reflected in the state budget revenues collected from tobacco taxes, which will proportionally decrease. I am confident that both the fiscal and social implications of the new pieces of legislation will be equally considered by the Romanian legislators. What are the main changes in the process of manufacturing and packaging cigarettes, as per the provisions of the Directive? The main changes are those related to packaging and labeling. The Directive introduces larger health warnings and cessation messages, which must cover 65 percent of the front and back and 50 percent of the sides of cigarette packs. Also, there will be new rules for reporting the ingredients used in the cigarette manufacturing process. How much do you think the tobacco manufacturers in Romania would have to invest in order to make these adjustments as per the EU Directive? From a financial point of view, it is very difficult to estimate a number, given the particularities of the supply chains of the tobacco companies in Romania. The biggest issue we are facing at this point is related to timing, namely the very short period of time we will have to comply with the new requirements. The deadline for the transposition of the Directive is May 20th, 2016 and it coincides with the date from which only tobacco products compliant with the new law can be produced. Today (March 8th) the draft transposition law is in the Senate and has to undergo the parliamentary procedures in both chambers. I cannot estimate how long it will take until it will be promulgated and published in the Official Gazette, but looking at other legislative processes, I can say we will have very little time to adjust our production, which will put significant pressure on our factories. In the context of the Tobacco Directive, how do you think the market will evolve

Steen Hjortholm has 19 years’ experience with Philip Morris and more than 16 years senior FMCG experience in the CEEMEA region. He returned to Romania last year as managing director of the company on the local market. His previous experience includes regional management positions in the areas of Africa and Levant, based in South Africa and Jordan respectively, as well as a country management position with Philip Morris Hungary. In 1998 he came to Romania for the first time, as he was appointed Manager Distribution.

in 2016, but also long-term? The cigarette market has a general descending trend, in line with demographics and overall societal development, not only in Romania, but also worldwide. On the other hand, people might also be interested in switching to new generation products which allow adult smokers to continue to enjoy tobacco, particularly products with a potential to signiﬁcantly reduce the health risks associated with smoking conventional tobacco products. In our desire to be the leader of this new market segment, Philip Morris International has invested more than USD 2 billion over the last eight years in the development of our reduced-risk products. A leapfrog innovation is iQOS, which uses state-of-the-art electronics to heat a tobacco stick to less than 250 degrees Celsius to generate a ﬂavorful

nicotine-containing aerosol. This allows for continued enjoyment of authentic tobacco pleasure, but no ﬁre, no ash, no smoke and less smell. iQOS will create a revolution in tobacco consumption, and I can proudly say that Romania is the fourth market in the world (after Italy, Japan and Switzerland) in which iQOS was launched, which shows that our company’s ambition in the Romanian market is very high. How did the business of Philip Morris in Romania evolve over the past years? Philip Morris operates two entities in Romania: one which handles the production of cigarettes (Philip Morris Romania SRL) and one, the distribution (Philip Morris Trading SRL.) The production facility in Otopeni, which supplies cigarettes to 18 markets,

Philip Morris in Romania in figures: 2014 turnover: RON 2.3 billion (combined for the two Philip Morris entities in Romania) Investment value to date: over RON 450 million Number of employees in 2014: 838 (combined for the two Philip Morris entities in Romania).

including Romania, is a model throughout PMI in terms of eﬃciency, sustainability and quality of the products manufactured there. The production capacity has been increased year on year, through signiﬁcant investments, and this trend will continue in the future. In terms of commercialization, Philip Morris’ share of market in Romania has, after some years of decline, turned around with a very promising performance in 2015. Combined with the iQOS launch, it gives us a solid base for the future growth of Romanian business. How stringent is the issue of illicit trade in Romania? How big is the estimated black market for cigarettes in Romania? It has the potential to become very severe. After a peak of more than 36 percent back in 2010, we have, through joint efforts of collaboration between law enforcement agencies and the tobacco industry, kept the level of illicit sales relatively stable, around the range of 12-15 percent. Our latest study (performed by Novel Research in January 2016) however, shows that the illicit trade is again on an ascending trend, reaching 17.8 percent of the total cigarette market. Compared to the EU average of 10 percent, that is already very high and it might further increase if it gains sustainable presence. Let’s not forget that the illicit trade generates sizeable funds for organized crime and terrorism. Unfortunately, the one who loses the most in this equation is the state budget, because the amount of uncollected tobacco excise is in the region of EUR 500 million per year. anda.sebesi@business-review.ro

www.business-review.eu Business Review | March 2016

MObILE 29

Fourteen Romanian companies attend Mobile World Congress in barcelona Romania participated for the 5th time at the Mobile World Congress 2016, being represented by 14 companies from some of the largest cities. These companies, which showcased various solutions in the areas of software, hardware and application development for mobile platforms, forged new business partnerships at the event.

∫ OTILIA HARAGA The companies that showcased their innovations at Barcelona come from some of Romania’s main technological cities, among which Bucharest, Cluj and Timisoara. Some of them have participated various times in the Barcelona technology event. These companies already have a solid foothold on the Romanian market and have already expanded their operations to neighboring countries or in Western Europe. The participation of these companies at the technology event required a budget of approximately EUR 200,000. The travel costs of the 14 local companies were supported by the Romanian Association for Electronic Industry and Software Timisoara (ARIES-TM) and the Ministry of Economy, Commerce and Business Relations, according to a an ARIES-TM press release. “This is an important moment for all of the participating companies not only due to the technological novelties presented, but because it is a good networking opportunity. It’s a good moment to create new connections on the European and international markets and to fortify the old ones,” according to Daniel Giurea, president of ARIES-TM. The companies, based in Bucharest, which participated in the MWC 2016 are Computaris and Simartis Telecom. Computaris, which offers system integration services, software development

and solutions for delivery platforms, but also quality control instruments, MVNO platforms and SS7 security for the telecom industry, was at its 7th participation at the MWC 2016. Simartis Telecom presented its Bubble application for smartphones, targeting marketing companies. “We managed to attract approximately 30 visiting companies from all over the world, from countries such as Great Britain, Germany, Iran, Libya, Vietnam and Canada,” said the representatives of the company. From Brasov, representatives of OCRMO Technology, a company that creates software for electronic wallets and electronic money transfer solutions, says that it received more visitors than during the previous edition. “We planned approximately 50 meetings even before leaving the country. (…) The highest interest was sparked by the possibility to replicate locally, in franchise form, the services that we offer, respectively the money transfer carried out through our infrastructure and license at global level,” according to company oﬃcials. The other company from Brasov that participated in the fair was Visual Fan, which launched two smartphones at the event: the Allview X3 Soul PRO and the P8 Energy PRO. Both phones will become available also on the Romanian market. “The feedback we got was positive, we launched two ﬂagship devices and most users appreciated the

design and the fluidity of use of these phones,” said Visual Fan representatives, according to ARIES-TM press release. Cluj was present at the fair with two companies, Altom Consulting and Cabrio Investment. Altom Consulting, which showcased consultancy services in software testing and a specialized robot in testing various applications developed by other companies was at the second participation at MWC. Following the presence to MWC, Cabrio Investment also managed to set the foundation for two important partnerships. “We have noticed very high growth in the mobile and internet of things area and at MWC we looked for partners for long-term cooperation. Most visitors were preoccupied by the business ecosystem in Romania, and what we could offer,” according to the company officials. Still from Cluj, Evozon Systems showcased its portfolio of game development and testing on mobile platforms, as well as gaming design and 3D art. “From where we stand, this was the best edition of this event. Moreover, MWC gave us the opportunity to find new partners and see the latest trends in the mobile field. During the event, we decided to continue the partnership with a distributor of games for children, based in Israel. At the moment, there are various discussions going on, that can end up in partnerships,” according to company representatives. Softech

showcased in Barcelona its Productis solution, used for production control and the traceability of the processing food units, as well as the iSpeedCam, an alert system for road safety, meant for smartphone users. Zynk Software, a company specialized in the development of web and mobile applications, had “tens of meetings and at least three partnerships have potential to become viable in the next period,” said company representatives. Craiova was represented by IT Six Global Services, a company which develops solutions for FinTech, Life Sciences and Hybrid Cloud. “Romania’s constant presence with a national stall ensures growing interest in the services and solutions presented by Romanian companies and a growing number of foreign visitors come to this stall. We had approximately 15 new visitors every day, plus others who came following contacts we had during previous editions,” said the company officials. Ropardo, a company from Sibiu, showcased at MWC its ZivaCare products for health monitoring and iFinance, dedicated to the business environment. “At the moment, we are having at least 10 advanced talks with companies from various industries where our applications can be used. Over the next period, their number will grow, after follow-up discussions,” said Ropardo officials, according to ARIES-TM press release. Still from the Western part of the country, Eta Automatizări Industriale, based in Timisoara, went with its FliGo application, used for monitoring a car in traffic. The app already has several tens of thousands customers among transporters. The company also presented Safe Fleet, a gadget that is installed on cars and provides data about consumption, the position on GPS, and provides the driver with a panic button in case of emergency. “We managed to set the foundation for signing two important partnerships,” said the representatives of the company, according to ARIES-TM press release. Other companies based in Timisoara that participated in MWC 2016 was Infobest Romania with MixMe, a virtual dressing via which online clothes buyers manage to monitor their products and those they wish to add to their wardrobe, QuickSport, Praiser and Weight Observer. otilia.haraga@business-review.ro

www.business-review.eu Business Review | March 2016

30 ENERGY

Energy watchdog denies RCS&RDS power distribution licenses The Romanian Regulatory Authority for Energy (ANRE) has refused to grant telecom operator RCS&RDS power distribution licenses. The energy regulator rejected in March the request from Delalina SRL and Foto Distributie, the companies controlled by RCS&RDS.

∫ OTILIA HARAGA The reasoning for the dismissal was that the two companies controlled by RCS&RDS did not fulﬁll several stipulations in two articles from the regulation for granting licenses and authorizations. These articles stipulated that the applicant should have the approval from the network operator or concessioner distributor operator in that area. This is not the ﬁrst time RCS&RDS comes across a refusal from the energy regulator. In October 2015, the telecom company announced its intentions to develop its own power distribution grids in two Romanian regions, but the

company’s request for licenses had been rejected by ANRE. In an oﬃcial statement sent to the media at the time, RCS&RDS announced that it will continue the actions necessary to obtain the licenses. In September 2015, RCS&RDS requested licenses for two pilot projects, one in Oradea city and the other in the vicinity of Timisoara city. However, ANRE did not allow RCS&RDS to offer this service, for lack of agreement from the distribution operators that are currently offering the service in each of these areas, according to the RCS&RDS press release. ANRE’s position is that RCS&RDS could develop its own power distribution grid only after it connects its grid

to the public grids that are used to take over or inject energy into the National Energetic System. At that time ANRE said for the media that according to EU regulations, in a certain area and for a limited timeframe, the state designates one single distribution company that has monopoly granted by the state via license and the cession contract In reply, RCS&RDS contested the ANRE decision, claiming that it breaks the law and it is unconstitutional. “By grounding this decision on its own orders, issued in 2014 and 2015, ANRE said the release of the licenses required by the companies in the RCS&RDS group depends on obtaining the agreement from current distributors in those areas, who signed contracts for the concession of this service corresponding to networks built by the state. Neither at the moment of signing the contracts, nor at the current moment, was there any legal monopoly on the power distribution service,” says RCS&RDS in its press release. Between 2014 and 2015, ANRE extended the exclusivity beyond the borders of the grid owned by the concessionaire, to an entire territory. The Authority thus has excluded the competition on this market, preventing other companies from providing power distribution service via grids ﬁnanced from their own funds. The two RCS&RDS companies have

ﬁled a complaint in which they required ANRE to revoke the documents that break the law and the constitution, but ANRE refused without giving any reasons,” stated the company in the press release. RCS&RDS also said at the time that it has conﬁdence in the success of this project because the law stipulates that power distribution should take place via licenses, does not regulate any exclusivity in offering this service and does not set such an attribution for ANRE; also the Competition Law forbids the actions of the public authorities which can affect the competition. “We anticipate that if the barriers created by ANRE are lifted, price reductions for consumers will be substantial, because we will offer through our grids a distribution tariff of 120 RON/MWh, compared to tariffs between RON 159.49 up to RON 188.2 RON/MWh asked by the concessionaire distributors,” stated the company. According to an article in Hotnews.ro, just a year after becoming a player on the electricity market, RCS&RDS managed to win nearly 100 power distribution contracts with public institutions such as the Romanian National Bank, the Romanian telecom watchdog ANCOM, the Ministry of National Defense or the Ministry of Internal Affairs. otilia.haraga@business-review.ro

MVP Academy launches new call for applications Acceleration program MVP Academy has led to total investments of USD 1 million and 13 products launched on the global market by its graduates. Technology startups with global potential can apply for the next edition of the program. ∫ OTILIA HARAGA MVP Academy targets tech startups with less than 2 years of activity that have developed at least one functional prototype of their product, have not obtained investments higher than EUR 50,000 and have not graduated from any previous acceleration program. “We are looking for startups that have both a broad business vision as well as a very good capacity for execution and learning. The only advantage that is on the side of a company at the start of the road is speed and we expect it will use this advantage in the way it develops its

products and learns from the interactions with the market,” said Bogdan Iordache, co-managing Director, MVP Academy. The acceleration programs helps entrepreneurs define their products, launch them on the market, generate sales and finance their business, offering them product and business consultancy and access to an international network of 400 mentors and 700 startups, financing opportunities and training. Most startups have the software as a service business model or are opting for freemium models and/or revenues from publicity. They develop social platforms on various niche or products

in the eHealth, education or cyber-security as well as hardware, according to the press release. Out of the 28 startups that have graduated from the MVP Academy, 13 have launched their products on the global market and the total sum of the seed investments they obtained exceeds USD 1 million. The main sources of ﬁnancing were angel investors and other acceleration programs- each of these representing 40 percent of the total obtained investments, while other 20 percent of the ﬁnancing comes from venture capital investment funds. The new MVP Academy edition will be taking place between April 11 and May 31 at TechHub

Bucharest. The applications will be open until March 31 on the website of the program (www.mvpacademy.co). The selected teams will participate in product workshops, sales and marketing, individual mentoring and coaching sessions, and can seal strategic partnerships, having access to an international network of over 400 mentors and 700 startups. The best MVP Academy teams can obtain an average investment of EUR 50,000 in exchange for a minority stake in the company from MVP Angels, an angel investor network associated to the program. otilia.haraga@business-review.ro

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32 TELECOM

Telekom Romania announces over EUR 180mln investments in 2016 Operator Telekom Romania announced plans to make investments of over EUR 180 million this year, the bulk of this sum being directed into the further development and expansion of the network infrastructures, for both fixed and mobile technologies.

∫ OTILIA HARAGA The company will continue the dynamic roll-out of its FTTH and 3G/4G networks, the base for innovative, interactive and convergent services, as well as for a complete and enhanced ICT portfolio for the business segment. Telekom Romania will increase its optical ﬁber footprint by more than 30 percent, in its aim to reach 2 million households by the end of 2016. On the mobile side, Telekom Romania will continue the efforts of modernization, expansion and optimization of the 3G/4G networks to improve mobile broadband services.

The main priorities of the operator will focus on improving customer experience through enhanced technology, innovative products and services and new standards in customer care. “Our key priority in 2016 is to consolidate our unique proposition as leading integrated provider. We will further differentiate on the market by creating more value to our users and by delivering the best customer experience through all touch points along the customer journey. Customer excellence is the keyword for us for 2016 onwards. This will reflect in providing greater value to our customers through more benefits, competitive, simplified and innovative services, and also in dedicated

initiatives meant to deliver a seamless experience since their first day with us”, said Miroslav Majoroš, the new CEO of Telekom Romania. While some adjustments will be made, there will be no major changes in the number of the staff working at Telekom Romania, like during the previous personnel reshuffle when the headcount went down from 14,000 to 3,000, Majoros also said. The company CEO also said he does not believe in cheap services and that Telekom will focus on delivering quality services. “You can’t have quality services at very small prices,” he added. On the commercial side, Telekom Romania will continue to focus on providing an improved fixed-mobile convergent portfolio, through the MagentaONE proposition. This includes improving TV experience on all screens, with focus on Interactive Television (IPTV), providing unique features, the highest number of HD channels, quality and exclusive sports content such as UEFA Champions League and UEFA Europe League, enhanced Telekom TV Web & Mobile platform. Another goal of the new CEO is to offer a strong portfolio on the business segment, including the only fixed-mobile-cloud offer on the market, a complete portfolio of fixed and mobile solutions, applications and turn-key IT integrated solutions, innovative cloud

and M2M solutions, meant to generate competitiveness for business. The company’s CEO said that, while Romania offers high quality digital services, it ranked in last place in the EU as far as the use of digital technologies in their business, especially in the case of small and medium sized enterprises. The privatization of Telekom Romania, where the Romanian state still owns a minority 46 percent stake, has been substantially delayed. In February, Marius Bostan, the new minister of Communications, told the media that the Romanian state does not want to sell the shares if the price is not right. The Romanian state appointed three representatives in the management board of Telekom Romania. These are Anca Georgescu Aladgem, former HR director at Telekom, Bogdan Voicu former acquisitions director at Telekom and Florin Furdui, founder of telecommunications company Dial Telecom, part of Digital Cable Systems, and currently country manager of Portland Trust real estate developer. The Ministry of Information Society has set among its priorities in this year’s agenda to ﬁnd the best privatization alternatives for Telekom Romania before June 2016. The initial date when the project should have been completed was November 2015. otilia.haraga@business-review.ro

New data center inaugurated in Cluj-Napoca GTS Telecom has opened its first data center in Cluj-Napoca, following an investment of approximately EUR 500,000. The data center, which is estimated to require a EUR 1 million investment in the long run, was inaugurated in the Liberty Technology Park. ∫ OTILIA HARAGA “The launch of the GTS Telecom data center comes as an answer to growing demand from companies for this type of service, but also the potential of ClujNapoca city in the technological ﬁeld, through a wide range of communication and infrastructure services. The cloud and data center services continue to be at the center of customers’ attention for optimizing their business, so we maintain our optimism as far as the development in this direction goes,” according to Razvan Stoica, general

manager of GTS Telecom. The Cluj-Napoca data center spans a surface of 140 square meters. The design and implementation of the data center lasted for 4 months. “We are delighted by the way our partners received us in Cluj-Napoca and that, with this launch, we are expanding the range of colocation and disaster recovery services, given that, at this point we have two data centers on Romanian territory on two different tectonic plates,” added Stoica. The investment in Cluj-Napoca is the third signiﬁcant investment of GTS Telecom in the data center ﬁeld within

just 2 years. Last year, GTS Telecom also invested EUR 1 million into the expansion and upgrade of its data center in Bucharest, originally opened in 2007. The company will continue to make investments in this ﬁeld, due to growing demand in services like cloud computing (virtualization,) disaster recovery, and business continuity. The number of contracts for colocation services and Infrastructure as a Service (IaaS) provided by GTS Telecom in Romania has increased with an annual rate of 25 percent over the next two years, according to the company. GTS Telecom has been providing

cloud computing services (Cloud public, hybrid and private IaaS, data storage and real time backup) since 2011. The company is based in Bucharest and has 125 employees. GTS Telecom is a provider of telecommunication services based on infrastructure, which is owned by German group Deutsche Telekom, which also owns Telekom Romania. On May 30, 2014, Deutsche Telekom ﬁnalized the acquisition of GTS Central Europe, with operations in Romania as well. otilia.haraga@business-review.ro

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ENTREPRENEUR 33

Olla Floral Art comes into blossom this year Oana Lamba, owner and floral designer at Olla Floral Art, took an old hobby and materialized it into a successful business, Now, she intends to increase the company’s turnover by three times, to EUR 150,000 in 2016. ∫ ANDA SEbESI

Photo: Mircea Avarvari Imagini Vii Photography

How did you enter the Romanian business scene and why? I have always been passionate about flowers and decorating and I think I inherited this talent from my grandmother, a handicraft teacher. I have a Master's degree from ASE, the School of International Economics Relations and Affairs and, until 2010, I worked as a financial auditor for a multinational company. I took my maternity leave, intending to come back to my job as soon as possible in order not to miss the next audit season. I was really passionate about my work and my career. However, as it sometimes happens, life has a way of changing your plans and showing new sides of the story. As it turned out, the birth of my son changed my priorities and me. I only wanted to spend time with him and my family, so I postponed my coming back to the office until he was two years old. I started to work with flowers both for fun and by need with the occasion of the christening a friends’ daughter. I wanted to create a christening candle with snowdrops and, despite strenuous efforts, I couldn’t find any flower shop that could do it. That was the moment when I decided to do it by myself. I worked for hours and it received fabulous success on that occasion. After that, initially the orders came from friends, for family events. I was always attracted by floral sculptures and therefore I decided to create a hat, a bear, a tortoise, a caterpillar, a buggy or a dolphin. At that time, working with flowers was still just a hobby. However, when I gave birth to my second child, I realized that I no longer wanted to go back to work. Then I started to think seriously about how I could transform my hobby for flowers into a business. Therefore, I resigned from my job and started my own business, Olla Floral Art. The first year of business was very challenging. Despite starting with a lot of passion, impetus and projects, it was also a huge amount of work. My first studio was in the kitchen and then I moved it in the garage. Now I have a dedicated space for the business.

What was the most difficult moment for your business and how did you manage to surmount it? The hardest thing was to be the orchestra-woman, the person good at everything: PR, creation, marketing, cost analysis, profitability, management, and, above all, still be there for my children. It was also hard to reach the breakeven. We didn’t focus on the money as our main target, but on our customers and their real needs, and that was a strategy that paid off. At present, we have an online shop and an updated website and, in the future, we intend to extend the Olla brand to several shops. If you were to start another business, what would you do differently? When starting a business there is a need to build it properly, so we focused on the team. You need professionals that come with specific knowledge in the field and that have the same energy as you. I started my business with wonderful people, but there was a need for training in order for them to

gain experience in this field of activity. What are the main challenges you face in your business now and how do you solve them? Because of the perishable specific of flowers, the biggest challenge in this field is to provision yourself according to the needs. Otherwise, you risk ordering a large quantity of flowers and not being able to sell it. In order to be safe, we work only by demand, so that when we buy flowers from The Netherlands, we know the orders we can count on exactly. How fierce is the completion in your field of activity and what differentiates you from the crowd? In the flowers’ business, the competition is fierce. Our main focus is on the customer experience, services we offer and the interaction with them. Moreover, we try to create new useful products that can be used even after the flowers fade. We don’t make promises to our customers that we know we can’t keep, but we guarantee them

Olla Floral Art Established: 2013 2015 turnover: EUR 50,000 2016 estimated turnover: EUR 150,000 Number of employees: 5 Initial investment: EUR 1,000 Estimated total investment so far: EUR 15,000 everything we promised. Strategically, we don’t intend to enter in a price battle as we focus on having creative and personalized products and fresh ﬂowers on delivery. What are your plans? We intend to develop the online store Olla, a chain of ﬂower shops and to grow our team as well as starting a rebranding process that will shape the image of the company. anda.sebesi@business-review.ro

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34 MAcROEcONOMics

The private sector voice: What needs to change in Romania’s business environment For Daniel Anghel, who became coordinator of the Coalition for Romania’s Development starting this year, one of the priorities is to make sure our country continues to increase its attractiveness for investors. “We need to understand the external factors, like what might happen with the Brexit, if the European Union might be affected by a potential exit of the UK and the potential threat to us as an emerging market,” said Anghel.

∫ OviDiu POsiRcA Predictability, the need for impact studies and continuous dialogue between the state and the private sector are some of the keywords he constantly used during an interview with Business Review.

Expectations from the new ANAF head, Dragos Doros

Private sector using one voice in talks with government “We enrolled in the Coalition only professional associations or those that don’t have a sectorial interest. (…) We are not a lobbying platform, we are a platform to develop transparent business principles and predictability in Romania,” stated Anghel, who has a six month mandate at the helm of the association. Our objective is to ensure a coherent consultation platform with the Government and other public institutions on themes that have an impact on the business climate in Romania. He stated that one of his priorities is to expand the Coalition as much as possible and some of his efforts are already starting to bear fruition. Thus, the French and German Chambers of Commerce in Romania have decided to join the Steering Committee of the association. Aside from the latest two entries, this committee includes Romanian Business Leaders, AmCham Romania, Foreign Investors Council (FIC) and the Association of Romanian Businesspersons (AOAR). At present, the organization has 44 members associations and approximately 400 members working on a voluntarily basis, practically making it the strongest voice of the private sector in the country. The Coalition is led by a steering committee, which has monthly meetings. Moreover, the organization has 14 task forces, which focus on the most important areas impacting business such as labour, tax policy, , infrastructure, energy, education, agriculture, entrepreneurship, IT&C, etc Asked if the Coalition is not acting somewhat as a shadow government, Anghel stated: “Not, not at all. We are here to sustain the business environment objectives. We have a number of task forces that are bringing ideas, debating and discussing with the government a number of priorities for Romania.” Talking about the priorities of the government led by Dacian Ciolos, Anghel says that some of them are

shared by the business community, such as the reduction of red tape, macroeconomic stability, better collection of taxes and reduction of tax evasion.

Minimum wage needed an impact study

job creation in Romania, especially for unexperienced workers or young people.”

Returning to euphoric growth rates from 2007-2008?

Moving on to the state of the economy, the current head of the Coalition acGetting directly into a discussion about knowledges that economic growth has policy, Anghel suggested the planned accelerated in the past years, but we hike in minimum wage by 19 percent shouldn’t compare to what happened in this May should have been accompa- the booming years of 2007-2008. nied by an impact study. He mentions that the growth rate of He said the study needs to be done around 4 percent estimated for this year, in order to see if the hike in minimum is roughly half of what we had in 2008, wage will impact economic growth or just before the start of the economic crithe country’s competitiveness. sis. “This increase in minimum wage is “Of course, Romania is one of the putting pressure on the labor costs in member states with the highest ecothe private sector, especially in labor in- nomic growth rates, and we hope that tensive industries like textiles, indus- 2016 will not disappoint from this pertrial manufacturing, construction etc.,” spective, with a 4 percent increase,” stated Anghel. said Anghel, adding that the gains in exAlthough the Ministry of Finance ports and consumer conﬁdence have had initially announced that the in- helped the economy. crease in minimum wage would be Already, foreign direct investments done after an impact study was ﬁnished, have accelerated by 25 percent to Anghel said he didn’t have any informa- around EUR 3 billion in 2015 against the tion about the existence of such an as- previous year. sessment from the government side. However, the head of the Coalition He added the impact study was im- points out that there are external risks portant because at a point in time this that could threaten the country’s increase “might also be an inhibitor for growth trend.

BR asked Anghel what he thinks of the appointment of Dragos Doros, a former director at professional services ﬁrm KPMG, as the new head of the tax administration agency ANAF. “Dragos is a reputable tax professional, and he has both public and private sector experience, because he also worked in the past for the Ministry of Finance,” said Anghel. “I do believe that he can come with good initiatives. We worked together with him and many other colleagues in rewriting the new ﬁscal code.” Anghel hopes that Doros will be able to cut red tape, and for instance, simplify the registration declaration and reporting requirements for VAT purposes, as he promised. Also, a modernized ANAF implies improved auditing techniques such as specialized audit teams, training of the tax inspectors, e-audit as well as an accurate tax payer registry such as to promote higher levels of voluntary compliance by highlighting the government’s efforts in maintaining high ethical standards and thereby improving service levels. “They also need to work on quick wins rather than long-term initiatives as time might not be in their favour,” said Anghel, due to the current technocratic government short term mandate.

Ongoing ﬁscal challenges for companies Right off the bat, the coordinator of the Coalition mentioned declaration 088 as one of the main issues faced by companies in Romania. Investors are complaining that this procedure for VAT registration of companies is cumbersome. “So, what we suggest is to make the declaration simpler, having more relevant information for the VAT registration process itself. Asking information related to shareholders, administrators, university diplomas (…) should not be necessarily relevant from a VAT perspective.” He added that within the EU the VAT registration process became more diﬃcult due to the missing trader fraud. However, as in most of the countries,

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Romania needs to simplify this declaration and make it mandatory only for companies that are in the process of being registered for VAT purposes. Anghel added that Romania should look more carefully at best practices in other EU countries in terms of reducing VAT missing trader fraud and understand what are the most successful legislative and institutional measures adopted to tackle tax evasion and increase tax collection. For instance modern measures implemented by other countries are always relying on IT infrastructure such as the tax inspectors find out in real time information about companies Romania’s ANAF is currently trying to build a similar IT system with the World Bank, which has provided close to USD 100 million in financing. However, this is a rather long-term initiative that could be concluded in 2019. Under the loan deal, ANAF will restructure its operations, train its staff and try to convince more individuals and companies to pay their taxes on time. „We collect more or less 32-33 percent of GDP and the EU average is around 40-41 percent,” said Anghel. He said Romania is also lagging behind of the VAT it should be collecting, missing around EUR 40% of the VAT that is entitled to, Romania being the last Member State in VAT collection in 2015. The collection rate is also remaining below potential on social contributions, despite the 5 percent reduction for employers at the end of 2014. „I believe that for instance putting a reasonable cap on the social contributions might be an important measure, because right now we only have such a cap for pension contributions, but not for the health contributions.” However, Anghel acknowledged that the state has made some progress in increasing tax collection, mentioning the envisaged implementation of the online cash registers to ANAF infrastructure, the fiscal lottery and the law for capping cash payments.

challenges in energy: Oil and gas needs new investors, renewable grappling with government intervention The situation in both conventional and renewable energy is not looking too bright at this moment. With falling oil prices, companies are already starting to put new projects on hold globally in an industry that is capital intensive. For Romania, whose oil and gas industry is already facing some technical challenges on its own, this could mean more bad news going down the road. Let’s take for instance the onshore production for oil and gas. Anghel says that companies are already struggling to find viable deposits. „We have oil fields that are mature and the oil output per well is very small. In order to increase this output, important investments have to be made. Increasing the recovery rate for Romanian onshore fields, of course requires those investments and any additional burden

MAcROEcONOMics 35 means that those investments will not be economically viable,” stated the official of the Coalition. His cautionary comments come on the back of the government’s intention to change the royalties scheme for oil and gas. The last changes were made in 2004. Anghel suggested the state should take into consideration the risks of companies venturing to find resources in difficult places, such as the Black Sea. „That new scheme has to encourage the upstream sector.” Asked if companies are still willing to invest in Romanian oil and gas, given the low price environment, Anghel stated: „I see more activity on the M&A in this sector due to the oil price; there are a number of smaller players which no longer have financing resources and they are looking to work with other bigger investors.” On renewables, the situation is getting even trickier. An estimated EUR 8 billion has been poured in the local sectors, on the back of a generous support scheme that saw investors come in droves into the country. At the moment, companies don’t know whether they will actually recover their investments. Lawyers at Wolf Theiss had recently estimated that the renewable investors have already lost EUR 1 billion. “The renewable sector is dependent on three factors: the government policies and the level of subsidies, the price of other competing sources, in particular natural gas, and the development of newer and more cost-effective renewable technologies. The government subsidies scheme has been cut and the price of competing energy sources is decreasing, so producers have been impacted,” said Anghel.

Romania through the eyes of the coalition

Daniela Nemoianu, president of AmCham Romania "Romania needs a breakthrough transformation focused on strategic priorities, common values and the higher purpose of a sustainable future for the next generations. This can only be possible if we remove obsolete patterns, we build a courageous alignment among key stakeholders and act pragmatically and responsibly on our own part. We have a duty to contribute not only to the proﬁtable growth of our business environment, but also to the prosperity of all Romanian citizens who deserve a better future in the country they love."

Florin Pogonaru, president of the Romanian Businesspeople’s Association (AOAR) "By focusing on its people and talent as its main strength, Romania could largely benefit from a coherent ‘smart specialization strategy’ meant to leverage existing competencies and knowledge, and generate new competitive advantages. The current challenge is to find the right balance between a fiscal policy aimed at encouraging the creation of new jobs and the accumulation of human capital, on one hand, and an industrial policy aimed at fostering entrepreneurial discovery at local level, the development of high value added activities, linked through strategic collaboration into domestic value chains."

Romania could risk an Eu infringement over passing to pay law With the passing to pay draft bill expecting to receive a final vote in Parliament, Anghel points out this law should follow EU legislation that is already available in this field. „In case the law is not respecting a EU Directive that has to be transposed into Romanian local legislation in the spirit and the sense of the Directive, then we might have an infringement”, said Anghel. In the end if this would become true, this would be the equivalent of a fine that the state will have to pay from public funds. What makes the bill so controversial among bankers is that, should it be passed into law, it would give debtors the upper hand by enabling them to discharge their mortgage-backed debts by transferring the property to the bank. Anghel said that the retroactivity of this bill is not included in the EU directive and that it might be challenged at a later stage in Court. ovidiu.posirca@business-review.ro

Eric stab, president of the Foreign Investors Council (FIC) "In the global competition for investments, Romania can build on good economic fundamentals and undeniable potential. It is through a clear vision, determined steps into the right direction as well as predictable, stable and transparent legislations and regulations that the country will unleash this potential and reach a level of development which truly reﬂects its demographic importance in Europe. Public authorities, the business community and all components of the civil society have the responsibility to shape this future together."

Eric Faidy, chairman of the French Chamber of Commerce and Industry in Romania (CCIFER) "To keep attracting FDI, Romania cannot only rely on a low cost economy. The country must support the development of other competitive advantages such as ﬂexibility, innovation and education. To design the best offer for investors, policy makers and business leaders should work hand in hand."

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36 HuMAN REsOuRcEs

clash of generations raises concerns on Romania’s labor market Baby boomers consider their work part of their identity, the X generation see it as a means through which to earn their living, and the Y generation see it as a way to get to know themselves better. These are only some of the differences among generations that challenge Romanian HR managers in today’s labor market, says EY Romania.

Here to stay: In the next ten years maximum, what we see now with the Y generation will be the norm, say pundits

∫ ANDREEA TiNT Baby boomers, found in a larger proportion in the energy industry than in others, "identify with the company, the industry, the job they’re doing, much more than today’s youngsters do," said Florin Tataru, Head of Human Resources & Organization at ENEL Romania, during a discussions after the launch of EY Romania’s “Urban generations and their priorities.” His statement confirms the EY study’s findings that 53 percent of the baby boomers find the work they do to be an important part of their identity, while only 37 percent of the X generation and 27 percent of the Y say the same. For the X generation, their work is predominantly a means through which they earn their living and maintain their current lifestyle (48 percent), while 16 percent of the Y generation saw it as a means to learn and get to know themselves better, compared to 6 and 4 percent for the X and boomer generations, respectively. More worrying, however, for the HR head of ENEL Romania, was the posi-

tion of the X generation. While in theory the X generation is made up of company managers, he drew attention to the fact that a similar number to those from the Y generation, who are young and exploring their options, saw their work only as a means to earning a living, according to the EY study. "The X generation is, if you will, the spine of the company and if we have problems there, perhaps we should be more worried than if we have problems with a generation that is only now discovering the business world," added Andreea Mihnea, Human Resources Director with EY Romania. Nevertheless, the changes and priorities of the Y generation should not be discounted. "In the next ten years maximum, what we see now with the Y generation will be the norm," said Oana Datki, SEE Managing Partner, Consulteam and TACK Intl. "Business will change so that what surprises us now, that [the Y generation] want ﬂexible schedules, are no longer proud to work and the job is only a means to earn money — what we see now with the Y generation will happen, and is already happening, for all generations," ex-

plained Datki, emphasizing that the norms will be dictated by the preferences of the Y generation. In this sense, the EY study found that, while 51 percent of the Y generation respondents don’t have any form of flexible schedules, 53 percent of the boomers have some flexibility in their work hours and 7 percent do projectbased work. Further speaking to the importance of flexible scheduling for the Y generation, Irina Stoian, HR Director, Cetelem IFN SA, recalled a recent candidate her company offered a higher wage to. "[The candidate said that they] chose work for a company that made [them] a comparable wage offer, but had flexible schedules, which means they had short Fridays," Stoian detailed. The need for flexibility was not the only chief characteristic of the Y generation that was brought up during discussions. The overall lack of patience that the Y generation exhibits is a main challenge for employees, said pundits. "For me, what I fight most is that managers tell me that they [the younger generations] are no longer responsible," exemplified Mihnea, talking about how the Y generation responds to the busi-

ness model that the older generations were applying. Moreover, the younger generations’ in-tune relationship with technology means that sometimes they say that while they like the overall work environment of a company, the technology is not one they wish to work on, pointed out Stoian. This results in companies having to keep up with technological changes in order to fulfil a need that the younger generations, much more technological savvy than their older counterparts, come with in the office. Another way in which the Y generation is demanding that the business model change is in terms of performance management, communication within the organization and the compensation and benefits packages. Regarding the first, companies have switched from the type of schedule that had one yearly feedback meeting, to talking monthly, according to Datki. "Communication must be much more increased, very open. Compared to what happened a few years ago, the successful organizations communicate a hundred times more and more freely,"

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she added. Regarding benefits, many work-life balance programs have appeared to fill out a need among employees, "plus transparency. This doesn’t mean that the wages are put on intranet, but there is a lot of communication in terms of compensation and benefits," further specified Datki. Nevertheless, in industries such as energy, "you can’t change everything for the Y generation," added Tataru. "There remains a need for discipline, for respecting the process," he said, pointing out, however, that an equilibrium must be found between said need for discipline and "a much more open and collaborative way to work with them [the Y generation]." Both the EY study and the discussion that followed suggested that the most significant differences in perception over the balance between the professional and personal lives are between the older baby boomers and the younger Y generation, with the X sometimes taking after the boomers and sometimes after the Y. It is clear also from the statements made by the panel members that the Romanian business environment has to keep up with the demands of the new generations, lest it lose its labor force. The “Urban generations and their priorities” study was conducted on a sample of 2,562 respondents aged between 18 and 55+ and predominantly from the urban environment, through

HuMAN REsOuRcEs 37 the CAWI (Computer Assisted Web Interviewing) method.

Navigating relationships and work In terms of relationships and maternity, the generations also have quite different perspectives. On the one hand, the EY study found that while the X and Y generations saw income level as the most important factor in terms of deciding whether to have a child (24 and 22 percent), baby boomers looked at the general improvement of their economic situation and the ability to ensure a house for the family (23 and 20 percent, respectively). Income level, which stopped many of the respondents from starting a family or owning a home (78 percent of the boomers, 64 percent of the Y generation, 59 percent of the X generation), "is

Baby boomers

still relevant for [Romania]," pointed out Stoian. Financial concerns further caused 14 percent of the X generation and 11 percent of the Y to postpone having a ﬁrst child, while it led a large majority of boomers (64 percent) to give up on relaxation activities such as hobbies or holidays. The younger generations proved more reluctant to give up the latter, only 39 percent for the Y generation and 42 percent for the X. Moreover, the Y generation showed to be more likely to change its workplace after the birth/adoption of a child/children, with 23 percent reporting having done so while 38 percent of the boomers said the change had no impact on their professional lives. The two generations also clashed in perceptions in terms of the change in number of weekly worked hours after the birth/adoption of a child/children. More

andreea.tint@business-review.ro

X Y generation generation

Work as part of identity

Work as means to earn a living

53 pct have flexible hours

Income level most important in starting a family

Overall economic situation most important

than half of the Y generation (55 percent) said that there was no change in work hours, while 52 percent of the boomers said that the number increased, nearly twice as much as the number of Y and X generation reporting the same (24 and 27 percent, respectively). What was surprising, however, was that when it came to taking maternity/child rearing leave, 22 percent of the Y generation and 21 percent of the X generation in Romania opted for up to ﬁve days. "I know that the border between the professional and personal lives for the digital generations is very thin to non-existent, and I know women who took no break, but the percentage still surprised me," shared Mihnea.

Opted for up to five days of maternity leave

Work as means to learn about themselves Impatient Technological savvy

www.business-review.eu Business Review | March 2016

38 cOAcHiNG

Romanian coaching industry is flourishing Professional coaching brings many benefits: fresh perspectives on personal challenges, enhanced decisionmaking skills, greater interpersonal effectiveness, and increased confidence. ∫ ROMANiTA OPREA And, the list doesn’t end there. Those who undertake coaching can also expect noticeable improvement in productivity, satisfaction with life and work and the attainment of relevant goals. Professional coaching could maximize potential and, therefore, unlock latent sources of productivity. According to the numbers provided by the International Coach Federation, one of the organisations that standardize this profession, in Romania, there are a total of 32 accredited coaches – 2 MCC (Master Certified Coaches), 8 PCC (Professional Certified Coaches) and 22 ACC (Accredited Certified Coaches). But how is the organizational coaching industry in Romania? How big or small is it compared to this industry in other CEE countries? What about compared to the Western Europe? According to Daiana Stoicescu, Executive Coaching (PCC) Coach, mentor coach & coach trainer and board chair & director of communication at the International Coach Federation-ICF Romania, more and more organizations have recognized the value in building a cul- Lilia Dicu, LS Institute ture of coaching that offers employees at all levels—not just executives and managers—the opportunity to cultivate Used at the right time and in the right their skills, enhance their value and way, organizational coaching is an effecreach their professional goals. But not tive approach for managers and leaders all coaching is equal. To ensure success- to develop their employees, increase ful results that go beyond skills training engagement, and create a culture of and truly enable the company to in- leadership and success. “This new crease employee engagement and re- trend emphasizes performance, actention, the organization must develop countability, and results – all in the cona comprehensive coaching plan that ad- text of developing employees and dresses both current and future needs. managers for the future. That way, com“The challenge arises not only in deter- panies continue to develop a pipeline of mining the types of coaching that will leaders in the organization while also be most impactful, but also in attaining setting higher and higher standards for the internal buy-in and support for such improved performance,” said Stoicescu. “The organizational coaching market in a program. Organizations continue to seek Romania is growing. In the last 7 years, coaches who exude necessary qualities, more and more companies have such as listening actively, establishing opened up to a development process trust and maintaining high professional like coaching. The leadership and team standards. Additionally, organizations development process through coaching must ensure that internal and external is becoming more widely used, even in coach practitioners, as well as man- different ways. Middle managers are agers/leaders using coaching skills, have learning how to do coaching with their received the appropriate amount of teams, while at Senior Management training,” explained Stoicescu further. level, managers are helped to More than that, the company must also strengthen their capacity and prepare actively evaluate the coaching program for bigger and more complex roles,” also to determine its effectiveness and re- considers Mihaela Reese, coach & team turn on investment (ROI) in order to developer. On her turn, Alis Anagnostakis, maintain continued support and investowner Mind Leaders, sees a constant ment. Therefore, on the Romanian busi- growth over the past 10 years. “It is still ness market, organizations are increas- a fragmented market. According to the ingly discovering the benefits of training numbers in the largest worldwide study managers and leaders in coaching skills. of the coaching market undertaken by

the International Coaching Federation and Price Waterhouse Coopers, the global number of coaches worldwide was around 41,000, with the largest numbers working in North America and Western Europe. Presently, in Romania I believe there might be a few hundred practicing coaches - some formally trained, some not,” added Anagnostakis. “In some European countries, the market is more crowded. I heard from a colleague that Romania has the highest number of coaches after the US (relative to the population,) though I cannot imagine this. It is still a very young profession and more and more people are starting to discover the power of coaching. It gets out of the corner of therapy. It is more about personal development. When I came to Romania about 20 years ago, I was impressed with people’s interest to learn, be it languages, new concepts etc. I met many people who speak 3 – 5 languages, do a study beside their full time job. Now, more and more people have discovered the possibilities of personal development and coaching is one of the good roads to take,” expressed her point of view Petra Müller-Demary, accredited senior coach & founder Solution Surfers Romania. Almost all executive coaching that Anagnostakis is contracted to deliver is addressed to top managers or those

preparing to make a position jump in the company. Companies are recognizing the value of coaching as a tool for developing key people in the organisation (there are worldwide studies on the return on investment on coaching which suggest that the ROI might be as high as 500% - making coaching one of the most profitable investments in people development.) “Also, I have more clients who ask for coaching as a tool to develop teams - I have done a lot of team coaching, particularly over the past two years. Finally, coaching is seen by more companies as a way to shift culture from passive-aggressive patterns towards more constructive ones. There are more and more internal coach training programs aimed at preparing internal coaches on one hand and also at training managers in the company to use coaching to develop their teams. I have seen properly trained managers practicing coaching in their organisations with outstanding results - both for their teams and for the company,” added the Mind Leaders’ Owner. Daiana Stoicescu also sees a flow in the “system.” Unfortunately, despite multiple studies proving that coaching provides important career and organizational benefits, many leaders still do not want a coach. According to her, they will sometimes point to members of

www.business-review.eu Business Review | March 2016

cOAcHiNG 39 needs. According to Lilia Dicu, coaching is currently heading more to the things that people run away or usually hide from. “I’m refering to our emotions, intuition, spirituality, questions such as what is the „bigger meaning”, what makes sense for us and what doesn’t. No matter the method, coaching nowadays is about who we are as people, how we respond to the world around us and how we can make changes more than the need to have a strict plan and making things ﬁt into a certain shape. So this is the future of coaching –harmoniuos blend of science and art- who we are, what shapes us, what triggers us to act at our best, how to mold ourselves in the best possible way, how to have different mindsets.”

Petra Muller-Demary, Solution Surfers Romania

Alis Anagnostakis, Mind Leaders

their team and tell the coach to fix them, tifications needed in order to practice not seeing the benefits of coaching for this profession at the international stanthemselves – at least until something dards brought under regulation by innegative happens in their careers, and ternational organisations. Thus, a certain handicap and prejudice towards by then, it is often too late. “There is one other category of leader this profession was created. In this conthat is relevant to the Romanian busi- text, we, as professionals, strive to exness market: the leader who has a plain to people, clients and coaching coach but never does anything despite passionates that coaching is a profesthe coach’s best efforts. These leaders sion that is based on deontological stanlike the status of having a coach, but dards, has clear objectives, is based on aren’t really interested in making posi- a structured process and achieves real tive change. A coach is more like a sta- results,” considers Lilia Dicu. tus symbol to them, a way of saying, “Hey, I’m on the leading edge of the 2016-2017 trends coaching trend. I have a coach with While Alis Anagnostakis is expecting to amazing credentials. I’m getting en- see an increased demand for coaching lightened as we speak. Now leave me from both companies and individuals, alone,” explains the executive coach. Mihaela Reese believes this occupation It’s important to know that, while will become more professional. Also on managers and leaders complete a the demand side, companies will incoaching training and learn to coach creasingly choose more on the basis of their own people, they also develop solid criteria, including accreditation by their own leadership abilities. They the ICF. Last but not least, Reese forelook at their own leadership style and sees that clients will become more eduopportunities for improvement. “In cated in choosing the right coach to that way, we observe a triple benefit: work with. the leader/coach develops new skills, “This goes hand in hand with an inthe people whom the leader coaches creased interest in self-awareness and improve their skills and performance, an understanding that personal and and the organization as a whole gets professional development often go stronger. The bottom line is that leaders hand in hand and cannot be separated. who have coaches in Romania have a “At corporate level, I am seeing more different quality about them and, to me, clients who prefer to replace the classiare better., “concluded Daiana Stoic- cal skills training with more facilitative, escu. coaching style workshops and someOn her turn, Lilia Dicu, executive times give up group training in favour of coach & founder of the LS Institute, be- individual coaching for key people in lieves that the situation in the rest of the company. I also expect to see the the Eastern Europe is quite similar to team coaching trend that has started ours, mostly due to the fact that multi- over the past two years growing,” connational companies take organizational cluded the Mind Leaders’ Owner. decisions at HQ. So, often, their choice “I also hope it will influence the eduof coaching is reflected everywhere, in cation system more. I see this as a trend Eastern Europe local branches as well. in other neighbor countries like Hun“In Romania, sometimes, coaching is gary. I am not sure if this is a trend or still a debate – what is this domain re- just a wish, but in the last years, I was ally about? How can it really serve a involved in 2 projects where coaching person? Does it really work? How is it was introduced in schools,” added Petra different from other practices? This Muller-Demary. happens for a number of reasons – Daiana Stoicescu sees one trend on there was a time when a huge number the Romanian business market: the of self-proclaimed coaches invaded the convergence of a variety of professional industry, without having the educa- services – training, consulting, facilitational background, experience and cer- tion, and coaching – to serve client

Where to study Professional coaching flourishes all over the globe, and in turn, so is the field of coach training. To ensure quality training, the International Coach Federation accredits coach-training programs that meet its high standards. This accreditation provides coach-training programs, and those who complete them, with a competitive edge both in their content and stature. Coaches worldwide recognize ICF as an industry leader and turn to the Association for training and continuing education. Potential benefits of coaching to the employee include: better decisions, clearer goals and roles, increased selfawareness, more ideas and options, better relationships, better teamwork, reduced conflict, and renewed organizational commitment. Potential benefits to the organization include: improvements in productivity, quality, organizational strength, customer service, and shareholder value. Moreover, when coaching produces better alignment between personal and organizational values and goals, the results often include increased job satisfaction and organizational commitment and improved performance. “The International Coaching Federation remains the point of reference when we talk about professionalism in the coaching profession. They are the ones who provide accreditation to coach training programs and to individual coaches. To get accredited, a coach needs to complete (depending on the level of accreditation) tens, sometimes hundreds of hours of training and prove they have a minimum of 100 hours of practice (the requirement for hours of practice can go as high as 2500 for the highest levels of coach accreditation). Abroad there are already coaching masters programs from respected universities (showing that coach education is being taken more and more seriously at formal academic level). In Romania there are several coach training programs accredited by the ICF, So fortunately there are more and more opportunities for coaches to get properly trained,” concluded Alis Anagnostasis.

What is a coach?

Besides the confusion around coaching as a sports metaphor, coaching is often confused with mentoring, counseling/therapy, and consulting. The differences are discussed below: Mentoring – A mentor works closely with an individual to help develop the skills, knowledge, and relationships needed to perform better in the current position and to advance his or her career. A mentor is usually at a more senior level in an organization and has the professional and personal competencies to pass on organizational culture, norms, and traditions through skill and example. The mentor shares personal experiences through dialog, and often gives advice. Counseling or Therapy – Counselors and therapists focus on an individual's psychological well-being and may spend time analyzing the past. In contrast, coaches concentrate on personal and organizational success, how well the individual is functioning within the organization, and is future-focused. Consulting – A consultant gives expert advice and is hired for speciﬁc technical expertise. Coaches help individuals set and achieve desired goals. Coaches utilize questions and assessment tools to help individuals become more effective. For example, initial interviews could be used to create a baseline for why coaching is being requested. Often the coach completes a “take-in” interview and observes the client in action for a day or two to better grasp the dynamics within the organization. Beyond the initial interview, assessment tools could be used to more speciﬁcally pinpoint an application for the client, such as leadership skills, emotional intelligence, personality types, that may or may not involve a prior completed 360-degree feedback. Through the insight gained from assessment tools and observations by the coach, individuals become more self-aware of their strengths and barriers, and develop strategies and plans to reach their goals. By Daiana Stoicescu

romanita.oprea@business-review.ro

www.business-review.eu Business Review | March 2016

40 iNTERviEW

Transforming mobile games into platforms The 2015 winner in almost all major advertising competitions, POSSIBLE CEE is a force to be reckoned with in the mobile advertising world. BR met with Tibor Gulyas, innovative technology lead, and talked about the challenges of this medium, but also its great potential.

CV:

in Romania most of the people download exclusively free apps. How can they be convinced to download a paid one or, at least, make in-app purchases? The target audiences are very different between them and also from a monetizing point of view. For example, for a younger audience, you can have purchases, because they don’t have a natural resistance to them, they don’t bother them. However, they don’t want to pay real money for an application, because, most of the times they don’t even have money yet. Also, in terms of geography and location, the USA consumer has usually more money than a Romanian or a Hungarian one. In case of paid applications, you really have to get the initial attraction, to build up the trust that is needed to actually convince the target to pay beforehand, before they even actually try out the application. But if you don’t have the initial attraction, it’s a harder road for you ahead, as an app producer. The only feature that can help you is an AppStore optimization. You need to have really, really good screenshots, with good descriptions (short statements about the game,) a very good preview video that shows your game in action and its main features.

Tibor is a young, 24 year old professional that, along with his team, has in his portfolio a Cannes Lion and several awards at prestigious international festivals such as Clio Awards, Epica, Golden Drum, Golden Hammer, Golden Blade, etc for the mobile and tablet game “Adventures of Poco Eco: The Lost Sounds”.

Where do you believe the limit should be placed between how much you can go on playing for free and when you really must pay inside the game, in order to be able to pass to another level? There is a really basic system that we are trying to employ every time: the user should be able to access all the content in the game only to play in the game, without spending any cent. This rule is essential for every major title, but, what they do and we actually try to avoid, is that they press the players with the option to spend money and therefore their quality of life increases or even they get a competitive edge in the game. This method is called “paid-to-win” and it’s something we try hard to avoid. But, I believe that it’s a really ﬁne line and different in any genre. In competitive genres it has to be about balance, because if you go over the top, only the users spending a lot of money will top the charts and that may be demotivating for someone who is also spending a dime, but not as much as the “whale,” as we call them. And this increases the bounce rate as well and, of course, it’s a much less sustainable way to monetize. We kept on hearing at the end of each year that the next one will be the year of

Photo: Mihai Constantineanu

∫ ROMANiTA OPREA

mobile. But, until now, it hasn’t happened. When do you believe that the year of mobile will actually come? Will it really happen? (in terms of the clients’ investments in the area, revenues, etc.) I think that we already have years of mobile behind us and we have more ahead of us, just not in terms of client spending yet. The trend is there: you can see the mobile spending, the charts, and the revenues that are going up exponentially, even if they are raw. If you compare them with the revenues of games on PC or puzzle games, they are growing constantly. Clients are not really expanding that way yet, but I think they are waiting for a generation change in the executive level in the companies. That is my opinion. As a behavioral change, I believe that it’s clear to everybody that mobile is going to be really unavoidable in the next future, because this is the way the customer behavior is working. Just think about how much you use your smartphone, how much you can do with one these days and how the time you spend using it expands into the leisure or social activities. And with it, the demand for paid services will come as well.

Right now there is still a big gap between the accessibility and the penetration of the smartphones on the market versus how many clients invest part of their budget on this medium and how far they go with the imagination and creativity. I think that we, as an agency, as a company, shouldn’t wait for the clients to come up with these ideas. We need to pitch them, to be proactive with our approach. It should be the agency who comes up with the idea and then convinces the client that it works. And this strategy always works. We’ve never had a client who invested in a mobile game and then left it because it didn’t work. We never had a project that failed because we are always looking for ways to improve and work on our existing client titles (whether it’s a game or augmented reality or anything else.) The clients see that projects and ideas work and they invest even more in it and support its growth and development. Once they start, it’s very easy to convince them to invest more, due to the fact that we always give results. They see that this is really cost effective. Do you have clients that invested in more than one of your games? I’d say it’s somewhere in between. Basi-

cally, in any project, we have culturalized and localized versions of the same game, for different countries. The cultural differences demand a little bit of a different approach in each case. The most important thing is the continuous improvement and eventual transforming the games into platforms, like in the case of the Tesco game. We also understand that the clients have ownership of limited budgets that they can spend into a given region or country and, compared to the Northern American or the Western European countries, in our situation (in Hungary), given the citizens’ smaller purchase power and the smaller number of the inhabitants of the country, we pretty much see that that they have to make a difference in terms of budgets. It’s not that they don’t want to invest as much as in the other places mentioned, but they are also limited by the possibilities and the reach that our country can offer them. Therefore, we can also understand the clients’ headaches and we try to apply the approach of “small steps” and try to ﬁnd a minimum viable product or solution for the mobile that can have an effect. With most of those clients, once they see the return on investment, you can then justify your agency and your region to the global management and plan the next year with a more signiﬁcant budget that matters. Any kind of agency should be shooting for long-term relationship with the client. A success story is not created overnight. It should be an interactive story, a longer process and road that we can walk hand in hand with the client. Therefore, the agency can even think about investing themselves at the beginning in a test project, consider it a prototype, develop it to a certain point, making it different and interesting. At this point, the agency’s business can help its management to later on consider selling it to a regional or global level. romanita.oprea@business-review.ro

www.business-review.eu Business Review | March 2016

GREEN cORNER 41

Publicis and Plantam fapte bune in Romania launches Green Endorsement campaign ∫ ANDA sEBEsi Publicis Groupe Romania, “Plantam fapte bune in Romania”, an environmental initiative, and over 30 companies recently launched the Green Endorsement campaign. Starting this month, all the volunteers that participate in the national forestation action launched by Plantam fapte bune in Romania will get a Green Endorsement certificate, recognized by the major companies in Romania. Green Endorsement is a certificate that confirms that being involved in organizing the national forestation initiative proves significant qualities that every company would like to see in its employees. Over 30 multinational companies and other significant players on the local economy already pay formal attention to volunteering when analyz-

ing the proﬁle of their candidates. While Romania is among the ﬁrst countries in Europe for its illegal deforestation, it ranks among the last ones when it comes to volunteering.

The campaign aims to create a bridge between the future of the local environment and the professional one of the youngsters, considering that they are more preoccupied by their career

and professional life rather than by the environment. Plus, its main goal is to raise awareness for youngsters who graduate universities that their time invested in the environment is also time invested in their career. Publicis Groupe Romania becomes the ﬁrst communication group in Romania that encourages volunteering as an added value for its future employees. “The Green Endorsement certiﬁcate is a statement and an incentive for youngsters to invest in the future of Romania, while investing in their future too. Publicis Groupe Romania is the initiator of this large project in which we hope more companies in Romania will get involved in the future so that we recognize the importance of volunteering for the future of youngsters,” says Teddy Dumitrescu, country chairman at Publicis Groupe Romania. anda.sebesi@business-review.ro

swimathon 2016 launches carrefour Romania fights its call for projects against domestic violence

∫ ANDA sEBEsi ∫ ANDA sEBEsi Swimathon Bucuresti, the event specialized in fundraising through swimming, recently launched its call for projects within its four annual edition. This year, Swimathon will take place on July 2nd at the Anatolie Grintescu Olympic swimming pool within the Dinamo sports base. It is organized by Fundatia Comunitara Bucuresti and aims to gather 15 community causes from Bucharest and Ilfov county and to involve as many people from Bucharest as possible to be ambassadors, swimmers and donors for these causes. “In its three years of existence, Swimathon grew and became notorious in a city where there are many other sport events. Former editions posted signiﬁcant achievements: about 2,500 people have donated over

RON 425,000 for 65 community projects. For example, the free phone line Alo, Prematuritate, a project of Unu si Unu Association was launched because of the donations made with the occasion of 2015 Swimathon edition,” says Alina Kasprovschi, executive director at Fundatia Comunitara Bucuresti. Both NGOs and initiative groups from Bucharest and Ilfov county that intend to participate at Swimathon 2016 can apply with projects by March 31st. The causes will be chosen by an independent jury elected by Fundatia Comunitara Bucuresti. Over RON 193,000 have been raised from 1,131 donors within 2015 edition of Swimathon Bucharest. They supported 16 projects for which 230 participants went for a swim. anda.sebesi@business-review.ro

Carrefour Romania and The National Agency for Equal Chances between Women and Men (ANES) have recently launched new measures to support nationwide victims of domestic violence. They aim to promote the emergency call number dedicated to such victims (0800 500 333,) support them in their integration on the local labor market and to offer a minimal package of services for the four local units managed by ANES. The call-center was launched in November last year by ANES, and it is a 24/7 service that offers both assistance and monitoring of the endeavors for victims. The call-center operators direct the speciﬁc cases to the intervention teams formed in each county of Romania, including Bucharest. In addition, the two organizations will support the integration of the domestic violence victims on the local labor market, by employing them in

the Carrefour retail chain. “We are involved constantly in actions that aim to create a better life for individuals from the communities where Carrefour operates. We permanently want our efforts to make a difference exactly where there is a need for it. Family is the main pillar of the current society and, in order to contribute genuinely to the creation of a solid and stable society, we chose to ﬁght against domestic violence. Within our social responsibility strategy, we intend not to limit our initiatives to punctual interventions, but to be a partner in mobilizing concrete measures that have a long-term impact,” says Andreea Mihai, marketing director at Carrefour Romania. Domestic violence is a continuous and recurrent phenomenon that increases in frequency and severity and has devastating long term effects on children as they are witnesses or victims. anda.sebesi@business-review.ro

www.business-review.eu Business Review | March 2016

42 FILM REVIEW FILM REVIEW

the Measure of a Man

dEbbIE stoWE director: Stéphane Brizé starring: Vincent Lindon, Karine De Mirbeck, Matthieu Schaller on at: See listings Unemployment seems to be having a moment with francophone ﬁlmmakers. In 2014, chroniclers of blue-collar Belgium, the Dardenne brothers, directed Marion Cotillard in a powerful and al-

most unbelievably tense tale of an emotionally fragile mother ﬁghting for her factory job, Two Days, One Night. Now Cannes entrant The Measure of a Man covers similar ground and themes, albeit less dramatically. The man in question is Thierry (Vincent Lindon), a 50-something unemployed French factory worker trying to support his family in an economy that has little use for his skills. The story follows his job search and its many frustrations and humiliations.

Appointments and interviews with a series of younger, confident, suited, ITsavvy professionals make Thierry – who’s basically the French version of a beaten down Bruce Springsteen protagonist – looks hopelessly out of his time. In one excruciating scene he finds himself at a sort of job club, during which the other participants are asked to watch a video of him being interviewed and give feedback. We see little outward reaction to the stream of criticism, but the power of Lindon’s performance here lies in conveying a lot with a little. The actor is on screen almost the whole time and carries the film with understated ease, investing Thierry with the quiet dignity of the working man. The rest of the cast are unknowns, and director Stéphane Brizé appears not to be interested in the other characters and their stories. The narrative is also pared down, avoiding the easy melodrama and crises that stories of the down-ontheir-luck working class can rely on. Thierry has money worries, but his family is not on the point of starving or

being evicted. His son is disabled, but this plot point is not milked as a source of stress – Matthieu (Matthieu Schaller) is high functioning and Thierry and his wife (Karine De Mirbeck) clearly enjoy each other’s company and don’t seem to row about their parlous finances. The drama instead comes largely from the minutiae – a negotiation of a caravan sale, the small moral dilemmas Thierry faces when he finally finds work. It’s this very human look at an ordinary Joe that gives the film its power, showing how the modern, capitalist economy leaves the hardworking little man on the scrapheap. The episodic nature of the movie does lead to a lack of narrative thrust at times, and though the end provides some catharsis, it’s a weak one – although one could applaud the director for not tacking on a tragic finish that would have been out of kilter with the low-key tone of the rest of the film. The Measure of a Man offers nothing new, but tells its familiar story with quiet conviction, and never patronizes its characters. debbie.stowe@business-review.ro

www.business-review.eu Business Review | March 2016

44 CULtURE

Innovation is the main common trait between the Netherlands and Romania Last month, a new cultural center opened in Cluj-Napoca, the Dutch Cultural and Academic Centre. BR talked with Mihnea stoica, the director of the center, to ﬁnd out the similarities between the two cultures and the importance of such a place in the heart of the country.

CV:

What is the main objective of the dutch Cultural and Academic Centre in Cluj? Since all our objectives derive from it, I would ﬁrstly like to refer to the mission of the Dutch Centre in Cluj. We seek to build stronger connections between Romania and The Netherlands and to contribute as much as possible to the deepening of the intercultural dialogue between the two countries. This is also in accordance with the greater mission of the higher educational institution which we are a part of, namely the Babeș-Bolyai University. Therefore, our main objective is not only to promote the image of The Netherlands in Romania and vice-versa, but also to encourage the collaboration between the two countries in various ﬁelds, especially in culture, research and education. We are focusing on organizing a series of cultural events, but we also want to provide research support for Dutch companies that intend to invest in our country or that are already established investors.

present: Babeș-Bolyai University, Director of the Dutch Cultural and Academic Centre, Research Assistant and PhD candidate 2013 - 2014: European Parliament, MEP Adviser 2011 - 2012: VU University Amsterdam, Master’s in Comparative European Politics 2007 - 2011: Babeș-Bolyai University, Bachelor’s in Law 2007 - 2010: Babeș-Bolyai University, Bachelor’s in Political Science

Could you give us an overview about the financial impact that the dutch community has it in Romania? The Netherlands has been the biggest foreign investor in Romania. Statistics show that over 20 per cent of all direct investments in Romania are of Dutch capital. There are about 4000 Dutch companies in our country, so I believe these figures can give us an image about how attractive Romania is for The Netherlands, at least in economic terms. Moreover, we should not overlook the other positive effects that the collaboration between Romania and The Netherlands has had over the years, which definitely goes beyond the economic factor. Even during communism, we know very well how much the Dutch Embassy supported oppressed artists to express themselves, by helping them publish their work – forbidden in Romania – in The Netherlands. The famous case of poet Mircea Dinescu is the first one that comes to my mind. And after the fall of communism, The Netherlands has continuously brought about and supported much of the progressive issues on the public agenda in our country and has been a firm supporter of the fight against corruption. So there is a clear positive impact in a variety of fields.

Photo: Dutch Cultural and Academic Centre

∫ oANA VAsILIU

What are the center’s activities? The center also intends to cover academic research activities in areas of interest for both parties. That is what I believe, on the whole, takes our activity further than a traditional cultural center. Basically, the activities of the Dutch Center will be divided into two large categories: cultural activities on one side and applied research on the other, both with a strong joint Dutch-Romanian character. We are also open to offer consultancy services and expertise, providing research-based insights for our Dutch partners about a variety of aspects related to life in Romania: social, political, economical issues etc. We intend to organize and promote scientiﬁc and value-added conferences, workshops, public trainings, summer schools and specialized cultural courses. What kind of partnerships, networks and international collaborations are you currently developing? We are deeply honored to have on our side the most important institutions that offered their support in pursuing this project and making it possible to take it all the way from a concept to reality. Our ﬁrst discussions were with the Embassy of The Netherlands in Bucharest through the Consulate of The Netherlands in Cluj. We had the honor

of having Her Excellency, Ms. Stella Ronner-Grubačić, the Ambassador of the Netherlands to Romania, as a main guest and speaker at the opening ceremony. We benefited from an enormous support from His Excellency, Mr. Wouter Reijers, Honorary Consul of the Netherlands to Cluj, who was very open towards the idea from the very beginning and who was always available for us with advice and contacts. The door of the Babeș-Bolyai University was also always open for us, the support of Acad. Prof. Ioan-Aurel Pop, Rector of the University and of Prof. Ioan Bolovan, ViceRector, having been crucial. The center works under the authority of the Faculty of Political, Administrative and Communication Sciences, and in this sense Prof. Călin Hințea, Dean of the Faculty and Prof. Ioan Hosu, Director of the Communication Department, were amongst the first supporters of the project and believed in its potential. We also closely collaborate with Dutch academics, Prof. André Krouwel from Vrije Universiteit Amsterdam, being our first connection with The Netherlands on the research dimension. Moreover, there is also an important business network that is financing the activities of our center. The Dutch Business Club in Cluj is our main sponsor, together with Reijers Consulting, Ecolor and Techo, all

of them important companies in the region. So I would say we have all the ingredients for success in the long run. In your opinion, what are the similarities between the two cultures? From my experience, I would say innovation is the main common trait of the two cultures, with the observation that maybe the Dutch are more aware of their potential and of the importance of innovation. But I think that in Romania this is also becoming more of an issue than it was a few years ago. Moreover, ever since both countries have been members of the same institutional framework, the EU, we share quite a lot of expectations in terms of future development for our countries and for Europe in general – which is also part of one’s culture. However, I think that what in such collaborations it’s the differences that characterize two cultures, elements which can come together complementarily that are most beautiful. Through our activities, we would like to stress the importance of active citizenship, which is a main characteristic of the Dutch culture. Living there has made me understand that being involved in your community is very important. And I know that other colleagues of mine, who have studied there and came back to Romania, share this opinion. We also want to tackle issues related to inequalities and discrimination. The environment is another important issue, which is so much cherished in the Netherlands. So I think that creating a bridge that connects the two is a perfect way of making the most out of both the similarities and the differences between the cultures. editorial@business-review.ro

www.business-review.eu Business Review | March 2016

REstAURANt REVIEW 45

A culinary fraud Salsa Caliente, No. 1 Iulia Hasdeu. 021 211 2030

Come with me dear readers whilst I walk you through creating a dish of culinary fraud. All the ingredients are available to every dishonest restaurant in town, but Caliente uses them all. So we start with a bowl full of DECEPTION. Google or Facebook the House and you will find a logo of fabulous shellfish. This picture is designed to lure you into a trap to visit them, but none of the shellfish exist when you get there. Next, add a big portion of LIES, for they profess to be a Spanish chophouse, but as you will see, they are nothing more than a Romanian joint with 162 dishes all sexed up with Spanish names, such as ‘olivas rellenas,’ a humble olive stuffed with an anchovy, and ‘tapa pimiento,’ the normal Romanian dish of roasted pepper with olive oil. Stir the ingredients of lies and deception together, and add a huge portion of STUPIDITY. Thereafter, the fun-loving Spanish customer goes on a pub crawl, eating Tapas in every bar to help him from getting slaughtered on Spain’s fabulous bar drinks. But there are no other bars selling Tapas near Caliente, so the cultural point is lost. But in Spain, typical Tapas dishes include fresh white anchovies, fresh octopus drowning in a sea of olive oil and garlic, fresh tender (not rubber) calamari swimming happily in white wine, and of course, Spain’s most loved national fish, Hake. But did we get those? Oh, give me a break, not a chance! Finally, to complete our fraud dish, season it well with a huge amount of ARROGANCE, because the dumb House assumes that we customers are gullible

fools who cannot see through their charade! At this point, please do not leave this page, as I am about to reveal a comedy of errors which beggar belief. OK, Let’s eat. It’s not expensive, and the décor fits accordingly. I flipped the menu to Blondie, who gasped in amazement. “Where are the Spanish ingredients? I can buy this lot in Mega or Metro,” she wailed. For once in her life, she was right. And the House had come to the same conclusion for all the ingredients were not sourced from Spain, but from a local Bucharest store. I told her not to bother her fluffy girlie head with such complexities and to wait and see if we got a pleasant surprise when our dishes arrived. Yes, it was a surprise, but not a pleasant one! Each dish on the menu had a warning of the wait time, from 20-45 minutes. I had no problem with this, as a chef myself, I could picture in my mind the House chef painstakingly mastering his art to perfection over 45 minutes. But no, I was wrong. More on that later. So off to a ‘mushlitos con salsa Rioja.’ That means breaded crab lumps, (30 mins, my time 4 mins.) We could not believe our eyes when our dish arrived, Blondie shrieked “you gave me this exact thing last week at your house.” And she was right. For I had purchased the same dish from the freezer cabinet in Obor. All the house had done was to heat it up, and slap 6 crab lumps on my plate. Hey, is there really a ‘chef’ in this House? Nah - read on because it gets worse. Blondie squealed she wanted the

only Spanish thing on the menu, ‘chicken paella’. (Correct at 35 minutes, provided it was really cooked freshly which I doubted.) I remonstrated that it would be a disaster, but you can’t argue with a woman bent on gastronomic destruction, so I smiled as her ‘paella’ arrived as a greasy stooge, which would be instantly recognizable in a Chinese restaurant as ‘chicken fried rice’. It was devoid of everything that makes a paella, from saffron, garlic, onion, seasoning, etc. I had a nasty suspicion that this was straight out of a supermarket chiller bag. But it was to get worse. Blondie shouted at me to get out, but I couldn’t leave my seat, because I was laughing too much at their ineptitude. So away we went to a chicken ‘gorgonzola with oriental rice’ (35 mins. me15 mins.) I lived as a child in Hong Kong but I never heard of ‘oriental rice.’ It came as rice with chopped vegetables. Thank you House, now I am so much wiser!!! The gorgonzola sauce was nothing more than a roux made from ﬂour and milk, devoid of any gorgonzola whatsoever. We passed on fried shrimps (35 mins- me 3 mins) and also on their prawn cocktail, which I suspected they would probably serve to us as a drink in the bar. We also passed on stuffed calamari (35 mins) which, although they did not state the stuﬃng, I am sure it would have been stuffed with bullshit. Away now to ‘ensalada griega,’ a green salad with Romanian feta, and to make it Spanish, they threw in an olive. And now another LIE. I ordered clams (vongole) in white wine sauce (45 mins.

Me 4 mins.) We could not believe our eyes when we received a steaming hot bowl of mussels (midi) and the white wine sauce was devoid of any garlic or onion which are essential in this dish. Hell, it was a failed version of ‘moules mariniere.’ Very Spanish! Our charming waiter insisted that the midi were really vongole but I knew the midi was from a Metro chiller cabinet. By now, the cataracts of gastronomic ignorance were falling from my eyes, as I realized these absurd waiting times were not for the so-called ‘chef’ to complete his art, but rather from the man in the kitchen to simply DE FREEZE THE PRODUCT FROM METRO, before heating it and throwing it on your table. They even conﬁrmed that all the seafood was frozen, and nothing was fresh. May I assure you dear readers that if this restaurant were in Spain, the passionate, hot tempered Spaniards would cause a riot, and walk out of the restaurant in disgust leaving the hapless waiter wearing the rejected dishes. In Spanish history, their most reviled character was the evil priest, Torquemada who murdered and raped his way through Spain during the Inquisition. He was such a sadist that the English word ‘torture’ derives from his name. If he were alive today, I would rather he crucify me and impale me on a spike rather than have to eat in this place again. I think you’ve gotten the point. Michael Barclay Mab.media@dnt.ro

www.business-review.eu Business Review | March 2016

46 CItY

Cultural calendar ∫ oANA VAsILIU one World Film Festival March 21 - 27, Cinemateca Eforie, Cinema Elvire Popesco, Cinema Union, Hollywood Multiplex

For this year’s edition, the international human rights documentary film festival offers 53 movies in nine categories, which will be screened in the various locations. “Documentary, as a film genre, is resting on edges, and lays there, where fiction borders journalism, where the experimental borders sound civic-mindedness. This being in-between borders, specific to non-fiction film, is perhaps the reason why documentary is so well-equipped to talk about frontiers. The genre itself essentially migrated towards ever more hybrid territories. The power of the documentary genre resides in its mobility, hard to constrain by definitions, in the fact that it swiftly absorbs the most cutting edge online tendencies, as it ventures in the landscapes of video games and already took off in the dizzyingly unknown space of virtual reality. Through our festival’s events, we also tried to paint a comprehensive portrait of these emerging adventures beyond any sort of established or expected borders,” explains Ada Solomon, the festival’s director, in the introduction of this year’s festival booklet. Tickets cost RON 10.5 – movie passes cost RON 35 and a full subscription RON 100.

Petra Acker Quartet March 25, Jazz Pong

Petra Acker and Albert Tajti are a lively duo for three years now, and the two are joined by Britta Seidner with backing vocals, and Robert Erdos, who contributes through warm grooves at the cajon, a box-shaped percussion instrument originally from Peru. The

For this tenth edition of the festival, 27 shorts will be screened at the international competition, out of which only two are Romanian movies: Second look (director Ana-Maria Comanescu) and Dispozitiv 0068 (director Radu Barbulescu – in picture.) Also, the Romanian competition consists of ten movies made by directors Bogdan Theodor Olteanu (Chinese lanterns), Adina Dulcu (Unavailable network), Sebastian Mihailescu (Old luxurious ﬂat located in an ultra-central, desirable neighborhood), Roxana Bentu (Paper Bag), Simona Sava (Plan B), Cristian Pop (Bread toaster), Dorian Boguta (Vera) and Andrei Tanase (Countryside holQuartet sings a mix between styles iday), as well as the two other shorts like soul, jazz, gospel, folk, R&B, own selected also for the international compositions and cover versions of competition. For one movie, tickets songs by the artists who inspired them. cost RON 10, while a full pass costs RON 80. Tickets cost RON 25.

Jazz in the church March 31 – April 3, Lutheran Church

The fourth edition of this jazz festival returns with an exceptional line-up: legends John Surman and Palle Mikkelborg, as well as two New York trios, Sylvie Courvoisier, Drew Gress & Kenny Wollesen and Lionel Loueke, Massimo Biolcati, Ferenc Nemeth. Progressive jazz, avant-garde jazz, dynamic piano jazz and modern jazz combined with west-African traditional music will be staged for this event. Also, the Romanian jazz singers will be represented by George Natsis, Adrian Flautistu, Vlad Popescu, Toma Dimitriu, Dan Alex Mitrofan, Adi Stoenescu, Tavi Scurtu and Iordache. Tickets cost RON 100, while a 4 day subscription costs RON 300.

NEXt FILM FEstIVAL April 7-11, Cinema Elvire Popesco, Romanian Peasant Museum Cinema and CinemaPro

Alessandro safina concert April 14, sala Palatului Italian tenor, Alessandro Safina, will return to the Bucharest stage accompanied by 74 professional musicians, known as Alexander Symphony Orchestra. Alessandro Safina has a brilliant career in the world of opera, his concerts being sold out on the most

prestigious stages in the ﬁeld. The Italian tenor has grown in popularity in the early 2000s when he combined classical and pop music to create a new style, hard to classify – “rock opera” – as he calls it himself. The single “Moon” has remained atop the charts for 14 weeks. Alessandro Saﬁna has collaborated with many international artists including Elton John, Carlos Santana, Rod Stewart, Miriam Stockley, Sarah Brightman, Jose Carreras and Mario Frangoulis. Tickets cost from RON 160 to RON 365. editorial@business-review.ro