Business Review - 04/2016

INTERVIEW: Rodica Lupu, founder and managing partner of Loop Operations, tells BR about some of the main changes applicants should take into consideration and the major developments concerning EU funds since the new programs were launched » page 16

ROMANIA’S PREMIER BUSINESS MAGAZINE

MAY, 2016 / VOLUME 20, ISSUE 4

REAL ESTATE THE ‘PASSING TO PAY’ BILL WAS ADOPTED BY PARLIAMENT IN MIDAPRIL, IN A BID TO BRING ABOUT A MORE BALANCED RELATIONSHIP BETWEEN BORROWERS AND BANKS >> PAGE 6

Best foot forward Despite the sector posting steady development in the past few years, SMEs are waiting for the local authorities to take measures to encourage entrepreneurial initiatives » page 10

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

EDitorial anda sebesi EDITOR-IN-CHIEF

be small, think big Every business has its own story behind its accomplishments or failure.

Regardless of its field of activity or size, a business has a shadow man (or woman) behind it: its founder. All national and international enterprises started as small businesses sometime and became large companies following tremendous efforts, and they all have something in common: the vision of their founder. Without a clear vision of how a company will look on the medium and long term, an enterprise is doomed to failure. According to stats, SMEs represent 99.6 percent of the total number of companies active in Romania. This makes them a real engine for the economy and the driver that makes things happen.

Romania is a growing market, both in terms of the number of entrepreneurs and those who find local entrepreneurial projects attractive, and there is still a lot of room for growth and improvement, say pundits. However, the legal, fiscal and judicial system continues to complicate and sometimes hinder the expansion of the business environment, say entrepreneurs. Although some regulations have been adopted in the past few years to support the ongoing development of small and medium projects, Romania is still in the first phases of a significant stage of development and maturation.

As for financing, EU funds, bank loans and government schemes are currently available to SMEs that are looking to grow their business in Romania. But despite all these options, a large share of these companies are financing their own operations. According to research published last summer by the National Council of Private SMEs in Romania (CNIPMMR), only a quarter of the more than 1,300 surveyed entrepreneurs said they used bank finance to develop their business.

In such a context, it becomes obvious that SMEs in particular and companies in general expect the Romanian authorities to support them more and give a significant impetus to the sector, as it represents the driver of the economy.

Without their support, businesses will grow more slowly owing to greater caution when investing in extending on the local market. And on top of the macroeconomic brakes, Romania has another significant problem when it comes to entrepreneurs. In addition to a relatively short tradition in this area, there is a major lack of education and culture of entrepreneurship. In order to create the future generation of valuable entrepreneurs, there is a need to invest time and money in educating young people from childhood. This way they will consider an entrepreneurial career in the future, as they will be well informed and know exactly what such an endeavor involves.

Last but not least, companies of all kinds should think big. They should be able to pass their limitations and realize that if they don’t act big they will remain limited to a specific market or field of activity. This is also true for SMEs. Whether they are small or medium companies, there is no impediment to thinking big. So let’s think big and forget we are small – for the moment. anda.sebesi@business-review.ro

EDitorial 3 Contents 6

REAL ESTATE

8 9

‘Passing to pay’ law finally comes to pass Local farmland set to cultivate future growth

DESIGN

Romanian Design Week brings art in all its forms to Amzei

10 COVER STORY

Small firms think big

18

Local SMEs self-finance despite multiple financing sources for development

22

Romanians ‘need strong culture of entrepreneurship’

24 BR EVENTS

CFOs cautiously optimistic about economy this year

26 CSR

Local CSR market seeks sustainability

33 PUBLISHING

New chapter: local book industry needs better distribution system

34 TECHNOLOGY

Laser project moves ahead despite infrastructure delay

35 IT

Top 10 IT contracts exceed EUR 6 mln in 2016

37 INTERVIEW

Wyliodrin eyes US expansion

38 SOCIAL MEDIA

Going from ‘likes’ to engagement requires a strategy

40 MEDIA

Storytelling – blurring the lines between PR, advertising and journalism

42 CULTURE

Companies splash the cash for culture

44

Stage set for sponsorship

44 FILM REVIEW

10 Cloverfield Lane

issn no.

1453 - 729X publishEr Bill Avery EDitor-in-chiEf Anda Sebesi DEputY EDitor-in-chiEf Simona Bazavan Journalists Otilia Haraga, Romanita Oprea, Ovidiu Posirca, Natalia Martian, Andreea Tint, Oana Vasiliu hEaD copY EDitor Debbie Stowe copY EDitor Eugenia Pupeza photo EDitor Mihai Constantineanu laYout Raluca Piscu

ExEcutivE DirEctor George Moise businEss DEvElopmEnt DirEctor Oana Molodoi salEs DirEctor Ana-Maria Nedelcu salEs consultant Valeria Cornean EvEnts DirEctor Oana Albu markEting Adina Cretu, Marius Andronic, Patricia Neamtu proDuction Dan Mitroi

publishEr Bloc Notes Media

Distribution Eugen Musat

aDDrEss No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania

Emails editorial@business-review.ro sales@business-review.ro events@business-review.ro

lanDlinE Office: 031.040.09.31

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

4 nEWs

nEWsin brief auto local market flooded with used cars after 2008, says new report Over 2008-2014, the total number of vehicles in circulation in Romania increased by 21 percent, reaching a total of 4.9 million cars, according to a new report by professional services firm PwC. However, most of the growth was generated by the used cars segment. At the moment, three quarters of the vehicles sold in Romania are second-hand. The firm further noted that the annual renewal rate of the auto fleet is 1.4 percent locally, compared to the European level of 5.1 percent. This takes into account the share of new cars registered in the total auto fleet.

american federal-mogul opens new plant for car wipers in ploiesti US Federal-Mogul Motorparts has opened a new production plant for automotive wiper components and assemblies in Ploiesti, adjacent to the firm’s manufacturing unit for brakes.

The new facility, which spans 12,000 sqm, will generate 300 new jobs. The company is one of the top employers in Prahova county and has been hiring both highly-skilled professionals and fresh graduates.

with EU state aid rules, according to EC officials. Under the rules, public interventions in companies are considered free of aid when a private operator would have acted in the same way. It is now up to the Commission to assess whether this was the case for Oltchim’s public creditors and suppliers or whether, on the contrary, the public measures gave Oltchim an economic advantage over its competitors and constitute state aid, said the EC.

austrian firm signs Eur 4.5 mln contract for romania-bulgaria gas pipeline Austrian engineering firm Habau has signed a EUR 4.5 million contract for building a section of the Romania-Bulgaria gas pipeline under the Danube River, according to OneStopBrokers. The deal was signed last week in Sofia by Bulgartransgaz and Transgaz, the transmission system operators of Bulgaria and Romania, and Habau PPS Pipeline Systems, in the presence of Bulgaria’s energy minister Temenuzhka Petkova.

The 25 km link between Bulgaria and Romania was originally meant to be launched in 2013, but was delayed due to technical problems under the Danube.

The last stage of the project is the construction of a 2.1 km river section.

Exports banking romania among biggest markets in region for non-performing loan deals, says Deloitte Romania is among the regional champions in Central and Eastern Europe for deals involving non-performing loans (NLPs), according to a new report by professional services firm Deloitte. It is estimated that the market for NPLs in Romania amounted to EUR 2.5 billion in 2015. This takes into account deals that were ongoing at the end of last year.

Aside from Romania, Slovenia and Croatia are likely to see substantial gains in deal-making involving bad loans this year, according to Deloitte specialists.

only 15 percent of romanian exporters have domestic capital, says minister borc The key to stimulating exports is increasing the number of exporters, as right now only 15 percent of Romanian firms in the field have domestic capital, according to Costin Borc, minister of the economy, as cited by Agerpres. In order to boost exports, Romania needs to grow those enterprises that can make exports and compete on the single market, added the minister.

Romania ranks 53rd worldwide in terms of exports and 17th in the European Union. Exports represent 30 percent of GDP, he added. The minister also pointed out that of the 750,000 enterprises registered with the Trade Registry, 22,000 are exporters.

EnErgY Ec investigates potential breach of state aid rules for oltchim The European Commission has launched an in-depth probe to verify whether debt write-offs by the Romanian state and continued supplies by state-owned enterprises in favor of Oltchim, despite the petrochemical company’s deteriorating financial situation, were in line

financE anaf looking to investigate romanians named in offshore scandal After the tax administration agency ANAF said it had created a group tasked with looking at potential local links with the Panama Papers scandal, the fiscal

authority has now initiated procedures to gain access to all documents involving Romanian individuals and companies included in the so-called PanamaPapers case, said the institution, which is headed

by Dragos Doros, in a statement to HotNews.ro news portal. The authority said that the documents will be processed in confidentiality, taking into account the fiscal secret. Some 100 Romanian names appear in the documents leaked from Panama-based law firm Mossack Fonseca, according to journalists at Rise Project.

local m&a market fourth biggest in region last year, says EY The local market for mergers and acquisitions (M&A) registered deals worth USD 3.6 billion last year, putting it fourth in the region, according to a report by professional services firm EY. Deal-making in Romania intensified last year, with the value of the market going up by 22.4 percent against 2014, notes the EY CSE M&A Barometer 2015. Turkey had the biggest M&A market with deals worth USD 10.8 billion. Poland came second with USD 7.6 billion, while the Czech Republic was third with USD 7.2 billion.

macroEconomics imf ups local 2016 growth outlook to 4.2 pct, above emerging Europe average The IMF expects Romanian GDP to increase by 4.2 percent in 2016, according to its latest World Economic Outlook.

Last October, the financial institution had forecasted a 3.9 percent expansion of the local economy this year. Next year, local economic growth is set to slow to 3.6 percent, in line with projected growth rates in Ireland, Latvia and Poland.

Overall, Romania is set to beat the average growth rate in emerging Europe this year, which stands at 3.5 percent. On consumer prices, the IMF expects a negative rate of 0.4 percent, with Romania set to be among the EU member states with negative inflation. In 2017, however, the IMF estimates a sharp increase of 3.1 percent for consumer prices in Romania.

romania could join Euro zone around 2020, says ihs global insight analyst Romania could attain Euro zone membership around 2020, according to Sara Johnson, senior research director for global economics at IHS Global Insight, a corporate data provider. Setting a clear timetable for the adoption of the euro could help Romania attract more foreign

month ahEaD may 1 Minimum wage increase In December 2015, the government adopted a bill increasing the monthly minimum wage from RON 1,050 to RON 1,250. It comes into effect on May 1. may 6 Start of electoral campaign The campaign for local elections will start throughout the country and run until June 4, the Saturday before the elections are held. This will be the first campaign financed from public funds.

At the moment the elections are set to take place with one round of voting, but the law could be amended to extend this to two. may 9 Europe Day Europe Day marks the anniversary of the historical Schuman declaration where the then French foreign minister set out his idea for a new form of political cooperation in Europe. To celebrate, EU institutions will open their doors to the public in Brussels and Strasbourg. may 23, ramada plaza bucharest Polish Investors Forum – first edition The Polish Investors Forum is part of the Country Focus series organized by Business Review. Poland has become one of the stronger European countries, with steady growth (3.3 percent in 2014), celebrating 26 years since its economic transformation and 11 years as a member of the EU. The first edition of the event will focus on discussing the opportunities and challenges brought

by Romania in terms of Polish investments and at the same time creating a mix-and-match environment where companies can exchange information, experiences and opportunities.

most rEaD www.business-review.eu 1 #PanamaPapers | Romanian businessman Frank Timis mentioned in offshore tax scandal

2 Companies getting more interested in organizational coaching in Romania

3 Over 100 Romanian names rumored to be involved in the #PanamaPapers

4 Ioana Manoiu (GMP PR), on the firm’s brand journalism department: “Some say it’s the future of PR”

5 Romania’s Prospectiuni files for insolvency over falling oil prices

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

direct investments in the coming years, she added. The country was mentioned among the FDI hotspots in emerging Europe alongside the Czech Republic, Serbia, Slovakia and Turkey, in a recent report published by HIS.

nEWs 5 will be ready in stages from the second half of 2016 until 2018, and which will house over 20,000 employees by 2018, said company representatives.

it lEgal

cluj’s softvision plans to hire 500 it specialists this year

corruption and bribery remain widespread in romania, says us Department of state

Software developer Softvision, which is based in Cluj-Napoca, has said it wants to hire 500 new IT specialists Analysts at the US state department this year, in a move designed to supwarn that corruption remains wide- port its accelerated growth plans. The spread in Romania, although investiga- company said it was focusing on traintions by the National Anticorruption Di- ing graduates with technical studies rection continued at a “steady pace” on various technologies given the fact throughout 2015, according to the latest that there is fierce competition for IT human rights report by the American specialists. Aside from Cluj-Napoca, institution. the firm has branches in Bucharest, “Conflicts of interest, disrespect for stan- Iasi, Timisoara, Baia Mare and in the dards of ethical conduct, and improbity US (Silicon Valley and Las Vegas). in public office in general remained Through the new recruitment camproblems in all three branches of gov- paign, the company aims to reach ernment. Corruption was widespread 2,000 employees internationally. in public procurement. Bribery was common in the public sector, especially in health care. Individual executive agencies were slow in enforcing sanctions, and agencies’ own inspection bodies were generally inactive,” said the report. vodafone shared services

tElEcom

center expands to new location, boosts headcount

managEmEnt 63 pct of romanian cEos present on social media, says EY romania While close to two thirds (63 percent) of Romanian CEOs responding to an EY survey said they were present on social media, only 44 percent of C-suite executives and 46 percent of non-executive staff said they were aware of their CEO’s presence in social media. The most popular platform is LinkedIn (67 percent), followed by Facebook (61 percent) and, considerably further back, Twitter (16 percent), according to the EY survey.

Additionally, 44 percent of the 320 respondents to the study stated that the CEO of the company they work for rarely posts on social media, once every few months, while 29 percent say that they have a very active CEO, who posts once or twice a week.

propErtY Eight major office projects to be finished by 2018 in orhideea-politehnica area, says Esop There are eight major office projects in the Orhideea-Politehnica part of Bucharest which are currently in various stages of permitting and construction, developed by CA Imo, Forte Partners, Sema Parca and Vastint (Ikea), according to data from ESOP Consulting | CORFAC International. In total, the eight projects will amount to 170,000 sqm of office space, which

Telecom operator Vodafone Romania has announced it will be expanding its Shared Services Center to a new location in Bucharest, and increasing the number of employees working in the center to 1,000, by the end of the year. The Vodafone Shared Services Center currently has 800 employees.

The new headquarters where the center will be expanding is the 4,300sqm City Offices. The space can house up to 500 employees and 300 people are already working there. The employees in the City Offices headquarters will be supporting the operations of the Vodafone Group in Germany, Italy and Spain.

tourism romania reaches top 20 countries for incoming tourism to germany Romania generated over 800,000 overnight stays in Germany last year, up by more than 10 percent y-o-y, according to data from the German National Tourist Board (GNTB). This increase propelled Romania to 20th position for incoming tourism to Germany.

The forecast is that the upward trend will maintain with GNTB estimating that by 2030 the number of overnight stays generated by Romanian tourists will double to about 1.6 million.

In 2015 Romania was the fourth biggest market in the South-East Europe region for Germany, ahead of Hungary (700,000 overnight stays), and behind Austria (3.7 million) and the Czech Republic (1.1 million).

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

cornelia coman has been appointed CEO of Nationale-Nederlanden Spain and will start working in her new position as of July. Coman will replace Robin Buijs, who has held the role for four years. The Romanian executive has worked as CEO of NN Hungary for the past four years. Between 2008 and 2012 she headed NN Asigurari de Viata Romania. Coman started working for NN Asigurari de Viata Romania in 1998, becoming deputy general manager in 2008.

Two years later she was named CEO of local operations.

mircea cotiga will take over the CEO position at UniCredit Leasing, following current CEO Antoaneta Curteanu’s acceptance of an international position. She has been promoted to director of the corporate investment banking division of UniCredit Bulbank Bulgaria.

Cotiga is currently acting as director of risk restructuring and debt recovery at UniCredit Bank He has worked in banking for the past 11 years, seven of those at UniCredit Bank, and holds an MBA in Financial Management from the City University USA – Romanian Banking Institute (2005-2007).

radu craciun is the new president and general director of BCR Pensii after the Financial Supervision Authority (ASF) approved the appointment.

Craciun had been chief economist and head of research at BCR for the past two years.

He is president of the Association of Financial and Banking Analysts in Romania (AAFBR). Craciun has coordinated the research and capital market analysis departments at ABM AMORE, and was also the investment director and deputy director of Eureko, which managed two private pension funds.

mihaela popescu has been appointed area manager of Tenaris for Romania. She will take over the role on July 1. Popescu is replacing Michele Della Briotta, who has been promoted to regional man-

ager for Europe. The new area manager has been working for TenarisSilcotub since 2005, managing the company’s sales projects in the oil and gas sector. She also served as CFO of the firm. Popescu has previously worked for KPMG Romania.

christine schillings has been named general director of Ana Hotels.

She replaces Alexandra Copos de Prada, who has stepped down for personal reasons.

Her over 30 years’ experience in the hospitality industry with Hilton Worldwide includes a period as regional director, where she coordinated a portfolio of 46 hotels in Eastern Europe, Turkey, Russia and Israel. Before that, she worked for hotels in France, Germany, Great Britain as well as Romania, where she was part of the management team that opened the Athenee Palace Hilton hotel in 1997.

adrian ster has been appointed partner and head of the competition and state aid practice of the Bucharest office of Wolf Theiss. He graduated from the Faculty of Law of Babes-Bolyai University, Cluj-Napoca in 2003, and, in 2005, from the School of Law, Nottingham University, UK. In 2006 he received his Master’s degree “with Merit” in European Law from University College London. Ster has practiced law for more than 10 years, focusing on competition law. He has assisted major players in the telecom, FMCG, retail, banking, pharma, energy, automotive and media sectors.

adriana stoian has become tax partner with Bulboaca & Asociatii Tax. The new partner has more than 16 years of experience in the tax consultancy sector.

She has worked on M&A, group restructuring, business reorganization and fiscal audit projects. Stoian has worked on projects for companies in various industries such as retail, pharmaceuticals, oil and gas, real estate and energy.

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

6 rEal EstatE

‘passing to pay’ law finally comes to pass After more than half a year of fierce debate, a bill that enables the discharge of mortgage-backed debts through transfer of the property to the creditor was adopted by Parliament in mid-April. The law promises to bring about a more balanced relationship between borrowers and banks, but its opponents paint a doom-and-gloom scenario.

House prices could fall by up to 10 pct, warns central bank

∫ simona baZavan To the applause of MPs from the Chamber of Deputies, the ‘passing to pay’ bill passed the final vote virtually unanimously on April 13, marking the end of more than six months of fierce debate.

The draft passed by Parliament makes several important changes to the one President Klaus Iohannis refused to sign into law and sent back for re-examination in December last year. For example, only end-users can benefit from the law and the mortgage must be on a residential property, and not just any type of building. The law will also apply to loans that do not exceed EUR 250,000 at the time they were taken out, including by borrowers currently going through foreclosure or whose properties have already been foreclosed on.

Another major change is that MPs have compromised on exempting the Prima Casa state-guaranteed loan program from the law. This comes after the government warned that should the ‘passing to pay’ law apply to Prima Casa, it would bring about the end of the program.

The bill will now go to the president who can only vote it into law, in which case it would come into force in

15 days’ time. Another possible scenario is for the law to be challenged by the Constitutional Court.

a house divided: bill splits opinion from the off The ‘passing to pay’ bill has undoubtedly been one of the most controversial to come out of Parliament in the past couple of years. It aims to make banks and their clients split the risk and so protect consumers from abuses committed by lenders, according to the bill’s initiator, liberal MP Daniel Zamfir. While this sounds straightforward, the bill has stoked controversy from day one.

Its fiercest opponents have been by far the local banks. What has made the law so unpalatable for lenders is that once it comes into force, it will give debtors the upper hand by enabling them to discharge their mortgagebacked debts by transferring the property to the bank. This would be a considerable game-changer given that, under the current legislation, a home owner is expected to pay back their mortgage under almost any circumstances.

The higher risk means that banks will have to increase their lending costs, they warn. Lending conditions will overall become much harsher, with down payments for mortgages

increasing from the present level of idential market back and this at a time about 15 percent to about 30 percent when it was finally resuming growth. for RON-denominated loans and even More moderate commentators argue higher for euro loans, banks say, and that the market will eventually find indeed several have already made ways to balance itself. such changes. In turn, this will mean fewer people will qualify to take out house prices to go up or loans. According to data from BCR, down? the largest Romanian lender, only one The central bank has warned that the in ten clients can afford a deposit of negative effects produced by the over 30 percent of the value of the ‘passing to pay’ law will see house property they are looking to buy. This prices fall by up to 10 percent. One efmeans that the number of eligible fect so far has been an increased numclients for a mortgage will drop by 60 ber of transactions, say real estate percent over the next five years, from agents. Following uncertainties re270,000 to only 110,000, according to garding the future of the Prima Casa its estimates. state-guaranteed loan program and International institutions such as the final outcome of the ‘passing to the International Monetary Fund and pay’ law, many prospective buyers the European Commission have previ- have sped up the decision to purchase ously criticized the law, saying that it a property. will affect the security and stability of House prices have strengthened, the local financial market and will increasing countrywide by 6.5 percent pose overall macroeconomic risks. at the end of the first quarter comThe National Bank of Romania (NBR) pared to December last year, accordhas backed local banks in their protest ing to data from real estate platform against the law and stressed in a re- Imobiliare.ro. It is worth noting howcent stability report that the “uncer- ever, that by March asking prices had tain and unpredictable legislative stabilized, and while all major cities framework in the financial and bank- saw asking prices go up in the first ing field” poses a “severe systemic quarter, the highest levels were rerisk”. The NBR has estimated that the ported in western Romania. Bucharest law will generate around RON 2.8 bil- saw a more modest hike, according to lion in bank losses, even though cen- the same source. tral bank representatives have also In the capital, asking prices were said that they do not expect too many up by an overall 3.3 percent in Q1 and borrowers to exercise the debt dis- 1.4 percent in March against the precharge option. ING said in statement vious month. The average asking price that the bulk of losses will be related stood at EUR 1,051/sqm for ‘old apartto hard currency mortgages granted ments’, meaning mostly flats in blocks before the financial crisis, as both cur- built before 1990, and EUR 1,144/sqm rency depreciation and declines in for new apartments. For the latter catproperty prices make them suscepti- egory asking prices have posted a ble to having an above par loan-to- more significant 6.9 percent increase value ratio. so far this year.

In the real estate industry, opinions vary. Some say the law will set the res- simona.bazavan@business-review.ro

The main changes made to the final draft • The law will apply only to end-consumers, thus preventing developers from benefiting from it • The mortgage must be on a residential property • The law will apply to loans that do not exceed EUR 250,000 at the time they were taken out • Beneficiaries include individuals presently going through a foreclosing procedure or whose properties have already been foreclosed on • Prima Casa loans are exempt from the law

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

partnEr contEnt 7

We can run the world without consuming the earth: the solar impulse journey continues by ulrich spiesshofer, president and cEo, abb In ancient Greek mythology, Icarus was the son of Daedulus who dared to fly too close to the sun on wings of feather and wax made by his father in spite of Daedulus’ warning. The heat from the sun melted the wax and Icarus fell to his death. It is meant to be a cautionary tale – and underscores the power of the sun.

It is the same sun that is ultimately a source of lot of the energy we use on earth – from indirect, stored versions such as hydroelectric and fossil fuels like coal to new, clean forms like direct solar.

The Solar Impulse project to fly a plane around the world without consuming a drop of fossil fuel is nearing the end of the Pacific crossing – its biggest hurdle. While its mission is not over yet, the team has already demonstrated that renewables can provide reliable power both day and night, an important step towards clean energy future.

To get this far, the Solar Impulse team has had to overcome many of the same technological challenges that are facing humanity on our lowcarbon transition. Its solutions to these challenges deserve our attention.

One important lesson is that there is no silver bullet. Together with its technology and innovation partners, the Solar Impulse team had to drive advances in all fields: maximizing the power yield from solar cells, integrating renewable energy into the electricity system, using energy as efficiently as possible, and storing energy after the sun goes down to keep the plane aloft throughout the night.

At 633 kilograms, the batteries used to store energy accounted for more than a quarter of the aircraft’s all-up weight – so minimizing energy consumption and losses was just as important as maximizing generating power and storage capacity.

Consequently, the plane’s solar cells and motors have record-beating energy efficiency.

Clearly, achieving a sustainable

flying the flag for technological innovation Last year, when a weary but exhilarated André Borschberg landed the Solar Impulse plane in Hawaii after nearly 118 hours in the air, one could not fail to be inspired by the determination, passion and technological achievements of the team which made this incredible achievement possible. On that leg of the journey alone, Borschberg set several important aviation records*, including that of the longest nonstop solo flight without refueling.

As the Solar Impulse plane continues its round-the-world journey over the continental United States, and then across the Atlantic, on its way to its starting point in Abu Dhabi, it will carry with it a message that is crucial for the future of humanity and our planet: by pushing the boundaries of technology, and challenging conventional ideas of what is possible, we can run the world without consuming the earth. energy system requires action and progress across the entire value chain, from power generation, to transmission and distribution, all the way to the consumption site.

Of all the actions that can and are being taken to limit carbon emissions and mitigate the effects of climate change, none holds out more promise than improving energy efficiency. For instance, simply fitting the electric motors on all pumps and fans with devices to regulate their speed would save 3,338 TWh (3.3 million GWh), roughly equivalent to the amount of electrical energy produced in the European Union in 2013*.

Another lesson is the importance of managing energy loads. When power supplies depend on the weather it pays to adjust your consumption patterns in line with the amount of power that is available. In the Solar Impulse plane, this was primarily the job of the pilot, who had carefully to manage ascents and descents depending on the power supply, and to take advantage of wind

direction and speed.

On the ground, we can manage energy loads by adjusting our consumption patterns, for instance by providing households with information about their consumption behavior and reducing energy prices at off-peak times; and by transporting power to where it is needed at any given time.

A third lesson concerns the valuable contribution of digitalization. With every piece of equipment on the aircraft fitted with lightweight sensors and communication functionality, the ground crew at the mission control center in Monaco was able at all times to monitor performance and recommend actions to the pilot to optimize his route.

As renewable energy from large and small-scale installations makes power systems more complex, digital technologies will have to be deployed more widely to prevent disruption from intermittent supplies, manage multidirectional flows of electricity, and balance supply and demand.

Dr. Ulrich Spiesshofer is President and Chief Executive Officer of ABB Ltd., a $36 billion company specializing in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 135,000 people. In 2014, ABB entered into an innovation and technology alliance with Solar Impulse to support its zero-fuel flight around the world. * Calculation is based on ABB’s installed base of variable speed drives, which covers around 20% of the global market and is estimated to be saving some 445 TWh of electricity annually. ** New aviation records set by Solar Impulse pilot, André Borschberg, on the flight from Japan to Hawaii in 2015: 1. Longest flight duration: 117 hours, 52 minutes 2. Free distance along a course: 7,039.9 kilometers 3. Straight distance – free flight: 6,449.8 kilometers

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

8 rEal EstatE

local farmland set to cultivate future growth After increasing on average by 10 percent in 2015, farmland prices are set to remain on an upward trend this year, marius schiopota, managing partner of real estate company Hitch&Mosher, told BR. However, problems such as land fragmentation remain a setback for potential buyers. ∫ simona baZavan

CV:

how do you expect the market for farmland to evolve overall in 2016, given last year’s performance?

We expect it to maintain its dynamism and attractiveness. Over the past year we have seen investors show an increased interest in farmland acquisitions, due to both an appetite for growth and investments shown by companies active in the farming and food industries, and the higher yields foreign investors get here compared to other European countries.

What is your forecast regarding prices?

Compared to previous years which were still marked by the post-crisis lack of liquidity, 2015 was far more dynamic, with prices increasing on average by about 10 percent. Average prices varied between EUR 2,000 per hectare and EUR 7,000 per hectare, with the higher level reported in western Romania.

Prices are influenced by factors such as land consolidation, the land’s cadastre status, the availability of the necessary infrastructure for efficient farming and the soil’s natural qualities. Farmland investments bring a good annual yield and that is why we expect the number of transactions to go up, which in turn will bring about higher sale prices.

Who is currently looking to buy farmland in romania?

Our clients include both private Romanian companies which are interested in vertically integrating their agri-food business in order to secure their raw material supply, as well as foreign investors coming particularly from Western Europe. Most of them are interested in buying large plots of land, having in view a more efficient production process and investment yields. The largest surface we have brokered over the past years for such a client was 2,000 hectares.

Some 90 percent of our clients buy the land because they want to use it for farming. This explains their focus on buying quality land and large consolidated plots, because this way it makes sense for them to invest in equipment and technology. The remaining 10 percent buy the land for investment reasons, taking advantage of the fact that prices are not yet in line with Western

He founded Hitch&Mosher in Timisoara in 2006 and has since served as managing partner. Prior to that he was general director of Fed Print, a printing house in Lugoj, and before that he managed several media businesses. Schiopota graduated from the Pontifical Gregorian University in Rome in 1996. and six months to the acquisition process and even more if the land is not yet registered in the Land Registry.

In order to help investors with this process we have set up Essimo Grup – a full service company dedicated to agricultural investments, which offers a wide range of services including land consolidation operations.

European levels. But these investors choose to lease the land which means that that land will be cultivated as well. has the ratio between romanian and foreign buyers changed following the market liberalization in 2014?

We haven’t seen a noticeable change in this ratio since this date. What we have seen instead has been an increased number of investment funds from both Western Europe and the US buying land.

Another welcome development has been that more and more Romanians are becoming aware of the opportunity of investing in farmland.

What is the average surface buyers are looking for?

Over the past few years we have brokered transactions ranging between 300 and 2,000 hectares. For our clients, the larger the land plot, the better. However, this is not always possible as the available land is very fragmented and with a legally unclear property status. Up to 30 percent of these land plots lack cadastre documents and are not registered in the

Land Registry which is why we have set up a specialized company, Geodetic Control, which offers cadastre, geodesy and topography services. how big of a setback is land fragmentation for potential buyers?

Land fragmentation does indeed cause problems for investors who plan to set up a large-scale farming business. Land consolidation can take from a few months to as much as two or three years.

The cost of this depends on several procedures that need to be carried out, from identifying the plots that need to be consolidated, measuring them, verifying the ownership history of each individual plot and contacting the owners to finally buying the land. This means costs depend on several other factors, such as, for example, the region. In western Romania the cadastre situation is far better than in the rest of the country and it is easier to establish the land’s ownership history or to verify any unclear situation. There is also the bureaucracy to consider. The pre-emption procedures alone add between three

has progress been made in tackling the land fragmentation problem?

I would say that right now we already have a coherent national program in place through which land is registered in the Integrated Cadastre System and the Land Registry. There are several pilot projects being rolled out in this sense. We consider this to be a very useful measure which enables a much faster registration of all land properties and we hope that this program will preserve its coherence. Overall, land registration makes the consolidation process much easier.

What were your financial results in 2015 and how many land transactions did you broker?

The companies that are part of our real estate group – Hitch&Mosher, Geodetic Control and Essimo Grup – posted a consolidated turnover of over RON 3.6 million (approximately EUR 810,000) in 2015.

Closing a transaction can take as long as two years, which is why we consider the number of transactions we reported over the past four years. Since 2011 we have offered consultancy services for the transaction of over 15,000 hectares of farmland, which places us in the leading position on this market segment. simona.bazavan@business-review.ro

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

DEsign 9

romanian Design Week brings art in all its forms to amzei Some 150 Romanian designers in the central exhibition alone, 50 side events, Night of the Architectural Offices and, for the first time, Night of the Advertising Agencies. All these will form part of the fifth Romanian Design Week, due take place in Amzei Square, and a platform for key figures from the local design scene to share their take on future trends in the field. on the market. “We have always tried to have a panoramic view of the phenomenon, especially in order to present the public with a realistic and objective selection. We are focusing on the designers that really have a voice, that have passed the consequence test and that can treat fashion as a job, not only as a form of art,” Munteanu added.

curators’ side

RDW is the first project dedicated entirely to Romanian design that addresses both the general public and professionals

∫ romanita oprEa Over time, Romanian Design Week (RDW) has become a major multidisciplinary event for the creative industries in Romania. This the first project dedicated entirely to Romanian design that addresses both the general public and professionals. The annual event includes the events and spaces that promote design and all of its disciplines: architecture, graphic, fashion and object design. “First, we wanted to organize a multidisciplinary festival which could exhibit and award the best works in architecture, design, advertising, photography, etc. But, because our main objective was to build a community of Romanian creatives, we chose to drop the idea of a competition and, from research and discussions with important people in those industries, we got the phrase ‘Design Week’,” said Andrei Bortun, CEO of Millennium People & The Institute.

Running from 20 May to 5 June, the event will encompass the central RDW exhibition, as well as a series of side events, projects and thematic events, parties, launches, workshops and conferences, plus trades and capsule displays. It will take place within the central displays, dedicated to famous artists and designers, and a series of conventional and unconventional spaces, art galleries, design studios, showrooms and workshops.

The event is also expanding into new areas. The biggest news, which the organizers hope will make a big splash, is the location: Piata Amzei. This is not just because of a lack of venues in Bucharest: this way, the project will highlight a problem and, with the help of the event, the organizers hope to be able to change this situation into an opportunity for the creative industries and for Bucharest. “This main period of the event is very important, not only for the objectives of this project, to offer visibility to Romanian design, but to redefine the paths that led to Piata Amzei for years, paths that have been covered during the last ten years, leaving a white stain over a place at the crossroads of the three most important boulevards in the city, in the middle of a square framed by the major markets in Bucharest,” said Bortun.

Last year’s event attracted more than 20,000 visitors, and involved over 60 satellite events and more than 130 designers in the central location, and this year is hoped to be bigger still: 150 Romanian designers, in the central exhibition alone, 50 side events, Night of the Architectural Offices and, for the first time, Night of the Advertising Agencies. Based on previous years’ experience, each of the ten architectural offices and tens of advertising agencies will draw in hundreds of visitors who they hope will find projects, people and talent in unexpected places.

“I feel that important changes are

about to come in our way of life and in our cities. People look more optimistic, more relaxed, more respectful, more interested in nature and how to protect it.

I think those changes in people’s way of being are directly reflected in the way we imagine and construct our buildings and our public space,” said Adrian Soare, curator of the category “Architecture, Interior Architecture & Urbanistics”.

In his turn, Ovidiu Hrin, curator for the “Graphic design & Illustration” category, has his own vision based on the way “design”, “branding” and “creativity” have had their meaning diluted. He says he has tried to see what they will represent tomorrow. According to Hrin, the contemporary creative hype allows more and more things to pass as design, but only a few of them are the results of strategic thinking, effort, of a process of searching for, testing and identifying sustainable solutions. However, he believes designers are still able to form opinions, influence behaviors and improve the way we interact with the overwhelming amounts of information around us. When it comes to the responsibility of the designer, Maurice Munteanu, curator of the section “Fashion Design”, is a great believer in the new wave of talent knocking on the Romanian design door. He points out that there are names in this industry that are famous at international level and that have proven they can perform at high standards, designers with a fresh vision that can see trends and also push them

Choosing the pieces is not an easy task.

“We are focusing on fresh ideas, both from established and young designers with a focus on products and prototypes that can easily be put into production consid-ering the constraints of the local industry and the income level of most Romanians. The new location will expose Romanian design to new audiences, with more space to show products and also showcase brands (we already have some companies with a very coherent business direction like Ubikubi or Dare To Rug),” said Mihai Gurei, creative director and owner of Intro.

In his turn, Soare believes that every year the RDW team tries to select the most meaningful projects, no matter their scale or budget. “What is interesting is that this selection is made by a heterogeneous team of individuals with different backgrounds. We search for projects and architects that question the sense and meaning of building. We don’t look for architecture as pure art, but for architecture that integrates creativity, responsibility, nature, the site’s history and social understanding in a mix that is both fresh and timeless,” said Soare.

“I think we are tempted to immerse ourselves in a visual extravaganza, that we spend too much time honing our technical skills in order to master ephemeral style trends while we forget that we live in Romania, we forget that graphic design is also in the traffic signs, the street signs, in the documents or web pages of the official institutions.

This is why, in selecting the pieces for the Graphic Design exhibition, beyond the stylistic execution and the visual coolness, I appreciated the programmatic thinking, the process, the responsibility taken to understand and address the need – a possible key in finding the true meaning of the designer,” added Hrin. romanita.oprea@business-review.ro

10 cOvEr STOrY

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

∫ Ovidiu POSirca aNda SEBESi

Small firms think big Despite the sector posting steady development in the past few years, SMEs are still facing difficulties. Such firms are waiting for the local authorities to take measures to give them an impetus and encourage the entrepreneurial initiatives that could boost the local economy.

The 2015 Romanian Entrepreneurship Barometer – Entrepreneurs Talk, conducted by EY Romania, found that small and medium enterprises (SMEs) represent 99.6 percent of the total number of companies active in Romania, and represent 44 percent of the total gross added value registered in the local economy. The same study says that over 64 percent of the total number of companies active at the end of March 2015 were limited companies (SRL) that have one associate on average. In addition, 91.6 percent of limited companies are micro-enterprises having on average two employees, an average share capital of EUR 11,000 and an annual average turnover of EUR 47,000. Most of the limited companies have their registered office in Bucharest and Cluj county.

“SMEs don’t have their own ministry, but are included within the Ministry of Economy. If we look at what has happened in the past year, there is no new regulation regarding SMEs that would have passed from the government’s side. I hope the current government is more active and firm regarding the implementation of EU funds, because, aside from one type of regulation, the resources that the public sector gets through EU funds should reach entrepreneurs,” says Florin Jianu, president of the Association of Young Entrepreneurs in Romania (PTIR) and a former technocratic minister for SMEs. At present, there are two main EUbacked operational programs for SMEs: the Regional Operational Program and the Human Capital Operational Program, which are linked to the creation of new jobs, the hiring process and the setting up of new companies by entrepreneurs.

According to him, neither of these two programs has so far launched a component for entrepreneurs, which would involve putting the projects up for debate, developing them and setting deadlines. By the time all this is done and a program implemented, it could take until the end of the mandate of this government before the funds reach entrepreneurs or any contracts are signed. “I think this government is missing a huge opportunity, because it doesn’t take any political risks. I would have expected a more courageous approach from this cabinet,” says Jianu. “Having a perspective from both the public and private sector, I have seen that the public sector will not be able to achieve results without modernization. This is almost impossible because modernization means new, well functioning rules. Working with the same people, no matter how many times you ask them to change or pay them better, you will not obtain superior results.”

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He said that there is a need for a transfer of competence from the private to the public sector. “I think the current government should have the courage to enforce new structures, to transfer over from frozen structures.

We are missing a very favorable moment, because the next government will be political and will stay away from making structural reforms,” concludes Jianu of the PTIR. According to Andrei Pitis, founder and CTO at Vector Watch, Romania is a growing market, both in terms of the number of entrepreneurs and of those who find local entrepreneurial projects attractive. He thinks that there is still a lot of room for growth and improvement in particular.

“However, the market lacks a well established, easy to follow and rapid flow. I think that the legal, fiscal and judicial system continues to complicate and sometimes to hinder the growth of the business environment.

There have been some regulations in the past few years meant to support the ongoing development of small and medium projects but we are still in the first phases of a significant stage of development and maturing,” says Pitis. In his opinion, however, there are still advantages. “To the utmost extent, Romanians are educated, have a friendly and open attitude and speak one or more foreign languages fluently, while good professionals can still be found at competitive wages for the external market.” According to him, IT, telecommunication and services remain the most attractive fields.

cOvEr STOrY 11 from my start-up in the furniture in- velopment or expansion in Romania. dustry. Although we have very good “For a foreign investor, for instance, it sales from exports, to the tune of mil- is very difficult, due to the legal lions of euros, all our exports are pre- framework, to invest in a Romanian fabricated products, things that are start-up. A lot of the successful startassembled elsewhere. We don’t add ups that left Romania have foreign inany value to the design or final prod- vestors, and those investors asked uct, where the profit is bigger. This them, in all the cases I know of, to reapplies to any kind of activity,” said locate. In practice, the large start-ups Petran. “Materia recovers all the that are mentioned in the press are wood, from demolished buildings, for Romanian only because they have instance; we turn them into unique Romanian founders, but legally they pieces of furniture for export. So our are already working in other jurisdicvalue add from such a product is 70 tions, the most common of them percent profit, 30 percent costs. If you being Great Britain,” says Florin Grosu, take any chair that we export, and the co-founder of Traderion, an IT startchair is the most exported piece of up. In his opinion, the regulators furniture from Romania, the added should work on the legal framework

New wave of SMEs shaping society Tourism is a sector that has growth potential, and the reduction of VAT to 9 percent has brought sharper growth and stronger investments. Jianu said the potential was not necessarily in tourism accommodation, because demand is not that high. Recreational facilities for tourists need massive development. “The potential is huge.

Other growth areas are IT, agriculture, and education,” he says. The PTIR president added that SMEs need to be supported by the government to specialize in niche industries, with automotive and textiles being areas where such niches can be found. In his opinion, more and more young people of Generation Y have this entrepreneurial drive, “not necessarily entrepreneurial in the traditional sense, but also social entrepreneurship or done within the company.” He said the new generation of entrepreneurs will be more socially responsible, which will lead to the modernization of society.

SME checklist Talking about SME strategy, Silviu Andrei Petran, co-founder at Materia, said during an event organized by EY Romania and Impact Hub this month that it is very important to start thinking about quality and not quantity.

“This is something I have discovered

“The legal, fiscal and judicial system continues to complicate and sometimes to hinder the growth of the business environment” says Andrei Pitis, founder and CTO at Vector Watch to make it attractive for an investor to value is insignificant.”

Tincuta Baltag, founder of Digital back a limited company founded in Kids, a project developed by Edusfera Romania.

According to Jianu of the PTIR, Association, says that entrepreneurs, at least at the beginning, have to deal companies in Romania are facing a with a lack of information regarding “huge problem” trying to employ peothe application of fiscal legislation or ple with technical skills, such as mechanics or welders. He added that financing sources.

Although the Romanian legal these people are going abroad where framework seems to be clearer to they are better paid. The PTIR head both local and international investors said the association has proposed the than it was, they still face significant setting up of a private technical legal challenges that affect their de- school in every county, with the help

of EU funds, under a program called Romania Profesionala. He added that there are already some successful cases, but needs to be a critical mass.

However, he mentions entrepreneurs in the tourism sector that have struggled to convince technical and economical schools to launch classes for tourism. Jianu said he would call for the complete privatization of the technical education system. At the same time, asked how his start-up is able to keep its programmers onboard, given the high demand in the market, Grosu said, “Equity. They become shareholders in the company. It’s the only way to face competition from giant companies because you are giving them the chance to work for something that is very challenging, and they own a part of it, which could become very big, in the not so distant future.” The start-up has ten employees.

“Our conversations, research and business life experiences show that the attraction of talent, restructuring and reorganization of the company to achieve an adaptable business model and business development and product/services diversification are important aspects on the agenda of entrepreneurs and their management teams. Additionally, we should not ignore the focus on improving cash flows, cost reductions and access to finance,” says Ionut Sas, director of tax consulting at PwC Romania and leader of the tax consulting team for private companies, family businesses and SMEs. SMEs are already dealing with difficult access to finance, poor collection of receivables and the instability of the economic and political background, according to Daniel Pana, tax director at professional services firm KPMG Romania.

"Developing businesses face a tougher challenge in finding resources to expand and in fulfilling all the legal administrative and fiscal requirements related to their development," Pana told BR. If a company is able to get over the domestic issues and is starting thinking about international expansion, it should prepare to face another set of challenges.

Minimum wage hike According to Jianu of the PTIR, the minimum wage has to be raised, but to avoid an additional fiscal burden for entrepreneurs, this should be done by freezing social contributions at the same time. This is possible, either as state aid or through a change in the Fiscal Code. “Entrepreneurs would rather give the extra money to their employees, not pay half to the employees and the rest to the state.”

He added that Spain had a similar program for job creation: the government capped the payment of social contributions at EUR 100 for companies that hired new people that were previously unemployed.

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

12 cOvEr STOrY

dan isai, CEO, Salad Box

∫ aNda SEBESi How attractive is romania for entrepreneurial investments in terms of the local business environment?

I think that the Romanian market is much more interesting and attractive than it seems. Although at first we noticed a lack of state involvement in supporting Romanian entrepreneurship, there are opportunities for a business to establish itself, as long as there is a good idea and a lot of work behind it. The competition is bearable and the level of investment is acceptable. But the business plan and the return on investment need to be calculated on the medium term and not on the long term.

When is the right time for an SME to think of expansion in the region?

It is important to consolidate on the local market before considering regional expansion. The local market becomes your support in your development abroad because it is the source of your money and the necessary expertise and ingredients. The internal proven know-how combined with an adjustment to the foreign market gives you a good chance at succeeding.

What should an SME consider when deciding to expand abroad?

To ensure that you find the right employees or partners that represent the specific area. As for the know-how of the region you target, you need to be sure that you have the right and complete legal and fiscal information, the local competition and behaviors.

Everything is important and relevant.

What are the main difficulties that romanian SMEs face now?

I think that the lack of trust from foreign partners when they hear that we are a Romanian company is the biggest difficulty. But we, the entrepreneurs who extend abroad properly, will slowly change this perception. anda.sebesi@business-review.ro

Main unsolved issues for SMEs “There is still a lot of useless regulation that costs the entrepreneur a lot of time reporting and obtaining information, and a lot of simplification can be done here. Micro-enterprises in Romania have on average 2.3 employees, and when you have two employees, it's hard to cover all these reporting requirements to the tax administration agency ANAF, to obtain documents,” says Jianu. He suggested that the extension of online reporting could be really helpful for companies, which, for instance, are looking to participate in public tenders and need a fiscal certificate.

“In the SMEs law there is a provision taken from from the Small Business Act, which says the state has to abstain from asking for information that it already has. So, in the next period a lot of effort has to be put into interconnecting various sources of information in the public sector – for instance for the fiscal certificate. There are a lot of good things in the new Fiscal Code, but there is also taxation on the social HQs which has to be revised and actually return to the previous provisions,” adds Jianu.

When to go abroad?

According to Pitis of Vector Watch, there is no appropriate time for international expansion. “In an economy based on consumption, a business plan that works locally can be applied to other markets too. I recommend that Romanian entrepreneurs think globally, because we live in a ‘dot com’ world, not in an exclusive ‘dot ro’ one.

We can look at companies that succeed wherever and that can enter in any market. This globalization is often seen in software but there are also other niches that cannot be neglected, such as tourism or services.

Once you have thought of a process that is tested and optimized, expansion in other markets is just a matter of time, resources and imagination,” he believes.

The lack of a clear strategy, poor management and limited revenues are some of the things that put the brakes on SMEs that are looking to make a name for themselves in Romania and even expand abroad. Analysts say that sometimes, even the founders of SMEs block the development of companies without realizing it.

“From our experience, one of the main difficulties facing SMEs is the transition from a family company to a management one. This means moving from a company in which the founder is the ‘hero’ and solves everything at anytime, to a new structure in which a well-prepared management team handles the firm’s current activity,” Sorin Spiridon, manager at Ensight Management Consulting, told BR. He says there are many reasons

“Maybe the penetration at regional why such a transition is blocked. For instance, the company’s founders level is not as visible and widespread might not have realized that being a as we would wish, but I would say successful entrepreneur is not the that Romanian SMEs are present in same as being a good manager. In the region, in the European Union or other cases, the founders tend to mi- at global level, with examples in this cromanage and miss the big picture. sense. Looking at whether there is a Some SMEs will also fail to develop good moment or not, it is quite diffibecause they don’t have efficient poli- cult to assess as it depends on market cies for retaining key staff and recruit- conditions and/or the industry where ing new talent, according to Spiridon. SMEs are involved,” said Sas of PwC “To approach a new market you Romania. Research carried out by the need to have basic competences so Ministry of Development has shown you can differentiate yourself from that two thirds of start-ups cease their the existing players. Moreover, when activity within a year, added Pana of looking to attack a new market, firms KPMG Romania. should have a clear business model, effective management teams and pro- Financing remains a chalcedures for repetitive tasks,” said lenge Spiridon. He added that firms will fail “Personal financing remains the main in their international endeavors, and source, self-financing, followed by even locally, if one of these elements traditional financing from banks. is not taken into account.

There will also be some guarantee Elsewhere, there is an inevitable funds of loans through EU funds – an tipping point when every entrepre- initiative for SMEs, as well as other inneur thinks of making his or her exit struments in the 2014-2020 period. I from the business they backed. But to am a supporter of listings on the stock do it successfully there is a need for a exchange, but in this area we need a clear exit strategy and a list of poten- culture and more time. Smaller comtial buyers who might be interested in panies generally stay away from listthe firm. ing on the stock exchange and they “We have an exit strategy and we are not very comfortable with this have in our mind the potential buyers. subject,” says Jianu of PTIR. We have never approached them to He added that the success of comsell; so far we have only talked with panies in America is confirmed by them so we could become partners floating, while this is not necessarily and work together. The ideal buyers the case in Europe. “I would look at are large clients, large companies, but alternative financing models, for inright now we are showing them what stance crowdfunding.” Jianu said we can do and over two to five years there is a bill in Parliament that reguof relationship, I think this discussion lates crowdfunding, which was will also pop up,” said Grosu of the IT launched while he was in government. start-up Traderion.

Crowdfunding involves breaking the Another feature of the local mar- banking monopoly, because if someket is that there are few strong com- one has a business idea and posts it panies with Romanian capital. on a crowdfunding platform, it can atMihaela Matei, entrepreneurship tract resources from other parties. communication officer at EY Romania, At present, the law prohibits such the professional services firm, says transactions. If a company wants to there are only 138 companies with lend money to another company,it is private Romanian capital that have a not allowed do it. Only banks and turnover above EUR 50 million, com- other non-banking financial institupared to 322 firms with foreign capital. tions have the right to do so. Another In the EUR 10-50 million turnover type of financing is through business band, there are around 1,300 compa- angels. There is already a law, and nies with foreign capital and 1,000 some kind of support scheme (minwith domestic capital. imis - e.n) should have been added,

What should an SME consider when choosing insurance for its business?

• What the policy covers and what its features are correlated with real needs: the possibility of choosing suitable and necessary types of insurance based on its activity; • Exclusions from the insurance contract: risks not covered by the insurer; • rapid and safe compensation in the event of loss: The company’s dispatch to pay compensation to its customers; • The recognition and financial stability of the insurer; • The insurance premium correlated with the utility of the product, the extension of cover and quality of services. The most important issue in the final decision for buying insurance is often the price (the premium), which is an indicator of the quality of services offered.

Source: Allianz Tiriac

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14 cOvEr STOrY but this has not yet happened.

Financing from EU funds remains a significant chance for Romania, but one not much capitalized upon. The Human Capital Operational Program has EUR 4 billion available, and the Regional Operational Program EUR 1 billion for SMEs, while there are significant options in the rural development programs.

Healthcare companies set SMEs as priorities…

SMEs already have dedicated products and services, with lenders prominent among the companies targeting them. Private healthcare providers and insurers also do so: the Regina Maria private healthcare network recently launched prevention and treatment packages aimed at SMEs, regardless of their number of employees. They also address lawyers, consultants and accountants. The SMEs range includes IMM Plus, IMM Optim and IMM Ultra, with all three products involving prevention services that can be customized with different medical options. “The SMEs sector is very active and there are many companies that post good growth and we want to support them.

The reason behind this range is ‘People that build things need solid health.’

If we look at the medical packages market for companies, we will notice that its penetration is significantly lower for SMEs than multinationals. It is a segment with high potential,” says Fady Chreih, CEO at Regina Maria. He adds that SMEs requested such products even before Regina Maria had officially launched its dedicated range and the demand increased along with the development of the specific products. “There are regions in Romania where the penetration of medical packages is quite low, especially within SMEs. So it is a market that deserves to be increased and supported.

Regina Maria intends to sell about 10,000 packages in the first year,” added Chreih.

construction.

New Fiscal code offers impetus, but unpredictable legislation lingers The new Fiscal Code rolled out this year offers some advantages for micro-enterprises, but the owners of SMEs are still dealing with cumbersome procedures and the lack of predictability in legislation, which remains a key issue for the local business environment.

Romania still lacks a fiscal framework that specifically addresses the

have a ‘global applicability,’ so large companies, multinationals and SMEs benefit to the same extent from these provisions. So, without fiscal provisions targeting only one sector, which is important for any mature economy, we can say the current fiscal framework is not that prepared to offer too many tax advantages for small and medium enterprises,” Razvan Graure, partner at Musat & Asociatii - Consultanta Fiscala, told BR. He acknowledges, however, that SMEs have simplified reporting criteria for their accounting data and need

Getting less taxing

… as do insurers Allianz-Tiriac has posted an increase of 20 percent for non-car insurance and doubled its number of health insurance policies for SMEs in the past two years. According to representatives of the insurer, almost all of its products for companies address SMEs too, but there are also some especially for such customers. There are two alternatives: fixed packages and flexible and modular ones that enable customers to customize them according to their needs and profile risk. “At the end of 2015, more than half of the total number of active polices closed by companies at Allianz Tiriac were taken out by SMEs,” say the insurer’s representatives. According to them, the majority of the SMEs (about 75 percent) that took out insurance policies in the past two years at AllianzTiriac come from fields such as distribution, services, production and

reduction in the tax burden. Entrepreneurs in Romania have to make three times more fiscal payments per year than the EU average, namely 39 (locally), according to a report put out in 2014 by the World Bank.

“Looking at SMEs and how a tax system could further facilitate their sustainability, simplification measures in terms of compliance, tax returns and payments would be of great help, combined with general support and assistance for SMEs’ tax affairs. In addition, access to state aid/EU funds or other financing aid will need to be simplified and made available to SMEs on a timely basis,” says Sas, of PwC Romania.

“Smaller companies generally stay away from listing on the stock exchange and they are not very comfortable with this subject” says Florin Jianu, president of the Association of Young Entrepreneurs in Romania (PTIR) SME sector, even though it generates most of the jobs in the country, according to analysts. Locally, SMEs represent 99.6 percent of the total number of companies active in Romania, compared with 99.8 percent in the European Union, according to a report by the European Commission, the executive arm of the EU, which was published in 2015.

“The provisions in the Fiscal Code

to submit fewer forms to the tax authorities than large companies.

The further simplification of legislation is something that smaller companies with fewer employees desperately need, according to Florin Jianu, president of the Association of Young Entrepreneurs in Romania (PTIR). The National Council of Private SMEs in Romania (CNIPMMR) agrees that this sector needs a further

Microenterprises are getting more fiscal room for development as of this year, thanks to some key provisions in the Fiscal Code. They get different tax rates depending on the number of employees, from 1 percent to 3 percent. A transitory regime is available to encourage start-up micro enterprises at 1 percent for the first two years of activity.

“These changes in the tax rates, based on the number of employees, encourage the employment market, as SMEs are a good source of new jobs,” Anca Sucala, managing partner at Roedl & Partner Romania, the professional services firm, told BR. According to Pana of KPMG, the reduction of VAT to 20 percent should incentivize companies, including SMEs, while investors would benefit from cutting dividend tax from 16 percent to 5 percent.

Furthermore, the threshold for applying the micro-enterprise tax regime has been increased to EUR 100,000, allowing more companies to benefit from the special treatment. Sucala warned, however, that not all the changes were favorable; for instance, the new taxation regime for buildings with mixed use combines the residential and non-residential tax rates.

“Many SMEs are in this situation, so the property tax hike increases the fiscal burden, which in turn reduces the activity of SMEs, while some could even stop operating. This means jobs lost and less tax collected for the state budget,” said Sucala.

Florin Gherghel, head of the tax department at Noerr Finance Tax, noted that SMEs are also grappling with the approach of tax inspectors, who might levy extra charges following controls.

He added that a growing number of companies are challenging the conclusions of tax inspectors in court. According to Graure of Musat & Asociatii - Consultanta Fiscala, the reversed taxation mechanism for VAT payments and the further reduction of labor taxes are some of the measures that could offer a “breath of fresh air” to SMEs. ovidiu.posirca@business-review.ro anda.sebesi@business-review.ro

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

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accessing Eu funds gets more competitive After a slow start to the 2014-2020 financial framework, the launch of new calls for projects financed with EU money is expected to finally pick up this year. rodica Lupu, founder and managing partner of Loop Operations, talks to BR about some of the main changes applicants should consider and the major developments concerning EU funds since the new programs were launched. ∫ SiMONa BaZavaN

What would you say is fundamentally different in the new framework that companies applying for Eu funds should bear in mind?

There are several key changes that potential applicants are only now starting to see. The truth is that over the past couple of years the authorities and the overall market have been caught up with finishing projects financed through the previous 2007-2013 financial framework and potential beneficiaries are only now waking up to some of these changes. For example, that company clusters are clearly favored in the application process. How exactly to come up with a project on behalf of such a cluster is still unclear to many.

Or that there is a focus on supporting SMEs from rural areas in order to bridge the rural-urban development gap.

There are limited options for SMEs and start-ups from Bucharest and Ilfov

CV: She is the founder and head of Loop Operations, which specializes in EU funds accession and project management. The company has so far attracted EU funds worth EUR 45 million. Lupu has more than ten years of professional experience in entrepreneurship and central administration. She is an expert in the European Commission’s Technical Assistance and Information Exchange instrument (TAIEX) on the internal market with a focus on the non-financial internal market.

Photo: Loop Operations

How attractive is Eu financing for small and medium sized enterprises (SMEs) through the programs available for the 2014-2020 period?

There continue to be significant allocations for SMEs through the 2014-2020 financial framework. However, one must bear in mind that there have been several major changes from the previous 2007-2013 framework and overall a different approach. This has been slowing things down a bit so far because of a poor understanding of this new and more strategic approach the authorities have taken to the new programs through which money is available.

Not every type of business or business activity can qualify for EU financing. There are some priority sectors such as IT&C; however, a company that applies for EU funds because it wants to invest in, let’s say, software or automation may still not qualify. There are clear limitations which I think that compared to the 2007-2013 framework have become even more restrictive and the competition is very tough because such funds remain in high demand. We’re still seeing SMEs that focus on attracting EU funds and adjust their business plan depending on the programs through which financing is available. I would say this is a losing strategy and we advise against it. Attracting EU funds is a very intensive resource consuming process that should be undertaken only if it really fits a company’s business strategy and answers a clear financing need.

county, for example, whereas more underdeveloped towns and former industrial areas remain a priority in terms of EU funds available for both public authorities and SMEs. This is generally the case for companies from urban areas.

There is still the ‘de minimis’ scheme available through the Regional Operational Program of up to EUR 200,000 per SME but competition is very high here.

SMEs active in which sectors stand the best chance of attracting Eu funds through the 2014-2020 framework?

R&D and innovation are priority areas.

IT&C, manufacturing, tourism, agriculture and healthcare remain areas of interest for which there is financing available for the 2014-2020 period. For example, financing manufacturing activities, including automatization, is still possible. The most disadvantaged sector is trade. When it comes to services there is a focus on companies providing these in rural areas, healthcare services in particular. It is good news that there are considerable allocations for R&D in particular; hopefully there is also the capacity to attract and absorb these funds.

Overall, there has been a more strategic

approach in drafting the new programs and the priorities that the authorities have set have been well chosen. There is a positive outlook for the 2014-2020 programs but how smoothly things will go remains to be seen as projects start rolling out.

Has this more strategic approach been accompanied by reduced bureaucracy for the 2014-2020 framework?

No, I wouldn’t say that. On the contrary, we have seen authorities add new conditions to existing regulations. It is true that there were EU funds beneficiaries who abused these regulations between 2007 and 2013. However, the authorities’ reaction to this has been, as always, to increase regulations and thus make life harder for good-will beneficiaries and discourage them from applying. The correct approach would be for them to boost their control capacity and hold accountable those who break the rules.

Because the latter will always find ways to do so.

What have the main developments in terms of Eu funds been over the past year?

In 2015 there was a rush to complete as

many of the remaining projects launched between 2007 and 2013 as possible in order to boost the overall absorption rate. This was a good thing, but there were clear limitations owing to existing problems that still have not been solved. On the other hand, this also meant a slow start for the programs available through the 2014-2020 financial framework.

The second half of last year saw the first calls for projects under the new framework but this was modest. The first quarter of this year has already ended and progress remains slow.

There have been so far calls for projects for the National Rural Development Program (PNDR) and the Competitiveness Operational Program (POC). We also expect calls for projects for the Regional Operational Program (POR) to be launched by the end of the year.

What turnover did Loop Operations post in 2015 and what are your priorities this year?

Last year we generated approximately RON 1.5 million from consultancy services and more than RON 4 million from EU funds, meaning projects that we ourselves implemented. This year we want to maintain a similar level given the slow start to the new financial framework. Overall, 2016 is a year of consolidation for us. We plan to focus on growing a project we launched last year, Ingenius Hub, a platform supporting entrepreneurs and start-ups. We are also considering new projects to invest in and for which we ourselves can apply for EU funds and the hub enables us to do that. simona.bazavan@business-review.ro

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

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Local SMEs self-finance despite multiple financing sources for development EU funds, bank loans and government schemes are currently available to SMEs looking to grow their business in Romania. However, despite all these options, a large share of these companies are financing their own operations.

Main financing sources for local SMEs in 2015 – survey* Self-financing Bank loans Trade loans Leasing Grants

17 percent

82 percent 24.5 percent 18.3 percent 3.8 percent 1.8 percent

the share of entrepreneurs who say access to finance is the main obstacle to doing business in Romania

Source: Start-up Barometer by EY Romania for 2016

*Source: CNIPMMR research on a sample of 1,375 entrepreneurs, published last summer

Government financing schemes for SMEs in 2016

Finance: finding the right mix for your company

∫ Ovidiu POSirca

was in decline.

available Eu funding...

This is happening especially in the case of new firms, where the owner or his or her family and friends are the sole financiers.

According to research published last summer by the National Council of Private SMEs in Romania (CNIPMMR), only a quarter of the more than 1,300 surveyed entrepreneurs said they used bank finance to develop their business.

The association suggested that the creation of loan mediators for SMEs in each county would help more firms do so. This is already happening in France and would help the companies to make financing requests that would have higher chances of getting approval from lenders.

Romania’s ratio of bank assets to GDP remains one of the lowest in the EU. It amounted to 78 percent of GDP at the end of 2014, while non-banking financial institutions made up 5.9 percent.

Pension funds and insurers accounted for 3.7 percent and 3.5 percent respectively, according to data from the National Bank of Romania (BNR). The central bank acknowledged the fact that financial intermediation in Romania

Nonetheless, the European Commission has continued to roll out financial instruments aimed at supporting SMEs, which generate most of the jobs across the EU. At present, several banks in Romania offer loans under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative. In this way, companies can get structural funds that can be used for innovation or for the expansion of existing operations.

A search online for access to EU finance in Romania yields close to 40 results on various financing mechanisms for companies on the europa.eu portal.

There is microfinance of up to EUR 25,000 or large loans which can go as high as EUR 25 million. The bigger ones are provided by the European Investment Bank in partnership with several local lenders.

Moreover, billions of EU funds are available for SMEs. In the Human Capital Operational Program (POCU) EUR 4 billion is available for SMEs, while the Regional Operational Program has another EUR 1 billion, according to Florin Jianu, president of the Young Entrepre-

Name

Total budget

SRL-D program Commerce Services Organization of SME trade show Entrepreneurship in rural areas Micro industrialization

RON 22.7 million for de minimis aid RON 21 million for de minimis aid RON 3 million RON 25.9 million for de minimis aid RON 60.9 million for de minimis aid

Source: Agency for Implementation of Projects and Programs by SMEs (AIPPIMM) neurs Association of Romania (PTIR).

...and local options for new companies Locally, the Ministry of Economy has announced several programs aimed at supporting new businesses, such as the SRL-D initiative, under which around 500 entrepreneurs will receive EUR 10,000 from the state to kick-start their companies. Another scheme aims to encourage the foundation of firms in rural areas. Just over 200 companies will be helped this year.

Mihaela Matei, entrepreneurship communication officer at EY Romania, cited the results of a barometer of Romanian entrepreneurship conducted by the professional services firm. Some 82 percent of respondents said that access to finance was difficult or very difficult in 2015. However, this figure was down by 6 percent from the previous year.

The situation gets even more complicated when it comes to start-ups.

“Venture capital is almost non-existent for early-stage start-ups. There are some business angels, albeit few and not that organized. But things are starting to change. Many of the new business angels are former or current

entrepreneurs in the technology field, who have already made an exit. Those people are already turning into angel investors and they are the ideal angels because they come also with experience not only with money, which is really important,” Florin Grosu, co-founder of Traderion, an IT start-up, told BR. He added, “Up to now, most of the so-called angel investors were devil investors. They had money, but also experience that was inappropriate, especially for IT, and were to some extent trying to impose on entrepreneurs what to do, which hasn’t been happening for over 20 years anywhere else.”

The company has its HQ in Delaware, US, but has a development team in Bucharest.

Some companies are also betting on the capital market, although owners’ appetite to list their firms on the stock exchange is still limited. Last year, the Bucharest Stock Exchange launched the AeRO platform, which targets companies in the early stages that have huge growth potential and need access to finance for expansion. In February, 23 companies were promoted to the premium category in this market. ovidiu.posirca@business-review.ro

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

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Local SMEs still need greater awareness of technology solutions Romanian SMEs are the least technologically driven among their peers in the European Union, for both financial and awareness reasons. However, things are picking up in this sector and some technology solutions are actually making a difference to the way SMEs are run in Romania, argue IT pundits.

Razvan Ionescu, Telekom

∫ OTiLia HaraGa At the moment, only about 22 percent of Romanian companies use management solutions, just 6.5 percent employ social media and only 5.7 percent use cloud solutions in running their business, as shown by The Digital Economy Scoreboard Index 2016. While this data applies to companies of all sizes, in the case of SMEs, the situation is even more dramatic, Valerica Dragomir, executive director of the Employers' Association of the Software and Services Industry (ANIS) tells BR. When it comes to investing in technology, companies in Romania are more cautious as they tend to take their time to analyze closely before deciding how to use their budget, argues Haris Zachariades . Another reason for the low adoption of technology among Romanian SMEs is that awareness of the benefits of implementing business solutions still needs to be raised. “Trust is another factor. Small companies would rather test before adopting any business solution, which makes the implementation process a little slower,” he says.

Bucharest, Cluj and Timis are among the regions where most computerized companies have chosen to develop their businesses. The less developed are those where the number of companies is still low, like Mehedinți, Botosani or Vaslui, says Zachariades.

"Aside from Bucharest-Ilfov, the North-West region of Romania is more technologized than the rest of the country, according to our internal research.

Moreover, SMBs Whitepaper data shows that 28.81 percent of the SMEs in

Haris Zachariades, Softone

Mihalis Bakouris, Entersoft

the North-Vest of the country rely on services such as acquisition of monthly subscriptions that relieve them from the burden of substantial investments in equipment and licenses, whereas in the North-East of Romania only 11.11 percent do so," according to Alina Georgescu, sales director Ymens.

Bogdan Nitulescu, small & medium business segment lead at Microsoft Romania, tells BR that there is “accelerated improvement in this field today, based on the alignment of the local business landscape to the European and global one.” “There are clear studies on how the implementation of a client relationship management (CRM) tool can boost income, enabling cross-sale or up-sale.

Recently a client with a business in the domain of research shared with us that adopting Microsoft’s cloud, specifically Azure machine learning, had facilitated a cost reduction of almost 30 percent and significantly reduced the time for go-to-market,” says Nitulescu.

Over the past three years, SMEs have increased the budgets for solutions delivered via cloud technology by over 30 percent, representatives of Vodafone Romania tell BR. There has been growth in decision makers’ awareness of the benefits that business applications can bring in controlling, optimizing and growing a company, they comment.

Additionally, more and more decision makers are convinced of the advantages of data security over the “on-thepremises solutions” of SME customers, say Vodafone representatives. The innovation-driving technological solutions for SMEs would include social communication applications/platforms, that redefine online commerce, market-

ing and promotion as well as the ways in which companies are perceived; mobile communication applications/platforms that redefine the working process, allowing maximum mobility and higher productivity; analytics applications/ platforms, which together with Big Data are redefining business processes, resource organization, product display and customer experience; and last but not least, cloud computing platforms, which give access to modern, up-todate, scalable and tailored resources (IaaS, PaaS, SaaS), used both for optimization as well as to try new solutions, processes and digital products, comment Vodafone Romania representatives.

“If we are assessing SMEs’ current needs, we can identify several areas: productivity suites (document editing, worksheet, and document management), communication/collaboration solutions (email, IM, VoIP), accounting/invoicing, security and also, from a broader spectrum, mobility with data/voice solutions,” Nitulescu tells BR. According to Zachariades, IT&C, construction and fashion are the main industries that are heavy users of ecommerce platforms. Mobility wise, according to a recent study conducted by Ipsos Mori, 52 percent of SMEs employees use mobile solutions to run their activity. But the most important fact revealed by the same study is that the number of SMEs that want to invest in IT solutions in steadily growing, says Zachariades.

Some of the must-have business solutions for SMEs are Cloud ERP and Cloud CRM solutions, mobile applications, BI solutions, and e-invoice/e-

commerce solutions. However, one of the main traits of business software is that it can be tailored according to a company’s needs, says Zachariades.

SaaS and IaaS solutions are becoming increasingly popular choices of SMEs, offering efficiency and flexibility for businesses in rapidly changing markets. Moreover, M2M solutions enable a large variety of applications that a business can adopt to increase the efficiency and quality of the services they provide, Razvan Ionescu, director marketing, segment business, Telekom Romania, tells BR. “According to IDC, the most popular M2M solutions in Romania are those for fleet management, video surveillance and smart metering and we have started to see a positive trend also for other M2M solutions like building management systems and people counting” says Ionescu.

According to Zachariades, SMEs who implement business software solutions generally register a 35 percent increase in work productivity, 22 percent reduction in operating costs, 20 percent reduction in administrative costs, 17 percent inventory reductions, 25 percent improvements in complete and ontime delivery and 20 percent improvements in schedule compliance within the first six months of the implementation. “The use of ERP, CRM and SFA solutions led to a 95 percent time reduction in issues solving in production and services; 75 percent reduction in maintenance costs for systems and production support; 17 percent increase in products and services exports; more than 20 percent savings on sales force time; and a 30 percent reduction in collection times,” Mihalis Bakouris, international business development director at Entersoft, tells BR. After the implementation of these solutions, there is a timeframe of adjustment for the company and its employees. “Managing change is always a major component in the initial solution deployment. Most people only see the disruption of their working habits and the extra work needed at the start. They have to adapt and this can be done only through change management practices, managerial commitment and focused, structured training which will show to them the benefits of the ‘new way’ Bakouris remarks. otilia.haraga@business-review.ro

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

21

OPiNiON alina Georgescu, sales director, Ymens

The unique challenge for local companies in dealing with the Millennial generation International studies have shown that the Millennial generation, young people born after ‘81, has already started to reshape the business landscape all over the world.

Nowadays, companies face the challenge of dealing with a totally different reality in terms of balance between employer and employees, while the new generation becomes capable of setting new rules in business. Companies have to develop their abilities to adapt to an unpredicted fast-changing environment and to the new rules.

Otherwise, they should be ready to significantly lose ground.

This new generation brings a need to shift the mentality and reshape the strategies and even business goals for companies of all sizes.

Even very strong companies like GE have decided to take bold actions in order to adapt their business. They moved from Stanford to Boston, a much more attractive location for their young employees.

Starting as a group with completely different characteristics and values than the previous Gen Xers, Millennials gained ground and have started to have the power to make a difference in the corporate cultures. This shift was possible due to the competition for their talent, especially in fields such as coding, analytics and life sciences.

Furthermore, as the previous generation is aging, it is expected that in four years, almost 50 percent of employees will be part of this increasing cohort, while by 2025 they will cover about 75 percent of the total global workforce.

The most significant change brought about by Millennials in the business environment is their new approach to how they want to work, what makes them productive and happy. They need to feel their job is the best place to be. Moreover, they claim to be connected to the company’s strategy and goals, to get an in-depth understanding of the purpose both for the business and their role or contribution. They need to be challenged before feeling engaged.

Millennials come with a fresh values set, seeking flexibility, collaboration and a proper work-life balance. They shape their roles in

order to achieve efficiency and a logical approach. Expecting to spend less time in the office, they are focused on how they can be more productive. They expect things to be done fast and they are unwilling to wait when it comes to creating impact in their work.

In their continuous race to succeed on the market, managers should properly understand this generation and their specific needs and figure out what impact in business this change will have in the workforce paradigm. They must create a sense of purpose and the proper environment in order to attract, engage and retain the biggest talents from the new generation.

Romanian companies seem not to be very well prepared to welcome digital natives. From being stuck in ten-yearold technology, to statistics regarding the working environment, Romanians are lagging behind European trends.

According to a survey conducted by Ipsos Mori for Microsoft, despite the largest percentage of Romanian employees required to work exclusively in their office (81 percent), compared to Norway with only 51 percent, the Romanian productivity rate is six times less than the European average and 12 times less than the Norwegian figure.

While 83 percent of local SME employees consider that mobile technology would really help them to enrich their productivity and to shift their work life balance, about 15 percent of Romanians work 51 hours a week or

more, almost double the European average of 9 percent. Furthermore, less than 10 percent of employees use a smartphone provided by the employer, which is the lowest rate in Europe after Ukraine. Some 38 percent use a personal laptop at work, while 30 percent use their own PC or smartphone.

However, most Romanian entrepreneurs are still reserved in adopting cloud technology, one of the most important drivers of effectiveness and productivity. To compare, according to research on SMB cloud computing adoption conducted last year by Compass Intelligence, in the US, in 2015, 37 percent of small businesses were adapted to the cloud and an anticipated 78 percent will be fully cloud operational by 2020.

Within the last three years, we have made a constant effort to educate the market about the benefits provided by cloud. More than instant access within the system and supporting a significant increase in effectiveness and productivity, this technology provides businesses with the benefits of predictable costs, together with access to the newest versions of business solutions. Nevertheless, companies should still be acknowledging the data center which hosts their data as well as the security standards guaranteed by their cloud vendor.

While cloud technology feeds an increase in a business’s competitiveness

and efficiency, there are also other key factors that substantially support a company in its battle to gain young talent. One of them concerns millennial-friendly technology. The natural needs of flexibility, mobility and collaboration drive companies to match the tools provided to the young employees to the communication expectations of the “fast and now” generation.

Office 365 is Microsoft's cloud productivity solution available to companies seeking mobility, flexibility and scalability together with Microsoft Office suite and collaboration solutions.

Nowadays mobility and flexibility have got new dimensions, as the key factors that generate both higher profits and highly satisfied employees.

Ymens launched its collaboration and communication solutions at the end of 2013, becoming the only company in Romania and Central and Eastern Europe which offers Microsoft solutions hosted on its own platform, and also as an Office 365 reseller. By acquiring the Microsoft Gold Collaboration and Content Competency, Ymens gained the official certification validating our expertise in the communication and collaboration area which we are glad to offer to our customers as a benefit.

As a result of Ymens’ desire to highly understand and anticipate its customers’ needs, the process of developing a Microsoft expertise center inside Ymens started once the communication and collaboration solutions were introduced within the company’s platform. It went on with the launch of Ymens CRM, based on the functionalities of Microsoft Dynamics CRM. The Gold-level Certification was an important step taken by the cloud company in the strategic partnership with Microsoft on the road of turning Ymens into one of the main national centers of Microsoft expertise.

In this respect, Ymens is one of the Romanian companies which figured out early that nowadays, the only way to face the next generation challenges is to adapt the business to the new reality. This can take time and effort but also an in-depth understanding of the new era and the capacity to take the right decisions by aligning the strategy to the market trends.

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

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romanians ‘need strong culture of entrepreneurship’ Lacking a long tradition in entrepreneurship, Romanians are still afraid to set up their own business and potential failure is perceived as a significant personal and professional defeat. Entrepreneurial education needs to be embedded from childhood in order to prepare future generations of young businesspeople, say entrepreneurs. ∫ aNda SEBESi The 2014 Entrepreneurial Culture and Education Barometer conducted by EY Romania on students found that, in 2013, entrepreneurial education improved in Romania, according to 58 percent of entrepreneurs. Entrepreneurial education is different from the traditional academic approach and involves embedding aspirations and attitudes specific to entrepreneurs; these can be developed only by being in contact with entrepreneurial success stories. The same study found that specific programs for entrepreneurial education and business schools are the most important forms of education to improve the perception of entrepreneurship as a career option (cited by 56 percent of respondents). Meanwhile, promoting entrepreneurial success stories and mentoring programs (each 18 percent) were perceived as less impor- Bianca Ioana, Asebuss tant. According to the same study, 80 percent of Romanian entrepreneurs mentor other entrepreneurs in the early ties that entrepreneurs offer is even ginning. There is something very immore important (cited by 49 percent of portant that is missing from this forstages of their businesses.

In addition, 59 percent of the entre- respondents). Launching a business mula: business education starting from preneurs included in the Entrepreneurs needs to be seen as a valid career option childhood,” he says.

He thinks that practice is the best Talk: The 2013 Romanian Entrepre- and a serious move towards personal school for entrepreneurs and Romanineurship Barometer, think that Roman- accomplishment.

According to Andrei Pitis, founder ans still don’t have the experience. “If ian mentalities and values do not support entrepreneurship, compared and CTO at Vector Watch, Romania is a we stick with messages about how to with 43 percent of entrepreneurs from market where entrepreneurs, either think out a business plan or design a the European Union (EU) and 29 per- first timers or those who lead more ma- product, aimed at young people over cent of those across the G20. According ture businesses, can still experiment. 20-25, a lot of time has already been to the same research, fear of failure re- “It is an environment where you can wasted. All the information should be mains one of the significant impedi- learn to lead a company, but for those presented from middle school so that ments in approaching who want to perform, this is just the be- when they choose their high school or entrepreneurship. Only 14 percent of respondents think that Romanian society indulges business failure, while 81 percent think that this will be an obstacle for future business projects, along with being perceived as a failure in • It offers experiential learning, access to data and information about entreone’s career or indicating a lack of the preneurial companies, success stories and wrong decisions, consultancy in necessary skills. setting up a valid business plan and structuring a specific entrepreneurial way Last but not least, the same study of thinking. found that, in order to improve the pos• It gives you a perspective of a company both by adding new information in itive image of entrepreneurship, busisome fields and by a better structuring of the information gathered as a mannesspeople think that the focus should ager or entrepreneur. be more on communicating the impact • It offers more opportunities for development or access to some industries. of entrepreneurs in the economy, by • It gives you the capacity to make decisions quickly with increased confidence. creating new jobs and generating eco• It can support you in launching your own company. nomic growth. This focus is important • It can increase your income. especially in a country like Romania, • It represents a networking opportunity. where the role of entrepreneurs is not yet well known because of the lack of entrepreneurial tradition. In addition, Source: Asebuss the promotion of the career opportuni-

How does an MBA help an entrepreneur?

college, they should be able to consider founding their own company at some point,” urges Pitis. He says that initiatives like Innovation Labs and local hubs that offer advice for young entrepreneurs are good examples in this regard. “Despite this, these are local initiatives that are generally concentrated around large urban centers like Bucharest, Cluj-Napoca or Timisoara, and there is no national coordinated program that can offer truly useful entrepreneurship lessons for all interested pupils and students,” says Pitis.

If education is one of the main drivers in encouraging entrepreneurial initiatives in Romania, how could an MBA/EMBA program help Romanians make their entrance into the business world? According to Bianca Ioan, marketing director at Asebuss, the MBA program for entrepreneurs includes the specific curriculum of an international accredited MBA program while courses cover all managerial skills, from financial-accountancy, marketing, strategy, macroeconomics and business plans to international politics and finance, and human resources.

“As a program that addresses both entrepreneurs and those who intend to start a company, as well as managers, the advantage is that case studies are focused on entrepreneurial companies while discussions also include examples of companies from Romania,” says Ioan. She adds that a special experience is the interaction with business owners that are invited to discuss with students the moments or key decisions they experienced in their own company.

“While at the beginning of the EMBA program entrepreneurs represent 5 to 10 percent of the total number of students in a cohort, this number triples in the first three years after they graduate, reaching over 30 percent,” says Ioan. As for the MBA program geared towards entrepreneurship, she adds that entrepreneurs represent about 25 percent, to which another 20 percent of new entrepreneurs will be added after the program is finished. “For example, within the 2015 MBA series of graduates, two businesses were launched during the second year and there are several other business ideas that have the start-up plan finalized and are waiting for the right time to be launched,” says the Asebuss director. anda.sebesi@business-review.ro

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

24

CFOs cautiously optimistic about economy this year In the financial departments of large international companies that are active in Romania, there is hope for more predictable and sustainable legislation following the rollout of the New Fiscal Code and Fiscal Procedure Code this year.

All photos: Mihai Constantineanu

volving protection. This is insurance with a low value and if it is deductible it can reach a larger pool of people that are not protected in any way right now,” said Ladunca.

He added that if more people were insured, the state would not have to step in and provide all the funding in the event of a disaster or major accident.

Another measure the industry is calling for is a 6 percent contribution from the gross wage to go into the pension system, by law. At present, this figure stands at 5.1 percent.

According to Ladunca, MetLife controls USD 1 billion of assets in Romania, with a major impact in the economy, ranging from the increase of stock exchange trading to the enhancement of predictability for the financial market.

IT struggling with changes to sole trader (PFA) regulation From left to right: Ovidiu Posirca, Business Review; Irina Dobre, OMV Petrom; Ciprian Ladunca, MetLife; Stefan Duhovnicu, IBM Romania

∫ OVIDIU POSIRCA However, CFOs fear that the country may see its economy grow aggressively once again based on consumption, while key investments in infrastructure will continue to move at a snail's pace.

At least, this is one of the conclusions that resulted from a special panel that BR hosted in late March, at its 15th Tax & Law event. The speakers were the heads of financial operations in multinational firms that have to plan budgets in the country on the medium and long term.

Oil industry fears new taxes on poor pricing evolution Let’s take for instance the case of Austrian oil major OMV Petrom, which is anxiously waiting for changes to the taxation framework for the oil and gas sector.

Irina Dobre, financial director of OMV Petrom, said that the government’s intention to tax the profits of oil

and gas companies from upstream activities, meaning exploration & production, should take into account the current investment realities.

“This year, we are forecasting a reduction of 10-20 percent in investments, and all this is because our cash flow is very tight,” said Dobre. She added that OMV Petrom had reduced its investments budget from EUR 1.4 billion in 2014 to EUR 900 million last year, due to the collapse of oil prices.

Dobre is hoping that the special construction tax will be scrapped next year, as this measure is included in the new Fiscal Code, underlining the fact that Romania’s potential for onshore oil and gas projects is dwindling.

However, she emphasized that explorations in the Black Sea remain a strategic project for the firm.

“The Black Sea requires huge investments, and for now the final investment decision is still under analysis, which will take another year or two. Of course, the national and international evolution of oil and gas prices will have an influence on that business model,

but for us the Black Sea is a strategic investment and is treated as such,” said Dobre.

A shot in the arm for life insurance through legislation For Ciprian Ladunca, CFO and deputy CEO of MetLife, the provider of life insurance and pension products, the main challenge is getting more Romanians to learn about the benefits they could get from such financial products.

“We are talking about Romania, a country where insurance, especially life insurance, is not a word used that often. We are ahead of only Bulgaria, throughout the whole of Europe, in the penetration of insurance services,” said Ladunca.

The CFO added that MetLife has insured 1 million Romanians in one way or another, but certain changes to the Fiscal Code would dramatically expand consumers’ access to this market.

“We are supporting and lobbying in two directions: The introduction into the Fiscal Code of deductibility for life insurance, especially for policies in-

One of the immediate impacts of the new fiscal legislation has been felt in the local IT sector, which relies on programmers that work as sole traders (PFA). This was supposed to be a legal option that would provide flexibility for specialists that were paid based on projects.

From this year, sole traders will have to pay income tax of 16 percent, as well as contributions to the healthcare and pension funds.

Gabriel Biris, state secretary at the Ministry of Finance, suggested that the sole trader regime was popular because the taxes were lower.

The prices of IT services are already starting to climb in Romania, following this change, according to Stefan Duhnovnicu, global finance & operations manager at IBM Romania.

“IBM does not work directly with sole traders (PFA), but we have local partners, which for certain niche skills hire sole traders,” said Duhnovnicu.

He said his challenge was to channel projects not just based on skills, where Romania is marking significant growth, especially in terms of niche capabilities, but also on costs.

“The impact of this change on the taxation of sole traders resulted in a 3 percent hike in the rate we receive from our suppliers, and I have personally conducted an informal investiga-

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

Gabriel Biris, Ministry of Finance

25 tion to see why the prices of services we receive and give have to grow. (...)

The projects are dynamic and do not go on forever. The deadlines are very strict, so when I set a team or a programmer a certain target, as sole traders they have the freedom to work during the night, or at the weekend, whenever they want. In opening a SRL, things get more complicated for him or her. We are losing flexibility, along with the increase in costs,” said the IBM official.

Duhnovnicu added that the authorities should at least provide some assistance for IT specialists that used to work as sole traders and are now trying to set up their own firms.

Major overhaul of customs legislation to be rolled out from May Companies doing import-export activities should be aware that a significant change in the customs legislation will be rolled out starting this May. The new provisions will come into force around three years after the New Customs Code of the EU was adopted.

Economy needs investments, not just consumption, warn CFOs

Luisiana Dobrinescu, Dobrinescu Dobrev

Florin Gherghel, Noerr Finance & Tax

With GDP expected to grow by around 4 percent this year, after expanding by 3.8 percent last year, BR asked the three CFOs if the economy risks slipping into a new boom and bust cycle.

“If economic growth were still based on consumption I don’t know if I would be that optimistic, but it is also based on viable projects. I don’t see large-scale projects, but investments in people. We are above the EU average for economic growth, which is a positive thing, but I don’t want to somehow become a consumer, but reach equilibrium in the balance of payments,” said Duhovnicu of IBM. Ladunca of MetLife said he was optimistic about the economy and commented that investors’ perception of the country was paramount.

Dobre, financial director of OMV Petrom, warned that Romania risks lagging behind other countries if the growth pattern does not include key investments in infrastructure, aside from consumption.

Key changes to tax inspections

Dan Barascu, BDO Romania

Starting this year, some changes have been made to the way in which tax officials carry out inspections. For large taxpayers or for those with second HQs, such an investigation may not take more than 180 days, according to Florin Gherghel, head of the tax department at Noerr Finance & Tax. He noted that the conclusions of the fiscal authorities following the inspection can be challenged within 45 days.

A new provision in the Fiscal Procedure Code states that if the administrative contestation is not resolved within six months, the taxpayer can ask directly in court for the cancellation of a tax enforcement order.

Luisiana Dobrinescu, managing partner at law firm Dobrinescu Dobrev, added that it takes around one year to challenge a foreclosure decision in court. She said that the controls from the anti-fraud department are based on a procedure that lacks transparency and clear rules.

Cristina Clujescu, EY Romania ovidiu.posirca@business-review.ro

∫ OVIDIU POSIRCA Valentin Durigu, tax manager at the professional services firm KPMG Romania, explained during the Tax & Law event that the new legislation aims to streamline procedures, but the problem is that instead of two regulations there will now be four.

“There are a few hundred normative acts of level two and three, including tens of guides to how this new legislation has to be implemented. So, at least in 2016, you should expect an avalanche of regulations, mainly from the European Commission,” said Durigu.

According to the tax expert, the executive arm of the EU wants to move all the communications between companies and customs authorities online.

“The customs as an authority, and from the perspective of legislation and control procedures, will reinvent itself. (...) The definition of an exporter will be changed. From May 2016, it will have to be a person established in the EU. So, if the firm is established in Switzerland and does import-export operations in Romania, from May 1 it can no longer be a

customs declarant,” said Durigu.

According to the new legislation, a decision made by a customs agency in Romania for instance will be mandatory for the titleholder and valid throughout the EU. Moreover, the first sale for export concept will be scrapped from the new code.

Durigu added that the principles of customs controls will also change.

“The freight will not be controlled in the customs office, through the freight represented there, but the authority will carry out an audit and risk analysis before the freight reaches the customs unit and after it is imported or exported,” said the KPMG representative.

He advised companies to make sure they understand what will happen after the new code is rolled out and if there will be any impact on their current authorization.

The EU has been trying for years to simplify cross-border trade by completing the new code.

According to EC data, EU customs handle 16 percent of world trade, or over 2 billion tons worth of goods with a value of over EUR 3.4 trillion. ovidiu.posirca@business-review.ro

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

26 CSR

Local CSR market seeks sustainability With the market growing steadily from one year to another, the Romanian CSR scene is becoming more mature as companies look for long-term interventions rather than quick-fix actions. With their focus on the sustainability of the projects they implement, they’re starting to look more carefully at the NGOs they choose as their longterm partners.

Gheorghita Diaconu, KPMG Romania

∫ ANDA SEBESI The Romanian business community has already acknowledged and gradually accepted the need to take into account social and environmental factors when planning its development strategy and operations. Leading companies, especially international firms present in Romania, are investing in building stakeholder trust and simultaneously improving their business performance. These organizations are responding to a new set of societal values based around the evolving role of companies in society.

“Even though companies operating on the Romanian market are more and more involved in Corporate Social Responsibility (CSR) activities and support the communities where they operate, many of them have not clearly identified their stakeholders in

order to develop an effective and reliable CSR strategy which takes into account the stakeholders’ expectations.

Many companies still consider CSR to be only about charity and sponsorship. However, a positive development is that we have seen an increasing willingness in recent years for businesses to be involved in community life,” says Gheorghita Diaconu, director environmental services at KPMG Romania.

The trends in the local CSR market continue to be set by multinationals operating in Romania, which have a strategic approach and clear plans for action, at group level, say pundits. Related policies, procedures and projects are implemented locally, in line with the group’s strategies. On the other hand, Romanian-owned companies tend to focus their efforts and activities mostly on social involvement, without an organizational framework. “A significant difference

can be observed between the level of involvement in CSR activities by governments and companies in developed countries, where there is a history of several decades of such activities, and the position in Romania.

However, during the last few years, progress has been made and, hopefully in the near future, CSR will rank high on the agenda of both public institutions and private companies,” says Diaconu.

A legal reporting requirement will certainly influence companies to become more active in CSR activities and set their strategies and directions.

However, this requirement will be applied only for large (with either a balance sheet total exceeding EUR 20 million or a net turnover exceeding EUR 40 million), public-interest entities (listed companies, banks, insurance undertakings and other companies that are so designated by member states) and with more than 500 employees.

According to Diaconu of KPMG, the directive on disclosure of non-financial and diversity information by certain large undertakings and groups gives significant flexibility for companies to disclose relevant information, as well as the possibility to rely on international, European or national guidelines. She says that the impact of non-financial reporting requirements on the companies subject to the directive will depend on how the Romanian authorities transpose this EU regulation into Romanian legislation by December 6 2016.

“If the directive is merely translated into Romanian and no subsequent implementation/reporting guidelines are developed, the impact on reporting companies might not be significant. Many of them will include information on environmental, social and employee aspects, human rights, anti-corruption and diversity issues in their management reports. As no assurance on non-financial information is required by the directive, the auditor’s obligation is limited solely to checking that this information has been published, not to verify its quality or reliability.” She adds, “If the Romanian authorities transpose the

directive through a specific regulation, the reporting companies might be seriously affected if a reporting preparation process (data collection, check, aggregation, and reporting procedures) is not already in place.”

According to Valentina Roman, executive director at Curtea Veche Association, companies choose projects they get involved in more carefully so that they match their interest and expertise area. “Compared with other countries, CSR in Romania is still developing slowly as there are no major changes from a year to another,” says Roman. She points out that, while for an NGO it’s very important to be assured of the necessary funds for developing projects, for companies the partnerships are interesting in order to consolidate their role in the community, develop credibility and motivate their employees. She warns that often NGOs rejoice that they have managed to attract sponsorships and forget to consider building long-term relationships with a company. “Evaluations of the projects, communication and implementation reports, presentation of the next actions and proposed programs belong to ongoing communication that needs to be kept up. But often for different reasons, NGOs burn these stages and lose,” says Roman.

According to Alina Tudor, sustainability projects manager at Enel Romania, the strong focus on sustainability, seen as a business strategy for endurance in the longrun, can be considered a relatively recent phenomenon. “We believe more and more companies will shift towards this philosophy – sharing the costs and benefits of social development, tackling the wider challenges that societies face and, by becoming more open and flexible, ensuring the resilience and growth of the business in the future,” she says. The development of the local CSR market is reflected both in the increased number of social responsibility projects and their complexity as well as in innovative solutions proposed by them, say pundits.

“Now more than ever, individuals expect companies to take part in the

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

28 CSR

Alexandra Maier, Avon

life of their community. The confidence in companies and their projects is getting built constantly and there is a need for honest and open communication with those that watch our evolution,” says Irina Ionescu, public affairs and communication manager at Coca-Cola HBC Romania. As a result, she says that in the past few years there has been an increase in the number of companies that report information about their performances in the field of sustainable development in Romania.

“My perception is that there has been a significant step towards maturity for CSR initiatives in the past year, as we speak more and more of strategic projects in line with the domain of the organization and less of just philanthropic actions,” says Alexandra Maier, CSR specialist at Avon. “In addition, many companies seem to become more open to close partnerships in order to have CSR actions with a high impact. I think that this is the approach we all need to have if we want to make a positive and substantial contribution to the community,” she adds. However, she warns that the CSR concept is hardly known and unclear to the general public.

According to the representatives of Orange Romania, in the past few years, programs with a major impact in improving the quality of life of the communities have become more visible. “As a result of the campaigns developed recently, we noticed that there is a direct connection between services and products to which is added a CSR mechanism, and customers’ perception of the company and further association of the brand with some values and principles,”

Valentina Roman, Asociatia Curtea Veche

they say.

Sanatatea Sanilor (the Breast Health identify those causes where it can Campaign) and 2008 when it make a difference and where involveHuge need for education launched Campania Respectului pen- ment is possible with the support of organizations The need for educational projects in tru femei (the Respect for Women non-governmental Romania is still great say pundits, Campaign,) it has supported projects (NGOs) specialized in different fields based on the existing studies and sta- to tackle breast cancer and domestic with a solid portfolio of successful tistics. “At present, Romania ranks violence. In the past two years, the projects. “Environmental protection, last in the European Union for the company has donated medical equip- encouraging an active and balanced number of books read per inhabitant. ment for the early detection and mon- lifestyle, creation of a safe working Moreover, according to the European itoring of breast cancer that is worth environment and supporting ecoCommission, 53.3 percent of Romani- USD 208,000 to county hospitals in nomic development are our key inans face difficulties in understanding Targu Jiu, Brasov, Bacau and the Aso- volvement areas,” says Ionescu. what they’re reading, and only 2 per- ciatia Caravana cu Medici. In addition, According to her, Coca-Cola HBC was cent of children from rural areas man- it has consolidated partnerships with one of the first companies in Romania age to study at a university in an NGOs such as the Regina Maria Foun- to have invested in the environment urban area,” says Roman. She warns dation, Amazonia Association, MAME and water resource protection and in that health, food, sports, first-aid Association, Hospice Casa Sperantei the development of local communiprinciples for children living with an and the Foundation for the Develop- ties. “The use of technology with ionolder individual and finance are ment of Civil Society (FDSC) aiming to ized air for the rinsing of PETs and the among the fields where there is a support projects that help victims. It co-generating station from our botneed for education. “For those who has also organized four major infor- tling plant in Ploiesti, which reduces understand the importance of reading mation events about the early detec- CO2 emissions by 50 percent, are in the development of young genera- tion of breast cancer that gathered some initiatives in this respect,” adds tions, we initiated the national pro- over 12,000 participants. These were Ionescu. Last year, the company initigram for reading ‘Cartile Copilariei’ worth USD 199,000. In order to sup- ated in Romania Dupa Noi, its largest (Books of Childhood) through which port victims of domestic violence and sustainability platform, which aims to we intend to promote reading for prevent it, the company modernized educate consumers about sustainable pleasure for children and minimise social housing (with an investment of development and reduction of impact the percentage of functional illiteracy USD 15,500) and offered, together on the environment. The long-term in Romania,” adds Roman. Azomures, with Friends for Friends Foundation, partnership with Tasuleasa Social, Accenture, Springtime, Sameday grants within the Bursele Superscrieri “Adopta un rau de la izvor pana la Courier, Dacia and Kaufland are program. “We also launched the first varsare” and “Grija pentru copii” among companies that have sup- Avon crowdfunding platform world- campaigns are among the other projported the projects initiated by Asoci- wide, www.doneazacuavon.ro ects developed by the company in the atia Curtea Veche. through which our customers do- field of sustainability. Throughout the nated USD 10,000 to eight social cases partnership with Tasuleasa Social, which started in 2007, the company so far,” adds Maier.

Avon Cosmetics Romania involves the community from Dor“Avon has become known among Ronelor Country (Tara Dornelor) in enmanians as being the brand with a Coca-Cola HBC Romania and biodiversity rose ribbon and we are the company The working environment, market, vironmental for women. It’s not just a statement, it community and environment are protection, volunteering and the prois our engagement to be near them Coca-Cola HBC Romania’s four major motion of responsible tourism projboth in happy and difficult moments,” directions of intervention based on ects. In addition, in 2013, Dorna in says Maier. Since 2002 when the com- which the company creates and de- partnership with Salvati Copiii pany launched Campania pentru velops CSR projects. The firm aims to launched the “Grija pentru copii”

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

ADVERTORIAL 29

“Donate for those who save“ for a better future message that the support of each of us matters, in order to make a change for the better in the community.

The donations were made in-store, so we ensured an extremely efficient and transparent system, by which our customers and employees could contribute to making a change for the better, supporting the SMURD cause.

More importantly, we wanted to show how small gestures can determine long term positive effects of great impact.

When did you launch the „Donate for traffic causes serious delays for those who Save” campaign and what ambulances. So, starting with October was the motivation behind this 2011 until the beginning of 2015 there initiative? has been a total number of 380 Ever since entering the Romanian interventions and 267 people who market, Lidl has developed a number received assistance, with just one of social responsibility projects to motorcycle in use. Then, in January provide a solution for the issues 2015, a second motorcycle was made identified on five main levels: Society, operational and, by August 2015, these Environment and Construction, two vehicles assisted another 157 Human Resources, Assortment and requests. The very short answer time for Products as well as Logistics. All of a motorcycle, of 3 to 5 minutes, these are incorporated in the compared to an average of 8 minutes for dedicated platform, „For a better an ambulance, stands as proof of the future”, and are devised to bear a long efficiency and necessity of such a term impact on the community. service.

One of the most important pillars This is the context that led to the of every society is the health system, “Donate for those who Save!” point-ofthus, in 2014 we identified a need in sale donation campaign, aimed to the integrated medical system that provide support for the project initiated SMURD has brought forward: to by SMURD and create a motorcycle fleet fluidify the first aid process, essential for Bucharest. The campaign was in saving lives. The Foundation had implemented in November 2014 in the already started a pilot project in 2011, Lidl stores throughout the country and using intervention motorcycles to lasted for six months. A total of 100.000 quickly assist emergency calls in euros were raised with the help of Lidl Bucharest – where the congested customers and employees, to which the

company added 50.000 euros. The funds collected were then invested in the expansion of this innovative first aid assistance project with 5 urban intervention motorcycles, fully fitted with medical equipment, and 23 protection equipment sets for the SMURD personnel who will use them.

What was the mechanism of the campaign?

The point-of-sale campaign spanned over a period of 6 months in all Lidl stores in the country. This was in order to ensure that the offered support will enable the SMURD Foundation to extend the fleet with sufficient motorcycles to cover the whole of Bucharest.

The start of the campaign was announced with a press release and there were also billboards placed in the stores’ parking lots in order to raise awareness about the supported cause.

Furthermore, the mission of the SMURD Foundation was broadcast on the Lidl Facebook Page as well as the official website. We wanted to put forward the

What are the main results of this campaign?

The total amount that resulted from the donations of Lidl customers and employees was 100.000 euros and Lidl supplemented this sum with 50.000 euro. The funds made it possible to extend the fastresponding urban intervention service by acquiring 5 motorcycles, fully fitted with medical equipment, and 23 protection equipment sets for the SMURD personnel who will use them.

This means that there is now a total of 7 first emergency motorcycles to offer first aid assistance until the ambulance comes. And it also points to the fact that we have managed to implement a medical project in Bucharest that is already available in large cities such as London, Budapest or Athens.

The campaign „Donate for those who Save” won the grand prize in the„Best Fundraising/Philanthropic Initiative”. What can you tell us about this?

While it is an honour to have received such a prestigious award, the fact that this was the only Romanian campaign awarded by the PR Daily judges serves to prove that there is an increasing urgency for the companies and us all to be actively involved in providing solutions to the acute needs of the society. We are well aware of the fact that this accomplishment would not have been possible without the support of our customers and employees alike, whom we wish to thank.

This distinction is an acknowledgement of our continuous efforts towards social responsibility, as well as sustainability and an incentive to move forward on our set trajectory.

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

30 CSR campaign in order to support programs that aim to offer proper care for premature newborns. “From its launch to the end of 2015, 40 maternity wards from Romania benefited from medical and specialized equipment worth over EUR 400,000,” says Ionescu. She adds, “Our sustainable approach can be seen in our whole value chain. Within Coca-Cola HBC we follow the impact of our products, both in the production, storage and transportation stages and in consumption and the packaging management ones,” adds the company’s representative.

adds Tudor. According to her, based on the type of activity the company has on the local market, the area of intervention will gravitate around the idea of access to energy, tackling the barriers – economic, technologic or social – that prevent people from enjoying the benefits of electricity. “In addition, another area of focus will be innovation and technology as the source for addressing social problems and creating economic development,” adds Tudor.

Lidl Romania

Assortment and products, human resources, environment-construction, Enel Romania society and logistics are the main CSR According to Tudor of Enel Romania, directions for Lidl. In terms of comthrough its projects, the company munity, the firm focuses its efforts on aims to create shared value for itself supporting education, as well as a and the community, to find, design healthy lifestyle – regarding both and implement those initiatives that physical activity and diet. It has also create opportunities for its business developed and funded many projects and promote social development at that offer assistance to disadvantaged the same time. “The main projects, children and those in poor health. As adapted to the Romanian context, are for the environment, Lidl Romania’s related to access to energy and eco- regional center, now being built in nomic development in general. From Lugoj, is based on the most ecological integrated community development technologies and will help the comprograms in disadvantaged areas, to pany to reduce energy consumption, support for civic engagement initia- emissions, and its CO2 footprint. Adtives or social businesses, all our proj- ditionally, the new Lidl headquarters, ects attempt to apply our new a construction that will also be based philosophy to concrete situations, to on sustainable and innovative techgenerate long-term growth opportu- nologies featuring natural refrigerant nities for the business and society,” and geothermal wells, and makes use

of geothermal energy for heating. Lidl is also implementing various measures and programs to care for its employees. Along with life insurance, gradually increasing annual leave, gym memberships, projects to help employees achieve work-life balance, there is also a Future Store Manager program, which is aimed at developing the skills of its employees on a number of levels: professional, business, personal, social and leadership.

In terms of logistics, the company optimizes its truck routes to minimise the impact of freight transport on the environment.

In 2014, Lidl signed a long-term partnership with the SMURD Foundation to support its mission to improve the integrated medical system. The “Donate for those who Save!” campaign at cash registers (EUR 100,000 was raised, plus EUR 50,000 from Lidl) and “Menține vie speranța” (Keep the Hope Alive – over EUR 100,000 raised plus EUR 25,000 from Lidl), which was dedicated to supporting the mission of Hospice Casa Speranței, are some of the projects. In addition, Lidl contributes to the preservation of local traditions, developing the “Sarbatori la Sat” (Village Festivals) campaign aimed at providing the means for local Christmas traditions to be passed on to new generations.

Orange Romania Involvement in the community through education, digital inclusion, environmental protection and a safer and more useful digital environment for children are the main CSR project areas for Orange Romania. The Orange Educational Program, Parinti la Scoala (Parents at School), Oferta de nota 10 (Offer of Grade 10), Saptamana Voluntariatului (Volunteer Week) and SuperCoders are some such projects. For ten years, the company has managed the Orange Educational Program, developed in order to offer students the opportunity to fathom and put into practice the information gained during their studies through specialized courses. Youngsters benefit from theoretical and practical information coming from Orange specialists.

The Parinti la Scoala project is an initiative launched last year to identify the difficulties that individuals unfamiliar with the use of new smartphones technologies or social networks face. The company also created an online platform where anyone interested in developing their digital skills had the chance to sign up for workshops. There were 15 workshops organized in a total of five Romanian cities, where over 150 parents had the opportunity to discover, with the help of Orange trainers, how technology can have a positive influence on their

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

lives.

In addition, through the Oferta de nota 10 campaign the company attached a good cause to an offer that contained benefits for its customers.

Throughout this project, Orange invited its customers to meet and support the young Romanian mathematics Olympians financially.

Each of the 40 students was granted EUR 2,500 as the campaign raised EUR 100,000. Involving its employees in volunteering is another action for Orange. Last year, over 700 of its employees together with bloggers and local celebrities gave 600 children from five Romanian cities a virtual tour of the Grigore Antipa National Museum of Natural History in Bucharest. “By fostering a culture of volunteering within our colleagues, we intend to get them to become promoters of the projects they believe in and initiators of change in the communities they are part of,” say representatives of Orange. Last but not least, SuperCoders is an Orange global initiative that is implemented simultaneously in four countries in Europe (Romania, Poland, France and Spain) and another five countries in Africa. Throughout this program, children between 10 and 13 participate in programming workshops created especially for their level of understanding.

CSR 31 logue. We have managed to create a working group that will contribute to the solving of medium- and long-term problems. Our plan is to have a solution from our stakeholders by the end of the year in order to make a change in the system,” adds Nicolici.

Through Fabricat in Tara lui Andrei, OMV Petrom and NESsT Foundation provide education and financial support for people creating social businesses that generate economic and social value in disadvantaged communities. The competition is on its second run and last year, over 180 participants signed up for it, of which 35 finalists passed in September last year to another stage: that of transposing their ideas into successful social businesses.

They started to plan their social businesses with the experts of Fabricat in Tara lui Andrei. For seven months they test their ideas, conduct market research and build their business plans, guided by trainers. This May the finalists will present their business plans before the Fabricat in Tara lui Andrei jury. Ten of them will get grants of EUR 32,000 and an additional year of consultancy for the development of each social business in the communities where OMV Petrom operates.

Giving social enterprises a chance Diana Certan is the executive director – communication and fundraising at Organizatia Umanitara Concordia, Alumni al Pilkington Ratiu Business School (Executive MBA), Aspen Institute Romania Alumni (2011), TED Ed Speaker (Romania) and juror for Social Innovation Award.

Porsche Romania

For the first time in the company’s history, Porsche Romania started a OMV Petrom streamlined CSR program in 2015. This Education is OMV Petrom’s CSR focus was intended to have a more focused, as the company fosters the personal measurable impact on the community, and professional qualities that lead rather than offer scattered support to people to success. “Education is im- various causes. Named “Mobilizing portant both for the development of excellence”, the program builds on the Romania in general and for the com- company values – innovation, design munities we operate in that have in and excellence in education – which general a high level of unemployment are transferred into supporting specific and a low level of education. We focus initiatives in the Bucharest community. our efforts on those areas that gener- More specifically, three grant-making ate benefits for our business, respec- funds were started last year, with the tively professional and support of the Bucharest Community entrepreneurial education,” says Mona Foundation, worth more than EUR Nicolici, head of sustainability at OMV 100,000. Two funds offered financing Petrom. Romania Meseriasa (Voca- to NGOs, institutions and initiative tional Romania) and Fabricat in Tara groups, for projects in urban design lui Andrei (Made in Andrei’s Country) and eco-innovation areas. Six such are the company’s main projects. Last projects were financed last year. In adyear OMV Petrom launched the Roma- dition, the firm is now supporting the nia Meseriasa campaign which aims to development of a meeting space for find solutions to improve the educa- grassroots initiatives, a set of seven tional professional system. “Only public self-repairing bicycle stations doing this can we have valuable arti- and the green roof of a self-sustainable sans and contribute to diminishing the building. Additionally, the third fund gap between demand and supply,” offered excellence scholarships to 14 says Nicolici. Last year the company children and young people with talent implemented two projects for future in sports and the arts. The projects fiartisans: Scoala Petrolistilor (the nanced by Porsche Romania will be School of Petroleum Specialists) and evaluated after completion and the reTabara Meseriasilor (the Vocational sults will become available in June.

Camp). “The projects dedicated to professional education had over 300 Vodafone Romania beneficiaries last year – children and Since it was founded over 18 years ago, teachers, and they will continue this the Vodafone Romania Foundation year too,” adds Nicolici. She says that has invested over EUR 23 million in the impact of the company’s projects communities in Romania. Along with in this area is seen in their results in 660 NGOs, it has developed 963 projthe futures of those involved. “It is ects for the benefit of about 1.4 million about the intention of reforming the Romanians in critical situations and system, restructuring the way it is or- built 186 social houses. In addition, ganized and getting involved in a dia- more than 6,600 volunteers have been

Working for 15 years in the NGO sector at all its levels (as a volunteer, operations, executive and on the board), I came to understand the reality quite well. In general, the biggest problem of each organization I worked for starts with one question: “How can we make our NGO financially sustainable?” Other questions about the effectiveness of programs or a specific intervention or impact measurement are also important, but discussions about what activities can generate income for an NGO or what social businesses it can develop in order to support social and integration programs have been the most challenging.

The concept of social business was introduced by Muhammad Yunus (Nobel Laureate) and it is defined as a business created and developed in order to address a social problem, a profitable company whose profit is reinvested in its development with the aim of increasing its social impact. Since 2011, Organizatia Umanitara Concordia identified the low level of employment of young vulnerable individuals despite having a specific qualification for a job. Its long-term solution was the launching of Concordia Bakery for young bakers where they are employed for a limited period while they attain professional experience and improve their

skills. Later, they manage to get a job easier in other bakeries, turning from assisted individuals into contributors and becoming responsible and independent.

Five reasons why a social business should be a strategic direction for an NGO: • An acute social problem that needs continuous interventions and constant financial resources (EU funds, fundraising) can be solved by a social business.

• You can create a sustained financial mechanism that provides a response to a social problem that could be scaled and duplicated.

• Your beneficiaries will regain their human dignity as they contribute to their own well-being and will become proud of their achievements. You will create the context for them to be independent.

• Vulnerable beneficiaries will work with your team so you will be able to better understand their needs. That will guarantee a higher level of quality for future interventions.

• You will benefit from much greater financial flexibility to solve social problems, so you will not face imposed limitations or excessive bureaucracy.

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32 CSR

Crowdfunding seen through the eyes of an NGO Mihaela Mohorea is the executive director at the Swedish Organization for Individual Relief

Irina Ionescu, Coca-Cola HBC Romania

involved in its projects so far.

Throughout its projects, the foundation supports the sick and individuals with special needs, supports the education of children and youngsters, encourages volunteering and social involvement and helps elderly individuals and disadvantaged families.

In recent years, the foundation has focused on projects that harness the innovation of mobile technology in order to positively change the life of ill or disadvantaged people. Mobile for Good was launched back in 2012 by the Vodafone Romania Foundation with the support of Vodafone Group Foundation with the aim of improving the quality of life of people in need and mobilize change in nationwide communities. “In 2015 the number of Mobile for Good projects reached 19 and there were over 30,000 beneficiaries. The cumulated value of the project is EUR 2.9 million,” says Angela Galeta, director of Vodafone Romania Foundation. The strategic program for investments in rural areas was launched last year and targets fields like education, health and social services for disadvantaged people from all 41 counties and Bucharest. In 2015, this program had a total budget of over EUR 650,000, and included 55 projects that impacted 25,000 beneficiaries. Since 2008, together with React Association, the foundation has developed the O sansa pentru viata (A Chance for Life) project that includes media and awareness campaigns about the importance of donating blood, mobile campaigns for donating blood, and the renovation of Romanian transfusion units. The total value of investment since its launch is EUR

640,000. In addition, in 2015, through this project over 15,000 sqm was renovated in transfusion centers in Bucharest, Buzau, Cluj, Giurgiu, Iasi, Slatina, Suceava and Targu Jiu. The project also involved the acquisition of different equipment for these units.

Another focus area is the building of social houses. In 2015 the foundation built four houses in Cristian, Brasov county with the help of 400 volunteers. These were added to the other eight houses built in previous years in partnership with the Diaconia Ajutor International Association. The total number of houses built so far has reached 186 units.

Elsewhere, 87 Vodafone employees took part in the Vodafone Big Marathon in order to raise money for two charitable projects that are part of Mobile for Good. Each of them was aiming to raise EUR 1,500.

Health, education, volunteering and social services are the main Vodafone Romania Foundation areas of intervention. As for health, in 2015 more than half of the foundation’s budget, namely EUR 2.4 million, was invested in health programs. “With each project we intend to contribute to the recovery of the Romanian medical system, to facilitate the access of individuals from any region of the country and any social category to quality medical services, to create better working conditions for doctors and all those that take care of ill children and adults,” says Galeta. As for education, the programs developed by the foundation allow children from disadvantaged Romanian communities, especially from rural areas, to participate in educational, cultural and

The Swedish Organization for Individual Relief made first contact with the concept of crowdfunding in 2012 when the US Embassy organized a workshop that presented the positive sides of this working tool. We needed more than one year to recruit the right specialist and offer her specific training in order to build a strategy and an “action” plan. Last year we were involved in two actions through which we mobilized 377 individuals and 22 companies in social investments that have proven to be successful, raising about EUR 35,000 for our organization. Better quality of life for people with severe disabilities and support for low-income elderly people were among the causes both individuals and companies supported. When an NGO intends to get involved in crowdfunding, fundraising or social teambuilding activities, it needs to

consider its reputation and visibility.

Often we collaborate with companies that cooperate with international NGOs that have a good reputation within both civil society and the corporate environment. In addition, a small and local organization that has fewer beneficiaries can impress companies through transparency, reliability, different causes and whether they can get involved directly. The more the trust in the services that we offer increases, the more willing they are to participate.

Crowdfunding forces any NGO to shake off its anonymity, create a clear image on the market, set the goals for which it intends to get financing and estimate very well its results. Crowdfunding pushes an organization toward competitiveness, professionalism and mutual empathy (NGO-company/individuals and vice-versa).

recreational activities within summer camps or day centers. For children with high intellectual potential, the foundation offers scholarships.

Elsewhere, last year 1,500 volunteers worked in Vodafone Foundation projects, with the majority of them being employees of Vodafone Romania. The foundation also offers the possibility of working in an NGO throughout the “Volutar de profesie” (Volunteer as your job) program. Each year the foundation selects nine volunteers that get their salaries for nine months, allowing them to support the activity of an NGO of their choice. Last but not least, the foundation offers so-

cial services for elderly people and children from maternal centers, and supports the special education and intellectual advancement of children with severe neural-motional disabilities. “We also helped children with autism to make progress by teaching social skills and independent life skills.”

Note: The companies and CSR projects/programs included in this article represent only a selection. The article is not a comprehensive report on the Romanian CSR market. anda.sebesi@business-review.ro

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

PUBLISHING 33

New chapter: local book industry needs better distribution system, says Litera Publishing House director Romanians spend around EUR 5 per year on books on average. With the industry turnover stagnating at around EUR 50-60 million, local readers could spend much more, but this won’t happen unless a bigger and better distribution system emerges to meet the demand, Marin Vidrascu, Litera Publishing House executive director, told Business Review. ian market isn’t growing and it won’t either, because the device to read on is not so cheap, and when it comes to illustrated books no solution to read them has been found, even at world level,” added Vidrascu.

Partnerships such as Litera’s current one with Uber, some of whose cars are equipped with books for customers to leaf through, are a source of exposure to literature, where “you see the book, you don’t buy it on the spot, but you keep it in mind and later there’s a website you access and order it from and it gets delivered in 24 hours,” said the director.

However, this progress is not replicated much elsewhere. “We must draw the unhappy conclusion that things can’t change in a few years,” he added, pointing out that the focus should be on igniting the urge to read from a young age.

“We need a serious infusion of books between four and eight. If this period is missed, it’s more difficult afterwards,” he warned.

Marin and Dan Vidrascu, the executive director and general director of Litera Publishing House

Adult coloring books reach Romania ∫ ANDREEA TINT While a German reads on average 16 books per year, a Romanian will only read one or two – but this is not the full story. “The big problem in Romania is the distribution system, not so much the fact that the average person reads or doesn’t read,” said Vidrascu. With around 250-300 bookstores nationwide for its almost 20 million inhabitants, “[Romania’s] distribution system is a very weak one,” added Vidrascu. “With such a weak distribution network — I mean spots where books are sold — the industry can’t grow. If, for example, the number of bookstores were to double or triple tomorrow, this would happen to the turnover, it would go up.”

Nevertheless, such a “bigger and better distribution system” is already happening, with “the online side [having] come in and created a really good niche,” he noted. “Those who didn’t use to have access to a physical bookstore can now order online in any corner of the country. Automatically, the book market has gone up, but let’s not imag-

Since the beginning of the year, Joine that this necessarily means that stores, be they in hypermarkets, on hanna Basford’s coloring books have many new readers were brought in. It’s Magheru Boulevard, or online,” said the topped the bestseller charts, the Litera just that the buying method is much director. “If we factor in the so-called director told BR. “After that are obvikiosk projects, the book market in Ro- ously the Disney books, the Zootropolis simpler.”

In fact, Litera expects that 5-10 per- mania is clearly decreasing because, ones. That has the movie as well, a cent of its projected 20 percent growth when the kiosk projects were in place, movie that was very well received in in turnover for 2016 will result from its the value of the market was around Romania, and that works well for us too.” online sales. “The departments will re- EUR 100 million, without counting textRomanian readers’ tastes are commain mostly the same, with 50 percent books,” he added, pointing out that parable to their international counterof the publishing house’s portfolio ded- with the kiosk projects having now de- parts. “It doesn’t differ very much from icated to children’s books,” said creased, the turnover has stabilized at countries such as Germany, Italy, or Vidrascu. Its major line is Disney books, around EUR 50-60 million. even the United States,” said the direcNot even the recent changes in VAT tor. “Personal development books have for which Litera is the only publisher in Romania to have a license, noted the di- rates, which led to a decrease in the soared both worldwide and in Romania: rector. “The increases we will be mak- price of books, “will generate a fast in- how to improve yourself in every field, ing this year in terms of the editorial crease in the Romanian book industry, from knitting to soccer, we have them portfolio will clearly be in this segment; because in the end it’s not a very large all. There’s a clear growth in that direcwe’ll develop the children’s brands that percentage and it needs some time be- tion.” we have, Disney and National Geo- fore its full effect will be felt,” said Women are the main buyers of graphic among them. For adults, fiction Vidrascu. “The state needs to do more books, locally, according to Vidrascu. and non-fiction, encyclopedias, diction- and, slowly, we see it growing closer “They always buy more than men, not aries, we’ll bring new things in each seg- somehow to the cultural market, which just books, and automatically they also is a very good thing.” ment,” he added. deal with children’s books,” he said.

It is not only the market for print Men are mostly interested in buying In 2015, the publishing house saw growth of around 10 percent from the books that is in a state of stagnation, but books that they later give to women, esprevious year, despite the book market also the one for e-books. Not even pecially during the Valentine’s, March 1 in Romania stagnating at around EUR young people, who might read a lot on and March 8 period.

50-60 million. The number is “exactly the go, necessarily focus on e-books. the books that are being sold in book- “When it comes to e-books, the Roman- andreea.tint@business-review.ro

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

34 tECHNOlOgY

laser project moves ahead despite infrastructure delay While expected to produce groundbreaking research across a wide range of fields, the Extreme Light Infrastructure-Nuclear Physics (ELI-NP) project based in Magurele has not yet benefitted from the Romanian authorities’ support in developing the infrastructure around it. Prof. Dr. Nicolae-Victor Zamfir, director of ELI-NP, tells BR about the current stage of implementation of the around EUR 300 million cross-border project that will host the most powerful lasers in the world. ∫ Otilia Haraga in February, the EC approved the second stage of the Eli-NP implementation.

What does it include?

The project started in January 2013 and will be completed in December 2018. It was conceived as a “bridge” project, which was going to be financed from structural funds in two cycles. As of 2016, the project must be financed from EU funds within the new financing cycle; therefore it was necessary to have EC approval for stage two of the implementation. In this stage, the construction of large-span equipment will be completed – the high-power laser system and the high-intensity gamma system. The experimental arrangements will be carried out and started.

What is the stage of the infrastructure works that should connect the facility to key communication points?

Although there have been a whole series of discussions, no project for the improvement of the infrastructure has been started – except some works carried out in Magurele by the town’s city hall. The access both in Bucharest and on the ring road is poor. The lack of involvement of decision makers in solving the infrastructure issue could damage the most important research project in Romania, but also the development of the area where we are active.

The existence and activity of the ELI-NP project creates the premises for an international Scientific Park close to Bucharest. However, if basic elements are missing from this equation, such as roads without potholes or that are not flanked by piles of garbage, there is a high probability this will not happen.

We hope that local and central authorities will be quick to react and will make fixing this situation a priority.

EuroGamma consortium, which includes research institutes and high-tech companies from eight European countries.

How many people are working on the project and what type of specialists do you need?

At the moment, over 120 specialists are working on the implementation of the project from the management, administrative and research perspective. The more than 100 researchers were hired following an extensive selection process. The various positions available, from senior researchers to research assistants, from technicians to engineers, are advertised all over the world and we have received hundreds of applications.

After looking at the applications and conducting the interviews, we selected Romanian specialists returning from countries where they had worked in last-generation labs or research facilities, but also foreign experts from France, Italy, Great Britain, Germany, Spain, What investments have been made in the Bulgaria, Turkey, China, India, the United States, Canada and Japan. The Eli-NP so far?

The first stage included the completion selection is ongoing and it is an exof the largest part of the civil construc- tremely rigorous process using top pertion, the components of the first 10PW formance criteria. At the same time, we laser in the world and the first part of are constantly focused on the new genthe linear electron accelerator, which is erations of physicists from Romanian part of the gamma system. These com- universities, and not only. Recently, we ponents were made by the Thales group, launched an internship program in which is supplying the laser, and the which students in their final year, or

doing their master’s, have the opportunity to undertake a research internship at the ELI-NP. We thus offer students the chance to work with a first-rank multinational team in the field of lasers, as well as to be hired after graduation.

What are the next medium-term steps to complete the project?

The next steps are: the completion of the buildings that will house the equipment and testing all the necessary parameters so that this equipment will work; the installation of the above mentioned systems; implementing all the experimental arrangements; and the completion of the ELI-NP team.

What needs to be emphasized is that scientific preparation for future experiments is a major and defining component in the activity of ELI-NP scientists. To this end, they start collaborations with labs and research institutes and universities all over the world, where they carry out experiments on systems that come close to the standards that will be implemented at ELI. One very important step in preparing for the moment when the project becomes operational was the draft of the Technical Design Report, the projects for the experimental arrangements, which was approved in 2015 by the international scientific community, and later by the International Scientific Advisory Board.

When will the laser become operational and what research will take place after that?

The laser system will become operational in 2018. The planned experiments target the study of the interaction between laser and matter, the nuclear reactions induced by photons and a whole series of applied research. Since this is a research infrastructure at unique parameters that is using new and high-performance tools, it is very likely that we will witness the discovery of totally new phenomena, some of them only suspected of existing in the universe. Of course, there will be several main directions of exploration, such as the interaction between intense laser beams and matter, the study of photonuclear reactions (the nuclear reactions produced by photons via a gamma beam), the possibility to create matter out of a void with the help of intense radiation fields and so on.

What collaborations do you have with other research institutes or companies?

At the moment, we have collaborations with 14 research institutes and universities in Romania and 35 abroad. In practice we collaborate closely with all those who have expertise and interest in implementing the project and then using the new ELI-NP international research center. The collaboration with US institutions on nuclear topics, I am sure, will be developed at the same time as the ELI-NP. In fact, there are numerous and varied fields where the results of our research can be used. In medicine, it will be possible to produce new radio isotopes for diagnosing and treating various illnesses, especially cancer, which are more accessible and at much lower costs. There will be applications in the field of nuclear security regarding the management of sensitive nuclear materials and subjecting the materials to an intense radiation field for space missions. Another important mission for scientists will be to use the laser in the construction of particle accelerators, but also other fields with a high impact on the development of important technologies. We are also very focused on developing relations with the economic environment and high-tech industries. otilia.haraga@business-review.ro

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

it 35

top 10 public it contracts exceed EUr 6 mln in 2016 The total value of the ten biggest software and hardware contracts awarded by the Romanian public authorities so far this year exceeds RON 26.4 million (about EUR 6 million. Among the beneficiaries are a ministry, military unit, research institute, a few cities and counties and national companies.

∫ Otilia Haraga One of the stated priorities of the Romanian Ministry of Communications and Information Society in the Strategic Plan 2015-2016 is to optimize the public acquisition of IT systems and equipment at governmental level. This priority includes three steps.

The first step is the analysis of the acquisitions of IT systems and equip-

ment at the level of the central public administration made over the past five years, which was due to start in January and must be completed by June.

The second step is to identify redundancies and support the efficient use of IT resources at the level of the central public administration, which will begin in April and must be completed

by August.

Finally, the Ministry of Communications aims to identify solutions for

optimizing the activity of the Technical-Economic Committee for the Information Society, a step which is due to start in June 2016 and must be completed by September 2016.

According to the Ministry for Public Consultation and Civic Dialogue (MCPDC), quoted by Agerpres newswire, more than RON 250 million has been invested in recent years in 400 online platforms meant to improve document management and interactive decision-making processes in the central administration. More than 80 percent of these funds came from external non-reimbursable sources.

In spite of these investments, the MCPDC analysis found that none of these online platforms offer a userfriendly space for online debates and efficient communication with citizens; most mainly post information. The development of a user-friendly platform to stimulate public consultation is still a challenge.

In the category of IT equipment supply and IT services, the Ministry of External Affairs has offered the highest contract so far, worth just over RON

8 million. The contract consists of IT services for 12 months and was awarded on January 16. The winner was Bion Advanced Support Team, following negotiations without a participation announcement, according to data from the Electronic System fro Public Acquisitions (SEAP).

The Horia Hulubei National Institute for Research and Development also awarded a contract for maintenance and support services for cross applications on February 8. The winner of the contract, which exceeded RON 3.6 million, was Atlas Corporation, which won following negotiations without a participation announcement.

The military unit 0418 based in Bucharest also offered a contract for VHF 8.33 Khz radio station compatible VoIP. The winner of the RON 3.3 million deal was Asseco, which was selected on February 11. BR has listed below the top ten IT contracts with the highest value awarded so far by the Romanian authorities. otilia.haraga@business-review.ro

top 10 biggest software and hardware contracts awarded by the romanian public authorities so far this year Winner

Contracting authority

type of procedure

Contract date

Contract title

Value in rON

Bion Advanced Support Team

Ministry of External Affairs

16-Jan-2016

IT services for 12 months

8,078,760

Atlas Corporation

Horia Hulubei National Institute for Research and Development 0418 Bucharest Military Unit

Negotiation without participation announcement Negotiation without participation announcement

8-Feb-2016

Support and maintenance services cros-applications

3,555,945

11-Feb-2016

Radio VHF stations compatibile VoiP and 8.33 Khz Integrated solution for IT system security for obtaining ISO 27001 certification Upgrade of the communication and VoIP collaboration system ERP IT system with management analysis tools for Hidroelectrica SA Supply contract

3,313,909

IT products and services for SCADA gas system of Distrigaz Sud Retele S.R.L. Agreement for the supply of IT equipment and products, software packages and printing equipment Lot 1 desktop computers 484 items

1,461,428

Asseco See

Negotiation without participation announcement Open tender

29-Feb-2016

Andan Impex

Suceava County Agency for Employment

Alfa Birotica

Arad City Hall

Open tender

14-Mar-2016

As Computer Craiova

Romanian National Highway and Road Company

Open tender

26-Feb-2016

Atlas Distribution 2000

Open tender

8-Feb-2016

B2B Digital

National Institute of Hydrology and Water Management APA Brasov Company

Negotiation without participation announcement

1-Feb-2016

Birotic

Brasov County

Open tender

8-Jan-2016

Ax Perpetuum Impex

Satu Mare City

Open tender

1-Feb-2016

Source: SEAP

2,559,369

1,734,200

1,703,942

1,553,155

1,282,222

1,200,000

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

36 it

lifebox focuses on product development and attracting more customers Lifebox, an application that helps users gather photos from friends on any device, won the prize for Best Product at Innovation Labs and went on to obtain two financing rounds that helped the business take off. Radu Oprea, CEO & co-founder of the Romanian startup, tells BR what the next steps in product development are. holiday pictures to his girlfriend Nadia!), we realized that something was not going well when it came to sending photos after a meeting with friends. We don’t have time, or we are not at the computer, or the phones don’t speak the same language. We talked to potential users and realized this problem was much greater than we initially thought, and we wanted to solve it. We are four friends who know each other and have worked together on countless projects before.

∫ Otilia Haraga How did you get the idea of starting this business?

It is said that problems are best solved when you have lived through them yourself. After many occasions when, as photography buffs, we failed to send photos to our friends (the most interesting time was when Radu almost slept on the doormat because he did not send

How did you obtain two financing rounds to develop the business?

The first financing round came through the Ignite acceleration program from the UK, while the second came shortly after we finished the program in May 2015. In the case of the second financing round, the most important thing is that we went through an accelerator in which we interacted constantly with the investors. The moment we decided to raise financing, the investors we best

interacted with joined us (an investment fund and four private investors). It was a process in which we evaluated each other. It is important to choose the right investors because they have lots of experience and they can help in more ways than just from the financial viewpoint. In the case of seed investments, the most important thing is the team behind the startup. A good team will always make things work, even if the financial idea is not spectacular. In a startup, the status quo often changes and the team must be prepared for this.

How many users does lifebox have at the moment?

We have a little over 40,000 users and most of them are from Asian countries such as Taiwan. The next countries with the most users are the United States and United Kingdom. For the end-user, Lifebox is free of charge. When it comes to bill payment, we capitalize via B2B partnerships: we offer Lifebox as infrastructure for companies managing

many images or wishing to implement new photo sharing or collection features from their users. For instance, an HR department can easily gather images after a teambuilding to better interact with employees, while the organizer of a music festival can implement Lifebox directly into its application without giving resources to building something of its own. We wish to develop the product to work faster and more fluidly on any device, from mobile phones to tablets, computers and TV sets. On the B2B side, we wish to grow the portfolio of customers. are you considering a takeover by a larger international company?

This is not something that we are actively pursuing, but if there is an opportunity that would help us develop a better product and it opens new doors to partners who could help us build a better platform, we will consider it. otilia.haraga@business-review.ro

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

it 37

Wyliodrin eyes US expansion After winning the Best Business prize at the 2013 Innovation Labs and partnering with Intel, Romanian startup Wyliodrin is planning to launch its product in California. alexandru radovici, CEO & founder, says that US expansion will bring international exposure. reached its current state based on the revenues we obtained from contracts with various companies and users paying for more advanced accounts.

You signed a contract with intel – what was that all about?

The partnership with Intel materialized two years ago when Wyliodrin was still in an incipient stage. Intel was basically our first customer, having contacted us for the programming and control of the Intel Galileo and Intel Edison plates via the Wyliodrin platform. Moreover, Wyliodrin users using Intel hardware have benefitted free of charge from advanced accounts for a year.

∫ Otilia Haraga How did you start Wyliodrin?

We got the idea from a summer school we’ve been organizing for nine years, called IP Workshop. For two weeks, pupils and students take part in IT classes, working on various projects using last generation technologies. One of the classes we organized was about the Internet of Things. In this class, pupils tried to change ordinary things by connecting them to the internet, such as a lamp that gives a different light depending on your best friend’s mood. Before long, we realized there was a lack of software development tools in this field, and starting from our needs, we built the Wyliodrin platform, which lets the user program and control the hardware plates that are necessary for building intelligent devices.

Why did you decide to expand to California?

At the moment, the business is located in Romania, but we are considering the possibility of expanding to the United States. We are thinking of this because following participation in numerous events in the US, especially California, we noticed there are more opportunities for us there and we stand a higher chance of making Wyliodrin known worldwide.

What are your targets for the next year?

We hope that over the next year we will have a high number of customers or even attract an investment that will allow us to expand the business to the US and improve the product. Also, we hope to form partnerships with educational institutions and universities that can use Wyliodrin in class. The final target is to develop a platform that will become the de facto standard in building Internet of Things devices. We are a team of five people.

We will invest in expanding the team and improving our platform with new How did you obtain funds to develop features. One component that we wish to develop greatly over the next the business?

The business developed without any year is the educational one. We wish type of external financing. The first to place at the disposal of students version of the product was made dur- and teachers an entire set of classes, ing the Raspberry Hack competition, complemented with an online comwhere we won best software prize, munity where users interact and exwhich also brought us a sum of change ideas on the Internet of money. With this money, we devel- Things. oped the platform and got our first customer. After that, the business otilia.haraga@business-review.ro

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

38 SOCial MEDia

going from ‘likes’ to engagement requires a strategy More than 74 percent of Romanian companies used social media for their business in 2015 and are planning to do the same in the future, a considerable increase from 58 percent in 2014. BR looked at an EY Romania study to see how social media measures up in Romania.

Elena Badea, EY Romania

∫ rOMaNita OPrEa Of all the platforms, Facebook proves to be the most important one (92 percent, slightly lower than 93 percent in 2014). The biggest growth was posted

by Instagram, rising from 7 percent in 2014 to 20 percent in 2015. The data was recorded and analyzed by EY Romania with the questionnaire applied from 3-20 November 2015. Some 270 respondents from local businesses participated, with the companies having from 50 -1,000 employees.

Of all the respondents, 58 percent come from firms with local capital, 27 percent from those with international capital and the remaining 15 percent from a mix of capital forces. This is the third time in a row that EY has carried out the survey.

Another interesting aspect pre-

sented in the survey is the time that firms spend weekly in order to promote their business on social media.

More than half (58 percent, 4 percentage points more than in 2014) spend 1 to 5 hours, 20 percent allocate 6 to 10 hours, and 9 percent devote 11 to 20 hours a week. Only a small percentage,4 percent, spend more than 40 hours a week updating their social media channels, a 1 percentage point increase from 2014.

When it comes to the frequency of posts, in 2015, 36 percent of respondents declared that they update daily, compared to 41 percent in 2014, while 28 percent post once every 2 or 3 days, (a 5 percentage point increase from 2014.)

According to Elena Badea, associate director branding, marketing & communication at EY Romania, the study has three key findings. The

most important one is that most companies (91 percent) say that marketing on social networks gives them with a competitive advantage over those that do not use social media. Other top benefits include marketing, sales and recruitment. Networking sees a significant growth (48 percent in 2015, +13 percentage points compared to 2014) and competitive analysis (21 percent in 2015, up 6 percentage points versus 2014).

The second finding is that the “star” platform in Romania remains Facebook. “The top three types of content posted on social media are: information about the company’s products and services (77 percent), information about the company (66 percent), and information on campaigns, promotions, direct and indirect sales (52 percent).

Social media is also increasingly used for recruitment (37

percent in 2015 compared to 35 percent in 2014),” added Badea.

the role of strategy This raises a big question: does strategy play an important part in their planning and posting? According to the EY specialists, many times companies don’t pay that much attention to social media when creating a marketing plan. Sometimes companies either ignore social media or create a Facebook page “because everyone else is there,” without having a plan or direction.

“Usually, these companies generalize and say ‘social media doesn’t work’ and they don’t have a strategy, which means they don’t have any goals or objectives. If you don’t know what you want to achieve, then how do you know if you have succeeded or not?

When you have clear goals and know

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

your target audience, you know what to do, how to communicate, what KPIs to measure. Only after knowing this can you analyze what worked and what didn’t,” said Anca Muraru, founder of The smmile (the social media mile).

Some 44 percent of the survey respondents said they had a strategy at the marketing department level (down from 46 percent in 2014), while 32 percent admitted to not having a social media strategy at all (compared to 27 percent in 2014). Only 21 percent said they had a strategy involving the whole company, and only 2 percent saw a strategy at the commercial team level (a decrease of 5 percentage points from 2014).

“A strategy can take many forms, as long as it contains the important aspects. From the desire to have a system that works for our clients, after searching different methods, I developed the CGOSTMA™ structure which covers all the important elements when creating a social media strategy: current situation, goals, objectives, strategy, tactics, measure, adapt. Let’s eliminate the preconception that it has to be a huge document that usually nobody has the time to read, but one that guides the direction of implementation and helps the company,” said Muraru.

Moreover, “a social media strategy should be aligned with business and marketing objectives. It should not be

SOCial MEDia 39 seen as a side project, but one that helps the company achieve their goals and helps the business grow. I think strategy is not only ‘good to have’ but can make the difference between earning and wasting money on social media, between success and failure,” concluded The smmile founder.

“Social networks are ‘social’ networks, not ‘sales’ networks. We have to listen to people, talk to them and only after we have developed a relationship, sell them something relevant to their needs. Many companies forget that and treat Facebook as a promotional posts avalanche. One rule that works well is that sales messages should only be 10 percent of the content, while the rest has to bring value (the 70/20/10 model). What we do on social media is the reflection of our brand in customers’ perception. If the target audience is spending a lot of time online, that means most of them will see a brand’s message in one way or another. Because bad news travels fast, a mistake could become viral and the brand could suffer enormously,” commented Muraru.

“When it comes to agencies, I believe they should explain why a strategy is important, ask about the company’s marketing goals and work together in the right direction. At the end of the day, agencies shouldn’t do social media just for the next invoice, but to really provide value and help their clients grow,” added the social

media specialist.

the future is omni-channel and s-commerce According to Muraru, there is no doubt that companies are more open to being present on social media. Still, from her experience, they ask for a consultant’s help only after they see that something is not working. “Even though they want a social media presence, many times companies start by appointing an employee in charge of their accounts, usually as a side task.

This is when many of the mistakes are made, because no one knows where to start. It’s a hard step and, at the same time, it’s one of the most important. Often, people start with social media tactics, while they should actually start with understanding the business, the marketing strategy, and social media goals and only then apply the tactics,” said Muraru. An overall marketing strategy, derived from the business strategy, would set the guidelines for what should and should not be posted, increasing chances of a positive outcome, especially with competition increasing.

“It is obvious that social media is here to stay for all types of companies, although the spectrum of social media players is quite wide – from zero to hero. In this context, 2017 will consolidate the following trends: (1) content marketing, with a focus on video marketing, (2) mobile market-

Social media platform usage, percentages Facebook LinkedIn YouTube Twitter Instagram

2015

2014

92 75 37 35 20

93 61 29 27 7

ing, and (3) omni-channel integration,” said Badea.

According to the EY Romania director, the most interesting aspects to be brought to light in social media marketing in the following year include companies beginning to use social media platforms internally to allow and facilitate employees to connect at the workplace.

“The rise of mobile advertising and mobile marketing, in general, will teach companies how to use social messaging for increased efficiency in their social media mix and ROI. Ecommerce will start to take a turn to s-commerce (social commerce) and this will enable many companies to learn a different philosophy about online customer experience and conversion, making the final link between social media and revenue generation,” concluded Badea. romanita.oprea@business-review.ro

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

40 MEDia

Storytelling – blurring the lines between Pr, advertising and journalism People like stories and consumers feel the need to be approached in an emotional and human manner, even by the brands we buy. Storytelling has always been present in our lives, through different means and forms and today, it’s blending into the communications world. But not everyone is happy about the merging of these various disciplines.

Cristian Lupsa, Decat o Revista

∫ rOMaNita OPrEa Why is storytelling creating such a buzz at the moment? Why not a few years ago? Or has it always been around and we simply called it something different? According to Oana Cristea, fun internal communication and public affairs manager at Pastel, people need to trust a brand or a company; they’re not willing to invest just in a product by itself anymore. They want to live an experience, see what others think about it, visualize the benefits and feel the impact their investment will have on their lives. Stories spark people’s interest by bringing in a human element and also bring them together by creating the power of communities.

“When you involve storytelling in advertising and PR, you’re sure your focus is on your audience, on your target, because you take time to think about what is impactful for them, what motivates them and what they need. You’re not limited to a product anymore, rather you explore experiences. You stop the one-sided communications and you start involving your audience. Storytelling is a participatory method and it’s mandatory to

Simina Mistreanu, freelance journalist

use it if we want to adapt to the needs of the industry we’re working in,” added Cristea.

In the agency she represents, Pastel, storytelling is part of the everyday work, since the staff decided to practice this art. They thought it was good for them as a team to first of all listen to others’ stories, to analyze how to put together a story and then how to share it with others. “We chose the “Stai sa-ti povestesc” (Let me tell you) project because every interaction with them was natural and filled with stories of their own. Also, we like it when our partners are involved in different projects and their purpose is to contribute to the community and care about people, focusing on the new generation, about how creativity is perceived and lobbying for people-oriented organizations,” said Cristea.

Storytelling is spreading to many agencies around Romania and also beginning to capture clients’ attention.

This spring, GMP PR launched a brand journalism division, which creates editorial content for the agency’s clients and combines the communication brand strategy with journalistic storytelling. The brand journalism department is run by Alexandra Olivotto, who has more than ten years of expe-

rience in press and two in marketing and PR. “In brand journalism, we think about the brand communication as an editorial meeting: what stories do we have, what angles should we approach, what are the key words. All have to shape a dynamic story for the brand, interesting for the consumer, that can be translated and adapted depending on the communication channel,” said Olivotto.

“The presentation of a brand story is more complex now than it was ten years ago. The time for advertorial and PR-istic texts has ended, brands either deliver valuable content or nobody will read it. The creation of the department came as a natural step in this context and hiring a person with experience in both fields allows us to cover exactly the bridge between journalism and marketing,” said Ioana Manoiu, managing partner at GMP PR. Although it is the only Romanian PR agency with a dedicated department, GMP PR is not the only agency in the country that puts a lot of emphasis on storytelling and its importance on the communications market.

PR agencies offering this type of service include McCann PR and Golin. In the Media Recap 2016, a piece of

analysis by Golin and blogger Alex Ciuca about the major trends in social media, along with the most important campaigns and events in the field in 2015, it was reported that last year was marked by a strong bond between visual and emotional storytelling and brands have passed from selective to active hearing, as more and more users have a permanent mobile connection.

These distinct groups were evaluated based on consumption, engagement, brand affinity, and relative influence in each local market, including: inner circle (10-20 most influential people for your brand who get your whole story first), middle circle (up to 100 influencers based on specific interests), and community members (the broader audience we engage with through the most relevant social networking sites and microblogging platforms).

“Marrying the right channel to the right audience can propel your community into the hundreds of thousands of millions,” found the report.

“I think storytelling has always been part of good advertising and PR. Powerful ads have always told a story because storytelling helps to get at the human heart, and people might buy

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

Ioana Manoiu, GMP PR

MEDia 41

Oana Cristea, Pastel

Alexandra Olivotto, GMP PR

your products if you've touched their the interests of the people you write from the internal organization. “We hearts. That's what made Donald about, the government, or the owners have internal events for the team with Draper, of Mad Men, a genius, and it's of your publication. If you do any of challenges that make them get over the same for advertising and PR peo- that, you lose your credibility with the timidity or reticence and practice imple in real life. ‘What you call love was public. Therefore, according to Mistre- provisation, public speaking or creinvented by guys like me to sell ny- anu, "brand journalism" is a contradic- ativity. They’re routine exercises that lons,’ Draper famously said in the TV tion in terms. You can't practice make every member of our team more show. Similarly, athletes' hard work journalism when your content is in- confident in using their personal exand perseverance is used by Nike to tended to serve your brand, she points periences and more bold in framing sell sportswear, and, closer to home, out. That is PR or advertising, which is stories for the brands. The power of friendship was used by the Alexan- what you're supposed to do in the first storytelling is also important in our indrion brand to sell booze,” com- place, but you can't call it journalism. ternal organization and we are conTaking a similar line, Cristian vinced that what we practice daily in mented Simina Mistreanu, a freelance journalist with extensive experience Lupsa, editor of Decat o Revista, a Ro- our team will for sure reflect on our manian magazine famous for its out- work. We listen to each other and in media & advertising topics.

Some argue that recent times have side of the box approach to the cherish every insight, emotion and been marked by a blending between Romanian editorial market, which has story a team member shares,” said the journalism, PR, advertising and digital, made its mark by creating powerful Pastel representative. Each member is all having in common the desire for stories, a unique design, special edito- encouraged to undertake specialized good, real content. Because, at the rial projects, but also a series of events training depending on their preferred end of the day, this is what consumers on The Power of Storytelling, consid- area of storytelling: in writing, speakare demanding more and more. ers that this relationship between PR ing, visual or digital storytelling.

From Lupsa’s point of view, the Therefore, native advertising and and journalism has always been branded content are rising. But others murky and complicated, which is not moment is just a simple combination recognize the problems in this ap- necessarily good for consumers. of things – people consume an enor“There needs to be a line, and I'm not mous amount of information, packproach.

“It's true that the lines between talking about a creative one, but one aged into all sorts of media, and the journalism and PR are starting to blur, of ethics and standards. Call it by any battle for their time has never been especially in Romania (as compared to name you wish, but content pushed fiercer. In this eco-system, to be seen, America and China, the other journal- by a company or an agency through you need to stand out. Stories have a ism markets I'm familiar with). It's the media is paid content, it's a form way of sticking out (and sticking to also terrible and a sign of the media's of promotion, and the consumer you) a little better, so it's only natural powerlessness and the public's lack of should be aware of that. It can be that many brands and agencies have media education,” said Mistreanu. She amazing, fun, sharable, but it needs to turned to these age-old tools. Also, also points out that storytelling is not be transparent as far as its origins go. “the public has matured and the tradijournalism and everybody should be Companies can now also talk directly tional forms of advertising-speak aware of this aspect. According to the to consumers – there we have a differ- aren't believable anymore. We want freelancer, journalism may involve ent issue, but it also goes back to hon- our companies to speak differently to us, to be closer to our experiences, storytelling, but it's much more than esty and transparency,” said Lupsa.

Elsewhere, the Pastel team mem- and this also demands a different way that. An essential trait of journalism is that it serves the truth and the public, bers were always encouraged and of communication,” added the DoR and no one else besides that. As a jour- trusted to have a human approach to editor. He believes that storytelling is nalist, you're never supposed to serve their clients and projects, starting a basic human instinct, as we are nar-

rative creatures, and we've told stories from the earliest cave paintings, to Snapchat. “There's nothing new in the principles and the intrinsic core of the story – it's just the form that has diversified. The problem is that what most agencies think is storytelling is just a softer approach to selling. Stories, at their core, require conflict, action, change, and that requires the kind of transparency and engagement with the real world that the majority of companies/agencies – especially in this part of the world – are not yet comfortable doing,” concluded Lupsa.

The Power of Storytelling series of events created by Decat o Revista started in 2011, bringing four high-profile journalists from the US, the standard for nonfiction reporting and writing, to Bucharest, to inspire and share best practices. As journalism struggles to find its bearings in the digital world, the event’s goal was to make people remember that bite-size information and speedy delivery won’t displace the well-reported, well-written, and well-produced narrative stories that explain, investigate, create emotion and build community.

Organizers say The Power of Storytelling is a conference built around the idea that we can learn to use stories to better our ways of communicating, but also change our worlds. It is intended to bring together superstar storytellers in all fields – from media, to arts, to business – to show the potential of stories to connect people, to heal wounds, to move to action, and to drive change. “We believe stories are for everyone. This event grows out of our deep commitment to in-depth and intimate narrative journalism, but it looks at the idea of storytelling from many different viewpoints. Over the years, our speakers have included multiple winners of Pulitzer Prizes, National Magazine Awards, Emmys, and other accolades. The participants it attracts are writers, producers, artists, techies, communicators, marketers, activists, entrepreneurs, and community leaders,” said the organizers. Last year was the fifth time the event has been held in Bucharest, with the conference also hosting its second edition in Cluj-Napoca. The market reacted very well to this type of event, giving the organizers the courage to carry on and do even small spin-offs, such as the series of seminars created by the DoR team especially for the Calea Victoriei Foundation. “We have sold out all five editions we have had so far, the most recent one two months in advance. I think the mix of people that we attract – both the speakers and the crowd – is a testament not only to the need to learn from accomplished professionals, but also to a growing community of writers, producers, communicators who can better – and more wisely – embed storytelling in the work that they do,” said the editor. romanita.oprea@business-review.ro

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

42 CULTURE

Companies splash the cash for culture

Photo: Adi Bulboaca/ Sibiu International Theatre Festival

For several years now, Romania has been a cultural hotspot for the performing arts, film, theater and music.

However, the local cultural industry is still badly under-financed, with its creative sectors dependent on funding from the Ministry of Culture, making private investment a great white hope. BR talked to the major companies that sponsor cultural products to find out why and how they integrate business into culture.

∫ OANA VASILIU The film industry, theater and classical music festivals – these are the cultural products that have put Romania on the international map in recent years, despite the gloomy economic climate.

The business world has been forthcoming with the necessary cash, and the new generation of artists and performers can take up the mantle from the creative Romanians who have blazed the trail. This is evident from a glance at the major local festivals, more specifically their sponsorship/partner section, as well as social media – both festivals’ official presence and brands’ channels.

The creative areas are getting attention from both government and private companies, taking into consideration the complex programs that every festival has and the impressive number of events, their national and international guests, and alternative events on the calendar. The numbers are increasing every year, transforming well-known festivals into something bigger and better. However, the budget of the Ministry of Culture for 2016 is around RON 773 million (EUR 171 million), meaning just 0.1 percent of the country’s GDP.

Though this may seem small, the amount has increased significantly from 2015, by almost 26 percent, but it is still insufficient to sponsor everything.

This is why the organizers seek to plug the cash gap with help from the private sector.

among other things, in empathy, respect, passion and professionalism – so we associate with events and entities that share our values, and beyond the impact they have in the community at the time being, are investing in future generations.” This year the bank will support Romanian Design Week, Sibiu Meet and greet the sponsors International Theatre Festival, Summer “The Romanian public is consuming Well, Diploma, The Power of Storymore and more culture and we try to telling, Creative Mornings series, as well meet clients’ needs and expectations as its own art events at the bank's headthrough many major cultural events. I quarters.

Carmaker Dacia has focused some of believe that supporting any cultural event of those traditionally sponsored, its social responsibility efforts on supmeaning the French Film Festival, Fes- porting culture, from film festivals to tival des Tres Courts, Festival de Cannes book fairs, and has been present at the a Bucarest, George Enescu Festival and biggest national cultural events over the Fete de la Musique, has a high degree of years. Anca Oreviceanu, director of ROI and the most gratifying aspect is communication and CSR at Dacia and that these events are growing year by Renault Romania, told BR, “The investyear and we have been their partners, in ment’s results in education aren’t insome cases, from the very beginning,” stant; they appear in time, which is why Alex Filip, senior events and sponsor- we have developed long-term partnership specialist at Orange Romania, told ships, with integrated communication in order to have visibility. (…) Over the Business Review.

The banking sector has also got in- last 16 years, we can talk about tradition. volved. Anca Nuta, first vice-president, We can even talk about significant anidentity & communication director at niversaries, which is the case with the UniCredit Bank, added, “We are part of Gaudeamus book fair, with which we a banking group with a tradition of pa- have had ten years of partnership, and tronage and our core values are fol- the Classic is Fantastic program, where lowed also in our CSR policy. We believe, it is five years since we first sponsored

the workshops for children.”

Another company with a tradition in sponsoring cultural events is Japan Tobacco International (JTI) which has channeled some of its CSR money into supporting culture, in particular contemporary ballet. Gilda Lazar, director of corporate affairs & communications at JTI Romania, Moldova and Bulgaria, told BR that this year the tobacco firm will be present at the Transylvania International Film Festival supporting a documentary about choreographer Ohad Naharin, then at Sibiu International Theatre Festival and Comedy Cluj, if the local authorities continue to support the film festival. “By funding cultural, social and educational programs we actually participate in shaping society. Finally, this approach has a beneficial effect on the company, although such an evaluation is difficult, taking into consideration the basis of conventional business. (…) Moreover, we continue our JTI Meetings, bringing onto the Romanian stage four living contemporary dance legends, Mats Ek, Ana Laguna, Susanne Linke and Dominique Mercy, at the beginning of October,” added Lazar.

Mastercard has supported cultural events in Romania for ten years now, being a traditional partner at the Transylvania International Film Festival and implementing new buying experiences with the festival’s fans, such as the first payment with contactless credit cards in 2013. Diana Tanase, marketing manager at MasterCard Romania, told BR, “Properly functioning card payment acceptance and the latest technologies, such as contactless, seconded by communication and promotion, have generated absolutely spectacular results: in 2015, at TIFF, 54 percent of the banking transactions made by card for tickets were contactless, out of which 89 percent were made through MasterCard and Maestro bank cards. At Electric Castle, where organizers gave the audience a card made especially for the festival, but also the option to pay directly at bars and food courts, contactless transactions were preferred by 65 percent of those that opted for the second solution.

Under these conditions, ROI is very good, especially as we are talking about a greenfield – we are glad to see that card payment immediately attracts users in non-traditional spaces, showing the growing appetite of Romanians for electronic payment instruments.” editorial@business-review.ro

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

CULTURE 43

Book your cultural holiday

Photo: Nicu Cherciu/TIFF

June Transylvania International Film Festival May 27-June 5, Cluj Napoca Cluj is getting ready to celebrate the

15th edition of the largest film festival in Romania. The first confirmed titles, either Oscar-nominated or productions awarded at Berlin, Cannes, Venice, Toronto, Locarno or San Sebastian, are the work of masters such

as Alexander Sokurov and Terence Davies and tell fascinating stories from all over the world.

music event.

Sibiu International Theatre Festival June 10-19, Sibiu

Music lovers will flock to Cluj’s Central Park to meet and greet the jazzmen. The organizers have yet to announce the lineup, but previous years have seen top jazz singers perform in the western city.

Over 2,600 artists and guests will come to 68 venues to witness over 430 performances and events, produced in 70 countries. One of the most eagerly awaited guests at this year’s event is Tim Robbins, known to Romanian audiences mainly for his role in The Shawshank Redemption.

Blaj aLive June 17-19, Blaj (Alba county) Acts such as Kadebostany, Dub Inc., Kiril Dzajkovski, BUG Mafia, Grasu XXL, Carla’s Dreams, ROA, CTC, Golan, When ‘Airy Met Fairy and Say Yes Dog will grace this electronic

Jazz in the Park June 27-July 3, Cluj Napoca

Airfield Festival June 30-July 3, Cisnadie (Sibiu county) The eclectic menu runs from jazz to funk, via ska, techno, indie rock and hip-hop. Six different stages will host performances by Jamie Woon, Robag Wruhme, BlabberMouf, Portable, Gorje Hewek & Izhesvki, Subcarpați, Golan, CTC, Lucia, Byron and many others.

JazzTM July 1-3, Timisoara Timisoara’s Victoriei Square, Justice Park and Civic Park will be jazzed up.

So far only two artists have been announced: BadBadNotGood, a young band from Toronto, and Dhafer Youssef, a Tunisian artist known for his unique combination of Sufi traditions, mystical and jazz influences and Arabic lyricism.

Garana Jazz Festival July 7-11, Garana (Caras Severin county) Yuri Honing Acoustic Quartet, Enrico Rava, the Kari Ikonen Trio, Magnus Öström Band and another 80 jazz artists will perform in one of the most amazing green spots in Romania, at the 20th edition of the well-known jazz festival.

Electric Castle July 14-17, Bontida (Cluj county) Banffy Castle, in Bontida, will host four days of live music. Sigur Ros,

Skrillex, Bring me the Horizon, Bastille and many others will perform on one of the eight stages.

Folk You July 22-23, Vama Veche (Constanta county) Twelve years ago, folk artist Florian Pitis launched Folk You, with a manifesto of “the resistance movement against poured stupidity”, in Vama Veche, Romania’s southernmost Black Sea resort, and the festival is still a beacon for music lovers.

Padina Fest July 28-31, Padina, Bucegi Mountains (Dambovita county) Those tired of the noise and bustle of the city can head up to 1,500 feet, to the Padina Fest, for camping, forest fun and good Romanian music.

Rock the City July 29-30, Bucharest No introduction is needed for Muse and Iron Maiden, the headliners of the rock festival which will take place in the capital.

Photo: Divan Festival

Photo: JazzTM

July

August Untold August 4-7, Cluj Napoca Romania’s biggest electronic music festival, which won the Best Major Festival title at the 2015 European Festival Awards, will bring back to its stage artists such as Armin van Buuren, DJ Hardwell, who was voted the best DJ in the world in 2013 and 2014, and Afrojack, another top 10 DJ.

Anonimul Film Festival August 8-14, Sfantu Gheroghe (Tulcea county) The idyllic backdrop of the Danube Delta and Black Sea adds to this festival’s charms. The movies are usually selected from international film festivals.

Spellground August 12-14, Capidava, Cernavoda (Constanta) Live music, art performances, workshops, great food and lots of exciting

moments in front of the three Spellground concert stages, all with an amazing view, is the promise made by the organizers. The Kooks and Röyksopp are the headliners, but the rest of the line-up is also impressive.

Summerwell August 13-14, Buftea (Ilfov county) Dubbed “a festival like a holiday”, the event brings together the Chemical Brothers, Hurts, The 1975, Years & Years, The Neighbourhood, BØRNS, Blossoms, HONNE, Sundara Karma and HÆLOS in the beautiful gardens of Stirbei Palace.

Divan August 22-28, Cetate (Dolj county) The Divan film and culinary art festival once again brings the spirit of the Balkans to an old Danube grain-shipping port, with food, movies, documentaries, debates and workshops, all at Cetate Harbor.

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

44 CULTURE

Stage set for sponsorship Highly esteemed, both in Romania and worldwide, the Sibiu International Theatre Festival (FITS) has, over the years, managed to attract various partners to support its cultural offering. Business Review talked to Constantin Chiriac, general director of the festival, to find out the key ingredients when it comes to cultural marketing.

Photo: Dragos Dumitru

evolve in this domain; marketing costs and priorities in culture are the cultural product itself, so the marketing budget often ends up goingin the “Others" section.

∫ OANA VASILIU From your point of view as director of a major cultural festival in Romania, which is also known worldwide, do we have cultural marketing in Romania?

Yes, I think we do. There are cultural institutions in Romania that do this, and they are doing increasingly well, but they are just a few. Sure, we still have to

Are Romanian companies interested in investing long-term in a cultural product such as an international festival? Who are the traditional partners of the festival?

Some are very interested and we have partners which return to the festival year after year; with some I would say that we already have a tradition of collaboration. We have a distinctive, educated public and the local community is very involved in the festival. International associations are also very important so that FITS reaches a standard of excellence; it has a card that cannot be overlooked. Association with such an event and the intersection with such a public are of interest to many companies. Our traditional partners return to us every year, especially those from the banking field. In 2016, we will have six

banks as partners.

In terms of ROI, how do you evaluate the investment in cultural products, namely an investment in FITS? We do not consider an investment as being part of FITS, but as an investment in the greater community, in Romania’s reputation nationally and internationally and in the future. Increasingly, several large companies understand that investing in culture is an investment in the future. This kind of partnership supports the efforts to prepare a better world – we also have important volunteering and education programs through cultural exchanges, workshops and training held every year at the festival.

What exactly does a partnership with a sponsor of the festival mean? I think we are talking about the traditional formula with sponsorship packages. Now, of course, it depends on what the festival offers, and it is especially important to understand each partner’s interests and

strategy. I think the most important "secret" lies in customizing each of these offerings so that it can respond to every partner needs, to the festival and, very importantly, the audience’s expectations. We are the only festival that does this and that is why we are among the very few events that can have more than one partner in a particular field.

Two additional secret ingredients of successful partnerships are empathy and mutual respect.

How much does investment in FITS account for?

This year, the costs of the International Theatre Festival in Sibiu amount to about EUR 8 million. Sibiu City Hall’s contribution to the budget for the current run is 19 percent, the Ministry of Culture gives 8 percent, and the rest comes from private sponsorships, international funding for cultural programs and partnerships with other national and international cultural institutions. editorial@business-review.ro

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

CITY 45

FILM REVIEW

10 Cloverfield Lane Not exactly a barrel of laughs: 10 Cloverfield Lane is dark and tense

DEBBIE STOWE Director: Dan Trachtenberg Starring: John Goodman, Mary Elizabeth Winstead, John Gallagher Jr., Douglas M. Griffin On at: Movieplex Cinema Plaza, Grand Cinema & More, Cine Grand Titan, Hollywood Multiplex, Cinema City Cotroceni, Cinema City Sun Plaza, Cinema City Mega Mall A young woman wakes up from an accident chained to the wall in a grim little bunker. The sound of her approaching captor elicits a queasy tension – what is he going to do to her?

Is this going to be another Saw-esque

slice of torture porn?

Well, no, but it’s impossible to give the actual genre without dropping a massive spoiler. Michelle (Mary Elizabeth Winstead) finds herself in the hands of doomsday prepper Howard (John Goodman), whose belief in conspiracy theories has finally been vindicated (he claims): the outside air is contaminated following a nuclear (or maybe chemical… or biological) attack by the Russians. Or maybe the Iranians.

Or aliens. Anyways, whichever way you play it, going outside is certain death, so Michelle had better hunker down with Howard.

Hmm. Michelle can’t allay her skepticism by making a call to her family, switching on the TV or checking Face-

book (everyone died in the attack, says Howard, and communications are down). But something about his story doesn’t add up. So what are we watching? Is it a war film, with axis of evil militants about to storm the place? Is it a sci-fi, with Martians poised to sweep in? Or is it simply a thriller – is the whole contaminated air thing just a cover story so Howard can keep Michelle locked up? Is he her savior or her captor? Well-meaning conspiracy theorist with poor social skills, or a psychopath?

Whatever the genre (and director Dan Trachtenberg withholds the revelation until fairly late in the game), 10 Cloverfield Lane is certainly tense and effective. Goodman blends folksy hospitality with an air of menace that would unnerve fans of the 1990s sitcom Roseanne, in which he played the laidback husband.

Winstead also rises to the demands of her role – getting most of the screen time in a claustrophobic movie that lacks expansive sets or scenery to distract from the acting – and Michelle evolves from the troubled and uncertain character we first meet, as she is forced to cope with her plight.

The chilling atmosphere and quality acting is enhanced by a twisty plot that keeps the audience guessing about Howard and his motivation, with frequent wrong-footings.

When it comes, the ending is more divisive. Some will feel that it squanders the long build-up, others that it ups the excitement.

It is not until this point that the relevance of the title is made explicit, although the viewer can surmise.

Described as a “spiritual successor” to the 2008 horror movie Cloverfield, the second film in the franchise shares no narrative elements or characters, and works perfectly well if you have no knowledge of the first one. 10 Cloverfield Lane in fact has more in common with Stephen King’s Misery, and there are some shocking moments, almost as excruciating to watch as that movie’s most notorious scene.

The genre uncertainty is both a plus and a minus – while it ratchets up the tension, it risks alienating viewers who were rooting for a different outcome.

But there are plenty of taut thrills in the preceding hour-plus to compensate. debbie.stowe@business-review.ro

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

46 CITY

Cultural calendar ∫ OANA VASILIU

Paolo Fresu May 14, Sala Radio

Bucharest International Lighting Festival May 5-8, several locations The aim of this event is to promote a better understanding among the public and politicians of the central role of light in the modern world, and last year’s impressive light performances bode well for this year’s run. The organizer, ArCuB, had yet to announce the details by the time BR went to press.

The Royal Concert May 6, Sala Radio

recitals, jam sessions, autograph sessions and workshops, with everything reaching its peak on 21 May when the Gala Concert will take place.

Events will be held in various locations in Bucharest and Sibiu so that they can take place simultaneously.

Venues include the Odeon Theatre, the Teatrelli hall, the Auditorium hall of the Cervantes Institute, the Italian Institute, the ArCuB Gabroveni hall, Ibis Caffe L’Estaminet and Athenee Palace Hilton.

Enrique Iglesias concert May 12, Romexpo One of the world’s greatest trumpeters with over 300 recordings, Ital-

promoting his 2014 album of the same name. The disc features guest vocals from Pitbull, Romeo Santos, Marco Antonio Solís, Flo Rida, Kylie Minogue, Yandel, Jennifer Lopez, Gente de Zona and India Martínez.

Tickets cost between RON 198 and RON 399 and can be bought from the Eventim network.

Romanian Design Week May 20-June 5, several locations The major exhibitions focus on architecture, interior design and urbanism, fashion, graphics, advertising and branding, lifestyle and product design, as has been the case in previous years.

Details have yet to be announced, but the main exhibition will take place in Amzei Square.

The White Night of the Museums May 21, several locations

Spanish singer-songwriter Enrique Iglesias is to perform at Romexpo stadium as part of his Sex and Love Tour,

Under the wand of Nicolae Moldoveanu, violinist Gabriel Croitoru will perform Eduard Hübsch’s Royal Anthem, Tchaikovsky’s Concerto in D Major for Violin and Orchestra, op. 35 and Mendelssohn’s Symphony no. 4 in A major, op. 90 – Italian. The concert celebrates King’s Day, May 10, and comes as the Romanian Royal House marks 150 years.

Croitoru will perform on a Guarneri violin, previously used by George Enescu. Tickets can be acquired on bilete.ro, from Romanian Post Offices, Germanos stores and Sala Radio’s ticket booth.

ian jazzman Paolo Fresu returns to Bucharest, this time with American guitarist Ralph Towner. Songs from the Chiaroscuro and Desertico albums are likely to feature. Tickets cost between RON 95 and RON 165 and can be bought from the Eventim network.

EUROPAfest May 12-21, several locations The only European festival to bring together four musical genres, jazz, blues, pop and classical, EUROPAfest will feature around 300 artists from 43 European countries. The agenda for the 10 days of festival includes concerts, international competitions,

This ever more popular event will this year give attendees access to an audio-video guide, on mobile phone, for the first time. The application will be available for museums in Bucharest, Cluj-Napoca and Iasi. editorial@business-review.ro