BR/06/2018

HOP TO IT: LOCAL DRINKERS DEVELOP THIRST FOR CRAFT BEER HOW WELL DOES THE WORKFORCE FEEL?

July, 2018 / Volume 22, Issue 6

www.business-review.eu

18

US AND EUROPE GO HEAD TO HEAD OVER ROMANIAN DEFENSE DEALS 24 SMES STRUGGLING WITH GDPR WEEKS AFTER ENFORCEMENT

The EUR 1 billion club

30

Photo: Dreamstime

WHERE ROMANIA TALKS BUSINESS

8

www.business-review.eu Business Review | July 2018

EDITORIAL 3 REAL ESTATE

• Editorial •

Ioana Erdei • Editor-in-Chief •

6 Industrial and logistics market needs infrastructure and workers

COVER STORY

2017 euphoria, 2018 hangover?

The Romanian economy performed well in 2017, as illustrated by

10 Romania’s EUR 1 billion companies in 2017 HUMAN RESOURCES

the increase in GDP. Consumer spending soared, and retailers from all economic sectors started rubbing their hands in anticipation of record profits. Although, last year legal and political uncertainties loomed large, the private sector absorbed all the free money the

15 Local professionals sharpen

government threw at the people in hopes of currying favor.

up their skills

Economic growth in 2017 stood at 7 percent, the highest in the

16 Foreign invasion: Romanian

EU, mainly based on consumption. Everything, or almost every-

creatives take skills abroad

thing, that was for sale was purchased, after years of consumers putting all their money aside for a rainy day. Taxes were cut at the beginning of the year, giving a boost to purchasing power.

ENTREPRENEURSHIP

Companies’ turnovers started growing continuously, and many passed the EUR 1 billion threshold. But only two of these firms were Romanian owned – private DIY player Dedeman and state

38 Floreasca’s small business

owned Romgaz.

ecosystem makes Bucharest’s restaurant scene flourish

The economy always follows its rules, so the side effects of the boom quickly made their appearance. Inflation started surging, and interest rates exceeded the highs posted during the financial

CITY

crisis (2008-2011). Meanwhile the EUR-LEU currency exchange rate made phone bills, rent, and food more expensive.

The government has tried to make it all better by throwing more

44 From Romania with

money at the problem- hiking public sector pay. But these threats

Louvre: Brancusi struts into Abu Dhabi

still exist in 2018. Economic growth in Q1, in comparison to Q4

45 infiniTIFF: new forms of

2017, was zero. The results of the coming quarters will determine if 2018 will be a wealthier year or just the bitter bill for the 2017

storytelling with Ricardo Mendez

euphoria.

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 | July 2018

4 NEWS

WHO’S NEWS BR welcomes information for Who’s News.

Submissions may be edited fo­­­r length and clarity.

Get in touch at anca.alexe@business-review.ro

Doron Klein has been appointed CEO of AFI Europe Romania. He is replacing David Hay, who managed the firm’s local operations for seven years. Klein has 15 years of experience in the Eastern European real estate market, mainly in the Czech Republic. He has worked for the company since 2008 and became CEO of the Czech operations in 2011. Klein will manage a 130-strong team in Romania, the company’s most solid market in the region.

Tens of thousands protested in Romania following the vote in Parliament

Parliament passes controversial amendments to Criminal Procedure Code

By Ovidiu Posirca

R

omania’s Chamber of

ment states that if evidence from

had justice laws that made me

Deputies approved a

a recording is obtained illegally,

deeply unhappy, now we have

raft of controversial

the prosecutor has to destroy it

something not seen before:

changes to the Criminal Proce-

and provide proof of the destruc-

the PSD majority votes laws

dure Code in mid-June, with

tion for the court file. In addi-

with dedication for its boss, for

the opposition announcing

tion, preventive arrest measures

Liviu Dragnea. This approach

that the amendments will be

can be ordered only when there

is unacceptable,” said Iohannis.

challenged in the Constitution-

is solid evidence or clues. The

Both the USR and the National

al Court. The changes have also

“reasonable suspicion” grounds

Liberal Party (PNL) said the

been attacked by the president,

for issuing a preventive arrest

draft bill amending the Crimi-

Klaus Iohannis.

warrant has been dropped. The

nal Procedure Code would be

draft bill was approved with 175

challenged in the Constitution-

amendment, judges will sen-

votes; 78 MPs voted against it

al Court. The changes have to

tence a defendant only when

and one abstained. The center

be signed into law by President

the court rules that the crimi-

left coalition PSD-ALDE currently

Iohannis to become applicable.

nal charge has been proved

holds a majority in Parliament.

The head of state said he would

beyond any doubt, according

“The PSD is trying to sever the

use all his constitutional pow-

to Agerpres. Another amend-

powers of the judiciary. If we

ers to improve the draft bill.

Under one approved

Inflation rate hits 5-year peak of 5.4 percent, highest in EU

Photo: Dreamstime

Michael Gable is the new vice-president for data centers at Bitdefender.

Gable is a veteran of the cyber security industry, with over 20 years’ experience in strategic alliances, professional services and sales. As a data center group leader, Gable will assist sales teams, partner with relevant players on the market, and develop partner channels.

The data center is a new structure that provides IT security technologies for virtual, hyper-conveying and hybrid business infrastructures.

By Sorin Melenciuc Mihaela Pavel is the new operations manager of PayPoint Romania.

Pavel has had a career spanning 26 years in the financial industry, for more than half of which she worked in banking, with stints at Raiffeisen Bank, page 5

R

omania’s annual

show. This was the biggest an-

inflation rate rose to

nual inflation rate since February

5.41 percent in May,

2013, when the indicator stood at

the highest it has been since February 2013, with food

5.65 percent.

Compared with the same

price increases making a large

month of last year, the price of

contribution to the surge in

food products rose by 3.9 percent

consumer prices, National

on average, while non-food

Institute of Statistics (INS) data

products increased by 7.8 per-

The EU annual inflation rate stood at 2 percent in May

www.business-review.eu Business Review | July 2018

NEWS 5 Photo: Dreamstime

the Romanian capital, Bucharest. According to Cristea, in the EU, 28 primary cities and 228 secondary ones generate 63 percent of the total GDP, and are responsible for 64 percent

OTP Bank Romania and BRD – Groupe Societe Generale. In her new role, she will coordinate the contact center, support & compliance and credit & collection departments.

of GDP growth between 2000 and 2013. “Bucharest is already in the same league as other European capitals, at least in terms of GDP per capita,” said the World Bank official.

The economist added that Timisoara is among the cities that grew the fastest in the past 15 years

91 percent of Romania’s GDP is generated by county capitals,

World Bank: main Romanian cities growing faster than Singapore in its heyday

urban development policy.

Cristea said that university centers in Romania are the champions of productivity – an agglomeration that is attractive for investors, who pay larger

By Ovidiu Posirca

T

but the country doesn’t have an

salaries and bring about a more dynamic economy.

he most developed

and 2015, while Singapore grew

counties in Romania

at a compound annual growth

are those that are most

rate of 7.25 percent between 1965

velopment of a country is the

urbanized, said Marius Cristea,

and 2015. The cities that grew

access to large enough markets.

senior urban development spe-

the most in this period were

The larger the markets, the bet-

cialist at the World Bank Group,

Timisoara, Bucharest, Ploiesti,

ter the development outcomes.

during Realty Forum 2018, an

Cluj-Napoca and Iasi.

The largest city is usually the

event organized by Business

For instance, the GDP per

“The first step in the de-

first beneficiary of the capital

capita growth rate in the western

infusion from large markets,

city of Timisoara stood at more

followed by the largest second-

cities registered growth rates of

than 250 percent over 15 years, a

ary cities and so on,” said the

8 to 12 percent between 2000

figure slightly higher than that of

specialist.

Review in mid-June.

Cristea said that Romanian

Catalin Radu is the new head of Bayer Pharmaceuticals’ operations in Romania and the Republic of Moldova. Radu joined Bayer in 2007 as director of the pharmaceuticals division in Romania.

Two years later he was named regional brand manager in Berlin, and from 2012-2014 he was the business operations manager for Turkey-Maghreb in the EMA region. From 20152018 he was in Kazakhstan, first as head of pharmaceuticals for Central Asia, then as CEO of Bayer Kazakhstan.

cent. The cost of services went up by 2.7 percent.

In May, the country recorded the biggest annual inflation rate out of all European Union member states, according to Eurostat, the statistics office of the EU. Eurostat data further show that the Euro area annual inflation rate was 1.9 percent in May 2018, up from 1.3 percent in April. A year earlier, the indicator stood at 1.4 percent. EU annual inflation was 2.0 percent in May 2018, up from 1.5 percent in April. A year earlier, it stood at 1.6 percent.

Leontin Toderici is the new CEO of Bancpost following the approval of the National Bank of Romania. He has been appointed by Banca Transilvania to coordinate the integration of Bancpost, ERB Retail Services IFN and ERB Leasing IFN in the BT Financial Group. Toderici, who has over 20 years of banking experience, has been the deputy general director – COO of BT since 2013.

He has a PhD in Economic Information Technology and is a graduate of EMBA CNAM Paris and ASE Bucharest.

Adrian Constantin Volintiru was named CEO of Romgaz, with a four-month term.

Volintiru was previously the president of the State Assets Valorisation Authority (AVAS), as well as president of the Romanian Post Office’s administration board. From June 2011 to November 2012, he was the general manager of Vulcan SA.

www.business-review.eu Business Review | July 2018

6 REAL ESTATE

Industrial and logistics market needs infrastructure and workers The industrial and logistics market was the second biggest growth driver of the Romanian real estate market after the office sector last year. As growing consumption powered the market, retailers and logistics players sought more storage space and developers gladly provided it – mostly in Bucharest and the west of the country.

By Razvan Zamfir The Western region is developing fast thanks to economic growth

T

here is around 3 million sqm of space

of the highest levels of rental demand in the

GO WEST

on the Romanian industrial and

industrial and logistics market. Infrastructure

“Logistics projects are usually developed

logistics market and if the economy

improvements in this region, proximity to the

in areas that provide easy and fast access to

continues to grow, the available surface will

western border and the abundance of new

major cities / neighboring regions; the main

probably reach 3.5 million sqm by the end of

entrants to the area, from sectors such as IT,

factor in choosing the location is the distance

the year.

automotive, electronics, retail and FMCG,

to motorways and national roads. However, it

are among the draws for CTP’s expansion

also depends on the specifics of the activi-

entry of logistics developer and operator P3

ambitions. “The capital city naturally records

ties carried out by the firms in charge of the

into the portfolio of GIC, Singapore’s sov-

the largest demand for industrial and logistics

deposits. For example, in the case of light

ereign investment fund, following a global

space. We have three parks – CTPark Bu-

production units (activities that can be hosted

transaction worth EUR 2.4 billion.

charest, CTPark Bucharest West and CTPark

in logistics warehouses), an important factor

Bucharest Chitila, whose cumulative surface

in the choice of the area is also the availability

Romania, P3 Bucharest, purchased from CA

has already exceeded 500,000 sqm, and we

of labor force. So it is easy to understand why

Immo in early 2015, currently including 11

expect it to reach 700,000 sqm at the end of

major cities are the urban centers chosen by

warehouses with a total area of 305,000 sqm.

this year, which makes us the biggest owner

developers of logistics space, especially for

One of the major market events was the

P3 has one of the largest logistics parks in

of logistic parks near Bucharest. The same

speculative projects,” says Laurentiu Duica,

with few players, and its plans. The Dutch-

situation exists at a national level, where

director of the industrial agency at Colliers

founded company plans to become the big-

we have industrial and logistics parks in the

International.

gest developer on the market, with the goal

western region: Arad, Cluj-Napoca, Deva,

to own 1 million sqm of logistics properties in

Ineu, Salonta, Sibiu, Timisoara and Turda.

stock is high: Timisoara, in the west of the

Romania.

Currently, at national level, we are focusing

country, with 370,000 sqm, and Bucharest,

Or, take CTP, one of the leaders of a market

Players say there are two areas where the

on finishing the developments started in

the leader and the country’s strongest eco-

properties in Bucharest, Cluj, Timisoara and

the Timisoara and Cluj parks, as well as the

nomic point, with more than 1.7 million sqm.

Pitesti, will deliver 300,000 sqm.

further development of the Pitesti Park,” says

But things change. The western region,

Iulia Busca, commercial & business develop-

not only Timisoara, is developing fast, thanks

ment manager at CTP Romania.

to economic growth and because it is near

This year, the company, which owns

CTP has covered key positions in the west of the country, which is home to one

www.business-review.eu July 2018 Business Review | May 2016

COVER REALSTORY ESTATE14 7

to the border. Cluj-Napoca, for example, has

in developing distribution centers serving

EUR 3.5-3.8/sqm. They vary and may also be

reached around 210,000 sqm and Arad close

the north of the country, while also aiming to

lower, depending on company specifications,

to 100,000 sqm.

access the Moldovan market,” says Duica of

leased area, contract length etc,” says Rodica

Colliers International.

Tarcavu, senior broker, industrial agency, at

“In the future we do not exclude any area in Romania, as long as the basic conditions for

Players say that no matter how exciting

Cushman & Wakefield Echinox real estate

the development of our clients’ business are

it may become, Moldova will not be able to

fulfilled: infrastructure, labor force, economic

compete in the foreseeable future with the

Emilian Podaru, head of industrial &

development,” adds Busca.

west of the country, but the eastern region

logistics at Crosspoint Real Estate, confirms

has a trump card: its workforce.

the level of rents, and claims that the highest

Another investor interested in the western region is Globalworth. Although concentrated

“Not surprisingly, the center and west of

consultancy.

rent is in Bucharest where the vacancy rate is

on the office market, the company founded

the Carpathian Arc are generally the most

the lowest, below 5 percent for Class A spaces.

by Ioannis Papalekas has owned the 103,000-

attractive for companies that have trade links

In the Cluj area rents can also exceed EUR 4 /

sqm TAP industrial park in Timisoara, since

with Western Europe. Potential employees

sqm. Bringing up the rear is Moldova where

2014, and last year spent EUR 42.5 million on

are located in other areas of the country, and

average net rent can be around EUR 3.25 - 3.5

another logistics project of 68,000 sqm which

Romania also has rather low internal labor

/ sqm. Demand comes mainly from logistics

can be expanded by another 40,000 sqm,

mobility. For example, Iasi and Suceava

companies, retailers, traditional or online,

located in Pitesti.

counties together account for a seventh of

and FMCG. Trade provides most of the de-

the total number of people committed at na-

mand for logistics space, especially as there is

moving its focus from the Bucharest market

tional level, from our calculations. Structural

a sizeable difference between the demands of

in order to buy industrial and logistics proper-

reforms to increase productivity and two

retail or logistics and industrial players.

ties.

highways on the north-south / east-west axes

The company announced recently that it is

The top eight rental deals in the first

OR LOOK EAST The market profile of Eastern Romania is, unlike the real estate, retail, office and residential sectors, evenly balanced between three major areas: the capital, the center of the country and the west of Transylvania.

Nevertheless, Moldova, although lacking fast road infrastructure (highways), seems to be interesting to players, although at present it has only 47,000 sqm of storage space, according to Costin Banica, head of industrial agency of JLL consultancy company, and no space delivered in Q1, a long way from the 1.7 million sqm of Bucharest or the 600,000 sqm in the west.

“Moldova is a region that has major development potential in the logistics segment,

could lead to explosive and lasting economic

quarter of this year reveal the structure of the

both in terms of surface area and population,

growth,” says Silviu Pop, head of research at

market. According to JLL Bucharest City Re-

or potential labor force. The development of

Colliers International Romania.

port Q1 2018, four of them involved logistics

quality infrastructure to facilitate connection

Only then will other regions with poorer

spaces, and total 45,000 sqm. Two involve

with the northern and eastern countries of

connections to the West, such as eastern

production facilities and account for 10,500

Romania would certainly increase interest

or northeastern Romania or the southeast,

sqm, and the others were for a storage space

in new and significant investments in the

benefiting from the underexploited potential

and a data center, with areas of 2,500 sqm and

region,” says Busca of CTP.

of Constanta port, be able to receive serious

6,000 sqm, respectively.

Nonetheless, the region is appealing. Mol-

investments to help their development.

“Most of the demand in 2017 came from logistics, transport and distribution compa-

dova is well positioned for malls and is open to other markets outside the country – the

MONEY TALKS

nies, which leased more than 55 percent of

Republic of Moldova and Ukraine.

Rents are roughly equal across the country,

the total space. Production companies need

and they have been stable in recent years.

buildings with special technical specifications

“Lately there has been increasing interest in less-cleaned areas such as the northeast of the country, with retailers being interested

“Rents in Bucharest stand at EUR 3.75 - 4.2/ sqm, and in the other cities they are

tailored to their needs,” concludes Busca of CTP.

www.business-review.eu Business Review | July 2018

8 BEER

Hop to it: local drinkers develop thirst for craft beer Although the vast majority of the beer drunk during this month’s World Cup will come from the major breweries, there are new players in town.

Craft beer – long a trend in advanced Western markets – is starting to brew up a storm in Romania too, and local producers are raising their glasses to a far from flat market.

By Aurel Dragan beer that was not industrial started to look interesting. The trend is not local, but global, and has also been adopted by the big brewers, which have begun launching unpasteurized beer as a way of bringing back the taste of old and appealing to craft beer fans.

Oriel Beer

I

Ursus, Timisoreana and Tuborg are just a few of those that have come up with “old reci-

PA stands for Indian Pale Ale, a hoppy

old brands have been bought by worldwide

pes” for new beers. How successful they will

beer that falls within the broader category

corporations and all the independent brewers

be remains to be seen, but we do know that

of pale ale. The latter is an old beer that

in the communist era disappeared.

sales of cans of beer went up by 38 percent for United Romanian Breweries Bereprod (also

first appeared around 1700, made from dried

What we have been witnessing in the last

malts with coke (a high carbon content fuel,

five years is the birth of a new class of brewers

usually made from coal), resulting in a lighter

that may have an important word to say in

color than other popular beers at the time.

the coming years in terms of beer quality and

THE BEER INSTITUTE

Fast forward a few hundred years and pale ale

taste. Today, there are around 30 craft beer

The craft beer industry in Romania is entering

has become synonymous with craft beer.

brewers in Romania, of which three or four

a new phase, embodied by the birth of the

are large, producing over 10,000 liters per

Beer Institute, a specialized concept store that

it is not made by the big “mega-brewery”

month, with a group of 20 that brew between

gathers over 100 Romanian varieties of craft

corporations. It is very close to what “micro-

4,000 and 8,000 liters every month. The rest

beer. The idea of opening the shop belonged

breweries” – small, independent brewers –

are even smaller, with a monthly production

to Catalina-Adina Mugescu, a young teacher

made back in the nineties. But because some

capacity of under 3,000 liters of beer. Most of

who believes in the potential of Romanian

microbreweries, like Sam Adams, grew into

them are under three years old, and six brew-

craft beer and in consumer education. Along

big companies and corporations, a new name

ers opened this year.

came Andreea Veronica Sararu, a tourist

The biggest quality of craft beer is that

was needed.

Now we have craft beer that is made by

First, there were a few pubs dedicated to craft beer, supplied by brewers from around

known as Tuborg Romania).

guide who had discovered beers on her journeys around the country.

small, independent and traditional brewers

the world and run by connoisseurs and en-

– at least in the US. In Romania it is difficult

thusiasts. Despite not being at all cheap, the

20,000 in the shop, which opened on Doro-

to find “traditional” brewers, since all the

pubs did fairly well and the idea of producing

bantilor Boulevard, close to Romana Square

Together they invested around EUR

www.business-review.eu July 2018 Business Review | May 2016

COVER STORY BEER14 9

Cristian Dinu & Mircea Georgescu, HopHooligans

Laurentiu Mandrila & Ioana Coca, Oriel

in the center of Bucharest. “The funds came

to become traditional, like Crowd Control. We

the beer for six months. We are a fairly small

from personal savings, leasing and bank

put anything in the beer, but we think well

micro-brewery with an annual capacity of

financing,” says Mugescu, who added that

before. Any ingredient can contrast with or

200 hectoliters,” says Coca.

the investment should be recovered in 12 to

complement something else, or use it more

24 months and hopes that in the first year of

effectively. It only takes imagination and time

dan Glavan started to produce beer. He now

activity the operation will have revenues of

to experience,” says Dinu, who added that the

brews four types: one Belgian, one coppery

EUR 50,000.

founders have full control over the beer due

and two IPA, with a total of 800 liters per

to the small batches produced, so they can

month. “I learned beer brewing technique

focus on the quality.

from scratch, even joking with a few friends

“The main challenges for a craft beer store are a mix between finding enough clients

Personal consumption was also how Bog-

that if I measured the time spent reading up

and juggling with relatively low warranty

Laurentiu Mandrila and Ioana Coca dis-

terms for beers. The clients are looking for

covered craft beer eight years ago and started

on this area, it would probably be equal to

two things: beer accessibility (meaning a lot

to produce it at home in small batches of 19

that spent writing a PhD thesis – something

of beer in the same place) and good prices. So

liters, for personal use and for friends. “We

I’m familiar with as a teacher. Following

far, craft beer is mainly sold in the HoReCa

kept practicing and at one point we decided

favorable reviews from those who tasted the

(hotels, restaurants, catering) sector at high

to shift from hobby to professional, especially

beer, in 2016 I decided to organize myself

of the industry) because we had been doing

because we participated in home-brewing

so that I could sell to those interested. After

it for years at home and it was time to take

contests in Europe and we won quite a lot of

a busy road through the Romanian bureau-

the next step. We come from IT and import-

prizes,” say the two producers of Belgium-

cracy, in the spring of this year White Collar

export. But the beer was constantly present

inspired ale.

Brewing really started to work,” says Glavan.

prices, while a retailer has other costs and prices,” says Mugescu.

In the big picture, craft beer is like a drop in the ocean, with a yearly production of around 2.2 million liters, versus overall national production of up to 1.7 billion liters.

IT ALL STARTED AT HOME “We decided to produce beer at a relatively higher level (albeit small compared to the rest

in life,” says Dinu Cristian Mihai, producer

“Like a good wine, our beers mature and

The future of the craft industry looks

of the Hop Hooligans brand. Together with

fulfill their taste with time. In addition to the

promising. With more and more brewers,

Mircea Georgescu and Petre Ion, Dinu pro-

permanent blonde and brown beer assort-

there may be people in the legislative field

duces around 800,000 liters per year. “We

ments, Oriel Blond and Oriel Dubbel, we also

that will understand that specific laws are

have no limits to our beer styles. From IPA to

focus on a lighter beer, 11 percent ABV, Oriel

required for this sector, leading to a more

imperial stout and sower beer, we constantly

Quadrupel, matured in oak barrels previously

permissive environment for micro-breweries.

experiment with new ingredients and differ-

used to mature some fine alcoholic beverages.

And also a more educated customer that un-

ent techniques: some beers only in limited

For the first batches we used barrels of Jack

derstands why a certain beer must be drunk

editions, other seasonal ones, others we hope

Daniel’s and Rom de Belize, in which we kept

at an exact temperature in a specific glass.

10 COVER STORY

www.business-review.eu Business Review | July 2018

ROMANIA’S EUR 1 BILLION COMPANIES IN 2017 All photos: Dreamstime

By BR Team

Automobile Dacia, OMV Petrom, Rompetrol, Dedeman and Kaufland are the biggest companies in Romania, with turnovers over the RON 10 billion mark in 2017, but around 20 local players have businesses of over EUR 1 billion, Ministry of Finance data show.

www.business-review.eu Business Review | July 2018

COVER STORY 11

T

urnovers increased in 2017 for most businesses in Romania, foreign and local. By GDP increase based on consumption, sales increased especially in the retail, auto and energy sec-

tors.

Automobile Dacia, owned by French group Renault, is the biggest company in Romania, posting a total turnover of RON 23.14 billion (EUR 5.07 billion) in 2017, up 11.5 percent from the previous year. Dacia produces passenger cars such as the Logan, Sandero and Duster at its manufacturing plant in Mioveni, Arges County. The carmaker had more than 14,000 employees in 2017. Dacia’s net profit rose by 18 percent in 2017, to RON 539 million.

OMV Petrom Marketing, a local subsidiary of Austrian group OMV, is the second-largest firm in Romania, with a total turnover of RON 15.06 billion (EUR 3.3 billion) in 2017, up 4.6 percent from 2016.

The company, which runs OMV Petrom’s fuel distribution network, registered a 17 percent decline in its net profit in 2017, to RON 320.5 million.

OMV Petrom, the other major subsidiary of OMV in Romania, is the third largest local company, with a turnover of RON 14.76 billion last year, up 18 percent year-on-year.

OMV Petrom manages OMV’s upstream businesses in Romania and increased its net profit by 164 percent to RON 2.4 billion.

It should be noted that OMV Petrom Marketing is a major client of OMV Petrom, so their businesses are closely related.

Rompetrol Rafinare, which runs Romania’s biggest oil refinery in Navodari (Black Sea coast), is the fourth largest local company, with a turnover of RON 11.19 billion (EUR 2.45 billion) in 2017, up 28 percent compared with the previous year.

The firm, controlled by Kazakhstan’s state-owned group KazMunayGas, recorded a net profit of RON 418.8 million last year, six times higher than in 2016.

Kaufland Romania is the biggest local retailer, with almost 14,000 employees, and the fifth largest company in the country, with a total turnover of RON 10.09 billion (EUR 2.2 billion) in 2017, up 4.1 percent from the previous year.

The company, owned by a German group, saw its net profit rise by 2.6 percent last year to RON 670.3 million.

Carrefour Romania ended 2017 with net revenues of RON 6.75 billion (EUR 1.477 billion), net profit of RON 209.7 million (EUR 45.9 million) and 9,939 employees. In 2016 net revenues were at RON 5.67 billion (EUR 1.24 billion) and net profit at RON 164.1 million (EUR 35.9 million). The number of employees was also lower at 9,101. Discounter Lidl Romania had a turnover of RON 6.51 billion (EUR 1.42 billion) and a net profit of RON 352.76 million (EUR 77.2 million). The number of employees was 4,815, up from 4,265 in 2016, when it registered a turnover of RON 5.58 billion (EUR 1.22 billion) and a net profit of RON 217.7 million (EUR 47.65 million).

Auchan Romania registered a turnover of RON 5.22 billion (EUR 1.14 billion) in 2017 and a net profit of RON 74.99 million (EUR 16.4 million). The number of employees was 9,290, down from 9,337 in 2016. The same year, turnover was at RON 4.89 billion (EUR 1.07 billion), and the retailer registered a net loss of RON 23.9 million (EUR

www.business-review.eu Business Review | July 2018

12 COVER STORY

5.23 million). Mega Image, the retailer that keeps expanding all over

nia, posted a 34.4 percent increase in its turnover last year, to RON

the country, had a turnover of RON 4.91 billion (EUR 1.07 billion) last

4.58 billion (slightly over EUR 1 billion), and net profit of RON 1.85

year and net profit of RON 201.78 million (EUR 44.17 million). The

billion (EUR 406 million), up 81.3 percent from 2016 and equivalent

number of employees stood at 9,313, up from 8,658 in 2016, when

to a profit margin of 40.4 percent. The RON 1 billion net profit from

the firm’s turnover was RON 4.32 billion (EUR 945 million) and its

2016 turned into RON 1.8 billion in 2017 with a relatively stable

net profit was RON 134.84 million (EUR 29.5 million).

number of employees, around 6,000.

Profi Romania, the other discounter on the market, posted a turnover of RON 4.73 billion (EUR 1.035 billion) and a net profit of

SINGLE EUR 1 BILLION ROMANIAN-OWNED PRIVATE COMPANY

RON 163.84 million (EUR 35.86 million) in 2017, with 11,662 employ-

Dedeman has become, during the last few years, a unique company

ees. The number of employees was up from 9,469 in 2016, when the

in Romania: it is, by far, the biggest Romanian-owned business built

company registered a turnover of RON 3.55 billion (EUR 777 million)

by local entrepreneurs (its turnover in 2017 was EUR 1.13 billion),

and net profit of RON 148.26 million (EUR 32.45 million).

posting higher growth rates than the economy and impressive

Romgaz, one of the two main producers of natural gas in Roma-

profit figures. And there is little chance of other Romanian-owned

TOP 3 oil companies in Romania in 2017

TOP 3 IT&Tech companies in 2017

The three biggest oil companies active in Romania, OMV Petrom, Rompetrol and Lukoil, which combine production with distribution operations, had a total turnover of EUR 7.8 billion in 2017, up by around EUR 1 billion versus the previous year.

The energy giants made around EUR 595 million in net profit, over EUR 280 million more than in 2016.

RCS RDS, Huawei Technologies, Oracle Romania, IBM Romania, Accenture Services and Luxoft Professional have reported cumulated net profits up by 72 percent in 2017 (up by EUR 65 million) compared to 2016, according to the financial reports they submitted to the Ministry of Finance. Their total turnover was EUR 2.3 billion, up by almost EUR 300 million.

OMV Petrom, covering the whole market, with gas, oil, and electricity production, leads the market with a huge chunk of the profits, EUR 525 million in 2017, but by turnover it ranked below Rompetrol, at EUR 3.23 billion versus EUR 3.53 billion.

The three companies own the last operational refineries on the Romanian market, Brazi (Petrom), Petromidia and Vega (Rompetrol) and Petrotel Lukoil (Lukoil).

RCS RDS, one of the biggest telecommunication operators in Central and Eastern Europe and the largest cable and satellite television company in Romania, had, in 2017, a record net profit of EUR 64.31 million, after a huge loss of EUR 12.94 million in 2016. The turnover marked a slight gain of EUR 9.60 million. The number of employees was down by 581 in 2017 year on year, from 11,703.

Rompetrol, which is controlled by KMG International, has seen a EUR 500 million growth in turnover, from EUR 3.03 billion in 2016, to EUR 3.53 billion in 2017. Its net profit decreased from EUR 48.7 million in 2016, to EUR 18.6 million last year. The company has around 2,000 employees.

Lukoil, the Russian energy company, made around EUR 1.02 billion in turnover in 2017, slightly up on the EUR 972 million it posted in 2016. The net profit figures follow Rompetrol’s road, down by EUR 15 million in 2017 at EUR 49.2 million from EUR 65.5 million in 2016. The number of employees grew from 426 in 2016 to 445 last year.

Huawei Technologies Romania had a net profit decrease of 80 percent in 2017 (EUR 4.4 million) compared to 2016 (8.02 million).

Its turnover was slightly up to EUR 294.19 million. The number of employees was also down by 95, to 1,352.

The Romanian division of software producer Oracle exceeded the RON 1 billion turnover threshold in 2017 (some EUR 219 million), 13.3 percent higher than in the previous year. Its profit, however, fell by 4.1 percent, to RON 22.81 million. Oracle Romania increased its number of employees by 14 percent in 2017, to 4,142. The Romanian subsidiary is Oracle’s second largest in Europe, after the one in the UK. Oracle, with USD 40 billion in yearly worldwide business, has offices in 145 countries and over 130,000 employees.

www.business-review.eu Business Review | July 2018

14 COVER STORY

companies catching it up: the second biggest local business had half

first major national DIY network in Romania. Dedeman’s owners,

its turnover in 2017.

brothers Dragos and Adrian Paval, were small local entrepreneurs

Dedeman’s success story is one of a first major player in a small

in Romania’s poorest region, Moldova, owning a local network of

market, shunned for decades by large foreign firms. The company

furniture and interior design solutions. Now, Dedeman is by far the

was founded in 1991, but changed its strategy in 2001 to become a

largest DIY retailer in Romania and the biggest business with Roma-

leading force in the DIY sector. The strategy change came after a

nian owners.

visit by its owners to Austria and Italy.

“I saw their big DIY stores and I thought that when they came

Official data also show that a growing number of local businesses exceeded the EUR 1 billion threshold in 2017, including retailers, car

over, they would eliminate us. I said we had to do something to

manufacturers and automotive suppliers Ford Romania and Star

keep up,” Dragos Pavel, one of Dedeman’s owners, said in 2011,

Assembly Sebes (Daimler), a tobacco manufacturer (British Ameri-

quoted by Adevarul.ro. And the strategy they adopted proved suc-

can Tobacco), telecom operators (Orange, Vodafone) and energy

cessful. The company took advantage of the lack of major foreign

companies (E.ON, MOL, Engie, Romgaz and Hidroelectrica). Some

investment in the local DIY sector until the late 2000s and built the

firms’ 2017 balance sheets are not available.

Top 3 electricity & gas companies in 2017

Most Romanian companies operating in the electricity and gas sectors – producers, transporters and distributors – expanded their businesses in 2017 and posted higher profit margins, but only two of them – state-owned Hidroelectrica and Romgaz – reached the threshold of EUR 1 billion in turnover, according to Ministry of Finance data.

Romgaz, one of the two main producers of natural gas in Romania, posted a 34.4 percent turnover increase last year, to RON 4.58 billion (slightly over EUR 1 billion), and net profit of RON 1.85 billion (EUR 406 million), up 81.3 percent from 2016 and equivalent to a profit margin of 40.4 percent.

Hidroelectrica came close in terms of profit margin. Last year, the company posted a turnover of RON 3.2 billion (EUR 712.2 million), down RON 100 million compared with 2016, and net profit of RON 1.3 billion (EUR 284.6 million), RON 130 million more than in 2016. The hydropower company lost 120 employees between 2016 and 2017 and finished last year with 3,279.

Nuclearelectrica managed to reach a turnover of RON 1.9 billion (EUR 415.9 million) in 2017 and net profit of RON 303 million (EUR 66.5 million). The company posted a turnover growth rate of 15 percent, while net profit increased almost threefold. The nuclear power company, which runs Romania’s sole nuclear power plant with two reactors in Cernavoda, has close to 2,000 employees.

Top 3 retailers in 2017

The biggest retailers in Romania had a great 2017 with consumption going up by 7.5 percent compared to the previous year. The top ten retailers had a higher growth in turnover, the numbers going up from EUR 9.96 billion in 2016 to EUR 11.144 billion in 2017, an 11 percent rise. The number of employees went up year-on-year by just 6 percent, from 70,897 in 2016 to 75,160 in 2017, which means players made more sales with fewer employees. Net profit climbed by 19 percent, from EUR 347 million in 2016 to EUR 414.2 million in 2017.

Kaufland, the biggest retailer on the Romanian market, finished 2017 with a turnover of RON 10.09 billion (EUR 2.21 billion) and net profit of RON 670.3 million (EUR 146.7 million). The number of employees was at 13,519, down from 14,070 the year before. In 2016, revenues were RON 9.69 billion (EUR 2.12 billion) and the net profit was RON 653.32 (EUR 143.02 million).

Carrefour Romania ended 2017 with net revenues of RON 6.75 billion (EUR 1.477 billion) and net profit of RON 209.7 million (EUR 45.9 million) while the number of employees was 9,939. In 2016 net revenues were at RON 5.67 billion (EUR 1.24 billion) and the net profit at RON 164.1 million (EUR 35.9 million). The number of employees was also smaller at 9,101.

Discounter Lidl Romania had a turnover of RON 6.51 billion (EUR 1.42 billion) and net profit of RON 352.76 million (EUR 77.2 million) in 2017. The number of employees was 4,815, up from 4,265 in 2016, when it registered a turnover of RON 5.58 billion (EUR 1.22 billion) and a net profit of RON 217.7 million (EUR 47.65 million).

www.business-review.eu Business Review | July 2018

HR 15

Local professionals sharpen up their skills Working on a very competitive market both in Romania and abroad, local workers need to adapt to the new challenges that technology is posing. Meanwhile, employers are interested in a highly soft-skilled workforce open to constantly learning and improving.

By Anda Sebesi

T

Mihaela Maranca, Randstad Romania

he quarterly Randstad Work monitor survey (Q3 2017), conducted by

with local branches, they have develop-

workforce for a while, and their importance

discrepancy between employers’ and employ-

ment programs that offer their employees

is still growing. Workers will need to develop

ees’ attitudes toward upskilling. While over

the opportunity to grow both in Romania

constantly and update their skills in order

80 percent of workers feel they have a respon-

and abroad, based on their results and drive

to keep pace with the new efficiencies that

sibility to upskill, many US employers and

to grow. “It is an important motivation and

technology provides – honing critical skills,

employees are not taking action to provide

retention tool that has had good results for

like leadership, creativity, problem-solving

upskilling opportunities in the workplace.

years when it comes to exporting Romanian

and collaboration, which machines cannot

intelligence abroad,” she adds.

replace. As Maranca says, quoting the “Work-

Randstad US, shows that there is a

Over a third of American employees report they have done nothing to upskill

According to her, indicators in other

force 2025 - the Future of the World of Work”

in the past 12 months, where upskilling is

countries and signals that the company has

report released by Randstad Canada, agility is

defined as attending workshops, completing

got from its clients show that employers are

a prominent trend when it comes to work-

online courses, receiving consultation from a

not interested in young people who have had

force skills. Organizations are already hiring

specialist, participating in personal coaching

excellent marks at school but lack initiative,

a broad variety of non-traditional workers

sessions or pursuing further education.

proactive behaviour and other necessary

who currently make up 20 to 30 percent of

skills on the labour market today.“The most

their workforce. In fact, more than one in four

labour force, at least on the white-collar side,

important aspect employers look for is em-

employees are freelance. Part-time workers

is at the opposite end of the pole: employees

ployees’ will and capability to learn and ac-

are less prevalent than contingent or free-

are watching out for opportunities to develop

quire the specific skills required by the digital

lance workers, averaging less than a quarter

their talents, sharpen their skills and stay

characteristics of each company. Companies

of the workforce. Employers estimate almost

relevant in an ever-changing economy. An

train their employees in emerging technology,

a quarter of their staff is working virtually or

important motivational engine of employees

as they know that otherwise they will lose

remotely. Almost half of organizations are

is the development opportunities given by

productivity and let employee potential go to

currently committed to building a variable

their bosses, which is still an advantage when

waste while at the same time potentially los-

workforce over the next five years to allow for

we look at the global labour market,” says Mi-

ing time and money,” says Maranca.

greater flexibility and adaptability. By 2025,

“Compared to these results, the local

the majority (85 percent) anticipate that com-

haela Maranca, general manager at Randstad Romania. She adds that, from her experience

THE SKILLS OF THE FUTURE

mitment to an agile workforce will increase

with clients, mainly multinational companies

Soft skills have been valuable in the global

dramatically.

www.business-review.eu Business Review | July 2018

16 HR

Foreign invasion: Romanian creatives take skills abroad More and more Romanian marcomm professionals are taking their careers international, with a larger number of local and international agencies opening businesses abroad each year and working for regional and international clients.

By Romanita Oprea

W

Photo: Dreamstime

hile the beginning of the advertising market in Romania, roughly 25 years ago, saw inter-

national agencies and marketing representatives bringing expats to start teaching locals and helping the market grow and expand its knowledge, the last five years has brought a major trend of experienced Romanian marcomm representatives “attacking� the international market, bringing a new touch of creativity, freshness and innovation, that both big, developed industries such as those in the UK, France, Italy, Germany and Spain, but also smaller markets in CEE and closer to home, such as Poland, Ukraine, Kazakhstan, etc, enjoy and benefit from.

FRESH EXPERIENCES With almost 14 years of experience in the marcomm industry, working both on the client side (Vodafone) and on the agency side (CohnandJansen JWT, Publicis Group, Ogilvy), Ana Maria Olaru is starting this month as strategic planner at Havas Worldwide London. According to her, working abroad was something she had wanted to experience since university. She had considered a move like this before, but the opportunity emerged at the beginning of the year and she decided it was time to make a change.

The UK was always top of her list for two reasons: first, it is a planning and creativity hub, a place Olaru often looked to for knowledge in advertising. Second, from a cultural point of view, British culture always seemed closer to her values and way of working, so she thought the integration would be easier for her.

Romanians’ Balkan spirit helps them understand better different categories of target

www.business-review.eu July 2018 Business Review | May 2016

COVER STORY HR 17 14

mental ones and the result will be seen even

in this direction, as they run incubators with

advertising industry that would bring a lot of

in the marcomm ecosystem. While there may

advertising schools in Spain, for instance, in

added value abroad. Leaving the country is

be a trend of marcomm professionals moving

order to recruit young talent from abroad.

a very personal decision as it involves tough

abroad, I do not see it as an accelerated one,

changes and decisions, so it is hard to say if

just one at the beginning of its real potential,”

in the key positions, Dobre wouldn’t say it is

there is a trend that is growing or not. I think

added PepsiCo’s Eastern Europe region digital

a widespread phenomenon. On the contrary:

also that we live in a world where work mobil-

& brand engagement manager.

he thinks there are just a few hot spots in

“I believe that there is a lot of talent in the

ity is much easier and brings a lot of value so

One of the most creative agencies in the

Still, when taking a look at people leaving

Romania that are growing creative and mar-

for sure there will always be a percentage of

CEE region, according to the judges at major

keting leaders that can compete anywhere in

people in the industry taking this challenge,

international advertising festivals, McCann

the world. And these hot spots are proof that

whether they are promoted within their

Worldgroup Bucharest has its own fair share

the industry in the country is growing. “They

organization or take the leap on their own,”

of great Romanian exports to the interna-

have exposure to regional and global projects

said Olaru.

tional market, from Adrian Botan (currently

that give people the chance to gain a lot of

Meanwhile, Diana Lupescu has taken a

president creative Europe, global ECD at Mc-

international experience from here, from

regional position, becoming Eastern Europe

Cann Worldgroup), Razvan Capanescu (chief

Romania. So, when they leave, they are not

region digital & brand engagement manager

creative officer at McCann Prague), Ioana Filip

experimenting on virgin ground, they are just

at PepsiCo in March. A member of the IAA

(former executive creative director at MRM//

getting better at what they are already doing.

Young Professionals Romania, Lupescu has

McCann and

nine years’ experience in marketing, working

currently

for big players, both agencies and companies,

SVP execu-

such as Infinit Solutions, Odyssey, Ursus

tive creative

Breweries / SABMiller and PepsiCo.

director at

“International mobility is not something

Energy BBDO

we’re hearing about for the first time today.

Chicago) and

It has been part of our lives for thousands

Diana Ceausu

of years, even though the reasons, the main

(currently VP,

motivators have changed. Now, career mobil-

global strat-

ity is nothing else but an evolution of our own

egy director

mindset as people and a broader understand-

at Common-

ing of our own values and capabilities. In

wealth//Mc-

the case of Romania and, more precisely,

Cann Detroit),

the marketing and advertising industry,

just to name

beyond the already stated factors, one that I

a few. Catalin

believe stands out is experience and learning

Dobre, CEE

enhancement. Being open to other countries

creative director at McCann Worldgroup,

For me, the biggest issue is not people leaving

and further understanding cultural diversity

believes that this brain drain is probably one

in leadership positions. That is just proof that

not only enriches you on a professional level,

of the biggest challenges the local industry

we are becoming more and more competitive

but also on a personal one. We, the Romanians

is facing right now. And it’s not happening

on an international level. The biggest issue

in marcomm, have always been courageous

only in Romania, but all across CEE. “It all

is with people leaving for the sake of going

enough to discover and leverage our potential

comes down to people. And if we don’t man-

abroad,” concluded Dobre.

in different contexts. Why not abroad?” said

age to keep the talented ones here, it will be

Lupescu.

hard to evolve as fast as we could. I think the

over their international competition? Al-

What are Romanians’ main advantages

next stage the industry is heading to is an

though she has only recently left and believes

awakening, not only for local businesses’

exchange. We’ll continue to see Romanians

that it is very early to judge, Olaru would say

HR recruiters, but also for those taking their

leaving, but we’ll also import talent. We are

that Romanians’ Balkan spirit helps them

activity outside the borders. The paradigms

an up and coming market. Maybe we don’t

capture more emotion and understand better

are no longer the same – agencies’ representa-

have the budgets, but we have the flexibility

different categories of target.

tives, clients’ representatives and the work

and the energy to move things faster. From an

that comes out of it – bringing profitability or

agency perspective this is very important be-

I know, without generalizing, I believe it is

not and/or equity sustainability. “I believe it is

cause I see a lot of youngsters from the West

the willingness to progress and get better and

a time of internal dialogue, as we actively seek

interested in coming here,” said Dobre.

better at what they do. Keeping the learning

Moreover, she believes this is a time of

to refresh our progress and goals, and our in depth understanding that the only borders are

Moreover, he pointed out, McCann’s representatives are helping to move things faster

And Lupescu added, “From the examples

process as a continuous momentum. Respect for their peers/colleagues.”

www.business-review.eu Business Review | July 2018

18 WELLBEING

How well does the workforce feel?

From corporate medical subscriptions, to an attractive package of both financial and non-financial perks, gym subscriptions and a friendly working environment, the majority of companies active in Romania have understood the importance of the wellbeing of their talent. They have gradually shifted from the work-life balance concept to the new work-life integration paradigm.

By Anda Sebesi

W

ith employees and job seekers now expecting their packages to go beyond salary and traditional

bonuses, the concept of wellbeing has developed gradually over the last few years.

Experts in psychology can scientifically demonstrate a direct correlation between wellbeing and its positive impact on work performance

The psychological wellbeing of its employees is an important aspect for any organiza-

“Research shows there is only one experi-

CEO & founder of COS. At present, there are over 50 types of

tion and so it has become a focus for both HR

ence in life that increases happiness over

departments and employees of multinational

a long time. It’s not money, above a base

wellbeing programs on the Romanian market,

companies active on the local market.

survival amount, nor marriage or having kids.

focusing on different aspects such as physical

The one thing that makes people happy is the

and psycho-emotional health, personal devel-

tional level that experts in psychology can

quality and quantity of their social connec-

opment and various hobbies.

scientifically demonstrate a direct correlation

tions,” says Gallup researcher and author,

between wellbeing and its positive impact on

Tom Rath.

Things have evolved so far at interna-

work performance. According to international

“The return is high for forward-thinking

AN OFFICE THAT FEELS LIKE HOME “Offices have become more than workplaces.

studies, when we experience positive mood/

organizations that invest in the physical,

They have become a platform through which

feelings, our brain is on average 31 percent

cognitive and psychological wellbeing of their

businesses can display their values, promote

more productive than when we are in a nega-

people by thinking about it holistically and

their culture and share their story,” says Fulga

tive, neutral or stressed mood. In addition,

incorporating it as part of their business strat-

Dinu, country manager of operations at Im-

according to Fortune, the company you work

egy. The result is highly engaged employees.

mofinanz Romania.

for can improve your personal/family life

The most successful organizations are now

(supporting you in your role as a parent) and

turning their attention to employee wellbeing

have between three and five generations of

health (encouraging you to give up smoking

as a way to gain emotional, financial and com-

workers. This represents a major challenge for

or maintain a healthy lifestyle).

petitive advantage,” says Christophe Weller,

companies as each generation of employees

As pundits say, at present organizations

www.business-review.eu Business Review | July 2018

20 WELLBEING

According to Dinu, the wellbeing of the workforce is a crucial element for developers gearing up for a new project. “The wellbeing of people in an office space depends on many aspects such as lighting, acoustics, noise, interior design, thermal comfort and air quality. As is the case with the international office brand, myhive, the various facilities offer employees an adequate, well-equipped, sociallyorientated environment,” says Dinu. She adds that the presence of hospitality businesses contributes to improving the daily experience of the people who work in the area, and with the growing number of corporate employees, the need to make their services easily accessible has increased.

“As the labour market is increasingly At present the design of offices is focused on flexibility and dynamism

competitive, companies are more and more focused on attracting and keeping talent. This translates into a strong focus by tenants on

has a different perception of what a workplace means and what it should look like. In

segments,” he said.

On the same theme, Dinu of Immofinanz

the needs and wellbeing of their employees, and office spaces play a crucial part in this,”

this context how should companies respond

says that the company has noticed how

says Dinu. She gives the new trivago campus

to the needs of the different generations?

organizations have begun to recognize that

– the new global headquarter for the company

a thoughtful, progressive work environment

– which is being developed by Immofinanz

also depends on the industry, as some offices

can reflect brand value, while improving

in Dusseldorf, as an example. “According to

are linked to production. When you have mil-

health and productivity, innovation and

trivago, they want to attract the best talent

lennials with friendly, colourful offices – what

collaboration in the workforce. “It is not

from all over the world and therefore it is

are workers in the production area going to

so much about working spaces anymore,

crucial not only to offer an office but a place

say? They will think their colleagues in the

but about living spaces, with employees’

where everybody feels comfortable,” says the

“We first need to listen and understand. It

office don’t really do any work,” said Diana Calfa, managing partner at Morphoza, during Realty

wellbeing becoming a priority. Office

Immofinanz representative.

spaces are already part of value creation, helping to recruit,

A MAJOR SHIFT IN THE OFFICE FIELD

Forum, a real estate event

enforce the brand and pro-

As people’s work changes, their needs change.

organized recently by Busi-

vide visible sustainability

And as needs change, work environments

ness Review.

credentials, and the trend

must also change to remain supportive. The

will continue in this direc-

evolution of offices as places primarily for

tion. This is why our myhive

process work to places for creative work has

She adds that while none of us know how we will be working in the next five years, at present the design of offices is focused on flexibility and dynamism.

concept stands for a friendly and a hotel-inspired design, as well as a number of services and

profound implications for wellbeing. “Creative work is all about making connections, being open to new ideas, taking risks and

“Companies want to maximize the existing

amenities, to enable tenants to focus on their

experimenting. These behaviours are impos-

space and one of the solutions for these needs

business,” says Dinu.

sible in a stressed state of mind. For creative

is shared-desk or flexi desk,” adds Calfa.

Plus, as Dragomir of Colliers says, devel-

work to thrive, the workplace needs to be a

opers offer a wide range of complementary

supportive and positive environment. For

advisory, at real estate consultancy company

services like gyms or kindergartens, aiming to

creative work, the workplace matters more

Colliers International Romania, stated dur-

create communities that will make relocation

than ever and it needs to do more than ever,”

ing the same event that arranging offices so

a more difficult process. He adds that while

says Weller of COS.

that employees feel more connected and to

two years ago corporate representatives were

encourage collaboration is the starting point

talking about “work-life balance” in the office

six dimensions of wellbeing have been identi-

for the office of the future. “Companies have

market, now this concept has become obso-

fied and they can be impacted by the design

started to use in their office spaces things that

lete and is being replaced with the “work-life

of the physical environment: optimism

are specific to the residential and hospitality

integration” paradigm.

(provide spaces that can be easily modi-

Sebastian Dragomir, director, office

He says that based on Steelcase research,

www.business-review.eu Business Review | July 2018

22 WELLBEING

fied, to encourage creativity), mindfulness (create environments that support focus and minimize distractions for all tasks by providing a diverse range of facilities), authenticity (allow individuals and teams to express their personalities by selecting the environments that best suit their work styles), belonging (provide spaces that encourage personal and professional connections), meaning (provide social spaces to reinforce the importance of fun and social interactions) and vitality (a variety of indoor and outdoor spaces that offer posture choices – sitting, standing, lounging).

“Turn-key projects depend a lot on the building, the requirements and the quality of finishes. The budget range is extremely vast.

If we allow 10 sqm/person, the budget of our previous projects can be found between EUR

Office spaces are already part of value creation, helping to recruit and enforce the brand

80 to EUR 800/sqm,” adds Weller.

A DIFFERENT APPROACH TO FINANCIAL PERKS

few companies in Romania that offer this benefit, it sees its impact which differentiates

increase in demand for such medical sub-

In addition to the work-life balance benefits

it on the local labour market. “This benefit

scriptions proves that Romanians are gradu-

that Adobe Romania gives its employees, the

allows us to access the top 5 percent of the

ally starting to understand that it is much

company offers them the opportunity to buy

best candidates on the market. We at Adobe

better to prevent than to treat. “The medi-

Adobe shares at a preferential rate within an

offer a complex and diversified package of

cal subscription remains the most popular

internal savings program. “In addition to the

extra-salary benefits for our employees, not

benefit in the salary package and we see the

salary increases, high performers get Adobe

just financial ones but especially those related

preference for complex, premium corporate

equity stakes which they can trade, allowing

to work-life balance. As a cumulative effect

subscriptions that offer access to a complete

them to benefit directly from the company’s

of these benefits, our personnel turnover is

range of medical specialities and medical

success. While last year the price of a share

under 5 percent,” says Radu. Working one day

tests, antenatal care, medical recovery, and

was USD 130, today it is USD 250. So, employ-

a week from home, a flexible work program

access to well-known doctors in our network,”

ees who buy or receive equity stakes have

depending on the project, encouraging an

they say.

significant extra-salary benefits,” says Cris

active sporting life and a friendly working

Radu, senior director of engineering and site

environment are among the facilities and ben-

ies, corporate subscribers access medical

leader at Adobe Romania.

efits that Adobe offers its employees in order

services 2.5 times more often than those who

to provide them with a balanced lifestyle.

have no such incentive, while its subscribers,

He adds that this is one of the most popu-

As Regina Maria representatives say, the

According to the company’s internal stud-

be it SMEs or corporate go to the doctor eight

lar benefits among the company’s employees and it is a very effective tool to retain and

WELLBEING MEANS PREVENTION

times a year. “These stats show us that there

motivate the team. “Each employee can expe-

Corporate medical subscriptions are among

is a significant need for this tool,” say officials.

rience directly the company’s success which

the most well-known and used perks that

Corporate subscriptions include, in all cases,

is translated into the positive evolution of the

companies offer their employees, as part of

free of charge medical examinations, medical

stakes and so they have an entrepreneurial

their strategy to retain their workforce. “From

tests, discounts depending on the package, a

approach to the project they are involved in,”

our perspective, the wellbeing concept refers

dedicated medical advisor, medical hotline

says Radu. According to him, this measure is

to prevention in the conditions of an active

and access to electronic medical records.

implemented in the company worldwide and

lifestyle. More than this, the mental com-

“Then, depending on the needs of each com-

is one of the most popular among software

fort of employees given by the knowledge

pany and considering the specifics of each

companies that take an entrepreneurial

that they have a reliable medical partner for

industry and the activity of the employes and

approach rather than a corporate one. “It is

maintaining their health it is important for

their level of risk they are exposed to, we cre-

more connected with the values of each com-

us,” say representatives of the private medical

ate customized offers,” add the Regina Maria

pany than with the competitiveness of the IT

services provider Regina Maria. About 30 per-

representatives. In addition, the medical

workforce,” adds the Adobe representative.

cent of the firm’s turnover was generated by

services provider has included in its portfolio

corporate subscriptions at the end of last year.

subscriptions dedicated to start-ups.

He says that because Adobe is among the

www.business-review.eu Business Review | July 2018

PARTNER CONTENT 23

Technology reshapes the face of the workplaces Technical constraints are fewer and so better care for all Wellbeing facets, physical, emotional and cognitive is attained. Innovative working environments create a safe haven for new ideas.

Innovation is achieved by creating, sharing and testing of these ideas, therfore the place where this happens needs to support the need for creativity, collaboration and development. We applied these principles within projects such as recently OLX, Steelcase and Adobe or HP, defining a pilot work environment for testing the effectiveness of integration of mobility in a usually fixed workspace setup.

What do you think it should be consid-

Andrei Angelescu, Architect COS

What can you tell us about the Biophilic De-

ered when designing spaces for today’s

sign? What does it mean and what are its specif-

employees?

ics and benefits for the employees?

Since today’s employees value the present

Biophilia is a ‘love of life or living systems’. It’s

by acting now and changing the future,

What should companies do to create an

our inherent human connection to the natural

keeping in mind the user experience, the

office of the future?

world. In an urban world of technology and

individual’s emotions and feelings will help

Technology is rapidly altering how we live

industrial architecture, this fundamental con-

shape the proper space for them. Address-

and work. We love the new conveniences

nection can sometimes feel all but lost. Biophilic

ing all senses using perception vocabulary

that our devices deliver. But as technology

design is an innovative way to harness this affin-

the space will affect the user and in turn

becomes a co-worker and even a personal

ity in order to create natural environments for

the users’ engagement. Targeting long

companion, employers are focusing in

us to live, work and learn. By consciously includ-

term feelings that will shape the character

offering to their employees all the newest

ing nature in interior or architectural design,

of spaces, or emotions that energize the

technologies and spaces that can incor-

we are unconsciously reconnecting; bringing

individual, the design of the space will blur

porate the new technological challenges.

the great outdoors in to our constructed world.

the edges of the office.

Also proper lighting, adjustable desks and

Natural light, vegetation, living walls, natural

comfortable temperature control can actu-

textures and materials and nature views will

In your opinion how can companies create

ally work to increase their performance,

provide a positive impact. Biophilic Design en-

a harmonious working environment?

allowing you to reap the benefits over the

creases performance and productivity, reduces

Helping create a project core team with

long haul.

stress among employes and absenteism caused

the client including leadership members

by illnessez.

to set the company’s goals while assessing

Tell us more about the projects you

strenghts and weakness will help conduct

developed so far for companies from the

What can you tell us about the WorkLifeCenter

studies to establish a beseline for the actual

perspective of the innovative working

concept that was implemented within your

status of the employees and set the steps

environment (including here the wellbeing

company?

needed to reach these goals. Implementing

part)?

We shaped a new approach on flexible environ-

new ways of working, or even improving a

Technology increases connectivity and

ment by understanding places that people react

work environment is a process that involves

mobility with the purpose of better com-

to and make them feel in a certain way or experi-

the user and the space. Space shapes be-

mnunication, information access and flow.

ence certain emotions. Using this knowledge we

haviour that over time is culture. Space on

Technolgy is only as useful as it’s purpose

developed our work environment as an example

the other hand must be flexible and react to

and user friendlyness, therefore the

for Human Centered Design, defining our social

the user, only then, harmony between indi-

technological advances allow for seamless

oriented Workcafe and collaborative Innovation

vidual and space can form a truly harmoni-

integration with the physical environment.

Center.

uous working environment.

www.business-review.eu Business Review | July 2018

24 DEFENSE

Arms race: US and Europe go head to head over local defense deals Photo: Dreamstime

Romania increased its defense spending to 2 percent of GDP in 2017 and major US and Western European military contractors have engaged in a fierce battle over multi-billion contracts, aiming to strengthen a weak link on the eastern fringe of NATO.

By Sorin Melenciuc

R

omania is militarily weak, experts say, as it has not invested enough to

Romania is oriented toward the European Union but is one of the many countries in the union that may not really belong there

boost its defense capacities since the

fall of the Communist regime.

RUSSIAN THREAT

world between 2016 and 2017 (…). This sharp

of NATO’s military spending. Official data

But the situation is about to change, as a con-

rise was due to Romania starting to imple-

show that the total military spending of all

sequence of both the rising external threat,

ment its military procurement, moderniza-

29 NATO members, including Romania, was

following the annexation of Crimea by Rus-

tion and expansion plan for 2017-26,” the

USD 900 billion – out of which around two

sia, and of NATO’s pressure on its members

report said. The increase was driven “by the

thirds are covered by the US – in 2017, ac-

to increase defense spending.

perceived threat from Russia felt by many

counting for 52 percent of world expenditure.

countries in Central Europe”, according to

And Romania’s need for military equip-

These external factors, combined with rapidly growing GDP and total budget in

SIPRI’s experts.

military spending in order to modernize its

EXPENSIVE EQUIPMENT

outdated ground, sea and air military forces.

This sharp increase in the

The political consensus to increase mili-

ment is huge: its military procurement, modernization and expansion plan for

Romania, have allowed Bucharest to boost its

military budget is a conse-

2017-2026 includes eight major projects, worth more than EUR 100 million each. Romania’s

tary spending to 2 percent of GDP from 2017,

quence of the rising costs of

main procurement and

from roughly 1.4 percent over the previous

technology-based military

modernization projects

years, has had a rapid effect.

equipment over the last few

are: the acquisition of four

decades.

multifunctional corvettes,

According to the Stockholm International Peace Research Institute (SIPRI), Romania’s

Advanced industrialized

rocket launcher mobile

military spending rose by 50 percent last year

nations like the US, Western

systems, the modernization of

compared with 2016, to USD 4 billion, the

European powers, and even

MLI 84 M combat machines, 8x8

biggest increase in the world, due to modern-

Russia and China can afford to spend

ization and expansion plans for 2017–26.

billions each year in order to keep up with

tems, ASAM large-scale rocket systems, short

the latest military technology, but for small

and very short range air defense (SHORAD/

military spender in Central Europe in 2017,

players like Romania it is difficult to bear the

VSHORAD) systems and a multiple missile

accounting for 42 percent of the subregional

costs.

launcher. Other important projects include

“While Poland was by far the largest

total, Romania made the largest relative

Despite the sharp increase in its military

and 4x4 armored carriers, C4I sys-

the expansion of the fighter plane fleet (from

increase: its military expenditure rose by 50

budget in 2017, Romania’s total defense

currently 12 F-16’s to at least 48), the acquisi-

percent, the highest rate of increase in the

budget represents less than 0.5 percent

tion of combat and utility helicopters, the

www.business-review.eu Business Review | July 2018

DEFENSE 25

because it is considered the only reliable security partner in the face of the threat from Russia,” a source familiar with the defense sector told Business Review.

Moreover, last year Bucharest established close ties with US helicopter producer Photo: Dreamstime

Bell, which is eyeing an order for 45 attack helicopters (24 AH-1Z Viper) – previously not Romania’s priority – and tactical transport (21 UH-1Y Venom).

For Romania, buying naval vessels and missile systems is part of a larger NATO strategy to block a very real Russian naval buildup in the Black Sea

EUROPEANS’ OFFER This possible contract could harm Romania’s decades-long relationship with France’s

upgrade of the training plane fleet (IAR 99

several important military contracts during

Airbus, which built a new factory in Ghimbav

Soim), the modernization of the two British

the last year, notably for Patriot and HIMARS

(near Brasov), 180 km north of Bucharest.

frigates (Regele Ferdinand and Regina Maria),

rocket systems and Piranha 5 military vehi-

the acquisition of military trucks and the

cles. All these contracts were granted directly

production capacity of 15 aircraft per year,

beginning of a small submarine fleet pro-

to US military contractors: Raytheon (Patriot),

but Airbus Helicopters is waiting for orders

gramme.

Lockheed Martin (HIMARS) and General

from Romania’s Ministry of Defense or Min-

Dynamics (Piranha 5), and the reason was not

istry of Internal Affairs to start producing its

necessarily the quality of the equipment.

latest H215 model. With this assembly line,

US FIRMS TAKE THE LION’S SHARE

This assembly line was designed for a

“In this type of military contract, it’s not

Romania would have entered the small circle

rest has already begun to launch its major

about real competition; other factors are more

of countries that have mastered the manufac-

military projects. With virtually no defense

important. It’s about security guarantees,

ture of a helicopter (France, the US, Russia,

against missile and naval threats along the

and the United States is in a leading position

China, Italy, India and the UK). Without the

Black Sea, Romania’s government has signed

in Eastern Europe from this point of view,

possibility to offer state-backed security

All these programmes are costly, and Bucha-

www.business-review.eu Business Review | July 2018

26 DEFENSE

perceived threat from Russia. “Reality creates policies. Policies don’t create reality. So in the end, it doesn’t matter that the Romanians are focused on the EU and that Americans are not at all focused on Romania. The reality of Russia defines this relationship,” Friedman added.

Photo: Dreamstime

MILITARY BORDERLAND For Romania, boosting military expenditure is also an opportunity to prove that it is a reliable ally in a complex security environment.

Some experts remember that Romania, For Romania, boosting military expenditure is an opportunity to prove that it is a reliable ally

unlike Poland, historically preferred to throw in its lot with the prevailing empire in the region. “Romania is oriented toward the

guarantees in the US style, European military

this part of Europe. The US has two military

European Union but is one of the many coun-

contractors are offering better technology

bases in Romania: the land-based Aegis BMD

tries in the union that may not really belong

and production options; they generally agree

facility in Deveselu (southern Romania) and

there. Unlike the Poles, for whom history

to locally produce a large part of the equip-

the Kogalniceanu airbase (eastern Romania,

and resistance are a tradition, the Romanians

ment and offer technology transfers. This is

near the Black Sea).

accommodate themselves to the prevailing

the case not only for Airbus, but also for the French-British group MBDA, which lost the competition with Raytheon for long-range

For Romania, being caught between rival empires is not a new situation.

“The problem that Romania has is that the

winds. It will be good to find out where they feel the winds are blowing from right now,” Friedman wrote in his article “Geopolitical

missile systems, but is still eying contracts

world cares about it. More precisely, empires

Journey, Part 2: Borderlands” published in

for coastal defense and SHORAD/VSHORAD

collide where Romania is. (…) Romania’s

2014 by Stratfor.

systems. MBDA is offering Romania a tech-

problem was that it was part of Europe, a

nology transfer and part of the production at

weak power surrounded by stronger ones,”

a Ploiesti factory, but it has still struggled to

geopolitical analyst George Friedman

win a contract.

wrote in his article “Borderlands.

Another major European defense group, Germany’s Rheinmetall, is hoping to land tary trucks in Romania, offering technology

Romania is key for Amer-

transfer and local production.

ica’s interest in the region

World War II, the first line of defense against the Eastern threat.

However, Romania’s accession to the EU and NATO has helped the country to

and this could be a source

best chance to win a contract seems to be the

of tension with its European

EUR 1.6 billion four multifunctional corvettes

allies.

Sources from the defense sector told Busi-

becoming again, like before

asia” published by Stratfor.

Experts point out that

project.

Russia’s influence in order to avoid

A Geopolitical Journey in Eur-

contracts for 8x8 military vehicles and mili-

But for the European defense groups, the

Strategically, Romania is interested in keeping the Republic of Moldova free from

modernize and develop, and this reality of a borderland between East and West seems obvious

“The Romanians still remain focused on the EU as their economic guide,

to many Western visitors.

“When I returned to Romania from

ness Review that four companies, all Euro-

and the US still expects allies to behave as it

pean, are competing for the contract: Damen

does – or pretends it does. There is inevitable

Moldova in the spring of 2014, I wanted to

(the Netherlands), Fincantieri (Italy), Naval

friction, but in coming here I realized two

kiss the ground. From the vantage point of

Group (France) and TKMS (Germany).

things: the centrality of Romania to American

Moldova, a former Soviet republic never a

interests and the fact that most Americans

member of the European Union, Romania

ed that the four corvettes will be built at the

are not even clear where Romania is, much

unambiguously signified the West, complete

Mangalia shipyard by the wining competitor.

less that it has become a critical ally,” Fried-

with NATO membership and institutions

For Romania, buying naval vessels is part

man wrote in the article “Journey to Europe:

slowly becoming more transparent, thanks to

of a larger NATO strategy to block a very real

Visiting Romania”, published by geopolitica-

the institutions of the EU,” the international

Russian naval buildup in the Black Sea.

futures.com.

bestselling author Robert Kaplan noted in his

Romania’s government has already decid-

Romania’s alliance with the US, inside or

book In Europe’s Shadow. Two Cold Wars and

WHERE EMPIRES COLLIDE

outside NATO, and the need to strengthen

a Thirty-Year Journey through Romania and

And Russia has its reasons to be very active in

its army is mainly a consequence of the

Beyond.

www.business-review.eu Business Review | July 2018

28 INTERVIEW

Lidl Romania aiming to harness local supplier network, continue development strategy Frank Wagner, president of the management board of Lidl Romania, says the retailer is looking to enhance its relations with Romanian suppliers as part of its ongoing development strategy. The company will open 15 new stores in the country this year. Lidl is also planning to streamline its distributon operations in eastern Romania through a new logistics center which is currently under development.

ABOUT Frank Wanger LIDL ROMANIA Wagner has been president of the management board of Lidl Romania since December 2015. He has close to 20 years’ experience in international retail management, spending more than a decade at Lidl. He has worked both in Germany and Romania.

By Ovidiu Posirca

All of our warehouse locations ensure op-

What are Lidl’s development plans in Romania this year?

Last year, we started the construction of our fifth logistics center, in Cordun (near Roman).

timal supply routes, with an optimal number

Just like every other pillar of our activity,

The warehouse is being built in collaboration

of stores allocated to each warehouse. This

the principle behind Lidl’s logistics strategy

with a Romanian company and is an extreme-

allows us, on one hand, to carefully plan the

is efficiency. Expansion and modernization

ly important asset for the distribution process

products’ traceability and maintain their

remain our growth drivers, and therefore

in the east of the country. The logistics center

quality and freshness, and on the other hand,

we are constantly improving our customer

will have a total built area of 45,000 sqm, on a

to reduce our environmental impact.

experience, as well as using sustainable

land plot of 132,000 sqm. An important factor

technologies and development strategies in a

in choosing the location was its proximity to

and logistics centers support our efforts to

responsible way.

the European road E85, which makes it possi-

minimize resource consumption and reduce

ble to optimize the supply processes and thus

our impact on the environment as much as

we have 226 stores and we are constantly

maintain the average distance of transport to

possible. For example, the logistics center

optimizing our supply chain, by organizing

the stores. The opening of the new warehouse

in Lugoj, opened at the end of 2016, uses

our warehouses as efficiently as possible. At

will also make an important contribution to

modern solutions and technologies that

the moment, we have four logistics centers in

the economic development of the local com-

deliver high energy efficiency standards, with

Chiajna (near Bucharest), Nedelea (near Ploi-

munity, by creating over 200 new jobs, both

low energy usage and a lower CO2 footprint.

esti), Iernut (near Targu Mures), and Lugoj.

in administrative and operational areas.

Moreover, the entire construction process for

Lidl is constantly growing in Romania –

The investments we make in our stores

www.business-review.eu Business Review | July May2018 2016

COVER INTERVIEW STORY 29 14

this building was a sustainable one, generat-

them in sustainable growth and to create

were the Buzau 1600 tomato and Buzau red

ing a far lower impact on the environment.

long-lasting partnerships. This helps them to

onion, which were part of our offer during

Sustainable investments such as this are one

constantly increase their quality standards

the vegetable season last year. Romanian

of the reasons why in 2017 Lidl obtained the

and to meet Romanian customers’ demand

Buzau 1600 tomatoes will also be available

ISO 50001 certification – an international

for local products. Every decision that we

this summer, in Piata Lidl.

standard for optimizing energy performance

take in relation to the local suppliers is ac-

and efficient energy management.

cording to our strategic guideline of building

What is your core development market?

outcomes. The results of our initiatives are

What’s Lidl’s strategy in the digital field?

Does the company plan to open an online store locally?

In our development strategy we aim to keep

very encouraging. They are outlined in our

Lidl Romania does not currently have an

our promise to our customers, of offering

first sustainability report, launched in May

online shop, which means that one of our

products at the best quality-price ratio, close

this year.

challenges is to maximize the conversion

an efficient partnership, with sustainable

to their homes. Therefore, in our expan-

For example, “Camara Noastra”, our own

generated by our online presence into offline

sion plan we consider every region equally

Romanian food brand, 100 percent developed

sales. We run complex campaigns with of-

and with the same interest in meeting our

with local suppliers, based on authentic reci-

fline components (such as radio, print and

customers’ needs. We are already present

pes purchased from them, had a significant

outdoor), as well as online elements, many of

in every county with at least one store and

increase over the reporting period (March

which are innovative. A very recent example

this year we are planning to maintain our

1st 2016 – February 28th 2017). We launched

is our new brand campaign, in which the

expansion strategy by opening at least 15 new

this project in October 2015 with 43 items

manifesto video can be seen online from two

branches. At the beginning of this year, we

and reached the end of the 2016 with 98

different perspectives, with the help of two

opened five new stores: in Sighisoara, with a unique format and architecture in Lidl’s portfolio,

items, and we are aiming to

different devices – on their mobile

increase the number

phones, people can see the

by at least 20

video from the perspective of

in Balotesti and Tunari (near

percent,

one character, while on their

Bucharest), in Galati, Brasov

until the

desktop they can see it from

and Orastie.

end of the

another character’s point

next report-

of view. For us, it’s impor-

However, the core of Lidl’s development strategy is to build a shopping experience for our clients in accordance with their taste, interest in diversity,

ing cycle.

Moreover, the number of local suppliers for all products increased

tant to create memorable experiences for Lidl customers, regardless of context, be it online or offline. Furthermore, we try to keep

lifestyle and purchasing power. In our seven

by 24.1 percent over the reporting period. One

our customers as engaged as possible with

years of presence on the Romanian market,

of our biggest commitments is to increase the

real time conversations in social media, as

we have learned to create a more efficient

number of local suppliers and consequently

well as constantly informing them about all

experience for our customers and to antici-

the number of SKUs made in Romania.

the offers in our stores via our website.

pate their needs. Our expansion process is

Nevertheless, we are aware of the chal-

committed to sustainable development by

lenges that Romanian farmers are facing and

using advanced building technologies. Thus,

we know that their sustainable development

What are Lidl’s expectations in terms of business results in Romania this year?

each store is equipped with modern solutions

is an important factor in increasing the local

We are very happy that in 2017 we were

and technologies that provide high energy

production of authentic fruit and vegetables.

able to exceed the market average turnover

efficiency standards. For example, LED

This is why, together with the University of

increase. It is a very big achievement and I

lighting systems with presence sensors and

Agronomic Sciences and Veterinary Medi-

am proud of my team who did such a good

heat recovery systems are integrated into the

cine of Bucharest (USAMVB), we developed

job. We plan to do the same this year. On the

ventilation systems. All these measures are

an ambitious project that aims to offer local

local business landscape, we are among the

part of our development strategy that helps

farmers technical and procedural support,

top three retailers, and our business model –

us offer our client the shopping experience

free counseling sessions and development

to offer our customers the best quality-price

they deserve.

opportunities. The partnership represents a

ratio – differentiates us from our competitors.

genuine project supporting the local economy

Our priority is to maintain the upward trend

How are Lidl’s relations with Romanian producers? What share of the range was made by local producers?

and a responsible way of doing business with

of market expansion with at least 15 new

our partners. It also gave rise to the program

stores each year and to reach the next big-

“Cultivat in Romania, specific romanesc”

gest milestone of 300 stores nationwide. Of

Developing long-term relationships with

(“Grown in Romania, typically Romanian”),

course, this expansion will be reflected also

Romanian suppliers has always been a prior-

which aims to revive traditional varieties of

on the local labor market, by creating new job

ity for us. One of our objectives is to support

vegetables. The first results of this program

opportunities.

www.business-review.eu Business Review | July 2018

30 GDPR

Local SMEs struggling with GDPR in first weeks after enforcement Roughly one month after the General Data Protection Regulation (GDPR) was rolled out across the European Union, start-ups, small and medium-sized companies are realizing that they are facing the same risks as large firms when it comes to implementing the new rules.

Photo: Dreamstime

By Ovidiu Posirca

Investors say internet startups remain attractive despite the enforcement of the GDPR

www.business-review.eu Business Review | July May2018 2016

T

COVER STORY GDPR 31 14

he legal changes are also set to gener-

that is processed, not the size of the com-

affect the way start-ups operate at first, but

ate additional challenges for internet

pany itself. In practice, there are situations

in the long term I do not expect disruption,”

start-ups whose business model is

in which small companies process a bigger

Inti Paolucci, partner at venture capital fund

volume of data than large companies,” said

GapMinder, told BR.

data driven.

In the first few weeks after the enforcement of the GDPR, the National Council of

the legal experts at Musat & Asociatii.

While smaller firms will struggle, for

“The GDPR sets a legal framework for the collection and processing of individual data

SMEs in Romania (CNIPMMR) surveyed 210

instance, to rebuild email lists that were deci-

in the EU. From this perspective, it regulates a

companies to find how they were coping

mated following the implementation of the

rather controversial area, in which companies

with the new rules. Close to 30 percent of

GDPR, large internet companies might have it

did not have clear boundaries. The frame-

the respondents said they had been able to

easier as consumers are already very used to

work ensures customers’ data protection and

meet the obligations prior to the deadline on

their products. “If you are like Facebook or

reduces companies’ risk of facing legal ac-

May 25, while 42.1 percent said they hadn’t

Google, you push that consent pop-up mainly

tion,” he added. The fund has already backed

adopted measures for the implementation

because your users are used to you so they are

14 start-ups in Romania with the potential

of the GDPR. Another 28.9 percent claimed

in the habit of using you over and over again.

to grow internationally. Gap Minder looks to

comprehensive guidance for smaller compa-

Of course you’re going to accept that, even

provide seed investments in the EUR 200,000

nies.

though Facebook as a big player is the one

– EUR 4 million band. Paolucci said that GPPR

that actually abused the trust of its users, of

compliance and the way in which start-ups

INTERNET GIANTS VERSUS MINNOWS

us, the users in the EU. So, that mainly means

process the new rules have become important

SMEs have grown concerned with the GDPR

because of their stuff, all the small compa-

parts of the investment discussions. “Non-

because of the tough sanctions stipulated by

nies are suffering. Not only are they suffering

compliance or a business model not fitting

the law. Companies breaching the new rules

now, they will suffer in the future as well,”

GDPR are definitely red flags for investors,”

risk fines of up to EUR 20 million or 4 percent

said Valentin Radu, CEO of Omniconvert, a

said the partner.

of their turnover. Close to 98 percent of the

start-up providing a real-time web personal-

respondents said that the sanctions were

ization tool. In comments in a video that was

director at 3TS Capital, says the new GDPR

excessive and disproportionate.

circulated on Facebook, he added that SMEs

rules impact companies across the board,

they were planning to implement the rules. More than half of the surveyed organizations were micro-enterprises. Moreover, 52.6 percent of the respondents were companies that had between one and nine employees.

The association concluded that SMEs needed assistance in covering the compliance costs for GDPR from EU funds as well as

Meanwhile, Marius Ghenea, investment

represent 99.8 percent of all companies in the

including internet start-ups and early-stage IT

First, fines can reach 2 percent of turnover or

EU and provide more than 66 percent of all

businesses. “In terms of their attractiveness

EUR 10 million and can double at the second

jobs.

to investors, because in general the impact is

There are two thresholds for the sanctions.

fairly evenly spread, these young technology

level, according to specialists at law firm

WILL THE GDPR IMPACT THE ATTRACTIVENESS OF INTERNET START-UPS?

companies from Romania and the region will

any additional regulation of the local au-

The new legal risks facing start-ups that are

risk capital funds. There may be some excep-

thorities, including on fines. Aside from the

heavy on data operations will be taken into

tions, in cases where companies have relied

administrative sanctions, any breach of the

account by investors contemplating private

heavily in their business model on communi-

rights of targeted individuals generates dam-

early stage financing. However, GDPR compli-

cation tactics which are no longer allowed by

ages that will have to be covered by those who

ance is just one of the factors that investors

the new GDPR,” Ghenea told BR.

produced it, which is the data operator or its

will consider.

Musat & Asociatii.

“The rules are applied in Romania without

trustee,” representatives of the law firm told

“The fundamentals of the GDPR do not

continue to receive the same interest from

Asked how the GDPR had been implemented in companies in which 3TS Capital

BR. Furthermore, the legal risks entailed by

affect the attractiveness of internet start-

has invested, Ghenea said the matter “was

the regulation don’t depend on the size of the

ups, but rather reassure all the stakehold-

addressed properly, probably better than in

company, with some exceptions. “This is the

ers involved. The implementation and the

most purely entrepreneurial companies, with

case because what matters is the flow of data

required actions to comply, however, could

no structured investors in their shareholding.”

www.business-review.eu Business Review | July 2018

32 PARTNER CONTENT

European banks have become stronger and resilient Gian Maria Gros-Pietro, Chairman of Intesa Sanpaolo, among the top banking groups in Europe, operating in Romania through Intesa Sanpaolo Bank, speaks about market trends and reviews his macroeconomic expectations for Europe and Romania.

Romania has registered one of the fastest growing economies in the EU last year, with an advance close to 7%. Local specialists, as well as the European Commission, foresee a slow down this year.

The economy will continue to grow, but it will register a progress of approximately 4-4.5%. What do you think will be the perspective in the near future?

In 2017, GDP grew by 7.0%, the highest rate in the last eight years, with the main contribution being provided by private consumption and investments. The most recent high-frequency indicators show that the positive cyclical phase continued in the first months of 2018, albeit at a slower pace compared to the last three months of last year. For this year we expect GDP growth to slow to about 4.5%, reflecting also the slowdown in private consumption, due to wage growth deceleration from the very high path of 2017. Investment growth is also expected to lessen owing to the current monetary policy tightening in place that, Economy in the EU is recording strong

markets are crucial elements to ensure the sus-

since December 2018, brought the policy

growth. In what way would you consider

tainability of the growth path even in the future.

rate from 1.75% to the current 2.50%. The

this growth to be sustainable?

monetary restriction, expected to continue

The European economies, impacted by the

Concerning the assumption that Italy could get

in the coming months due to high inflation-

past crises, are reviving, as witnessed by

out of the Euro Zone, do you think that this is

ary pressures, will cool down the economic

the 2.4% rise of the real EU GDP in 2017. The

realistically practicable?

cycle by bringing GDP growth on a more

recovery proves ample and widespread in

It’s hardly to conceive Italy out of the Euro. I

sustainable path in following years, at

the EU. The positive cycle is broadly sup-

rather deem that Italy, being among the leading

around 3.5%.

ported by investment and private consump-

European economies, has to play an important

tion, reflecting also the structural reforms

role to strengthen both the monetary union and

What is the current status of the European

process in place in many member states.

the functioning of the European Union as well.

banking sector?

Structural reforms and the action of the

In addition, I’d like to underline that in Italy the

In the past years, European banks have

European Central Bank, notably aimed at

position of the new government is clear and

become stronger and resilient, thanks also

strengthening the soundness of the bank-

unanimous: there is no plan or discussion about

to regulatory measures, in the frame of the

ing sector and the stability of the financial

leaving the Euro Zone.

single supervisory mechanism, focused on

www.business-review.eu Business Review | July 2018

PARTNER CONTENT 33

risk reduction. However, banks still face a

quirements. At the end of 2017, ISP has reached a

the serious social consequences that would

number of challenges, some of which being

common equity ratio of 14.0% (13.0% after IFRS9)

have otherwise derived from compulsory ad-

due to structural market changes, such as

and has posted a net result of EUR 3.8 billion,

ministrative liquidation proceedings for the

technology.

the highest since 2007. This brilliant economic

two banks. In particular, the ISP intervention

According to mainstream opinions, there

performance reflects, inter alia, the best year

has safeguarded the employees of the banks

are two things at the top of the “to do” list

ever for commissions with strong acceleration

involved, the savings of around two million

for European banks: increase profitability

of the volumes of assets under management,

households, the activities of around 200,000

and clean up balance sheets. In this respect,

net inflows, as well as the continued accurate

businesses financially supported and, there-

NPLs have been under great scrutiny in

cost management, with a cost to income ratio

fore, the jobs of three million people in the

recent years and are considered a top

at 50.9%, one of the best among the European

North-Eastern Italy, an area which records

priority for some time to come. I agree on

peers. ISP’s business model, although tradition-

the country’s highest economic growth rate.

the need to tackle this issue straight away,

ally rooted on money intermediation, focuses

As per the impacts on operations, namely in

but we should also recognise that NPLs in

more and more on wealth management, an in-

Italy, the acquisition gave the ISP Group the

Europe have declined significantly and the

dustry that provides some of the most attractive

opportunity of enlarging its activity within

issue is solvable. Anyway, I would say that

growth prospects, both in Italy and internation-

the North Eastern part of the country,

profitability is now the major challenge

ally: at the end of 2017, ISP managed EUR 338

considered the growth-engine of the Italian

for European banks, which need to rethink

billion of assets under management, a volume

economy as a whole.

their strategies and their business models.

on a steady robust increase in the last years.

This positive performance was confirmed in the

In Romania, Intesa Sanpaolo has a very

How would you compare the banking

first quarter of 2018: as of end of March 2018, ISP

interesting strategy compared to other

system in Italy to other banking systems

achieved a net income of EUR 1.25 billion, with

countries. Here, you focus mainly on large

in Europe?

an increase of 39% in comparison of the cor-

corporation and SMEs. What is your view

As stated, profitability is “the” challenge for

responding period of 2017, further improving the

on the local banking system, also in the

European banks, regardless of the country

quality of its loan portfolio.

context of its consolidation process?

The Bank has recently undergone a process

they operate in. Profitability is on the rise, but banks still struggle to earn their cost of

How would you characterize the Romanian

of operative reshuffle from universal bank

capital.

banking system?

to specialized bank on Corporate and SME

In this environment, the situation of Ital-

Romania has a very healthy and resilient

clients, without forgetting, of course our

ian banks has greatly improved, despite

banking system, thanks also to a sound super-

retail customers. In comparison with other

the burden of the legacy assets deriving

visory activity of the National Bank of Romania.

countries in the region, we deem that Roma-

from the double dip recession and the low

The system is currently well capitalized, while

nia represents a very interesting business

interest rate scenario which penalises the

the quality of assets is better than in many of

opportunity, taking into account not only

commercial banking model. During these

the surrounding countries, as witnessed by the

the promising economic outlook and the

years of negative interest rates and very

ratio of non-performing loans to total loans,

development of the local manufacturing

high liquidity, Italian banks, apart from

which dropped last year, to 8.0%, the country’s

sector, but also the high number of Italian-

few exceptions, were able to diversify their

lowest level since 2009. In this respect, it’s also

related companies (Romanian companies

income sources towards commissions. In

worth mentioning that a substantial part of the

with Italian shareholding and Italian compa-

2017, profitability rose, mainly thanks to

Romanian banking system is controlled by solid

nies with Romanian shareholding) operating

lower loan-loss provisions, reduction in

international groups.

in the country, estimated at around 24,000 units. In addition, as result of the acquisi-

operating costs and the increase in fee and commission income. Further improvements

Last year, Intesa Sanpaolo took over Banca Po-

tion of certain assets and liabilities of Banca

in profitability are expected in 2018 and the

polare di Vicenza and Veneto Banca. What does

Popolare di Vicenza and Veneto Banca, few

following years.

this mean for the Group’s future strategy?

weeks ago we integrated the former Veneto

Last year ISP has signed a contract with the

Banca Bucharest Branch into ISP Bank Ro-

Where does Intesa Sanpaolo’s stand on the

liquidators of Banca Popolare di Vicenza and

mania, so that our Romanian subsidiary has

European banking spectrum?

Veneto Banca concerning the acquisition by

become the eleventh bank in the country in

Intesa Sanpaolo (ISP), maybe the most suc-

Intesa Sanpaolo of certain assets and liabilities

terms of total assets, gaining therefore six

cessful banking story in Italy over the last

and certain legal relationships of the two banks.

positions in the system. This further signals

decades, is one of the strongest banks in

Certain assets were also included in Romania

our commitment in the country, where In-

Europe, with solid profitability and a lofty

and subsidiaries in Albania, Croatia and Mol-

tesa Sanpaolo pursues a strategy of organic

capital buffer, well above regulatory re-

dova. The operation makes it possible to avoid

growth.

www.business-review.eu Business Review | July 2018

34 TECH

Football World Cup sees TV sales shoot up Whenever there is a major sports event, like a football championship or Olympic Games, sales of TV sets spike. The desire to see one’s sporting favorites competing makes consumers invest in the latest technology possible so the images are perfect. And the Romanian market is no exception.

By Aurel Dragan

Samsung QLED home design

with better images and connectiv-

T

ternet browsing and the use of apps available

economy so the growth was a lot bigger than

ity. TVs are becoming smart just like

online made up 63 percent of total sales last

expected. Last year, sales rose, but only by

phones and trends suggest that TVs will

year. There are 158 color TVs per 100 house-

6-7 percent, closing the year at 1.5 million

replace PC monitors and tablets for view-

holds in Romania (roughly 15 million TVs),

units sold.

ing online productions. While television in

according to a report by the National Institute

general is being replaced more and more

of Statistics, but around 20 to 25 percent of

“A football championship event brings certain

by the smartphone or laptop (40 percent of

all households still have old cathode ray tube

sales growth, especially for large TVs,” says

teenagers in developed markets no longer

TVs.

Laurentiu Faur, director of marketing and

he technology is changing every year,

This is the reason smart TVs that allow in-

by a general feeling of confidence in the

So the outlook for this year is optimistic.

In 2016, when the Olympic Games and

communication at Panasonic Romania. The

obsolete, but are moving towards online

European Football Championship took place,

Japanese producer is focusing on premium

platforms, like Netflix, YouTube or any other

sales of TVs went up by 35 percent, reaching

TV sets and has a target of 15 percent by

provider of entertainment through internet.

1.4 million units. Sales were also supported

value of OLED TVs this year. “We can see an

watch TV), TV sets are not waiting to become

www.business-review.eu Business Review | July 2018

TECH 35

increase in customer demand for bigger tele-

factors – wage growth, VAT cuts, post-elec-

was drawn at 80 cm, not 102 cm. The aver-

visions and 4K resolution. In terms of value,

tion euphoria and good credit conditions.”

age price of a TV is also increasing, but only

4K TVS make up close to 50 percent of the

An interesting development in the first

slightly: it stood at RON 1,225 last year, versus

market, while 80 cm TVs, the biggest sellers,

five months of this year was an increase in

RON 1,215 in 2016. While there has been an

are going down,” adds Faur.

sales of low-cost TVs with small screens (60-

increase in the sales of big TVs, which are

80 cm), according to market sources. Brands

pricy, the average price is kept low by the sale

FEVER PITCH: SALES CLIMB

like Vortex, owned by Complet Electro Serv

of small and cheap units. For example, while

According to a GfK TEMAX study, the value

company, part of Altex Group, found their

a 4K resolution smart TV of over 45 inches

of the electronics market (TV sets mostly)

way into customers’ shopping carts, going

can be found at RON 2,300-2,500, a 23 inch TV

was EUR 506 million last year, up 9.2 percent

up in terms of market share by volume. In

(60 cm) can be bought for RON 500-700. Even

from 2016. In the first quarter of this year,

the first five months of 2017 the top selling

more, “a 4K resolution TV (Class A brand)

according to the latest official data available,

brands by volume were Samsung, followed by

can be purchased at a full price of about RON

sales were up 16.2 percent, to EUR 107 million.

LG, Philips and Vortex. This year, Vortex has

2,300-2,500, while during sales season it can

For January-May, data on the TV set market

gone up, overtaking Philips and closing the

fall to RON 1,500,” said Samsung representa-

indicate an increase of 15 percent by volume

gap with LG.

tives.

(units sold) and almost 25 percent by value.

In terms of value, Vortex is nowhere near

The brands dominating the market are

The numbers are in line with a year domi-

the top, which is dominated by Samsung,

Samsung, LG, Sony, Philips and Panasonic,

nated by the World Football Cup, Russia 2018,

LG, Sony and Philips. Samsung is the leader

which account for around 80 percent of total

which started a couple of weeks ago.

on both segments (by volume and by value)

sales.

The numbers will most likely fall off

because it covers all screen sizes and price

through to the end of the year. “In 2018,

segments, accounting for more than 40 per-

growth will be moderate with around 100,000

cent of the Romanian market.

ULTRA HIGH-DEFINITION, THE TECHNOLOGY OF CHOICE

Today, about 50 percent of the market is

Romanians want a new TV to be high-per-

2017,” said representatives of Samsung Roma-

made up of 40 inch (102 cm) TVs and half of

forming, have a wireless connection to the

nia. “Last year, there was a larger increase in

TVs measuring less than 40 inches. There

internet, to be Full HD or UHD (Ultra High-

the first half than in the second one, with the

has been an increase in the average size of

Definition or 4K), and have a good and clear

rise supported by a series of macroeconomic

the screen: in the past the halfway mark

sound. Last but not least: it should be on sale!

more units added to the level registered in

www.business-review.eu Business Review | July 2018

36 TECH

This is according to EvoMag, an online electronics retailer, which expects sales of TVs to go up 30 percent between May and July due to the World Cup. “Romania’s passion for football can be seen in the retail electro-IT business. By the end of the World Cup, we expect to have sold over 4,000 TVs on evoMAG, up by over 30 percent versus last year,” says Mihai Patrascu, CEO of evoMAG, who added that TV sales are expected to be up by 20 percent over the full year.

As for the technology, producers agree that the future belongs to OLED and 4K, with good design and clear sound. “Sony is focusing on large Bravia TVs, remarkable for improved image, improved sound and user experience,” said Gheorghe Mares, commer-

Panasonic OLED Smart 4K

cial cluster head at Sony for Romania and the Moldavian Republic. “OLED and 4K HDR (High Dynamic Range) technologies will be

The same strategy is used by Panasonic.

production studios as a monitor customer

the main attraction for a long time. OLED TV

“We want to grow on premium TVs, where

reference in testing video productions,” adds

sales are rising and we expect more and more

image quality matters a lot. For these OLED

Faur.

consumers to opt for this technology in the

TVs, we have a 15 percent market share target

coming years.”

in 2018,” says Faur.

Sony is focused on premium devices,

“The TV has become a multimedia hub

Samsung, meanwhile, covers all categories, with a focus on the latest technology that can be used for TVs. “This year Samsung launched

which is why it leads sales by value, but not

where access to custom content is very

the new QLED TV models – the most techno-

by units sold. “Last year we launched the A1

important. That’s why video on demand ap-

logically advanced in the Samsung portfolio.

OLED model and this year we launched the

plications will become increasingly impor-

With unique design features, incredible

AF8. Both models feature Acoustic Surface

tant. We also expect high customer demand

picture quality and intuitive smart features,

technology, which enables sound generation

for high-quality TVs, and here Panasonic

the new Samsung QLED 2018 range offers

directly from the screen, resulting in a new

offers a complete solution through its OLED

users a complete viewing experience – even

immersive experience,” says Mares.

TVs, which are also used in Hollywood post-

when the TV is turned on in the background,” say officials. This means that it can mimic the background if the user wants it (and takes a picture of the wall that is afterwards used as a screen saver).

UHD technology is gaining momentum and sales are rising. “Last year, sales of UHD models generated about 38 percent of total TV sales in Romania and almost half of Samsung’s sales,” say Samsung representatives. As for the future, the Korean company is focusing on IoT (Internet of Things) and connectivity between devices. “We have built the perfect connectivity between IoT devices by unifying existing IoT applications into one, the SmartThings application. Now, we have a single cloud to manage Samsung’s IoT ecosystem, namely SmartThings Cloud, and put Bixby on more devices so users can have

Samsung QLED TV

a smart interface in their IoT ecosystem,” say officials.

www.business-review.eu Business Review | July 2018

38 ENTREPRENEURSHIP

Floreasca’s small business ecosystem makes Bucharest’s restaurant scene flourish When going out on the town for a meal, Floreasca is one of those places you can simply head to and decide on a place on the go. The variety of cuisines present and the specialty shops make it a distinct culinary destination. The result, an ecosystem of small businesses active in the food and drink sector, has shaped the identity of the area, which is looking for sustainable ways to meet its full potential.

By Georgeta Gheorghe

L

ate one afternoon, 32-year-old Giulio da Sacco, a reinsurance broker hailing from Northern Italy, hopped on a

rented bike and started cycling through the streets of Bucharest looking for a location for the city’s first Italian delicacies store. It was 2007 and he picked Floreasca, where, having revived his childhood dream of being a food shopkeeper, together with a partner, he opened his business one year later. But, as Cotroceni looked just as appealing and promising a neighborhood, at that point it could have gone either way. “I was lucky. It was a 50/50 bet that turned out to be a good business decision,” he concedes, sitting in the window of Grano, one of the oldest restaurants in the neighborhood, which grew next to the store to answer popular demand.

At that time, the centrally located Ion Campineanu Street also looked like an option.

Alexandru Pitigoi, Mesange Fromagerie

“When I arrived in Bucharest, Comtesse du Barry was the only cool shop in town and I

to eat, it is rivaled only by the Old Center in

villa, Floreasca is a green, quaint residential

immediately understood that was something

terms of density. As for the quality of the

neighborhood. Over the past ten years, how-

I would like to copy,” Da Sacco confesses.

food and experiences on offer, many say it

ever, and, in particular, in the past year and a

“The city needs more shops like this. Open

is among the highest and most consistent in

half, the area has become home to a flourish-

next to me; it will be good,” he recalls the

town. Not surprisingly, commercial spaces

ing ecosystem of small businesses that thrives

words of advice he received from Cristian

here are among the most sought after in Bu-

while apparently flouting many rules.

Preotu, the entrepreneur who brought the

charest and businesses are paying premium

French gourmet gift brand to Bucharest. “I

rents to occupy them. But, while Floreasca

Floreasca has an increasingly high com-

didn’t manage that, as I couldn’t find the

has always been considered one of Bucha-

mercial density. And, while traditionally,

space. But Cristian’s words stayed with me:

rest’s most upscale and sought-after neigh-

the former cannot support the latter, in this

‘Competition is healthy,’ he told me then, and

borhoods, it is a playground of contrasts.

neighborhood’s case, factors such as afflu-

this is something I now strongly believe.

Indeed, it is precisely the concentration of

For an area with a low residential density,

ence and high demand from the local and

POTENTIAL THROUGH PASSION AND PROXIMITY TO THE RIGHT PUBLIC

incoming public to whom the food and drink

wine bars, terraces, restaurants and bistros that makes Floreasca appealing, and one of

A mix of areas with small apartment blocks

business districts such as Aviatorilor, Barbu

the indisputable culinary destinations of the

of three or four floors and streets lined with

Vacarescu and Pipera, are enough to spur

Romanian capital. With around 100 places

houses with front gardens plus the occasional

growth.

businesses cater, along with the proximity of

www.business-review.eu Business Review | July 2018

ADVERTORIAL 39

FEPRA recycled and recovered 178,000 tonnes of packaging waste in 2017 With a turnover of EUR 32 million, which it used to recycle and recover over 178,000 tonnes of packaging waste in 2017, in the name of producers and importers it represents, FEPRA International is among the top 3 companies that manage packaging waste on the Romanian market. The company’s plans include constant investments which will contribute to the national infrastructure for collection and recycling. why we conduct on-site checks, we audit our sup-

69 percent, compared to the minimum of 60

pliers, we look carefully over all the documents

percent stated by the law. We work in such

we receive, and we reconfirm all the quantities. It

way because we have a prudential approach

is a big effort, it is quite expensive, but abso-

– during on-site checks we may discover

lutely necessary if we want real recycling that’s

that not all quantities are accompanied by

not just on paper,” said Roxana Sunica, Director

justifications according to legal require-

of Marketing, Communication and Public Affairs

ments and thus we acquire larger quanti-

at FEPRA International.

ties throughout the year so that we do not

FEPRA’s revenues in 2017 were RON 145.6 million.

endanger the targets of our producers.

The budgetary execution shows that 80 percent

We also do this because we believe waste

FEPRA International is a joint stock company,

of the total was used for paying fees regarding

management and environmental protection

authorized in 2016 by the Environment

waste management; 6.4 percent for administra-

are continuous actions that should be car-

Ministry to take over waste management

tive and operational expenditures; 5.2 percent

ried out to the end. The action does not stop

responsibility for producers and importers

for taxes; 2 percent profit (which, according to

when the minimum legal requirements are

who put packaging and packaging waste

the law, can be used exclusively for the same

met,” said Sunica.

on the Romanian market (these companies

type of activity), while another 6.4 percent are

In 2018, the company plans to invest in the

are known as RTOs – responsibility transfer

investments made by the company following its

preparation and recovery of wood, treat-

organisations).

development lines.

ment and recovery of glass, implementing

“In 2017, 528 companies declared to us

In terms of collection, the company acquired:

the production of selective collection bags

their placement of about 260,000 tonnes of

specialised vehicles, trucks, containers, bins

and mechanisms for increasing the recy-

packaging waste on the market: paper and

and bags. For waste treatment, investments

cling capacity for PET.

cardboard, glass, PET and other plastics,

were made in: sorting stations, fixed and mobile

“Why FEPRA? First of all, we want to be

wood, steel or aluminum. In order to meet

presses, glass compactors and crushers, waste

transparent with all our partners – clients,

the recycling and recovery targets specific

shredders and forklifts. On the recycling seg-

authorities, suppliers, citizens. We want to

to each flux and the total general recycling

ment, there is now a new line for PET recycling,

work with as many trustworthy suppliers as

objective of at least 60 percent, we con-

at Cadelplast, in Hunedoara county.

possible and to professionalise the activity

tracted the services of 176 companies across

“According to public data available at the Com-

on this market together. To become more ef-

the country – collection and sanitation firms,

merce Registry, in terms of turnover, FEPRA has a

ficient both for the environment, as well as

sorting stations, treatment and recycling

market share of 22 percent of the total packaging

for our clients, and, ultimately, for consum-

companies, landfills. Specifically, these part-

waste management done by RTOs. Our objec-

ers. To really focus on social responsibility,

ners conduct the type of activities for which

tive is to have a steady growth in 2018, perhaps

waste management and sustainable devel-

they are authorized by the environmental

getting close to taking responsibility for 300,000

opment. To contribute to the long-awaited

authorities, then they inform us about the

tonnes of packaging, as this is the quantity

national system that ensures the separate

waste quantities they manage and provide

for which we are confident we can fulfil our

waste collection from citizens. Without this

us with all the necessary documentation so

contractual obligations to our clients. But, above

factors, most waste quantities will still end

that we can have proof of waste traceability.

growth, we want to ensure that we follow all the

up in landfills,” added Roxana Sunica.

We want to ensure that the financial resourc-

legal environmental provisions in the name of

For more information about our company,

es we manage in the name of producers are

those whom we represent. For example, for 2017,

please visit our corporate website

used efficiently and for real services, that’s

FEPRA reached a recycling and recovery rate of

www.fepra.ro.

www.business-review.eu Business Review | July 2018

40 ENTREPRENEURSHIP

canned products are top-of-the-range simply

ing closer to its existing clients. “After three

an outlet in Floreasca is multifaceted, it all

because they are highly authentic. “I came

years on Barbu Delavrancea, where we had

started with “the universal secret to business,

here because there is a community of people

our first shop, we looked for a new place to

which is to go where the people are,” Da Sac-

who appreciate good quality, craft products.

open a lab, without a sales point. In Floreasca

co says, summing up what everyone firmly

Nevertheless, Romanians are fond of their

none was available. So we considered Pipera,

believes. Nevertheless, no longer prone to

traditions and many are attached to their

Cotroceni, Piata Alba Iulia, but they didn’t

being looked at as a chicken or egg dilemma,

countryside roots,”

in the past ten years Floreasca has gone full

the entrepreneur

circle and is now an area that, thanks to the

comments, adding

varied and consistent supply of restaurants

that it is the retail

and shops, has become an attraction in itself

deals he has with

for food lovers everywhere, including expats,

two major chains

who represent up to 40 percent of clients.

that provide a life-

Although the motivation for setting up

“The research we did showed that this

line to his business.

was the area that offered the most to this

“But what I wanted

type of business,” says Alexandru Pitigoi,

to do with my shop

owner of Mesange Fromagerie, which opened

was to say ‘this is

on Intrarea Tudor Stefan nine months ago.

what I do and I am

“Our clients are open minded people, with a

coming to meet you’.

certain knowledge of the products and who

I believe there is a

value quality. Also, they have a certain level

need for this, for

of education, are cultivated and have average

people to under-

or above average income,” he adds. A car

stand how a craft

aficionado and experienced rally pilot, Pitigoi

product is made.”

is an Academie Opus Caseus alumni, the in-

Austrian-born

dustry’s primary hands-on center for cheese

artisanal ice cream

education, who found a gap in the market

maker Moritz Fried

and turned a lifelong passion into the first

could not agree

specialty cheese shop in Bucharest. Already

more. “People who

a cheese supplier to local businesses such as

live here or work

Lovin, Cava, Tasting Room Pogany and Nido,

nearby are more aware of the small, inde-

resonate,” Aliman, a former marketing spe-

Mesange buys fresh bread from neighbor Pain

pendent places that cater to those with more

cialist, says. The bakery delivers its products

Plaisir and sell jams from Dulceata lu’ Raz-

individual taste,” he notes. “I also see a lot of

to Le Vivier, Sky Bar in Dorobanti and Lovin.

van, the newest arrival in the neighborhood.

creative people around, such as designers,

“In the beginning we thought the two

architects and others. Yes, you do have a lot

shops might be too close to each other, but

preneur behind Dulceata lu’ Razvan, opened

of very rich people, but it is an increasingly

the one at Kiseleff immediately made up

his shop on Calea Floreasca in the first week

heterogeneous place, which includes all age

for the 10-15 percent of clients that took

of June to bring his products closer to the

groups and diverse backgrounds. The average

advantage of the newfound proximity.” The

Similar to Pitigoi, Razvan Rusu, the entre-

age has also

market is an emerging one, adds Aliman, who

dropped signifi-

partnered with Irina Stancescu, a graduate of

cantly over the

the prestigious Paris-based culinary school Le

years,” he adds.

Cordon Bleu, and British-born Thomas Rees,

While looking

a pastry chef who had worked in a three-star

for a place to

Michelin restaurant, after the two dismissed

start ice cream

London as a business location due to high

production at

entry costs and opted instead for Bucharest.

One of the Pain Plaisir customers who

right public. At Idicel, he sells his brand’s

industrial level, he chose a former commu-

flagship products such as zacusca, several

nist-era store on Frederic Chopin for his

would drive from Floreasca to the Kiseleff

types of jams, and chocolate he makes in an

first Moritz Eis shop in Romania in 2015. For

area to buy fresh bread, Irina Barbu, co-owner

on-site lab, from scratch. Made in the village

Pain Plaisir, Monica Aliman, one of the three

of l’Aprozar, one of Bucharest’s hippest fruit

of the same name, from local and often wild

partners behind the French Bakery, outlines,

and veg stores, says opening here in 2015 was

produce, using the traditional technique of

opening a second shop at the border between

a no brainer. “We’ve been living in Floreasca

outdoor slow cooking over a wooden fire, his

Dorobanti and Floreasca in 2016 meant com-

for two generations and living and working in

www.business-review.eu Business Review | July 2018

42 ENTREPRENEURSHIP

the same place was ideal, as it allowed us to use our time efficiently. At the same time, we

ments of several cuisines,” he says.

The second, one of the most talked about

right now,” Da Sacco says. But, in order to sustain its continued growth, local business

also use proximity in our business model: our

and highly anticipated among local busi-

argue, the neighborhood needs to take heed

main target public lives in the neighborhood

nesses, the Agora Floreasca food hall on Calea

of their needs and find ways to fix longstand-

and we bring to them fresh products while

Floreasca, will open its doors in September.

ing issues. As a city, Bucharest is a newcomer

also shortening the supply chain,” Barbu says.

Following a EUR 10 million investment, the

to the ‘pedestrians versus cars’ debate. In

For the founders of the Fish House res-

venue will be developed by Nikos Koliopou-

Floreasca’s case in particular, the discussion

los and partners and is designed to cater to

is moving into new territory, once the stake-

taurant, one of the newest arrivals on Calea

holders ask themselves: is traffic a measure of footfall or a hindrance?

As the business attractiveness of northern Bucharest increased, so did the traffic. Moreover, the already narrow sidewalks are so poorly maintained, parts of them are missing and are often blocked by badly situated lamp posts, making it impossible for two people to walk side by side. Add to that the scarcity of parking spaces, and the sorry picture is almost complete. However, all businesses are well aware that a significant part of the traffic translates into footfall. While they thrive on the appetite of the local crowd for new and high-quality experiences, they know that many of their customers, particularly those from other areas, drive to visit them.

Echoing a common thought among local business owners, Da Sacco, Bogdan Sandu, co-founder of Ethic Wine and Aliman are strong advocates for the area to become – Floreasca, it was precisely the high number

food lovers in Bucharest and beyond, as well

of existing eateries that spelled future suc-

as becoming a lively meeting point.“Floreasca

cess. Set up in late 2016 by partners Zoran

is an attractive area of Bucharest. It already

the area would benefit greatly if pedestrians

Savic, Viktorio Salic and Jan van Groningen,

has a great vibe, given by the restaurants that

and cyclists were to be favored over cars. As

it developed around “a good location on a

are there already. It is colourful but it is also

for closing down certain streets at weekends,

corner in an area that we thought was going

one with tradition. We are complementing

Salic believes it could be a good thing, as long

to grow,” Salic says. “After we opened, within

that by bringing something new. Agora Flore-

as the solution takes residents’ needs into

a six-month window, another six restaurants

asca, like the functions of the traditional ‘ag-

account and available parking is provided for

and bistros opened, and that’s a great sign,”

ora,’ will be a space where people gather, eat,

those who come from other neighborhoods.

he adds.

socialise

Among the new businesses that will

even part-time – pedestrian-only.

According to Fried, a cycling enthusiast,

and

take advantage of the “sparkling times” the

have

neighborhood and Bucharest are experienc-

fun. It is

ing are two upcoming arrivals to Floreasca.

located

The first, Mediterranean restaurant Corto

in the

Maltese, set to open in July, will be the first

north,

in Cristian Preotu’s portfolio set in Floreasca,

and we want to bring added value to an area

an area he has always had a high affinity for.

that means something for Bucharest via this

pedestrian-only, even if only at weekends,

“It is a highly animated area, which gives a

investment,” Koliopoulos said.

is strong. Recent reports on the economics

And the business case for making the area

of walking show that, apart from improving

lot, where a lot of the clients of our group,

community interaction and helping reduce

opening a restaurant on Floreasca Boulevard

AN ECONOMIC EQUATION INVOLVING CARS, PEDESTRIANS AND FOOTFALL

was a natural extension of our activity. A

Floreasca’s potential has yet to be exhausted.

efficient way to improve an area’s economic

family-friendly place, it will combine ele-

“Floreasca and Bucharest are at their peak

viability.

Le Manoir, have their residence or offices, so

urban pollution, walking is the most cost-

www.business-review.eu Business Review | July 2018

44 ART

From Romania with Louvre: Brancusi struts into Abu Dhabi Among the 600 artworks on show in one of the world’s newest – and most controversial – galleries, the Louvre Abu Dhabi, is Constantin Brancusi’s The Cock, on loan from the Pompidou Center in Paris, part of an inter-cultural exchange between the UAE and France. How come? Business Review took a trip to the desert city to explore the Louvre Abu Dhabi.

By Oana Vasiliu of spotting connections and find your own

LOUVRE-ING IT

analogies between the pieces. It’s an acceptance art game that all cultures are equally valuable,” said the guide. And it makes sense, even if not necessarily there, on the spot.

EAST MEETS WEST

In November 2017, art lovers were all talking about the grand opening of the world’s most hotly anticipated gallery, Louvre Abu Dhabi, part of an attempt to make the sandy city a permanently relevant place of world culture.

About half of the 600 artworks on show

The grand plan is to transform the emirate

belong to the museum’s permanent collec-

into a new cultural hub, with the addition

in a dimly lit lobby-type area – in stark con-

tion – and the name tags near every artwork

of a National Museum (designed by Lord

trast with the parts of the museum that have

indicate precisely what’s on display and from

Foster) and a new Guggenheim Museum (by

natural light – Brancusi’s Cock stands proudly

where. The rest have been loaned from 13

Frank Gehry) creating an island of museums

between a Giacometti sculpture and a Guinea

leading galleries in France via an umbrella

and galleries. This is just the beginning of

serpent mask. The official description of The

group called Agence France-Museums, which

the UAE’s preparations for the post-oil age

Cock runs, “the symbol of the sun, the rooster

includes the Louvre. The entire museum is

through culture, a surprising but smart busi-

stands as cosmic clock in agrarian cultures,

separated into 12 “chapters” which tell the

ness choice.

standing and facing space and the limitless

story of humanity. Each chapter focuses on

GBP 1 billion, and a financial crisis which

time of past to present, present on to the fu-

shared themes and ideas that reveal common

led to a five-year delay and several postponed

ture. The rooster is seen to surpass such time

connections throughout humanity.

grand-openings later, the Louvre Abu Dhabi is

and space issues”, exactly like most of the

simply wow. Spanning 180m, the dome of the

Louvre Abu Dhabi’s artworks. When I asked

toric artifacts to contemporary artworks, a

gallery is a complex masterpiece of geometry

my guide about it, she said that “any major

trip through time, from a Jordanian statue

and light designed by French architect Jean

cultural institution of the world should have

that dates back to 6,500BCE, to 17th-century

Nouvel, winner of the prestigious 2008 Pritz-

a Brancusi in its portfolio”. As I pondered the

Portuguese maps and works by Pollock and Ai

ker prize. Its form seems to float, courtesy of

mix between the three artworks, the answer

Wai Wai. And what’s more, the curators have

four hidden piers, while walkways and canals

came from the museum’s official communica-

managed to create a conversation between

invoke the meandering charms of Venice,

tion: it’s an educational process and about

the artwork, putting together overlapping

sustaining the floating theme.

visitor engagement. The links between the

ideas, parallel concerns and conversations

world’s cultures will make all the works of art

across borders, creating striking antitheses:

COCK OF THE WALK

feel more approachable. “Once you under-

Western and non-Western work shown side

Just between the modern world art chapters,

stand the antithesis, you will gain the habit

by side.

The works on show range from prehis-

www.business-review.eu Business Review | July 2018

STORYTELLING 45

infiniTIFF: new forms of storytelling with Ricardo Mendez For the second year in a row, Transylvania International Film Festival (TIFF) offers participants infiniTIFF, an experience hub dedicated to showcasing new and innovative forms of audiovisual storytelling. It is designed to inspire the audience to explore interdisciplinary collaboration and rethink the future of film production, distribution, and experience. BR spoke to Ricardo J. Méndez, Samsung NEXT’s technical director for Europe, about pushing the boundaries of contemporary storytelling as we know it.

By Oana Vasiliu Nowadays, using technology, can anyone be a storyteller?

Yes, actually, I would say that technology hasn’t been a barrier for a while. We forget that a lot of things that we take for granted are technology and filmmaking is a technology, books are a technology, language itself is a technology, and language was the only main requirement that we had for storytelling. Yes, definitely, anyone can tell stories now. I think Photo: TIFF

that technology is not about you anymore; it is just about how much use we make of it.

So many great stories in the world start with “once upon a time”. Has this changed now we actually tell our own stories using new technologies?

needs to be that. We can use VR to introduce

At this point, worldwide, can we talk about a shift from storytelling to story-living?

new concepts.

I would say that there is a lot more interaction with stories that go on social media. A lot of people tend to use it for certain reactions,

quires a beginning, a middle and an end, but

We are at a film festival. Do you think that VR will replace the traditional cinema at some point?

not necessarily in that order. So sometimes

Replace, not necessarily, but I do think that

way that it makes it easy to consume for those

you need to start with “once upon a time”

it allows us to tell immersive stories. But it is

with whom they connect.

and sometimes you start with your middle as

not going to replace it in the same way that

close to the action as possible and you go back

movies did not replace radio, and radio did

to the story, and I think that with technology

not replace books.

A filmmaker once said that every story re-

we can do that sort of thing: we can stop at whatever point we want. Sometimes we give

whether these reactions are likes or reach.

People are trying to narrate their own life in a

Some say that a good story is 1 percent inspiration and 99 percent perspiration.

How do these percentages change when it comes to telling stories using technology?

them a little bit of background; sometimes we

Do you agree that VR today resembles the early days of cinema?

move the story forward.

I would agree, but not in a literal sense. I

nology opens up a lot of potential but there

I say it’s exactly the same. I think that tech-

would say it resembles the early days of

is basically no substitute for sitting down and

What’s your definition of virtual reality?

cinema in the sense that we are still trying

experimenting with it and having a goal in

My own definition would be something that

to make sense of the medium; we are trying

mind and seeing how well you can achieve

constructs a completely new world into which

to figure out what exactly this medium is

that goal and adjusting your expectations.

you embed yourself as an individual. The

capable of. So yes, it definitely resembles it,

Inspiration is important, but also the more we

trivial version of virtual reality (VR) just puts

but obviously technologically it is entirely

experiment, the more we can discover things

us as individuals into a new representation

different. The things you can do with VR are

that we not have been inspired to experiment

of the physical world, but I don’t think it just

impossible in any other medium.

with until we engage with technology.

www.business-review.eu Business Review | July 2018

46 CITY

Cultural calendar Bucharest Jazz Festival 3-9 July, Piata George Enescu

By Oana Vasiliu

Ceau, cinema! film festival 19-22 July, several locations Timisoara

Bucharest Jazz Festival returns in July with seven days of free live concerts and events for jazz enthusiasts and tourists. Among the artists who will take to the stage are Jan Garbarek, Trilok

Ceau, cinema! film festival is

that starts in the cinema and

Keneally on keyboards. With

Gurtu, the Lars Danielsson Quar-

promoting artsy movies, with

goes right up to the famous Ras-

over 10 million albums and 15

tet, Teodora Enache and The

this edition having a communist

nov Fortress. The program com-

Grammy nominations, the in-

Prophet Band, and the Bucharest

theme. Book a trip to the future

prises 44 movies, 15 concerts,

strumental rock guitarist has had

Jazz Orchestra feat. Blue Noise.

European capital of culture and

22 debates and workshops, 70

collaborations with Alice Cooper,

enjoy the flicks, comrade!

special guests and 5 exhibitions.

The Yardbirds, Ian Gillan and

Electric Castle 18-22 July, Bontida Castle, Cluj County

Joe Satriani concert 25 July, Arenele Romane Bucharest

Garana Jazz Festival 12-15 July, Garana, Gorj County

Dream Theater, and now returns to Romania to rock the capital.

Tickets cost from RON 85 to 239.

Artmania Festival 27-28 July, Sibiu What is probably Romania’s most high-profile rock music fesNow on its 22nd edition, Garana

tival will welcome the one and

Jazz Festival remains faithful to

only Steven Wilson. The event

the three elements that give it

also includes the East European

its uniqueness: the music, the

Music Conference (EEMC) and Romanian Music Export, which

place and the people. Educating generations of artists and

The festival that transforms

Joe Satriani brings to Bucharest

has been set up to promote local

music fans, the festival has

Bontida Castle into one of the

his What Happens Next tour,

music throughout the rest of

made a huge contribution to the

greatest stages in the world will

with Joe Travers on drums,

Europe and is the first program

development of the national jazz

host London Grammar, Damian

Bryan Beller on bass and Mike

of its kind in Romania.

scene. Always embracing diver-

Jr Gong Marley, Quantic, and

sity, Garana has hosted memo-

Wolf Alice, among many others.

rable performances of Nordic,

Pack a pair of rubber boots, as

American, Eastern European,

rain is a tradition.

Far Eastern and local jazz. This year, the Stanley Clarke Band, Sly & Robbie, Nils Petter Molvaer, Eivind Aarset and Avishai Cohen

The Histories and Film Festival Rasnov 20-29 July, Rasnov

will warm up the Wolf’s Meadow, where the jazz magic happens up

Rasnov awaits lovers of historical

in the mountains.

movies with a visual experience