WHERE ROMANIA TALKS BUSINESS June, 2018 / Volume 22, Issue 5
www.business-review.eu
ROMANIAN CSR MARKET GOES SUSTAINABLE
12
FINANCIAL EDUCATION SUPPLEMENT
19
RUBBISH PERFORMANCE: ROMANIA SEEKS TO RECYCLE AND REUSE
32
‘TECHNOLOGY HASN’T CHANGED ARCHITECTURE’
36
New this issue
There’s a new Business Angel in town
Photo: Mihai Constantineanu
Check out our exclusive Financial Education supplement
www.business-review.eu Business Review | June 2018
EDITORIAL 3 EU FUNDS
• Editorial •
Anda Sebesi • Deputy Editor-in-Chief •
6 Question marks over EU funds and future impede local development
COVER STORY
Building new businesses in Romania Romania has around 450,000 small and medium enterprises (SME), but experts say many of them struggle to survive, due to a lack of proper business plans and financing. Plus, an OECD report places Romania, along with Serbia and Latvia, among the European countries with the poorest level of understanding of basic
8 Making his Marcu on business: MedLife CEO seekes to inject cash into service startups
FINANCIAL EDUCATION SUPPLEMENT
financial concepts in Europe.
20 The insurance market,
Business Review has therefore chosen to publish this month a special supplement dedicated to financial education for com-
thirsty for a more educated consumer
panies. From how Romanian SMEs can borrow money from local
22 Risky business: home
banks, to the development of the local insurance market and the efforts made by firms to increase the level of financial education
insurance remains niche product
among young people, our guide aims to show how important it
24 RCA insurance market
is to be informed when it comes to starting a partnership with a
expects smoother road
25 How to choose the right
lender or an insurer. Entrepreneurs and SMEs are emphatically the engine of any
loan for your SME
developed or emerging economy. Choosing to help them to get
26 Local players sow the
easier access to financing could be a win-win situation for both
seeds of financial education
the business environment and the local economy. For example,
28 Banks lend large deals a
after developing one of the most successful medical businesses in
financing hand
the country, MedLife, Mihai Marcu, the CEO of the company, now plans to invest as a business angel in Romanian start-ups active
CITY
in sectors like building maintenance, logistics, telecom services, hotels and tourism, and services around health, maintenance and gyms. In a challenging economic climate, supporting innovation and new, fresh business – regardless of whether the support comes
44 Jam packed: jazz festivals
from private or public sources – could be the key to more rapid
jostle for room on summer calendar
development.
46 Cultural calendar
FOUNDING EDITOR: Bill Avery EDITOR-IN-CHIEF: Ioana Erdei DEPUTY EDITORS-IN-CHIEF: Sorin Melenciuc, Ovidiu Posirca, Anda Sebesi JOURNALISTS: Anca Alexe, Aurel Dragan, Georgeta Gheorghe, Romanita Oprea, Oana Vasiliu COPY EDITOR: Debbie Stowe PHOTO EDITOR: Mihai Constantineanu ART DIRECTOR: Raluca Piscu PUBLISHER: Bloc-Notes Media Network ADDRESS: 58 Stirbei Voda Street, 3rd Floor, District 1, Bucharest, Romania LANDLINE: 031.040.09.31 EXECUTIVE DIRECTOR: George Moise BUSINESS DEVELOPMENT DIRECTOR: Oana Molodoi SALES DIRECTOR: Ana-Maria Nedelcu SALES MANAGER: Alexandra Rosca EVENTS DIRECTOR: Alina Moldovan EVENTS MANAGER: Mara Dragoiu MARKETING: Eugenia Pupeza PRODUCTION: Dan Mitroi DISTRIBUTION: Eugen Musat EMAILS: editorial@business-review.ro, sales@business-review.ro, events@business-review.ro
Publicație auditată pe perioada Apr 2015 - Mar 2016
ISSN NO. 1453-729X
www.business-review.eu Business Review | June 2018
4 NEWS
WHO’S NEWS
he added. Ford’s total investment so far stands at EUR 1.5
BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at anca.alexe@business-review.ro
billion since 2008, the year the automaker bought the Craiova factory. With the hiring of the 1,500 new employees, the factory will have a total workforce of 5,900. Recently, Ford installed more than 550 robots in its vehicle assembly plant to increase efficiency in several Ford has invested EUR 1.5 billion in Craiova to date
At present, 90 percent of
Ford to invest EUR 200 mln in production of new model at Craiova factory
ported by train, while the rest is delivered by truck or sold domestically. “The investment in the future of Craiova is a sign of in the plans assumed by the
US car maker Ford will invest
tion of our range of interesting
Romanian government to of-
an extra EUR 200 million in
models produced in Europe and
fer key improvements to the
the production of a new model
underlines the transformation
infrastructure and the logistics
at its Craiova factory, and hire
of the production complex in
structure, this being of the
1,500 extra workers.
Craiova,” said Steven Armstrong,
utmost importance for main-
The new car model will
president and CEO of Ford Eu-
taining Ford Craiova’s global
supplement the range of mod-
rope, Middle East and Africa.
production operations,” said
els produced at the Craiova factory, which include the SUV
“The inclusion of the second vehicle in the production process
the company in a statement. The output of Ford’s
EcoSport, which is sold on the
is a clear proof of the operational
plant in Craiova might reach
European market, and the 1.0
flexibility of the Craiova factory
300,000 units per year after
EcoBoost engine.
and reflects the strong partner-
the launch of the second
ships we have with local provid-
model, according to Mediafax
ers and community members,”
newswire.
the continuation of the evolu-
page 5
the Craiova production is ex-
the confidence that Ford has
By Georgeta Gheorghe
“The investment confirms
David Jordan has been named the new group CEO of Policolor – Orgachim. He previously led Unilever’s manufacturing and logistics supply chain in the Middle East between 1999 and 2003 and then moved to Bucharest to coordinate the firm’s supply chain operations in South Central Europe. In recent years, he has provided management consultancy for operations and supply chain for various companies in CEE, especially Romania and Bulgaria.
departments.
AmCham calls for national investment plan for Romania By Ovidiu Posirca The leadership of AmCham
In the first quarter of this year,
Romania says that the country
output was up by 4 percent
needs to change its approach
compared to the same period of
to economic growth so it can
last year.
better reflect the way in which
Representatives of AmCham
individuals and companies
Romania’s over 430 members –
experience economic develop-
US, international and Romanian
ment.
companies – suggested that the
The Romanian economy
Photo: Dreamstime
Bogdan Grecu is the new general manager of ArcelorMittal Galati and Skopje, replacing Bruno Ribo, who took up the position in 2012. Grecu, 41, has been a member of the ArcelorMittal Galati Steering Committee since 2012. He has worked for ArcelorMittal Romania since 2001. Up to 2006, he held various management positions in the internal audit department of ArcelorMittal Galati. In 2008, he became head of ArcelorMittal Romania internal audit, while in 2009 he was appointed internal audit hub manager for SE Europe, Balkans and Ukraine, and one year later he became head of the purchase department of ArcelorMittal Galati and Cluster no. 7.
country should design an invest-
expanded by 6.9 percent last
ment plan that can replicate the
year, the biggest growth since
one put forward by the European
the end of the financial crisis.
Commission.
Romania’s economy expanded by 4 percent in Q1 year-on-year
www.business-review.eu Business Review | June 2018
NEWS 5 regarding the pension pillar, which has seven private administrators. The PM said that the analysis aims to find out the best split of contributions between Pension Pillar I and II for individual payers. At present, over 7 million individuals pay pension contributions that go into Pillar II. The net assets of Pillar II Photo: Dreamstime
The net assets of Pillar II stood at over EUR 8.5 billion last year
stood at RON 39.7 billion (over EUR 8.5 billion) at the end of 2017, according to the Financial
Romanian president and ruling coalition at odds over Pension Pillar II future
Supervision Authority (ASF).
By Ovidiu Posirca
shares.
The regulator adds that 91 percent of the funds are invested in Romania and 61 percent of the total assets are invested in bonds, with 20 percent in Romania also has a third
Romania’s president has
of the ruling coalition to make a
pension pillar that is optional
clashed with the government
clear statement on the future of
for payers and managed pri-
over its plans regarding pen-
Pension Pillar II.
vately. It had nearly 450,000
sion provision. Klaus Iohannis
“The biggest risk is for people
payers at the end of last year and assets of RON 1.78 billion.
says the biggest risk of the
to lose their trust in the state
rumored changes to Pension
institution. This can’t happen.
Pillar II is for individual payers
A firm clarification is needed.
tions oppose any attempt by
to lose trust in the state. Mean-
I hope PSD doesn’t touch this
the public authorities to change
while, PM Viorica Dancila said
money,” said Iohannis.
the structure of Pillar II. The
this pension pillar will not be
Meanwhile, the opposition
The private sector associa-
head of the PSD, Liviu Dragnea,
dismantled, although an analy-
parties said they plan to back a
said there were no plans to
sis of the issue will be carried
vote of no confidence against
dismantle or nationalize this
out. Iohannis urged members
the government over its plans
pension fund.
Nicolas Renard has become CEO of MSD Romania, replacing Fabrizio Giombini, who will take over another leading role at MSD. With over 16 years’ experience at MSD, Renard will accelerate the strategic development of the Romania branch, which is among the ten biggest pharmaceutical companies on the local market. Before this appointment, he was global portfolio leader for the pain franchise in the diversified brands division, where he introduced an innovation pillar for creating integrated solutions for health services. Between 2012 and 2015, he was managing director of MSD’s North & West African cluster. Irina Scarlat has been named country manager at Revolut. She previously worked as lead marketing manager of Uber. Her main objective will be to develop the Romanian market and increase the service’s user base from the current 25,000 to over 100,000 at the end of the year. She has over seven years’ experience in technology, marketing and project and team management.
Petru Vaduva has been appointed CEO of Tiriac Group, replacing Dragos Dinu, who has completed his four-year mandate at the helm of the company. Vaduva previously held the same position for two prior mandates: January 2009 – June 2011 and April 2012 – May 2013. After leaving the group, controlled by Ion Tiriac, Vaduva became general manager of Transgaz, the stateowned operator of the gas infrastructure in Romania. He held this role until 2017.
www.business-review.eu Business Review | June 2018
6 EU FUNDS
Question marks over EU funds and future impede local development
Romania has been one of the main beneficiaries of EU funds during the last decade, despite its poor absorption rate
By Sorin Melenciuc
R
Photo: Dreamstime
The European Union’s budget transfers, seen by the union’s founders as a way to strengthen the cohesion of European civilization, reduce the historical development gap between countries and, ultimately, prevent wars on what once was a violent continent, are coming under pressure. As the United Kingdom prepares to leave the bloc, a wave of nationalism rises across the continent and the main contributors keep tight hold of their purse strings when it comes to redistributing wealth towards the poorer, eastern wing of the community.
omania risks being caught in the mid-
all member states can ultimately guarantee
collection of member states, to agree to sanc-
dle of this battle over the future of the
that money from the EU budget is sufficiently
tions, before the EU member state breaking
EU, and losing a share of its structural
protected,” the commission said.
European rules can be punished.
and cohesion funds, due to a lack of strategic
The procedure could be invoked by the
The absence of Bucharest in the debate
vision, voice in the debate and motivation to
commission when the authorities’ managing
is striking particularly because Romania has
use free money to ensure prosperity for the
EU money “proper functioning of investiga-
been one of the main beneficiaries of EU
next generations, say commentators.
tion and public prosecution of fraud or cor-
funds during the last decade, despite its poor
ruption relating to the budget” and judicial
absorption rate.
Two main debates regarding the future of the EU are on the agenda, both with major im-
review are in danger in an EU member state,
plications for Romania’s role in the bloc.
under the proposal. The move is seen as a way to sanction
Romanian Academic Society data show that in the 11 years following Romania’s EU accession, on January 1, 2007, Romania re-
LESS MONEY WITHOUT RULE OF LAW
EU members, notably Poland and Hungary,
ceived EUR 45.7 billion in EU funds (including
First, the EU executive, along with its propos-
two countries which the EU has investigated
direct payments for agriculture) and contrib-
als for the next seven-year EU budget (2021-
in recent years for curbing their judiciary’s
uted EUR 15.3 billion to the common budget,
2027), which was announced on May 2, wants
independence.
meaning a net inflow of EUR 30.4 billion, or
to introduce a new mechanism to discipline
But Romania could also fall under the EU’s
EUR 2.8 billion per year, on average.
countries whose judiciary has been put under
spotlight, as recent controversial draft bills
political pressure.
that amend the rules on judicial organization
more significant than the Marshall Plan funds
are seen as a threat to the rule of law.
for West Germany after World War II and has
The executive, led by Jean-Claude Juncker, wants to be able to “suspend, reduce or
Poland is already part of the commission’s
restrict access to EU funding” in a proportion-
Article 7 probe, with negotiations ongoing be-
ate manner to protect EU investments and
tween Brussels and Warsaw on how to come
European taxpayers’ money.
to a political and legal compromise.
“Only an independent judiciary that upholds the rule of law and legal certainty in
The rule of law investigations, such as the Article 7 procedure, requires the council, the
Compared to Romania’s GDP, this sum is
been the engine, along with foreign direct investment, of Romania’s development. Eurostat data show that Romania was still lagging behind other Eastern European nations in terms of economic development in 2016, posting 58 percent of the EU’s aver-
www.business-review.eu Business Review | June 2018 May 2016
COVER EUSTORY FUNDS14 7
and some members of the new generations, without memories or fear of war, think differently. And the leaders of this new Europe will decide within the next few years what will remain in place from the foundation of the old Europe.
FRENCH-GERMAN ENTENTE? One of the main subjects on the agenda is reform of the EU, and the debate is intense in the main EU capital cities. Many European leaders think that the bloc has weathered the worst of its recent crises – the euro, refugees and Brexit – and should now turn its focus to the future. For some, like France’s president EmPhoto: Dreamstime
manuel Macron, the answer is easy: to leave reluctant – mostly Eastern – countries behind and allow others, more advanced – and more powerful – to move ahead on key policies. Last year, Macron set out his plans for a Traditional European federalists want to use the departure of the United Kingdom to push the remaining EU members closer together
“profound transformation” of the EU with deeper political integration to win back the support of citizens, even suggesting that a
age GDP per inhabitant at purchasing power
in Bucharest?” Valentin Naumescu, a profes-
bloc moving forward at differing speeds could
parity (PPP), compared with 60 percent in
sor of foreign relations at the Babes-Bolyai
become somewhere the UK may “one day find
Croatia, 65 percent in Latvia, 67 percent in
University in Cluj, recently commented.
its place again”.
Hungary, 68 percent in Poland, 75 percent in
The EU was set up with the aim of ending
Macron’s proposals included creating a fi-
both Estonia and Lithuania, 77 percent in Slo-
the frequent and bloody wars between neigh-
nance minister for the 19-member Eurozone,
vakia, 83 percent in Slovenia and 88 percent
bors, which culminated in the First and the
budget and parliament, but his ideas depend
in the Czech Republic.
Second World War and left several European
on the backing of Berlin, as would have been
generations traumatized.
the case decades ago.
But between 2006 and 2016, Romania
“The coming together of the nations of
posted the second-fasted growth in the EU in
From 1950, the European Coal and Steel
terms of economic gap recovery, albeit from a
Community began to unite Western European
Europe requires the elimination of the age-
low base. In 2006, Romania posted 39 percent
countries economically and politically in
old opposition of France and Germany. Any
of the EU average.
order to secure lasting peace, in a world domi-
action taken must in the first place concern
nated by the cold war between the Russian-
these two countries,” Robert Schuman said in
controlled East and US-backed west.
his declaration in 1950, without knowing that
RESHAPING THE EU AFTER BREXIT The second debate concerns the future of the
According to the architects, this coopera-
union after Brexit, and Romania is notably
tion was to be designed in such a way as to
absent from the discussions.
create common interests between European
his words would still apply seven decades later. But traditional European federalists want
countries which would lead to gradual politi-
to use the departure of the United Kingdom
vanguard of the reform and of the big debates
cal integration, a condition for maintaining
to push the remaining EU members closer
in the EU27, but let’s not miss out on these
peace between them.
together. They think that too much ‘variable
“Okay, we did not expect to be in the
discussions altogether, have no ideas and
“Europe will not be made all at once, or
geometry’ could weaken EU institutions,
propose nothing, especially as on January
according to a single plan. It will be built
according to a recent report by the Centre for
1 next year we take over the Presidency of
through concrete achievements which first
European Reform.
the EU Council in the key semester in which
create a de facto solidarity,” said Robert
the elections to the European Parliament
Schuman, a former French foreign minister
will take place and when Brexit is likely to
and one of the founding fathers of the EU, in a
actually take place (unless a one-year delay is
speech delivered on May 9, 1950.
decided). (…) But with what national, if not European agenda do we approach this future
But the generations who lived through Europe’s bloody wars have been shrinking
Local experts deplore Romania’s absence from the debate. “We will probably be outside the group of governments that matter in the debate about the future of the Union,” Naumescu complains.
Photo: Mihai Constantineanu
8 COVER STORY
www.business-review.eu Business Review | June 2018
www.business-review.eu Business Review | June 2018
COVER STORY 9
MAKING HIS MARCU ON BUSINESS: MEDLIFE CEO SEEKS TO INJECT CASH INTO SERVICE START-UPS By Ioana Erdei
After developing one of the most successful medical businesses in the country, MedLife, the firm’s CEO Mihai Marcu plans to invest as a business angel in Romanian start-ups. He firmly believes that the local economy has a unique potential that attracts foreign private equity funds. He says he has already started talks with three young entrepreneurs and is seeking more new businesses. Marcu told Business Review his thoughts on business from an investor’s point of view as well as an entrepreneur’s perspective.
WHAT TYPES OF ENTERPRISES ARE YOU INTERESTED IN, AS A BUSINESS ANGEL?
MEDLIFE IS A SUCCESSFUL BUSINESS. WHAT MAKES YOU WANT TO KEEP INVESTING IN OTHER FIELDS?
There are several initiatives in Romania involving larger or smaller
I believe it is natural for businesspeople to invest in other fields,
investment funds, but not necessarily for small businesses. They
even if in a limited way. Obviously, MedLife represents the success
tend to be for the high tech and IT sectors. I believe that a fund
of the family. But I’ve always had other small investments alongside
that invests in services start-ups, with investments limited to EUR
it. I’ve had small real estate investments: in 2004-2005 I built a ho-
300,000 - 500,000 per project, which would also encourage banks
tel in Predeal and a small residential project of villas in Mogosoaia,
to contribute, would be welcome for Romania.
both of which I sold. I am now talking about things that happened
I think that the services area brings great added value to the
ten years ago. I created a company that imports vessels and fishing
Romanian economy and it is also the sector I am most familiar with.
crafts. Small investments, compared to MedLife, which I do not
I am not interested in investing in medical services though, because
see myself exiting, not even on the long term. I am planning to
of MedLife. It does not seem ethical and the shareholders would not
invest my own money in several equity funds or start-ups that can
approve either. The buildings maintenance area, logistics, telecom
bring added value to Romania. I believe there is a very big business
services, hotels and tourism, the services area involving health,
potential in our country.
maintenance and gyms is interesting for investments. I stress, not large sums, and also I would be strictly an investor and not on the
HOW DO YOU DESCRIBE THIS BUSINESS POTENTIAL?
executive side.
Eurostat data shows that Bucharest, Constanta and Galati have witnessed the biggest economic growth in the past few years. Europe
HOW CAN THESE ENTREPRENEURS REACH YOU?
has very static regions, in the developed countries, but also very
Three entrepreneurs have already done so. I am not a hard to find
dynamic ones, especially in Eastern Europe. That is why Romania is
person. Generally, I answer the phone. Also, I am in talks with sev-
an attractive destination for private equity funds. Romania had a 7
eral serious Romanian business incubators and I am willing to join
percent economic increase last year. But, obviously, it was based on
as a business angel. Unfortunately, time does not allow me to get
consumption, and there were artificial wage increases in the public
very involved. MedLife will still represent 90 percent of my business
sector, which will have a kickback effect. It is a vicious circle and
activity. It is a company that needs the presence of executives.
will have consequences on pensions the most, but there are also im-
www.business-review.eu Business Review | June 2018
10 COVER STORY
mediate effects like inflation and
fail. In Silicon Valley this concept
interest rate increases.
is considered normal. You can’t really imagine that every Tom,
It seems to me that we are swimming against the current. The
Dick or Harry ends up being a Bill
economic growth is not correlated
Gates. Some 80 percent of new
with the increase in consump-
companies fail. I have a friend
tion, or with living standards. I
who invests in start-ups in Silicon
believe we need to have better eco-
Valley and says that out of ten, two
nomic education at government
might be successful. I believe this is what young
level. I believe the members of the executive should enroll in some
people should understand. That it
economics courses. They should
is not a tragedy to fail and to start
understand that GDP isn’t built by
over, even after a failure. We have
politicians, but by businesses. In
bright young people, especially in
my opinion, it’s unacceptable to
the IT sector, who should defi-
draw up the national budget with-
nitely give it a try.
out conferring with the presidents of the largest companies in your own country, to ask them about their ability to increase salaries, investment plans, etc. If I were PM I would ask for a monthly audience with the heads
AS A BUSINESS ANGEL, HOW DO YOU DISCOVER THE BRIGHT SPARKS? FOR EXAMPLE, WOULD YOU HAVE INVESTED IN UIPATH A FEW YEARS BACK?
of the biggest companies in Romania. I believe it is the only solu-
Probably not. A few years ago I was extremely focused on MedLife.
tion: communication between the private sector and government
You shouldn’t assume I have a gift for discovering emerging busi-
officials. I think that decisions such as investing in infrastructure or
nesses. I’ve even had businesses that failed. In a start-up you have
establishing new days off and salary increases must be taken after
different behavior than with a mature business. In a company such
consultation with the business sector.
as MedLife you do not allow yourself to stay foolish. You have some
It is time for politicians to reconnect with the economy.
investors and you are listed on the stock exchange. When it comes to start-ups, as I previously said, you’ll invest in
ARE GOVERNMENT PROGRAMS DESIGNED TO BOOST SMALL BUSINESSES A STEP IN RECONNECTING WITH THE ECONOMY?
20 and maybe there will be two that meet success. In Silicon Valley,
Government programs designed to boost small businesses (SMEs)
we’re talking a lot about a lottery here and luck. I don’t think inves-
are welcome, in my view. On the other hand, I don’t believe in state
tors can be so visionary as to anticipate when a new company will
intervention in the economy. I think that the state should only
revolutionize the world and that they need to invest in it. There are
be a supervisor. The economy regulates itself. Let me give you an
many projects in the medical field, new devices that work wonders.
example. In the UK, a few years ago, there was a program called
There are plenty of good ideas in all sectors. But let’s not forget that
Start Up Britain, which consisted only of a huge information and
we live in a time when large, gigantic companies can just disappear.
support campaign for people to open a business, without providing
There are many companies in all fields that have gone from agony to
any funds. The future entrepreneurs turned to the three Fs – fam-
ecstasy.
ily, friends and fools. Thousands of companies were set up, and out
100 new companies are started every day. As an investor, I think
We are witnessing a revolution in which economic climate chang-
of those, after a few years over 30,000 were still running. And the
es will be huge. We don’t yet understand the situation our children
average investment in such an initiative was GBP 7,000. It is clear
will face economically and in terms of the workforce. They will live
proof that one doesn’t need to invest huge amounts to start a busi-
in a partially virtual world. In spite of the uncertainties, companies
ness.
of a certain size can be responsible and enforce a certain discipline in response to these aspects.
HOW WOULD YOU DESCRIBE THE ROMANIAN ENTREPRENEUR?
And I repeat: Romania has a unique chance. If we manage to get
Eurostat published some data that show that Romanians are the
rid of the stigma of corruption and to regain our pride, our country
most motivated among Europeans to start their own business, three
can embark on a train it’s never been on before and it can become
times more than a Finn, for example. But fear of failure is very big
the real economic tiger of the Balkans. I’m talking about creativity,
and this needs to change. If in the US somebody starts a business
productivity, and the natural features of our country. Romanians
and fails, it is not a tragedy – on the contrary. Where is the failure?
are beautiful, they are extremely intelligent and creative and we
In trying?
can lead good lives here. Let’s not forget that the economic phe-
We have to take a different approach to failure. A small entrepreneur must understand that his or her business is very likely to
nomenon leads to progress. Economic progress will be followed by cultural, national, artistic progress.
www.business-review.eu Business Review | June 2018
HOW IS FAILURE TRANSLATED INTO YOUR BUSINESS EXPERIENCE? I have had failures. My investment structure isn’t to put all my eggs in one basket. I’ve made some bold moves, but they were not that risky. I’ve invested in the boat industry, but I bought the real estate where business was being done. The real estate investment ended up being successful, but the businesses established at those properties are also as successful. At one point, I was face to face with
COVER STORY 11
MedLife turnover up 34 pct y/y to RON 197 mln in Q1
several entrepreneurs and executives from big companies, and one journalist noticed that I was more of a risk avoider than an executive. This is also because I have the experience of working in a bank. That’s where I cultivated my risk appetite.
WHAT’S NEXT FOR MEDLIFE? We’ve considered expanding abroad and we’re particularly interested in Hungary and Serbia. I’ve made some visits there with my team. Nothing is set in stone yet, but there are a few things we liked. We want to wait for an opportunity and to study the cultural barriers. We haven’t decided whether we’ll enter these markets organically or through acquisitions. It is clear, however, that we can’t cross the border without a partner. There are big differences between us, in terms of health systems, health services consumers and insurance markets. It may take place this year; we’re serious about it. It’s not yet a certainty, but we’re heading towards a finish line at the moment. In this country, there aren’t any significant investment plans on our radar for now, but we have major resources set aside for that. There are some due diligence procedures in the works, but they’re small transactions compared to the acquisition of Polisano.
MedLife ended the first quarter of 2018 with a turnover of RON 196.8 million, up by 34 percent on the same period of last year. Clinics and hospitals have the biggest share of the posted turnover, at 29.4 percent and 21.6 percent respectively, followed by the corporate and labs divisions, on 20.2 percent and 17.8 percent. This structure also includes the acquisition of Polisano. According to MedLife’s representatives, the results are in line with their initial estimations and significantly higher than the market’s growth rate. “We are following our development and expansion strategy, and the results reflect what we’ve projected. We have already announced the first transactions of the year – Solomed and Ghencea Medical Center – and we continue to advance on this segment. We are continuously investing in people and medical technology, with the objective of creating the most powerful private diagnostics and surgical treatment platform in Romania. At the same time, we are looking towards a new series of greenfield projects, as well as the development of a new business line,” said Marcu. In 2018, MedLife aims to maintain an accelerated rate of development, with a projected growth of 20 percent from 2017.
www.business-review.eu Business Review | June 2018
12 CSR
Romanian CSR market goes sustainable Photo: Dreamstime
With companies becoming more aware of the benefits of their involvement in the community in which they operate, the local CSR market has made a significant step toward maturity. Many firms are now focusing on embedding the sustainability concept in their business strategy. By Anda Sebesi
M
any companies operating on the Romanian market have already identified their relevant stake-
holders, and an increasing effort to answer their expectations can be observed. While a few years ago, firms often considered CSR
In the near future companies will develop reliable and diversified CSR strategies
to be only about charity and sponsorship, currently the CSR market in Romania offers many other ways for companies to get involved in community life. “The main trend
business decision,” says Tuta. In addition,
basis of stakeholders’ legitimate demands
on the local CSR market is the difference that
more and more companies are investing in
and each company’s socio-economic impact
companies have started to make between
the development of their internal knowledge
on society.
‘responsibility’ and ‘philanthropy’. As a
and skills, by training a specific team com-
result, we have witnessed a significant drop
prised of representatives of key departments
SUSTAINABILITY IS THE KEY
in the number of companies that justify their
to become specialists in sustainability.
So how do businesses embed sustainability in
responsibility through some charity activities
“CSR activities have diversified and now
their business strategy? According to a recent
or sponsorships,” says Dragos Tuta, founder
also include, for instance, volunteering and
study conducted by CSR Media and Valoria,
and managing partner at The CSR Agency. He
direct involvement in helping to address vari-
The Dynamic and Perspectives of the CSR
adds that this is an important step because
ous problems in the community, or offering
Sector in Romania in 2016 and 2017, although
for many years responsibility and charity
pro bono professional services to active NGOs
fewer companies say that they are involved
were similar things in Romania, and so the
or local authorities working in the com-
in CSR projects because these activities bring
CSR concept lost credibility.
munity,” says Gheorghita Diaconu, director,
them both awareness and visibility, equally,
advisory services, at KPMG in Romania.
fewer say that their corporate social responsi-
As Tuta says, corporate responsibility has become a work style for firms’ entire man-
To conclude, many Romanian companies’
bility is part of their sustainability strategy.
agement teams, and not just a practice of the
approach to CSR has progressed from an in-
communication department. “Now Romania
coherent and project-based manner of acting
investing in building stakeholder trust and
has companies that have on their board a sus-
to one of strategic management, with clear
simultaneously improving their business per-
tainability coordinator who can oppose any
directions of involvement, established on the
formance. “For instance, social and environ-
But despite this, an increasing number are
www.business-review.eu Business Review | June 2018
ADVERTORIAL 13
Digital education Orange Romania For over 20 years, Orange has been an active partner in the community life, constantly supporting social, educational or environmental causes through its 4 strategic social responsibility directives: community involvement, digital inclusion, responsible products and services, and environmental protection.
Moreover, the company runs many programs
extend the program, so those who wanted to
equipped with tablets so that each student
that focus on education and how technology
continue within coding could learn more. There-
can work individually during the day, with a
can be used to meet the community’s needs
fore, from year to year, we have expanded both
laptop for the teacher and video projector
in terms of education, both through CSR
geographically and indepth, with an academy
for the class. Laboratories can be used by
projects and through the Orange Foundation
where children learn to write code. The Super-
any teacher in the school, not just by math
programs.
Coders Online Academy 2017 ended in April 2018
and ICT teachers to whom the program is
4 years ago, Orange Romania launched the
with nearly 40 graduates who are now at Level 2
addressed.
SuperCoders program – coding workshops
in Python coding language.
At the national level, the Orange Founda-
for children aged between 10 and 13. The
The Orange Foundation has assumed the same
tion supports digital education through
first edition consisted of a workshop for 50
role of supporting digital education in Romania.
the development of the online Digitaliada
children in Bucharest. Last year, we had 20
In 2015, together with GfK (market research
platform and through the digital materi-
coding workshops in various cities around
institute), it conducted a comprehensive study to
als contest. The Digitaliada platform is an
the country, over 600 participants, over 300
gain an overview of the level of technology usage
online learning hub that can be accessed
applications in the SuperCoders national
in rural schools and to determine the problems
and used by any interested person, students
competition and 40 SuperCoders Online
they face. Based on the study findings, Digitalia-
or teachers across the country. The Digital
Academy graduates. The first edition was
da emerged - a digital education program aimed
Materials Contest is being held annually and
thought of as a touchpoint to introduce
at encouraging the use of technology to improve
awards the passionate people who develop
children into the world of coding. We wanted
students’ school performance.
original and open source educational
it to be an opportunity for the little ones to
At rural level, V-VIII grade students are encour-
content. Currently there are over 400 digital
find out what coding is and to figure out if
aged to learn math and ICT through interactive
educational materials in Romanian on the
they would like to continue learning in this
digital methods. Digitaliada now includes 30
www.digitaliada.ro platform that can be
field. After the first workshops, however, the
schools equipped with IT equipment, a complete
accessed free of charge. Orange Romania
needs of teh beneficiaries changed. First of
package of applications, digital materials and
will continue its social investments through
all, we begun receiving requests from several
lesson plans to support the learning of math
sustainable, long-term programs aimed
cities around the country to organize work-
and ICT with digital technologies. At present,
at contributing to the development of the
shops locally. Secondly, we had requests to
more than 3400 students learn in digital labs
digital education segment in Romania.
www.business-review.eu Business Review | June 2018
14 CSR
How does the local CSR market look? Robert Uzuna Vice-president of corporate affairs at Ursus Breweries “The Romanian CSR market is in line with European and global trends considering its profile and the projects developed here. This is possible through the participation of large players, although their number is relatively limited, for the moment. The positive evolution that we all want will depend first on the anchorage of as many players as possible in the CSR field and second on the substance of the projects undertaken.” Angela Galeta Director of the Vodafone Romania Foundation “The focus is more and more on the sustainability of the projects financed and on their potential to be implemented in an increasing number of communities. Elsewhere, transparency in CSR activity has gained increasing importance both for the partners included in the programs and the communities which benefit from them, and in general for all parties involved.” Cristina Hanganu Communication and CSR director at Lidl Romania “Companies are also starting to come out of their areas of direct impact and use their influence to support global solutions for fundamental issues such as climate change, education and human rights.” Veronica Dogaru Corporate Communication Manager at Orange Romania “The CSR sector is a very specific one and it develops depending on the types of companies, their business vision and the communities where they operate. For sure the sector has increased considerably in recent years. First, the investments made in social programs have increased and companies have understood the need for a CSR strategy to bring them a social impact in the communities where they operate. So it has become easier to identify what company invests in a specific field, because there is a coherence and consistency in its involvement.”
mental criteria are included by an increasing
Last year, he decided to launch the Em-
number of companies in the procedures and
bassy of Sustainability, a platform dedicated
policies for the selection of suppliers and
exclusively to the promotion of sustain-
clients,” says Diaconu of KPMG.
ability in the Romanian economic and social
According to the same research conducted
environment. It aims to spread the culture
by CSR Media and Valoria, 54 percent of firms
of sustainability in Romania by promoting
say that they have a policy on the sustainabil-
this concept at the political, economic and
ity of their supply chain that is already imple-
social level. “We intend to encourage, inspire
mented. The same research says that for 33
and motivate companies to develop invest-
percent of respondents, the sustainability of
ments in sustainability in Romania and to
their supply chain allows them to be cost ef-
offer many more responsible products and
fective. “Investment decisions are also taken
services – including the idea to encourage the
based, among other factors, on sustainability
demand from final consumers for sustain-
criteria. Environmental impact mitigation,
ability,” says Tuta. According to him, in the
as well as energy and climate change matters
first stage of the initiative, the main objec-
represent a criterion for many companies
tive is to create a community and encourage
in Romania when developing their business
collaboration. The Embassy includes seven
strategy,” says the KPMG representative.
dedicated areas: multimedia gallery, the first
“Companies are increasingly aware that
library with specialized books in the world,
sustainability is no longer just a fashionable
conference room, training room, interview
thing to do; it has to be relevant and really
studio, a dedicated area for informal events
make a difference. Sustainability issues must
and a garden.
be embedded in the company’s overall strat-
Last but not least, Diaconu says that in
egy and hence should be relevance-deter-
response to the growing awareness of the
mined based on the field of activity, impact
importance of CSR and sustainable develop-
assessment and stakeholder expectations,
ment issues (human rights, workforce diver-
which are all essential factors to consider to
sity, climate change and environmental pro-
achieve successful strategic design.”
tection) the related performance attributes
Any company has four major responsibili-
are increasingly being used by companies
ties: economic, legal, ethical and charitable.
to differentiate their brand, products and/or
While the economic and legal responsibilities
services to both consumers and competitors,
are compulsory, the third one is an expecta-
enhancing their reputation.
tion of the stakeholders, while charity is a request coming from the community. “Romania leaped over the ethical responsibility of
URSUS BREWERIES Projects in 2017: The “9 months with 0 alco-
a business and we chose the easy way where
hol” campaign continued last year and aimed
we assumed some philanthropic responsibili-
to inform consumers of the risks of drinking
ties. This costs us a lot but we don’t under-
alcohol during pregnancy. The company con-
stand these costs yet: more expensive financ-
tinued its partnership with Step by Step and
ing, bigger operational risks, turnover of
the Federation of NGOs for Kids to develop
personnel and a lack of trust from customers
parental skills within Romanian families with
and business partners,” says Tuta of The CSR
the aim of preventing alcohol consumption
Agency. He adds that firms that have already
among children.
understood this loss of synchronism started to make changes that have already shown results. “There are companies that imple-
VODAFONE ROMANIA Projects in 2017: The renovation and mod-
mented an internal audit process of their
ernization of an intensive care unit (ICU)
sustainability indicators and made public
for newborns within the Constanta County
their audit report. The development of the so
Hospital (ongoing project). The company
called ‘culture of sustainability in business’ is
continued its Connecting for Good program
rising in Romania but the country is at least
– which uses technology to tackle some of
five years behind its EU peers. But we hope to
the problems facing disadvantaged commu-
quickly narrow this gap,” adds Tuta.
nities – and the Investments in Rural areas
www.business-review.eu Business Review | June 2018
16 CSR
one – through which it supports educational projects for children from rural communities.
Facts about the local CSR market
It also invested in renovating and equipping all the blood transfusion centers in Romania and in the largest volunteering initiative of Vodafone Romania Foundation, called Letters to Santa Claus. The Vodafone Romania Foundation invested over RON 7.6 million in CSR projects in 2017.
LIDL ROMANIA Projects in 2017: It launched the Lidl Com-
•
55 percent of companies say that they are involved in CSR because it is part of their public relations strategy;
•
The share of companies that say they have a CSR strategy increased to 86 percent in 2017 from 76 percent in 2016;
•
42 percent of companies say that their CSR budget has deductible allocations as their main financial resource;
•
The number of CSR budgets which have increased by 20 to 30 percent is bigger in 2017 than in 2016;
•
29 percent of companies say that their budget was between EUR 50,000 and 100,000 in 2017;
•
34 percent of companies develop CSR projects with an average value of maximum EUR 5,000, while 9 percent say that the average value of their projects is over EUR 100,000;
•
59 percent of companies develop CSR projects nationwide while 34 percent have local CSR projects;
•
Companies which develop national CSR projects were ranked first in 2017, followed by those with local ones and those with community-based projects;
•
72 percent of companies supported the community through financial donations and 58 percent have made in-kind donations.
munity Grants platform, which aims to support projects with a long-term impact in the fields of education and the environment, implemented by NGOs. In 2017, it donated EUR 770,000 to 18 projects. The platform is now on its second round of financing, currently funding 20 NGOs. It invested over EUR 2 million in supporting 45 NGOs and over 60,000 beneficiaries in 2017. The company ran fundraising campaigns for the Fundatia Noi Orizonturi, Greenpeace Romania, Fun-
Source: The Dynamic and Perspectives of the CSR sector in Romania in 2016 and 2017 study, conducted by CSR Media and Valoria.
datia Leaders and Cercetasii Romaniei. With the help of its clients and employees, it raised
100,000 to the Atlantic4 team who crossed
involves a series of workshops in the Land of
RON 580,000. Lidl Romania matched this
the Atlantic Ocean in order to raise money
Dornas, with local craftsmen, who learned
amount, so almost RON 1.2 million went to
for the center. Last but not least, Kaufland
how to use social media to promote their
fund the NGOs’ missions. In addition, the re-
Romania donated 8 tonnes of food last
products.
tailer concluded a number of long-term part-
Christmas and together with GTC Motorsport
The company also redesigned the eco-
nerships, with organizations such as World
and Reality Check Association gave presents
touristic circuit at Bigar Waterfall, one of the
Vision, SMURD, Save the Children, Padurea
worth RON 40,000 to seniors and children
most spectacular waterfalls in the world.
Copiilor and Banca de Alimente, which it
from isolated mountain villages in Buzau
will continue to support in 2018. Last but not
county. The company invests about EUR 6
project Youth Empowered, through which
least, Verde la Educatie pentru Circulatie is
million annually in community projects.
the company intends to contribute to the
its road safety education campaign for kids, which it has been organizing since 2013 in
In parallel, it launched the educational
integration of an increasing number of young
ORANGE ROMANIA Projects in 2017: Digital Parenting (an aware-
people in the labor market. The project ad-
ness campaign for parents), #parintilascoala
and its results will have effects not only for
KAUFLAND ROMANIA Projects in 2017: Gradinescu, through which
(a project continued from previous years)
the youngsters, but also for the entire econ-
– workshops where participants learned
omy, which is facing a deficit of adequately
Kaufland Romania launched the first network
the basics of data management and the use
qualified professionals.
of urban community gardens by transforming
of a tablet and smartphone; Digitaliada – a
its stores’ roofs and parking lots into small
project that aims to promote digital educa-
pany launched and organized the Respon-
gardens with vegetables, fruits, herbs and
tion and improve academic performance by
sible Mountain Hiking School in 2015, a pro-
flowers that can be used by the community;
using technology and other digital teaching
gram through which it promotes responsible
its involvement in the Big Build initiative to
materials (second edition); SuperCoders
tourism and the means to safely enjoy hiking
provide a decent home for disadvantaged
(fifth edition) and CodeKids (a program that
while also promoting the natural potential of
families along with a contribution of RON 100
supports coding activities in Romania, both
the Calimani Mountains, the Land of Dornas
per month for 20 years, a sum that covered
in urban and rural areas) and Tech a Break
and their surroundings. The project is ongo-
part of their housing loans; along with Hos-
events platform.
ing and will take place this year too. Every
partnership with the Romanian Police force.
paceni by selling t-shirts and it donated EUR
Together with Tasuleasa Social, the com-
year, the Coca-Cola System in Romania allots
pice Casa Sperantei it raised money for the hospice social-medical center in Adunatii Co-
dresses young people in vulnerable groups
COCA-COLA HBC ROMANIA Projects in 2017: The After Us project
between EUR 700,000 and EUR 1 million to CSR projects.
www.business-review.eu Business Review | June 2018
18 TECH
From watching robot manga to building robots that save lives
company’s early days – he comes pretty close to anyone’s definition of a risk-taker.
THE IMPORTANCE OF A HEAD START Having completed his degree in Telecom-
Italian-born CEO and co-founder of PAL Robotics, one of the world’s top robotics companies, Francesco Ferro grew up in Bari watching manga series featuring shapeshifting flying robots such as Gold Rake and Mazinger Z. A degree in engineering, an unfinished PhD and many years of hard work later, he is now in Barcelona building service focused, state-of-the-art robots valued at up to EUR 900,000, which improve and can even save lives.
munications Engineering at the Politecnico di
By Georgeta Gheorghe
lona where we founded the startup. Bureau-
Torino (Italy), with a specialization in image processing and computer vision, in 2002, and a master’s degree, Ferro enrolled in a PhD he abandoned one year before completion. “I didn’t finish it. It was too boring,” he says with the reassured smile of someone at the helm of a company that made EUR 4 million last year. “Instead, in 2004 I got together with some Italian colleagues and went to Barcecracy was a challenge,” he says. “Technology and innovation move at a fast speed and bureaucracy cannot keep pace,” he notes. “Still, Spain was faster at that moment” than his native Italy, he says. “Now it is very easy, as everyone is talking about robots. But 14 years ago, we even had difficulties renting a flat in the city after telling prospective landlords that we were making robots for an Arabic country. That’s why we changed the strategy and became successful only after we started cheating and told everyone we were building a research company. We drew the first robots in a bar in Barcelona,” Ferro recalls. “I always believed
Photo: Dreamstime
that robots could help humans a lot with what they are doing every day. From helping us do things that we don’t like to do like the futuristic Rosie” – he recalls the robot maid in REEM and REEM - C shaking hands
I
The Jetsons cartoon series – “to doing what we cannot do like they do in the industrial sector,” he says.
n the closing remarks to his presentation
But a customer comes to you because he has
at the sold-out Innovation Summit ses-
needs. And you can’t come up with a brilliant
NEXT, SAVING LIVES?
sion of the Bucharest Technology Week
solution that doesn’t cover any needs. Also,
Do people trust robots? Ferro thinks so.
(14-20 May), Ferro said that PAL Robotics’
with technology, not everything is possible,
“Studies show that, in emergency situations,
solid positioning on the market, which has
so if we keep working with our customers,
people do trust robots, even more than they
taken off in recent years, boils down to three
problems can be solved in an easy way,” he
trust people. For instance, in the US a study
factors: passion, motivation and working with
says.
showed that, in the event of a fire, when peo-
“Then”, he suddenly adds a new layer,
ple had to leave a venue, as part of an experi-
“comes the willingness to take risks. We are
ment, more chose to follow a robot that was
more than keen to expand on this. “Passion
constantly taking risks, because we are a dis-
moving in the wrong direction than a human
for what you are doing is essential,” he says,
ruptive company,” he says. And few can argue
showing the right way.” ‘Can robots make
“as is a strong motivation, because you are
with that. As one of ‘four Italian guys who
mistakes?’ is the obvious next question. “Yes,
going to put in a lot of work. And equally im-
moved to Barcelona and rented a flat to start
they can, because they are pre-programmed
portant is working closely with your custom-
making robots for a United Arab Emirates
by humans, and humans make mistakes,” he
ers. Engineers think they can do everything.
(UAE) client’ – as he candidly describes the
says. But they can also save lives.
your customer. When BR caught up with him later, he was
WHERE ROMANIA TALKS BUSINESS June, 2018
www.business-review.eu
INSURANCE MARKET THIRSTY FOR MORE EDUCATED CONSUMER
20
RISKY BUSINESS: HOME INSURANCE REMAINS NICHE PRODUCT
22
RCA INSURANCE MARKET EXPECTS SMOOTHER ROAD
24
HOW TO CHOOSE THE RIGHT LOAN FOR YOUR SME
25
LOCAL PLAYERS SOW THE SEEDS OF FINANCIAL EDUCATION
26
BANKS LEND LARGE DEALS A FINANCING HAND
28
Financial education supplement From how Romanian SMEs can borrow money from local banks, to the development of the local insurance market and the efforts made by firms to increase the level of financial savvy among young people, BR’s financial education supplement highlights how important it is for companies to be informed when they access financial products or services.
www.business-review.eu Business Review | June 2018
20 FINANCIAL EDUCATION
The insurance market, thirsty for a more educated consumer The Romanian insurance market increased by 3.5 percent in 2017, to RON 9.7 billion. A change in the trend over the previous years was the consolidation of the life insurance segment, which registered a significant increase of 21 percent last year. In spite of these results, Romania is the last EU member state when it comes to spending on insurance services, with only EUR 40 per year.
Photo: Agerpres
By Ioana Erdei
Leonardo Badea, the president of The Financial Supervisory Authority (ASF)
W
hy do Romanians stay away from
at all levels. A well educated individual can
attending this program is over 22,000. In
facultative insurance? Leon-
easier understand and decide in all aware-
addition, within the Academic Lab, the ASF
ardo Badea, the president of
ness when it comes to buying an insurance
program designed for the financial education
product”, he said.
in universities, nine university centers from
The Financial Supervisory Authority (ASF)
According to him, ASF is currently per-
all over the country will be involved in. We
the main issues of the market and gave some
forming a national program of financial edu-
are making all efforts to include the finan-
solutions. In his opinion, the low level of
cation in kindergartens, schools, high schools
cial education as compulsory subject in the
financial education of the public represents
and universities. “Early financial education
schedule for 8th grade, starting 2020”, Badea
one of the main obstacles in buying faculta-
plays a very important role in shaping the
announced.
tive insurance. “Unfortunately, we are the
future consumer of financial products. The
worst performing European countries on this
ASF financial education program includes 159
BACK TO BALANCE
matter. This is why I consider that we need
schools from 28 counties including Bucha-
The Romanian insurance market is stable,
extensive campaigns of financial education
rest. The estimated number of the pupils
after facing a series of deficiencies, “well
talked to Business Review and underlined
www.business-review.eu Business Review | June 2018 May 2016
FINANCIAL COVER EDUCATION STORY 21 14
capitalized and has a remarkable growth
and by settling the claims files without delay,
stock, A8 - Fire and natural disasters (for
potential”, says Badea. “As you know, within
he explains.
goods other than those insured in classes A3
the mature market the weight of the fac-
When it comes to the obligations that the
to A7). In 2017, the share of these three classes
ultative insurance is higher than in case of
institution he represents has to the con-
compulsory insurance”, he added. In spite
sumer, he sais thata ASF must make sure that
accounted for 88 percent of the total gross
of these positive results, in Romania, the
their rights and interests are protected in
written premiums for non-life insurance. In
market is still dependent on the compulsory
accordance with the legal provisions and that
the area of civil liability for the use of land ve-
insurance (especially MTPL). “One of the fundamental ASF objectives is focused on reversing this
no deviation from these principles is tolerated. “At the same time, I believe that better information on voluntary products
trend. If we analyze the
hicles, gross written premiums amounted to RON 3.82 billion, representing 50 percent of total non-life insurance. The provision of land vehicles, excluding railway rolling stock, had
insurance market evolu-
must be a priority for all of
a gross written premium of RON 1,89 billion,
tion since 2017, we notice
us. People need to know
representing 25 percent of total non-life insur-
the strengthening of the
in detail the risks they are
ance, up 8 percent. In the segment of fire and
protecting and must make
natural calamities, gross written premiums
life insurance segment
informed choices when
that, last year, registered a significant growth of 21%, compared to year 2016. This aspect is particularly gratifying and
purchasing a life insurance, health insurance or one motor insurance. In other words, both insur-
must be further encouraged”, Leonardo
ance companies and brokers must provide
Badea explained.
advice at a very detailed level”, he concluded.
went up to about RON one billion, representing 13 percent of total non-life insurance. In the life insurance segment, underwritings increased by 21 percent, to about RON 2.02 billion. The highest weights are held by C1 - life
On the long term, the Romanian market will
insurance, annuities and supplementary life
the fact that 2017 has been a reference year
also need more diverse and sophisticated
insurance respectively, C3 - life insurance and
for the compulsory insurance market. The
insurance products.
annuities related to investment funds, which
He underlines that we cannot overlook
together account for 96 percent of the total
Romanian Parliament has adopted the new MTPL Law, to which the ASF experts have
FACTS AND DATA
gross premiums written for the insurance
had an important contribution, that intro-
If during 2012 - 2014 the life insurance activ-
business life.
duced a series of new elements and concepts
ity was decreasing in
(reference tariff, high risk client, direct com-
terms of the volume of
pensation), that contributed to a more stable
gross written premiums,
and predictable market. ”In my opinion, I
starting in 2015 this
do not think that we will witness again the
segment resumed its
imbalances from the past”, he concluded.
growth and in 2017 the evolution of the insur-
SOLUTIONS, SOLUTIONS
ance sector was due to
In order to accelerate the maturity of the in-
the insurance segment
surance market, there has to be a joint effort,
life, according to The
from the supervisory authority, and from the
Financial Supervisory
companies operating on this market, the ASF
Authority (ASF).
President underlines. “And here I refer both
The insurance
to insurance companies and brokers. This is a
market in Romania is
complex approach, which involves action on
characterized by a high degree of concentra-
In 2017, insurance companies reported
several levels”, he said. A first area to act on
tion. In 2017, approximately 89 percent of the
gross indemnities paid (excluding partial and
is consumer confidence, as trust is perhaps
total gross written premiums were made by
total maturities and redemptions), cumulated
the most important capital in the financial
10 insurance companies out of the 31 compa-
for the two categories of insurance, amount-
markets. “Market players need to convince
nies performing insurance and reinsurance
ing to RON 4.21 billion, of which RON 4.05
consumers that they can trust facultative
activity on 31 December 2017.
billion are related to the contracts general
products and that these products meet their
Considered by segments, gross premiums
insurance (96 percent), registering an increase
needs and are an important option in manag-
written (PBS) for general insurance (AG)
of 12.6 percent compared to the similar period
ing risks related to their life, health and safety
amounted to roughly RON 7.7 billion last year,
of 2016 (RON 3.6 billion). Another RON 158.4
of their goods”, Badea underligned.
with the largest shares held by classes A10
million are paid for life insurance, about 2.8
- Civil liability for the use of land vehicles,
percent above the level of RON 2016 (RON
A3 - Land vehicles, excluding railway rolling
154.06 million).
How can this be done? Simple - by respecting ad litteram the contractual obligations
www.business-review.eu Business Review | June 2018
22 FINANCIAL EDUCATION
Risky business: home insurance remains niche product Few Romanian residential properties are insured, despite compulsory policies for major catastrophes, which market players attribute mainly to poor financial education and widespread populism from the authorities, which avoid fining people for non-compliance with the law. By Sorin Melenciuc Photo: Dreamstime
I
nsurance for catastrophic events has been mandatory in Romania since 2008. Every home owner must take out a compulsory
insurance policy providing coverage for three kinds of disasters: earthquakes, landslides and floods.
COMPULSORY, BUT NOT ENFORCED Compulsory insurance (or PAD) is provided by a separate insurance company, PAID, owned by the major players in the Romanian insurance market, at a cost of EUR 10 or EUR 20 per year, depending on the construction type. For houses built from solid materials, like brick or concrete, insurance costs EUR 20 and the insured value is EUR 20,000, while houses built from cheaper materials (mud bricks or clay) are insured for EUR 10,000 for
The widespread Romanian mentality (“it can’t happen to me!”) doesn’t encourage the insurance sector
a fee of EUR 10 per year. However, after a catastrophe, which is defined as an accident with large losses in terms of either the number of victims or the amount
vides coverage to potential disaster victims,
in despite the existing mandatory insurance
of property damage, the Romanian govern-
according to the study Insurance against
scheme, due mainly to political pressure,
ment often intervenes in the compensation
Catastrophe: Government Stimulation of
which reduces people’s motivation to buy
for victims.
Insurance Markets for Catastrophic Events,
mandatory insurance.
Globally, governments intervene either be-
by Veronique Bruggeman, Michael Faure &
cause no satisfying solution is available in the
Tobias Heldt, published in 2012 by the Duke
LOW COVERAGE RATIO
private market or to fulfill the requirements
Environmental Law & Policy Forum.
According to data provided to Business
of existing compensation schemes. Government intervention in compensa-
In yet other situations (for example, with
Review by PAID, at the end of March, 1.7
terrorism risk), the government acts as a
million PAD insurance policies were in force
tion for victims of disasters can take a variety
reinsurer of last resort and intervenes when
– compared to a total of 8.9 million homes in
of forms. In some cases (for example, in
the magnitude of loss exceeds a specific
Romania – meaning 19 percent of households
Romania and other European countries),
threshold.
were covered by compulsory home insur-
the government obliges potential victims to
Finally, the government may provide di-
purchase comprehensive insurance; in others
rect compensation to victims of catastrophes
(for example, in the case of the California
either through structural fund solutions or on
Earthquake Authority), the government
an ad hoc basis, the study says.
replaces the primary insurer and directly pro-
In Romania’s case, the government steps
ance in Romania, or less than one out of five homes is insured. One of the main reasons behind the low take-up is poor education, according to PAID. “We cannot avoid mentioning the low
www.business-review.eu Business Review | June 2018 May 2016
FINANCIAL COVER EDUCATION STORY 23 14
Moreover, Romania’s compulsory insurance is not without controversy, especially because it forces individuals who run no risk at all to purchase insurance coverage. Many experts have argued in favor of compulsory first-party (in other words, bought by potential victims) insurance for property damage caused by all kinds of natural disasters. Further, compulsory insurance is thought to play an important role in improving the Photo: Dreamstime
perception of hazard. But comprehensive insurance may be an attractive alternative, which would at least foster self-protection and insurance. A compulsory insurance scheme is not enough without proper financial education
HIGH COST OF CATASTROPHES Experts point out that any alternative is betlevel of financial education in Romania and property owners’ lack of awareness. Even
help the owners rebuild their homes. The current fees – EUR 10 / EUR 20 – have
though this compulsory home insurance has
been calculated to be accessible to the entire
existed since 2008, we still notice that many
population of Romania.
do not know about it, and if they know it
“Of course it is not a high tariff, but PAID
ter than providing direct compensation to disaster victims due to the high cost to the public budget. PAID, as the key compulsory insurance player in Romania, emphasizes the role of
exists, many do not know what risks it covers
has been constantly working on all compo-
education as the main driver of increasing
or how it could help them,” PAID officials told
nents of this system, so that in the event of
insurance coverage.
Business Review.
a disaster, it will pay all the obligations as-
“Without financial education, without a
sumed by valid insurance policies. The most
concrete understanding of how an insurance
is local authorities’ lack of interest in applying
important pillar is the reinsurance program
product works, even if it is simple, such as
fines to those who are not insured.
– currently EUR 900 million – a guarantee
PAD, it is difficult to hope that we will have a
A second major reason for the low take-up
for any insured owner who, in the event of
much higher insurance coverage in the near
applied by local authorities, only the homes
damage, will receive the indemnity,” PAID
future,” PAID told Business Review.
of responsible and informed Romanians who
indicates.
“The truth is that in the absence of fines
are conscious that they have to protect their
But the compulsory insurance covers
property in the event of a catastrophic event
only the dwelling itself, not the contents or
will be covered by insurance,” PAID officials
improvements made by the owner before the
commented.
catastrophic event.
Players in the market also cite the wide-
In order to insure goods and annexes, the
Romania’s case proves that a compulsory insurance scheme is not enough without proper financial education. “Of course, the obligation to take out an insurance product should be enough to ensure a sufficiently large degree of cover-
spread Romanian mentality (“It can’t happen
owner must complete the PAD and take out
age, but here’s the reality that contradicts us,”
to me!”), which doesn’t help to encourage the
additional insurance.
PAID indicates.
insurance sector.
The role of Romania’s compulsory insur-
In the World Risk Index 2016, calculated
“And when this is supported by timely
ance law “is a social one and the help it offers
by the United Nations University Institute for
aid received from local authorities following
is extremely important in the event of a major
Environment and Human Security (UNU-
events that affect inhabitants, it becomes
disaster,” PAID says.
EHS), Romania ranks 97th globally on the
even harder to explain to them that in the
But many experts point out that the
event of a major disaster, the state will have
limited population coverage reflects the low
no way of helping them to rebuild their
density of insurance in Romania.
basis of vulnerability and its exposure to natural hazards. According to the authors of the study, Ro-
houses and that, for this reason, compulsory
In 2017, the entire property insurance
mania has a risk index of 5.92 percent, higher
home insurance was introduced,” PAID says.
market in Romania was worth RON 1 billion
than the indexes of most European countries.
(around EUR 210 million), and the insurance
The last major catastrophic event in Roma-
SOCIAL ROLE
density was about EUR 108 / inhabitant, com-
nia was the big earthquake that struck on 4
According to calculations made at the time
pared with more than EUR 500 in the Czech
March 1977, with a magnitude of 7.2.
the law entered into force, EUR 10,000 / EUR
Republic and more than EUR 300 in Hungary
20,000 were considered large enough sums to
and Poland.
It killed some 1,578 people, including 1,424 in Bucharest, and wounded more than 11,000.
www.business-review.eu Business Review | June 2018
24 FINANCIAL EDUCATION
RCA insurance market expects smoother road Players tip the mandatory car insurance market to stabilize in 2018, after years of controversies such as bankruptcies and driver protests against the cost of RCA policies. By Ovidiu Posirca RCA DIRECT SETTLEMENT GAINING GROUND The system of direct settlement for RCA is becoming increasingly used on the market, according to players, as it allows insured drivers to be compensated by their own insurer for damages in the event of incidents where they are not at fault. This is an extra, payable option for any driver that purchases a mandatory RCA policy. It boosts after-sales operaPhoto: Dreamstime
tions, but cannot replace the full coverage of CASCO. Calin Matei, deputy general director of Groupama Asigurari, says that there is growing interest among the company’s customers for the direct settlement facility. Players expect a more stable RCA market in 2018
T
he RCA insurance market fell by 8.2
“We believe there is significant growth potential for this type of policy in Groupama’s
second-hand cars from Western Europe.
RCA portfolio and we’re aiming for policies with direct settlement to reach over 10 per-
percent last year to RON 3.7 billion
“Insurers will have to market to custom-
(around EUR 800 million) worth of
ers CASCO products that are adapted to the
cent of the RCA portfolio by the end of 2018,”
car stock, translating into products that
Matei told BR. Elsewhere, for Gotaher Asigu-
gross written premiums, year-on-year.
have a more restrictive coverage both for the
rari Reasigurari, the RCA segment accounts
stable and predictable, due to the legal
customer and the insurer,” added UNSAR.
for roughly one quarter of its general insur-
package approved in 2017 regulations that
On the car segment, they will also have to
ance portfolio. “From this perspective, we
brought benefits for the industry and mainly
keep up with new technologies, including
don’t foresee significant changes, but on the
for consumers: direct settlement as a support
driver-assist and self-driving systems, which
other side, the increase of auto repair costs
mechanism for customers when selecting
means they will further have to update their
(by around 10 percent versus 2016, due to the
damage coverage services, for those with a
risk policies.
cost of spare parts and painting materials), as
“In 2018, the RCA market will be more
high degree of risk,” representatives of the
Trends in the car market have a crucial
well as insurers’ efforts to optimize adminis-
National Union of Insurance Companies in
role in the overall development of the insur-
trative expenses, manage their portfolios and
Romania (UNSAR) told BR.
ance industry. Auto insurance cover repre-
improve the net result of this segment, will
sented around 74 percent of the total gross
represent some of the biggest challenges in
oping the optional CASCO insurance product,
written premiums in general insurance and
2018 and beyond,” Mihut Marculescu, chief
added UNSAR. The main challenge is the old
59 percent of the gross premiums subscribed
underwriter at Gothaer Asigurari Reasigurari,
stock of registered cars, whose average age
by insurers in the previous year.
told BR. He added that the insurer is planning
Some players might focus more on devel-
to increase its presence in the CASCO market.
climbed from eight years in 2016 to 12 years
The annualized value of an RCA policy
and three months in mid-2017, according to
fell by 14 percent year-on-year to RON 695 in
representatives of the Romanian Auto Regis-
2017, with prices for individuals at RON 518,
insurance market in the non-auto segment.
try (RAR).
Players also predict an expansion of the
while for companies they reached close to
According to UNSAR, insurance for fire,
Companies will continue to grapple with
RON 1,300. The average amount paid out by
natural disasters and other categories grew by
an auto market marked by massive imports of
insurers for damages was around RON 5,600.
around 6 percent year-on-year.
www.business-review.eu June 2016 2018 Business Review | May
FINANCIAL COVER EDUCATION STORY 25 14
How to choose the right loan for your SME Romania has around 450,000 small and medium enterprises (SME), a crucible for the businesses of tomorrow. But experts say many SMEs struggle to survive, due to a lack of proper business plans and, maybe more importantly, financing. Business Review sets out how a Romanian SME can borrow money from local banks. By Sorin Melenciuc
R
Photo: Dreamstime
omania’s lenders have a lot of financing tools designed specifically for SMEs, and hundreds of millions of
euros are currently available. But loans come with a cost, in the form of interest, and a small company usually needs collateral in order to access funding. Romanian banks currently ask firms to be in good financial health – in profit or at least with a sound business and a clean balance sheet – and collateral. Of the total number of SMEs in Romania, only about 80,000 are posting profit, an important criterion for accessing a loan. But it is not only profit that matters to banks. Most banks in Romania have separate products designed for SMEs, in two different categories: loans for investments and cash
Most banks in Romania have separate products designed for SMEs
flow loans. Cash flow loans are usually shortterm loans – one to three years – and invest-
ment of debts to the state budget, payment of
ments in the event of a gap between earning
ment loans are generally for longer terms
suppliers – of a minimum of EUR 7,000 and
and payment. The bank usually finances 70
– from five to ten years.
three years maximum maturity. Companies
percent of the value of the invoices.
Most funds currently available to SMEs in
interested in accessing these loans need a
SMEs without enough collateral, but with
Romania are from external sources. In 2017,
mix of guarantees that include a mortgage on
a sound business, can take out bank loans us-
six local banks signed operational agreements
current accounts and personal or real estate
ing the state guarantee scheme offered via the
with the European Investment Bank (EIB) to
collateral. For the same purpose, Alpha Bank
FNGCIMM. Romania’s government-backed
receive EUR 400 million to finance SMEs.
Romania offers cash flow loans with a matu-
guarantee fund has agreements with many lo-
Banca Transilvania (BT) grants loans
rity of at least one year to SMEs with mini-
cal banks and can guarantee up to 80 percent
to SMEs from the EIB credit line for both
mum 12 months of activity and the existence
of a loan granted to a small company.
objectives: investments and cash flow, with a
of at least one annual balance sheet.
maturity of two to ten years. BT asks SMEs interested in accessing these
The list of accepted guarantees includes
In some cases, banks agree to grant loans to SMEs without collateral. Banca Transil-
state guarantees, real estate collateral, a
vania has a product called “Fast credit line
funds for several documents: a copy of the
promissory note issued by the company and
without guarantees” for SMEs without restric-
last two annual balance sheets, an audit of the
endorsed by shareholders, mortgages on ac-
tions to issue bank checks, not included in
balances, legal approval of the credit agree-
counts, and cash collateral among others.
the Credit Risk Center with delays longer than
ment and a tax certificate. Raiffeisen Bank offers SMEs cash flow credit lines – for the purchase of stocks, pay-
But some SMEs can use credit granted on
15 days, without attachments on assets or
the basis of invoices, promissory notes or
suspended accounts and without listings in
cash receipts to cover working capital require-
the Insolvency Proceedings Bulletin.
www.business-review.eu Business Review | June 2018
26 FINANCIAL EDUCATION
Local players sow the seeds of financial education With financial education considered one of the most important pillars of a healthy society, local players active in the financial sector have focused on developing and implementing educational programs for the young generations. By Anda Sebesi Photo: Dreamstime
A financially informed public is important for any healthy economy
A
ccording to Eurostat, the statistical office of the European Union, the percentage of adults who use online banking services has doubled in the last ten years, reaching an average of
51 percent in 2017. The same study says that age and level of education – financial education in particular – are the two factors that have the highest impact on a consumer’s decision to bank online. A financially informed public is one of the most important pillars of any healthy economy and its absence leads to the social and economic exclusion of those who don’t have access to information and financial products and services. As international data shows, financial inclusion remains a significant challenge worldwide. According to World Bank estimates, more than 2 billion individuals worldwide had no access to financial services in 2016, while just 59 percent of men and 50 percent of women in emerging markets had a current account. In addition, the international financial turmoil which started back in 2008 showed that the world population is not ready to cope with a crisis and that they have a poor level of knowledge of financial products and mechanisms.
www.business-review.eu Business Review | June 2018 May 2016
According to a report issued by the Organization for Economic Co-operation and Development (OECD) there are still significant gaps between countries in terms of the level of financial education of the general public. The report found that Romania, along with Serbia and Latvia, was among the countries with the poorest level of understanding of basic financial concepts in Europe. Against this backdrop, many players acting on the local financial sector – including Visa, Mastercard, ING, Raiffeisen, BCR and Banca Transilvania – have decided to make their contribution to financial education and have started to develop such programs, either alone or in partnership with NGOs. For example, this year Mastercard supported the fifth edition of the Olympiad of Small Bankers, a program in which children competed to show their financial knowledge. “Financial education is crucial for a modern and healthy society. As future players on the economic scene, either as consumers or entrepreneurs, the current generation of students have at their disposal all the tools needed to get key knowledge and a responsible attitude towards money,” says Cosmin Vladimirescu, general manager of Mastercard Romania. Apart from supporting young people’s financial education through traditional and specific courses, local financial players have brought to the market some innovative models. For example, earlier this year BCR launched an online show, on YouTube, called School of Money (Scoala de Bani). It is positioned as the first financial literacy show in the Romanian vlogosphere. The show takes about six minutes and covers themes like loans, cards, insurance and advice for a wealthier life and personal development. “Since we launched Money School two years ago, we noticed how easy it is to change individuals’ perceptions of financial behavior when you offer them interactive and simple tools. While meeting with youngsters, we realized that they learn from vlogs and get information about holidays and gadgets by following vloggers. Thus, the most direct way to approach them was to move the education from the classroom to the online environment,” says Nicoleta Deliu, coordinator of the national program School of Money. According to her, over 70 percent of youngsters active in the digital environment follow at least one Romanian vlogger. Raiffeisen Bank has also brought something new to the local market with the launch of the eighth edition of its ABCdar bancar in digital format. The program, supported by the lender and developed in partnership with Junior Achievement (JA), aims to offer through the LMS JA Inspire platform free access for both students and teachers to digital financial learning. The initiators intend to reach about 2,000 students and their teachers and coordinators from 55 high schools through their platform by yearend. In addition, along with the launch of the digital part of the ABCdar bancar project, Raiffeisen Bank and JA launched a competition called “I support financial education in my community” with the aim of encouraging the introduction of an optional financial education class in as many schools as possible. Last but not least, Banca Transilvania in partnership with Ken Academy has developed Ken Money, a financial education program for children. It aims to help kids understand a lot about money, how they can manage it effectively, and how to develop their capacity to make the best possible decisions about it.
FINANCIAL COVER EDUCATION STORY 27 14
www.business-review.eu Business Review | June 2018
28 FINANCIAL EDUCATION
Banks lend large deals a financing hand On a mergers and acquisitions (M&A) market that climbed to over EUR 4 billion in 2017, banks’ role in financing transactions remains critical, especially in the case of deals that break the EUR 100 million barrier. By Ovidiu Posirca “Banks remain the first option in M&A financing for strategic investors in Romania,” Coman told BR.
DEALS TO THE TUNE OF EUR 100 MILLION AND MORE Usually, banks step in when the acquisition value exceeds EUR 100 million and can provide financing through club deals. This process involves a bank arranger and/ or agents that can also get parent banks on board or can directly raise funding from international markets. “If the financing is done with arrangers/ international bank agents, the documents will Raluca Coman, Clifford Chance Badea
R
Ioana Filipescu, Deloitte Romania
meet the standards required for the syndication of the respective exposures on international markets,” Alina Radu, partner and head
omania’s deal-making activity
Romanian entrepreneurs and other mid-
of banking and finance at law firm NNDKP,
involved 15 transactions with a value
sized strategic investors are also more often
told BR.
between EUR 100 and 500 million in
using loans from local and regional banks to
The financial complexity is higher in the
2017, the highest number in the past decade,
partially fund acquisitions, so indeed there is
case of private equity funds. For deals above
according to consultants at Deloitte, the
a clear trend towards using more debt financ-
EUR 100 million, there is typically an equity
professional services firm. The average value
ing for M&A,” Filipescu told BR.
component that can be as low as 30 percent
of a transaction stood at EUR 60 million last
Banks’ interest coupled with the low cost
and a syndicated bank facility structured in
year and the overall value of the market is
of debt are fueling this trend, while mez-
various tranches (revolving, amortizing, bul-
estimated to have reached EUR 4.6 billion,
zanine debt, direct lending and using bonds
let), according to Filipescu of Deloitte.
if transactions with undisclosed values are
to finance acquisitions remain less popular
included. Based solely on M&A deals whose
options, says the partner.
values have been made public, the market
In industries such as energy and real
“Banks have dedicated teams involved in financing M&A transactions, which are part of investment banking divisions, structured
stood at EUR 3.8 billion, growing by 15 per-
estate, investors always use debt in their
finance departments or project finance
cent year-on-year
deals, to cover as much as 70 to 90 percent
departments. These teams review all the deal
of the price, said Filipescu.There are also
documentation, receive due diligence reports,
been financed with equity, which left more
cases in which large international financial
create financial models and evaluate the abil-
negotiation room for buyers, according to
institutions buy stakes in companies with
ity of the lender and target to repay the debt
Ioana Filipescu, M&A partner at Deloitte
high growth potential, based on strong due
being raised. At the same time, they are also
Romania, who adds that the usage of various
diligence.
responsible for the more ordinary activities,
Generally, acquisitions in Romania have
forms of debt in on the rise.
Meanwhile, the low-interest rate environ-
identifying, evaluating and securing col-
ment of the past few years has seen leverage
lateral, and evaluating risks relating to the
now using pre-existing multi-purpose credit
loans holding a commanding grip on the
market, operations, liquidity and reputation,”
facilities at international level to fund acquisi-
acquisition finance market, but some inves-
she outlined.
tions in Romania. Private equity investors are
tors are looking to tap the capital market as
Filipescu added that comfort and experi-
increasingly using leveraged buy-out loans
an alternative funding source, according to
ence in dealing with the client and the M&A
and debt push-down structures to optimize
Raluca Coman, senior associate, banking &
financing products are key aspects for banks,
their returns on equity investments. Private
finance, at law firm Clifford Chance Badea.
before they consider the merits of the deal.
“Many of the global strategic investors are
www.business-review.eu Business Review | June 2018 May 2016
TWENTY YEARS COVER IN REVIEW STORY 14 31
Romania’s economic adventures in the past 20 years In just over two decades, Romania has lost more than 3.5 million inhabitants, 2 million employees and around 1.6 million jobs. Over the same period, the country’s GDP has expanded fivefold, while wages have also grown exponentially. Meanwhile, foreign investment flows have jumped more than 10 fold. By Ovidiu Posirca
A
Photo: Dreamstime
fter the painful early 1990s, marked by triple-digit inflation and attempts to privatize large state-owned com-
panies from the communist era, the economy continued to remain in the red up until 2000. Huge layoffs and chronic unemployment were among the major issues in the mid-90s. More than a million people were out of work in December 1998, according to the National Institute of Statistics (INS). By comparison, in December 2017, some 350,000 Romanians were looking for a job. Output fell by 16 percent in the 1997-1999
Romania’s economic growth of 6.9 percent in 2017 was the biggest in the EU
period, as the central bank made last ditch efforts to prevent Romania from slipping into
mained stubbornly high at around 11 percent,
were truly felt after 2008, when the economy
a sovereign debt crisis. Following a series of
while the number of employees shrank by 2.2
grew rapidly, up by 8.5 percent, as a lending
bankruptcies in the banking sector in the late
percent compared to 1992.
boom boosted consumption. The number of
90s, the authorities enforced new rules that
“In 2000, Romania resumed its fight with
employees exceeded the 5 million milestone
aimed to make lenders more sustainable. This
inflation and re-started its economic growth
for the first time in a decade, while the unem-
marked the start of a period in which foreign
based mainly on exports,” said Horia Braun,
ployment rate fell to 4 percent.
financial groups began to take over local
chief economist at BCR.
banks through privatization. “Up until 2000, there was a period of
Thanks to EU membership, the Romanian economy became more connected in terms
TWO KEY MOMENTS FOR THE ECONOMY
of trade. In 2009, Romania entered its first
major structural transformation, but without
In 2004, when Romania joined NATO, the
recession in 18 years, with a 7 percent con-
defined approaches or continuity in reforms,
economy was riding the growth wave, at least
traction in output. Wages in the public sector
and there wasn’t a normal economic cycle.
on paper. GDP expansion hit a record of 8.5
The economy was mainly dominated by agri-
percent, while the median wage reached USD
culture,” says Ionut Dumitru, president of the
185. Inflation dropped below 12 percent, with
Fiscal Council.
GDP per capita at USD 4,577. Jobs remained
From 2000, Romania started aspiring to be a member of NATO and the European Union. The country’s international ambitions also
hard to come by, with the unemployment rate edging close to 7 percent. By joining the EU, Romania’s borders
made foreign investors more confident about
opened for the free trade of merchandise,
were slashed by 25 percent the next year. The
launching operations in Romania.
allowing free flows of capital, but also remov-
economy began to post a solid recovery in
Average wages climbed slightly to USD 134
ing restrictions on the labor market. In July
2013, when GDP grew by 3.5 percent, while
per month, while Romania’s GDP hovered
2007, the population fell by 50,000 people
the number of employees was up by around
around USD 40 billion. Romanians’ purchas-
year-on-year. The number of employees
100,000 versus 2010. Over the next few years,
ing power stayed low as the average inflation
climbed significantly to 4.88 million.
the economy climbed steadily, posting a
rate stood at 45.7 percent. Unemployment re-
The fruits of Romania’s EU membership
record 6.9 GDP hike in 2017.
www.business-review.eu Business Review | June 2018
32 RECYCLING
Rubbish performance: Romania seeks to recycle and reuse The waste that humanity produces at global scale, whether from domestic or industrial activity, represents a problem that we all have to face and fix. Fortunately, there is a road for all EU countries to follow to increase recycling and reduce landfill. By Aurel Dragan to be rerouted to third countries, which may not have the facilities for safe recycling, causing environmental damage.
TIPPING POINT The USA, Canada and most of the countries in European Union were depending on China to get rid of their scrap paper and plastic. So the issue will not go away easily, especially if you consider that China had been ‘the solution’ since the 1980s and 1990s, when the country, which had a lot of cheap labor, was eager for raw materials. Today, everybody is looking at countries like Indonesia, India, Vietnam or Malaysia, but they can’t cover the needs of the world’s rich – at least not yet – as they just Photos: Dreamstime
don’t have the capacity to recycle at such a huge level. The EU is not doing much better. Although it has proclaimed itself a ‘champion’ of recyRomania must recycle 65 percent of the weight of all packaging waste by 2025
T
cling and reusing, the bloc collected a total of 56.4 million tons of paper in 2016, of which about 8 million tons ended up in China. In
he world’s largest consumer of waste
in plastic bottles, and sets new limits on the
the same year, the EU collected 8.4 million
was, until last year, China. The
levels of impurities in other recyclables.
tons of plastic waste and sent 1.6 million tons
country was recycling about half of
The United States of America is the biggest
to China. Last year Chinese imports of scrap
the globe’s plastic and paper products, but in
exporter of waste, sending out of the country
paper from the EU stood at just 6.4 million
2017 it stated that it no longer wanted to be
more than 13.2 million tons of scrap paper
tons and 1 million tons of plastic. And the ban
the “world’s garbage dump”, a decision that
and 1.42 million tons of scrap plastic, most
was not in effect like it is in 2018.
came into effect on January 1 this year. China
of it to China, according to a study by the US
The best solution to curb the buildup
has not really stopped recycling; it is just not
Institute of Scrap Recycling Industries. The
of waste is to recycle and reuse as much as
taking any more bad quality waste – meaning
whole US industry of collecting and sorting
possible. The EU, Romania included, has es-
that there was too much mixed waste com-
waste employs about 155,000 people and the
tablished a long-term road that should lead us
ing into the country. Mixed waste is plastic
value of exported waste to China was USD 5.6
to that goal. But that is not going to happen
or paper mixed with or contaminated by
billion in 2016.
to soon. So right now one solution for getting
food waste, which raises the humidity of the
The USA has accused China of violating its
rid of the piles of waste is incineration. The
recycled waste, making it more difficult to
World Trade Organization obligation of not
best example is Sweden, where the incinera-
process and generating less recycled output.
treating domestic and foreign waste differ-
tors are so efficient that they have run out of
China’s ban covers imports of 24 kinds of
ently, but to no avail. On the other side of the
waste to burn. There is a problem there: while
solid waste, including unsorted paper and the
ocean, European Union representatives have
Sweden considers incineration a recycling
low-quality polyethylene terephthalate used
said that China’s new policy will force scrap
process, it is not quite so. Burning the waste
www.business-review.eu Business Review | June 2018
34 RECYCLING
is solving the problem of landfill, but it’s nei-
Romanian waste in numbers
ther reusing nor recycling the waste. Sweden had to close three of its high quality incinerators because it couldn’t find any more suitable waste for them. And we have, in Europe, incinerators all over the continent, particularly in Sweden, Germany, the
•
In 2014, the latest year for which data are available in the National Waste Management Plan, a total of 4.95 million tons of municipal waste of all kinds was collected in Romania;
•
The most waste collected was from households, both separately and mixed. It reached 2.9 million tons and includes reusable or recyclable waste, while garbage from the streets stood at 340,000 million tons;
•
The population account for 72 percent of all municipal waste collected, while public services waste made up 10 percent and other waste 18 percent;
•
The municipal waste collected in 2014 came to 249 kg per capita (for urban areas only) against an EU average of 474 kg per capita;
•
On average, household waste is 60 percent made up of biodegradable products (mainly food waste), while scrap paper and cardboard represent 12 percent, metals 11 percent and plastic around 7 percent.
Netherlands and Denmark. But the carbon dioxide that results from the burning is not seen very well anywhere in the EU. In fact, at the last IFAT, the trade fair for water, sewage, waste and raw materials management, there were a lot of discussions over finding a way to trap the carbon dioxide (which can be used for a lot of purposes). But it will not be easy or cheap. Burning waste is a regular practice even in Romania, but mainly in specialized incinerators. For example, cement producers use
instruments to discourage waste storage and
95 percent. Also, the weight of waste coming
burned waste residue as binder for their
simplified and improved definitions and cal-
from housing renovations, either interior
final product, but only use low-humidity
culation methods for harmonized recycling
or exterior, destined for landfill should not
waste. The problem is that even the plastic
targets. An important stipulation is to cut
exceed 50 percent. Overall, the weight of
is contaminated because it is not collected
the generation of food waste in primary and
municipal waste given to recyclers should be
separately. This means that we are also im-
secondary production, in shops, restaurants
55 percent of the total waste collected.
porting waste for those incinerators that need
and other food service locations and also in
it. In the past there were also problems with
homes.
those imports, with inspectors finding that
France, for example, banned food waste
Today, the main problem we have is that garbage is not sorted and recycled selectively, combined with a lack of infrastructure to cap-
what was supposed to be recyclable waste
in supermarkets and restaurants a few years
italize on the waste. On their part, individuals
was mixed with household waste. Today it
ago. Companies can sell food products at a
should separate their waste by raw material
doesn’t seem to be a problem, but we should
marked-down price before their expiry date
(food waste, plastic, metal), while collectors
not be complacent.
or donate them or use them in meals before
should take them separately. We may look at
the date so they last longer (until consumed).
the example of Sweden and other developed
THE EUROPEAN PLAN
This is the simplest way to stop waste, even
countries and wish to emulate it (as they have
According to the Circular Economy Program
if it is not fighting the waste at the primary
the infrastructure and the mentality), but we
adopted by European Commission in 2015, by
source (the vegetable or livestock farm).
forget they reached this point after decades of small steps. For example, Swedes who did
2030 the country should be ready to reuse or recycle 65 percent of municipal waste (with
THE LAWS ARE IN PLACE
not respect the garbage collection schedule
an interim target of 60 percent by 2025).
Romania has quite a number of laws regu-
would be given a red trash can so everybody
Romania can postpone the term by five years
lating the way waste is collected and the
could see that they were not ‘good citizens’,
on the condition that it reaches 50 percent of
amount that should be reused or recycled,
and today people will do anything not to be
waste being reused or recycled by 2025 and
including a National Waste Management Plan,
seen with a red bin.
60 percent by 2030. The program also stipu-
that transpose the EC regulations in this field,
lates that we must reuse or recycle 65 percent
including those from the circular economy
and adopting and implementing the National
of the weight of all packaging waste by 2025
program. All the new regulations should
Waste Plan is just the beginning. It should
and 75 percent by 2030. By the same year,
become law after the government emergency
have plans based on ‘the metabolism of the
2030, only 10 percent of municipal waste will
ordinance for the modification and comple-
city’ that can take into consideration the
be allowed to go to landfill; this deadline can
tion of law no. 211/2011 and law no. 249 are
specifics of Romanian urban and rural areas.
be pushed back five years under the condition
adopted.
Reusable goods will soon get a boost in shops
that only 20 percent of the municipal waste
Under the Ordinance the minimum level
There are many things Romania could do,
and supermarkets through a fee on things like
of municipal waste collected and handed
glass packaging. And while biodegradable
over to recyclers should be 52.5 percent of the
waste can be used in agriculture as a fertil-
economy also prohibits the storage of sepa-
total, while the level of waste collected and
izer, paper, cardboard, metal and plastic can
rately collected waste, and sets out economic
handed over to a sorting station should be at
be recycled.
goes to landfill by 2030. The European program for the circular
www.business-review.eu Business Review | June 2018
36 INTERVIEW
‘Technology hasn’t changed architecture’ Winner of several international awards for architecture, and creator of the Elastic Living and Black Cube concepts, Angelo Roventa was one of Romanian Design Week 2018’s special guests. BR sat down with him and talked about urbanism, modern buildings and the new architecture and its impact. By Romanita Oprea
ABOUT Angelo Roventa Executive Director, Roventa Architecture Planning Urban Design Studied at the Ion Mincu Institute for Architecture, Design and Urban planning, Bucharest Graduate of the Academy for Applied Arts, Vienna (Hochschule für angewandte Kunst-Wien, Meisterklasse Prof. Hans Hollein) with the title: master’s degree in architecture (Magister der Architektur). Since 1990, freelance architect with projects and achievements in the field, at national and international level. manner. I wanted to be a sculptor, but I later changed my mind and wanted to be a doctor instead, as I had many relatives working in that field. But my mother was opposed to the idea. As a doctor herself, she thought that I wasn’t cut out for it. So she suggested I chose architecture, even though back then I had no idea what it meant. I passed the entrance exams, but my real, whole interest in the industry started when I began to pay it attention, to try to understand it and see what it was all about. Back then, everybody in Romania used the phrase “to steal trade”. But that was something I’ve always felt was wrong. It’s like today if I said something from the language of those times. Because the atmosphere in the Mincu Institute was extremely good. Those who wanted to learn and were interested always received help. In my case, it was school that got my interest back on track. In Western Europe there is conventional study, with everybody in full competition mode, all the time, and everyone is responsible for what they can learn or not. But
What advice would you give to young Romanian artists wanting to make themselves known and, why not, break the Romanian borders?
of advice. I believe one is drawn by the desire
at Mincu we had a lot of team spirit, and
with which one entered this field of activity.
architecture is a team job. In the past, inter-
The projects that gave me the biggest per-
nationally, there were names of important
sonal satisfaction were the ones I proposed
architects who became brands, but today all
I think that it is very important to be driven
myself. The themes I gave myself. It might
this is gone. There are some names, but this
by the desire to do it. Perseverance. Cour-
also be because I had the biggest success with
attitude is completely in the past, from my
age. Trust in oneself. A dimension and a state
them.
point of view. if they were divinities, and instead people
The steps taken depend on each individual’s
What made you decide become an architect?
personality and I cannot offer general pieces
The architecture path came to me in a strange
done, it’s a healthy trend.
When architects are not talked about as
of love. If you could be permanently in love you would produce fantastic works of art.
talk more about what they’ve managed to get
www.business-review.eu Business Review | June 2018 May 2016
How would you characterize the quality of submissions that you were asked to choose from at Romanian Design Week 2018?
COVER INTERVIEW STORY 37 14 which many traditions and cultures, artisans
sumption. When I was a student at Mincu we
and their qualitative work all left their mark.
studied on tempera and China ink. You could find all types of crayons everywhere. In the meantime, the architects still studying have
thenticity, creativity and the desire to fit as
How do you see this combination between old and modern buildings? Does it have any logic?
correctly as possible to the proposed theme.
There has been logic forever. We can think
a one-to-one model of a house was built, in
There are some extraordinary works, but I
about Ceausescu’s times when many build-
order for them to understand. Even in my
cannot figure out where they come from. I
ings were razed and entire places disap-
time I had to learn descriptive geometry; I
have no idea if they are from Bucharest or a
peared, as we still bury the tracks from those
had to learn all kinds of things. And it’s not up
suburb in Paris or somewhere in Frankfurt. I
days. It all had a logic. Now whether it was
to human intelligence, but about the practice
was less interested in that type of works and
good or bad logic is another discussion. But
you need in this field.
more drawn towards the ones in a context
what it translates from those changes is
and how correct was the answer they gave.
positive. Contemporary architecture risks
kind of relief, with the technology of Virtual
Architecture can exist as long as there is
destroying the public environment. There is
Reality glasses. This technology allows you
money and the faster the client defines its
an architectural object that it cannot satisfy,
to just walk around the built space and to see
problems and architecture gives it answers,
from a town planning point of view.
exactly what you will get. This is extremely
I was more interested in discovering au-
stopped using them. No crayons, no chalk. For Ceausescu and people from that time,
At the moment it’s working, and it is some
important. It’s a very interesting and neces-
the better. Clients are diverse and we must
sary leap.
of a city the client is the administration
Are there some European cities whose examples you would say that Romania could follow?
alongside the politicians. But the final client is
No, Romania has enough energy and creativ-
I design traditionally, by hand. The biggest
actually the public who wants to benefit from
ity to design itself. I believe that, from this
step for me was when I started to reduce the
places where children can play or a bicycle
point of view, it would be a mistake
track, a park, etc. We all know that green
to look at other examples. It would
spaces are disappearing from crowded, urban
be just like looking at Sibiu, Brasov
centers, where we don’t have a place to park
or Targu Mures, a Transylvanian
our cars, etc.
city that has a completely different
always ask who those clients are. When it’s about public buildings or the development
Therefore, the architecture that is born
architectural language; totally dif-
reflects very clearly the state of the society
ferent elements have generated the
that is using it. There is a strong fight starting
architecture and it would be some-
from urbanism and ending with the decora-
thing artificial, imported. It would be
tive objects that we find in stores and that
a horrible mistake.
can make our houses more beautiful. All
I personally don’t design with the help of the computer; only my collaborators do.
Unfortunately there are always
designers, town planners and architects do
imported things that you can easily
is look towards whoever is giving them their
find in Budapest or anywhere else in
“homework”: their clients.
the world. I was always surprised by the built
dimensions of the plan, because I did a lot
A very famous architect, Luican, said 50
substance, which is something fantastic. This
of town planning. I started to reduce them
years ago that it doesn’t matter how good the
is why I was trying to criticize what happens
and make them more and more compressed.
architect is, the important thing is that the
at the outskirts.
Through the graphic representation I was able
client is good. How do you believe Bucharest looks from an esthetics and town planning point of view? Each city has an esthetics of its own. The
If people looked for continuity, it would be
projects that some years ago I did only at a
something being imported; it’s a demonstra-
very large scale. And all I need is a pen. I gave
tion of useless forms.
up the academic forms completely because
problem that we encounter is that everything is newly built. I can talk about how European
to express and to draw on a piece of A4 paper
much better. Unfortunately, there is always
the technology developed alongside the design stage. But, in the end, it’s just an object.
Since then the impact has been too weak.
Technology has changed architecture a lot in recent years. How much do you believe it can still change it?
What happens on the outskirts of Bucharest
I don’t know if technology has changed ar-
to be thought of. The computer only helps
is something that happens everywhere. If I
chitecture. Technology is an instrument that
you make the most accurate representation
visited a city, anywhere in Europe, I wouldn’t
has helped the architect’s work to a certain
possible in order to have a very good basis for
go to the outskirts. And if by pure chance I
degree. Architecture has always had the prob-
discussion with the client.
ended up there, they all look the same. The
lem of representation, of being able to express
cities are still characterized by the times in
what the architect was presenting for con-
cities and Romanian cities were 40 years ago.
For me it is very clear that the computer is not doing the project as the project needs
The creativity dimension cannot be overtaken by a technological intelligence.
www.business-review.eu Business Review | June 2018
38 MARCOMM
How to organize a great pitch Although the local marcomm industry is winning major awards internationally and Romanian specialists are giving speeches and presentations at top international events, players complain that most clients still have problems learning and using the basic industry ABCs. Many continue to invite too many agencies to pitches, don’t pay them for their efforts and sometimes even steal their ideas and use them with rivals. By Romanita Oprea
Carmen Simion, Dentsu Aegis Network Romania
W
Raluca Ene, Chapter 4 Romania
Mia Munteanu, Marks
hat should a client know and take
are looking for – you can see it from the way
relationships, they need a ‘lead’ agency, or a
into consideration when organiz-
the brief is written. There are no studies or
‘one-stop-shop’.
ing a pitch? First of all, it depends
solid research to support the brief there are
“The second point is for the client to
on the point the business is at. It’s one thing
no internal processes to provide relevant
define very clearly the selection criteria. Also,
to be on your first pitch with your first agency
information, such as other campaigns with
take into consideration that for the agency
and another to be considering changing the
similar results or mechanisms, or conclusions
a pitch is always an extra job, and agencies
agency you already have a partnership with.
drawn from other tested projects. The work
usually put a lot of resource into any pitch: in
According to Carmen Simion, new business
structure is often faulty. The marketing teams
terms of people, time and money. It would be
director at Dentsu Aegis Network Romania,
are already hyper busy, and the pitch is just
great to offer some compensation for agen-
a client should define their needs very well,
another ‘to-do’ on their lists. You can notice
cies that take part in the pitch. Try to invite
whether they are seeking an agency for the
this from the short deadlines that agencies
specialist agencies, depending on the needs
long term or just for one project. After they
are given,” says Mia Munteanu, client service
of the brief,” adds Simion.
have their needs defined they should scout
director at Marks.
After these important steps comes the
for agencies to make a shortlist: see which
The Institute of Practitioners in Advertis-
brief, which often proves to be a big chal-
ones provide the services they need, what
ing (IPA) recommends a checklist for clients
lenge, both for clients and agencies. “The
groups the agency is part of, the portfolios it
to consider before embarking on an agency
pitch organizing team should gain the full
handles or has handled, what kind of projects
search. First of all: why are they organizing
agreement of all those involved in the deci-
it has done and finally, what are its references
the pitch, do they have the full support of
sion-making process about the requirements
like (if any).
the top management, do they really need
of the agency. They must invest time and
“I’ve had experience with dozens of
outside help or can they handle the process
effort in agreeing the budget and producing a
pitches over the years and almost every
internally? Another aspect, especially when
written brief describing the brand or com-
time the companies have proven to have no
choosing another agency or adding a second
pany’s current position, and where it wants to
development strategy from the beginning.
one: clients should decide whether they are
be in the context of clear marketing and busi-
The departments cannot pinpoint what they
acting as the orchestrator of a series of agency
ness objectives,” says Cristina Oncescu, head
www.business-review.eu Business Review | June 2018
40 MARCOMM
conducting a successful review and selection
etc, while Munteanu cites the importance of
process,” adds Oncescu.
relevance. “The client needs to know how
If the client has covered the above and still
The main DON’Ts By Cristina Oncescu, head of strategy at pastel 1. DON’T do it if you can still fix the situation with your current agency. A pitch is expensive and time-consuming for both the client and the agencies involved. 2. DON’T fish for ideas and never award a winner. 3. DON’T appropriate ideas from non-winning agencies. 4. DON’T do it without a clear brief. 5. DON’T do it without having clear evaluation criteria. Make sure the agencies are aware of them. 6. DON’T do it without a set budget. It’s frustrating to receive great ideas that cannot be implemented because they cost way more than the available budget. 7. DON’T invite more than three agencies, or four with the incumbent agency. Hold a thorough pre-selection process. 8. DON’T take more time to announce the winner than it took the agencies to prepare the pitch proposals. 9. DON’T avoid post-pitch meetings with non-winning agencies. Tell them why they didn’t win.
to make the difference between a strategic
decides to go through with the pitch process,
solution with a creative resolution (good
here are the steps: prepare all the necessary
ideas that are grounded in real life) and the
background information, hold chemistry
creatives’ exercise of their imagination, with-
meetings and sign a confidentiality agree-
out a strategy compass (the ‘wow’ ideas that
ment, think of the response required and
are apparently timely executions, but which
prepare a written brief accordingly, consider
do not actually help the company grow on the
the time necessary for response to the brief,
long term.) Reality beats fiction every time.
give the agency background market data,
What do you do with the ideas you receive?
interpretation and clarification, agree basic
Do you have the right context to make them
contractual terms upfront, understand the
grow?”
roles of all those involved on both sides and set up an objective evaluation system.
THE PR SIDE OF THINGS
All the specialists canvassed by BR agree
“There are two main things to cover when
that the client should invite no more than five
preparing a pitch: the process and the con-
firms to take part in the pitch process, three
tent. When it comes to the process, it would
being the perfect number.
be in all parties’ best interest for the number
In Munteanu’s opinion, the brief should
of agencies invited to be kept at a reasonable
most of all be honest with itself, with the
number – three to maximum five would be
expectations of the company it represents
ideal. This is usually enough for the compa-
and with the agency. “It is simple in theory,
nies that have identified correctly their need
complicated in practice. It doesn’t matter
for communication services and researched
how well you can write a brief, what matters
the local market for the agencies that best
is how realistically you can estimate your
fit these needs. In order for the companies
own resources and the transparent commu-
to identify these agencies, anything on their
nication that you can build with your project
websites, social media and mass media
partners,” notes the Mark representative.
presence, as well as recommendations from
That said, the IPA has three basic prin-
fellow professionals would help a tremendous
ciples that it advises companies to take in
lot,” said Raluca Ene, managing director at
account: being clear about what is needed,
Chapter 4 Romania.
providing the critical information necessary
The selected agencies should be given a
to complete the task and inspiring or motivat-
comprehensive brief detailing at least busi-
ing people to do their best.
ness and communication objectives, other
After the winner is chosen, the client
marketing communication activities devel-
of strategy at pastel. Moreover, the client
should inform the agencies (both the winning
oped by the company (so as to have the big
should give thought to the type of search that
and losing ones) quickly and fairly. The losing
picture over the entire communication activ-
will best assist it in making the appointment.
team or teams should be offered an explana-
ity spectrum), as well as requirements, KPIs,
“The traditional pitch process is expensive for
tion for the result. Moreover, ensure that all
and estimated budget. “Criteria for choos-
both parties, so agree fees where appropri-
participating agencies learn of the result on
ing the winner are also compulsory for the
ate to offset a fair proportion of agency costs
the same day.
clarity of the process. Not having any of this
and to ensure a professional approach on
As stated in the IPA’s guidelines, and a very
information transforms the offer preparation
both sides. Understand that many successful
important factor: the losing agencies must
into a guessing game that would unjustifiably
agency appointments are based on reputa-
return all confidential material and informa-
waste teams’ time and effort and not provide
tion, personal chemistry, credentials and
tion provided – in whatever format – and the
the expected results. Openness to clarifica-
references from other clients, as opposed to
client must not use any of the losing agencies’
tions, even a debrief meeting, would be great,
pitches. Workshops and trial projects are also
pitch ideas or information provided during
in order to make sure the offer provided is a
effective methods of choosing an agency.
the process.
good fit, and also to see if there is good chem-
When it comes to the criteria for choos-
istry between the company’s and the agency’s
help in the initial stages of researching the
ing the winner, Simion believes that clients
team – this is an extremely important element
marketplace, but they should not replace the
should go for the agency that would bring
that can actually make or break a pitch deal,”
face-to-face contact which is so important in
the most added value to the brand/project
adds Ene.
Equally, online ‘e-sourcing’ techniques may
www.business-review.eu Business Review | June 2018
42 INTERVIEW
Dome-stic design: spherical homes win round consumers Alexandru Dinulescu is an engineer who has come up with a new business model for the Romanian market: building spherical houses at apartment prices. These are the geodesic domes on wooden structures that Americans are so fond of. With the goal of creating a structure analogous to nature’s own designs, Dinulescu builds his domes with the conviction that they are the most efficient building systems available.
ABOUT Alexandru Dinulescu Owner of Pilastru construct He is a constructor engineer passionate about building geodesic domes and has a portfolio of 12 such houses. He graduated the Technical University of Civil Engineering of Bucharest. He was one of the beneficiaries of the RURAL-Entrepreneur project, developed by the National Foundation of Young Managers - FNTM during June 2010 - May 2012.
By Daniela Oancea
sought after by families who want to avoid typhoons. They also have greater earthquake resistance than traditional houses. This type of home has proven its efficiency and resistance to typhoons and there are about 2 million built across the ocean. However, in the US a house of this type costs from USD 80,000 up. Fuller especially created large-scale buildings, and his structures can sometimes have a diameter of 680 meters! I have studied it intensively and have come to the conclusion that this system can be designed, improved and built on a smaller scale, best suited to a regular dwelling.
What is unexpected in a dome house, compared to other dwellings? With a rather small appearance on the outside, but generous space inside, the Natural Spaces Domes system has proven, more than anything, extraordinary resistance, reliability in terms of time and utility, and at the same time does not compromise on style and elegance.
How did you come up with the idea of building a geodesic house?
the dream of all those who want a very special home at a good price.
advantages of living in such a home, modeled on a most ancestral ambient form − but
It was my teenage dream. I was fascinated by all the atypical constructions, from pyramids
The feeling of freedom, the joy and great
thought for the third millennium − cannot be
to igloos and yurts. This dream made me
Have the works of Buckminster Fuller been a source of inspiration?
study at the Technical University of Civil
I have studied thoroughly the work of Buck-
Engineering of Bucharest. There were metal
minster Fuller, the American architect who
What are the benefits of such a home?
domes in the Tei Lake area where I lived as a
is universally recognized as the father of geo-
It is difficult for me to rank all the benefits. I
student and I would often tell a colleague of
desic domes. And this American has a great
would structure everything into three broad
mine, “I shall build things like these one day,”
story. He predicted that the future belongs to
categories of advantages: first of all, major
to which he would answer, “I believe you!”.
sustainable buildings and renewable energy
savings on the building materials, resulting in
My dream came true, but it has also become
technologies. In the US, this type of house is
lower final costs. Then a significant reduction
compared to anything else.
www.business-review.eu Business Review | June 2018
INTERVIEW 43
in maintenance and usage costs, energy costs.
are increasingly confronted with extreme
How much does your geodesic house cost?
And third, the fantastic resistance to extreme
weather phenomena. Well, a dome can have
Oh, this is a difficult question! It depends on
weather phenomena and earthquakes. All
an incredible resistance to external natural
many variables, but mostly on the owner’s
these could mean a lot! I made it possible to
factors. For example, the dome can withstand
choices! Depending on the dreams, expecta-
use up to 40 percent fewer building materials
earthquakes of up to 8.5 on the Richter scale!
tions and wishes of each client, quite large
than would be the case for an ordinary home.
Furthermore, it became famous for the fact
differences may appear. A 100 sqm house can
Another advantage that brings significant
that, in tests, but also in everyday life, it
cost from EUR 55,000 to 80,000 due to the
savings is that a dome house does not need
resisted harsh winds and hurricanes of up to
finishings or the alternative energy systems
a conventional foundation, only perimeter
320 km / h! What other type of construction
chosen. A completely turnkey standard dome
support! The dome can be mounted on simple
could survive without major damage or with-
would cost EUR 55,000.
foundations, made of wood, that can be
out being completely destroyed?! The dome
thermally insulated. It can also be lifted on
has been shown to be able to withstand loads
belts or concrete foundations or mounted
of up to 20 tonnes at the point of structure.
Have you found a skilled workforce, people trained to complete such unusual construction work?
cannot naturally otherwise be used for the
What are its shortcomings?
Without passion, you have nothing to look
construction of a dwelling.
There are shortcomings. Being a more
for in this area! Therefore, I think that it is not
prominent type of construction, the build-
the working hand that is important, but the
Is this an energy efficient home?
ing method is unique. The materials used
passion to build such things. I try to incite
The spherical shape of a dome provides
in geodesic dome buildings are rectangular,
this passion in my co-workers. You train
natural and efficient air circulation inside. It
which requires cutting them to achieve
them, you create a team, you form a kind of
may seem incredible, but this house can be
triangles, and this increases costs. Also, the
family and if you have this flame of passion
80 times more energy efficient than a normal
windows are more expensive than those of
to achieve something special... the impos-
house of the same used surface! The dwell-
conventional buildings. Increased attention
sible does not exist!
ing that I designed is fully enjoyable and has
should be paid to waterproofing the structure
natural lighting with lifetime advantages
and protection against precipitation due to
for the house in itself and those who live in
the multiple existing joints. But all these
Is there a demand on the Romanian market for this type of home?
it. On the other hand, it is well known that
disadvantages are fully offset by a multitude
Yes, demand is growing, organic and grow-
we are seeing radical climate changes and
of advantages.
ing.
on pillars, above the ground or on land that
www.business-review.eu Business Review | June 2018
44 MUSIC
Jam packed: jazz festivals jostle for room on summer calendar When a niche musical genre like jazz becomes a hit on the national festival circuit, you wonder how long it will be until jazz becomes mainstream in Romania. Don’t worry, that’s not going to happen, but the question remains: what’s with all these jazz festivals that from one year to another continue to expand in the least likely places? Business Review went into the field to find out what’s going down with all that jazz. By Oana Vasiliu
Photo: Horatiu Curutiu
The amazing Jazz in the Park atmosphere
ONCE UPON A TIME…
days of his life, Raducanu remained one of
Men and the Telephone, Leszek Możdżer and
Romania’s multicultural heritage is evident in
the legendary presences in the world’s jazz
Jasper Hoiby’s Fellow Creatures are among
the country’s uptake of a wide range of music:
bars, playing anything from classics to his
the bands booked to play. “The Green Hours
from classical to funky jazz and Balkan-
own arrangements, influenced by Romanian
Jazz Fest line-up is always eclectic and sur-
influenced rhythms, Romanian performers
folklore.
prising. We manage to create, in our ‘avantgarden’, a unique and intimate climate, in the
embrace a diversity of styles and genres, often reinterpreting traditional themes in their
ALL THAT FESTIVAL JAZZ
middle of a crowded and crazy city. And last
compositions. And many local names have
Romania’s jazz calendar is bursting: sum-
but not least, we keep the jazz in the place
made it big internationally. On the jazz scene,
mer brings a myriad of events, from north to
where it was born: in a club. (…) Modern,
there is no musician out there who doesn’t
south, east to west. Business Review talked
contemporary, classical, electronic, experi-
know the magical sounds of the late Johnny
to some of the festival organizers to find out
mental, world, avant-garde…we call it ‘jazz’.
Raducanu, also known as the “Romanian Mr.
how a niche musical genre can become such
We like to think that the music of tomorrow
Jazz.” With Roma roots, Raducanu (1931-2011)
a nationwide hit. We asked how their jazz
happens today,” says Rozana Mihalache,
showed remarkable talent from an early age
festivals stand out amongst their summer
artistic coordinator of Green Hours & Green
that ultimately led to one of the most inspir-
festival peers, and what unique experiences
Hours JAZZ Fest.
ing artistic journeys. He managed to release
attendees get.
several albums during Romania’s communist
Summer starts with Green Hours Jazz Fest,
Next up is Jazz in the Park Cluj-Napoca, from 21 June - 1 July, which has developed
period and toured the US with the support
between 31 May and 3 June, in one of Bucha-
appreciably, with more bands and activi-
of American organizations. Until the last
rest’s longest-running live jazz venues. Tin
ties both for jazz lovers and Cluj residents.
www.business-review.eu Business Review | June 2018
MUSIC 45
fusion approaches and international household names from the jazz scene, this greatly entertaining and interesting puzzle will make anyone fall in love with jazz. (…) The nights vibrate with nocturnal jam sessions that invite all local and national musicians to join Photo: Mircea Albuțiu
the JazzTM artists in creating together. This year a focus will be the educational program that is under development and which aims to further enrich the artistic community through facilitating interaction.” Where jazz bands meet Green Hours
Bucharest also has a jazz festival of its own, which is gradually carving out a name in the jazz world, in the heart of the city, at Piata George Enescu. This year’s Bucharest Jazz Festival runs from 3-9 July. The festival has grown each year, fighting for recognition in the capital’s crowded cultural calendar. For 22 years now, the Garana Jazz Festival has attracted a chilled-out crowd for jazz in the forest. Chilled-out in both senses – the village is in the mountains and the evenings are cool, so take a jacket! Garana Jazz Festival is a once in a lifetime jazz experience, for the atmosphere of its surroundings. Pack your tent and your warm clothes and head to the mountains to disconnect from everyday life
Beautiful people of Timisoara enjoying JazzTM
and get into the groove. One of the newest jazz festivals in Ro-
“Since the beginning, we’ve wanted through
should appreciate jazz too. Because it stands
mania, Smida Jazz Festival has quickly won
our festival to do more than just music or
for certain values that are important: free-
plaudits for its eclectic line-up. Positioned
entertainment: we wanted it to mean some-
dom, openness, curiosity, civic duties. So, to
similarly to Garana Jazz Festival, this inter-
thing to the local community. This is why
sum up in one sentence, you don’t attend Jazz
national event is dedicated to avant-garde
every event and venue has a special story
in the Park, you are part of it… if you come, of
jazz, built on the unique concept of blending
or reason. We were the first to use the local
course.”
innovative jazz styles with the raw beauty of
central park, we discovered a special beach
From Cluj we move west, where Timiso-
the Apuseni Mountains. The event takes place
on the riverside, and since last year, we’ve
ara celebrates with JazzTM, which attracts
in the open air, in Smida, a Transylvanian
dedicated one day of the festival to events for
some of the greatest names in international
village in the heart of Apuseni Natural Park.
members of the community living near the
jazz: Gregory Porter, The Cinematic Orches-
Outdoor activities accompany music from
garbage landfill. (…) In terms of participation,
tra and Kurt Rosenwinkel. The action takes
international and Romanian artists. The event
we’ve positioned ourselves as welcoming a
place throughout the last weekend of June.
runs from 17-19 August.
general crowd, not only jazz enthusiasts. This
“JazzTM’s approach to jazz was, from the be-
The new kid on the block is The Piano
is way we have a lot of open-air venues with
ginning, discovering its many facets and great
Jazz Festival in Bacau, one of the Moldavian
big capacities. People come to our festival to
range of influences and bringing it in front of
city’s first attempts to create a festival-going
discover elaborate or high-quality music in
a general audience. The aim is not that this
public. “Our festival stands out amongst other
a very friendly and open environment,” Alin
audience comes prepared, but that a large
summer festivals for the fact that it’s not just
Vaida, director of Jazz in the Park Festival,
audience gets to experience something new,
a simple festival where musicians perform on
told Business Review.
is taken by surprise, learns and interacts with
stage, but a dialog, a cultural dialog between
sounds and musicians that they wouldn’t if
people and local artists, painters, musicians
festival is joyful and you feel part of what is
it weren’t for JazzTM,” says Norbert Tako,
and actors. This festival is a necessity for
happening there. We know that jazz isn’t the
JazzTM festival’s director. “A line-up that
Bacau and is the only one of its kind in the
most popular musical genre and we don’t
smoothly combines and promotes new
Moldavian region, not just in our town,” the
act like it is, but our sole message is that you
Romanian acts with experimental, fresh and
festival’s organizers told Business Review.
He added, “The general feeling at the
www.business-review.eu Business Review | June 2018
46 CITY
Cultural calendar Afterhills Festival May 31 - June 3, Iasi
By Oana Vasiliu
a journey based on movies and eco trends. Everything happens in the old style, taking care of nature and presenting an entirely new eco-concept.
Sibiu International Theatre Festival June 8-17, Sibiu, various locations
Hurts, Tom Odell, Paul Van Dyk and The Crystal Method are all playing at Afterhills, the festival that opens Romania’s international summer of music. Ticket prices go from RON 187 to 520.
Grime, The Mono Jacks, Cred Ca
three theater festivals, the event
Shine Festival June 30 - July 1, Arenele Romane
celebrates its 25th anniversary
The Cat Empire returns to Ro-
cost RON 59 for one day and RON
with an incredible program fea-
mania, taking to the stage along
149 for a full pass.
turing international attendees as
with Skillet, Subcarpati, Fratii
Ranked among Europe’s top
The Nights of the Romanian Movies June 6-10, Iasi, various locations
well as a brand new performance If you haven’t yet discovered the
by the acclaimed director Silviu
capital of Moldova, this may be
Purcarete. Contemporary world
your chance. The biggest Roma-
dance masters and an outdoor
nian movies, actors, directors
program will also feature.
and film specialists will gather in Iasi at this film festival to present to the world what’s new, retrospectives and, most importantly,
Nick Cave and the Band Seeds June 19-20, Romexpo
why international film critics like our movies.
Pelicam, Film and Environment Festival June 21-24, Tulcea, various locations
Rock the city will stage one of the most hotly anticipated concerts of the year, by Nick Cave and the Band Seeds. The once in a lifetime show promises to enThe Danube Delta is hosting the
tertain rockers and non-rockers
cinematic experience Pelicam,
alike.
Sunt Extraterestru, Fantome and Argatu, at Shine Festival. Tickets