Business Review - 12/2015

INTERVIEW: Silviu Savin, partner with Ascenta Management, talks to BR about the development of its office project in Brasov, Coresi Business Park, and how the company plans to invest between EUR 15 million and EUR 20 million in a private healthcare chain. » page 8

ROMANIA’S PREMIER BUSINESS MAGAZINE

SHOPPING

DECEMBER, 2015 / VOLUME 19, ISSUE 12

IT’S NEARLY CHRISTMAS AND BUCHAREST IS ALREADY PANIC SHOPPING. BR IS ON HAND TO HELP YOU. OVER THE FOLLOWING PAGES, YOU WILL FIND OUR SELECTION OF THE BEST PLACES TO DO YOUR CHRISTMAS SHOPPING >> PAGE 24

2015

Year in review Romania had a challenging year in 2015.

From a tragic fire that reshaped the political scene, to an international economic and social crisis, Romania saw the faces of a challenging year » page 10

MARKETING

DIGITAL

Promos rule

Roaming online

Brands are challenging themselves in the attempt to catch consumers’ attention. In a price-driven market, promotional campaigns still reign supreme during this time » page 20

In line with the Digital Single Market strategy, the European Commission recently presented a proposal to allow Europeans to travel with their online content » page 7

www.business-review.eu Business Review | December 2015

EDITORIAL Anda Sebesi EDITOR-IN-CHIEF

Summing up a tough year It’s hard for everyone to define the year of 2015. From the stepping down of a government as a result of the Colectiv tragedy, to international social and economic turmoil, Romania has faced one of the most challenging years in its recent times.

But one thing is sure: we need to be prepared to act whatever comes thrown our way. We need to be ready for action in crucial situations and not just boast of our efforts because it is our duty to bring our contribution in order to get through a crisis. There is a need for a drastic change of our deeply-rooted “It goes as it is” mentality, as the Colectiv fire proved this approach to be invalid.

In addition, it seems that the Romanian landscape appears to have changed: journalistic investigations are forcing the government to give answers for the lack of transparency regarding the public health system and what happened with the victims during their treatments, legislation for fire safety regulation has changed and the HORECA players are willing to offer protection to their customers. Many ask if anything is different since October 30. How deep the recent change of both the political scene and community involvement is, we will not see just in 2016, but in the years to come.

2015 brought a lot of good things for Romania. First, the adoption of the New Fiscal Code seems to be a breath of fresh air for the local business environment.

It is in many ways much better than the previous one especially if we think of a clearer explanation of fiscal terms. Second, according to Eurostat, Romania posted a 1.4 percent increase in GDP in Q3 2015 compared to the previous quarter, the highest value among EU members. And this should be seen in the quality of Romanians’ life. As for the investment side, approximately EUR 1 billion was invested in 2015 in oil field works in the Romanian Black Sea. This was done despite 2015 being a hard year for the Romanian oil and gas industry, and also despite slumping oil prices. This year has been a challenging one for producers of renewable energy as well, albeit in their case, the motives lie elsewhere. The renewable energy sector was one of the few to boom during, and in the immediate aftermath, of the economic crisis, attracting a total of EUR 7 billion in investments between 2009 and 2014, according to market reports.

Also the Romanian IT market continued to post growth in 2015, with total revenues made by companies producing software and IT services in Romania being estimated to be 14 percent higher in 2015 than the 2014 level of EUR 2.42 billion.

As for employment, direct employees together with the sole traders in the IT industry, will reach 100,000 people by the end of 2015.

In short, a good year paved with challenges and unexpected tragic events should give us the input and drive that we need to be better and better in the year to come. Business Review wishes you A Happy New Year and a wonderful 2016! anda.sebesi@business-review.ro

EDITORIAL 3 Contents 3

EDITORIAL

Summing up a tough year

6

NEWS

Pwc: External recruitment rate is on the rise across all sectors

7

REAL ESTATE

Ascenta Management speeds up development of Coresi Business Park and prepares for healthcare investment

10 COVER STORY

2015: Wrapped in political and social turmoil

11

Real estate market posts real growth in 2015

12

Lenders face profits and challenges

13

Local car market is a little broken down

14

Romanian IT boasts a good year

15

Telecom operators focused on 4G coverage expansion in 2015

16

Drought withers grain production Slump in energy this year

18

Consolidation and in-house power are the 2015 key words in advertising

20 MARKETING

Promotional campaign enforced with digital knowledge

22 INTERVIEW

IAA appoints first Romanian at the helm

23 RESTAURANT REVIEW Brash and flash 24 SHOPPING GUIDE

Christmas comes but once a year

28 GOING OUT

Romania: a country of contrasts and juxtapositions

30 CULTURAL CALENDAR

ISSN No. 1453 - 729X PUBLISHER Bill Avery EDITOR-IN-CHIEF Anda Sebesi DEPUTY EDITOR-IN-CHIEF Simona Bazavan JOURNALISTS Otilia Haraga, Tatiana Lazar, Romanita Oprea, Natalia Martian, Andreea Tint 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 Anamaria Radu, 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 | December 2015

4 NEWS

3Q Bianca Bardas business division manager at Orange Romania

How many people are currently working in Orange Romania’s division dedicated to catering to the SMEs on the Romanian market?

The marketing division dedicated to small and medium enterprises currently counts seven marketing specialists who are dealing both with small entrepreneurs as well as small and medium enterprises. Apart from the marketing team that is in charge with creating the offers, there are also teams dedicated to sales and customer service.

Generally, from what sectors do the SMEs that Orange Romania caters for originate and what kind of services are they generally looking for?

Our SME partners come from various fields, the best represented being the trade sector. Customers generally start with taking up mobile services for smartphones and/or tablet - namely, the voice and internet services - so that they can manage their business as seamlessly as possible. To these, we can also add more and more fixed services, especially the internet service, that also comes with differentiating benefits for their business - such as virtual hubs like Business One Voice. We have been receiving very good feedback regarding auxiliary services that we are facilitating, for instance the access to Microsoft Office 365 licenses on the Orange invoice.

What budget do these SMEs usually spend on the communication services they take up?

The budget they spend varies very much, depending on the number of employees, the development stage they are in, as well as the type of telecom or auxiliary services. Small entrepreneurs who have at most two employees can choose from a dedicated portfolio of individual postpay offers called Orange Pro, which start from EUR 9.68. As their needs diversify, we are no longer talking about postpay offers, but about customized solutions, depending on their needs and on the budget that the company wishes to invest.

We are glad to see that the number of entrepreneurs who choose us is on a steady growing trend. otilia.haraga@business-review.ro

NEWSin brief AGRICULTURE Romanian agro sector registers high level of investments despite low profitability, says Coface While having an average productivity in agriculture three times lower than the EU average, Romanian companies registered the highest level of investments in fixed assets and land in 2014, a Coface study of the agro sector reveals. With a share of 23 percent in total fixed assets, two times higher than the average regional level, local firms’ high level of investment is justified by the need to increase efficiency.

Despite this, the agro sector saw a decline in profits, Romania registering a level of profitable companies lower than the one in CEE. With 44 percent of the agro companies reporting a deterioration in net earnings during 2014 and 20 percent falling from profit to loss, the consolidated net result for 2014 for this sector was 4.7 percent (falling from 5.8 percent in 2013 and 8.9 percent in 2012).

AUTO Eco-friendly car sales in Romania go up 125 percent in first ten months During the first ten months of 2015, sales of new electric and hybrid cars in Romania hit 411 units, marking a 125.8 percent surge from the same period in 2014, show statistics released by the Car Producers and Importers Association (APIA).

According to APIA, 25 of the total cars are 100 percent electricity-powered.

Over the same period of 2014, 182 green energy cars were marketed, six of them completely electric.

ENERGY Romania’s 7 pct energy interconnection capacity needs improvement, says EC

cent). Sweden stood at the same level as Romania, while the rest of the countries were mostly below 2 percent. The overall energy trade deficit has decreased since 2006 from a level of 3.6 percent of GDP. At the same time the current account deficit recorded a marked improvement in the same period as a result of a macroeconomic adjustment process.

HEALTHCARE MedLife invests EUR 1 mln into Timisoara ‘hyperclinic’ MedLife has opened its second clinic in Timisoara following a EUR 1 million investment, offering 26 medical specializations, HotNews informs. The clinic, covering 1,600 sqm, includes integrated ambulatory and imaging services, a laboratory, and next year will provide day hospitalization.

MedLife is active in Romania since 2004 and currently has 16 units across the country, in Bucharest, Arad, Timisoara, Galati, Iasi, Constanta, Brasov and ClujNapoca.

HOTELS EUR 14 million Ramada Plaza hotel opens this November in Craiova A Ramada Plaza hotel was opened November 25 in Craiova, in southern Romania, following a EUR 14 million investment made by local company Jiul SA. The investment went into the refurbishment of the former Jiul Hotel and was financed to the greatest extent by a bank loan from Garanti Bank. Addressing business and leisure segments in a ratio of 90-10 percent, the 162room hotel Ramada Plaza Craiova expects a turnover of EUR 2.5 million and over 50 percent average occupancy in its first year of activity, according to company representatives.

The unit in Craiova is the only Ramada Plaza property outside the capital. It features four-star plus lodging facilities (162 rooms), a conference center, two gastronomic restaurants and a SPA.

Romania has an energy trade balance deficit lower than the European average, with strong points registered in gas and coal, but still needs to work on its interconnection level with other EU member states, according to a report released by the European Commission, Romania ranks 55th out of 189 Romania’s energy trade balance posted countries for ease of paying a deficit of 1.4 percent of GDP in 2014, taxes, says PwC which is lower than the EU average. Romania has ranked 55th in PwC’s Denmark presented the lowest deficit ‘Paying Taxes 2016’ global ranking, among member states (0 percent), fol- which measures the ease of paying lowed by the United Kingdom (0.8 per- taxes for a standard company across

LEGAL

189 economies all over the world, the company announced today.

By reducing the social security contributions (CAS) in the autumn of 2014, Romania saw its 2015 tax rate (which measures the amount of taxes and contributions payable by businesses and expressed as a share of their profit) drop from 43.2 percent to 42 percent.

Romania’s total tax rate in 2015 of 42 percent was below the Central and Eastern European’s countries’ average rate of 45 percent and close to the global average of 40.8 percent, shows PwC data. In terms of the number of tax fillings and payments a company has to perform annually, Romanian companies registered a number of 14 such payments, well above a regional average of 9.5 payments but below a global one of 25.6.

MACROECONOMICS Romania’s economy sees highest growth among EU members in Q3, says Eurostat Romania registered a 1.4 percent GDP increase in Q3 2015 over the previous quarter, the highest increase among EU member states, according to Eurostat, the statistical office of the European Union.

Close behind came Croatia (1.3 percent), Malta (1.1 percent) and Latvia (1 percent).

In the EU the GDP rose by 0.4 percent over the previous quarter, while y-o-y the value increased by 1.9 percent. Final consumption expenditure was one of the main drivers of the advance, going up 0.5 percent in the third quarter, followed by gross fixed capital formation (0.3 percent). Exports (0.3 percent) and imports (1.4 percent) also had positive contributions.

Romania’s 2016 state budget foresees a 2.95 percent deficit, within EU limits With a deficit of 2.95 percent built on an economic growth of 4.1 percent of the GDP and a nominal gross domestic product of RON 746.6 billion (EUR 166.92 billion), Romania’s 2016 budget had to accommodate a four percentage point cut in value added tax to 20 percent and other tax reductions, wage hikes of between 10 and 25 percent and higher social benefits, according to finance Minister Anca Dragu.

The 2.95 percent deficit is below the EU’s 3 percent threshold, according to officials.

Investment spending has been raised to 5.1 percent of the GDP, compared to an estimated 4.7 percent of the GDP in 2015, while employee spending will grow from 7.3 percent to 7.7 percent of the GDP as a result of the multiple wage in-

www.business-review.eu Business Review | December 2015

creases.

Trade deficit widens to EUR 6.4 bln in first ten months During the first ten months of 2015, Romania’s trade deficit reached EUR 6.4 billion, EUR 1.53 billion more than in the same period of the previous year, according to data released by the National Institute for Statistics (INS).

While exports amounted to EUR 45.9 billion, Romania imported goods worth EUR 52.31 billion during the mentioned period, registering rises of 4.3 percent and 7.1 percent y-o-y.

Romania exported goods worth EUR 33.88 billion inside the EU (73.8 percent of total) and EUR 12.01 billion outside the union. Imports from inside the European Union reached EUR 40.26 billion (77 percent of total), while extra-EU arrivals totaled EUR 12.04 billion.

ONLINE EC places Romania last among EU members in digital ranking Romania has an overall score of 0.32 and ranks 28th out of the 28 EU member states, according to the Digital Economy and Society Index 2015 (DESI), a ranking put together by the European Commission within the framework of the European Digital Agenda.

Compared to last year, when it had a score of 0.28, Romania made some progress, the study shows, though it still falls into the cluster of low-performance countries, where it performs below average. This is mainly due to the fact that, although more people subscribe to fast broadband networks (60 percent of fixed subscriptions are to a fast connection today, in comparison to 55 percent in 2013 – Romania ranks second in the EU), low levels of digital skills and trust seem to be holding back the development of its digital economy.

REAL ESTATE Real estate projects worth EUR 800 mln to be delivered in 2016 Real estate developers are expected to deliver projects totaling over 700,000 sqm in 2015 following an overall investment volume of over EUR 800 million, according to JLL data.

According to the real estate services firm, office buildings will remain at the top of developers’ preferences, followed by retail and logistic.

Among the largest office projects expected to be delivered in 2016 are Bucharest One (50,000 sqm GLA, a EUR 95 million investment by Globalworth), HBC 2&3 (45,700 sqm, by Atenor) and Oregon Park (45,000 sqm, a EUR 90 million investment by Portland Trust).

Building permits for residential constructions up by 3.9 pct in first 10 months Over 33,500 building permits for residential constructions were issued during

NEWS 5 the first ten months of 2015 in Romania, marking an increase of 3.9 percent y-oy, according to data from the National Institute of Statistics (INS).

However, in October the number dropped on an m-o-m basis, shows the INS data. Last month, a little over 3,000 building permits were issued for residential buildings, a 14.2 percent decrease compared to September 2015 and a 7.3 percent drop compared to October 2014. Out of the 3,000 permits, 62 percent were issued for the rural area.

RETAIL Romanians have largest Christmas expenses in Europe compared to revenues Though having the smallest revenues among 14 other countries, Romanians plan to spend the largest share of it for Christmas shopping, according to a study by ING. With a net monthly revenue of EUR 346, Romanians spend 32 percent of it for Christmas shopping.

By comparison, in Poland people have net average revenues almost double the ones in Romania (EUR 634), but they allocate only 11 percent of it (EUR 70) for Christmas related expenditures, while inhabitants of the Czech Republic spend 25 percent of their EUR 726 average income.

The biggest sums allotted for festive shopping can be found in the United Kingdom (EUR 420 – 15 percent of their salary), USA (EUR 360 – 15 percent) and Luxembourg (EUR 300 – 9 percent), while the lowest ones are registered in Romania (EUR 110), Poland (EUR 70) and the Netherlands (EUR 40).

Some 70 pct of money consumers save from VAT cut gets spent on more FMCG goods Money that consumers saved following the VAT cut for food and beverages this June went back into the acquisition of more such problems, according to a PwC report. Romanians’ buying behavior has changed since the time of the first impact of falling prices. At first, though still some 70 percent returned to FMCG, the proportion of food and non-food products was approximately equal (between June and July 2015). Personal care products especially saw an increase in spending, the GfK study notes. Meanwhile, this phenomenon has diminished, the money returning mostly to food goods.

Erratum Due to an error in the article "The greatest challenge is to make fitness fun" from Business Review's last edition, we published the information that Wordclass has 5,000 subscribers. The correct figure is 35,000 subscribers.

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

Ionut Ardeleanu is the new general director of Auchan Romania and he will also preside over the retailer’s board of directors.

He joined Auchan in 2006, as sector manager for the Auchan Titan store in Bucharest and later as market manager. In 2008, he was appointed manager of the company’s Timisoara store. In this position he was responsible for opening in 2011 the Auchan hypermarket in Craiova. Later, in 2012, he was appointed bidding director within the marketing department. One year later, Ardeleanu became responsible for the company’s operations in southern Romania.

Sorin Ioan Blaga has been appointed general manager of Liebrecht & wooD’s local operations. He has over 25 years of professional experience, holding

positions such as marketing director within Philip Morris Romania and Bulgaria, Adevarul Holding and Otter Distribution Romania, as well as VP marketing, communication and corporate affairs in the Rompetrol Group and managing director of Wave Division Group.

Blaga studied at the Technical University Gheorghe Asachi, in Iasi and holds a diploma in management and an MBA degree from the Open University Business School, UK.

Marcin Lapinski currently managing director of Skanska Property Romania will move on to hold the similar position within Skanska Property Hungary starting January 2016. He has been working for the Swedish developer since 2006. Zoltan Linczmayer and Aurelia Luca will fill the new positions of country directors for Hungary and Romania. Luca is presently acting as leasing manager.

www.business-review.eu Business Review | December 2015

6 NEWS

Romanian Post is seeking financing The Romanian Post intends to take up a RON 60 million loan with a view to finance working capital. The institution also announced this month that it intends to kick off projects with European financing estimated at approximately EUR 800,000.

∫ OTILIA HARAGA The Romanian Post also announced its intention to take up a RON 60 million loan with a view to finance working capital. The loan will have a reimbursement period of 36 months. The cost of

the loan is estimated at more than RON 10.2 million (VAT not included) and will be financed from the company’s own resources, according to an announcement published in the Electronic System for Public Acquisitions, writes Hotnews.ro.

The loan contract will be granted to the party who offers the lowest price, but other aspects will also be taken into consideration, such as the grace period or the way for reimbursing the money, according to Hotnews.ro.

The deadline for submitting the application for access to the documentation is January 8, 2016. The deadline for submitting the offers is January 18, 2016.

The offers will be opened the same day.

On December 7th, the Romanian Post announced in a press release that, by the end of 2016, it intends to kick off projects with European financing estimated at approximately EUR 800,000.

The company announced that, between July 2014 and December 2015, it completed a project for training employees

of over EUR 55,000, through the Sectoral Operational Program Human Resources Development. Other four projects of EUR 44,000 are currently under implementation.

The postal company intends to submit in 2016 another three projects in total value of EUR 530,000. These are financed through Horizon 2020, Erasmus + France and Erasmus + Romania.

The projects are targeting the training of employees in fields such as marketing, sales or insurances, acquiring IT&C equipment and the development of products and services common to other postal operators in Europe.

At the moment, the Romanian Post is expecting the approval of a new project financed through the European Commission, as part of the Horizon 2020 program. In this project, which was submitted in August and is coordinated by AIT Austrian Institute of Technology, the Romanian Post is a partner and has an allocated budget of EUR 213,000. The project targets the im-

provement of security ability of organizations against cyber-attacks.

The Romanian Post also announced in the press release that it is developing other projects from European non-reimbursable funds. The company implemented two projects of EUR 430,000 which concern the optimization of the process for delivering correspondence.

The company implemented two projects financed by the Universal Postal Union that are worth USD 570,000. Another two projects, targeting the optimization of the mail delivery process that are worth USD 430,000, are under implementation.

The major share package of 75 percent in the Romanian Post is owned by the state through the Romanian Ministry for Information Society and the Proprietatea Fund, which owns 25 percent.

The Romanian Post posted a profit of RON 22.8 million in 2014. otilia.haraga@business-review.ro

Pwc: External recruitment rate is on the rise across all sectors The Romanian market had an external recruitment rate of 13.5 percent representing a 13 percentage increase to last year’s. Most of the external recruiting was carried out to replace departed employees (10.3 percent), while only 2.2 percent was done for filling new positions, according to the PwC Saratoga 2015 survey.

Horatiu Cocheci, PwC Romania

∫ OTILIA HARAGA The external recruitment rate varies for different types of jobs: there is an increase of external recruiting for administrative/support positions, while for experts and blue-collar workers posi-

tions the rate is largely unchanged from the previous year.

Although for management positions, the rate of external recruiting is significantly lower than the general market average of 5.1 percent, there is a 1.3 percent increase in employments on new positions, compared to 0.7 percent in 2014, according to the PwC Saratoga study on human capital markers, based on information collected from 64 companies from pharmaceuticals, industrial production, retail, banking and financial leasing.

“This shows, on the one side, that there is an increase of the labor market dynamics in light of a more favorable macro-economic context, which allowed for a larger workforce migration.

On the other side, the small number of external recruitments for filling new positions can indicate the fact that Romanian companies are still cautious when it comes to creating new jobs within the existing organizational parameters,” stated Horatiu Cocheci, senior manager, leader of Human

Resources Consultancy Team at PwC Romania.

At industry level, retail remains the field with a 52.1 percent external recruitment rate, which is considerably higher than the market average. The sectors which have a lower recruitment rate than the market average are industrial production, standing at 10.3 percent and pharmaceuticals, standing at 12.6 percent.

The costs of employee recruitment have remained at last year’s levels, continuing to vary between EUR 65 per employee recruited in retail and EUR 1,000 per employee recruited in the pharmaceutical sector.

“The costs of recruiting an employee are directly linked to their qualification level. As such, in areas such as retail, where we see large fluctuations of personnel and seasonal activity, coupled with a basic level of training of most employees (in particular those on operational positions), the costs are lower, while in sectors which require rare specialized knowledge and expertise, the

recruitment costs are significantly higher,” explains Cocheci.

The rate of termination of employment contracts is similar to last year’s.

However, there is a slight increase of voluntary departures or resignations (from 9.6 percent to 10.3 percent), together with a notable decrease of involuntary departures (from 4.6 percent to 2.7 percent).

“The decrease of involuntary termination of employment contracts shows that employees have largely overcome the stage of massive personnel restructuring. The only sector where there is an increase of involuntary termination rates is the industrial production, where it is likely that processes for operational efficiency are still ongoing (through the technologization or modernization of production lines), this generally leading to a decrease of the number of employees,” said Nicoleta Dumitru, Manager, Consultancy Services for Human Resources, PwC Romania. otilia.haraga@business-review.ro

www.business-review.eu Business Review | December 2015

NEWS 7

EC aims to broaden access to online content and modernize EU copyright rules In line with the Digital Single Market strategy, the European Commission recently presented a proposal to allow Europeans to travel with their online content, which should ensure better access for consumers and businesses to online content, goods and services across Europe. The EC also proposed an action plan to modernize EU copyright rules. Once adopted, these two initiatives will be applicable across all 28 EU member states.

Andrus Ansip, EC

∫ OTILIA HARAGA “When people download a movie or a

song, it must play. If this is not the case, they should be able to end the contract and get their money back. People who legally buy content must be able to carry it with them anywhere they go in Europe. This is a real change, similar to what we did to end roaming charges,” said Andrus Ansip, vice-president for the Digital Single Market.

While at present, Europeans travelling within the EU may be cut off from online services providing films, sports broadcasts, music, e-books or games that they have paid for in their home country, the EC came up with a proposal. They propose the implementation of a regulation on the cross-border portability of online content services which will eliminate these restrictions so that EU residents can travel with the digital content they have purchased or subscribed to at home.

Cross-border portability, which

should come into force as a new EU right for consumers, is expected to become a reality in 2017, the same year as the end of roaming charges in the EU, according to the press release on the website of the EC. Since it is a proposal for a regulation, once adopted it will be directly applicable in all 28 EU Member States, according to the press release.

The new rules on digital contracts aim to better protect consumers who buy digital content or goods online across the EU and help businesses expand their online sales.

Vera Jourova, Commissioner for Justice, Consumers and Gender Equality said: “The internet has lifted technological barriers to a Digital Single Market, with the digital contracts proposals we want to lift legal barriers.

Consumers and businesses must buy and sell online easily and confidently

anywhere in the EU.” According to the EC press release, removing barriers caused by contract law differences should bring an overall benefit to the European economy in the order of EUR 18 billion and EU’s GDP is expected to increase by EUR 4 billion from its current level.

The EC also outlined its vision of a modern EU copyright framework, which will be translated into legislative proposals and policy initiatives over the next six months, following several public consultations.

The action plan in this field is built on four complementary pillars: Widening access to content across the EU, exceptions to copyright rules for an innovative and inclusive society, creating a fairer marketplace and fighting piracy. otilia.haraga@business-review.ro

www.business-review.eu Business Review | December 2015

8 REAL ESTATE

Ascenta management speeds up development of Coresi Business Park and prepares for healthcare investment Silviu Savin, partner with Ascenta Management, a Romanian investment advisor and real estate developer, talks to BR about the development of its office project in Brasov, Coresi Business Park, the challenges of buying distressed assets on the local market and how the company plans to invest between EUR 15 million and EUR 20 million in a private healthcare chain.

Photo: Vlad Virban

∫ SImONA BAzAvAN What is the current gross leasing area (GLA) of Coresi Business Park and what are your development plans for the project?

Right now, we have around 30,000 sqm (GLA) of office space and the target is to reach 100,000 sqm. In April, we will finish the project’s second development phase which will account for a total of 18,000 sqm which will be delivered by segments of about 6,000 sqm – 7,000 sqm through to this date. Given the current development speed, we estimate that the 100,000 sqm will be delivered in about five to six years.

Lately, we have seen leasing activity pick up due to two main factors. The first is the fact that Brasov is becoming an increasingly interesting destination for multinational companies and secondly, because of changes to the application of ISU (e.n. the Inspectorate for Emergency Situations) safety norms in the aftermath of the Colectiv fire. We see companies, particularly multina-

tional players, pay more attention to building safety. In fact, this is no longer an item on a long list of things to check, but any negotiation with potential new tenants now starts with questions about compliance to ISU norms.

Do you think Brasov has the capacity to absorb these 100,000 sqm of office space?

Brasov and the county overall have had an industrial revival over the past years.

After a period of industrial decline, production is now several times higher than it was even before 1990. And this drives up demand for office space. This demand is split relatively equal between multinational companies such as shared service centers, business process outsourcing and IT companies. They come here mostly because of the work force which they say it is still available and competitive both in terms of qualification and costs. The downside is the lack of infrastructure such as a highway connection to Bucharest and an airport which has led to Brasov sometimes losing potential newcomers in favor of

other regional cities such as ClujNapoca, despite several competitive advantages in terms of work force.

Another driving factor is that many companies that are already present in Brasov but whose offices are presently in class B or even C buildings, are migrating towards class A projects. There are quite many companies that are looking to upgrade and are relocating from such buildings which overall represent an important share of the existing office stock. I estimate that Brasov now has between 100,000 sqm and 120,000 sqm of office space, out of which only about 60,000 sqm are class A. The rest are class B and in many cases, class C. We already have 30,000 sqm of office space and we are flexible with regards to expansion as we have the support of both banks and the investor behind the project. The market presently suggests that it can maintain its growth rate. Given that we don’t do speculative developments, should this change we will slow down expansion. If we won’t reach 100,000 sqm in five or six years, we will perhaps reach them in eight or ten. But the investor behind the project, Philip Jacobs (e.n. of the Jacobs family which set up the coffee business with the same name) is in this for the long term and there is no time pressure for him to exit.

What are your main tenants and how much has been invested so far in the project?

CGS is has been with us since 2009 and they are our biggest tenant. Other tenants include Raiffessen, IBM and Tata Technologies which will move in our

new building. They each lease between 3,000 sqm and 5,000, sqm and have between 500 and over 1,000 employees.

We haven’t lost any of our tenants and in fact, they have all expanded their initial offices and continue to have expansion plans.

The project is presently fully leased.

We are not doing speculative developments so we have never built without pre-lease agreements.

Up to date, we have invested about EUR 15 million, excluding the price of the land. About half of this was private equity and the rest was represented by bank loans from Blom Bank France and Garanti Bank.

How do you estimate the recently announced plans to increase taxes for residential properties used as office spaces will affect the market?

It is hard to estimate the exact impact, but if indeed it will come into force, and if this will apply for all companies that are located in residential spaces, it will eliminate a considerable fiscal advantage they presently enjoy. The local tax can account for between 10 and 20 percent of the rent a tenant pays in an office park so this fiscal change would help balance things.

The same applies for the special constructions tax. Scrapping up this tax will help eliminate another imbalance. For example, we have invested between EUR 2 million and EUR 3 million in Brasov over the past years in landscaping common grounds such as green areas, alleys or parking spaces. This doesn’t reflect in any way in our rents, but it generates taxes which weigh hard

Silviu Savin bio He has been a partner with Ascenta Management, since 2010. Between 2007 and 2010, he acted as administrator of Centerra Capital, the company responsible with acquiring and masterplanning the former industrial plantform, Tractorul, in Brasov where the office park was later built.

He has 16 years professional experience in private equity and real estate, out of which eight with the Government of Singapore Investment Corporation (GIC) in London and Singapore.

He holds an MSc in applied physics from Stanford University and an MBA from INSEAD.

www.business-review.eu Business Review | December 2015

REAL ESTATE 9

for an office park such as us. On the other hand, if someone rents an apartment to use as office space there is no such additional cost.

volved in bids for the non-performing loan (NPL) portfolios of several banks but so far we haven’t managed to close any a transaction of this kind.

Have you made other real estate investments besides the office project in Brasov?

We have a number of six properties of one to two hectares where we will develop retail projects. Between 5,000 sqm and 10,000 sqm of retail space can be developed on these plots of land that will feature a small box FMCG retailer and a connected shopping gallery.

On one of these properties, we already have a Penny store and for another two projects we are in advanced negotiations with retailers. Here too we have seen a higher interest from retailers for expansion, as a result of higher sales over the past couple of years.

Besides this, we are constantly looking at making new investments in real estate properties, be they office, retail or residential developments. We are not a real estate fund. We research such business opportunities, we analyze them and take them to a number of investors we work with and who have very different risk- return profiles.

We later do the management of the resulting projects. One of the advantages of operating like this is that we can get involved in very different projects and thus be more flexible.

We have also looked at investing in distressed assets and have been in-

What do you think are the reasons for this?

Over the past three – four years we have made about 15 bids which were either binding offers or very close to becoming binding for distressed assets, mostly from banks. For example, we have made bids for the Swan office project in Bucharest or the NPL portfolios of Bank of Cyprus or BCR. In the latter two cases we partnered up with players such as the EBRD and Sankaty.

In many cases, we have had the highest offers but still we didn’t close any transaction. In fact only two of these 15 bids ended up with the distressed asset being finally sold.

The reason for this is that banks continue to have unrealistic expectations.

In many cases, the gap between the offer made by the buyer and the bank continue to be very high at between 30 and 50 percent. It is hard to estimate when offer and demand will eventually meet. Until then, the fact that such bids never see the assets change hands is not good for the market. Should this happen, we would finally have a benchmark for both buyers and sellers.

Overall it is a frustrating situation for investors and this is a competitive market. There aren’t that many players willing to invest over EUR 100 million

in such assets and none of them have a focus on Eastern Europe. Therefore they prefer to do business elsewhere on other markets such as Spain, Italy or France, where things actually happen.

We continue to be interested in the acquisition of distressed assets but we are more selective because the whole due diligence process is very time consuming and costly.

Are you also looking at investments in other fields?

Yes, we are working on launching a private healthcare network in 2017, more specifically a chain of specialized clinics. The investor behind this is also Philip Jacobs and we are looking at an investment of between EUR 15 million and EUR 20 million, mostly private equity since we don’t know what the banks’ appetite for such projects is. We will start with four units and the target is to reach 10. We are now in the process of acquiring the land, equipment and recruiting medical personnel.

Do think the office market outside the capital will maintain the growth trend it has reported in recent years?

I think that the volume of new office space that will be delivered outside the capital will remain constant and it can even increase because, just like in Bucharest, there will be a migration towards quality. All regional cities

presently have a stock of old office space that does not meet the demands of multinational players. The same has happened elsewhere. For example, in the Czech Republic, Poland or Slovakia - markets which I would say are about ten years ahead of us in terms of development – the office stock in secondary and tertiary cities is very modern.

Moreover, a similar city to Brasov in one of these countries has a stock of about 400,000 sqm – 500,000 sqm GLA. simona.bazavan@business-review.ro

Coresi Business Park: Surface: 30,000 sqm Revenues from rents for 2015: RON 12.3 mln (approx. EUR 2.8 mln) Investment up to date: EUR 15 mln (land excluded) Location: The project is located on the grounds of the former Tractorul industrial platform on a 13 ha plot of land which Ascenta Management took over from Flavus Investments in 2012 and which cost EUR 77 million. Part of the land was later sold to Immochan for EUR 21 million.

www.business-review.eu Business Review | December 2015

10 COVER STORY

2015: Wrapped in political and social turmoil In 2015, Romania has faced a lot of challenges and experienced one of the most tragic events in its recent history.

From a tragic fire that reshaped the political scene, to an international economic and social crisis, Romania saw the faces of a difficult and challenging year. Business Review looked over the year and sums up some of the most important events on the local market. ∫ ANDA SEBESI 2015 has been marked by significant political change as a result of a terrible tragedy: the Colectiv fire. After 20,000 people took to the streets to protest over the Colectiv nightclub fire, the former PM Victor Ponta announced at the beginning of October that he and his team were resigning. As a result of his stepping down, President Iohannis named Dacian Ciolos as the new Romanian PM who, last month, formed a technocrat team of ministers. The local business community saluted the new government, believing that it could bring a new wind and regain the trust of the business environment.

The new Fiscal Code shines on the local business scene

Despite the far too many doubts of corruption that have hovered over the Ponta government, there are also some good things that the former Cabinet has done for the local economy. One such example is the New Fiscal Code. Pundits say that the New Fiscal Code is, in many ways, much better than the previous one, even if solely for the much clearer explanation of fiscal terms that the local business environment faced in the past decade.In addition, it gathers all the fiscal changes made since 2003 so far. It offers a fiscal relaxation generated by the adoption of some reductions or cuts of certain taxes, from the reduction to 20 percent VAT to be implemented January 1st 2016, to the elimination of taxes on special constructions and the diminishing of the tax on dividends.

GDP: ups and downs

According to Eurostat, the statistical office of the European Union Romania posted a 1.4 percent increase in GDP in Q3 2015 over the previous quarter, the highest value among EU members. Romania was followed closely by Croatia (1.3 percent), Malta (1.1 percent) and Latvia (1 percent.) Poland and Slovakia (both up 0.9 percent,) were among the

countries that posted high growth also compared with the previous quarter, followed by Spain and Sweden (both 0.8 percent.) Greece (0.9 percent), Estonia and Finland (both 0.5 percent) as well as Denmark (0.1 percent) posted a decrease of their economies. In the EU, GDP rose by 0.4 percent over the previous quarter, while its year on year value increased by 1.9 percent. Final consumption expenditure was one of the main drivers of the advance, going up 0.5 percent in the third quarter, followed by gross fixed capital creation (0.3 percent.) Exports (0.3 percent) and imports (1.4 percent) also had positive contributions. According to Ionut Dumitru, the president of the Fiscal Council quoted by Mediafax, the 4 percent economic growth in 2016 could represent a peak and it might be followed by a decrease to 3.5 percent, considering the lack of investments, especially the public ones. In his opinion, an economic growth based only on consumption is not sustainable in the long term.

“For example, the National Commission for Forecasts sees an economic growth of about 5 percent in the next years and an increase of the potential GDP of over 4 percent at some time. It seems to me less credible as Romania hasn’t had investments. Worldwide, there is no country that posted long term growth based on consumption only,” Dumitru told Mediafax.

Oil prices fall humbled

According to MarketWatch, oil prices reached their lowest level in the past seven years. They decreased significantly in the last year after the Organization of the Petroleum Exporting Countries (OPEC) decided to maintain the production at a high level, allowing the market to set the evolution of oil price quotations. As a result, the offer exceeds the demand and the prices have maintained about USD 50 / barrel for months.

With total debt of over EUR 320 billion, of which 65 percent to Eurozone and the IMF and 8.7 percent to the European Central Bank (ECB), Greece was teetering on the edge of bankruptcy and default before a last-minute agreement was reached by EU leaders this summer.

At that time, Erste Group analysts said that the Greek crisis didn’t pose a significant economic risk to Central and Eastern European countries. “Their exports to Greece represent about 0.1 and 0.5 percent of GDP. As for Romania, the exports to GDP ratio is just 0.5 percent. In addition, the Romanian banking system is very liquid and well capitalized,” they said.

Migrant crisis rolls across Europe

More than 750,000 migrants are estimated to have arrived by sea so far this year, according to the International Organization for Migration (IOM.), quoted

by BBC. According to BBC, Germany continues to be the most popular destination for migrants arriving in Europe. It has received the highest number of new asylum applications, with more than 331,000 at the end of October. Hungary is the second destination for migrants, as more have tried to make their journey over land through Greece and the Western Balkans. So far, Romania has not been a major migrant transit country, but it is possible for the situation to change in the future. Romania, like most of its East European neighbours, objected to mandatory EU quotas and was willing to take in maximum 1,785 migrants in a voluntary quota scheme.

According to Eurostat, quoted by BBC, Syria, Afghanistan, Kosovo, Iraq, Albania, Pakistan, Eritrea, Nigeria, Serbia and Ukraine are the top ten origins of people that applied for asylum in the EU during January-October.

EBRD sets plans for Romania

Greexit never happened

The Board of Directors of the European Bank for Reconstruction and Development (EBRD) have approved a new

strategy for Romania earlier this year which will guide the bank’s investments in the country for the next four years.

The 2015-2018 strategy sets out three priorities: broadening access to finance by inducing lending and developing capital markets, reducing regional disparities and boosting inclusion through commercialised infrastructure and finally, enhancing competitiveness in the private sector through targeted investments.

“We will work to boost Romania’s private sector growth by helping to expand access to finance, with an emphasis on capital market development. With the economy rebounding, conditions are suitable for companies to enhance their competitiveness through balanced financing structures and improved management practices. The EBRD will work to reduce regional disparities by financing essential infrastructure to promote economic inclusion. We will also combine our investments with support for sector reforms and improved corporate governance in state-owned enterprises,” stated Matteo Patrone, EBRD Director for Romania.

Higher corporate governance at Bucharest Stock Exchange

The Bucharest Stock Exchange (BVB) has taken an important step toward better corporate governance of Romania’s listed companies by adopting a new corporate governance code, developed together with the EBRD. The new corporate governance framework promotes higher standards of governance and transparency for companies whose shares are admitted to trade on the regulated market and will enter into force on January 4th, 2016. “We are deploying new measures in order to lay down the most solid base for the capital market in Romania. The new code of corporate governance is a modernised set of rules and practices, which will increase the attractiveness and valuation of Romanian companies for the greatest benefit of investors. We are introducing this code, with a new system of compliance and enforcement, because Romania no longer wished to remain as a frontier on the map of European markets,” said Ludwik Sobolewski, CEO at BVB. anda.sebesi@business-review.ro

www.business-review.eu Business Review | December 2015

COVER STORY 11

Real estate market posts real growth in 2015 Spurred by an overall positive evolution of the economy, all segments of the real estate market posted steady growth in 2015. Office and industrial in particular have rallied, but retail and residential were close behind, hinting at more growth to come.

The total local real estate investment volume is expected to reach EUR 800 million by the end of this year, say pundits

∫ SIMONA BAZAVAN Outsourcing companies boost demand for office Demand for office space in Bucharest and the main regional cities in the country has remained relatively constant in 2015, fueled, as was the case in previous years, mainly by outsourcing players.

Overall, more than 50 percent of transactions with office space in 2015 were closed by companies active in outsourcing, a strong increase from the 27 percent registered in 2014, according to CBRE data.

According to data from the Association of Business Service Leaders (ABSL,) Romania is the second-fastest growing shared-services and outsourcing market in Central and Eastern Europe, with more than 80 centers employing about 45,000 people in the country. This trend will maintain and the Romanian business-services sector is expected to employ 150,000 to 200,000 people by 2020, according to the same source.

In 2015, both the leasing activity and new deliveries have remained relatively stable. Total leasing activity involving office space in Bucharest stood at 210,000 sqm in the first nine months of this year, up by seven percent y-o-y, according to JLL data. By the end of the year, this is expected to reach last year’s 300,000 sqm level, and some pundits even forecast increases. Between 100,000 and 120,000 sqm of new office space is expected to be delivered by the end of 2015 in Bucharest, similar to the volume reported in the previous two years. Vacancy is expected to marginally increase, due to the fact that space with no significant pre-leases will be delivered, say JLL consultants.

Industrial market maintains momentum The industrial and logistics market maintained a dynamic evolution this year, posting positive results both in terms of leasing activity and transactions.

Some 230,000 sqm of logistics and industrial space was leased in Romania in the first nine months, almost half of which was in capital Bucharest and the western city of Timisoara, according to data from real estate services firm JLL. The firm estimates that a total of 300,000 sqm of industrial space will be leased until the end of this year, in line with the 2014 volume.

In terms of investments, more than 360,000 sqm of industrial space were transacted during the first nine months of the year for EUR 160 million, while some 240,000 sqm, worth about EUR 100 million, are expected to be sold until the end of the year, also according to JLL. In fact, industrial, alongside office, accounted for 70 percent of the total transactional volume involving real estate properties in the first nine months, and several key projects are currently in advanced stages of negotiations, says JLL. The total local real estate investment volume is expected to reach EUR 800 million by the end of this year, say pundits. While this will be well below the EUR 1.2 billion recorded in 2014, a correction was to be expected given last year’s record level, according to real estate consultants.

Retail, car parts manufacturers and logistics operators were the most active players on the industrial market in the first nine months of 2015, said JLL representatives. A new development

this year is the increasing demand coming from retail and e-commerce companies, which leased a total of 80,000 sqm. Much of this was fueled by preparations for Black Friday sales.

Car parts manufacturers leased 63,000 sqm and logistics players leased 44,200 sqm.

Bucharest and Timisoara were the most active markets, reporting leasing volumes of 65,600 sqm and 41,200 sqm, respectively. What is different this year, is an increased interest for new cities such as Brasov (16,000 sqm), Cluj-Napoca (26,600 sqm), Pitesti (14,000 sqm), Ploiesti (28,900 sqm), Ramnicu Valcea (12,800 sqm), Targu Mures (3,500 sqm) and Sibiu (11,500 sqm).

New shopping mall additions Some 150,000 sqm of new retail space is expected to be delivered in Bucharest and the rest of the country by the end of this year, according to data from Colliers International. This is double the volume that was completed the previous year, albeit 2014 was a year with particularly low values for the market.

Two major projects were completed this year. In Bucharest, NEPI, one of the most active real estate investors on the local market over the past years, inaugurated Mega Mall in May. The EUR 165 million shopping mall is located near the National Arena and offers 72,000 sqm of gross leasable area (GLA.) Outside the capital, Immochan opened the Coresi Shopping Resort project in Brasov, following a EUR 60 million investment. The shopping center has a 45,000 GLA and the developer estimates that in the first year, Coresi Shopping Resort will generate EUR 6 million in rent revenues and will report

some 8 million visitors from Brasov, but also other regional towns.

More apartments to be delivered in 2015 After posting the first signs of a rebound in 2014, the local residential market has seen even more solid signs of growth in the first nine months of 2015. One sign has been the fact that the number of new housing units to be delivered has gone up - 11,000 are expected to be completed in Bucharest and its surrounding areas alone by the end this year, surpassing last year’s level of 10,100 units, according to Coldwell Banker data.

However, this still remains a buyers’ market and prices have remained relatively stable throughout 2015, with variations of less than 5 percent. According to data from online real estate platform Imobiliare.ro, the average asking price for Bucharest apartments stood at EUR 1,095/sqm in November, down 1.1 percent from the previous month, but up by 3.2 percent against the same month last year.

Another development with regard to the residential market is that this year, two draft bills pertaining to this sector were announced. A new taxation system for residential properties used as company headquarters is expected to come into force in 2016. For buildings owned by individuals and used for business purposes, such as firms, taxes are set to go up. Also, should it be passed by President Klaus Iohannis, a new law will enable owners who can no longer pay their mortgage to end the loan by giving up on the property, which will pass into the bank’s ownership. simona.bazavan@business-review.ro

www.business-review.eu Business Review | December 2015

12 COVER STORY

Lenders face profits and challenges With a satisfactory level of profitability and several noticeable mergers and acquisitions completed this year, the Romanian banking system faces new challenges as the law of “passing to pay” puts pressure on lenders to tighten the financing terms.

The local banking system posted a profit of RON 2.2 billion in the first nine months of the year

∫ ANDA SEBESI At present, the Romanian banking system is well capitalized, with a high capacity when it comes to absorbing potential shocks and the demand for loans on an ascending trend. According to the Romanian Banking Association (ARB,) the solvency rate was 18.07 percent in June, compared with the minimal level of 8 percent set up by the European regulatory framework. The same source says that the Romanian banking system is one of the few banking sectors in the European Union that didn’t require financial support from public funds during the financial and economic crisis.

The same data shows that, at present, the weight of gross banking assets in GDP is 60.8 percent, while the level of the net volume of assets was about EUR 82 billion at the end of June. According to ARB, the economic growth perspectives generated by the attraction of European funds, the financial brokerage level of 32 percent and the bancarisation level of about 50 percent, all make Romania an attractive destination for investors in the banking sectors.

However, pundits say that it will become an attractive option for foreign investors if the return on capital im-

proves. This could be a significant step forward for the local banking market as industry representatives say it is less attractive than other fields of activity or banking systems in the region for an international investor. Last but not least, the same ARB data shows that the NPL rate decreased by more than 9 percentage points to 12.8 percent in June as a result of the cleaning of the balance sheets of the banks and changing of the methodology in calculating the NPLs. As Nicolae Cinteza, the manager of the Supervising Division within The National Bank of Romania (BNR) stated earlier this year for Ziarul Financiar (ZF,) the local banking system posted a profit of RON 2.2 billion in the first nine months of the year, while more than half of the operating lenders reported profits during this period. According to ZF, BCR, BRD and BT – the first lenders on the market – a cumulated profit of RON 1.6 billion was posted.

One of the most important events on the local banking scene this year was the merger between Banca Transilvania, the third lender on the market, and the local branch of the Austrian group, Volksbank. The process of integrating the operations of Volksbank is making a beeline and will be completed by the end of this year as the High Court of Cluj recently approved the merger be-

tween the two institutions. The transaction will rank Banca Transilvania second on the Romanian banking market.

The lender signed a decisive commitment to buy the full package of shares of Volksbank Romania in December last year. According to the data existing on the market, the transaction was worth EUR 711 million in total.

Elsewhere, The European Bank for Reconstruction and Development (EBRD,) has reduced its equity stake in Banca Transilvania, one of the leading banks in Romania. The EBRD sold 86.76 million shares in November in an accelerated bookbuild placement on the Bucharest Stock Exchange (BSE.) Following the sale, the EBRD continues to hold 11.47 percent of Banca Transilvania’s shares. The Bank has been the largest shareholder in Banca Transilvania since 2001, when it acquired a 15 percent stake to strengthen the bank’s capital base and support the expansion of its activities and loan portfolio. Since then, Banca Transilvania has grown into the third largest bank by assets in Romania. “We are very pleased with Banca Transilvania’s achievements over the past few years, notably its strong position as an innovative and fast-growing, locally-owned bank in Romania. As a continuing shareholder, the EBRD remains confi-

dent about Banca Transilvania’s future prospects and its capacity to further strengthen its profitability and market position. By reducing our stake, we are helping to increase the liquidity of Banca Transilvania stock, while we continue to support the bank’s growth strategy,” stated Nick Tesseyman, EBRD Managing Director, Financial Institutions.

The EBRD is a leading institutional investor in Romania, with almost EUR 1.5 billion invested in 75 projects over the previous country strategy period.

In total, the Bank has invested over EUR 7 billion in the country to date and has also mobilised more than EUR 14 billion from other sources of financing in all sectors of the country’s economy.

Another significant move on the local banking scene this year was that made by UniCredit Bank Austria AG. It bought 45 percent stake in UniCredit Tiriac Bank from Tiriac Holdings Ltd, increasing its equity from 50.6 percent to 95.6 percent. The transaction was planned to complete before the end of June. “As a result of the acquisition from the Royal Bank of Scotland of the Romanian retail and corporate client portfolios, we continue through this transaction to consolidate and extend our position on the Romanian market,” stated Carlo Vivaldi, vice president of the Supervising Council of UniCredit and chief of Central and Eastern Europe at UniCredit Bank AG. Last but not least, a hot point that came into public notice recently is the “passing to pay law” (legea darii in plata.) It allows an individual that signed up for a loan and that can no longer pay his or her debt to pass into the lender’s property his or her mortgaged house. The law was adopted by the Romanian Parliament recently and has been sent to President Iohannis to promulgate it. The law generated a large debate among the local community of lenders who believe that one of its negative effects will be to encourage real estate speculators rather than help the individuals that bought a house using a loan and that are now in financial difficulty. According to a press release issued recently by ARB, this law puts into danger the real estate loan market and could have crucial consequences for young families. The ARB representatives say in the same document that the “passing to pay law” created the premise for lenders to re-analyze the terms of financing and tighten them at least, before the situation is clarified. anda.sebesi@business-review.ro

www.business-review.eu Business Review | December 2015

Local car market is a little broken down Although the local automotive market posted a moderate growth this year, it needs much stronger sales from the domestic new cars’ side. Additionally, increasing the financing capacity of the Rabla program would also help stimulate new car sales.

ways to restart the domestic market,” said Nicolas Maure, the general manager of Dacia Renault Romania.

The government’s First Car proAccording to the Automotive Manufactures and Importers Association, the gram is meant to stimulate new car acRomanian car market posted an in- quisitions, however producers say it crease of 17.7 percent to 97,807 units should be changed to increase the sold in the first ten months of this year, lending period beyond five years and compared to a similar period last year. offer lower interest rates. Such measThe same source says that the passen- ures are crucial to support the market, ger car segment posted an increase of given that lowering the VAT from 24 15.9 percent, or 79,739 units sold, in the percent to 20 percent would have little period mentioned above. As for the effect in boosting new car sales, added brands, Dacia is the leader with 27,986 Stroe.

According to Maure of Dacia Reunits (or 35.1 percent of the total market,) followed by Volkswagen (7,960 nault Romania, quoted by Mediafax, units or 10 percent,) Skoda (7,245 units Romania has more than 3.5 million cars or 9.1 percent,) Ford (4,991 units or 6.3 that are over eight to ten years old percent,) Renault (4,832 units or 6.1 which should be replaced with new percent) and Opel with 2,953 units, or ones. “In order for this to happen, 3.7 percent of the total market. From there is a need for more Rabla tickets as the model perspective, Dacia Logan the current ones are not enough. Addihas been the best seller in the first ten tionally, the First Car program must be months of this year, with 13,379 units better and we consider that the reimsold, followed by Dacia Duster with bursement period should be longer 5,366 units, Dacia Sandero 4,926 units, than seven years,” he said.

Pundits say that the potential of the Skoda Octavia 3,298 units and Dacia Logan MCV with 2,612 units. The same Romanian car market is actually high, report shows that 411 new hybrid pas- but that Romania should stop or limit senger cars have been sold in the first permanent imports of old cars which ten months of 2015, of which 25 units the more developed countries don’t use anymore. “There is a lot of potenhave been 100 percent electrical.

But what can boost Romania’s local tial because, if we consider the Romancar market? The First Car program does ian population of 20 million, the car little to boost new car sales as it offers industry is quite low. As for the eco cars, potential buyers the same terms as reg- we have an infrastructure problem, as ular loans, stated earlier this year Con- Romania doesn’t meet the condition to stantin Stroe, the president of the have cars that meet many safety reRomanian Car Producers’ Association quirements is not valid. The domestic – ACAROM – during the second day of market could develop very much,” said the Foreign Investors’ Forum organ- Valerio Brenciaglia, general manager at ized by Business Review. “Romania is Ford Romania, quoted by Mediafax. importing three used cars for every new car being sold. It is crucial to find anda.sebesi@business-review.ro

∫ ANDA SEBESI

COVER STORY 13

www.business-review.eu Business Review | December 2015

14 COVER STORY

Romanian IT boasts a good year The Romanian IT market continued to post growth this year, with both companies and employees in the industry making higher revenues, further establishing the sector as one of the most important contributors to the Romanian GDP. However, even though the employee pool is well-trained, the industry development is slowed down somewhat by the shortage of a qualified labor force.

The number of direct employees, together with the sole traders in the IT industry, will reach 100,000 people by the end of 2015

∫ OTILIA HARAGA Total revenues made by companies producing software and IT services in Romania are estimated to be 14 percent higher in 2015, over the 2014 level of EUR 2.42 billion, according to the second edition of the Software and IT Services in Romania survey published

by ANIS and carried out by Pierre Audoin Consultants (PAC) this year.

The revenues generated by software and IT services on the local market totaled around EUR 931 million, representing 35 percent of the sector’s turnover. The segments generating most of these revenues were public administration (30 percent), industry (17 percent) and banking (14 percent).

The most substantial growth opportunities in 2015 were in services and consumer products (which saw an estimated growth of 9.8 percent) and the industry (8.1 percent.) On the medium term, until 2018, three sectors will continue to be the biggest buyers of technology, each recording an estimated increase of 10 percent.

“The main source of growth for domestic software and IT services are technology investments in the private sector. It’s the only chance for this segment to have increased competitiveness, especially for SMEs, given that we expect government purchases to have a slight decrease this year,” said Valerica Dragomir, executive director of ANIS.

At the moment, the bulk of the products produced by the Romanian IT&C industry in Romania are produced for export. There are some products made for the internal market, especially for the state, because the Romanian internal IT market is dominated by the state.

This is not a healthy development formula, according to Varujan Pambuccian, member of the Commission for Information Technology and Communications of the Chamber of Deputies.

A survey on the state of the Romanian IT industry carried out for iTech Transilvania by ARIES Transilvania found that, at the moment, there are 14,000 IT companies in Romania. Approximately 50 percent of them are based in Bucharest and Cluj-Napoca.

“IT will continue to support the Romanian economy and be a top employer. We estimate that the number of direct employees, together with the sole traders in the IT industry, will reach 100,000 people by the end of 2015, compared to 93,000 in December 2014, according to Voicu Oprean, president of ARIES Transilvania.

Bucharest, Cluj, Iasi and Timis gathered 73 percent of all the employees in the local IT industry, with Bucharest offering half of the IT jobs in Romania.

However, cities like Iasi, Dolj and Bihor are also attracting a growing number of IT professionals.

The local Romanian IT industry offered full-time jobs to 75,500 IT employees. Additionally, there were

17,000 IT professionals working as sole traders in Romania.

The net average salary in mid-2015, as declared by representatives of the surveyed companies, totaled approximately RON 2,600. More than half of these companies said they would raise salaries by approximately 16 percent by the end of the year.

The Romanian IT&C field continued the favorable trend of past years, as far as both the turnover and the salaries of employees in this sector are concerned.

A Mercer survey on salary growth in the first half of this year shows that salaries in the IT&C sector grew on average by 4.5 percent. The value of the salary increase covers the 2.2 value of the inflation, a trend which, at present, we find in nearly all countries in the region. This 4.5 percent growth in salaries will hold true for 2016 salaries as well.

The higher demand for specialists in this sector generated fierce competition on the labor market. For this reason, benefit packages are becoming more and more attractive, as revealed in the IT&C salary survey carried out by Consulteam. Thus, apart from the salary, the benefit packages also include less usual benefits such as inhouse coffee, fresh fruit and vegetables and soft drinks, modern headquarters, catering or a private chef for lunch, parties and team buildings and investment in CSR projects selected by the employees. These come on top of the

more standard benefits such as medical subscriptions, meal tickets, training programs and so on.

At regional level, apart from Bucharest, Cluj-Napoca is more and more present in the IT&C employers’ attention. Even though salaries in Bucharest still differ from the ones in the other cities, this gap is becoming smaller and smaller. For instance, the salary of a Java developer in Bucharest was still 18 percent higher than in ClujNapoca.

“Following an analysis of salaries in Bucharest, a Java developer can earn a gross salary between EUR 900 - EUR 2,400, depending on seniority,” says Oana Botolan Datki, SEE Managing Partner, Consulteam.

At the moment, the IT industry has come to generate 6 percent of the GDP, and while the industry has the potential to grow a lot more, its development is capped by the shortage of a qualified work force. “The demand could take Romania to have a software and IT services market of EUR 5 or EUR 6 billion, but we lack the delivery capacity, simply put, we do not have enough people,” according to Eugen Schwab, PAC vice-president for Romania and the CEE. As far as the legal framework in this industry is concerned, employers of software programmers who have as a main activity the creation of computer programs will be exempt from income tax if they achieved a revenue of at least USD 10,000 in the previous year from the sale of software, according to the Official Gazette.

The exemption applies to every employee, while achieving the sale limit during the previous year. By dividing the turnover from sales of software to that ceiling, the company can determine the maximum number of employees who benefit from this exemption.

Among job positions that the tax relief can be applied to are those of database administrator, analyst, system engineer in computer science, software systems engineer, IT project manager, programmer, systems designer and system programmer The person receiving the exemption must be part of a specialized compartment, distinctly specified by the employer. The employee can benefit from this exemption regardless of the time of hiring or their contribution to the turnover margin, according to the Official Gazette. otlia.haraga@business-review.ro

www.business-review.eu Business Review | December 2015

COVER STORY 15

Telecom operators focused on 4G coverage expansion in 2015 Telecom operators in Romania continued to develop and upgrade their 3G and 4G networks in 2015, expanding the area of coverage of these services. This year marked a new entrant on the 4G market as Romanian - based telecom operator RCS&RDS announced that it will offer 4G data services in 25 Romanian cities. Telekom Romania is reportedly undergoing top management changes. At the consumer market, telecom services are becoming more present in Romanians’ lives.

At the moment, all four major mobile operators in Romania are providing 4G services

∫ OTILIA HARAGA According to data from the Romanian telecom watchdog ANCOM, in the first nine months of this year, Orange Romania offered real average download speeds of 27.83 Mbps indoors and 39.21 Mbps outdoors, RCS & RDS provided speeds of 2.62 Mbps indoors and 2.85 Mbps outdoors, Telekom Romania Mobile Communications offered 10.25 Mbps indoors and 13.45 Mbps outdoors and Vodafone Romania provided 15.78 Mbps indoors and 26.77 Mbps outdoors.

This data was aggregated by Netograf.ro, the application for testing and monitoring the quality of internet service in Romania, set up by ANCOM. The top five providers of fixed internet services offered in the first nine months of the year the following real average download speeds: Digital Cable Systems – 47.42 Mbps via cable and 26.25 Mbps wireless, Nextgen Communications – 63.57 Mbps via cable and 35.53 Mbps wireless, RCS & RDS – 98.95 Mbps via cable and 43.48 Mbps wireless, Telekom Romania Communications – 31.10 Mbps via cable and 16.68 Mbps wireless and UPC Romania – 57.19 Mbps via cable and 31.27 Mbps wireless, according to Netograf.ro.

This data was generated based on 120,000 tests conducted by users from the start of the year, of which approxi-

mately 100,000 were validated, the rest being considered as having flaws or as attempts to influence the results.

Romanian-based telecom operator RCS&RDS, announced this year that it will offer 4G services to 25 Romanian cities. RCS&RDS obtained the 4G license in the 2,600 MHz bandwidth from 2K Telecom. RCS&RDS promised that Digi Mobil users will benefit from transfer speeds of up to 150 Mbps. In the first stage of the project, 4G services from RCS&RDS became available to Digi Mobil customers in 12 cities: Bucharest, Cluj, Timisoara, Brasov, Oradea, Craiova, Constanta, Iasi, Arad, Sibiu, Pitesti and Ploiesti. By the end of the year, the 4G coverage will be expanded to Galati, Braila, Baia Mare, Targu Mures, Satu Mare, Ramnicu Valcea, Drobeta Turnu Severin, Targu Jiu, Resita, Slatina, Hunedoara, Vaslui and Alexandria.

At the moment, all four major mobile operators in Romania, Orange Romania, Vodafone Romania, Telekom Romania and RCS&RDS are providing 4G services.

Telekom Romania will have a new CEO, as the German Nikolai Beckers is ending his term, after integrating Cosmote and Romtelecom into a single entity and rebranding the company. The new CEO of Telekom Romania will be the Slovak Miroslav Majoros, who, until now led Slovak Telekom as CEO and board president. The Romanian state

also appointed new representatives in the Telekom board, two of these being former members of the Telekom team, according to Ziarul Financiar.

On the market of fixed broadband internet, ANCOM decided there is no need for further regulation because the market has fair competition. In 2010, ANCOM had imposed a series of obligations on Romtelecom (currently Telekom Romania Communications), compelling the company to transparency, non-discrimination, granting access to infrastructure, as well as tariff control and keeping separate accounting books, as far as the services of access to the local loop were concerned. After the latest analysis, ANCOM decided to withdraw the regulation previously imposed to Telekom Romania, arguing that the company no longer has significant power on the market of infrastructure access.

ANCOM explained that any regulation ex ante at the level of the wholesale market is justified only if it yields real benefits for users and would make the retail market competitive in the long term. Since the ANCOM analysis showed the retail fixed internet market is already highly competitive as far as the infrastructure is concerned, the authority considered that no further regulation is needed.

The ANCOM analysis showed that the fixed broadband internet market will continue to be competition-driven.

“The market is dynamic, fluid and is growing continually, and Romania has the highest infrastructure-based competition out of all European Union member states, with over 750 providers of fixed broadband internet services in 2014, with over 60 percent of the connection speeds amounting to at least 30 Mbps and over two thirds of the population in Romanian localities covered by at least three networks that can offer fixed broadband internet,” according to a press release from the authority.

The low rate of penetration of fixed broadband internet services is not caused by the lack of competition on the market, but by the low degree of penetration of terminals that allow internet access from home, the low digital skills of the population as well as the low average income level per capita, especially in the rural areas, ANCOM argued.

Nine out of ten Internet users in Ro-

mania use fixed home connection to search for information, read news and keep up to date with events, while 77 percent use it to access online socialization networks.

When choosing an internet connection, the main criterion that internet users take into consideration is the financial aspect, 66 percent of Romanians consider the subscription price as important, while 62 percent of them are interested in the stability of the connection and 48 percent the maximum speeds of transfer provided by the supplier.

The ANCOM analysis also showed that the market is highly innovative and the products are highly differentiated, as seen in the wide range of products, varied internet speeds and varied price offers. ANCOM mentioned that the tariffs for fixed broadband internet speeds in Romania are still among the lowest in the European Union.

At the moment, there is one tablet for every three Romanian households and a smartphone for every two, according to ANCOM data. Thus, approximately 36 percent of Romanian households own at least one tablet, 73 percent have at least one smartphone and 55 percent of them at least one laptop.

“50 percent of Romanians have access to mobile internet by phone, based on a telephony postpay offer that also includes internet, 35 percent have internet access on the phone, based on a prepaid card that includes a mobile internet additional option, while 25 percent have internet access via a stick or USB card with subscription,” according to the press release.

Approximately 55 percent of mobile internet users with limited traffic said they pay close attention to the way they use the traffic and do not exceed it. Another 24 percent of users very rarely exceed the traffic limit, while some 10 percent admit this happens to them often or very often.

In the case of mobile internet services, Romanians pay on average RON 58 for an individual service, while for a bundle that includes mobile internet, they pay RON 109. Most users pay between RON 23 and RON 45 for individual service while the price of a package of services is RON 90. otlia.haraga@business-review.ro

www.business-review.eu Business Review | December 2015

16 COVER STORY

Drought withers grain production The effects of unfavorable weather conditions on agricultural output, and the launch of the first calls for projects under the new NPRD, have been the main developments for the local agribusiness sector in 2015. projects between 2014 and 2020 from the European Union. How these funds can be accessed is regulated by the country’s NPRD. In 2015, farmers submitted some 5,800 project applications,¬¬ totaling over EUR 639 million, according to data from the Agency for Financing Rural Investments (AFIR).

The program includes 19 measures, down from the 24 in the NPRD for 20072013, which, officials say should allow a better focus on the needs of local farmers and which should help solve some of the issues the sector is dealing with.

∫ SIMONA BAZAVAN Romania’s grain production dropped by 25.8 percent in 2015 compared to the previous year, the highest decrease among European Union member states, according to European Commission (EC) estimates. The overall lower production was however not offset by higher prices, as losses in countries like Romania were compensated by surplus elsewhere, indicate market data.

Romania is estimated to have produced some 16.6 million tons of grains in 2015. The highest loss –about 40 percent - was reported by far for corn production. The EC estimates that Romanian farmers harvested 7.5 million tons of corn in 2015, down by 4 million tons compared to the previous year.

The wheat production was less affected, with this year’s production estimated at 7 million tons, down by 0.5 million compared to 2014.

Other European countries also saw their production drop on account of the drought, but their decrease rates were lower than Romania’s: Hungary (-16.6 percent), Poland (-11.8 percent) and Italy

(-11.3 percent).

While unfavorable weather conditions affected other European countries as well, the losses were far greater in Romania, were an underdeveloped irrigation infrastructure has left farmers particularly vulnerable. Despite the stringent need for investments, local authorities have yet to come up with a coherent plan to address this issue. A draft bill on a EUR 1 billion investment plan in a much needed irrigation infrastructure has failed to pass Parliament, as not enough MPs were present for the

vote in September. One month later, the bill passed the Chamber of Deputies.

Another important development this year has been the launch of the first calls for projects under the new National Program for Rural Development (NPRD) for the period 2014-2020 in March. That month, calls were launched for projects for Sub-Measure (SM) 6.1 – Setting up of young farmers and SM 4.1 – Investments in agricultural holdings.

Some EUR 9.85 billion are available for Romanian farmers for investment

simona.bazavan@business-review.ro

Grain production (million tons) Wheat Corn Total

2014 7.5 11.9 22.3

2015* 7 7.5 16.6

*estimates Source: EC

Slump in energy this year Slumping oil prices and legal hurdles have been the main challenges the local energy market has had to deal with in 2015. ∫ SIMONA BAZAVAN Approximately EUR 1 billion was invested in 2015 in oil field works in the Romanian Black Sea. This was done despite 2015 being a hard year for the Romanian oil and gas industry, and also despite slumping oil prices, said Razvan Nicolescu, executive lead advisor within Deloitte’s energy & resources practice and a former energy minister during a ZF event. “This is not little,” he said, also adding that by the end of the year, Romania’s gas production will increase slightly above the 2014 level.

Meanwhile, dwindling oil prices have put pressure on producers’ financial results. OMV Petrom, the largest Romanian oil and gas company, controlled by Austrian group OMV, has seen its profits shrink by 59 percent. Values reached only EUR 223.1 million in the first nine months of 2015 compared to the same period last year, according to company data. The company’s financial performance was “severely affected” by oil prices, dropping by about 50 percent during the same period, said company

representatives.

This year has been a challenging one for producers of renewable energy as well, albeit in their case, the motives lie elsewhere. The renewable energy sector was one of the few to boom during, and in the immediate aftermath of the economic crisis, attracting a total of EUR 7 billion in investments between 2009 and 2014, according to market reports. This was the result of government support schemes consisting mainly of a system of mandatory quo-

tas combined with green certificate trading. Come 2013, the government decided to cut back its support which led to investments going down considerably, a trend that continued through 2015.

At present, the green certificate market is collapsing due to a major reduction in the annual mandatory quota of electricity produced from renewable energy versus the values set out in Law 220: 11.1 percent compared to 15 percent in 2014 and 11.9 percent compared to 16

percent in 2015. According to energy and gas market regulator ANRE, in late 2014, the total number of green certificates issued through the program was 12.7 million fewer than the quota estimated by the institution at the beginning of the year, i.e. 17.6 million. For 2015, ANRE estimates the issuance of 18.1 million green certificates, up 3 percent from the previous year.

This situation has not only frozen new investments, but existing players have also announced plans to shut down facilities.

This August, Monsson Group, one of the largest developers in the Romanian wind energy sector, announced it will dismantle its windmills from CEE Targusor from Constanta. The decision was the result of the legal regulations adopted by the Romanian government in the past two years and the uncertainty regarding the Romanian renewable energy market. Both factors in turn rendered the project unfeasible from a financial perspective, according to company representatives. simona.bazavan@business-review.ro

www.business-review.eu Business Review | December 2015

18 COVER STORY

Consolidation and in-house power are the 2015 key words in advertising The large advertising groups are starting to consolidate their position on the market, gathering their resources under one roof.

Agencies are aiming to the core of the target

∫ ROMANITA OPREA The main example is Publicis Groupe, which took major steps in 2014 and 2015.

One of the biggest moves made till this date was in November 2014. Publicis Groupe and Centrade Saatchi & Saatchi announced that the Saatchi & Saatchi brand in Romania would be consolidated under a sole legal entity, Lion Communication, with Publicis Groupe as its main shareholder. The group’s three local brands, Publicis, Leo Burnett and Saatchi & Saatchi, were brought under the Lion Communication umbrella. Still, the real transfer of Saatchi started on January 1st, 2015. Since then, the agency and the team, headed by Radu Florescu, continue to function as an independent entity, keeping their portfolio of clients.

Publicis Romania didn’t stop there though. The group consolidated its strategy and digital teams globally and, in November this year, launched a new agency called Nurun, specialized in digital integrated solutions. With offices in 21 countries and over 4,000 employees, in Romania the agency is run by Calin Buzea and Liviu Toader, as co-managing directors. The agency will combine consumer insights with new technologies in order to develop products, services and platforms that transform the consumer experience.

Also under the Publicis umbrella in

Romania, the Leo Burnett Group made an interesting move that was kept outside the public knowledge for a while. It reinforced its internal digital department by closing its agency iLeo and incorporating it into the mother-agency, Leo Burnett & Target.

Also in the digital world, another big group in Romania – Lowe – announced soon after Nurun’s launch, the start of a new digital road. The group’s digital agency SeniorHyper became Lowe Profero Bucharest including the affiliation to its international network with 17 years of experience, offering digital integrated solutions and with a global presence in Europe, USA and the AsiaPacific region.

Lowe Profero is a network of offices present in the most important digital markets of the world, delivering creative, technical and media performance solutions, for all communication platforms adapted to the newest trends in the industry.

Just like Leo Burnett, but for a completely different set of reasons, Lowe closed its mobile marketing agency MobileWorks in 2015. On its turn, The Group, the biggest Romanian independent advertising group, decided to launch this year the first programmatic media agency in Romania as well as its second PR agency – Galeriu & Partners.

“Programmatic has been, undoubtedly, a disruption that drove – and will continue to do so – some of the most signifi-

cant changes in the media industry, requiring players to reinvent themselves.

Media Investment has already taken multiple steps over the past years to embrace this imminent disruption.

We’ve invested significant work and effort into proprietary solutions in order to be ready for the programmatic era, bringing to life our own localized solutions within The Group. Prometheus Programmatic Media, our specialized agency, launched in 2015, has already implemented exclusive and efficient media tools. The challenges driven by programmatic do require structural and operational changes across the entire Romanian media landscape,” said Dan Balotescu, managing partner of Media Investment.

2015 was also a year of big celebrations. Three of the best known Romanian PR agencies – DC Communication, BDR Associates and Image PR celebrated 20 years of activity in this tumultuous market and were ready to hope for another set of 20s, while 2Active PR gathered 15 years of experience. 15 is also the lucky number for the Romanian research company D&D Research that marked the occasion with a series of novelties, from a new positioning to new work tools and new headquarters.

Still young yet determined, the Romanian PR market is still growing, not having reached its full potential. Also, the previously mentioned The Group, represented by Mihaela Nicola and Zoltan Szigeti, achieved 10 years on the market and set that time in the collective memory by launching a stamp issue.

All these actions and important decisions bring to light the dynamics of the Romanian advertising market and its power to regenerate and change.

There is also a clear demonstration of the fact that the big groups are “powering up” and are ready to fight for the top.

Media split and budgets According to industry experts, Romania still remains a traditional country when it comes to media budgets and the channels chosen. “TV remains "the king" media in Romania, both in terms of investment, as well as consumption, with almost 60 percent market share and more than 5 hours average time view per day. Digital remains the predictable star, with a continued increase in market share of 20 percent over this past year. Other media, such as radio, OOH and print, have experienced small changes. 2016 is expected to drive a similar investment in media in off-line channels compared to 2015, while digi-

tal media will continue to increase in both market share and net value, as well as consumption,” said Dan Balotescu, managing partner at Media Investment.

On the other hand, Romanian internet users are spending over 5 hours a day hooked to the internet, browsing or using online services, as shown by Digital Scope, a study made by IAB Romania along with partners from IAB Europe. While TV remains the predominant media in terms of consumption (60 percent of the internet users also watch TV on daily basis), the time dedicated to this medium decreases (1 – 2 hrs/day) and the interest of the public is divided between multiple devices.

Therefore, 68 percent of the Romanian internet users access the internet while watching TV on multiple devices. Moreover, 75 percent of them are going online from their smartphones, mainly to check emails, communication sites, maps and location-pinning programs.

Also, the smartphone has an important place in the entertainment, communication and information areas, but less in acquisition, investments and finance.

From the advertising point of view, ads within apps or advertising on mobile are over average in the CEE region, considering the degree of usefulness in informing consumers.

Digital Scope is a research project created by local IAB offices in 8 CEE countries (Bulgaria, Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey.)

Over the past years, the total investment in media has seen only slight increases, with one digit, and the experts don't expect miracles in 2016. Nevertheless, the good news is that “the market has the potential to increase up to 10 percent. We expect digital investment to be the main driver for growth and, because digital already has an important share in the overall investment in media, its influence will be relevant for the entire industry,” added Balotescu.

Looking at the near future, he considers Google and Facebook are born 100 percent programmatic. “The most significant development we expect to see in 2016 is a trend emerging amongst local publishers, who will consider programmatic trade as well, driving value for the Romanian market as a whole.

The media "actors" - clients, agencies and publishers - should be prepared to communicate and trade information, adopting new technologies and new business models,” concluded the Media Investment representative. romanita.oprea@business-review.ro

www.business-review.eu Business Review | December 2015

20 MARKETING

Promotional campaigns enforced with digital knowledge Winter is a season of celebration and feasts. The holiday spirit embraces us whether we go out for a walk in the park or turn on the TV to watch a movie or a reality show. Brands are challenging themselves more than ever in the attempt to catch consumers’ attention in hopes of getting them to make the final buying decision. In a pricedriven market, promotional campaigns still reign supreme during this time. ∫ ROMANITA OPREA During the last years marked by the economic crisis, price was one of the most important aspects emphasized in almost any campaign. From Carrefour to Altex retailers were promoting “the small” price tag, no matter the season or the festivities. BR wanted to know if the situation is still the same or if we will start to see a seasonal distinction again.

We spoke with Sorina Pentilescu, creative director of the BTL agency Men in Black, to see whether the Romanian advertising market has been more focused on promotional campaigns than image ones in the last years and whether the situation is a consequence of the economic crisis. Although it would be tempting to think so, she believes that the ratio has remained pretty much the same, with peaks in promotions around holidays. “Besides, no large player needed to introduce itself through a conventional image campaign. New media is more inviting, therefore TV, print or radio significantly faded out,” said Pentilescu.

According to Monica Radulescu, head of digital & senior strategic planner at CohnandJansen JWT, said that, although the economic crisis has ended, as the agency’s representatives predicted, its consequences linger on. “We have a Romanian saying “It works either way – Merge si-asa,” which means that, once we discovered tight budgets and the immediate effects of promo campaigns, we continued to follow the same “successful recipe". It’s easier to aim for short-term objectives and immediate sales results, even though in the long run, it’s not a very healthy approach for the brand,” explained Radulescu.

Diana Benko, BTL director & partner Jazz, is a little more optimistic, considering that with time, slowly but surely, things have changed, putting us now in a great transition. “Today brands start to generate beautiful stories, anchored in the social current contexts. Communication is more creative and relies more on emotion and surprise, succeeding in engaging more and more consumers. Even if we look at prizes formerly known as the most important triggers in promotions – we can see a shift. Instead of simple and ordinary home appliances, money or phones we can see brands offering memorable ex-

Monica Radulescu, CohnandJansen JWT

periences and customized offers,” said Benko. In terms of budgets, “the crisis has left a great inheritance – a new smarter and creative approach, leading us to find solutions, which can bring results that are sometimes higher than the amount invested,” added the Jazz representative.

As she emphasized in an article at the beginning of this year, Andreea Daniel, managing director Good Vibes, thinks 2015 was the year promotions became trendy again. “I don’t believe that this trend has anything to do with the crisis. It’s more about coming out of it. Promotions have always been an efficient communication tool and the crisis put them in the shadow, as they were the first to suffer from budget cuts,” said Daniel. She also believes that in 2015, strong brands, along with mobile marketing agencies, were the ones to help revive the promotion trend once more.

“2014 was the first year when we felt we started to recover from the crisis and the year that promotions restarted to appear on the discussion tables, due to the new pioneer wave of young marketers and the continuous effort of the industry’s professionals. No matter the starting point of the idea, it’s evident that promotions worked. Therefore, from my point of view, the 2015 promotions’ volume size represents the doubtless success of 2014’s initiatives,” added the Good Vibes representative.

Year- long promotions?

In a world where, for several years price used to be the number one important factor in the decision-making process, both for clients and consumers, image

campaigns used to be more present than the promotional ones. Everywhere we would look, on any media, promotions were “hitting” us, with creativity often neglected, as industry experts considered. Is the trend the same or has the situation changed? Can we talk about a shift from holiday promotions' time to a year-round promotion style?

According to Pentilescu, the traditional calendar is overcrowded with improvised opportunities in the hope that consumer behavior would change.

“Fortunately or unfortunately, it has.

Consumers are more educated and more sophisticated: they select the offers more carefully and their criteria are based on image-related experiences.

Therefore, the implementation of promotions (the so-called activations) are better-thought and invested in with more production value,” she added.

Her point of view is continued by Diana Benko who says that she wouldn’t call it a shift per se between these two types of activities, but she rather observes a periodical mix, encouraging dialogue with consumers based, or not, on incentives in the brand communication. “Being in a constant dialog and not having just some activation here and there creates a closer relationship between brands and customers,” explained Benko.

On her turn, Andreea Daniel believes that it’s possible those directions are present, but that the base of the communication is still seasonal and the seasonal aspect differs from one brand to another. “If there is a good enough communication pretext, it can pass over the seasonal barrier. But this is a principle

that is active in any type of communication: direct or indirect, on or offline, not only in the promotions’ case. This is the main reason it’s so extremely important that promotions are thought about, launched and treated with care. The consumer must be educated into seeing the real advantages, the functional advantages he/she has by taking part in a promotion, therefore building a long term consumer-brand relationship, with mutual benefits and motivations.

Promotional campaigns are the most long-lasting mobile communication smart tool on the Romanian market,” explained Daniel.

“If we are talking about national consumer promos, they are usually once or max twice a year and their timing is related to brand seasonality. Furthermore, it’s best to stay away from the advertising clutter during the holidays, when every brand has a Christmas-related message and the risk of blending in is higher. That is why most brands time their big promos throughout the year, according to the seasonality. However, some brands, especially FMCGs, like to leverage the shopping spree and push their sales through brand activations, contests, conditioned by proof of purchase. In the absence of codes on pack, these have a moderate impact,” considers Radulescu.

Taking the discussion into a more technical zone, Andreea Daniel points out the fact that while analyzing the predecessors of the mobile era (SMSs, MMSs, QR codes) as independent communicational tools, and comparing them with the international experience, we get a clear understanding that we have adapted really fast to all the changes, but also made a lot of mistakes in doing so. “Due to misuse (SMS spam or unscannable QR codes that lead to unoptimized mobile sites) it lead to consumers’ general negative perception of the tactic in itself and limiting their reach to half of its internationallyproven potential. The same mentality applies to promotional campaigns. The consumer has to be continuously amazed, even the participation mechanism is virtually unchanged (buy, enter, win). Clients and agencies need to put more effort into the relevance and the contextualization of the campaign,” added the Good Vibes representative.

2015 new NCPs tactics Looking for innovational tools and cre-

www.business-review.eu Business Review | December 2015

MARKETING 21

Sorina Pentilescu, Men in Black

ative ways of putting a campaign in light is not easy, but the results are rewarding. And 2015 was a year in which agencies and clients tried to be more innovative and close to the consumer, a reality also proven by the international awards won by Romania, but also by the increasing number of codes entered in promotions, both online and offline.

“I have seen some interesting NCP (National Consumer Promotion) mechanics for Kinder Bueno, for Untold the “promo” - to donate blood (which is more a brand activation than an NCP).

And our campaign for Jacobs 3in1 had very engaging and addictive mechanics, using a game-like strategy. It proved winning, as users entered 2,000,000 codes over a period of several months.

However, I find it odd that I can’t think of any examples of creative NCPs in Cannes, even in the Promo & Activation category – they are mostly referring to brand activations, even though our clients' primary goal is linking the communication to purchase,” said the CohnandJansen JWT head of digital.

A great example was also the “Know the Universe” promotional campaign for Beck’s, where the implementation was made by Good Vibes.

“From my perspective, promotions should have a 360 approach and should deliver a complete experience to consumers. It should incorporate technology, mobile applications, and deliver more dynamic interactions. In-store activations should acquire more meaning based on the fact we all realized the buying decision is taken at shelf so the shopping journey becomes critically important,” said Diana Benko. Jazz, the company she represents is no stranger in winning efficiency awards for promotional campaigns from brands such as Lay’s or Provident.

“Shopper marketing becomes an important extension/slice in the communication mix and it has developed a lot in the last period (yet there is room for learning more about it and improving it.)

Promotions, which also use these ingredients besides the traditional ones, would for sure bring great results,” added Jazz’s BTL director.

On her turn, Sorina Pentilescu believes that there’s a pattern that tends to become boring, like any pattern does.

Diana Benko, Jazz

These days, all promotions are about integrating online subscription with offline engagement. However, direct contact (human touch, literally) still adds value to loyalty. ”Creativity gets better and better, and expectations get higher and higher. When it comes to consumer promotions, creativity can display a mix of mechanisms, awards and engagement. No promotion relies only on the name of the brand. It’s a promotion because it promotes a temporarily enhanced benefit of the product/service or of the purchase,” concluded the Men in Black creative director.

When it comes to the Romanian promotional campaign participants, all the brands are trying to escape the usual “prize” driven ones, which follow every promotion, no matter the brand. And both companies and agencies are looking to create long relationships with their customers and create a brand experience, even through promotions.

“Prizes are still the main trigger of promo participation. Making sure that the prizes are appealing enough is the first step in ensuring the success of the promo. It is never enough though, it needs to be doubled by communication and mechanics’ attractiveness,” said Monica Radulescu.

“The brand name can bring greater participation in promotions, at least from the ‘promo-hunter' audience, but cannot compensate the lack of quality interactions only because it is a great brand.

Prizes represent an important hook to attract people in promotions. But they don’t have any magical power if they don’t cross the border of promotional items. Standard promotional campaigns have been, for a long time, the “crises solutions” when things went wrong. The potential is much greater than that,” considers Diana Benko.

According to the Jazz representative, in this field we still need a creative infusion, and there are signs that both client and agency understood there is a big opportunity to express it through these types of campaigns. “In BTL campaigns there are always open doors to be unconventional and less standard, especially due to the specific media channels integrated – online, mobile, in-store,” concluded Benko.

Nevertheless, points out Andreea Daniel, promotions are pragmatic, they are lead by a clear objective: winning a prize. Therefore, whether we are referring to guaranteed prizes or aspirational ones, the prizes are a main driver in a promotional campaign. “The communication idea is the one that triggers the action, the one that launches the call to the consumer and sets the positioning, the prizes becoming just <<a means to an end>>,” declared Daniel. She also believes the prizes are important, but they are not the ones guaranteeing the promotion’s success. “A classic example in that regard, from my point of view, is the one of the South Africans from Carling Black Label. They have proven that a promotional campaign can have a huge impact even when the prizes were falling and showing nothing else except the reaching of a personal goal for every consumer,” added Daniel.

The digital impact Like in any other advertising sector, the digital revolution changed the landscape 100 percent and brands and agencies learned that they must adapt and embrace all the new technologies as fast as possible. It’s a new development that helped the market evolve, but at the same time became more interesting and thus engaging with the audience.

“It offered a significantly larger territory to interact with the consumer; this is not a one-way interaction, it aggregates the feedback from the consumer to the client, via specialized marketing people.

This process allows to quickly adjust anything that goes wrong. The digital world gives marcomm professionals the capacity to instantly react to consumers’ needs. As someone put it, we no longer refer to 360-degree campaigns, but to 365-day campaigns,” said Pentilescu.

“The online environment is giving the opportunity for brands to express themselves more unconventionally and different than on traditional media channels, and technology has a great importance in educating and serving/helping customers. But when it comes to integrating technology and mobile into activations, I believe we are moving on a scale from 1 to 10 – we are also in a pilot phase/trial-and-error on small areas of a campaign to peaks of

fully-embedded technology campaigns,” says Diana Benko. And according to the Jazz representative, we are in that moment where we can meet a shy hostess inside the shop offering paper leaflets with special offers for a product, and in the meantime shoppers drive a basket with a touchscreen attached, running a smart shopping application correlated with beacons among the shelves.

It’s a good time for brands and consumers to interact and be honest. “The big changes are seen at the direct communication level, for instance, in the model of the KA or HoReCa promotional activities, where the supremacy of the hostess is clear. This niche has evolved a lot during the last years and become the preferred communicational tool for most brands. And because they offer clear advantages form the consumer experience point of view, because they are interactive and, most of the time, memorable, due to the story they present. The activations that use tablets are a very personal way of communicating and create a good environment for establishing the first contact with the consumer. Also, good memory can be the basis of a brand values induction program. A more and more significant part of the Romanian mobile marketing market is represented by these kinds of activations that enter and set their ground in the Romanian advertising industry,” concluded the Good Vibes managing director.

Still, as Monica Radulescu showed, there’s a fine balance between the effort and the reward – consumers will not participate if the effort of participation is greater than the chance to win. “Secondly, an NCP usually has to have national coverage and thus, we end up avoiding mechanics that exclude a significant target group, like the ones that depend on smartphone usage.”

Therefore, even though the penetration of internet and mobile internet is constantly growing, clients and agencies are still reluctant to base the promo participation on technological innovations. We have to find a balance between the innovation of the mechanics or medium and the simplicity of the effort,” concluded Radulescu. romanita.oprea@business-review.ro

www.business-review.eu Business Review | December 2015

22 INTERVIEW

IAA appoints first Romanian at the helm Currently the Global Senior Vice President of the International Advertising Association (IAA), the world’s largest communications industry association, representing advertisers, media companies and advertising agencies, Felix Tataru talked to BR about becoming the youngest Global IAA President in 2016 and the prerogatives and challenges that come with that title. decree. The association’s importance has grown and IAA Romania continues to be one of the best chapters in the world. That makes me very proud.

∫ ROMANITA OPREA How did you receive the announcement that you have been elected as Global IAA President?

In 2013 at the Cannes Lions festival, IAA held a board meeting. The meeting included all the Chapters’ Presidents in the world, around 40, along with the Executive Committee, which itself gathers around 15 professionals: regional directors, the IAA president, the senior vice president, the treasurer, the general secretary and the vice presidents. At this board meeting, the current treasurer, the Senior VP and the General Secretary were elected. Following the IAA bylaws, SVP automatically becomes president at the end of the current president mandate. Before becoming president, you actually have a mandate as a VP. The IAA presidents must represent in rotation all the regions of the world. The actual president is from the Middle East and it was Europe’s turn to get at the IAA lead. The European countries proposed me for that role. I was the only candidate for the position and I was voted unanimously.

What would you say are the main qualities that make you perfect for this position?

I have the ability to make things happen.

I think I proved it during my presidential mandate at IAA Romania, but also as a senior global vice president. It’s a skill that comes from my entrepreneurial spirit.

You are the youngest to ever have this position. How do you feel in this role?

Indeed, this position gives me the chance to lead professionals having more years of experience than I have. It is inspiring for me to have this opportunity in my 40s, otherwise I feel encouraged by their vote.

What are you main goals for the new position?

The objectives are to be decided next year. We are now talking about the mandate of a team that will be elected in March. I do not have a team yet so it is too early to talk about a strategy with goals.

Previously, this year you were awarded as the category IAA Champions. What does that distinction mean to you?

I’ve received it as an encouragement from the behalf of my colleagues in the global Board for the mandate that will come.

Felix Tataru bio Felix Tataru is also Founder and President of GMP Group, a company he founded in July 1988, and partner in the digital agency Webstyler as well as the radio Itsy Bitsy. Graduate of the Berlin School of Creative Leadership, he is known for his desire in changing the industry for the better.

As the President of IAA Romania from 2005 to 2010, Tataru has guided a number of successful initiatives for the Romanian communications industry, such as the IAA School and the Excellence Awards.

So, my first target would be to create a team with those that are to be elected and come up with a strategy as soon as possible.

I have in mind now two directions: first, IAA can help the industry reduce the gap between the consumer and the marcomm industry, a gap that is present in all the markets. The consumer is far ahead of the industry when it comes to his needs of communication and his habits to interact with brands.

For many years, IAA has been oriented towards itself and its members. I wish that under my leadership the IAA orientation can shift towards the exterior: the industry and the consumer.

Do you still have an influence over IAA Romania?

I am no longer part of the IAA Romania Board, but I am consulted in critical situations, such as the 25 Decree when I was involved along with my colleagues from IAA Global.

Otherwise, I am pleased to see that the projects started by me are further developed (the IAA School, the Excellence Awards) and that others with great impact on the industry were set up by the Board (The Advertising Day and the Study for the evaluation of the advertising impact over the economy).

How would you characterize the evolution of the Romanian chapter during the years?

The industry has proved that it can act united when it succeeded in convincing the political class in changing the

What are, in your opinion, the 2016 trends in advertising?

The topic of communication trends is worth a whole material as there are so many things changing right before our eyes with a speed hard to anticipate. I will only name a few. We kept on hearing that content is the king.

According to recent studies, about 90% of consumers trust recommendations from others—even people they don’t know—over branded content. We can conclude then, that influencers, real content and conversations are to define 2016 and years to follow.

Mobile marketing and advertising will be key components of a digital marketing strategy. The “Mad Men” era of wine, whisky and women as inspiration, are now a distant memory.

The rise of digital and social web has changed the landscape while the appearance of smartphones totally transformed the consumer and his habits.

This context will require changes in the structure and the way agencies work. The boundaries between communication disciplines melted, the speed required to deliver a solution is increasing and the linear structure of agencies is now facing difficulties in addressing the consumers’ real needs.

I think this will be a challenge for 2016, not only in our market but all over the world.

Another trend in communication that years to come will try to solve is that now we have access to a whole amount of data. We will soon have to figure what to do with all this data.

We will not talk about big data, but smart data. romanita.oprea@business-review.ro

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RESTAURANT REVIEW 23

Brash and flash Stejarii Pool Club, 14 Jandarmeriei, 0744 332 155

Over the years, I have written 321 critical food reviews for this paper, but I have always refrained from mentioning the owners’ names as it would be a total irrelevance. But here I am, throwing discretion to the wind and telling you the owner of this place is Ion Tiriac. And why am I breaking my own rule? - Because his PR machine has gone out of its way to bring it into the spotlight. Maybe it’s just me, but a restaurant’s quality is not intrinsic with the owner being a celebrity or not and does not automatically draw me in. Perhaps focusing on other strong-points might do the location better justice.

But oh well, come with me and we will go there and see if all the boasting is worth the effort.

My experience began, well, when I was greeted at the reception by gorgeous hostess, Alina. She took me to a cool, likeable, professional waiter, Danut. But it soon went downhill with a catalogue of house errors. The place is undoubtedly pretty, but certain details rather unnecessary. For example, the bright expensive carpets on the floors. They will soon learn that restaurants never have carpets,

as they are all destroyed by diners’ they were restrained by the menu. So spills. Another mistake is its size. It we had “Vietnamese spring rolls” recan effortlessly accommodate 250 splendent with an ethnically correct covers. In other European capitals, vinegar/sugar/pepper/ fish sauce this place would be packed with an bowl of dip, perfect fresh lettuce eclectic mix of cool locals, rich oli- leaves to hand wrap around the excelgarchs, nouveau riche flaunters, bil- lent rolls, but it was ruined by not lionaires galore, chic hipsters and the having the obligatory sweet mint occasional international fraudsters. leaves to place in the wrap. Romanian But, in Bucharest, it’s much harder to mint is bitter, and sweet mint does attract all of them in the same venue not exist here.

Off to five ex-frozen (frozen is not so even on a good night, if it doesn’t fill up, the empty space might put a a good idea) scallops, with a ludicrous downer on the ambiance for the din- dipping sauce of lemon and cream.

What! That sauce is a crime against ers.

The biggest disappointment was gastronomy. Anything, but anything the menu. The house struts and ranging from a salsa, or a Cognac, butboasts it is a French restaurant. Oh, ter and cream sauce, even to a humgive me a break! The ostentatious ble cheesy mornay sauce would be menu was simply “New York meets better. But, I do not blame the chef.

Romanian bistro,” Apparently, they He is merely following orders from hired an alleged French chef to design the silly menu which, by this stage, the menu and train the kitchen, after was beginning to annoy me. which he returned to France. Perhaps So again, we had a superbly made he took the actual French menu with “prawn risotto with saffron.” Thank you chef, it was so large I had to order him.

But now comes a paradoxical a second plate to share it with my dintragedy because, just like Alina and ing buddy. But the ghostly invisible Danut, the other staff in the kitchen hand of the menu designer (and inatwas also superb, as was the food. tention to specifics in the local marEvery dish we had was excellent, but ket) was still present: just like the

missing sweet mint, he simply does not understand that you cannot buy a reliable supply of “live” fresh saffron in Romania. There was zero saffron sensation (not the Chef’s fault) and I suspect they made up the color of the risotto with flavorless turmeric.

Excellent bread and side dishes were included in the price of the mains, so I ordered a simple bowl of mashed potatoes. In advance of the dish arriving, I asked for extra butter and olive oil to improve it. But stupid me. By now I should have realized that my potatoes would have been as good as everything else we had - and they were. Just perfect, and they needed no help from my butter and olive oil.

We passed on so many “Americanized” so-called French dishes that are too numerous to mention. But, my dining buddy had to order a dessert.

OK, I am old fashioned and I do not believe that “real” macho men like me eat quiche or drink Prosecco or order desserts. But he ordered an apple pie, correctly known as a “tart tatin” and I mooched a slice from him.

It was superb.

I really do advise you to go there, but if you don’t like the rigid menu, ask Danut to tell the chef to make subtle changes to your satisfaction. The staff are so professional, they may well accommodate such an abnormal request.

My only gripe was the prices of the wine. The cheapest house red was RON 120. This should change.

Michael Barclay Mab.media@dnt.ro

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24 SHOPPING GUIDE

Christmas comes but once a year It’s nearly Christmas and Bucharest is already panic shopping. But don’t worry, BR is on hand to help you navigate the festive retail maze. Over the following pages, you will find our selection of the best places to do your Christmas shopping, from local designer fashion boutiques, through to traditional Christmas fairs, upmarket delicatessens and multi-language bookshops. ∫ OANA VASILIU Romanian designer goods Atelier Merci Charity Boutique Altogether different from the designer fashion boutiques in Bucharest, Merci Charity Boutique is the perfect place to discover hand-made items and all for a good cause. The charitable tea house has opened its own fashion brand, Port cu mine o fapta buna / I’m “wearing with me” a good cause and the money obtained from the items are given to a project called Zana Maseluta / Tooth Fairy, a program for children with cancer who need dental treatment.

13 Smardan Street.

Cocor Store Unique for its Romanian fashion designers’ gallery on its second floor, which brings together more than 30 local designers, Cocor offers a variety of clothes and accessories at affordable prices, as well as bespoke options.

29-33 I.C. Bratianu Blvd. www.cocor.ro Dada After enjoying a fusion lunch in the unmistakable Dada style, you can pick up a dress or bag at production prices, as the building’s upper floor hosts the factory itself.

94bis Matei Voievod (restaurant/showroom), 1 Tache Ionescu (shop). www.dada.ro.

ner with Biserica Amzei; Briolette Boutique, 12 Ion Campineanu Molecule-F For several years now, Molecule F has been the place to look for pieces by Romanian designers: the online platform currently has 43 designers and over 800 products, ranging from clothes to interior design products and even cosmetics and perfumes.

Currently the online platform has opened a store in Promenada Mall, so now you can try in the dressing room whatever you want to buy.

Promenada Mall, www.molecule-f.com

Nissa A Romanian apparel brand for women with a modern-classical style in keeping with the latest international trends, but with a very good price/quality ratio. There is a network of shops, most of them in malls, but also a flagship store close to Romana Square (39 Dacia Blvd.).

Unirea Shopping Center, AFI Palace Cotroceni, Cora Pantelimon, Centrul Comercial Feeria-Baneasa, Centrul Comercial Orhideea. www.nissa.ro

Kristina Dragomir Hats Artistic hats are created on frames made by the renowned UK Royal House specialists, with the finest and most exotic materials purchased in London, where the designer learned her craft. Kristina Dragomir is available to discuss bespoke hat options and give styling advice by appointment only.

51 Mihail Kogalniceanu, 2nd floor, access code 11. www.kristinadragomir.com Musette A classic feminine look and comfort are the main characteristics of the Romanian-based footwear brand, Musette. Bags, clutches and belts, in various colors and styles, are also manufactured under the same name.

Cristhelen B is Musette’s premium brand for women, an exclusive line produced in limited editions.

114 Calea Victoriei, Baneasa Shopping City, Bucuresti Mall, Unirea Shopping Center, Promenada Mall, Mall Plaza, AFI Palace Cotroceni. www.musettegroup.ro

Bands of creators In the heart of Bucharest, near the Romanian Athenaeum, there is this cozy and intimate space, filled with designer clothing and accessories. As the name itself states, the creators from the band are emerging designers from Eastern Europe, but they also have a fine selection of established Romanian designers.

14 Benjamin Franklin Street, www.bandofcreators.com

Madame Briolette A window full of heads wearing hats, berets and caps on Magheru Boulevard heralds a store with modest interior design. However, this means little given the shelves of headgear waiting to be tested. Aside from fur hats, a multitude of felt options and classic models in many colors are locally made. Hand-knitted hats and shawls and plenty of colorful leather gloves are among the many other accessories.

And all at very affordable prices.

Briolette du Cinema, 29 Magheru, cor-

Sepala The footwear brand Sepala, Mihaela Glavan’s high-end line, embraces minimalism. Shoes are simple, with well-defined cuts and cutouts. Sepala Kids and RSM for men make the shopping ex-perience one for the family.

104 Sabinelor Street. www.sepala.ro Tudor. Personal Tailor For a perfect item of clothing, the material should combine almost seamlessly with the stitching. Tudor.

Personal Tailor works with four local tailors with 30-55 years experience in the field, but also draws on expertise from specialists in marketing, fabric and back office operations.

1-3 Episcopiei Street (inside Athenee Palace Hilton). www.tudor-tailor.com Venera Arapu A mono-brand store with a distinctive interior design signature, fashion designer Venera Arapu presents a range of clothing from evening gowns to shirts and coats, all suited to strong and non-conformist women, yet endowed with refinement and elegance.

42 Calea Dorobantilor Street. www.venera-arapu.com

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Souvenir shops

SHOPPING GUIDE 25 statuettes are on sale.

In between Nicolae Balcescu Blvd. and Regina Elisabeta Blvd.

Unusual home ware

Peasant Museum Souvenir Shop Quality traditional peasant clothes, icons and naïve art, as well as artistically unique tapestries, wooden and glass icons, handmade metallic objects, tiles, vegetable thread knitwear, folklore dolls and souvenirs are all on sale, albeit at relatively high prices.

3 Sos. Kiseleff, near Victoriei Square Romartizana The gallery shop sells authentic folk art objects that showcase the values and traditional folklore of the old Romanian regions. Shoppers can admire and buy folk costumes, embroidered blouses (the English for the Romanian “ie”), raw silk headdresses, ceramics, wooden objects, woolen folk weaves, as well as useful handmade objects and interior design pieces, such as embroideries, knitwear, crocheted table cloths, lacy patterned fabrics, crocheted hangings and curtains.

16-20 Calea Victoriei. www.romartizana.com.ro Souvenir Shop Located in the Old Town area, this outlet has both Romania and Bucharest branded gifts, from postcards to T-shirts with funny messages, such as “Send more tourists, last ones tasted great” – signed by Dracula. The shop is open daily from 10:00 to 20:00.

13 Smardan Street. www.souvenir-shop.com.ro Unirea Shopping Center The retail center is home to two souvenirs shops selling products showcasing traditional Romanian and Bucharest landmarks and sights (old and new postcards, maps, mugs, fridge magnets), as well as books and Romanian wine bottles in special gift packs.

Piata Unirii. www.unireashop.ro Universitate Passage Souvenir Shop This small souvenir shop is tucked in Universitate Passage, near the Tourist Information Center. Postcards, mugs, traditional items of clothing and small

Atelier Anda Roman Creativity meets a passion for beauty at this concept store, housed in an innovative, avant-garde space. Atelier Anda Roman is a subtle blend of innovative design, where items “converse and cre-ate emotions”, to produce creative living rooms, dining rooms, bedrooms, children’s rooms, office spaces, kitchens and even bathrooms.

With products sourced from France, Belgium, Holland, England, Italy and even local producers and antique markets, the boutique showcases furniture, decorations, toys and fabrics, everything served with a green tea, coffee or gingerbread.

42 Grigore Alexandrescu Street.

Cadolines The shop was recently launched in Romania, bringing together dedicated brands for luxury presents. Most materials used are tin and china, everything wrapped up in details and beautifully hand engraved. Vases, candle stands, bowls, photo frames, coffee caddies, oil lamps, coasters, trays, jewellery boxes, platters, zodiac signs, glasses and many other exquisite products are waiting to be discovered.

Mario Plaza, Baneasa Shopping City, www.cadolines.ro

Dizainar This store offers a wide variety of designer products for those interested in decorating homes and offices with Romanian-made pieces of art.

Dizainar’s portfolio is comprised of over 200 pieces from furniture, lighting, clocks and graphics to personal accessories, decorations, toys, glassware and ceramics which come from more than 130 designers.

17 Puțul cu Plopi Street, www.dizainar.ro

Iconic Food Wine & Design With a focus on classic, high-quality design, this airy and minimal outlet is nonetheless unselfconsciously warm and friendly. Housed in a discreet and elegant villa in the Aviatorilor area, this is a space where passion for aesthetics and rules of style prevail.

Choose from unique interior design objects, gifts for the home, fashion and beauty items, wine and gourmet foods and, last but not least, a selection of books and magazines dedicated to relaxation. The showroom includes brands that are available in Romania for the first time, such as Fornassetti, Ingo Maurer, Palucco, Edra, Jars Ceramics, Lara Bohinc, Uncommon Matters and Hermes Vintage.

7 Aleea Alexandru, near Victoriei Square. www.iqonique-cs.ro Pierrot Interior and garden ornaments, gift ideas and Christmas decorations all under one roof. This store stocks beautiful objects, carefully put together and inspired by various traditions. They bear the names of famous interior design companies from Italy and Germany such as Wald, Shan, Hoff Interieur and Drescher, found exclusively at Pierrot. The product range is wide, running from porcelain from the exclusive Villar collection, inspired by Italian baroque, to affordable products, both contemporary and traditional. The store is a rich source of gift ideas from scented candles and Swarovski crystals to traditional Christmas decorations.

1 Intr. Biserica Alba. www.pierrot.ro

Mesteshukar ButiQ(MBQ) Mesteshukar ButiQ(MBQ) is a network of social economy enterprises aiming to revalue traditional Roma craftsmanship. The pieces are made with clean raw materials, craftsmanship passed from generation to generation, skillful hands and an immediate major utility. Most of the products are copper made, designed

by Roma craftsman Victor Clopotar together with the Viennese designer Nadja Zerunian.

7 Edgar Quinet Street, www.mbq.ro

Petalia Christmas decorations At Christmas, we sing about the holly and the ivy, and shoppers who wish to add some floral color to their festive celebration, either at home or at the office, will find it here. Special Christmas arrangements express glad tidings for a joyous holiday season with a bounty of blooms.

Online orders at www.petalia.ro Floria Picture this: bright red carnations which create a splash of color on a bed of white cushions, nes-tled in a clear glass vase, tied with a scarlet red holiday ribbon and adorned with candycanes or other Christmas decorations.

Did you like it? Then you can order it from Floria.

Online orders at www.floria.ro

Festive food and drink Bacania cu suflet The shop was created in order to bring to Bucharest some of the traditions and goodies from Bucovina and Maramures, two parts of Romania where food is naturally preserved and the recipes are passed down from generation to generation. Jams, meats and cheeses, homemade cakes and chickpea-made coffees are the best selling products in the shop. Quality wines and traditional strong liqueurs can also be found here, as well as local handmade interior design accessories.

11 Salcamilor Street, www.bacaniacusuflet.ro Bacania ROD Located behind

the

Romanian

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26 SHOPPING GUIDE Athenaeum, Bacania ROD seems more like grandma’s goody room, a place where all the jars are nice looking and everything is perfect arranged.

The owners bring the natural vegetables for the products from Valcea county, where a family cooks the goodies in the traditional way, and cheese and meat products are brought in from small farms.

2 Mendeleev Street.

Bacania Veche The owner says that this grocery store aims to offer food with a story. The shop sells traditional Romanian meat, dairy products, wines, all sorts of preserves, in-season fruit and vegetables, unconventional kitchen implements, baked goods, as well as international products – all under the motto “no preservatives, no colorings or other chemical additives”.

49 Barbu Vacarescu Blvd. www.bacaniaveche.ro Camera din fata Among old family pictures, thousands of pots with flavored tea, cups of coffee and, of course, coffee bags, visitors are transported back in time, as Camera din fata is inspired by grandparents’ houses. There is also a selection of related gifts: mugs, cups, tea services, tea kettles, espresso machines and even homemade goodies such as jams and fruit syrup.

22 Mendeleev Street, near Romana Square

Boutique Comtesse du Barry Upmarket delicatessen that brings a little French gastronomic savoir faire to Bucharest. All manner of edible and drinkable treats await, including smoked salmon, caviar and posh chocolates, not to mention a range of wines. If you have foodie friends and money to spend, you could do all your Christmas shopping here. Another outlet can be found in Baneasa Shopping City.

2-4 Episcopiei Street. Baneasa Shopping City 1st floor, 3 Mircea Eliade Blvd. www.lemanoir.ro Leonidas The famous Belgian praline – a chocolate layer covering a soft fondant center – is best known in Bucharest thanks to Leonidas, a worldrenowned chocolate maker, which sells over 100 different kinds of Belgian chocolate through 1,400 outlets around the world. To mark the winter celebration, over 20 different Christmas chocolate figures can be beautifully wrapped and put under the Christmas tree, for those with a sweet tooth. On top of that, tea lovers can purchase Tea Forte special collections, such as Winter Spice Teas, the seasonal recommendation.

35 Calea Dorobantilor. www.pralinebelgiene.ro

medal-winning wines, star buys, and wines from both the New and the Old World.

1 Bacani Street, Old City Center, entrance from Lipscani Street. www.corks.ro Crama Murfatlar Crama Murfatlar (Murfatlar Winery) stores can be found in almost all neighborhoods in Bucharest, as well as in a large number of shopping centers. If choosing from the full range of producer’s varieties leaves you stumped, tasting is free and the vendors are there to offer advice.

35 stores in Bucharest Dionysus Wine Bar This little place near Unirii Square offers you a fine selection of self-imported wines, which can be tasted inside, at the large wooden table that seems to occupy the entire space.

19 Sepcari Street Ethic Wine With an ethos of bringing quality wines to local consumers at sensible prices, Ethic has some bargain bottles (it also sells spirits and olive oil.) The owners boast of having “the largest selection of Romanian wines in Bucharest”, but the rest of Europe and the New World are also covered.

55 Banu Antonache, Piata Floreasca. www.ethicwine.ro Van Gogh wine shop The Netherlands might not be the main country you’d associate with fine wines, but the people behind Van Gogh café know their onions when it comes to quality food and drink. The expat hangout du jour sells a selection of bottles, which can be tasted on site along with some cheese, or delivered to your home.

9 Smardan Street. www.vangogh.ro

Wine and dine Arte & Vino While its Romanian language-only website makes Art & Vino a little less foreigner friendly, this is another business run by proper wine people.

The bottles stocked come from Romania, Eastern Europe, the traditional wine-making nations of Western Europe and the New World.

2 Marasesti Blvd. (Carol Parc Residence). www.artevino.ro Corks Cozy Bar Bucharest’s Old Center has a new spot for wine lovers who can select their tipple from a few hundred labels. The bar offers a menu of over 300 bottles, all of which can also be served by the glass. The selection includes both new and vintage wines. For wine collectors, the bar sells anni-versary and

Online orders at www.winery-outlet.com

Bookshops Anthony Frost Tucked away opposite the Kretzulescu Church, this little place has now been impressing local bookworms for several years now. Open until 8pm on weekdays and with a central location, Anthony Frost is a good spot to pick up gifts for friends and family after work in one fell swoop, as its extensive stock runs the gamut from children’s stories to the latest literary sensations.

45 Calea Victoriei, www.anthonyfrost.ro Carturesti The capital’s premiere book concept store, this multi-functional location – also a teahouse and a coffee shop – has the largest book, music and film ranges on the market. Currently, it is also host-ing a high-end gift fair.

13-15 Arthur Verona. www.carturesti.ro Carturesti Carousel The revamped Chrissoveloni House in Bucharest’s Old Town has been hosting a Carturesti bookstore for nearly one year, being the biggest one from their chain. Six floors, a bistro on the last floor, a multimedia space in the basement and a contemporary art gallery on the first floor are the place to be for a memorable shopping experience.

55 Lipscani Street, www.carturesti.ro

Vinexpert Started by a group of oenophiles, the Vinexpert network stocks a range of top European wines and spirits, along with other high-end goods such as teas, coffees, chocolates and Cuban cigars. If you’re stuck for inspiration, the website has a list of Christmas gift ideas. The chain also has mall outlets.

24 Octavian Goga Street. www.vinexpert.ro The Winery Outlet The Winery, part of the British company Halewood, has special deals on bubbly – ideal with the party season coming up – and other products. The store stocks the entire range of wines produced by Romanian Halewood and another 179 imported wines – from Uruguayan Pisano and South African Simonsig to famous French producers like Hugel & Fils, Lupé Cholet and Gerard Bertrand. In addition to wines, the store also sells beer and liquors – for some Christmas flavor, you can choose ginger beer or cider.

Kyralina French bookstore Opened last month in the presence of the French writer Pascal Bruckner, Kyralina provides an authentic French cultural experience, for the purpose of personal enrichment and greater understanding of the diverse people of the French-speaking world.

8 George Enescu Street Humanitas Cismigiu In the newly refurbished historic Hotel Cismigiu building, Humanitas has opened a new outlet that respects the spirit and architecture of interwar

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SHOPPING GUIDE 27

Bucharest. One of the best bookstore chains in Bucharest, you can always find the latest titles here as well as your favorite works by world famous authors.

38 Elisabeta Blvd. www.humanitas.ro

Christmas fairs

Nautilus Another long-termer, Nautilus heaves from floor to ceiling with shelves that are themselves burst-ing with books.

Again, all major genres are covered, with its fantasy and sci-fi section particularly chock-full. Orders for out-ofstock titles can be made online.

Games and other gifts (tarot cards, anyone?) are also on sale.

17 Arhitect Ion Mincu Street. www.nautilus.ro

Bucharest Christmas Market The fair is open until December 27, so visitors will have the chance to find various gifts for their loved ones. The goodies from this winter fair include decorations and ornaments, painted pottery, masks and traditional wooden toys, musical instruments, jewellery, traditional food, jams, honey, sweets. Besides shopping, you can also donate books and toys for children. There will also be a stage where concerts will be performed by well-known artists or carol singers.

Universitatii Square

ALT.CRACIUN! Christmas fair Arcub Gabroveni hosts the ALT.CRACIUN! Christmas fair between December 7 and 23. The event aims to celebrate the festive period together with Romanian contemporary artists who express themselves best through clothes, jewellery, design or music. ALT.CHOCOLATE Factory offers visitors mulled wine, hot chocolate and other goodies, while ALT.DESIGN Shop and ALT.GIFT Shop powered by Dizainăr will host unique gifts like clothes, jewellery and interior design objects created by Romanian designers. Every evening, from 7pm, the most popular alternative music bands, brass ensembles and choirs will take the stage on the passage of Gabroveni Inn and will offer visitors some unique musical surprises.

55 Gabroveni Street Bounty Fair – the Christmas edition Casa Universitarilor in Bucharest hosts Bounty Fair on December 18 and December 19 and will have for sale jewellery, designer objects, beauty products and art pieces. The entry will cost RON 5, but those aged under 14 can enter for free.

Carturesti Fair Between December 1 - 31, at Carturesti Verona, there is a fair offering books, games, jams, sweets and home decorations, everything wrapped up

in the Christmas spirit. The fair has the same program as the bookstore, from 10am to 10pm.

13 Arthur Verona Street, www.carturesti.ro

Shopping centers Most of the shopping centers organize indoor or outdoor fairs with traditional products and special Christmas products, while the program exceeds the normal hours. Sun Plaza, Mega Mall, Promenada, Baneasa Shopping City, Bucuresti Mall, Plaza Mall, and Unirea Shopping Center have already announced their Christmas fairs. editorial@business-review.ro

www.business-review.eu Business Review | December 2015

28 GOING OUT

Romania: a country of contrasts and juxtapositions It’s now been six weeks since the horrendous fire at the Goodbye to Gravity album launch, and the heart-breaking stories have stopped. It seems that we are back to focusing on our lives and the Romanian landscape appears to have changed: journalistic investigations are forcing the government to give answers for the lack of transparency regarding the public health system and what happened with the victims during their treatments, legislation for fire safety regulation has changed and the horeca players are willing to offer protection to their clients. But is anything different since October 30? ∫ OANA VASILIU ANDREEA TINT Once upon a time …

For several years now, Bucharest has been promoted as a cheap city break for those who want to enjoy nightlife in all its aspects, from food to drinks, beautiful women and clubs with live music which remain open until sunrise or even non-stop as well as good bargains for bed & breakfasts. But, it wasn’t always like that.

Between 2007 and 2011, the Old City was effectively a no-go zone, with minimal street lighting and gaping holes in the pavement, papered over by unstable plywood bridges.

In 2010, there were around 80 pubs in the historical center. By 2011, an

analysis of the market put the figure at 110. A year later, in 2012, the number was estimated to have grown by 36 percent, though in 2013 it returned to the 2011 level, according to Ziarul Financiar.

Currently, there are around 130 bars and pubs downtown.

In 2013, Bucharest’s Old Town covered an area of 57 hectares, of which Lipscani Street occupies about 15 hectares. A total of 527 buildings – of which about one third are clustered in the Lipscani area – occupy the space delineated by six major roads: Regina Elisabeta and Carol Boulevards to the north, Hristo Botev Boulevard to the east, Calea Victoriei to the west and Splaiul Independentei and Coposu Boulevard to the south. Half of these buildings were built before 1900, and the other half before 1940.

Currently, in the Old Town, there are nearly 520 buildings, which have different surfaces, from 50 sqm to 2,500 sqm, and the majority are between 100-300 sqm, explains Liana Dumitru, Associate Director, Retail Agency Colliers International. “Taking into consideration the sustainable value of the rent and an average return, we evaluate the whole Old Town at about EUR 500 million,” sustains Dumitru. When it comes to rent, the prices differ. For example, Lipscani Street has an average value of EUR 4060/sqm/month, while Selari, Smardan, Covaci Streets are smaller prices, starting from EUR 20-40/ sqm/month, shows the data provided by Colliers Interna-tional. Asked by Business Review how much the rehabilitation of the Old Town would cost, the specialist said that they estimate an average price of

EUR 400-600 per sqm.

Before the tragedy that happened in Colectiv Club on October 30th, the only existing and outstanding problem with the pubs in the Old City Center was the consolidation of the buildings. In the past two years, several buildings collapsed and fortunately no one was hurt - the authorities managed to close the streets just before the walls fell. Many other structures in the Old Town are in similar conditions, despite the recent improvements in the area. Since the demolition of historic buildings is not allowed by law, owners prefer to let structures fall apart by themselves, before building something else on the land.

This consolidation problem still remains, but many other questions have risen: do they have proper authorizations? is it safe to go partying in the

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GOING OUT 29

area? are they ready to prevent another tragedy?

The changes in the legislation The Colectiv fire sparked Romania into action as the country turned its attention to the laws dealing with fire safety and their applicability, putting pressure on both the government and the Inspectorate for Emergency Situations (ISU) to take action. In the month since, close to 40 clubs, restaurants, pubs, and other such venues have been shut down in Bucharest and throughout the country, bring-ing to light the many shortcomings of implementing fire safety regulations, according to Mediafax.

On the 3rd of November, when the death toll had reached 32, former Prime Minister Victor Ponta was saying in a government meeting that “we cannot leave tough measures only to the local authorities because they do not have the capacity to implement them,” referring to the lack of proper enforcing of existing fire safety laws, according to Digi24. What Ponta’s government did following the fire, was to adopt an emergency decree “through which we give power directly to the ISU, not local authorities, not anyone else” to implement extreme measures, including sealing the venues, until they meet legal conditions, said Ponta at a government meeting on Nov 3rd.

From a legal point of view, law no.

170/2015, which entered into force in July 2015, already provided the inspectorate with the power to fine and shut down those public venues that do not follow fire safety regulations and endanger the lives of their occupants, according to the Official Gazette.

The Colectiv fire led almost immediately to fire safety checks being made by the General Inspectorate for Emergency Situations (IGSU) at a national level. Subsequently, 37 venues were shut down and sealed off from further use because “in their current state, they were endangering the safety of their clients,” reported Mediafax. Firemen and policemen conducted close to a thousand checks in clubs, bars, cinemas, and other such venues between November 9-16, and found 3,218 deficiencies, of which 432 were removed during checks, according to statements made by IGSU for Mediafax. The total amount of fines given out during the checks amounts to more than RON 8.5 million (EUR 1.9 million,) reported the same source.

Following the checks done by firemen, buildings considered national monuments, such as the Peles Castles, Ateneul Roman, and the main building of the National Museum of Contemporary Art, were found to be operating without fire safety authorization, stated Mediafax. Furthermore, a few days after the Colectiv fire, the interim Prime Minister at the time, Sorin Campeanu, former Minister of Education, had stated that “93 percent of Romanian schools are operating without the ISU notice,” according to Mediafax.

Party all the night

Let’s party. But where?

Debbie Stowe wrote in Expat Eye section for Business Review that “nightclubs crammed with revelers, crumbling old town buildings in an earthquake zone, basement dive bars accessible via one narrow entrance and staircase, the lack of emergency exits and fire extinguishers, the prevalence of smoking – it all adds up to an accident waiting to happen.” And she is right. Has anything changed from October 30th until now in the Old Town? Is it safer? We went downtown to find the answer.

About Friday night It’s way past midnight in the Old City Center and quite cold. It’s Friday, December 4th, and we are looking for a place to warm up a bit. On Lipscani Street, there are only a few groups of people, mostly expats, speaking in English and Spanish. They are in a hurry and it seems they are looking for taxis.

At the junction with Selari Street, the music is so loud that we can barely understand each other. Barbero bar has the door wide open and inside people are crazy dancing. Across the street, a nice hostess invites us to Jack’s Pub where another wild party is happening.

We move forward and go to Bazaar, on Covaci Street, a place where people usually go for food and drinks, but the space has its own DJ, so it could easily pass as an all-in-one kind of space. Inside, everyone was chatting at their tables. We went upstairs for some drinks.

The generous space has no exit sign and no visible evacuation plan, as the law demands. But in the basement, where the toilet is, there’s a green exit sign that can be spotted. We left the bar around 4 pm, and, while going to Calea Victoriei, it seemed we were the only ones on the streets.

The view from Saturday On Saturday, we returned much earlier - it was about 10 pm. On Facebook,

everyone seemed to be at the Bucharest Christmas Market, and the crowds from the Universitate passage confirmed our newsfeed. We rapidly passed the area and we went straight forward to Blanari Street.

The first club on this street, Maraboo, was open, but we didn’t enter as we weren’t properly dressed for this premium club. The club is situated in the basement, so probably some controls were made here during the past month.

Then, we discovered Argentin bar closed - it used to be the cheapest place from the Old Town. On the other part of the street, Club A, one of the oldest underground pubs from Bucharest, was open and the party was about to start.

Right at the entrance you could see the evacuation plan and a second door was properly flagged. Still, the club is considered a building with level A seismic risk and currently the owner has a dispute with City Hall regarding the building’s expertise.

Then, we crossed Selari passage, where we discovered that El Comandante club has moved right on the corner from a basement. The rooms were flagged with the exit signs, but unfortunately, there were no customers, although the music was quite good. We entered to see the atmosphere in The Drunken Lords, and right at the entrance, a fire extinguisher was flagged.

They didn’t have room for us and we couldn’t even stay there longer because of the cigarette smell. Back on Lipscani Street, the atmosphere was exactly like the previous night: loud music, but the two bars, Jack’s Pub and Barbero were almost empty. But we saw the green exit signs, which probably means someone from ISU was previously there.

Gabroveni Street, one of the most vibrant streets of the city center, was almost desolate. The big surprise was to see Mojo Club closed. The club used to be very popular among locals and expats, for its upstairs location where

people could karaoke, and for their basement, where most of the live concerts had taken place.

The other surprise came from Biutiful by Fratelli, the restaurant, which was also closed. On their official website, they announced that they moved to Golden Street, in the same building as the club. “It is also true that at this present time, regardless of our plans, it is also a matter of new legislation in force regarding the Old City Center seismic rehabilitation projects. This is not an action we can undertake as it envisions the entire building, not the actual location rented space. Therefore, we are now relocating Biutiful Downtown in a new home, in 1-3 Glodeni St.,” it informs us. But on the restaurant’s door, there’s no mention about this new location.

Further on the street to Selari Street, we entered Fire Club. Last week they announced that the club, situated in the basement, will remain closed, although they have a second exit and all the authorizations to run the place. Still, the bar and the restaurant are open and at 10:30 pm, every table was booked.

Seller Street was more alive than ever, with hostesses inviting us to their clubs.

Grand Prix, Old City, Mulanruj, Bordello’s, Trinity College, The Bankers and Vintage were open and the parties were about to start. Previously interviewed by investigative reporters, the owners of these bars declared that they have everything in order and safe. In all honesty, we did see the exit signs and evacuation plans.

The second most famous street, Smardan, received us with four closed clubs: Goblin, whose owner is one of Colectiv’s shareholders currently under prosecution, Nomad Sky Bar, Pals and Laboratorul de Cocktailuri. Nomad Sky Bar had an interesting explanation on the door, arguing that “be-cause of a change in laws overnight and with no time for implementation, we are forced to close the location until we update the security measures. […] Any proposed complementary measure, includ-ing collaboration with a private firefighter company with rented fire truck in front of our location to prevent risk of fire 100% was refused. […] See you in December.” Open, and probably safely ready for fun are Cliche, Bound, Freddo, Les Bourgeois, Storage Room, The Barrel, Black Jack, St. Patrick and Tan Tan. Overall, the scenery in the old town is quite unusual. Every street has 4-5 restaurants/pubs/bars closed and visible “to rent/to sell” advertisements are on their windows. It seems to me that locals are avoiding the area - there wasn’t so much public for a proper Saturday night - considering also the fact that it was Saint Nicholas day, so people were probably celebrating their names.

We completed the “investigative walk” at about midnight and the streets were again almost empty, with small groups of expats and very few Romanians. editorial@business-review.ro

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30 CITY

Cultural calendar ∫ TATIANA LAZAR Colectiv “#FIND_US” photo exhibition Arcub Gabroveni, until January 31

is that Selah is able to use all kinds of different styles and puts them together into one record that still sound like a unity,” say the critics from www.abitofpopmusic.com. VIP tickets are sold out so hurry up to book your place.

DSCH. The Dream Bucharest National Opera, December 16

“#FIND_US” photo exhibition rejoins 200 images displaying concerts performed in Romania and abroad. The photos are shot by some of the photographer victims of the Colectiv fire and by their colleagues. The charitable exhibition will end with an auction, with the funds raised going to the injured. Part of the exhibition comprises 100 photos made

by Alex Chelba, Teodora Maftei, Claudiu Petre, Mihai Anghel, Catalin Ilnitchi, Liviu Emil Zaharescu, Roxana Boghian, Cristian Mitroi, Andrada Mihailescu and Miluta Flueras, the ten photographers who either passed away or were wounded in the tragic blaze.

The auction will be organized at the end of the exhibition, with the reserve price being EUR 50 for one photo. Those visiting the venue and wanting to attend the auction, can choose photos displaying famous artists and bands performing in various shows: Black Label Society, Ozzy Osbourne, Roger Waters, Joe Satriani, Rammstein, Slash, Mike Terrana, Deep Purple, Depeche Mode, Scorpions, Texas, Hiromi Uehara, Avishai Cohen, Metallica, Sepultura, Judas Priest, Godsmack and Down.

The National Opera House hosts the latest premiere presented by the amazing ballet, DSCH. The Dream ballet. The ballet performance is a mix between Alexei Ratmansky’s choreography on Dmitri Shostakovich’s music and the magic of Sir Frederick Ashton, based on William Shakespeare’s play “A Midsummer Night’s Dream”. The ballet can also be seen on December 20, when it will be on stage again. Tickets are available from RON 10 to RON 150.

Grigore Lese Sala Palatului, December 20

Folk musician Grigore Lese will deliver his traditional Christmas performance.

The singer is Romania’s most important folk artist, known for singing with the Selah Sue “horea din grumaz”, an extraordinary Beraria H, December 15 vocal technique that translates as “singing from the throat”. The vocal and instrumental show, which is meant to offer an alternative to festive western pop music, includes traditional carols and songs celebrating Christmas themes. Many of the vocal pieces included in the event are part of a traditional musical genre given World Heritage status by UNESCO in 2009. For Belgian singer Selah Sue, alternating this event, tickets are priced between electro-soul, trip-hop and house beats, RON 60 to RON 200. is returning to Romania to perform at Beraria H in Bucharest. Reason is the Alessandro Safira second studio album by the Belgian Sala Palatului, December 21 artist and she will present it for the Ro- Italian tenor, Alessandro Safina, is exmanian public, too. “Listening to Rea- pected in Bucharest on December 21 for son feels like listening to a diverse but a special Christmas concert. Safina is accohesive and perfected but still sincere companied by 74 professional musibody of work. In comparison to her ear- cians, known as Alexander Symphony lier work, the tracks sound fuller thanks Orchestra. Tickets cost from RON 160 to to the layered and less acoustic produc- RON 365. tion that gives the overall sound more swing. The great thing about this record editorial@business-review.ro