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
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ISSN NO. 1453-729X
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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