BR/07/2019

July, 2019 / Volume 23, Issue 7

www.business-review.eu

FIRMS MUST REINVENT THEIR BUSINESS MODELS FOR THE FUTURE

18

COMPANY OWNERS POOLING MONEY FOR STARTUP INVESTMENTS

20

THE COACHING INDUSTRY – GROWING FAST AND SPECIALIZED

28

WHEN IN ROMANIA: TOP TIPS FOR TRAVELERS

36

DARK CLOUDS OVER THE ROMANIAN ENERGY SECTOR

Photo: Dreamstime

www.business-review.eu Business Review | July 2019

EDITORIAL 3 REAL ESTATE

• Editorial •

Anda Sebesi • Editor-in-Chief •

6 Millenial mores prompt developers to focus on ”business communities”

COVER STORY

8 Dark clouds over the

It’s business time!

I

Romanian energy sector

COUNTRY FOCUS

n times of profound changes in the global business environment, companies worldwide need to adapt their strategies to the new context and come up with a fresher perspective. In

other words, agility, adaptability and flexibility are some of the key

14 French investors get

characteristics that they need when (re)designing their strategies,

strategic for Romanian economy

as pundits say. The drivers behind these changes often have to do

17 The local business

with intensifying competition, increasing consumer sophistication and the speed of technological advancements.

environment is getting ready for the future

An important question, as Szabolcs Nemes, managing director of Roland Berger, told Business Review in an interview about the main trends in management, is: how can mature companies bring

ENTREPRENEURSHIP

back the energy of their startup days and accelerate their growth?

20 Local business owners

This is a tipping point when companies need to adjust their corpo-

pooling money for startup investments

rate business approach into an entrepreneurial one, making them more flexible and more prepared for the challenges to come in the years ahead.

Entrepreneurial spirit has certainly flourished in recent years

24 Startup push: local industries that need a shot of innovation in the arm

in Romania, with many interesting moves made by local entrepre-

CITY

neurs coming onto the radar of larger investors. Meanwhile, from the financial perspective, Romanian business owners are beginning to create their own investment funds to target domestic startups, with starting capital running into the tens of millions of euros.

While local investors can fill a funding gap for early-stage companies, their familiarity with the way business is done in Romania might provide an advantage over traditional international players in the venture capital and private equity markets. So, it’s business

41 One of a kind: Vertigo brings high-quality anniversary show to Sibiu

42 Food for thought: young chefs shake up old classics

45 Sounds good: Electric Castle

time, and let’s leverage all the opportunities the local market can

opens up to hearing-impaired visitors

offer!

46 Calendar

EDITORS-IN-CHIEF: Anda Sebesi, Sorin Melenciuc JOURNALISTS: Anca Alexe, Paul Barbu, Aurel Dragan, Romanita Oprea, Oana Vasiliu CONTRIBUTOR: Ovidiu Posirca 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 SALES MANAGERS: Radu Fireteanu, Alexandra Rosca EVENTS MANAGER: Mara Dragoiu EVENTS & MARKETING MANAGER: Luiza Luca PRODUCTION: Dan Mitroi DISTRI­­BUTION: Eugen Musat EXECUTIVE DIRECTOR: George Moise GENERAL MANAGER: Catalin Alistari USA MANAGER: Oana Molodoi FOUNDING EDITOR: Bill Avery EMAILS: editorial@business-review.eu, sales@business-review.eu, events@business-review.eu SUBSCRIPTIONS on Manpres Distribution

Publicație auditată pe perioada Apr 2015 - Mar 2016

ISSN NO. 1453-729X

www.business-review.eu Business Review | July 2019

4 NEWS

WHO’S NEWS

Slovakia, Romania, Hungary, Turkey, and Peru all jumped

BR welcomes information for Who’s News.

Submissions may be edited fo­­­r length and clarity.

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

significantly between the 2014 and 2019 studies, climbing from 12-24 places on the Index, and positioning themselves as the “rising stars” of countrymaking. “Meanwhile, Romania is home to eight World Heritage sites, including the Voronet Monastery, one of the country’s most popular attractions,” the report says.

Now on its eighth edition,

Robert Redeleanu will be UPC’s new CEO for Eastern Europe starting in July.

He joined Liberty Global in 2013 as the CEO of UPC Romania and has since expanded his responsibilities to oversee UPC Hungary, Romania and Poland.

With this appointment, he will be leading the company’s operations across Eastern Europe until the expected closure of Liberty Global’s transaction with Vodafone, at which point he will lead the UPC businesses in Poland and Slovakia.

Ilinka Kajgana will be the new chief risk officer at BCR from January 2020. She has been in charge of Erste Bank Austria’s strategic risk management department since 2017, and will replace Michael Beitz, who is retiring after more than 30 years at Erste Group. Born in Croatia, Kajgana holds a PhD in Physics from the Vienna University of Technology and started her career at the General Hospital in Vienna, where she did research in the field of cardio-thoracic surgery.

page 5

Saschiz fortified church in Transylvania is a UNESCO World Heritage site

Romania’s nation brand ranked 42nd in the world

the FutureBrand Country Index examined what transforms a country from a spot on a map to a place that survey respondents ultimately want to invest in, live in, visit, and buy goods and services from. Countries have traditionally been mea-

By Sorin Melenciuc

sured and ranked by measures

Romania’s nation brand has

Turkey (40), Slovakia (35), and

of might – GDP, population

been ranked 42nd out of 75

Greece (34) all placing above it.

size, even a sovereign’s nuclear

countries around the world,

Last year, Romania was named

arsenal.

up 20 places since 2014. The

the 45th best nation brand in the

country came above Poland

world, above New Zealand and

an optimized national play-

(44), Chile (43) and Brazil

Portugal, and the best nation

book of shared beliefs, rooted

(47), mainly due to its cultural

brand in its region, in the UK-

in purpose and experience, to

heritage, in the FutureBrand

based Brand Finance’s “Nation

shift global perception with the

Country Index 2019. How-

Brands 2018”. The best nation

explicit goal of boosting tour-

ever, in Europe, Romania

brands in the world this year are

ism, investment, and consumer

was ranked below most other

Japan, Norway and Switzerland,

choice for a country’s goods

nations, with Hungary (38),

according to FutureBrand.

and services, say officials.

Country-making represents

Robots ‘could take over 20 million manufacturing jobs worldwide by 2030’

By Anca Alexe Over 20 million people – about

sector, according to a new report

8.5 percent of the global manu-

by Oxford Economics, entitled

facturing workforce – could lose

“How robots change the world”.

their jobs to robots by 2030, with

However, the study also finds

one industrial robot eliminat-

that the spread of industrial

ing an average of 1.6 jobs in the

robotics will lead to increased

Robots are starting to become cheaper than human workers in some areas

www.business-review.eu Business Review | July 2019

NEWS 5

Ride-hailing app Yango launches in Bucharest Mihaela Bitu has been appointed CEO of ING Bank Romania. Bitu first joined the bank shortly after its entry onto the Romanian market 25 years ago, and has multi-disciplinary experience in the banking sector, both on the Romanian and international markets. She is currently the head of wholesale banking and deputy general manager. Since May 2018, Bitu has also been a member of the directory board of the Romanian Banks’ Association.

By Anca Alexe Yango, a digital e-hailing app currently operating in 16 countries across Europe, the Middle East and Africa, has been launched in Bucharest.

Romania is the fifth EU country where the service has been made available, after Estonia, Latvia, Lithuania and Finland.

Yango is part of the Russian Yandex Group, one of the largest IT companies in Europe, also known as “the Google of Russia”.

Romania is the fifth EU country where the service is available

The company says that the new service offers affordable

make it possible to significantly

and other important issues.

rides and quality services.

reduce net travel costs so that

In addition to very affordable

Rides ordered through the app

users pay less for a ride while

prices, Yango excels in technol-

start at the discounted price of

drivers can earn more.

ogy – our main competitive

RON 5, which includes the car

“Recently, the urban transport

advantage. Our company

reservation, a 3 km distance

market in Romania has signifi-

has developed a number of

and a duration of 7 minutes.

cantly lowered quality standards

advanced technologies that

for customer experience. As

automatically check the car

go uses its own mapping, tar-

a first step before the official

and the way it is driven, which

geting and navigation system,

launch, our team held a series

we plan to bring to Romania as

as well as intelligent command

of training sessions for partner

soon as possible,” says Andrei

distribution based on machine

drivers, where they were trained

Voicu, Yango regional director

learning technologies. These

on service specifications, how to

for Romania and the Republic

features, the company claims,

communicate with passengers

of Moldova.

Unlike its competitors, Yan-

Martin Schulz has been appointed CEO at Mercedes-Benz Romania, 20 years after he first joined the company, replacing Philipp Hagenburger, who is now part of the Daimler South East Asia team. In recent years, he has been in charge of sales & marketing activities in Vietnam and Thailand, and since 2016 he has served as head of product & marketing at Mercedes-Benz Korea.

productivity and growth, creating new jobs to replace some of those lost. Robots are starting to become cheaper than human workers in some areas – the average unit price of a robot dropped by 11 percent between 2011 and 2016, according to the report. At the same time, they can now do more sophisticated tasks in more varied environments.

The economic effect of a 30 percent rise in the current robot installation rate by 2030 would be a 5.3 percent increase in global GDP.

Sara Del Fabbro is the new CEO of IKEA South East Europe. She will manage the Swedish furniture retailer’s business in Romania, Croatia, Serbia, Slovenia and Ukraine. She has been working for IKEA for 20 years, starting in Bologna and becoming deputy store manager at the company’s store in Torino. Two years later, she took over the Milan San Giuliano store. In 2017 she became the deputy CEO of IKEA Italy.

www.business-review.eu Business Review | July 2019

6 REAL ESTATE

Millennial mores prompt developers to focus on ‘business communities’ The rise of the millennial generation has become a challenge for many businesses, but office developers across the globe, including in Romania, see business opportunities from the realization that adapting to the new lifestyles could be a win-win strategy.

By Sorin Melenciuc opened so far, a strong community of about 3,300 employees has grown from 20 multinational companies that enjoy many benefits in Iulius Mall, part of the project: immediate access to more than 350 stores, food court, themed restaurants and cafes, a fitness center and a wide range of services such as medical clinics, launderettes, bank offices, insurance brokers, travel agencies, spa and massage salons, body remodeling, hairdressing salons etc,” Iulius representatives point out.

SAVING TIME ON BUREAUCRACY Romania is well known for the excessive bureaucracy that erodes people’s spare time.

Proximity to the first kindergarten and primary school in Timisoara will be another benefit for those working in the office buildings of Iulius Town Timisoara

A

For developers, adapting to local realities and saving time on bureaucratic procedures may prove to be a key aspect in attracting

ccording to experts, millennials want

opportunities during the week and at the

the interest of millennials. “They can solve

employers to grant them autonomy

weekend.

administrative issues in a short time as many

and flexibility in their work schedule,

These young workers enjoy meeting

public institutions have relocated their public

and they like workspaces with places dedi-

friends and colleagues after work, in cafes

relations centers to the mall. The offices of

cated to socialization and interaction between

and restaurants, for fun and socializing. “Our

the Inspection and Driving License Exam

teams.

office buildings, developed under the United

Bureau, Driving License Office, Car Registra-

Business Center (UBC) brand, are integrated

tion Bureau, Posta Romana (Romanian Postal

analyzed by office developers, which are

into projects that meet all the main aspects

Company) and Tax Department are located

now designing projects adapted to younger

of a community’s life: business, shopping,

in the same area, on Iulius Mall’s first floor.

employees. “The mixed projects developed

malls, relaxation and entertainment, the pres-

There is also an office of Timis County’s Com-

by Iulius group, such as Palas Iasi and Iulius

ence of parks, cafes, restaurants and various

munity Public Service for the Issuance and

Town Timisoara, which include extensive

dedicated venues. All these facilities meet

Registration of Passports,” say Iulius Town

business communities, have the advantage

active people’s goals by minimizing the effort

Timisoara representatives.

of integrating various functions and facilities

and time needed to accomplish the multitude

that are very useful for employees in office

of daily activities,” say Iulius group officials.

These new lifestyles have been carefully

buildings, including for millennials,” Iulius Town representatives told Business Review.

Millennials are also known for being

EDUCATION & HEALTH Another key issue for many employees in

receptive and involved in social projects,

Romania is education infrastructure, as

eco projects and sports competitions, and

highly educated people are very interested in

SOCIALIZING PLACES, A KEY ASPECT

they enjoy having facilities and services in

ensuring a good education for their offspring.

Millennials are more connected with technol-

the immediate vicinity that help them save

“Another benefit for those working in UBC

ogy and social sites than older employees. At

time. “For example, in Iulius Town Timiso-

Timisoara buildings will be proximity to

the same time, they like to have socializing

ara, through the three class A office buildings

the first kindergarten and primary school in

www.business-review.eu Business Review | July May2019 2016

COVER REALSTORY ESTATE14 7

Timisoara based on the British model, with

over 10,000 trees), greening, blood dona-

say Iulius Town developers. “We also provide

offers courses exclusively taught in English,”

tion, fundraising and charity. In addition, it

our employees with parking facilities and we

say project representatives. Access to quality

regularly holds sports competitions, inter-

are constantly looking to extend them. For

medical services is also a strong incentive for

company video or board games, Valentine’s

example, more than 4,000 parking spaces will

young employees who typically pay more at-

Day Cooking Workshops, cross-company cake

be available in Iulius Town Timisoara, after

tention to their health than previous genera-

baking, etc.

we built a parking lot and another underground parking lot besides the underground

tions.

“With the completion of the fourth office

EASY ACCESS

parking lot under the Iulius Mall,” they added.

In many cases, developers in Romania are

building, from next year employees will have

Compared with the past, employees now

access to the largest medical hub in the west

carefully look at both the work environment

also investing in infrastructure moderniza-

of the country. Developed on an area of 3,000

and workplace inside the office, as well as the

tion to ease access and traffic. Iulius Town

sqm, it will provide diagnostic and treatment

location where the workplace is and what it

developers are building a tunnel that passes

services for many medical specialties, mainly

offers in terms of services, HR experts say.

under their project and connects two major

treating the diseases associated with the

Developers have therefore begun to focus on

crossroads in Timisoara. The cost of this in-

modern world, which impact on development

integrating office buildings into mixed proj-

vestment will be borne by project developers,

and quality of life. The specialties that will

ects where employees can access facilities

and the tunnel donated to the municipality.

be available will include: physical therapy,

and services that are useful both during and

acupuncture, cardiology, obstetrics-gynecol-

after work. In Romania’s secondary cities like

PREPARING FOR TELEWORKING

ogy and infertility treatment, aesthetics and

Timisoara or Iasi, location is considered one

Remote working is still a rare option in Roma-

dermatology, body remodeling, dentistry,

of the most important criteria when choos-

nia, but studies conducted by experts in more

neurology and microsurgery,” Iulius represen-

ing an office space. That’s why developers

advanced economies show that employees

tatives outline.

are looking for ultra-central locations with

are more productive and attached to their

good access to the city and suburban road

company if they interact with the rest of the

ACTIVE SPARE TIME

infrastructure, and good connectivity to the

team on a regular basis. However, the growing

As regards the millennial generation’s desire

public transport network and cycle lanes. As

number of people working remotely and new technologies have led companies to adapt and make changes in office space management.

They have designed large areas and devoted regular sums to social spaces or unconventional work areas.

Other firms that offer their employees the option of working from elsewhere rent offices in coworking spaces. This gives employees flexibility in choosing where to work, but also the chance to interact with other professionals or team members. At the same time, developers are concerned about facilitating employees’ access to green spaces, where they can relax in breaks and after work.

“At both Palas Iasi and Iulius Town Timisoara, we have established generous parks and green spaces as an area where people can relax, but also have the opportunity to attend

to be involved in social projects, eco proj-

a consequence, companies spend more than

theme fairs we organize, outdoor concerts or

ects and sporting competitions, Iulius has

they did in the past on office space. “Our

other events,” say Iulius representatives. On

sought to develop and focus on a community

office buildings have a great advantage by

August 30, Iulius and Atterbury Europe will

through its projects. It supports partner com-

being located in the city center, both in Iasi

open the first stage of Iulius Town Timisoara

panies in their work projects, but also offers a

and Timisoara. Our mixed projects are easily

(previously called Openville), the largest real

rich calendar of events and actions, on varied

accessible both by public transport and on

estate investment in the region, worth more

themes, according to their concerns, passions

foot, or alternative means of transport. For

than EUR 220 million. This will be the first

and rhythm of life. For them, but also for their

example, in the office buildings in Timisoara,

mixed project in western Romania and the

families, it organizes social campaigns such as

we included special parking lots, showers and

most important real estate project to be inau-

afforestation (so far the company has planted

changing rooms for those who cycle to work,”

gurated this year on the local market.

8 COVER STORY

www.business-review.eu Business Review | July 2019

DA OV EN

www.business-review.eu Business Review | July 2019

COVER STORY 9

ARK CLOUDS VER THE ROMANIAN NERGY SECTOR Romania’s energy sector was for years considered to be a pillar of the entire region, as it supplied electricity to vulnerable countries and covered much of its gas consumption from internal resources. But these times are gone, as dark clouds gather over the country’s energy industry. This year, Romania turned into a power importer due to the lack of investments, poor management and regulation changes, while gas imports from Russia have soared. This situation puts pressure on authorities and experts alike to find proper solutions in the next period in order to revive the local energy sector.

By Sorin Melenciuc

www.business-review.eu Business Review | July 2019

10 COVER STORY

Wired: local electricity sector switches to turbulent mode Romania was long an electricity exporter in the region as its Communist-built power supply industry was large and diversified. But the situation has changed dramatically this year due to lack of investment, poor management and regulatory changes, say pundits.

“

By Sorin Melenciuc

Electricity is

The regulatory and

really just orga-

tax framework. We

nized lightning,”

must quickly drop the

the American come-

obligation to trade

dian George Carlin

energy produced by

once said. The key

new capabilities on

word in this sentence

the stock exchange

is “organized”, many

futures market. This

energy experts would

regulation creates

add.

major problems with

In order to get

the financing of new

lightening, you need

investments,” said

an electricity supply,

Razvan Nicolescu,

transmission and dis-

a former energy minis-

tribution industries.

ter and now energy

And Romania has all

consultant at Deloitte.

these segments but lacks the essential:

FROM EXPORTER TO IMPORTER

good organization.

Compared with

Last year, Romania

other Western Euro-

was still an electric-

pean countries, like France, which kept some monopoly groups – with powerful unions –

ity exporter, but the amount of exports was much lower than in previous years.

at the top of its energy systems, Romania has split its electricity sys-

But in the first quarter of this year the country became a net im-

tem into three separate ones: supply, transmission and distribution.

porter, left reliant on large imports to provide the power needed by

By the EU books, experts would argue, again. But energy systems are

its businesses and households.

not so simple – and you don’t need an expert to tell you that.

Electricity systems need expensive investment but they also need constant maintenance. It seems to be a technical matter but it is also a daily life matter: without light and electrical outlets, life is now almost inconceivable.

According to official data, Romania imported 1,125.5 million kWh over January-March 2019 and exported only 862.6 million kWh, putting the country’s electricity balance into the red.

Electricity exports more than halved (down by 53 percent) in the first three months of this year, while imports rose by 78.5 percent.

For decades, Romania managed quite well to provide its house-

This reliance on imports was due to a slump in power output,

holds and businesses – and even its neighboring countries – with a

which was down by 10.8 percent compared with January-March

reliable power supply. The last blackout in Romania occurred in 1977,

2018, associated with a slight decline in consumption, of 1.6 percent,

just after the country was rocked by a major earthquake. So what

during the same period. But the situation remains tense as Romania

has changed compared to the past decades? Romania still has good

continues to rely on imports to cover its electricity needs.

technicians and engineers, who should be able to keep the system

Transelectrica data seen by BR show that even on a calm day like

on track, shouldn’t they? Well, it’s not sure. “Romania has bigger

June 26, at 9.30 PM, Romania imported electricity due to weak wind

problems with ensuring its real power production capacities. Causes?

power output. Some experts warn that the country risks higher im-

www.business-review.eu Business Review | July 2019

COVER STORY 11

ports, higher prices and even “a disastrous blackout” if the govern-

pushed imports to record levels. Under normal conditions, the coal

ment doesn’t take urgent measures.

power plants cover around 40 percent of consumption over the year.

RENEWABLE BUT VOLATILE

designed a plan to combine in a single company Hidroelectrica, a

Despite these statistics, Romania is among the European Union

highly profitable hydroelectricity producer, and some of the coal

countries that manage to cover over 20 percent of consumption from

plants – an idea dismissed by most local experts.

In order to save the inefficient coal plants, the government has

renewable sources, due to large investment in projects made during the last decade. But these sources are not enough to cover the coun-

TAX GAMES: WINNERS AND LOSERS

try’s needs. In 2017, the share of renewable energy in Romania was

The most stable and profitable energy producers in Romania, Hidro-

26.6 percent, over the EU average of 19.5 percent.

electrica and Nucleaelectrica – which produce the cheapest electric-

Only four member states cover more than half of their con-

ity in the system – have been hit this year by emergency ordinance

sumption from renewable sources: Sweden (69.1 percent), Finland

114/2018, which imposed a special tax of 2 percent on turnover and

(54.8 percent), Latvia (54.6 percent) and Estonia (51.6 percent). By

capped the profit margin at 5 percent for energy supplied to house-

contrast, the power production system in Romania needs major

holds. Both companies need investments worth billions of euros in

investment and maintenance works – and both have been rare in

order to guarantee their long-term electricity output.

recent years.

On average, around 10 percent of the consumption was covered

“The ordinance was requested by those who profit from it. As we have a mix of energy, we also have a mix of interests. The winners

by wind turbines in the last few years, but the share increased this

are those who have a regulated market and guaranteed income.

year due to lower production in other type of power facilities like

They are the big winners because they keep their market frozen,” ar-

coal-based power plants. The total power of the local wind turbines

gues Niculae Havrilet, an adviser to the energy minister and former

is 3,029 MW, but production from this type of power source is very

head of the Romanian energy regulator (ANRE).

volatile in a country located far from the planet’s oceans and prevailing winds.

In eastern Romania, close to the Black Sea coast – where most of

AFFORDABLE, BUT FAST-RISING PRICES Despite the mismanagement of the local energy sector, Romanian

the local wind turbines are installed – wind is not constant, which

households still pay low prices for electricity. According to the latest

means that wind power could fall from peak to nothing in a couple

official data, from 2017, local homes paid the fifth lowest electricity

of hours. However, some experts say that doubling the production

bills among the 28 European Union member states.

capacity of wind power could solve some of the problems Romania

Average household electricity prices in 2017 were lowest in Bul-

is now facing. According to local experts, 8,000 MW of production

garia (10 euro cents per kWh), Lithuania (11 cents per kWh), Hungary

is missing in Romania from the total of 24,000 MW production in

(11.5 cents), Croatia (12.4 cents) and Romania (12.4 cents), according

theory.

to Eurostat.

The energy minister has threatened electricity suppliers that they

But the situation is about to change. This year, Romania’s elec-

could have their licenses revoked if they don’t supply enough elec-

tricity prices hit a record high of over EUR 130/ Mwh in some periods

tricity, despite the fact that most electricity producers in Romania

– and these prices have an impact on local businesses.

are state-owned.

The main problem in production is generated by coal power

In the first four months of this year, Romanian firms significantly reduced their electricity consumption, possibly owing to higher

plants that have low electricity supply due to a mix of factors such as

prices in the market due to output disturbances and rising costly

poor management, lack of investment, social problems and regula-

imports.

tory difficulties. The two main Romanian coal power plants, CE

Official data show that local companies cut their consumption

Hunedoara and CE Oltenia, supplied only 18 percent of the national

of electrical energy by 5 percent in January-April 2019, to 14.4 TWh,

production on January 17, 2019, when consumption peaked, and

while total national consumption declined by 1 percent to 18.9 TWh.

www.business-review.eu Business Review | July 2019

12 COVER STORY

Romanian gas market: the return of the Russians For years, Romania was considered one of the least dependent countries on Russian gas imports, as it had its own resources covering most of its domestic demand. But commentators say things are about to change this year, mainly due to new regulations.

A

By Sorin Melenciuc

fter 2013, Romania’s

REGULATORY UPHEAVAL

gas imports

from Russia rapidly

Running out of

declined, reaching

revenue sources, the

a decades-low of

government imposed

163,000 tep in 2015.

special taxes of 2

But imports rose again

percent of turnover

in 2016.

on energy firms at the

In 2017, imports of

beginning of this year,

natural gas from

and capped the retail

Russia declined by 19

and corporate gas

percent to 962,000

price at RON 68/Mwh.

tep, from 1.19 million

These measures

tep in 2016, but the

were introduced

trend changed direc-

through the controver-

tion again last year.

sial emergency ordi-

In 2018, the indica-

nance 114/2018, which

tor soared by 26.8

players say caused

percent to 1.2 million

major upheaval in the

tonnes of oil equiva-

energy market.

lent (toe), the highest

“When the govern-

level since 2012, in

ment representative

sharp contrast with

presented us with the

the trend seen during

draft ordinance, my

the previous years.

first reaction was: my

Romania’s sole source of imported gas is Russian giant Gazprom,

God, you’re selling us to the Russians! Because this was like a door

through two intermediary companies. The reversal in 2018 may

wide open to Russian gas,” a source from the energy market told BR.

indicate a rising reliance on Russian gas – and put at risk one of Ro-

In effect, the two major gas producers in Romania – Romgaz and

mania’s biggest assets. In 2016, Romania ranked 26th among the 28

OMV Petrom – are being forced to sell gas at capped prices and pay

European Union member states in terms of energy dependency, with

extra taxes, while there is no regulation governing imported gas –

energy imports covering only 22.3 percent of national consumption.

meaning that such a measure hits local producers and favors gas

The energy dependency of the EU stood at 53.6 percent in 2016.

imports from Russia.

According to official EU data, Estonia (with a dependency rate

And the effect was soon evident: in January, Romania increased

of 6.8 percent) was the least dependent member state on imported

its reliance on Russian gas, as imports from Gazprom jumped, and at

energy, ahead of Denmark (13.9 percent), Romania (22.3 percent),

much higher prices, official data show.

Poland (30.3 percent), Sweden (31.9 percent) and the Czech Republic

According to the Romanian energy regulator (ANRE), gas imports

(32.8 percent). Romania’s energy imports consist mostly of oil and

from Russia rose by 55 percent in the first month of the year com-

gas.

pared to January 2018, to 4.2 million MWh, while the average price

www.business-review.eu Business Review | July 2019

COVER STORY 13

shot up by 37 percent to RON 124.1 per MWh. Romania’s reliance

Today, the picture looks completely different: experts say these new

on Russian gas imports climbed this year as 23 percent of total gas

resources have been put at risk by the new fiscal hurdles introduced

consumption was covered by Gazprom, compared to 18.6 percent in

by the government. Last year, Romania’s main ruling party, the PSD,

January 2018. This increase is mainly due to higher local consump-

proposed an amendment in Parliament that would increase the

tion and to steadily decreasing local gas production. Pundits say the

taxes paid by local gas producers, a move that favors imports from

main driver behind the decision to cap domestic gas prices was po-

Russia, according to experts.

litical. In Romania, gas prices are considered a social protection tool,

Under this proposal, the supplementary tax paid by domestic

and are used without discrimination: the poor and the rich alike are

producers for the natural gas extracted in Romania will be calculated

“protected” through low prices even if many don’t need to be.

according to the trading prices of the hub from CEGH Vienna. But

The measure is also a consequence of the fact that the Romanian

the hardest measure was imposed through the infamous emergency

government has never managed to identify the energy-vulnerable consumers in order to subsidize only those who need protection from high prices.

“With emergency ordinance 114, we erased five years in terms of energy price liberalization; we returned to 2014,” an energy expert told BR.

RISING PRICES FOR BUSINESSES But another effect was a significant price hike on the market. Lower prices for households had to be offset through higher prices for businesses in order to balance the books, experts say.

In May, the average price of domestic gas was RON 101 per

ordinance 114/2018, approved just before Christmas. OMV Petrom, Romania’s biggest oil & gas group, warned that the measure would

MWh on the local commodities exchange BRM, an all-time high for

hurt the local energy sector, in terms of energy supply, employment

Romanian gas. The local gas price for businesses is now higher in

and investments.

Romania than in Austria, the reference market for the region, and

The group also said that it would not yet be making a decision

the reason is emergency ordinance 114/2018. This took much of the

regarding a possible investment in gas production in the Black Sea’s

Romanian gas out of the market; most of the gas is sold at a low price

Neptun Deep perimeter, due to the current “legislative environ-

to households, and the remaining gas became more expensive – the

ment”, referring to the ordinance.

part sold to businesses. For local gas producers, the emergency ordi-

“The current legislative environment does not offer the neces-

nance has had another vicious effect.

“We have received so many signals that exploration and exploitation programs have been reduced by at least 30-50 percent, depending on the owner, and there is also a tendency to diminish the value of these projects. This will undoubtedly lead to a fall in domestic gas production owing to the closure of gas deposits that will no longer be economically viable due to the suspension of funding received by small producers,” Saniya Melnicenco, head of the local ROPEPCA association, told reporters.

Official EU data suggest that Romania has registered a decline in output this year. During the first quarter of 2019, gas output in the

sary conditions for an investment decision worth a few billion. We

EU was below the 2014-2018 range, reinforcing the decreasing trend

remain willing to see development around the Black Sea deposits

of domestic production in the bloc. In Romania, natural gas produc-

and will continue our dialogue with authorities to understand the

tion decreased by 3 percent (0.1 bcm).

way forward,” a company report reads. Neptun Deep is considered

But the EU data also indicate a sharp fall in storage filling rates. At

the largest gas reserve in Romania’s exclusive zone at the Black Sea

March 31, 2019, storage levels were between only 5 and 15 percent in

and the main hope to make Romania a gas exporter in the region.

Sweden, Romania and Latvia, the lowest levels in the EU, according

In April, OMV and ExxonMobil teams working on gas explora-

to the quarterly report on the European gas market released by DG

tion and exploitation in the Black Sea were temporarily dismantled

Energy.

due to the legislative uncertainty in Romania. In the same month, Christina Verchere, CEO of OMV Petrom, said that the key require-

POSTPONED OFFSHORE GAS PROJECTS

ments for the company’s Black Sea offshore development are not yet

Last year, Romania was widely expected to have become a major

in place. However, company Black Sea Oil & Gas announced that it

producer and exporter of natural gas within the next five years, due

would invest another USD 400 million to extract gas from the Black

to its offshore reserves in the Black Sea exclusive economic zone.

Sea.

www.business-review.eu Business Review | July 2019

14 COUNTRY FOCUS

French investors get strategic for Romanian economy Despite its significant investment potential, Romania still lacks road infrastructure that could boost and support foreign investors in their efforts to develop their businesses on the local market.

Photo: Dreamstime

By Anda Sebesi

Along with large French groups, many other French SMEs are active in Romania

www.business-review.eu July 2019 Business Review | May 2016

A

COUNTRY COVER FOCUS STORY 15 14

ccording to the most recent market

It was followed by the wholesale and retail

and Romanian capital, whose combined

data, released by Bank of France,

trade and repair of motor vehicles and mo-

turnover is EUR 17 billion, and which together

France ranks fifth in terms of total

torcycles (358 companies) and professional,

have more than 125,000 employees (not all

scientific and technical activities (242 firms).

the CCIFER members are French companies).

investments in Romania, with EUR 4.7 billion

These three sectors represent 51 percent

“The French community is quite dynamic –

addition, economic relations between France

of all the French companies included in the

existing investors continue to develop their

and Romania have been in recent years and

study conducted by ICAP. Manufacturing

footprint and new ones are interested and

still are on an upward trend in terms of com-

and wholesale and retail trade are the sectors

ready to access new sectors,” she adds.

mercial exchanges, posting an increase of 4.4

that posted the highest number of employees

percent in 2017, to EUR 7.8 billion. Last but

(over 72,000) and account for 89 percent of

BRD GROUPE SOCIETE GENERALE

not least, France has a strong economic pres-

the total turnover. Last but not least, accord-

BRD Group recorded a net profit of RON 301

ence on the Romanian market, with about

ing to financial data from 2018, quoted by

million in the first quarter of 2019, down 27

2,300 companies with French majority stakes

ICAP, only four sectors are not profitable:

percent from the same period last year, as a

being active here, according to a CCIFER

electricity, gas steam and air conditioning

result of the decrease in the cost of positive

study based on data from National Trade Reg-

supply; construction; arts, entertainment and

risk and an increase in regulatory costs. “In

ister Office (ONRC). Along with large French

recreation; and other service activities.

the first quarter of the year, BRD continued

in 2017, or 6.2 percent of the total FDI. In

groups with a long tradition in Romania in

“Despite the economic and political insta-

to grow lending on both retail and corporate

sectors like automotive, financial services,

bility, the trend in Romania in the past year

segments, and increased transaction volumes

large distribution, urban services, cosmetics

has been of economic growth, and we expect

while improving its operational performance.

and agriculture, many other French SMEs are

the growth to continue in 2019 as well. The

In the future, we will continue to build on our

active on the local market.

economic growth of 4.1 percent was sup-

strong franchise, actively financing the proj-

A study conducted by ICAP based on

ported by an increase in domestic demand

ects and activities of all economic actors, and

financial data from December 2018 shows

and by Romanian exports, which reached

prioritizing improving customer experience

that more than 3,300 active companies with

EUR 67.7 billion, an increase of 8.1 percent.

by enhancing digital innovation and further

a direct French shareholding of more than

For sustainable growth, we think public

streamlining processes,” said Francois Bloch,

10 percent were registered in Romania in

investment should be a factor, in order to

general manager of BRD Groupe Societe

June this year (whether individuals or legal

stimulate local and also attract foreign private

Generale. Last but not least, last November

entities). The study also found that 1,865

investment. Furthermore, local companies

in London, the lender was named “Best

(EUR 1.1 million), Renault Comercial Rou-

should be encouraged to go international

Bank in Romania” by The Banker magazine.

manie (EUR 879 million) and Sanofi Romania

and reach new markets with added-value

Ability to adapt to the business environment,

(EUR 259 million). The researchers also found

products and services,” says Adriana Record,

profitability, competitiveness, the quality

that 54 percent of the firms with a French

executive director of the French Chamber of

of strategic partnerships with clients and an

shareholding of more than 10 percent are reg-

Commerce (CCIFER). According to her, the

innovative commercial offer were among the

istered in Macro-region 3 (which includes the

CCIFER has the mission to stimulate col-

criteria for this award.

following counties: Arges, Calarasi, Dambo-

laboration between its members across the

vita, Giurgiu, Ialomita, Prahova, Teleorman,

country, with openness to other business

capitalized on the mix between our products,

Ilfov and Bucharest). The manufacturing sec-

communities, working in a network through

a careful policy of risk management and a

tor accounted for about 19 percent of the total

Coalitia pentru Dezvoltarea Romaniei (CDR)

sustained effort to improve customer care.

number of companies (349) and 47 percent

Task Forces. This year, CCIFER has reached

This allowed us to obtain very good financial

of the total number of employees (45,872).

over 550 members, companies with French

and commercial results,” added Bloch.

companies that have declared their financial data, posted a combined EUR 15.5 billion in turnover and had more than 98,000 employees in December 2018. In addition, 119 firms reported a turnover of above EUR 10 million last year. Some 982 companies (53 percent) recorded profit, another 713 (38 percent) posted a loss, while the remaining 9 percent declared 0 as their result.

According to ICAP, in December 2018 Automobile Dacia was ranked first in terms of turnover (EUR 5.3 billion), followed by Carrefour Romania (EUR 1.6 billion), Auchan

“In 2017 and the first half of 2018 we

www.business-review.eu Business Review | July 2019

16 COUNTRY FOCUS

AUTOMOBILE DACIA At the beginning of this year, Romanian carmaker Automobile Dacia, a subsidiary of France’s Renault Group, announced that it had started a major expansion program at its factory in Mioveni, which will generate an increase of its production capacity to over 400,000 units per year by the end of 2020.

The investment is estimated at EUR 100 million for the next two years. In addition, as part of this program, the company will hike its number of employees by 300 while its automation degree will reach about 20 percent

launched Bringo, an integrated platform that

cling and recovery, optimization of energy

in 2020. Along the same lines, the company

includes an app for customers, one for sup-

consumption to conserve energy, reduce

registered record profit last year of EUR 162

pliers and a system that coordinates every-

carbon and fight climate change). Based on

million, up 40 percent compared to 2017. The

thing behind the two apps. “Bringo managed

digital technology, smart solutions have

group posted a total turnover of EUR 5.3 bil-

to go, in just two years, from an innovative

been designed to improve information and

lion in 2018, a 5 percent gain on the previous

startup on the Romanian market, to the only

convenience for users and to optimize the

year. The results include only the Romanian

delivery service available in 18 cities around

environmental and economic performance of

businesses, excluding its Morocco factory

the country. We ended 2018 with over 400

the company’s services. Consequently, Apa Nova has now positioned itself as a natural player in smart city solutions and the sustainable city of the future.

SAINT GOBAIN Last year, the Saint-Gobain Group in Romania Photo: Dreamstime

announced that it had restarted the production of fiber glass mineral wool at its Isover factory in Ploiesti, following an investment of EUR 5 mln. The production line was reopened last August following major investwhich produces cars under the Dacia brand.

percent more orders and more than 2.5 mil-

ments in technological upgrades, two years

The Mioveni factory produces mostly the

lion products delivered, and for the current

after it was temporarily suspended.

Duster and Sandero models and has about

year we want to expand the service to as

15,000 employees.

many cities as possible and deliver more and

many other indirect ones in related services.

more orders,” Alex Matei, IT director at Car-

Saint-Gobain Isover will provide products

refour Romania, told BR earlier this year.

and solutions from the plant in Ploiesti for

CARREFOUR

The move created 50 new direct jobs and

both the national market and other markets

Retailer Carrefour, the operator of Europe’s largest hypermarket chain, obtained 2018

APA NOVA

in the region, such as Moldova, Bulgaria,

revenues that were 6 percent higher than in

For the last two years, Apa Nova has been go-

Hungary, Serbia, Croatia, Bosnia, Macedonia,

the previous year, reaching a record value of

ing through a modernization process which it

Kosovo and Albania. “The Isover plant in

almost EUR 1.9 billion, according to profit.

says has had visible results on the quality of

Ploiesti is a strategic asset for Saint-Gobain,

ro. Carrefour’s local store network grew by

its services. The company supports sustain-

being one of the few mineral wool factories

almost 40 branches last year, reaching a total

able development through investments in a

that produces both glass wool and mineral

of 360, of which 35 are hypermarkets, 261 are

more efficient water and sewage network, a

basalt wool. The decision to reopen the fiber

supermarkets, 51 are proximity stores and 13

continuous business reengineering process,

glass mineral wool production line is part

cash & carry stores. Plus, this year, Carrefour

the digitalization of its internal operations,

of the wider strategy of the Saint-Gobain

Romania launched the largest integrated

the sewage treatment at Glina, a continuous

Group in Romania, prompted by the positive

program for supporting Romanian farmers

reduction of paper usage and a customer-

trend on last year’s construction market and

wanting to adopt a bio-agriculture business

oriented approach. At international level

the desire to strengthen our commitment to

model. The program represents a long-term

the group has put sustainable development

the local and regional market,” said Ovidiu

commitment and is open to any Romanian

issues at the forefront of its strategy (water

Pascutiu, general manager of Saint-Gobain

farmer who intends to be certified as an

service management and protection of water

Construction Products Romania – Rigips and

organic producer. Back in 2016 Carrefour

resources, promoting treatment, recy-

Isover.

www.business-review.eu Business Review | July May2019 2016

COUNTRY COVER FOCUS STORY 17 14

The local business environment is getting ready for the future Adriana Record, executive director of the French Chamber of Commerce (CCIFER), tells Business Review how French investors perceive the local business environment and outlines the main initiatives the CCIFER has undertaken to improve the Romanian business climate.

By Anda Sebesi

What are the main challenges for French investors that have businesses here?

The challenges facing French investors in Romania are very similar to the challenges facing any other investors in the region: workforce shortages, adaptation of the existing workforce to the challenges and changes in the labor market and also training future employees in line with the faster and more complex technological changes. In addition to this, there is also the legislative and normative instability. Nevertheless, Romania is an attractive destination for foreign investors, and French entrepreneurs. The past year has seen an increase in trade exchanges, with trade between France and Romania growing by 8.2 percent in 2018 to EUR 8.5 billion, which made France the sixth biggest supplier and the third largest customer for Romania.

What are some of the initiatives undertaken by the CCIFER to improve the local business climate?

The CCIFER is a business community founded on French savoir-faire, a leader committed to the sustainable development of individuals, companies and Romania. Our strength comes from the synergies that our

How has the business environment evolved in the last year from the CCIFER’s perspective?

are part of the CCIFER network and, for them,

community generates year after year, within

the past year has been full of opportunities.

a business network with tradition, that shares

The business environment in Romania is

the same values. CCIFER is a leading member

Romania is the second biggest market in

evolving, Romania is no longer a low-cost

of Coalitia pentru Dezvoltarea Romaniei

the European Union and one of the most

country and the focus in every industry has

(CDR). As a business community, it shares the

dynamic European economies. These facts

been to find the best strategies in order to

five CDR priorities: business predictability,

contribute to shaping the country’s business

take advantage of this new reality. Romania

reducing labor market imbalances, simplify-

environment, strategically situated at the

has many other competitional advantages

ing interaction with the state, improving

intersection of three major markets: the EU,

besides the cost of the workforce, which is

public infrastructure and strengthening the

the CIS countries and the Middle East, being

increasing. Among them I would mention

EU anchoring of Romania. We encourage and

crossed by pan-European transport lines

its openness to the technological revolu-

maintain a close collaboration with regional

and with a gateway to the Black Sea through

tion, know-how and agility when it comes to

business clubs and honorary consuls, Busi-

Constanta Port.

technology and digitization. In Romania, the

ness France and the Embassy of France, in

business environment is getting ready for the

partnership with the Chamber of Commerce

future.

and Industry of Romania.

Among the 2,300 companies with French capital present in Romania, more than 550

www.business-review.eu Business Review | July 2019

18 MANAGEMENT

Companies must reinvent their business models for the future Szabolcs Nemes, managing director of Roland Berger, tells Business Review about the main trends in management and business strategy in 2019 and highlights the drivers behind the major changes in management over the past decade.

By Anda Sebesi (re)designing their strategies.

only the entrepreneurial will survive.

The drivers behind these changes often have to do with intensifying competi-

How many of these trends are present on the local market too?

tion, increasing consumer

All of them. Agility, adaptability and flex-

sophistication or the speed of

ibility are of greater relevance than ever,

technological advancements.

especially given the often very unpredictable

Also, in the past few years

environment Romanian companies face.

companies have been more

Furthermore, in Romania, we also see a more

inclined to conduct proper

prominent orientation to data-driven deci-

strategy definition exercises

sion-making – today data, be it on markets

with more comprehensive

or consumers, is more easily available than

outcomes as opposed to hav-

before and our clients appreciate our support

ing and following some high-

in analyzing it and turning it into pillars for

level directions or simply

strategic changes – we navigate complexity

“muddling through”.

together.

What are the main trends in management worldwide in 2019?

How different is a strategy designed today compared with one from five or ten years ago?

Agility, adaptability and

Ten years ago we were supporting clients in

flexibility remain important

designing strategies focused on turnaround,

requirements in 2019, too.

on helping them address the aftermath of

There are lots of ongoing

the economic crisis and on getting them back

conversations about the

on a healthy growth path. Five years ago the

latest management trends.

focus had already shifted towards growth

I would like to draw your

and expansion-related topics, whereas today

How have companies’ management strategies changed in the past few years and what were the main drivers behind this shift?

attention to only one, which we at Roland

companies take a much bolder stance towards

Berger call “re-entrepreneuring” as it refers to

leveraging disruption and innovation-related

how mature companies can bring back the en-

opportunities and pursuing, in general, more

ergy of their startup days and accelerate their

ambitious medium- and long-term growth

Companies can no longer rely on the courses

growth. Traditionally, mature companies’ role

targets.

of action charted in their traditional long-term

was to preserve their advantages, not take on

strategic plans and need to be prepared to

new risks. However, in this era of fast-paced

past ten years, also in Romania, we have

adjust course much more frequently. Agility,

change, a defensive game is often no longer

multiple examples of companies from vari-

adaptability and flexibility are some of the key

an option. The era of aging gracefully is over,

ous industries realizing the shortcomings of

characteristics that they are looking for when

regardless of the industry, we believe, and

traditional, more static, methods and opting

In terms of the actual approach, over the

www.business-review.eu Business Review | July 2019

MANAGEMENT 19

for dynamic strategy definition approaches,

I expect the impact of digitalization to be

based on scenario planning or war-gaming for

massive. Firstly, digitalization is removing

How do you think a business strategy will look ten years from now?

example, as means to better cope with what

or lowering market entry barriers, giving rise

In the future the impact of megatrends will

was emerging as a VUCA (volatile, uncertain,

to new business models that both threaten

only accelerate, causing further industry

complex and ambiguous) environment. To-

established companies and create new op-

disruption and the need to reinvent business

day the dynamic nature of these approaches

portunities that can be tapped into.

models. In a world characterized by uncer-

is taken to the next level – they are enriched,

Secondly, it is fundamentally changing

tainty and “unknown unknowns”, strategy is

for example, with more holistic 360 stake-

consumer behavior, putting the consumer in

likely to become even more important. The

holder assessments, future visioning, and not

the driver’s seat, and companies will need to

complexity of the world around us will only

only simulating but also testing out certain

anticipate, adapt and come up with answers

increase, and the greater the complexity, the

strategic directions as part of the strategy

to that. Thirdly, digitalization and technology

greater the need to reduce it and to properly

definition, before actual implementation.

enable evolutions of the operational models

navigate it.

and structures of companies that are neces-

This is where strategy, good strategy, can

What generated this major change in business strategy?

sary for successfully executing the strategy.

help. I expect the core components of strat-

Just one example here: we already see

egy to remain the same and to be essential

The growing volatility and uncertainty in the

how modern technologies provide, in many

in the future, too. For example, conducting

strategic environment faced by companies

cases, real-time insight into changing market

sound strategic analysis rooted in data and

have been the main triggers. Blurring industry

demands and in the following years in many

based on facts will continue to be invaluable.

boundaries, shifting economic fundamentals,

cases this can further evolve towards instant

That being said, the requirements for adapt-

the emergence of new types of competitors,

feedback to be used to swiftly adjust the

ability and agility of strategy will become

changing role of assets, evolving customer

course of a strategy.

more stringent and the need for flexibility

and employee needs, and advances in

Fourthly, it is irreversibly changing the

and the frequency of updating it based on

technology are all underpinning this environ-

nature of human work – certain human work

significant external evolutions only greater.

ment.

streams will be altogether eliminated or

Furthermore, as the technologies around ar-

replaced, while critical thinking, creativity

tificial intelligence mature, these will become

and strategic decision making will become

more important as potential building blocks

highly important skills for the employee of

of strategy and ultimately as tools for crafting

the (near) future.

superior strategies.

How big do you think the impact of digitalization on management processes and business strategies will be in the years to come?

www.business-review.eu Business Review | July 2019

20 STARTUPS

Local business owners pooling money for startup investments Romanian business owners are beginning to create their own investment funds to target domestic startups, with starting capital running into the tens of millions of euros. While local investors can fill a funding gap for early-stage companies, their familiarity with the way business is done in Romania might provide an advantage over traditional international players in the venture capital and private equity markets, say commentators.

By Ovidiu Posirca with the new funds created by Romanians, suggested Claudiu Vrinceanu, an enabler and connector in the Romanian startup ecosystem.

Jennifer Austin, founding partner at Risky Business, a startup investor, says that when she came to Romania five and a half years ago, “most people told me Romanians would never invest in startups.”

“Local investors are critical to an ecosystem, since they are engaged for the long term and have a strong incentive to maintain a healthy ecosystem and nurture early-stage companies. This was the exact thesis behind Risky Business, and I’m happy it is proving true not just for Cluj,” Austin told BR.

Photo: Dreamstime

HOW COMPETITIVE ARE ROMANIAN INVESTMENT FUNDS? The structure of these new domestic investment funds is different, depending on their initial starting capital. Some are working as private equity, others are simply funds in Collaboration with international funding players is required in the case of the newly minted domestic investment funds

S

which all shareholders pool an equal amount of capital. It’s still unclear in these funds if the founders are putting in their own money or

eeing established Romanian entre-

cal companies, especially for startups. The

funds from their large companies, a situa-

preneurs jointly making investments

recent emergence of local funds will help

tion in which we might talk about corporate

in startups, a risky endeavor in any

finance companies other than the leaders of

venture capital.

economy, is an emerging trend in the local

each industry,” Dinu Bumbacea, consulting

economy, which has experienced capitalism

partner-in-charge at professional services

investments in startups remain high, even

and free markets for 30 years. This is viewed

firm Deloitte Romania, told BR.

though the returns could prove to be very at-

as another step in the development of the

Aside from providing money, these invest-

Nonetheless, the risks associated with

tractive. With these funds only being set up in

overall entrepreneurial ecosystem, which

ment funds can also help entrepreneurs

the past few years, it will take a while before

welcomes any fresh source of capital.

understand better the financial and business

we can make a first assessment of the invest-

aspects of their growing firms.

ment results.

“Until recently, most investment funds were international or regional, but they have ticket sizes which are too large for most lo-

There are around 1,000 startups and scaleup firms in Romania that can get in touch

“If we take a closer look at the Romanian market, five years ago, there were virtually no

www.business-review.eu Business Review | July May2019 2016

COVER STORY LEGAL 21 14

OPINION Mihai Ioachimescu-Voinea, associate at Savescu & Associatii

The equal treatment paradox in CETA ‘form of investment’ and, therefore, an extension of the investor. This is the key link that allowed the Court to switch towards comparing the situation of a foreign investor with that of an EU investor, and conclude that the two situations are different. Comparing the situation between two EU incorporated companies however, should have led the Court to a different result. It is worth noting that the Court stated in case Felixstowe[6] that ‘the status of being a European Union company is based, under Article 54 TFEU, on the location of the corporate seat and the legal order where the company is incorporated, not on the nationality of its shareholders’.

Therefore, we can safely say that based on this two different approaches, the locally established enterprises as an extension of In Opinion 1/17 [1] the Court of Justice of the

paid to that locally established enterprise’.[3] So

foreign investors will be able to benefit from

European Union (the Court, CJEU, ECJ) followed

the discrimination denounced by Belgium was

the advantages and privileges they have

the view of AG Bot, holding that the situation

with respect to the possibility of some of the EU

under CETA, without them being considered

of an EU investor investing within EU cannot

incorporated companies, that are controlled or

discriminatory, while at the same time, the

be compared with that of a Canadian investor

owned by a foreign investor, to benefit according

locally established enterprises may not be

[2]

that invests in the EU. Therefore, the Court took the view that the difference in treatment resulting from CETA Agreement (EU-Canada Comprehensive Economic and Trade Agreement), in which a Canadian investor can rely on both EU domestic courts system and CETA Tribunals, while EU investors can only rely on the national courts system is not discriminatory under Art. 20 of the Charter of Fundamental Rights (hereinafter CFR).

However, one should carefully examine

to Article 8.39.2(a) of the CETA, from the damages

discriminated against, because they are

the argument brought by Belgium in respect

paid by EU as a result of a CETA Tribunal`s award,

considered to be EU legal entities according

to the principle of equality. In its request,

while other EU incorporated companies, which

to Felixstowe interpretation.[7]

Belgium contended that ‘where a Canadian in-

are domestically controlled or owned, do not

vestor brings proceedings before the CETA Tri-

have such possibility.

bunal on behalf of a ‘locally established enter-

What AG Bot argued in his Opinion[4], and the

prise’, that is, an enterprise established within

Court later on held valid[5], is that that the locally

the European Union and owned or controlled

established enterprise and the foreign investor

directly or indirectly by that investor, the dam-

should be treated as one and the same, whereas

ages awarded by that Tribunal will have to be

the locally established enterprise represents a

[1] Opinion 1/17 of the Court, ECLI:EU:C:2019:341, paras. 180, 181.

[2] Opinion 1/17 of AG Bot, ECLI:EU:C:2019:72, paras. 203,204.

[3] Opinion 1/17 of the Court, ECLI:EU:C:2019:341, para. 53.

[4] Opinion 1/17 of AG Bot, ECLI:EU:C:2019:72, paras. 193, 194.

[5] Opinion 1/17 of the Court, ECLI:EU:C:2019:341, paras. 182, 183.

[6] C-80/12, Felixstowe Dock and Railway Company and Others, ECLI:EU:C:2014:200, para. 40.

[7] A Parallel Universe: Advocate General Bot in Opinion 1/17, H. Schepel. Available here, last accessed 05.06.2019)

www.business-review.eu Business Review | July 2019

22 STARTUPS

local funds targeting startups or SMEs; today

the first investments from Romania and at

portant that 0-Day Capital is ‘up and running’

we already have a number of them, focused

some points moves somewhere else for capi-

and is committed to assisting with developing

on different areas. During this period, we

tal; what’s important is to start here and have

innovative ideas into successful businesses,”

have been witnessing an ecosystem that is

its roots here,” Postolache told BR.

says Nestor.

growing both through the number of funds,

One of the success stories of a startup with

The investment club co-founded by Nestor

accelerators and projects recognizing and

Romanian origins is that of UiPath. The pio-

explores innovative startups in IT software

promoting entrepreneurship, and through

neer of the robotic process automation (RPA)

development, artificial intelligence, robot-

the increase in the financial education of the

industry was founded in Romania, raised

ics and biotech. 0-Day Capital will also help

young class of entrepreneurs,” Ion Nestor, co-

funds abroad, and recently hit a EUR 7 billion

entrepreneurs with other business aspects

managing partner at law firm NNDKP, told BR.

valuation.

related to technical

Nestor is one of the founding investors

Austin of Risky

support, marketing &

of 0-Day Capital, an investment club with

Business adds that

communication, legal

a starting capital of EUR 1.2 million. There

Romanians need to

& tax advice.

are 12 local entrepreneurs in the founding

be willing to collabo-

investment team, each with a ticket of EUR

rate with internation-

to turn the entre-

100,000. The fund, which was launched this

al funds and be able

preneur’s product

year, focuses exclusively on technology.

to build relationships

into an income-gen-

“The final target is

with them. “This is

erating business as

sen Horowitz, a venture capital firm in Silicon

the only way they

soon as their project

Valley, which has made early investments in

can be competitive,”

reaches the tested

dozens of tech startups including Facebook

she says.

product level,” says

Scott Kupor, managing partner at Andrees-

and Lyft, estimates that roughly half of the

“Local entre-

Nestor.

money invested in startups generate losses.

preneurs already

Another quarter could generate money that

have experience in

could cover the initial investment or provide a

fighting the system

two-fold return on the invested capital.

coming from Romania so they can pro-

brothers, have created their own fund with a

Meanwhile, the owners of DIY chain Dedeman, the Paval

vide real value add for their investments,”

starting capital of EUR 50 million called Equil-

ference between success and failure means

Marton Medveczky, investment associate at

iant Capital. The fund will target small and

you’ve got 10 to 20 percent left of your invest-

Flashpoint Venture Capital, a fund targeting

medium-sized companies. The brothers have

ments that basically need to generate 90

companies in Central and Eastern Europe,

also invested in a separate fund that aims to

percent of your returns so you have to find a

told BR.

recover distressed Romanian companies, and

“The way this business works is the dif-

have made investments in the office segment.

Facebook or a Google, or a Twitter or Airbnb where you can earn

“We don’t invest in startups; we invest in scaleups. So we look for companies that are

your money,” said

DIFFERENT INVESTMENT PHILOSOPHIES

Kupor in an interview

Supporting the

business. There are niches in the market

published in June on

younger generation,

where with EUR 20-30 million you are the

the firm’s YouTube

not just with finan-

market leader, even though in scale you are

channel.

cial capital, but also

not a big company,” Laurentiu Ciocirlan, man-

10-20-50-100 times

still small in absolute terms, but big in their

In the case of the

with experience and

aging partner at Equiliant Capital, said during

newly minted domes-

business knowledge,

a BR event held in June.

tic investment funds,

is one of the aims

collaboration with

of the increasing

ated by Romanian investors looking to help

international funding

number of funds

the next generation of entrepreneurs. Their

players is required to

created or funded by

committed capital and investment strategies

make them competi-

Romanian business

might differ, operating partially as private

tive.

owners, suggested

equity or corporate venture capital with a

Andrei Postolache, managing partner at TBNR, a startup accelerator founded in Iasi

Nestor of 0-Day Capital.

“Overall, what we are experiencing today

These are just two examples of funds cre-

longer-term view, while also providing some of the support found in startup accelerators.

by a local community of investors, says that

is a clear mark of maturity and visible proof

Ultimately, this will provide more funding op-

domestic players could provide critical fund-

that the local entrepreneurial ecosystem is

tions for entrepreneurs and know-how from

ing in the first stages of a startup.

beginning to thrive. I am confident that this

people that have created some of the business

trend will continue. This is why it is so im-

champions in the Romanian private sector.

“There is no problem if a startup receives

www.business-review.eu Business Review | July 2019

24 STARTUPS

Startup push: local industries that need a shot of innovation in the arm Sectors of the Romanian economy that are undergoing a digital transformation are a good fit for entrepreneurs that could come with fresh ideas or approaches, say commentators. Across Europe, transportation, construction and real estate saw among the least private equity investment in 2018 as the number of startups has remained rather low.

By Ovidiu Posirca on the number of startups in a certain field, but I would rather look at the type of need that can be answered by a solution created by a startup, which can be easily implemented or integrated. Fields such as e-government, education, healthcare, and financial services are among those that are planning to or are already going through significant transformations, mainly as a result of the digital world we live in, so they could benefit from innovative ideas and approaches,” Dinu Bumbacea, consulting partner-in-charge at Deloitte Romania, the professional services firm, told BR.

SECTORS IN NEED OF STARTUP INNOVATION Industries in which new tech solutions can be implemented can provide fertile ground for new startups.

Claudiu Vrinceanu, an enabler in the

Photo: Dreamstime

Romanian startup ecosystem, suggests

Tech sector is on the investors’ radar

S

ome EUR 80.6 billion of private

billion in 2018. The biggest investment sum

equity investments were made in the

(EUR 6.2 billion) went into industry, followed

European market last year, according

by commerce and services on EUR 4.5 billion

that there is big potential in the following

to figures from Invest Europe. This record

and construction with EUR 3.6 billion, ac-

verticals, which haven’t been fully exploited

subbnts in startups are limited, but most of

cording to the National Institute of Statistics

by Romanian entrepreneurs: enterprise SaaS,

the announced funding rounds were made

(INS).

fintech, security, healthcare and HR tech.

for firms in the tech sector. Across the whole

“I think we have an abundance of startups

Innovation is needed across the board,

economy, net investments stood at EUR 17.9

in probably any field. I wouldn’t assess based

in all sectors of the economy, but startups

www.business-review.eu Business Review | July May2019 2016

COVER STARTUPS STORY 25 14

strike big in areas with exponential potential,

trending the past six months,” Austin told

healthcare received 28 percent. The con-

where an idea or a product can change an

BR. She says that her fund is more interested

sumer goods and services industry had a 9

industry, a lifestyle or create a new market,

in teams with relevant industry experience

percent share of the funding pie. Startups in

says Andrei Postolache, managing partner of

and connections that are “trying to solve a

these fields were also the largest recipients of

rather boring, but persistent problem than

buyout investments, which grew 10 percent

people running around shouting AI, block-

to EUR 58.8 billion last year.

TBNR, a startup accelerator.

“This is why the biggest number of startups is in the tech field and especially in software, because the marginal production cost is zero and the distribution is practically instant,” Postolache told BR. One field with fewer companies is industrial software and hardware, adds Marton Medveczky, investment associate at Flashpoint Venture Capital, a fund targeting companies in Central and Eastern Europe.

“I think talent always surrounds existing companies so the areas where the country is

chain, fintech, or whatever the latest ’hot less strong will potentially mean that there is

trend’ is.”

less industry knowledge and fewer startups popping up,” Medveczky told BR. Seeing value beyond the fashionable trends in the market is another strategy pur-

In the same year, the sums raised by the private equity industry exceeded EUR 97 billion, which was split between 581 funds.

RECORD YEAR FOR VENTURE CAPITAL

Central and Eastern Europe (CEE), includ-

In 2018, the total venture capital investment

ing Romania, received only 1 percent of the

amounted to EUR 8.2 billion, up 13 percent

EUR 80 billion in private equity investments made last year in Europe, according to industry statistics. By far, the biggest recipient was the UK & Ireland, with a 38 percent share.

However, it’s unclear what will happen with the investment position of the UK this year, as the Brexit saga rumbles on.

For entrepreneurs looking to secure funding, Laurentiu Ciocirlan, managing partner of Equiliant Capital, a EUR 50 million Romanian private equity fund, has some advice: “You must be honest and open and not go for the easy guys; you should keep in mind that the investor’s return is your return. There is a saying: when you build a house, don’t go cheap on the architect. It is the same for an

sued by Jennifer Austin, founding partner at

on the previous year, while the number of

investment fund; the company should have

Risky Business, a startup investor.

companies backed by VC money was up 12

a good advisor or consultant in order to be

percent to over 4,400, according to Invest

successful. The consultant is the one with

related to the founders’ backgrounds and ex-

Europe data. Almost half of the funding

the experience who can tell the owners of the

perience rather than whatever fad has been

targeted the ICT sector, while biotech and

company what they can and cannot do.”

“We’d like to see more startups emerging

www.business-review.eu Business Review | July 2019

26 BUSINESS

Florin Neby, Neby Fitness: ‘We analyze and know how long people allow for sport’ With more than 26 years of experience in sport, he trained as a gymnast, a field in which he won dozens of national and international medals. BR talked to Florin Neby, general manager of Neby Fitness, about the fitness club market, his road to entrepreneurship and his newly launched products.

By Romanita Oprea

ABOUT Florin Neby, general manager, neby fitness At 19 years old he decided to leave artistic gymnastics behind him and continued his career in the Aerobic Gymnastics National team, going on to become European and World champion and Emeritus Master of Sports in Romania. After ending his sporting career, he took part in several projects, such as serving as member of the Aeros group, whose show was compared to Cirque du Soleil’s, performing all around the world and appearing in major magazines and newspapers, including the New York Times.

ed in keeping 80 percent of the team which gave us credibility in front of our clients and helped loyalize them.

What were the main challenges over the years and how did you surpass them?

We face challenges every year. One is the days off given by the state and announced at the last minute that interfere in any campaign you want to roll out, so, no matter how attractive it is, people’s interest during the free days is lower than usual.

Another challenge is that most people go to the gym in a seasonal rhythm. Any fitness club has a drop of 30 to 40 percent during the

In 2012 I started to develop my personal brand

When did you decide to launch Neby Fitness and why these particular two locations (Baneasa and now Domenii)?

– Florin Neby – and along with it to attract a

Prior to launching Neby Fitness Baneasa I

of 10-11 months a year, and that helps.

community of people. Something that little by

was a trainer in a network of clubs that was

little made me realize there was a market for a

subsequently bought. In mid-2014 I decided

Neby concept.

the time had come for me to stop depending

How are you positioned on the market and what is your differentiator?

When did you first feel you wanted to become an entrepreneur and why?

summer season. Still, we run awareness campaigns about the need to do sport a minimum

on the location / rules / logistics of others. So

We always analyze and know how much time

What qualities that you developed in your career as a multi-awarded sportsman have helped you along this journey?

I started to look for that particular location

people allow for sport. The average time is 45

that would define best what Neby Fitness

minutes for a training session. We know that

wanted to transmit and, after nine months of

time is really important for the people coming

I would say determination and organization

searching, we found it. I’ve always chosen the

to our fitness clubs and therefore we try to

skills. Both as a sportsman and as an entre-

location strategically. To be easily accessible,

make their time here as efficient as possible.

preneur you need them. Determination helps

with visibility, in a bustling area, with parking

Therefore, our services and activities are

you put your ideas into practice, even when

spaces and a special interior architecture.

adapted around those 45 minutes. We function under the fitness express principal.

the people around you say no to them. And we all know that while organization is hard to

How has your business grown?

achieve, it is necessary in order to start off on

We had an organic approach. We have always

How do you choose new locations?

the right foot both as an entrepreneur and a

been oriented towards the client, who is the

Depending on the concept that we want to

sportsman.

most important to us. Moreover, we succeed-

implement in the club, the flow of people in

www.business-review.eu Business Review | July May2019 2016

COVER BUSINESS STORY 27 14

that particular area and the club’s proximity

first training, adapted nutrition and coaching

tions, where we transform people passion-

to the target audience.

program in Romania, conceived in 2012 and

ate about fitness and movement into fitness

launched at the beginning of 2013, and which

trainers. With a diploma recognized nation-

What are your main business goals for 2019?

has as its main purpose the body remodel-

ally and internationally that allows them to

ing of those who take part in it. The program

practice further in this industry, it’s good to

We have developed a complementary busi-

is composed of training, nutrition, coaching

know that 90 percent of our graduates are

ness, an online shop of accessories and tech-

and motivation, but also long-term educa-

now active in the best fitness centers and a

nology in fitness, together with our partners

tion through Q&A sessions. It is divided into

small number of them are our collaborators

from LivingWell, in which we invested in the

groups with different intensity: Basic, UP,

as well.

first round EUR 100,000. We also launched

Advanced, Pro.

the platform fitmag.ro, which targets every-

Moreover, the program has a corporate

one passionate about movement and sports

version called BecomeFit Corporate for

and the future fitness studios.

companies that want to offer their em-

What would you say are the main problems faced by businesspeople who come to the gym and why?

ployees a complete and complex seminars

Most people coming to the gym don’t treat it

What was your turnover in 2018 and what do you estimate for 2019?

service, adapted nutrition and training at the

as a priority, but more like an option or a fad.

company’s location. We believe that Becom-

We’ve come a long way in the last few years,

In 2018 we had a turnover of around EUR

eFit Corporate is the most efficient method

but we still have a long road in front of us.

650,000 with 11 percent profit, but also with

of stimulating the employees to take part

While stress is this century’s main problem,

the EUR 100,000 investment in modernizing

actively in steering the company in the right

practicing sports is one of the few options

the clubs, in the logistics and the equip-

direction, supporting the development of a

that one has of anti-stress treatment without

ment. In 2019 we aim to raise the profitability

new community and providing stability at

negative effects. Sport can solve a lot of prob-

growth margin to at least 15 percent.

the workplace while raising work capacity

lems, from bad posture to better daily health.

through the employees’ wellbeing.

What are your most successful programs and why?

The second one is Neby Fitness Academy,

How would you characterize the market you are on?

We have two very special programs that have

a fitness school launched in 2018 which is

Effervescent, but still chaotic. It definitely has

priority. One is BecomeFit, which was the

receiving feedback way beyond our expecta-

huge potential for the next five years.

www.business-review.eu Business Review | July 2019

28 COACHING

The coaching industry – growing fast and specialized At international level, the coaching market continues to grow – the 2016 ICF study noted 53,300 coaches globally, a 12 percent increase from 2012, and valued the industry at an estimated USD 2.4 billion and growing. Moreover, according to PwC, the coaching industry was the second fastest growing sector in the world.

By Romanita Oprea

Alina Tabusca, Coach4Marketing

Adela Iepure, professional certified coach

(ICF) defines coaching as “partnering

T

were 53,300 coaches, up from 47,500 part-

tion include: improvements in productivity,

with clients in a thought-provoking

time and full-time coaches worldwide. About

quality, organizational strength, customer

and creative process that inspires them to

92 percent of them are active. Of these, 33

service, and shareholder value. Moreover,

maximize their personal and professional

percent operate in the United States – a total

when coaching produces better alignment

potential.” Coaching is a distinct service and

of 17,500 coaches. “I expect the market value

between personal and organizational values

differs greatly from therapy, consulting, men-

to reach USD 1.34 billion by 2022 – or a 6.7

and goals, the results often include increased

toring, or training. The ICF describes itself as

percent average yearly growth rate from 2016

job satisfaction and organizational commit-

the leading global organization dedicated to

to 2022. The biggest challenge facing coaches

ment and improved performance.

advancing the coaching profession by setting

today is that untrained and incompetent

high standards, providing independent certi-

coaches are damaging the reputation of the

the International Coach Federation Romania,

fication and building a worldwide network of

industry. The coaching field is unregulated.

meaning 150 professionals have chosen to

trained coaching professionals. As the world’s

No license is required. Currently, there are

train themselves and learn the skills of the

largest organization of professionally trained

more than 500 training and ‘certification’

coaching profession. They are well trained in

coaches, it offers the only globally recognized,

programs worldwide, and many of them will

the 11 core competencies and the code of eth-

independent credentialing program for coach

certify you if you simply pay them a fee,”

ics. But what is the industry’s level?

practitioners. ICF credentials are awarded to

John LaRosa told marketresearch.com.

he International Coaching Federation

professional coaches who have met stringent

According to the federation, in 2011 there

Commentators say the potential benefits

mitment. Potential benefits for the organiza-

Locally, there are 150 current members of

According to Adela Iepure, professional certified coach (PCC), trainer and facilitator,

educational and experience requirements and

of coaching for employees include: better

if one were to compare the demands of multi-

have demonstrated a thorough understand-

decisions, clearer goals and roles, increased

national companies for training and coaching

ing of the coaching competencies that set the

self-awareness, more ideas and options, bet-

services today with those five or ten years

standards in the profession, says the organi-

ter relationships, better teamwork, reduced

ago, one would see more explicit requests

zation.

conflict, and renewed organizational com-

for coaching. “In terms of coaching schools,

www.business-review.eu Business Review | July 2019

COACHING 29

you can clearly see a more robust offer on our

happening as some managers have already

skills for middle managers and executives,

market: every year new coaching schools are

had the courage to invest in team coaching

explicit individual coaching services, espe-

coming up and new and more sophisticated

next to individual coaching, and are willing

cially for managers in career transition or key

programs are offered. If five to ten years ago

to make efforts to get a truly collaborative,

people dealing with complex changes or chal-

you could choose from two or three options

supportive and effective work environment.

lenging projects, or team coaching requests to

locally, now you have a very rich offer of for-

“I personally see this as a cultural shift in the

improve internal efficiency, self-organization

mal professional development in the coaching

leading style in Romania. I also often observe

and stakeholder management. “International

field,” said Iepure. Moreover, she has also

that coaching is presented as a ‘repair’ tool.

coaches are usually more frequently request-

noticed a trend among those attending coach-

This may be why people are afraid to be

ed for CEOs and other top executives. Often

ing schools: while a few years ago participants

sent to a coach. Companies need to learn to

expats are already working with coaches

were largely looking to change careers and be-

integrate coaching as a growing and develop-

when they join Romanian teams and they

come coaches, now a lot are attending formal

ment tool more than anything else. Coaching

prefer to stick with those partnerships. But

coaching training not to change profession,

is great for anybody

but to add meta skills to their existing profes-

looking for ideas,

sion (e.g. lawyers, music business profession-

resources, perspec-

als, HR professionals, project managers, sales

tives, clarity and/or

managers, etc).

more. We all need

Meanwhile, Alina Tabusca, marketing

these at different

coach & consultant at Coach4Marketing,

times, not only when

emphasizes two different aspects: coaching in

we are in trouble,”

Romania as a service offered for the local mar-

said Reese.

ket and coaching in Romania as an international coaching provider. “A market can grow horizontally, by overall service coverage, and

SPECIALIZED SERVICES

vertically, by addressing specific niches or

But are firms in Ro-

service types. Horizontally, I consider coach-

mania opening up to

ing to still be in a penetration phase, although

these services? What

most of the big competitors are still fighting

type of coaching is

over the same market segment. Business

most sought after

coaching relates to the business market and

and why? As coach-

mainly the businesspeople emerging from

ing continues to

it, and I can see that more and more entre-

grow as a profession,

preneurs, intrapreneurs and managers rise

the expectations of

nowadays to take their companies or teams to

clients grow too. “They demand results from

we now have very good Romanian coaching

the next level,” said Tabusca.

coaching. They will not tolerate coaches –

professionals with sound backgrounds that

But turning to local coaches serving

internal or external – that do not get results,

are serving these layers of top executives as

international markets, the Coach4Market-

that use jargon, that do not have a clear path

well,” added Iepure.

ing representative considers this a different

to results, that are what we call ‘lightweight’.

discussion. This is an emerging market, with

Companies present in Romania are very open

popular type of coaching in Romania is

very few coaches practicing outside the coun-

to receiving professional coaching services,

probably individual coaching, which follows

try. However, she believes that as the average

sometimes called leadership, executive, man-

a training program, often around leading

age of coaches has decreased in recent years,

agement, high-potential, career, development

people. “Companies are frequently linking

this type of service will grow. More and more

plan, team or corporate coaching. Companies

coaching to implementing certain behav-

managers decide to go from coaching their

seem to love to make up new terms, and I

iors or models (communication, meetings,

teams to coaching at a larger scale, and these

am sure I have left out some possibilities,”

managing teams, time, etc.). There is still a

are managers that are used to working in

said Daiana Stoicescu, master certified coach

huge need to take coaching as a development

a multicultural and international environ-

(MCCT), coach supervisor and a registered

tool in its true meaning. This means to create

ment, taught to think and strategize globally.

ICF mentor coach. She is also the president

the coaching space and time for the person to

“A great addition is the increase of online

and member of the board of directors of the

deeply look for his or her own solution and

content consumption, which is an indicator of

ICF Romania Chapter.

resources, and devise a personal strategy,”

openness to grow,” commented Tabusca.

At the same time, Mihaela Reese, leadership executive coach, thinks that a shift is

In her turn, Iepure says that most requests are coming to her from multinational companies. They want either training in coaching

Elsewhere, Reese believes that the most

commented Reese.

“The most frequent service is business coaching. This is partly because the top

www.business-review.eu Business Review | July 2019

30 COACHING

relevant training, experience or skills. “So to

other key criterion are values like yours. It’s

separate the professionals from the masses,

hard to work with somebody that you do not

you can start your search by homing in on

trust. And if you do not trust them, you might

coaches that have chosen to pursue – and

be tempted to prove them wrong more than to

earned – a credential from the ICF. In lieu of

apply what you learn,” commented Tabusca.

government regulations, the ICF has estab-

by Daiana Stoicescu

Coaching solves specific problems.

Common challenges:

sionals in the field and can one talk about

introduced a robust evaluation process for

an inflation of coaches or not? While the ICF

awarding credentials, which saves you time

Romania currently includes four master certi-

in searching for a coach that has the relevant

fied coaches, 21 professional certified coaches

training, experience, and skills,” explained

and 55 associate certified coaches, Iepure be-

Stoicescu.

lieves that we do not yet have coach inflation.

Moreover, all ICF-credentialed coaches are

“There is a lot of space for working and creat-

expected to adhere to the ICF Code of Ethics,

ing a market: the entrepreneurial zone, public

which includes commitments to professional

sector, education. Romanian culture needs an

conduct, continuing professional develop-

infusion of the coaching mindset: autonomy,

ment, maintaining client confidentiality and

accountability and efficiency are still in high

so on. Should an ICF-credentialed coach

demand and the more professionals we have

breach any part of the Code of Ethics, a

to infuse this mindset the more we can create

complaint may be filed with the ICF, which is

change that is sustainable,” added Iepure.

a reassuring recourse from a client standpoint in case anything goes awry.

My team is not working well together We need a strategy We need a succession plan I received feedback that I need to correct I need to change the culture of my company I need more leadership presence I need to influence people I need to manage my time better I need to develop more leaders I am not getting along well with my manager I want more accountability from my people We need to improve our revenues and profits

managers come from international cultures, where coaching is a norm, and were open and

Does Romania have really good profes-

lished professional standards for coaches and

According to Reese, there is now a more professional cohort of coaches, and compa-

“The coach-client fit is very important

nies are starting to appreciate this. She regu-

for the effectiveness of the coaching engage-

larly sees the ICF standards being requested

ment. So at this point in the coach selection

by companies when they hire a coach, which

process, after reviewing the coaches’ web-

is also a sign that the market is maturing from

sites, you can do a gut-check to get a sense

both perspectives: demand and supply. “If

of who you feel you might resonate with and

companies are truly looking for coaches who

then reach out to those who make the cut for

respect internationally recognized standards,

an initial conversation. During the initial call

they know how to find them. There are not

(or meeting) check whether you feel you can

too many yet, so there should be no inflation

trust this person, whether you’ll be safe being

from this perspective for the years to come,”

completely honest and vulnerable with her

added Reese.

or him. If you can’t, you know the coaching

In turn, Tabusca pointed out that it is not

won’t be as transformative as it could be,”

always about the training you do, but the

added the ICF Romania president.

quality of your practice. And sometimes the

Meanwhile, Iepure says she would encour-

market standards will determine the qual-

even used to receiving this type of support.

age the person to look for professionals that

ity a coaching service has to rise to, which is

Another reason is that large companies have

were evaluated internationally and had a

where she hopes Romania will soon get to as

a development plan that includes top-down

credential (see above) and see two or three

a local market. “I believe coaching is boom-

growth in terms of culture and productivity,

people to choose from. Then she would en-

ing and sometimes people choose coaching

and business coaching is the best way to do

courage the potential client to reflect on their

because it sounds fun, not because they see

this. As a niche for this type of service, coach-

need and have a clear intention or objective

the depth and involvement of this field. But

ing for mom-entrepreneurs or marketing

for the coaching process.

this happens with every new job that is not

coaching are new but increasing in awareness

“Choosing a coach depends primarily on

fully regulated. I do believe, however, this is

the need you are trying to address, but also

a field that regulates itself. If you are a poor

the reason why you want a coach. But if we

coach, the competition will catch up sooner

should know that the field of professional

refer specifically to what you should look

rather than later. So I choose to see the full

coaching (with all of its subsets: executive

for in a coach, I would say relevant experi-

half of the glass. We have a lot of coaches to

coaching, leadership coaching, life coaching,

ence for what you want to work on. Having

choose from. This will give Romania a very

business coaching, etc) is not yet regulated

seen multiple working styles helps a coach in

good generation of coaches in the next year,

like law or medicine, which means anyone

adapting to yours and making a customized

as the current interest trims,” concluded the

can call her or himself a coach even without

plan that will help you reach your goal. An-

Coach4Marketing representative.

and demand,” said Tabusca.

Prior to working with a coach, a person

www.business-review.eu Business Review | July 2019

ADVERTORIAL 31

Romania is the fastest-growing health & fitness markets in Europe “The last trends show that Romania and Health and Fitness Industry have the fastest speed in terms of growth. This is an opportunity for us and we will continue to invest in. It is part of World Class core strategy to continue expanding in order to make health & fitness services more accessible to Romanians, close to where they live and work. Our network expansion is strictly focused on strategic urban locations, and our sales and marketing approaches are closely interconnected with our mission: to inspire more Romanians to be more active more often to live a healthy lifestyle. Our unique market position in terms of physical network, programs and services, combined with our digital tools and presence creates strong member stickiness and satisfaction, and consequently also high retention rates. Our current plan foresees growing our network to more than 90 premium health and fitness centers by the end of 2023. Our main focus will continue to be Bucharest, followed

by Cluj, Timisoara, Iasi, Constanta and Brasov”, said Kent Orrgren, CEO World Class.

The study shows that the healthy lifestyle trend is an increasingly influential factor when it comes to personal time and leisure activities.

8 out of 10 people practicing sports mentioned that they exercised at least 2–3 times per week during the previous year. The main reasons Romanians practice sports are to preserve their health and prevent the occurrence of medical conditions (31 percent), and a desire to improve physical appearance (28 percent).

According to the European Health & Fitness Market Report published

Of the respondents who practice sports in a fitness center, almost

by Deloitte and EuropeActive, the European Health & Fitness Market

60 percent do so 2–3 times a week. The most frequent types of activities

(EU28 countries plus Norway and Switzerland) reached 55.3 million

performed at the fitness center are group fitness classes (53 percent

memberships in 2018 compared to 44.7 million in 2014—an annual

of respondents go to at least one type of class, with the percentage

growth rate of 5.5 percent. On average, 1 in 10 Europeans had a fitness

increasing to 65 percent if we refer to women respondents only) and

membership in 2018.

exercising alone using equipment (35 percent). Around 8 percent go

Together with Daedalus Online, A.T. Kearney conducted an online market survey for World Class to understand the profile of the Ro-

swimming.

Among the respondents who do not have a fitness membership,

manian health & fitness customer. The sample included respondents

three major reasons account for their decision: lack of time (more

(fitness-goers and non-goers) from key cities, aged 18–60 years old.

than 40 percent), lack of financial resources (around 20 percent), and

In terms of development perspectives for the Romanian health &

lack of access (no fitness club in their proximity—15 percent). Still, the

fitness market, there is an increased demand for premium health &

Romanian fitness market remains an aspirational one with 85 percent

fitness clubs, accompanied by higher willingness to pay. By 2023 it is

of respondents that don’t currently go to fitness centers declaring the

expected that an additional 250,000–300,000 new members will join the

willingness to buy a membership in the next 6 months.

fitness market (a 30–35 percent increase versus 2018). The market value

With 36 health & fitness clubs located in strategic location through-

in 2023 is projected at EUR 360–380 million (a 45–55 percent increase

out 7 of the most important Romanian metropolitan areas, World Class

versus 2018).

remains the largest health & fitness network, continuously expanding

On the Romanian health & fitness market there is only one domi-

to reach with the strongest team of health & fitness professionals

nant player, with 36 clubs, three more to be opened in 2019 and pres-

(over 400) and the most consistent corporate wellness program offer

ence in more than one city—World Class. With over 64,000 members

at national level. World Class development plans for the next 5 years

(about 7 percent market share in terms of members), World Class is

include reaching over 140.000 World Class members and over 90 clubs

active in the premium segment and market leader in terms of network,

in strategic and premium locations across Romania that have suitable

membership, and revenues.

catchment areas to ensure healthy performance of the clubs.

www.business-review.eu Business Review | July 2019

32 INTERVIEW

Romanian financial regulator ASF looking actively at risk and FinTech, planning to implement Cloud Computing integrated system The president of the Romanian Financial Supervisory Authority (ASF), Leonardo Badea, tells Business Review about the approach of both governments and private companies to cryptocurrencies and how AI will influence the labor market in the future.

By Anca Ionescu

Are cryptocurrencies suitable as national currencies?

system. While Nouriel Roubini continues with

have been contemplating the possibility of is-

his passionate assertion that 99 percent of

suing digital currency. Sweden’s central bank,

According to some sources, the first open

cryptocurrencies are worth ZERO and that it is

Riksbank, is wrestling with this issue right

source bitcoin client was released on January

fintech, and not blockchain, that will innovate

now. Mobile payment apps have exploded in

9 2009. Today, more than ten years later and

the banking system, Fidelity, one of the larg-

popularity in Sweden, and cash use is declin-

after some huge ups and downs in the value

est mutual fund managers, had just launched

ing so quickly there that Riksbank researchers

and popularity of cryptocurrencies, it still

its crypto trading desks, and the Bill and Me-

think it may be just a few years before physi-

seems that economists and digital innova-

linda Gates Foundation has announced a part-

cal banknotes are no longer accepted by most

tors are divided on their role and on the role

nership with Ripple’s Interledger for mobile

retailers and households. The People’s Bank

of blockchain technology in the financial

payments. Recently, some major central banks

of China also appears to be aggressively devel-

www.business-review.eu Business Review | July 2019

INTERVIEW 33

oping a digital currency. Last year it launched

Are businesses ready to be disrupted?

it is less dramatic, slower and more positive

its Digital Currency Research Institute, and

The business sector, or at least some seg-

than was anticipated some years ago when

it has recently been recruiting cryptography

ments and members of the private economy,

discussions started in the global arena. We

experts to help it create a new form of money

will always be more willing to accept risk in

now understand the limitations that AI has, at

that is cheaper to handle and easier to trace

search of profit or lower costs. This has been

least for now, which make human labor still

than cash. As regulators, we are also very

especially true in the last couple of years

irreplaceable in many areas. For such reasons,

prudent about developments and products/

since competition increased significantly and

the use of AI and robotics is now perceived

instruments that are not yet fully understood,

cost reduction became a necessity in many

a little more positively than it was five years

especially regarding their implications on the

areas of the economy. Today banks, insur-

ago.

financial system and stability. For this reason

ance companies, stock market intermediar-

“Due to” the increasing role of AI in the

my opinion is positive but reserved.

ies and asset managers are forced to explore

future (please note that I am not using the

ways to cut costs or face being pushed out of

word “because”) we might see an increase

Are governments willing to be disrupted?

the market in a few years, by competition. So

in efficiency and productivity (which, by

Governments and especially financial market

they are already adopting new technologies,

the way, has been seriously slowing or even

supervisors, including us, are torn between

not necessarily cryptocurrencies. And we

lagging behind, at a European and global

trying to be on top of financial innovation, fa-

have numerous examples. So I suspect some

level, for some years) without the most feared

cilitating market developments and the need

companies are more willing to try major steps

negative implications on the labor force and

to safeguard financial stability at all costs.

in this direction and to risk disruption.

the level of individual income. It could be that people will be able to work fewer hours

This has not just been happening for the last

but be more efficient, have more time for

the last 50 years (for example, the originate-

What will the economy look like when AI replaces labor?

to-distribute models, mortgage-based securi-

This is a somewhat different topic, broader

development, do work that is more motivat-

ties, SPVs etc). Now, after so many learned

than the previous questions. The implica-

ing (using their creativity) and less annoying

lessons, I think that governments and super-

tions of embracing and using AI for the

(like repetitive tasks). Unfortunately we still

visors are at least a little bit more conservative

economy and society will be much broader

need to find ways to avoid the impact of AI on

than they were before the crisis and unwilling

and more significant. As for cryptocurrencies,

individual rights (for example, privacy) and to

to be disrupted.

we can already see it happening. Fortunately,

avoid abuses.

ten years, it has been happening for at least

family, leisure, personal and professional

www.business-review.eu Business Review | July 2019

34 INVESTMENTS

Funding by strategic investors needs to find company open to partnership Business Review teamed up with Schoenherr last month to offer startup and scale-up communities legal and funding advice, as well as success stories from local entrepreneurs, helping players reach their business goals.

By Aurel Dragan solutions and we are now focusing on our scaling business model, which means building a network of implementation partners to scale locally and globally,” said Marinescu.

READY FOR DUE DILIGENCE Attracting investors means having the company ready for due diligence, as Madalina Neagu, partner at Schoenherr Romania, says. “Start-ups may not put emphasis on having signed contracts in the early stages, they often carry out their business based on a handshake, but this should change when seeking to attract investors. The corporate governance will likely witness changes once Speakers from across the industry came together at BR’s Start-ups vs. Scale-ups Roundtable

S

an investor joins the business. Some investors prefer to take a seat on the board of directors, others favour the structure of a board of advi-

peakers from across the industry came

goes back to 2000 when the team led by An-

sors, and founders should expect a certain

together at BR’s Start-ups vs. Scale-ups

drei Damian (current main partner and chief

level of control along with the investment,”

Roundtable to talk about problems and

research officer at Lummetry.AI), was doing

says Neagu.

It is not easy for the founder to adjust to all

solutions that both companies and investors

traditional software development. In 2015 the

can face. The event gave Romanian start-ups

company pivoted to exclusively data science.

these changes. Attracting an angel investor is

and scale-ups access to international know-

“In the past few years we’ve been building

just the first phase, and the following rounds

how and good practices, from legal experts,

our own AI solutions and in 2018 we re-

of financing will likely trigger additional

investment funds and successful start-uppers

branded our company as Lummetry.AI. So we

operational changes. Ideally, owners should

and scale-uppers.

are not acting like a typical start-up who was

be prepared to decrease their stake in their

founded a short while ago,” said Marinescu.

company, which is inherent to the upside of

Or, as Alex Glod, senior trainer and online instructor, who moderated the discussions,

“Luckily, we are in an effervescent

additional funding.

Also, there is a need to build protection

said, “When people hear about investors they

domain. When you say you are doing AI

think only about profit, but the picture is a

everybody is eager to find out more and this

into the contract for the minority shareholder

lot bigger. So we are here to talk about more

opens doors. We had the chance to get a

and the exit scenario needs to be aligned with

important issues.”

business angel on board who felt more like a

both the founder’s interest and the inves-

partner than an investor. It is more important

tor’s interests. The exit routes should be well

AI FOR DEEP LEARNING TECHNOLOGY

to have someone like that on your side, and

anticipated in the transaction documents.

Cosmin Mihai Marinescu is the managing

not an investor who just wants control of the

Among the exit choices, an IPO may also

partner and leads business strategy and

company, detailed reports and to impose his

be a feasible scenario, in which case careful

development at Lummetry.AI, a company that

vision. The successful way to do it is founders

consideration should be given to the regula-

uses artificial intelligence for deep learning

executing their vision with the support of the

tory requirements. “Looking at the market

technology in order to build solutions to real

angel’s networking and expertise. We already

developments, we’re witnessing an increase

business problems. The company’s history

have local and global customers for our AI

in the number of business angels and venture

www.business-review.eu Business Review | July May2019 2016

INVESTMENTS COVER STORY 35 14

capital funds looking to provide early-stage

is to look at similar companies. When I was

CHASING UNICORN STATUS

funding, which should allow entrepreneurs

in the capital market, we looked at Poland

Chasing unicorn status is one of the advan-

more choices in attracting the right invest-

to see how our market would develop in the

tages of IT companies, as Cristian Logofatu,

ment partner,” says Neagu.

following years. It is also good to tell the in-

co-founder and CFO of Bittnet, says. “If you

vestor about the transactions that have been

are in the tech business, you have the advan-

IPO FOR EXIT

made with similar businesses – this way, the

tage that investors are chasing ‘unicorns’. It

The overall strategy is important to discuss,

investor has a pretty good idea of the market

is important to explain why your company is

as well as the exit, in order to establish long-

context and the scale. If you can give similar

able to deliver that status, even though the

term plans and identify potential conflict

examples from the region, in Poland or Hun-

probability is 0.0001 percent or something,”

areas, Thomas Kulnigg, partner and head of

gary, it would be a lot easier for the investor to

says Logofatu. “In the first few years, when

technology and digitalization at Schoenherr

understand what they can achieve,” says Cio-

you don’t have to show turnover or profit, it

out to be very expensive for the founder of he

cirlan. The more specialized a company is, the

is very easy to present yourself. But after that

start-up,” he cautions.

better it is for an investor as they look to work

you must have the numbers when you try to

with entrepreneurs, and it is best when com-

find investors. Usually, the revenues grow

TOP TIP: LOOK FOR EXAMPLES IN THE REGION

panies are prepared to do that. “If you want

constantly, but expenses grow in steps or

to grow slowly, the bank is your best partner,

leaps. And there is a gap that must be covered

Equiliant Capital, the fund set up by the

but if you want to develop more quicklyd we

by outside financing. In some areas, tech

Dedeman owners, does not invest in start-

are there to support this acceleration moment

not included, Romania is 20 years behind

ups, but in scale-ups, as Laurentiu Ciocirlan,

in the life of the company,” says the managing

developed countries, which is a good thing

managing partner at Equiliant Capital, says.

partners of Equiliant.

because you have a printed roadmap for your

Attorneys at Law, says. “Venture capitalists will typically seek an exit via M&A or IPO, whereas strategic investors may not be interested in an exit at all. Also, founders should disclose known issues and risk, such as legal, HR and tax, to avoid liability risks for them,” says Kulnigg.

It is no surprise that founders are usually afraid to lose control over their company.

“But while this is a legitimate interest, they should also ask themselves: do you want to be king or do you want to be rich – because an investor, in particular a financial/professional investor that invests other people’s money, will require a certain level of control over the company. So you have to give away some control of the company, if you want to raise funds,” says Kulnigg.

“Founders have to understand that funding comes at a certain cost – also in relation to their advisors. Saving advisor fees can turn

“So we look for companies that are still small

“There is no real recipe to how to find an

business for the coming years,” says Logo-

in absolute terms, but big in their business.

investor. You must be honest and open and

There are niches in the market where with

not go for the easy guys; you should keep in

EUR 20-30 million you are the market leader,

mind that the investor’s return is your return.

because it needed new funding. “We thought

even though in scale you are not a big com-

There is a saying: when you build a house,

in 2014 that the economy would continue

pany,” says Ciocirlan.

don’t go cheap on the architect. It is the same

growing so we wanted to accelerate the com-

for an investment fund; the company should

pany’s growth. On AeRO at BVB you can float

they want to do, where they want to take the

have a good advisor or consultant in order to

a small company, and we had a few million

business. It is important for the founder to

be successful. The consultant is the one with

RON in revenues and profit. We thought that

do their homework and make the investors

the experience who can tell the owners of the

the stock market would give us continuous

excited about their business,” says Ciocirlan.

company what they can and cannot do,” says

access to patient capital, which we got in

Ciocirlan.

small steps,” says Logofatu.

“We are always asking founders what

“A suggestion for those looking for funding

fatu.

Bittnet chose to list on the stock exchange

www.business-review.eu Business Review | July 2019

36 TOURISM

When in Romania: top tips for travelers As the holiday season approaches, BR takes you on a whistle-stop tour of some of Romania’s highlights, from its rustic reaches to the crowded capital. Whether you’re fresh off the plane or have lived here all your life, there’s plenty to see, do, eat and drink in this colorful country.

By Paul Barbu

Bran Castle - the fortress that inspired Bram Stoker to write about Dracula

TRANSYLVANIA, FROM DRACULA TO DACIANSJ For many foreigners, Romania is practically

of Bears, the Biseat Bridge, and the Crystal Cave,” says Corboianu.

He has a special focus on the traditions of

synonymous with Transylvania, the roman-

the Romanian people. Through his proj-

tic region popularized by Bram Stoker in his

ect Proud of Romania, tourists will go this

famous novel Dracula.

summer to Bistrita Nasaud County, where

Costin Corboianu’s company, Travel Va-

they will spend three days visiting the most

cante, offers Romanian and foreign tourists a

important attractions, including the memo-

series of tours in Transylvania, from the east

rial houses of major Romanian writers, the

(Bistrita Nasaud, Mures) to the west (Timis

Guards’ Museum, and Colibita Lake, while

and Bihor).

meeting authentic folk craftsmen of the

“We have tours lasting between five and seven days, in which we reach the most

region. Everything will end with a tasting of palinca and the famous Lechinta wine.

important landmarks of this area, and here we are talking about castles, natural reserves

FORTIFIED CHURCHES

and also popular cities such as Cluj-Napoca,

The remaining fortified Saxon churches in

unique church in the Romanic style, built by

Oradea, Arad, Sighisoara and Brasov. For tour-

the region number about 250, seven of which

the Saxons.

ists we also have trails that include a number

are UNESCO World Heritage Sites. But even

of lesser known natural reserves, such as the

excluding these jewels, there are extraor-

brought to the Hungarian kings, they were

caves in the Apuseni Mountains, the Cave

dinary churches to visit, such as Herina, a

settled at the crossroads separating the Hun-

“It is known that when Saxons were

www.business-review.eu July 2019 Business Review | May 2016

COVER TOURISM STORY 37 14

Barsana Monastery in Maramures

The house in Sighisoara where Vlad Tepes, also known as Dracula was born

Romania called The Most Beautiful Roma-

Fortresses, and the well-known monaster-

nian Villages, where tourists can see the ten

ies Agapia, Varatec, Bistrita (Neamt County),

most beautiful villages in Romania. Apart

Moldovita, Sucevita, Voronet, and Humor

from Cirnea, which was the first Romanian

(Suceava County).

touristic village, there are also Rimetea, Bot-

“For the monastery tour we recommend

iza, Cazanesti or Ciocanesti, where we made

staying in the Fundu Moldovei area (Suceava

an entire circuit for tourists who wanted to

County), in Cerbului Domain, the Gura Hu-

garian kingdom from Moldova and Tara Ro-

discover the rural Romania. In the summer

morului Area, and Inima Bucovinei Boarding

maneasca. We also have a separate program

months, we plan to visit Dabaca fortress, the

House. It is possible to follow mountain and

for the fortresses and fortified churches in

mining town Baia Sprie, Blue Lagoon (a lake

ecotourism trails in the Ceahlau National Park,

Transylvania, so we will go to Prejmer, Valea

formed in a sand quarry) and Tara Oasului, a

and we recommend staying in Brates, Tarcau

Viilor, Biertan, Calnic, and Darjiul, the only

region where all traditions are kept alive. And

(Neamt County), Rodna Mountains, and the

Szekler church included among UNESCO’s

on the subject of nature reserves, in the Sebes

Calimani Mountains,” said Maria Stoian,

World Heritage Sites. We usually see six Sze-

area we have Rapa Rosie and Crisul Gorge,”

president of the National Association of Ro-

kler and Saxon churches. The church at Darjiu

Corboianu added.

manian Rural Ecological and Cultural Tourism (ANTREC).

is very little known, but it is a real jewel that I recommend visiting,” Corboianu advises.

Depending on the duration of the trip or tour specifics, prices start from RON 250 per

MISSION: MOLDOVA In Moldova, experts say tourists should not

FOLLOWING THE WINE ROAD

miss: Bicaz Gorges, Neamt and Suceava

The Ministries of Tourism in Romania and

person and reach some RON 1,200 per tour.

If you’re after culinary experiences, Romania has unique areas. But you cannot talk about food without mentioning wine, and in Transylvania there are two such areas, Jidvei, where wine was brought by the Saxons, and the Recas area where it was brought by the Banat Swabians. In Transylvania, where fattier food is more popular, there is no borsch, but soup. Over 70 percent of traditional dishes are cooked with milk or sour cream and, of course, no table is complete without a bottle of palinka (fruit brandy).

VILLAGE LIFE “We have a very interesting offering that brings together all the historical areas of

Inside Rasnov fortress, situated at the border between Tara Romaneasca and Transylvania

www.business-review.eu Business Review | July 2019

38 TOURISM

The bisons nature reserve in Neamt County

The entrance to Agapia Village

the Republic of Moldova have established a

modation at the Viorica agrotourist board-

hospitality in Moldavia. Do not miss popular

partnership promoting the “Stefan cel Mare

ing house, which is especially popular with

portraits, local folklore dances, and visits to

Route”. This includes tourist attractions and

foreign tourists.

the historical, cultural and natural sites of the

destinations related to the history of the Mol-

“We also recommend visits to the Lamp

area.

davian ruler as well as vineyards, 24 historical

Museum in Campulung Moldovenesc, the

In Botosani, on December 31, the com-

and cultural sites in Romania and about ten

Workshop of the Craftsman Ionela Lungu

mune of Vorona hosts the Winter Dining and

in the Republic of Moldova, including: Putna

from Neamt Fortress, Ion Creanga’s House in

Customs Festival, where tourists flock to

Monastery, Neamt Fortress and Iasi Palace of

Humulesti, Bojdeuca lui Creanga (the house

discover the traditions of Botosani. The event

Culture.

where the writer lived between 1872 and

includes a parade of mascots, the promotion

1889) in Iasi, and Eminescu’s Linden Tree,”

of winter gastronomy, and traditional music.

“For wine routes, for example, the best time to visit is in autumn when tourists can

added Stoian. Prices start at RON 150 / room

take part in picking grapes, see how the wine

/ night, including breakfast, depending on

is made, pick fruit from orchards and other

season, activities etc.

similar activities. Summer is best for hiking in

HANU ANCUTEI, THE OUTLAWS’ GATHERING PLACE The inn called Hanu Ancutei, which boasts

nature in the mountains, and winter is loaded

TOP FESTIVALS FOR FOREIGN TOURISTS

three centuries of tradition, looks like time

with traditions and customs, especially

Every autumn, in Oituz, Bacau County,

stood still. Rooms have a medieval look that

around the winter holidays. The same goes

ANTREC organizes the gourmet Pies Festival,

is surpassed only by the atmosphere created

for spring when Easter is popular with tour-

as well as the promotion of traditions and

by the musicians playing centuries-old songs.

ists, especially since we are in the homeland

historical settlements in the Oituz step and

And the food is highly reputed: locals say that

of the painted egg,” the ANTREC chief said.

AN EGG-CELLENT ATTRACTION ANTREC Romania has promoted the area of Ciocanesti, Suceava County, for over 25 years.

The Trout Festival is held this area, around the feast of St. Mary, an occasion on which the area is celebrated on the Bistrita Aurii shore. Ciocanesti stands out as a true open-air museum, where the houses are “painted” like Easter eggs and boast decorations specific to Bucuvina.

In Ciocanesti tourists can also visit a museum of painted eggs, see exhibited dowry boxes, trout farms, and follow hiking trails in the Suhard massif. To make the most of Ciocanesti, ANTREC recommends accom-

A table in Hanu Ancutei

www.business-review.eu Business Review | July 2019

40 TOURISM

if you don’t love Moldova for anything else you will love it for the food.

nians) must be “tasted” at least once in life.

Those who prefer to stay close to civiliza-

takes more than an hour. This is inhuman from a tourist point of view. We have several

tion can choose the “wild” atmosphere of the

apartments for rent in the center of Bucha-

is placed in the middle of your table, amid

Romanian seaside, where, from Mamaia to

rest, at University Square, and from there we

distinctly tasting dishes. On one side you will

Vama Veche, the fun doesn’t stop all summer.

organize city walking tours because generally

receive cheese, sour cream, bacon and a fried

The white nights in Mamaia are surpassed

if you want to do it by car it is very difficult,”

egg. On a wooden platter an array of meats

only by the rock and folk of Vama Veche,

said Dan Anghelescu, owner of La Piovra

will wait patiently to be tasted, all washed

where the beach is home to adventurous

Turista.

down with a cold glass of local wine. Or, if you

youngsters who sleep off the excesses of

An unsalted polenta like a smiling sun

His firm runs trips around Bucharest,

think you can take it, try a few small glasses of tuica – but don’t blame us if you quickly get merry!

A room costs no more than EUR 30, and if you want to dine like a king with a table full of Moldavian goodies it will likely set you back less than EUR 50.

Periodically, Hanu Ancutei, in Tupilati, Neamt, organizes Romanian evenings, being a cultural and tourist landmark of the Neamt lands. The owner won the Golden Margarita Award for Gourmet Diversity and Culinary Experiences.

Also in Neamt, tourists can visit the Targu Neculai Ethnographic House-Museum, where an exhibition of hundreds of masks of various shapes and colors will delight tourists.

DOBROGEA: THE DANUBE DELTA AND THE SEASIDE

the night before to the gentle lapping of the

the bestselling of which is Two Castles, One

waves. The wine cellars in Dobrogea are also a

Day, on which tourists leave in the morning,

must-do for oenophiles.

visit Peles and Bran castles and pass through Brasov before returning to Bucharest. The

Nature lovers should head for the Danube

BUSTLING BUCHAREST, THE GATEWAY TO ROMANIA

12-hour trip with an English-speaking guide

vealed. Rare or unique animal species in the world make their homes in one of the largest

Bucharest is getting harder to visit because it

Tourists who do not speak English can use

deltas on the continent. Tourists can take a

has become very crowded. “With very small

videophones with the same explanations in

ride in a local’s cart along the sandy paths of

groups, we can go on foot, but it is indescrib-

German, Spanish, Italian and French.

the Letea Forest. Lipovenian traditions (spe-

ably busy: cars, bikes, scooters. A simple

cific to Russian ethnic groups called lipove-

transfer from the airport to the city center

Delta, where a true ecosystem will be re-

includes transport and entrance to the sights.

“We offer traditional dinners at Hanul lui Manuc, Caru cu bere, and Teresa Doamnei.

We have set menus ranging from EUR 30 to 55,” Anghelescu told BR. He added that the problem with Bucharest is that it is a last-minute destination, and the average duration of a stay is 1.9 days. In general, it is a departure or arrival port, so there is still work to do, as it’s very difficult to build good quality services over 1.9 days. For last-minute prices, services cannot be of the highest quality.

However, the capital has over 600 tourist attractions, of which, unfortunately, only ten are promoted. According to Oana Danaila, director of the Bucharest Municipal Tourist Company, the city lacks information centers and foreign travelers do not stay for more

Waiting for the sunrise at Neversea Festival

than two or three days because they do not know what to visit.

www.business-review.eu Business Review | July 2019

FESTIVAL 41

One of a kind: Vertigo brings high-quality anniversary show to Sibiu Vertigo Dance Company is staging a special performance to mark its 25th anniversary, entitled One. One & One. The dance show is renowned for its extravagant music, decor, costumes, and lights, and that’s before the real dance starts. The Israeli troupe is returning to Romania under the umbrella of the Sibiu International Theatre Festival.

By Oana Vasiliu

T

his new original offering, by choreographer Noa Wertheim, revolves around an individual’s inner wish to

be whole whilst being constantly challenged by a fragmented reality within the personal, existential and spiritual realms of one’s being, say organizers.

One. One & One reflects both the internal and external worlds whilst paying attention to the echo as reflected from different perspectives, as the piece develops the metaphorical relationship between far and near and self Photo: Paul Baila

and the other, they add.

The show is also a sensory experience, with the performance taking place on a stage

Photo: Sebastian Marcovici

Photo: Paul Baila

Photo: Vlad Dumitru

Photo: Paul Baila

covered by soil.

www.business-review.eu Business Review | July 2019

42 FOOD EXPERIENCE

Food for thought: young chefs shake up old classics For some time now, forward-thinking chefs have been reinterpreting classic Romanian fare in original, one-of-a-kind dishes. It started slowly in the capital, but there are now restaurants serving “new Romanian cuisine” in Sibiu, Brasov, Cluj-Napoca and Targu Mures, to name but a few. BR donned its napkin to find out more.

Photo courtesy of Fragmente

By Oana Vasiliu

Reinterpreting Romanian cuisine

INTERNATIONAL APPROVAL: GAULT & MILLAU GUIDE

more and more interested in quality gastro-

CHEF’S SPECIAL

nomic experiences and that there is an evolu-

While in 2018 the Chef of the Year was Alex

June saw the release of the second Romanian

tion of culinary concepts which Romanian

Petricean from Maize – from Farm to Table

edition of the international restaurant guide

restaurants and chefs provide.”

(currently cooking at Noua restaurant), the

Gault & Millau. The guide is focused on “nou-

The move was hailed as the first sign that

accolade this time goes to Alexandru Dumitru

velle cuisine”, stressing the freshness of the

Romanian cuisine is getting more and more

of Bistro Ateneu (formerly known from Atra

ingredients, the simplicity of their overlap-

creative, while using international standards

Doftana), who received 15.5 points out of 20

ping in a dish, innovation, and the way they

to evaluate local restaurants serves as an ac-

from the international guide. Great Chefs of

lend flavor to one another. Gault & Millau is

knowledgment of the national cuisine, as we

Tomorrow were named as Andrei Chelaru

the first internationally recognized restaurant

seek to analyze the current culinary universe

of Fragment (Cluj-Napoca), who is currently

guide to have entered the Romanian market.

in Romania. Furthermore, the 2019 edition of

doing an internship at Denmark’s Noma,

At the launch of the first edition in November

the guide listed 275 new restaurants with 15

said to be the most famous restaurant in the

2017, Côme de Chérisey, CEO of Gault & Mil-

new towns and cities introduced, versus just

world, Radu Ionescu of Kaiamo (Bucharest)

lau, said, “We have seen that Romanians are

154 eateries in the first edition.

and Roland Suciu from Baracca (Cluj-Napoca).

www.business-review.eu Business Review | July 2019

FOOD EXPERIENCE 43

Furthermore, Woman Chef of the Year is

New Nordic Cuisine. Nordic chefs have their

our stews, it might be a better idea to try the

Oana Coanta from Bistro de l’Arte (Brasov),

own manifesto: exclusive use of national and

opposite: use Western cooking techniques on

while Pastry Chef of the Year is Ana Consulea

even regional ingredients. Therefore, when

Romanian ingredients. What’s more Roma-

from Zexe Braserie (Bucharest). Those whose

they want to sour something, they don’t

nian than polenta?! And what’s so difficult

budgets stretch to it are well advised to try

use citrus fruits, even though lemons have

about baking polenta in an oven, much like a

their fare.

become a kind of universal ingredient. What

pizza?! In all its varia-tions! I’d call it ‘pizzalenta’.”

Journalist Dragomir, a food historian who writes about local cuisine on www.gastroart. ro, told BR: “Modern Romanian cuisine has two major subcategories: one where the dish presented is the re-sult of modern cooking techniques and ingredients from local production, and a traditional, old-fashioned dish, similar to what we know from our childhood, cooked in a modern way but pre-served unal-

Photo courtesy of Fragmente

tered, with the original taste. You cannot cook carp on cabbage using sea bream and Brussels sprouts. (…) We have managed to develop new gastronomic of new gastronomic emotions like the new Nordic cuisine manifesto or the new Anatolian cuisine, but we are still far away. I’d love to learn from their mistakes and not make them. Tourists should expect savory products offered by a remarkable ter-

A TASTE OF NEW ROMANIA

stops us from souring food with unripe grape

roir and a taste that includes Eastern, Slavic

To judge by the menus of most local restau-

juice (known as ‘agurida’, the French ‘verjus’,

and Central European influences. An unusual

rants, Romanians are big fans of pizza, pasta,

which they used for centuries, but forgot in

but tried-and-tested combination that can

Macri quoted Cosmin Dragomir, writing

time)? Or, an even better suggestion, who still

provide an exciting experience for any type of

in Dilema Veche, who made fun of these very

sours food with mirabelle plums (‘corcoduse’)

papilla.”

rapidly introduced excesses: “‘Oltenia stew

juice? No one. This return to local ingredients

with shrimp’ or ‘shepherd’s squid’. If they

gives birth to unique recipes and reintroduces

ROMANIAN FOOD IN VOGUE

weren’t ridiculous, they’d be surrealist. (…)

value to today’s neglected prod-ucts. Last

The beginning of the year brought encourag-

A better idea would be inspiration from the

but not least, before we introduce shrimp to

ing news for Romanian cuisine: Vogue Paris

burgers, chicken and pork. So does the “RoPhoto courtesy of Gault&Millau

manian new cuisine” have a public? Business Review asked food journalist Vlad Macri to outline it. “Being still in its inception, it’s still very chaotic. The modernization of Romanian cuisine entails many initiatives, which often contradict each other. To begin with, over a decade ago, Romanian chefs realized they should reduce the volume of lipids, which is the main caloric source of our traditional dishes. Sarmale with 80 percent fatty pork meat has become “diet”, with lean beef becoming the most important part of that recipe. At the same time, a more minimalist approach to Romanian recipes was adopted: let’s stop throwing eight sarmale and a Mount Everest of polenta onto the plate, but just three sarmale and one or two spoonfuls of polen-ta. (…).”

www.business-review.eu Business Review | July 2019

Photo courtesy of Fragmente

44 FOOD EXPERIENCE

Starter served at Fragment in Cluj-Napoca

One of the side-projects of Sibiu European Gastronomic Region

magazine included Ibrik Kitchen in its Janu-

tastes and stories (currently available only in

year is half over and little has happened. But

ary list of “Nos 5 restaurants du moment à

the Romanian language) are worth mention-

things are looking up, as at the beginning of

Paris.” More international magazines followed

ing: Claudia Romana Rista (known for her

June, the County Hall announced that RON

suit. What’s the key to success in the world’s

cooking blog Fata care gătește cu flori) and

1.25 million had been allocated to the project,

fashion and gourmet capital? The Romanian-

young chef Mihai Toader and musician Bog-

giving several city halls from Sibiu county as

born owner Ecaterina Paraschiv explains in

dan Simion, who film the Fragmente vlog.

well as NGOs promoting traditions and local

an interview that it’s mici (specially cooked

In an attempt to unearth old recipes

food the funds to hold events to boost local

minced meat), sarmale (minced meat rolled

hidden in grandma’s country kitchen, Rista

in cabbage leaves), and papanasi (a dough-

looked in the Romanian villages where mi-

nut with jam and sour cream). Food blogger

nority communities still preserve some of the

hind the project have put in little effort so far.

Alexander Lobrano notes on his blog that the

best recipes. With the help of Profi supermar-

Recently, there was a buzz about the visual

place offers the “excellent ‘neo-nostalgic’

ket, she has already launched two cooking

identity of the event: a flower made from the

Romanian cooking of chefs Ovidio Malisevs-

books full of tasty stories: the collection is

famous Sibiu salami with a real butterfly on

chi and Bogdan Alexandrescu a.k.a. Dexter

available in the supermarket chain, evocative-

it and a girl dressed in a ham and salad dress

chef (check out his Instagram feed: https://

ly entitled Zestre culinară (Culinary Dowry).

were the talk of the country, and not in a good

www.instagram.com/dexterchef/). So instead

Also on the hunt for hidden recipes is

gastronomy.

The general impression is that officials be-

way. But officials from the Sibiu European

I’ll only say that this dinner was not only

Toader, with the help of Simion, the young-

Gastronomic Region (basically all the public

the best non-French meal I’ve had in Paris

est cobza players in Romania. Their videos

institutions in Sibiu) declined to comment.

dur-ing the last twelve months, but one of the

encompass traditional music and slow food.

But the incompetence of the authorities

best ones full stop. In fact, this art-gallery-like

But there is more: you can actually taste the

of Sibiu county cannot detract from a com-

little restaurant on a side street in the Sentier

chef’s interpretation of the discovered reci-

munity of chefs cooking with local products,

came as a delightful surprise in almost every

pes, and the online video content presented

and promoting slow food without the help

way. And now when people ask me what

also appears at pop-up dinners in random

of the endorsement of the public authori-

‘foreign’ kitchens I recommend eating during

venues across Bucharest with Toader cooking

ties. In their restaurants, real effort goes into

a trip to Paris, Romanian will now join the

and Simion singing.

finding local producers who can provide constant ingredients for their menu – and this

usual Israeli, Moroccan, Tunisian, Laotian

is the biggest challenge, as they undertake

nia’s gourmet ambassador and doing such an

LEAVING A SOUR TASTE: SIBIU EUROPEAN GASTRONOMIC REGION 2019

incredible job.

It’s still an enigma what happened with

the menu every week. BR was particularly

something that should have been another

impressed by Syndicat Gourmet (chef Ioan

TRIPPIN’ FOR FOOD STORIES

boom for the Sibiu region. Instead, the Sibiu

Bebeselea), Hochmeister (chef Daniel Joa),

Documenting the history of Romanian cuisine

European Gastronomic Region 2019 event has

Kombinat Sibiu (chef Mihai Toader), and Pasaj

and its influences, two impressive sources of

been written off as a failure, given that the

(chef Andrei Luminea).

and Vietnamese.” Chapeau for being Roma-

the seemingly impossible task of changing

www.business-review.eu Business Review | July 2019

FESTIVAL 45

Sounds good: Electric Castle opens up to hearing-impaired visitors One of the best pieces of news emerging from the impressive schedule of festivals happening in Romania this summer is that Electric Castle has become the first music festival to be accessible to hearing-impaired people, giving them support to enjoy a fully-fledged experience of the event, from the gates to the main stage.

By Oana Vasiliu describes the “density” of the sounds, outlining different bass rhythms at the highest frequencies.

“It is a big step forward that we are taking in our relationship with people with disabilities and yet another way we want to convey that everyone is welcome to join the Electric Castle community. Until now, we have had this kind of audience with us only during the day when we created areas dedicated to activities and the arts. Now we can offer such visitors the full experience of what Electric Castle means and enjoy with them the power of music to unite, regardless of our identity,” says Andi Vanca, the festival’s director of communication.

People with hearing impediments, like all visitors with disabilities, have enjoyed free ac-

A

Surely not to be missed event

ccording to Electric Castle officials,

cess from the first Electric Castle. The festival has dedicated areas for them and continues

From the entrance to the main stage

to invest, each year, to make the entire area a

more than 23,000 Romanians are

shows, the festival will provide assistance to

safe and accessible area for all types of audi-

living with some sort of hearing im-

any hearing-impaired attendee. The teams at

ences.

pediment, and restrictive access to cultural

the access gates will include a sign language

events is just one of the forms of discrimina-

interpreter, with sign language also being

WHAT NOT TO MISS

tion that they face each day. That’s why the

accessible at the info point area and the main

Highlights include conceptually innova-

organizers of Electric Castle Festival want to

stage. Amber Galloway Gallego, the world’s

tive stages, lighting, technology, and arts to

disprove the myth that a hearing-impaired

best known sign interpreter, will translate

help break down the boundaries between

person cannot appreciate music or connect to

all the songs of the artists performing on the

electronic music, reggae, pop, and rock, as

this type of art. “For the Romanian public, it

main stage. Gallego caused a stir in 2013 when

artists ignite the spectacular and unique

is time to remove the barrier between people

she made one of the first performances in her

surroundings for five days. Florence and the

with healthy hearing and those with a hear-

field at Kendrick Lamar’s concert at Lolla-

Machine, Thirty Seconds to Mars, and Bring

ing impairment, and Electric Castle hopes

palooza, sending a powerful message to the

Me The Horizon headline this year. Last year

that its example will be followed by as many

world about a new way for everyone to enjoy

over 212,000 people flocked to the festival.

musical events as possible,” say the organiz-

live music. She not only interprets song lyrics

The event takes place at Bontida Castle, Cluj

ers.

but has developed a language that visually

county, from July 17-22.

www.business-review.eu Business Review | July 2019

46 CITY

Cultural calendar Garana Jazz Festival July 11-14, Garana, Caras Severin county

By Oana Vasiliu

Castle redefines the way people interact with a music festival, breaking down the boundaries between electronic music and reggae, mainstream and subculture. The Castle of Bontida (Cluj county) will host Florence and the Machine, Limp Bizkit, Nils Frahm, Thirty Seconds to Mars, and Bring me the Horizon, among many others. Subscription costs RON 600.

Four days in the Semenic Mountains, 40 mountain bike paths, dozens of square kilometers of lakes, forests and open sky. And

Open Air Blues Festival July 18-21, Brezoi, Valcea county

ART Mania July 26-27, Sibiu

manian festival to have brought on the local market the concept of combining art with entertain-

jazz, of course. A lot of jazz, the

ment, is a platform dedicated to

best jazz of today from artists

promoting all forms of artistic

that you know or that you will

expression inspired by rock

discover this year, including

culture. Dream Theater, Opeth,

Jan Garbarek Group feat. Trilok

Architects, Alcest and many more

Gurtu, Jeff Berlin, Dennis Cham-

will take to the stage. Subscrip-

bers, John Surman, Luiza Zan,

tion costs RON 320, while a day

Giovanni Guidi, Thomas Morgan,

ARTmania Festival, the first Ro-

Bobby Previte, GrĂŠgory Privat, Renaud Garcia-Fons & Dorantes,

The Open Air Blues Festival in

Jacky Terrasson, Paolo Fresu &

Brezoi, Valcea county, will wel-

Lars Danielsson, Maciej Obara

come blues greats, from head-

and Per Mathisen. A one-day

liner Beth Hart to Oscar Benton,

ticket costs RON 85, while the full

Diana Rein and more. The road

subscription is RON 300.

there is charming. Then, the festival offers over 30 of the best

Electric Castle July 17-22, Bontida, Cluj county

blues, blues-rock, jazz, fusion and funk performances as well as four workshops supported by international guests, three dialogue workshops and over 20 jam sessions.

Rock the City July 22, Piata Constitutiei, Bucharest The Cure and the Editors need no introduction. And they are comBy mixing arts and technology

ing to Bucharest this summer to

with an eclectic musical line-up,

Rock the City. God is an astronaut

unique architectural concept and

and Firma will open for the two

the breathtaking scenery of an

musical legends. Tickets cost

amazing medieval castle, Electric

from RON 154.

ticket costs RON 260.