INTERVIEW: Mihai Arghire, partner and senior consultant at training company Brightway, tells BR about the beginnings of the company, how it has outlasted many of its competitors and why he doesn’t regret any of his past decisions »page 19
ROMANIA’S PREMIER BUSINESS MAGAZINE
AUGUST, 2015 / VOLUME 19, ISSUE 8
CHINA CRISIS WITH SUCCESSIVE FINANCIAL TURMOIL IN GREECE AND CHINA, IMF ANALYSTS EXPECT GLOBAL GROWTH TO SLOW THIS YEAR TO ITS COOLEST PACE SINCE THE FINANCIAL CRISIS » PAGE 6
A MONTH OF MUSIC Photo: Vlad Eftenie
The 22nd George Enescu Festival is underway! From the director’s view and full program to the effect on the local hospitality sector, BR surveys the flagship cultural event as the first notes ring out » page 10 TOURISM
EDUCATION
Exotic excursions
A different class
Romanian holidaymakers are increasingly venturing outside Europe to destinations such as the Dominican Republic, Cuba, Indonesia and India
With parental confidence in state educational provision low, businesspeople have spotted an opportunity to import international non-formal education courses » page 28
» page 9
www.business-review.eu Business Review | August 2015
EDITORIAL Anda Sebesi EDITOR-IN-CHIEF
The power of an emerging brand We all know that while it has made many efforts to close the gap with more developed countries, Romania is still an emerging market from all perspectives. But it continues to mature and tries to attract both investors and tourists. And, not surprisingly, in some fields, Romania is a brand – one of which its up-and-coming leaders can be proud. As Oliver Perkins says in his opinion piece (page 24), today there is a new generation of Romanians, brimming with confidence and pride, innovative, entrepreneurial, creative, hardworking and drivers of change. He points out that this comes despite years of economic turmoil, brain drain, and, more recently, bad press in Western Europe. “Perhaps this is one of the reasons why a whole new vibrant community of leaders has appeared on the radar here and abroad – leaders that celebrate openly and confidently their ‘Romanianness’. Initiatives such as the ‘Bucharest not Budapest’, and ‘Why don’t you come over?’ campaigns show how Romanian leaders at all levels are shedding a positive light on their country,” writes Perkins. So what does it prove? We, Romanians, have started to become more confident and try to prove that Romania deserves to be perceived for what it is, with its strengths and weaknesses. Tennis star Simona Halep, film director Alex Nanau, and a slew of cultural events – Untold, Artmania, FITS, Street Delivery, Roaba de cultura and Electric Castle, not to forget the George Enescu Festival – all powerful symbols of Romanian sports, arts and music. And all can be excellent ambassadors for the emerging country brand. The George Enescu International Festival, which is now on its 22nd run, is seen as the jewel in Romania’s cultural crown, showcasing the very best the country’s arts scene has to offer. Many say it’s up there with the great festivals of the world, like Lucerne, the BBC Proms, Salzburg and Aix en Provence, proving the value of Romanian culture. Seven of the twenty greatest orchestras will perform at the festival this year. Audiences will even be able to enjoy the four top orchestras in the world, as ranked by the prestigious British publication Gramophone in April: the Royal Concertgebouw Amsterdam, Berlin Philharmonic, Wiener Philharmonic and London Symphony Orchestra. Beyond its cultural scope, the festival is a great economic engine that generates business for the HORECA segment. For hotels alone, it brings an average 10 percent increase in revenues. And given an average budget of around EUR 500 to 600 per tourist, local hotels and restaurants could cash in over EUR 10 million from the event. In 2013, the George Enescu Festival brought some 20,000 foreign tourists to Bucharest, up from 16,000 in 2011, and both organizers and local hotels and restaurants hope that a similar number will be in town this time around. So let the curtain go up and let the music speak for itself! anda.sebesi@business-review.ro
EDITORIAL 3 Contents 3
EDITORIAL
The power of an emerging brand
6
HIGHLIGHTS
China in investors’ hands
8
REAL ESTATE
New demand for office space up by 35 pct in first semester
9
TOURISM
Exotic vacations generate sunny outlook for travel agencies
10 COVER STORY
First notes of Enescu Festival chime out
12
Enescu, the global way
14
Is the Enescu Festival the best Romanian cultural product for export?
16
Don’t miss at the Enescu Festival
18
Festival is music to the ears of Bucharest hotels and restaurants Enescu Festival launches new app
19 ENTREPRENEUR
Local training firm looks to Bright future
21 AGRICULTURE
Local agriculture left gasping after drought
22 LEADERSHIP
Follow me: what makes a great leader?
24
What can Romania teach the world about leadership?
25 IT
Markus Lause, Vodafone: “Local firms increasingly want to give their staff smart phones”
26 PROFILE
Toasting a ripening wine market
28 EDUCATION
Non-formal education opens its books
29 ENVIRONMENT
Eco-Rom Ambalaje GM: “Recycling should not require public effort”
30 CITY
Calendar
ISSN No. 1453 - 729X PUBLISHER Bill Avery EDITOR-IN-CHIEF Anda Sebesi DEPUTY EDITOR-IN-CHIEF Simona Bazavan EDITORS AT LARGE Anca Ionita, Simona Fodor JOURNALISTS Otilia Haraga, Tatiana Lazar, Laura Grigore, Romanita Oprea, Andreea Marinas COPY EDITOR Debbie Stowe PHOTO EDITOR Mihai Constantineanu LAYOUT Raluca Piscu PUBLISHER Bloc Notes Media ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania
EXECUTIVE DIRECTOR George Moise BUSINESS DEVELOPMENT DIRECTOR Oana Molodoi SALES & EVENTS Ana-Maria Nedelcu, Oana Albu, Valeria Cornean MARKETING Anamaria Radu PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 EMAILS editorial@business-review.ro sales@business-review.ro events@business-review.ro
www.business-review.eu Business Review | August 2015
4 NEWS
NEWSin brief AGRICULTURE Drought generates EUR 2 bln of losses for local agriculture, say farmers The extreme droughts in some parts of the country over the summer have affected local agriculture, leading to massive crop loss costing farmers EUR 2 billion, warned Laurentiu Baciu, president of the Romanian League of Associations of Agricultural Producers (LAPAR). Agrostar, the National Federation of Unions from Agriculture, Food, Tobacco and connected services, has warned that wheat, barley and canola cultures will be most affected, accounting for 30 percent of the damage, but the vegetable and animal sectors would also suffer.
Agricover Credit IFN sees profit rise by 28 pct in H1 2015 Agricover Credit IFN, a non-banking financial institution specialized exclusively in agricultural financing, has reported an operating profit of RON 14.07 million (EUR 3.18 million) for the first half of 2015, 28 percent higher than the same period of 2014. The company posted a net profit of RON 10.2 million (EUR 2.26 million), 27 percent higher year on year, while its funds increased to RON 118.1 million (EUR 26.66 million) from RON 100.1 million. The NPL portfolio stood at 1.2 percent of total loans, while the number of customers rose to 1,653, up 26 percent on the same period of 2014. The exposure value reached RON 679 million (up from RON 580 million in H1 2014), while the capital adequacy ratio stood at 22 percent.
AUTO Automotive trade and market services move up a gear in June The turnover of the automotive trade increased as gross series by 4.1 percent but decreased as adjusted series according to the number of working days and seasonality by 3.9 percent in June against the previous month, according to a report by the National Institute for Statistics (INS). The turnover for market services provided to the public increased both as gross series by 6.2 percent and as adjusted series by 0.7 percent. The increase in auto sales turnover was due to rises in the spare parts and accessories trade (up 5.2 percent), motor vehicles trade (up 3.8 percent), maintenance and repair activities (up 2.7 percent) and mo-
torcycles trade (up 1.7 percent).
ENERGY OMV Petrom sees profits slashed by 25 pct in H1 OMV Petrom (SNP) has reported a 25 percent net profit drop in the first half of 2015 y-o-y (RON 1.04 billion or approximately EUR 234.1 million) as sales fell by 18 percent to RON 8.81 billion (EUR 1.98 billion), the company has announced. The decline comes in the context of falling global oil prices. In the first six months of last year OMV Petrom reported a net profit of RON 1.39 billion and RON 10.72 billion in sales. However, Q2 2015 saw a clear upward trend against the same period of last year, with RON 693 million in net profits (up 122 percent). Sales, however, fell to RON 4.5 billion, 16 percent lower year on year.
Transelectrica net profit down 7 pct to EUR 47.4 million in H1 With financial expenses up 16.5 percent and financial income dropping by 36 percent during the first half of the year, the net profit of state-owned national electricity carrier Transelectrica fell 7 percent to RON 210 million (EUR 47.4 million), according to company data. In H1 2014 the firm’s net profit stood at RON 226 million. Transelectrica’s operating revenues increased by 8.1 percent in the January-June period to nearly RON 1.43 billion, with both operating segments (allowed profit activities and zero-profit activities) seeing advances.
Romgaz takes H1 hit from lower gas demand with 12 pct profit drop The net profit of natural gas producer Romgaz Medias (SNG) fell by 12 percent in the first half of the year to RON 766.6 million (EUR 172.4 million), after a drop in natural gas consumption led to an 11.5 percent reduction in annual business, according to company representatives. In the first six months of last year net profit stood at RON 871 million. The company’s turnover declined by 11.5 percent in the first six months of the year from RON 2.53 billion (EUR 571.2 million) to RON 2.24 billion (EUR 503.7 million) against the same period of last year. According to Romgaz officials, the company’s performance was mainly affected by a decrease of about 6 percent in natural gas consumption on the Romanian market.
FMCG Maspex Wadowice to splash out
on local water bottler Rio Bucovina Polish food company Maspex Wadowice has signed an agreement to take over Romanian water bottler Rio Bucovina, the two companies have announced. The move is subject to the approval of the Romanian Competition Council. The value of the deal has not been made public. It includes the acquisition of the three bottling facilities Rio Bucovina operates as well as the Bucovina brand. The company has a 10 percent share of the local bottled water market, according to AC Nielsen data. Maspex Wadowice owns several juice, instant drink and snack brands in Romania including Tymbark and La Festa, and has been present in the country since 1996.
HEALTHCARE Local healthcare provider Regina Maria to get new owner Mid Europa Partners, a private equity firm focused on Central Europe and Turkey, has announced that it is planning to buy the Regina Maria private clinic network (Centrul Medical Unirea SRL) from its current owner, American investment fund Advent. The transaction is subject to anti-trust clearance and is expected to be closed in Q4 2015. The value of the deal has not been made public but is estimated to exceed EUR 100 million, according to local media reports. With approximately 300,000 corporate subscribers, Regina Maria is a premium private healthcare services operator in Romania with a national presence through 22 polyclinics, 4 hospitals, 11 labs and 5 imaging facilities. It posted a EUR 55 million turnover in 2014 and expects growth of about 20 percent this year.
HR Job vacancies up slightly in Q2 2015 The job vacancy rate was 1.06 percent at the end of Q2, up by 0.03 percentage points quarter on quarter, with the number of vacancies reaching 47,400, up by 2,300, according to data from the National Institute for Statistics (INS). Year on year, the job vacancy rate rose by 0.22 percentage points and the number of vacancies by 11,100. In the second quarter of 2015, the highest rates were registered in public administration (3.17 percent) and in other service activities (2.5 percent).
IT STS launches EUR 7 mln bid for election data collection devices The Special Telecommunications Service (STS) has launched a public tender request estimated at RON 31 million (EUR 7 million) for the acquisition of tablets and supports for ID cards to be used during elections, according to agency officials. The bid includes between 1,000 and 23,000 tablets and 1,000 to 20,000 supports for ID cards, which are to be delivered within 12 months of the signing of the contract. The equipment will be used with a special mobile application developed by STS.
MACROECONOMICS GDP up 3.7 pct in H1, with 0.1 pct increase q-o-q Romania’s Gross Domestic Product (GDP) increased by 3.7 percent (gross series) and by 3.8 percent (seasonally adjusted series) during the first semester of 2015, while in the second quarter it recorded rises of 3.2 percent (gross series) and 3.7 percent (seasonally adjusted series) against the same periods of last year, according to the latest data from the INS. The advance was lower q-o-q, namely a 0.1 percent increase against the first quarter of 2015. The budget for this year was based on GDP growth of 2.5 percent, while the latest estimate of the National Prognosis Commission in May was an advance of 3.3 percent.
Economic expectations for Romania mark highest improvement in CEE in August, finds survey Economic expectations for the Romanian economy posted the highest improvement in Central and Eastern Europe (CEE) in August, according to a survey by the Mannheim Centre for European Economic Research (ZEW) and Erste Group Bank. Both Romania and Slovakia saw the indicator increase to 50 points in August, the highest value in the CEE region, with Romania also reporting the most significant m-o-m improvement (an increase of 18 points in August compared to July). Economic expectations for the entire region, including Turkey, posted a slight increase in August. The ZEW-Erste Group Bank Economic Sentiment Indicator for the CEE region, which reflects financial market experts’ expectations for the CEE region on a six-month horizon, went up by 3.5 points in the August survey, to reach 19.0 points.
Inflation rate down to -1.7 pct following July price cut Consumer prices fell 0.2 percent in July compared to June, while the annual inflation rate fell to -1.7 percent, from -1.6 percent in June, according to data from the INS. Food prices slumped 7 percent compared with July last year, but nonfood products and services recorded
www.business-review.eu Business Review | August 2015
NEWS 5
increases of 1.3 percent and 2.2 percent. In July, 40 percent of goods and services registered a price decrease y-o-y, while 34.5 percent posted increases in the range of 0-2.5 percent. The remaining 25.5 percent recorded rises of over 2.5 percent.
first quarter of 2015. At the same time, its share in the total ADTV of the BVB rose from 26 percent in Q1 (RON 33.5 million) to almost 30 percent in April (RON 34.6 million), given increased interest and trading ahead of the LSE listing.
MONEY
TELECOM
BCR reduces NPL portfolio in H1
Telekom Romania still has widest coverage in Romania
Banca Comerciala Romana (BCR) posted a profit of RON 603.4 million (EUR 135.7 million) while its NPL ratio decreased to 23.1 percent, having stood at 29.3 percent in H1 2014. BCR reported an operating result of RON 778.5 million (EUR 175.0 million) for H1 2015, 28.9 percent lower than the previous year at RON 1,096.6 (EUR 246.4), driven by lower operating income, impacted by a reduced unwinding contribution and slightly higher costs.
Telekom Romania Communications has the widest coverage across Romania. Compared to its competitors, which focus their operations mostly in urban areas, Telekom has a very wide rural coverage, according to data from telecom watchdog ANCOM, quoted by Hotnews.ro. At the end of last year, Telekom Romania Communications covered approximately 91 percent of the total Romanian population. One of its main competitors is RCS&RDS, which covered 62 percent of the populace. Another is UPC Romania, which reached 48 percent.
Banca Transilvania profit up by 5 pct in H1 Banca Transilvania (BT) posted a 5 percent increase in net profit to RON 190 million (EUR 43 million) in the first half of 2015, compared to RON 181 million in the first half of 2014, according to company officials. BT’s gross profit stood at RON 226.31 million (EUR 51.28 million), 8 percent higher than in H1 2014. The lender’s total assets went up by 8.4 percent compared to the end of 2014, reaching RON 38.6 billion, while the operating income reached RON 965.5 million (11 percent higher year on year).
RETAIL Growth pace of durable goods market slows, says GfK The durable goods market in Romania recorded an increase of 6.4 percent in the second quarter of 2015, to reach EUR 449 million, according to the GfK Temax Study. Telecom and household appliances were the sectors that most contributed to market growth, while electronics decreased by 3.3 percent in Q2. Year on year, the second quarter of 2015 brought a 15 percent rise in sales in the telecom segment, reaching some EUR 145 million
STOCK EXCHANGE Property Fund liquidity increases after London Stock Exchange launch The Property Fund has posted an increase in liquidity since its secondary listing on the London Stock Exchange (LSE), a company statement says. In anticipation of the secondary listing on the LSE in April, the fund’s average daily trading value (ADTV) on the Bucharest Stock Exchange (BVB) increased by 17 percent that month, compared to the
WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Andreea Bovnoczki has been promoted to finance vicepresident of Schneider Electric Southeast Europe. She is currently a finance business partner at Schneider Electric Romania. Bovnoczki will coordinate the group’s financial activities within a cluster the company recently established, covering countries in Southeast Europe. She has been working for Schneider Electric since 2005 when she joined as a senior internal auditor in France, being appointed to her current position two years later.
Victor Croitoru Four in ten Romanians would buy a smart watch Two percent of internet users in Romania now have a smart watch, according to a study by iSense Solutions, a local marketing solutions company. However, four in ten respondents would like to buy one in the next 12 months. Although smart watches are considered expensive, 50 percent of Romanians would find them very useful, found the research. The main reason for choosing such a product is the many existing applications (42 percent), but consumers also see it as useful because of the possibility of communication with others when they find it difficult to use the phone, for example when behind the wheel (38 percent) or owing to limited battery life (32 percent). Some 37 percent of respondents would buy a smart watch for its design.
is the new CEE regional strategy director of IPG Mediabrands. In this position he will have a coordinating and support role within the firm for the UM, Initiative and BPN agencies, focusing on strategy, planning, intellectual property and creation for group customers in Central and Eastern Europe. Croitoru is a graduate of marketing and holds a master’s degree in communication. He has over 12 years of experience in UM Romania, a division of the IPG Mediabrands international network. His last position within the agency was that of planning director, responsible for the implementation and supervision of media strategies for the entire customer portfolio.
TOURISM
Alex Morar
Seaside hotels to slash rates by up to 30 pct after August 30, says FPTR Hotels in the Romanian Black Sea resorts will reduce accommodation tariffs by up to 30 percent after August 20 and lower rates by an additional 30 percent after September 1, according to the Romanian Federation of Tourism Employers (FPTR). Prices are expected to drop to between RON 45 and RON 80 per person (per night, breakfast not included) for two-star hotels in southern Black Sea resorts and by between RON 120 and RON 210 (per night, breakfast included) in four-star hotels in Mamaia. The average hotel occupancy rate of seaside hotels presently stands at between 90 and 100 percent during the weekends and drops to about 70-80 percent on weekdays, according to the same source.
has been appointed CEO of real estate investment fund New Europe Property Investments (NEPI). He is replacing Martin Slabbert, who has left the company. Morar has been part of NEPI’s management since its establishment in 2007. Over the years he has gained experience in areas such as investment, management and real estate in several positions. In recent years, his role at NEPI was to coordinate investments and some operational processes.
Bogdan Neacsu has been appointed deputy general manager at Garanti Bank, responsi-
ble for coordinating risk area activities. He has over ten years of experience in the banking industry, having previously held the position of chief risk officer and management member at Volksbank Romania. Neacsu has developed his career mainly in the risk and control system area. In 2004, he was appointed economist in the regulation and licensing department, prudential regulation service, at the National Bank of Romania.
Jaime Ortiz-Canavate is the new manager of the Ford Romania engines plant in Craiova, replacing John Oldham, as of this August. His previous position was production manager, automotive operations, at Ford Motor in Valencia, Spain. After two years of managing the engine plant in Craiova and with over 35 years of experience at Ford Great Britain and Ford Europe, Oldham will take the position of assistant operations manager, vehicles operations, at Craiova. Ortiz-Canavate joined Ford in 1999 and has held several positions in product development and the engine production and automotive production operations division at Ford Spain, Ford Great Britain and Ford Germany.
Cristian Prichea has been appointed sales manager of the Ford Romania National Sales Company, replacing Rafal Krajewski, who had held the position for the last two years. Krajewski has been part of the team since its inception in 2010 and worked as manager of Ford Romania’s client services division for more than three years. He will join the Ford division in Africa and the Middle East in his new role as manager of the customer service retail division. Prichea joined Ford in 2010 as product manager and two years later was appointed marketing manager, leading the department until August this year.
Carmen Stanciu is the new finance business partner at Schneider Electric Romania, replacing Andreea Bovnoczki. She joined the company in 2008, after seven years of experience in the financial and entrepreneurial fields in Romania. During this period, Stanciu held several positions within the company: senior accountant, chief accountant and finance manager.
www.business-review.eu Business Review | August, 2015
6 HIGHLIGHTS
China in investors’ hands With successive financial turmoil in Greece and China, IMF analysts expect global growth to slow this year to its weakest pace since the financial crisis. The current problems in China may mark the end of investors’ propensity to enter emerging markets, pundits warn.
Still attractive: International financial advisors say that for the long term investor, the Asian country still offers significant potential
∫ ANDA SEBESI The recent financial crisis in China has put pressure on investors who were expecting significant revenues from their investments on the Chinese stock market. But international financial advisers say there is no reason to panic because of the crashes on the Shanghai and Shenzhen stock markets. Although this is an encouraging message, many commentators are asking if this marks the end of investors’ fondness for emerging markets, including China. A three-week plunge knocked about 30 percent off Chinese shares from mid-June, while the country’s securities regulator has warned of “panic sentiment” among investors, especially individual ones. In addition, hundreds of local companies have suspended their shares. The Chinese authorities have taken some measures, including an interest rate cut. But their efforts have failed and, according to international analysts, the moves made by officials have increased panic among investors. Recent international data indicate that funds invested
in global emerging markets like the BRICs (Brazil, Russia, India and China) have lost about 10 percent in value over the past year, and are now the worstperforming of all fund types. International financial advisors say that for the long term investor, the Asian country still offers significant potential. “However, in the near term it faces major economic challenges. China’s economic model has become fragile and unbalanced, with too much reliance on internal investment and exports, and a need to adjust to a lower but more sustainable level of growth,” said Jason Hollands, adviser at Tilney Bestinvest, quoted by The Guardian.com Both investors and policymakers are concerned that the volatility in the Chinese stock market will significantly influence the country’s economy, the second-largest in the world and a huge engine of global growth. In such a context, many are asking if the country’s financial crisis is actually bigger than Greece’s. Instead of focusing on Athens, investors should be much more worried about what’s going on in China, warned CNN Money at the beginning of July. Ruchir Sharma of
Morgan Stanley Investment Management commented for the Atlantic.com, “If the Chinese economy spirals downward, it will make the drama surrounding Greece feel like a sideshow.” Over four weeks, Chinese companies lost about USD 3.9 trillion in value, or more than 15 times the size of the entire Greek economy. The government has restricted new company IPOs and suspended trading by thousands of struggling firms. In addition, the securities regulator announced that any shareholder owning stocks worth more than 5 percent of an individual company could not sell them in the next six months. “The Chinese stock market got out ahead of where the economic fundamentals suggested it should be,” said Nick Consonery, a China expert at Eurasia Group, a political risk consultancy. However, its economy is more insulated from stock market fluctuations than those in developed countries like the United States. According to The Economist, less than 15 percent of overall household assets are invested in it. The country’s national savings rate remains extremely high, protecting it
from a US-like debt crisis, and the government could still encourage more investment by lowering interest rates. At the macroeconomic level, the government set a growth target of about 7 percent this year. In the three months from April to June, the economy expanded by 7 percent compared with the same period of 2014. In addition, in the first quarter of this year, industrial production posted its weakest growth since the worst of the global financial crisis, while the property market, a pillar of the Chinese economy, slumped. According to available international data, the industrial sector increased by 6.1 percent year-on-year in the first half, down from 6.4 percent in the first quarter. By contrast, the services sector jumped to 8.4 percent growth from 7.9 percent in the first quarter. That matters since services now count for a larger share of Chinese GDP than industry. But the current financial crisis in the country significantly affects the global economy. According to the IMF, global growth is set to slow this year to its weakest pace since the financial crisis, as mounting threats from China to the Eurozone add to a long list of forces re-
www.business-review.eu Business Review | August, 2015
straining the world economy. Pundits say that China has a history of manipulating its economic stats. The current PM, Li Keqiang, once said that local GDP data were “man-made and therefore unreliable”. According to Economist.com, the most notorious example came in 1998 when many Asian countries suffered recessions but China said its economy grew by 7.8 percent that year. Looking at other indicators, many economists concluded that growth was in fact closer to 5 percent.
Market forces reshape the landscape Since initiating market reforms in 1978, China has shifted from a centrallyplanned to a market-based economy and experienced rapid economic and social development. According to the World Bank, GDP growth averaging about 10 percent a year has lifted more than 500 million people out of poverty. With a population of 1.3 billion, China recently became the second largest economy and is increasingly playing an influential role in the global economy. Yet it remains a developing country (its per capita income is still a fraction of that in advanced nations) and its market reforms are incomplete. With the second largest number of poor people in the world after India, poverty reduction remains a fundamental challenge. Rapid economic ascendance has
HIGHLIGHTS 7 brought many challenges too, including high inequality, rapid urbanization, environmental sustainability and external imbalances. China also faces the demographic pressures of an aging population and the internal migration of labor. Significant policy adjustments are required in order for its growth to be sustainable. Experience shows that transitioning from middle-income to high-income status can be more difficult than moving up from low- to middle-income, say pundits. China’s 12th Five-Year Plan (20112015) forcefully addresses these issues. It highlights the development of services and measures to address environmental and social imbalances, setting targets to reduce pollution, increase energy efficiency, improve access to education and healthcare, and expand social protection. Its annual growth target of 7 percent signals the intention to focus on quality of life, rather than pace of growth.
The World Bank view Growth in China is expected to decelerate to 7.1 percent in 2015 and 6.9 percent by 2017, reflecting a trajectory that is slower but more balanced and sustainable – a “new normal” for the world’s second-largest economy, according to the World Bank’s China Economic Update released at the beginning of July. “In the short run, the slowdown in China’s economic growth means the
government is making inroads with structural adjustments and policy efforts to address financial vulnerabilities. Over the medium term, these efforts are helping China gradually shift its growth model from manufacturing to services, from investment to consumption, and from exports to domestic spending,” said Karlis Smits, senior economist and main author of the report. The state’s polices to slow rapid credit expansion, contain shadow banking and limit borrowing by local government have led to slower investment growth in areas such as real estate, the report says. To prevent growth from slowing down too much, China also announced a series of limited, targeted stimulus measures, according to the World Bank country report. “In 2015, it remains a priority for China to balance reforms and shortterm growth, because large-scale, broad-based stimulus measures aimed at supporting growth may conflict with efforts to make the economy more sustainable in the medium run,” said Chorching Goh, lead economist for China. The country’s economic structure is slowly changing. On the one hand, economic activity remains constrained by overcapacity in heavy industries, decelerating export growth and regulatory tightening on nontraditional lending. The real estate market remains weak, with excess inventory and, in most
cities, softening property prices. On the other hand, growth in services has stayed robust, especially in advanced services such as banking and insurance. And in most recent years, consumption has grown slightly faster than investment. To keep the economy on the right track, the World Bank report recommends, for example, a better allocation of credit, which in turn requires financial sector reforms. The investment-driven growth model helped China’s economy take off, but reforms are needed to enable the financial system to support sectors that can maintain reasonable growth over the medium term. anda.sebesi@business-review.ro
China in numbers: Indicator: 2015 (projection, %, annual growth) Real GDP: 6.8 Consumption: 7.1 Investment: 5.8 Unemployment rate (annual average): 4.1 Exports of goods: 21 Imports of goods: 15.1 Gross external debt: 8.9 Source: IMF
www.business-review.eu Business Review | August, 2015
8 REAL ESTATE
BRIEfS EUR 45 mln green residential project to be built near Bucharest Ad Astra Partners has begun work on a EUR 45 million residential project near Piata de Gros, south of Bucharest, which will feature over 1,000 apartments. The entire project is scheduled for completion at the end of 2017 but the first 296 apartments should be delivered by the end of this year. The site will feature 1,800 solar panels producing 600 MWh per year, which will be used to serve communal areas and should also generate revenues in the form of green certificates.
New demand for office space up by 35 pct in first semester While new demand jumped, total leasing activity involving office space in Bucharest remained relatively stable in the first half of 2015 against the same period of last year, totaling some 135,000 sqm, according to data from real estate services firm DTZ Echinox.
Retail stock density in greater Bucharest reaches 444 sqm/1,000 inhabitants The total retail stock density in the greater Bucharest area reached 444 sqm/1,000 inhabitants at the end of the second quarter of 2015, according to JLL data. In the first semester of this year, the 70,000 sqm Mega Mall project was delivered in Bucharest by NEPI. Overall, the modern retail space density per 1,000 inhabitants in Romania reached 151 sqm, still below the average density in Europe, which is 199 sqm.
AfI Europe Romania posts 8 pct income hike in H1 AFI Europe Romania posted a net operating income of EUR 10 million in Q2 (up 8.3 percent) and close to EUR 20 million in H1 2015 (up 8.4 percent). With an occupancy rate of 99 percent, AFI Palace Cotroceni shopping mall in Bucharest, the company’s largest and most important asset, generated in Q2 a net operating income 7 percent higher than in the same period of last year (EUR 7.8 million) and retailer sales (excluding the hypermarket) that were 6 percent higher.
Iulius Group to build 9,000 sqm office block in Palas Iasi complex The Palas Iasi real estate project in eastern Romania will expand to 62,000 sqm GLA through the addition of a 9,000 sqm class A office building (United Business Center 6), developer Iulius Group has announced. In addition to this development in Iasi, the company also plans to start work this fall on a second multifunctional complex in close proximity to Iulius Mall Timisoara, an investment estimated at over EUR 220 million. Openville will include, in addition to retail areas, a park and entertainment areas and seven class A office buildings with a total area of over 131,000 sqm. Iulius Group owns a retail network comprising four shopping malls as well as over 55,000 sqm of Class A office space in Iasi and Cluj-Napoca.
∫ SIMONA BAZAVAN New demand for office space (meaning relocations from old stock, expansions of existing leases and new operations) was up by 35 percent y-o-y, although the overall market volume stayed the same. Out of the 135,000 sqm of office space leased in Bucharest in H1, net take-up represented more than 80 percent, (112,000 sqm) and was divided between relocations into A and B class facilities (44 percent) and new demand (56 percent). Compared with the same period of last year, net take-up was up by 3.5 percent and the ratio between reloca-
tions within modern office stock and new demand reversed. A notable development in the first half of the year was that the volume of pre-leased space was up by 50 percent. Approximately 59,000 sqm of space was pre-leased in the first six months of 2015, representing 52 percent of net take-up. Three new office buildings were delivered in H1, with a total GLA of 54,000 sqm: City Offices, Auchan Tricodava and Green Court, building B. Some 100,000 sqm of modern office space, about half of which is concentrated in one project – Bucharest One – is currently under construction and due for delivery later this year. Over the next 18 months 345,000 sqm of office space will be completed in Bucharest, more than 70 percent of which will be delivered next year. Overall the level of new supply in 2016 is forecast to be the highest in the last five years. The overall vacancy rate for class A and B office space in Bucharest varied throughout the first six months of 2015.
After a slight increase in Q1, the vacancy rate began to fall in Q2 to reach 13.5 percent at the end of June. In total 300,000 sqm of modern office space is standing vacant in the capital, the largest volume being located in Pipera North (26 percent) and the north of the city (17 percent). The lowest vacancy rates were reported in the CBD (Victoriei-Aviatorilor area) and the west (each at 5 percent) and central north (9 percent). By the end of Q4 2015 Bucharest’s vacancy rate is expected to reach around 12 percent, according to DTZ data. Rents underwent no major changes in the first semester with prime headline levels standing at EUR 18.5/sqm/month. In CBD headline rents for A class office space run from EUR 15-18.5/sqm/month, while in the central north area they are in the range of EUR 15-17/sqm/month. In semi-central locations headline rents for prime projects are around EUR 1215/sqm/month, while in peripheral areas A class office space goes for around EUR 8-11/sqm/month. simona.bazavan@business-review.ro
Immofinanz Group to sell logistics portfolio Real estate company Immofinanz Group has announced that it will sell its entire logistics portfolio, including three properties in Romania valued at EUR 22.6 million, in order to focus on its office and retail business. ∫ SIMONA BAZAVAN Austrian property group Immofinanz is in negotiations with interested parties to sell its logistics business, consisting of around 1 million sqm of rentable space and various logistics development projects, the company has announced. The move is meant to enable the company to focus better on its office and retail business and will also include the sale of its Romanian assets. These consist of three logistics parks in Bucharest, Timisoara and Ploiesti totaling 52,300 sqm and valued at EUR 22.6 million. The three properties have an
occupancy rate of 95.3 percent. In addition to this, in July the Austrian company started work on a new logistics project, in Mogosoaia, near Bucharest, whose development will not be hampered by the announced sale, Immofinanz representatives told BR. The first phase of the project is set to be delivered in the last quarter of this year and the second in the first quarter of 2016, featuring a total of 40,000 sqm. The announcement by Immofinanz Group comes after the first half of the year saw five transactions involving logistics and industrial properties, closed by players such as P3, CTP and Lone Star The Austrian real estate company cur-
rently owns 16 properties in Romania – nine office projects, four retail projects and three logistics parks – totaling some 400,000 sqm (GLA) and with a book value of EUR 965 million at the end of last year. This represented about 13.9 percent of the company’s total asset portfolio (EUR 6.9 billion) making Romania its third largest market behind Russia and Austria but ahead of other countries such as Germany and Poland. Overall, Immofinanz Group is present on eight core markets besides Austria. In Romania it also owns residential developer Adama. simona.bazavan@business-review.ro
www.business-review.eu Business Review | August, 2015
TOURISM 9
Exotic vacations generate sunny outlook for travel agencies Romanian tourists are increasingly venturing outside Europe to destinations such as the Dominican Republic, Cuba, Indonesia and India, Sorin Stoica, president of travel agency Eturia, told BR. Falling prices are one reason for this, and pundits expect the market to expand even further over the next couple of years. ∫ SIMONA BAZAVAN While last year local travel agencies saw business stagnate and in some cases even drop, 2015 has got off to a better start for the industry. “The market is going up. This is my feeling and this is also what other players on the market are telling me. The number of Romanian tourists travelling abroad has been going up. This can also be seen from the traffic on our site and the number of requests we get,” Sorin Stoica, president of travel agency Eturia, told BR. The agency, which specializes in holidays outside Europe, has reported a 10 percent turnover hike for the first semester and Stoica estimates the growth rate will maintain this pace through to year end. By comparison, in 2014 business increased by only about 3 percent. What’s fueling this growth? Partly it’s the overall market growing, but also the company’s efforts to diversify its portfolio by launching, for example, several spa and wellness products in countries such as India, Thailand and Vietnam, and family friendly packages for other distant destinations. Most of Eturia’s travel packages are for destinations outside Europe, which make up about 80 percent of its turnover. “In Europe there are mostly destinations where tourists can plan their own holiday, and as a travel agency there are limited means to compete against booking.com and other direct booking sites. Our customers are people who are looking for more complex holidays and who choose us for our expertise,” he said. Regardless of the destination or the type of holiday, targeting the mid-market segment and making efforts to charge reasonable prices remain the company’s focus, said Stoica. “We continue to work on offering affordable products. While three years ago we couldn’t offer a trip to, let’s say Peru, for below EUR 3,000 per person, this year we were able to offer that at even EUR 2,000. While three years ago a trip to the Maldives was hard to come by for less than EUR 4,000 per couple, now we can offer this for EUR 2,600,” said Eturia’s co-owner. This is partly the result of the company’s efforts to come up with new options for travel and accommodation. “For the past three years we have worked
to get better deals with airlines and hotels. For example, two years ago we signed direct contracts with hotels in the Dominican Republic, the Caribbean, Cuba, Mexico, the Maldives and the Seychelles. All this has enabled us to offer attractive packages to our customers – for example, an eight-day trip to China for EUR 1,000 or Aruba for EUR 1,100,” said Stoica. This was also possible because international tour operators and hotels are starting to see the potential of the Romanian market, he added. “Two or three years ago nobody would have bothered with us,” said the co-owner. All this should translate into even higher growth rates for the sector beyond 2015. “I think that the Romanian market has far greater potential and I think that it will grow by more over the next two or three years, although it hasn’t yet reached that turning point. This could be the moment when a critical mass of tourists is reached who would act as ambassadors, both for outgoing and incoming business, a new air-
line enters the local market or a direct flight from Bucharest to the US is launched. This would send a strong signal and at that moment the market would become attractive. We are heading that way,” he said. Nevertheless, although the market started from a very low base, thereby offering plenty of room for growth, conditions remain tough and the travel agency says it still has to “fight for every client and every euro”.
A growing taste for exotic travel destinations The average price of the holidays Eturia sells is down to about EUR 3,000 at present, says its co-owner. At the extremes, prices range from below EUR 1,000 for holidays in Europe, Dubai and Morocco, low-season packages in the Caribbean and tours of India or China, to standard packages of EUR 10,000 to EUR 15,000 for destinations such as Australia, Tahiti and Bora Bora, as well as for extensive tours of around 25 days in other destinations. “At least once or
twice a week we sell a holiday for over EUR 10,000 per couple. These are not necessarily luxury holidays. They end up costing this much because of travel costs and the duration,” said Stoica. The price can rise even further to several tens of thousands euros for customized vacations. The most expensive one the travel agent has sold so far was a EUR 110,000 holiday booked in 2009 by a Romanian couple living in London who took a round-the-world cruise for six months. Nevertheless, the company’s target remains to offer as many options for a budget of EUR 2,500 per couple. “Over the years we have seen that this is a psychological benchmark for many customers and we offer a lot of options at this price point,” added Stoica. The most popular travel destinations over the past two years have been the Dominican Republic, where Eturia says it sends some 700 Romanian tourists each year, the Maldives, Cuba, Thailand, Indonesia, Mexico, China, the USA, Peru, Argentina and Tanzania. India is becoming an increasingly attractive destination due to growing interest in wellness and personal development, along with South Africa and Iran. All these are a mixture between tours and beach holidays. The latter kind in particular is on an upward trend as many tourists are starting to look for alternatives to traditional seaside destinations in Europe, such as Greece, Turkey and Spain. “There is a growing demand for beach destinations that also involve visiting and sightseeing – what we call relax and tour packages,” he added. The company’s target beyond 2015 is to increase its annual turnover to about EUR 8-10 million, which it wants to be mostly generated by repeat customers. “We know our clients and we offer customized packages; this has been our selling point and we want to be able to maintain this,” concluded Stoica. simona.bazavan@business-review.ro
EUR 5.3 mln Eturia’s turnover in 2014
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10 COVER STORY
First notes of Enescu Festival chime out It’s that time of the year – or, to be more accurate, of the two years: the spirit of George Enescu is celebrated through his works and the younger generations of performers he inspired, enlivening Bucharest with the magic of his magnificent music. Everything happens in under a month, from August 30 to September 20, with over 58 concerts in several venues throughout the capital, and in Timisoara, Brasov, Iasi, Ploiesti and Bacau.
∫ OANA VASILIU In the introduction to his festival review in September 2011, James Jolly, Gramophone's editor-in-chief, wrote, “Bucharest is also, as I’m discovering, a veritable Mecca for great musicmaking. Think Romania, and think classical music, and the names that will probably slip easily into the mind are Dinu Lipatti, Radu Lupu, Angela Gheorghiu, Constantin Silvestri and maybe a couple of others. Come to Bucharest and the Main Man is, without doubt, George Enescu. He gives his name to streets, to orchestras and to a music festival
of commendable ambition.” years. And nothing has changed since then This year’s opening night fea– except that more and more Romanian tures the Romanian Youth Orchestra, classical musicians are conquering which will accompany one of the world’s famous concert halls, while world’s great violinists, Sarah Chang, more and more foreigners are working of whom the New York Times wrote, to understand Enescu’s works to play “Her gifts are at a level so removed them during the festival or competition. from the rest of us that all we can do Over 3,000 artists will perform at is feel the appropriate awe and then the 22nd George Enescu International wonder on the mysteries of nature. Music Festival, including the four best The ancients would certainly have rated orchestras in the world: the Royal had Ms. Chang emerging fully Concertgebouw Amsterdam, Berlin formed from some Botticellian scalPhilharmonic, Wiener Philharmonic, lop shell.” and London Symphony Orchestra. The major coup of the festival is the pres- Free concerts ence of the Berlin Philharmonic, with ArCuB will stage several concerts whom negotiations had lasted over 15 throughout the festival in George
Enescu Square, hosting the Craiova Oltenia Philharmonic Orchestra, Romanian Radio National Orchestra, Bucharest Festival Orchestra, a Zhibek Mussurgaliyeva recital, Sinfonia Orchestra, Romanian Radio Brass Quintet, ART Quintet, Transylvanian Saxophone Quartet, 4Strings Quartet, Trio Mozaic, vocal group Acapella, a Nicolas Bourdoncle recital, Bucharest Symphony Orchestra and Bucharest Symphonic Pops Orchestra.
Al fresco Enescu The 2015 Bucharest Creative event is inspired by the composer’s work Impressions from Childhood. The organizers say they encourage interactive ap-
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COVER STORY 11 Photo: Vlad Eftenie / Festivalul Enescu
proaches, with the public welcome to with a dimension of approximately two actively discover Enescu and his music meters, combine the technique of colthrough any creative means. lage, color with surprising materials, Bucharest’s Unirii Boulevard will be- depicting the violin as a symbol in come the Art Boulevard during the fes- novel positions. tival, with the section between Alba One new project is Muzexpo, a creIulia Square and Unirii Square hosting ative musical exhibition at the George two outdoor exhibitions: the History of Enescu Museum. Muzexpo has been the Enescu Festival and the Life of described as a showcase and a George Enescu. “sonorous fair”, a mixed presentation of Fine artist Oana Manuela Pavelescu musical creativity. Events are schedinvites the public to a visual explo- uled for September 20, from 16.00 to ration of the violin as a symbol of the 22.00, at the museum. composer’s music through the installa- Several venues have put together spetions The Violin full of Secrets, The Vi- cial menus for the festival, including olin and Traditions and The Violin’s Acuarela, Cărturești Carusel, Grădina Ladder, on the green area outside the Verona, Lente Arcului, Lente PraPalace Hall. The three installations, porgescu, Ludic, Modelier, M60, Pallets,
Paul and Simbio. Prezels will also be available in Simigeriile Luca in a special G key form.
Fifty years of Gigi Caciuleanu Exactly 50 years ago, the famous Romanian choreographer Gigi Căciuleanu debuted as a dancer on the stage of the Small Theater under the choreography of Miriam Răducanu. He now celebrates half a century of stage performances, returning to the Small Theatre as an interpreter with the new choreographic creation One Minute of Dance or UF!!!. The show will leave out one minute of dance before the final part which the choreographer will reinvent at every
performance, before the audience. The protagonists, the composer and two dancers, will have to rise to the challenge and adapt to the “state of emergency” in the moment. They will have to memorize the choreography and music, both invented on the spot, and integrate and interpret to the best of their ability. The music comes from the “orchestra man” Paul Ilea (Sensor/Kult Studio), whom the choreographer asked to work from the themes of Mozart. The performance will take place on Sunday, September 6, at 20.00, at the Small Theater. editorial@business-review.ro
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12 COVER STORY
Enescu, the global way For 24 years now, Mihai Constantinescu, director of the Enescu Festival, has fought to nurture Romania’s cultural scene worldwide by staging a bigger and better classical music event from one edition to the next. Business Review went behind the scenes with Constantinescu to learn the secrets of this jubilant Romanian festival. ∫ OANA VASILIU
Tell us about the 15 years of negotiations with the Berlin Philharmonic. I tried to demonstrate that we can live up to the demands of the world's top orchestras. The four best orchestras in the world will attend this year’s event, which means a lot for the festival, for Romania and for us, as Romanians, who have demonstrated that “we can”. We have brought the best and most representative classical music to this festival, and we met the difficult contractual conditions and obligations that we negotiated. This was appreciated; it made us credible to the orchestras. And in this area quality is decisive. A long time has passed – particularly due to the busy schedule of the Berlin Philharmonic – but in the end, this particular group found a few hours to come to Bucharest. Describe a day in your life in the run-up to the event. A day means 24 hours – we no longer have a normal workday. And the night
Photo: Andrei Gindac / Festivalul Enescu
How would you describe your 24 years of organizing the Enescu Festival? This is a festival that has grown because of the work of young people, as I myself was 24 years ago, thanks to their way of understanding each other and the cultured people who have convinced politicians to take favorable decisions for the festival. Thanks to the prestige of the festival’s artistic directors, such as Ludovic Spiess, Mihai Brediceanu, Lord Yehudi Menuhin, Lawrence Foster, Vlad Roman, Cristian Mandeal and Ioan Holender, the professionalism seen here has made the festival a reliable event. It is not easy to build, and even harder to maintain what you have built. We built this festival in the name of and for the great Romanian musician George Enescu and I think he would be proud of our achievement. We must not forget that the festival brings to Romania, besides international reputation, an opportunity for economic development, from tens of thousands of foreign tourists who come here to attend it. Major festivals abroad are an opportunity for tourism: this exposure to cultural events attracts tourists and spurs organizers to show the best a place or a country has to offer. It’s the same with the Enescu Festival in Romania.
– which is known as being a good adviser – is a good opportunity to resume what we did during the day, to analyze some decisions and to revisit others. Is George Enescu’s work promoted outside the festival and/or competition? I do not believe it is promoted enough in Romania and especially by Romanians. The Enescu Festival tries to do just this and has aimed for years to take the great Enescu music across borders, and showcase it here, in Romania, in contemporary interpretations by the most important orchestras in the world. There is also the Enescu Competition in which we try – we believe successfully – to introduce the study and interpretation of Enescu's music to young artists, the musicians of the future. Part of the compulsory repertoire for the contest consists of some essential works by the composer. Few major orchestras include works by Enescu in their concerts. It is a struggle to achieve this. It is not easy to impose your point of view, nor a program. And besides all of these difficulties, there is also the problem of understanding Enescu's creations. Unfortunately – in my opinion – there are few people who understand and can make others understand the great works of Enescu. This could be why so many foreigners bypass it. But those who are convinced – eventually – to interpret some of Enescu’s creations do it with pleasure and professionalism. And we have many examples of foreign performers and conductors who have become ambassadors of his music and the festival. But Enescu should not be promoted
only during the Enescu Festival, but by all those working in the field of music. Enescu has to be studied as a "bible" of all Romanian musicians. Once we achieve this performance, we can ask foreigners to interpret his work as well. Is the Enescu Festival the best Romanian cultural product for export? This is something I cannot decide. Only the market can decide, along with Romanians, if they want to be represented by the festival. I think we have something to celebrate in this respect – the festival manages to be the largest international cultural event organized in Romania and to bring about 20,000 foreign tourists to Bucharest every two years, who come here especially for the festival. It depends very much on us. Let's all recognize this achievement and come up with ideas to improve the festival, not with suggestions that "demolish and denigrate" it. Criticism is fine as long as it is constructive. How do you select the orchestras? Have you ever been unable to bring an artist because of budget considerations? The selection of artists and orchestras is based on their "business cards", as well as the program we want to present. There have been artists and orchestras whose fee was not accepted. This was at the beginning of the festival, when they demanded high fees just to be refused and not to turn down a concert. Now it is no longer the case. The decision is entirely ours because we know the value, including their fees. Today many of our refusals are related to the repertoire, conductors or soloists. It is important for the festival to have this
opportunity and discretion. Was it difficult to impose Enescu on international orchestras? Yes, it was – and is – difficult to impose. But, slowly, we have managed to convince them and as I said before, we are in a position to decide. The works that we require are pivotal: symphonies, suites, major works, which require understanding, knowledge, patience and a lot of practice. Those who understand this participate in the festival. We are happy that in terms of chamber music we more and more value soloists who include works by George Enescu in their programs. You will have a big surprise when you see soloists performing important chamber works – sonatas, suites etc – in 2017. More and more international artists include major works by Enescu in their concerts or chamber recitals – let’s remember this February’s London premiere of George Enescu’s Symphony III, conducted by Vladimir Jurowski, on stage at the Festival Hall in the Southbank Centre, right on the Thames, in front of an audience of over 2,000 who gave a standing ovation that resulted in four curtain calls. The London premiere came after Jurowski performed Enescu works at the Enescu Festival on the Palace Hall stage in 2013. It is and has been one of the aims of the festival, but there is room for more and better. Is there any difference between Enescu played by Romanians and by foreigners? This difference is becoming smaller and smaller because Enescu has begun to be understood. For those who decide to do one of his works, they can document and compare between interpretations. Unfortunately, fewer Romanians are playing Enescu. Now, it is foreigners who mostly top the charts with his compositions, which means it is a goal achieved. This is the merit of George Enescu Competition, which gets his repertoire played by more and more young people. Can you rank the best Enescu performances? I wouldn’t like to do so – although it would be possible – in order not to upset and discourage those trying to approach more Enescu. I’d rather pay tribute to the audience, the viewers whether through TV, theater, live transmissions on the internet or the festival site, www.festivalenescu.ro. editorial@business-review.ro
www.business-review.eu Business Review | August 2015
ENESCU’S DIGITS 22
days of the festival
20
works by the composer will be performed at the festival, given contemporary workings by some of the top symphonic ensembles in the world, led by renowned conductors
10 seconds/ minutes
full passes for the Enescu Festival 2015, which went on sale on Thursday, January 15, at 10.00 am though the Eventim network, sold out in only 10 seconds (for the concerts at the Romanian Athenaeum), and 10 minutes (for the concerts at the Palace Hall).
less than 2 hours 120,000
over 25,000 individual tickets sold for the 2015 edition
20,000 265 concerts 44 broadcasting companies
spectators attended the festival in 2013 foreign music fans came to the festival in 2013 at the 2013 George Enescu International Festival were shown by public broadcasting companies affiliated to the European Broadcasting Union sent transmissions by Radio Romania to 37 countries in 2013. The Enescu concerts reached countries including Australia (Australian Broadcasting Corporation/ABC Classic FM), Hong Kong (Radio 4/Radio Television Hong Kong), France (Radio France) and Germany (Bayerischer Rundfunk, Hessischer Rundfunk, Deutsche Welle)
Over 3,000
of the most highly esteemed artists from around the world will participate in the 2015 festival
58 concerts
will take place at the festival
EUR 8 million
the Romanian government’s contribution to the event
COVER STORY 13 THE ENESCU FESTIVAL’S TYPICAL DIGITAL ATTENDEE* Digital attendees like music, films, news, travelling
24% aged between 25 and 34
22% aged between 35 and 44
63% are women
44% speak at least one foreign language
64% come from Romania, with other main source countries Germany, the US, UK and France.
*information provided by Oma Vision using data from the festival’s website and Google analytics
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14 COVER STORY
Is the Enescu Festival the best Romanian cultural product for export? Daniel Kearvell, general manager of the festival’s official logistics partner, DHL Romania “It is indeed clear that the Enescu Festival is the jewel in Romania’s cultural crown. As a genuine leading international event, it showcases the very best Romanian culture has to offer. I would like to wish everyone all the best with the festival. DHL is proud to be delivering Enescu’s outstanding cultural product to the ears of the world.”
Radu Boroianu, president of the Romanian Institute of Culture “Alongside Brancusi, the International Theatre Festival in Sibiu, the Transylvania International Film Festival and the National Theatres Festival, it is certain that the George Enescu International Music Festival and Contest have universal significance as cultural products.”
Stefan Liute, strategy director of Storience “The Enescu Festival has been, for a long time now, a cultural landmark and an event appreciated by Romanians and foreigners. But I would not categorize it as the best Romanian cultural export product, because it is not structured or formed as an export product. It's a product and a brand that lives and is staged especially in Romania, where it attracts artists, cultural institutions and lovers of classical music, from our country and abroad. All these come to Bucharest for the Enescu Festival, but the event itself is not part of an itinerary. It is not conducted in various cities of the world; it doesn’t meet its foreign audiences but calls them here to Romania. The Enescu Festival is an attraction for in-bound tourism (foreigners who visit our country) without being an existing product in other countries – as are most of the classical music festivals in the world, which have a fixed ‘home’ where they attract local and foreign public. There are a few exceptions, one being SoNoRo, an event now ‘physically’ in Romania and abroad (Italy, Bulgaria, the US, Austria, the UK).”
Dean Thompson, charge d'affaires at the US Embassy Bucharest “Romania is blessed to have a rich cultural heritage that it can share with the world. The Enescu Festival is a marvelous opportunity to showcase Romania’s richness in culture, diversity and history.”
Alexandru Filip, senior events and sponsorship specialist at Orange Romania “If we consider only the strict classical music festival, which brings together and catalyzes past editions and other diverse musical genres and cultural events, yes, we can say it is the best event of its kind in Romania. It's an event that draws together Romanian culture in early September. However, besides the George Enescu Festival, there are other cultural events that take place, in theater (the International Theatre Festival in Sibiu, the National Theatres Festival), jazz (Garana) and film (the Transylvania International Film Festival, Anonimul, Astra in Sibiu). The George Enescu Festival has inspired many cultural workers to seek various ways in which Romanian culture can be promoted around the world. Through the extent of participation and the international recognition it has earned, the Enescu Festival can be compared with the great festivals of the world (Lucerne, BBC Proms, Salzburg, Aix en Provence) and also proves and promotes the power of Romanian culture.”
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16 COVER STORY
Don’t miss at the Enescu Festival
Berlin Philharmonic
London Symphony Orchestra
Wiener Philharmonic
Royal Concertgebouw Amsterdam
∫ OANA VASILIU Seven of the world’s greatest orchestras will perform at the 22nd George Enescu International Festival this year. Audiences will be able to enjoy the four top orchestras in the world, as ranked by the prestigious British publication Gramophone in April: the Royal Concertgebouw Amsterdam, Berlin Philharmonic, Wiener Philharmonic and London Symphony Orchestra. After 15 years of negotiations, the Berlin Philharmonic will give an extraordinary concert at the Enescu Festival for the first time (September 3, the Palace Hall), under the baton of the esteemed conductor Sir Simon Rattle. The London Symphony Orchestra (September 8 and 9, the Palace Hall) will take to the stage with famous Romanian conductor Ion Marin. The concert given by the renowned Vienna Philharmonic (September 16, the Palace Hall) will be a double premiere: the soloist will be the soprano Valentina Nafornita, who graduated from the National Music University in Bucharest and has been described as “a star of international classical music”. Nafornita is a member of the iconic Vienna State Opera’s ensemble. Royal Concertgebouw Amsterdam, “the orchestra with the most velvety sound in the world,” according to critics, returns for the fourth time to the Enescu Festival over the last two
days (September 19 and 20, the Palace Hall). It will be led by the Latvian-born conductor Andris Nelsons. Another highlight will be the San Francisco Symphony Orchestra – winner of a Pulitzer Prize for Music – which will perform the Enescu’s Voix de la Nature for the first time, under the wand of Michael Tilson Thomas (September 7, the Palace Hall).
Enescu works on the program About 20 works by the Romanian composer are to be performed at the George Enescu International Festival, given a contemporary edge by some of the top symphonic ensembles in the world, led by famous conductors.
Sunday, August 30 19.30, Palace Hall Romanian Youth Orchestra Choir of the George Enescu Philharmonic Conductor: Kristjan Jarvi Soloist: Sarah Chang – violin Program: Enescu – Rhapsody no. 1 in A Major op. 11 no. 1 Sibelius – Concerto for violin and orchestra in D minor op. 47 Orff – Carmina Burana
Tuesday, September 1 20.00, Palace Hall Israel Philharmonic Orchestra Conductor: Zubin Mehta
Program: Enescu – Vox Maris op. 31 Soloist: Marius Vlad Budoiu (tenor) Mahler – Symphony no. 9 in D Major
soloist instruments op. 33 in E Major Beethoven – Klavierkonzert No.3 in cMoll op. 37 Bruckner – Symphony No. 6 in A-Dur
Wednesday, September 2 17.00, Romanian Athenaeum
Sunday, September 6 11.00, Palace Hall
Scottish Ensemble “Musica Nova” Program: Florian Popa - clarinet Silvestri – Three pieces for stings op. 4 Frederic Moreau – violin no. 2 Dorel Fodoreanu – cello Brahms – Three Choral Preludes from Mara Dobrescu – piano op. 122 Program: Mansourian – Four Serious Songs Enescu (Bentoiu) – Trio in A minor Soloist: Patricia Kopatchinskaja – violin (1916) (violin, cello, piano) Enescu – Intermezzi for strings op. 12 in Bartok – Contrasts (Sz 111, BB 116) D Major Olivier Messiaen – Quatuor pour la fin Ravel – Petite Symphonie (arr. Rudolph du temps (violin, clarinet, cello, piano) Barsai)
Thursday, September 3 17.00, Romanian Athenaeum George Enescu Philharmonic Conductor: Peter Ruzicka Program: Enescu/ Bentoiu – Symphony no. 4 Ruzicka – Clouds for String Quartet and Orchestra (2013) Guests: Solartis Quartet Bartok – Kossuth – poem for orchestra
Monday, September 7 19.30, Palace Hall San Francisco Symphony Conductor: Michael Tilson Thomas Program: Enescu – Voix de la nature Adams – Absolute Jest with St. Lawrence String Quartet Beethoven – Symphony no. 3 in E flat Major op. 55 Eroica
Friday, September 4 19.30, Palace Hall
Tuesday, September 8 20.00, Palace Hall
Staatskapelle Dresden Conductor: Christian Thielemann Soloist: Yefim Bronfman – piano Program: Enescu – Chamber Symphony for 12
London Symphony Orchestra Conductor: Ion Marin Soloist: Lars Vogt – piano Program: Enescu – Orchestral suite no. 2 in C
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COVER STORY 17
Major op. 20 Grieg – The Piano Concerto in A minor, Op. 16 Stravinsky – The Firebird (Complete Ballet)
Bentoiu Beethoven – Concerto for piano and orchestra no. 5 in E flat Major op. 73 Shostakovich – Symphony no. 5 in D minor op. 47
Thursday, September 10 20.00, Palace Hall
Sunday, September 13 11.00, Palace Hall
Sankt Petersburg Philharmonic Orchestra Conductor: Yuri Temirkanov Soloist: Elisabeth Leonskaja – piano Program: Enescu – Overture de concert Sur des Thèmes dans le Caractère Populaire Roumani in A Major Rachmaninoff – Concerto for piano and orchestra no. 2 in C Minor op. 18 Rimsky – Korsakov – Symphonic suite op. 35 Sheherazade
Aoede String Quartet Sophia Jaffe – first violin Ermir Abeshi – violin Aida-Carmen Soanea – viola Romain Garioud – cello Program: Sibelius – Andante festivo Shostakovich – String quartet no. 4 in D op. 83 Shostakovich – Theatrical suite excerpts from Hamlet and Human Comedy Enescu – Quintet with piano in A minor op.29 Guest: Alfredo Perl – piano
Saturday, September 12 11.00, Palace Hall Moldavian National Chamber Orchestra Conductor: Cristian Florea Program: Warlock – Capriol suite Bartok – Divertimento for strings in a op. 113 Enescu – Octuor in C op. 7
19.30, Palace Hall Bayerisches Staatsorchester Conductor: Constantinos Carydis Soloist: Poerre Laurent Aimard – piano Program: Enescu – ISIS Symphonic Poem posthumously completed by Pascal
16.30, Romanian Athenaeum Les Dissonances Soloist: David Grimal – violin Program: Debussy – La Mer L 109 Enescu – Caprice Roumain for violin and orchestra (arrangement by Cornel Taranu) Beethoven – Symphony no. 5 op. 67 in C minor
Soloist: Xavier Phillips – cello Program: Schnittke – Moz-Art à la Haydn Enescu – Symphonie concertante pour violoncelle et orchestre en Bineur op. 8 Brahms – Symphony no. 1in C minor op. 68
Tuesday, September 15 17.00, Romanian Athenaeum Monte Carlo Philharmonic Conductor: Gianluigi Gelmetti Soloist: Dadid Garrett – violin Program: Enescu – Ballade for violin and orchestra Bruch – Concerto for violin and orchestra in G minor op. 26 Ravel – Alborada del gracioso Ravel – Pavane for Dead Princess Ravel – Bolero
Wednesday, September 16 17.00, Romanian Athenaeum
Monday, September 14 17.00, Romanian Athenaeum
Monte Carlo Philharmonic Conductor: Cristian Mandeal Program: Bartok – Hungarian Sketches (1931) Sz. 97, BB 103 Enescu – Suite no.3 in D op. 27 Villageoise Mahler – Das Lied von der Erde Soloists: Ruxandra Donose – mezzo-soprano Vincent Wolfsteiner – tenor
Les Dissonances
20.00, the Palace Hall
Wiener Philharmoniker Conductor: Semyon Bychkov Soloist: Valentina Nafornita – soprano Program: Haydn – Symphony No.44 in mi minor H 1/44 Enescu – Enescu 7 Chansons de Clement Marot op 15 Brahms – Symphony no. 3 in F Major op. 90
Friday, September 18 19.30, Palace Hall Royal Liverpool Symphony Orchestra Conductor: Vasily Petrenko Soloist: Simon Trpceski – piano Program: Rachmaninof – Concerto for piano and orchestra no. 3 in D minor op. 30 Enescu – Symphony no. 3 in C Major op. 21
Sunday, September 20 19.30, Palace Hall Royal Concertgebouw Orchestra Amsterdam Conductor: Andris Nelsons Program: Brahms – Symphony no. 2 in D Major, op. 73 Enescu – Rhapsody no. 2 in DMajor op. 11 no. 2 Ravel – Daphnis & Chloë Suite no. 2 For additional info, check festival’s official website, www.festivalenescu.ro/en. editorial@business-review.ro
www.business-review.eu Business Review | August 2015
18 COVER STORY
Festival is music to the ears of Bucharest hotels and restaurants After the 2013 George Enescu Festival brought 20,000 foreign tourists to the capital, local hotels and restaurants are hoping for at least a similar number of visitors in 2015. ∫ SIMONA BAZAVAN “The Enescu Festival is the most important event organized this year in Bucharest. The scale it has reached makes it surpass by far any other type of event hosted in the capital,” Calin Ile, VP of the Bucharest Tourism Board and director of Ibis Bucuresti Gara de Nord, told BR. The event helps shape a positive image of Bucharest as a travel destination and market players are taking full advantage of this. Bucharest hotels that are part of international chains have run special promotion campaigns abroad, travel agencies have brought foreign tourists, restaurants and bars have adopted themed menus and guides have held organized themes tours of Bucharest “following in the steps of George Enescu,” added Ile. “The Enescu Festival is definitely a momentous event for Bucharest as a destination. Apart from giving people a reason to travel to the city, it draws attention to Romania's ability to organize important events that run for several weeks,” Jan Thomsen, GM of Athenee Palace Hilton Bucharest, told BR. The 2013 George Festival brought some 20,000 foreign tourists to Bucharest, up from 16,000 in 2011. This year both organizers and local hotels and restaurants hope that the festival will generate at least many tourists as last time. “We hope this year’s festival will be even more successful than pre-
The business behind the music: more than 20,000 foreign tourists are expected in Bucharest this September
vious years as a result of Bucharest becoming a more popular destination over the last few years,” added Thomsen. Given an average budget of around EUR 500 to EUR 600 per tourist, local hotels and restaurants could cash in over EUR 10 million from this cultural event. For hotels alone the festival brings
an average 10 percent increase in revenues, estimates Ile. “The festival drives up demand for the hotel market so in September hotels report higher occupancy rates as well as higher average rates,” he added. The foreign tourists are mostly Europeans from countries such as Germany, France, Switzerland and Austria, aged on average above 50,
he added. Alina Fugaciu, GM of Mercure Bucharest City Center, echoes that most of the foreign visitors coming to Bucharest are Europeans and adds that their average stay is between two and three days. “However, we have partnerships with travel agencies that organize groups from Asia and America for this famous event,” she told BR. In addition to tourists, the hotel, which is located close to the Romanian Athenaeum and whose interior design centers on music, will also be hosting musicians performing during the festival, said Fugaciu. September is a good business month for Bucharest restaurants in general, as many city dwellers return from their holidays, but this year it will be particularly profitable because of the festival. “Because it is intensively promoted we expect to see a significant business increase at our restaurants close to venues, such as Trattoria Buongiorno Lido and our locations in the Old City Center: City Grill Lipscani, Covaci, Caru’ cu Bere, Hanu’ lui Manuc and Trattoria Buongiorno,” representatives of the City Grill chain of restaurants told BR. While pundits admit there are organizational aspects that need improvement in order for the Bucharest tourism industry to make better use of the reputation the festival has earned, they agree that the event will be music to the ears of local hotels and restaurants this September. simona.bazavan@business-review.ro
Enescu Festival launches new app ∫ OTILIA HARAGA The George Enescu International Festival launched this month a new application version for smartphone and tablet users with an iOS or Android operating system. Officials said the app feeds the public with real-time information about the 2015 Enescu Festival. This includes an array of detail, from articles about the festival to the event schedule and latest news. The app is connected to the website database that comprises all the artists’ charts and also has a search option, which allows digital users to skim more
easily through the information, according to information provided by the organizers to BR. The key feature of the app is that it is directly connected to the Enescu Festival website (www.festivalenescu.ro), which means that it is updated in real time, along with the festival website. This means that any new information is delivered in real time to users of the application. New sections have also been created on the website, making public access to the venues hosting festival events much easier. The website also comprises an interactive map of Bucurestiul Creativ (Cre-
ative Bucharest) and a special dedicated section (http://festivalenescu.ro/bucuresticreativ/). Each venue is given extensive presentation space under a dedicated section (http://festivalenescu.ro/venues/). Technology partner LG supported the development of the Enescu Festival application. At the end of the 2015 event, the organizers will have new information on how many people have used the application and the data will be centralized. In 2013, approximately 20,000 foreign tourists came to Bucharest especially for the festival. Google Analytics data currently show that 28 percent of Enescu Festival
digital content consumers are aged between 25 and 34, while 22 percent are aged between 35 and 44. Approximately 44 percent speak at least one foreign language. Some 64 percent are from Romania, and the next countries in line are Germany, the United States, England and France. The 2015 George Enescu International Festival will take place from August 30-September 20 at Sala Palatului and the Romanian Athenaeum. The event will include more than 58 concerts in halls, as well as various open air events. otilia.@business-review.ro
www.business-review.eu Business Review | August 2015
ENTREPRENEUR 19
Local training firm looks to Bright future Mihai Arghire, partner and senior consultant at training company Brightway, tells Business Review about the beginnings of the company, how it has outlasted many of its competitors and why he doesn’t regret any of his past decisions. What are the main challenges facing you in your business now and how do you solve them? At present we are in the process of increasing our market share and we are faced with the fact that potential large customers are working with other suppliers. The challenge is to gain their confidence and convince them to try to collaborate with us in order to experience our level of quality and see the results obtained in the Brightway training and consultancy programs. So we have created demonstrative sessions and a set of individual programs that are different from what is on the market now.
∫ ANDA SEBESI How did you enter the Romanian business scene and when? Brightway was founded by my father, who got the idea after attending a more complex training program for top managers organized by a university in the UK. His aim was to discover new methods to develop a company specialized in the distribution of IT equipment. He applied some successful strategies and some friends asked him to organize a similar program in Romania. More and more requests came in a short time and so the need appeared to create a center of separate incomes, namely Brightway. I joined the business after seven years in sales when I decided that I was ready to become an entrepreneur and could bring added value to the company. At that time Brightway was a business fueled only by word of mouth. We decided that we had the specific know-how to collaborate with larger customers and we started to become more visible in the market and develop our portfolio of services, targeting a medium- and long-term growth. Why did you decide to launch such a business in Romania? I had the chance to see more ways a company can operate, both with Romanian and foreign shareholders. Some of them were successful, some weren’t. I realized how important it is to have the right people for their jobs who are trained constantly to do what they do as well as possible and to im-
Brightway Established: 2004 2014 turnover: EUR 330,000 for the group of companies that operates under the Brightway umbrella 2015 estimated turnover: over EUR 400,000 Number of employees: 7 and 4 collaborators Initial investment: EUR 20,000
plement a management system that facilitates results and allows the company’s management to put growth strategies into practice. What was the most difficult moment for your business and how did you manage to surmount it? I joined this business in 2009 when the Romanian economy was starting to feel the negative effects of the economic crisis and companies were rethinking their internal procedures to try to optimize their costs. Many companies cut their training budgets and were waiting to see how the market would evolve before making a decision. I think that this was the most difficult
moment, but it made us innovative and drove us to focus fully on results. If you started another business, what would you do differently? Whatever its result or consequence, each decision I made was a source of learning in the pursuit of perfection. I try constantly to scale up the things that work and change what didn’t bring the expected results. If I started another business with my current experience I certainly wouldn’t make some of the decisions that cost me a lot. But it was a beautiful journey and I think that people learn best from their mistakes, so I don’t regret anything that I have done so far.
How fierce is the competition in your field of activity and what do you think differentiates you from the crowd? The local training and management consultancy market is quite fragmented now. There are many small companies and plenty of freelancers. It is a business that doesn’t require a large initial investment and this encourages many individuals to enter the field. But the majority of them don’t earn high incomes or disappear from the market in two or three years. Brightway has now been present on the market for 11 years and we have developed successful projects for more than 300 companies. Each training session is based on a business simulation that facilitates the learning process. The training programs are followed by consultancy projects for the implementation of the delivered tools. We have trainers with business experience and a medium- and long-term training process that is accompanied by the constant evaluation of its results. What are your plans? We intend to increase our turnover by about 60 percent in the next three years. We also plan to focus on more types of technical training and access European funds for the development of human resources. Each year we invest in developing new training products and marketing campaigns. Time is the most important investment for me, and I have invested thousands of hours of work in this business over time. anda.sebesi@business-review.ro
www.business-review.eu Business Review | August 2015
20 TAX & LAW
bRIEfs Parties reach agreement on cutting VAT to 20 percent Following the latest debates over the Fiscal Code, representatives of the main political parties in Parliament have reached an agreement over lowering the general VAT level to 20 percent from January 2016 and 19 percent the following year. Politicians also agreed to scrap the tax on special constructions, but postponed the axing of the EUR 0.07 excise tax on fuels to 2017. Finance minister Eugen Teodorovici said the gradual lowering of the general VAT level and postponing the elimination of the fuel tax to 2017 would help reduce the budget deficit to approximately 2 percent, down by about 0.5-0.6 percentage points from the government’s initial estimation. The changes come after the president, Klaus Iohannis, sent the initial Fiscal Code back to Parliament for reexamination this July. That draft would have reduced VAT from 24 percent at present to 19 percent and scrapped the tax on special constructions and the EUR 0.07 excise tax on January 1, 2016. Parliament is expected to vote on these changes in the last week of August.
fiscal agency refunds EUR 350 mln of VAT in August The National Agency for Fiscal Administration (ANAF) will reimburse RON 1.55 billion (EUR 350 million) of VAT in August, according to Agerpres. The reimbursement concerns the settlements approved until July 27 for imports and until July 10 for other operations. Approved settlements with compensation and refunds amount to RON 1.34 billion, including RON 1.29 billion of refunds and RON 47.01 million in compensation.
Tax procedures change 23 times in first 7 months of 2015 In the first seven months of 2015, the Fiscal Code, its implementing rules and the Fiscal Procedure Code underwent a total of 23 amendments, which increased spending on tax administration, IT services, and tax and accountability advisory, according to a TMF Group study. The tipping tax act, the VAT change and VAT registration procedure amendments were the most significant tax changes during the first seven months of the year. Of the total of 23, 12 changes were made to the Fiscal Code, two affected the implementing rules of the Fiscal Code and nine were made to the Fiscal Procedure Code. They ran from simple changes such as amendments to forms, to major revisions, such as the VAT rate on food.
European order for payment. Irregularities with the service of the order. Remedies provided by EC Regulation 2006/1896 Andrei Talamba Attorney at Law, Schoenherr si Asociatii SCA
A European regulation (EC Regulation 2006/1896) sets out a very accessible debt recovery tool in cross-border disputes by providing flexible procedural rules for the issuance of enforceable titles consisting in orders for payment. However, the differences between member states legislations can sometimes hinder the procedures. According to the Regulation, the relevant court of justice from the member state in which the claimant resides (shortly "the court of origin") can render such orders for payment. On the other hand, the defendant has the right to challenge the order for payment by filling an opposition against it within 30 days as of receipt (i.e. service). If the defendant does not oppose the order or the opposition is denied, the order for payment will be declared enforceable by the court of origin. Subsequently, the creditor may start the enforcement procedure in any member state without the need to carry out any further recognition procedures. If the defendant is not served with the order in a timely fashion or cannot oppose the order due to extraordinary circumstances, article 20 of the Regulation provides the possibility to lodge a review. In case the review is granted, the order for payment will be cancelled. As far as the service of documents procedure is concerned, the Regulation provides minimum requirements, which will be completed with the procedural rules of the defendant's member state ensuring that the latter is duly served with a copy of the order for payment. The Regulation however does not provide for any remedies in case the service of documents is not effectively carried out (i.e. the defendant does not actually receive a copy of the creditor's request for order of payment and/or the order for payment itself, et cetera). Due
to the fact that the service of documents procedures vary among the member states, certain difficulties have arisen in practice considering the severe sanction provided by article 20 of the Regulation. In a recent case, an Austrian Court that issued an order for payment, subsequently declared enforceable, was confronted with a service irregularity arising from failure to effectively serve a defendant having its head office in Romania. Briefly, the order for payment and the documentation attached thereof were served to the defendant in the postal box of his registered office, but there was no actual proof that the documentation actually reached the company in question. As no statement of opposition had been lodged by the defendant, the order for payment was declared enforceable and the claimant successfully carried out the enforcement proceedings in Romania, recovering all amounts provided by the order for payment. Several weeks later, the defendant lodged a review according to article 20 of the Regulation claiming that it did not have any knowledge about the order for payment procedure initiated and that there was no valid proof as to the service of the relevant documentation. The Austrian Court granted the said review. The Austrian Court however did not declare the payment order to be null and void as per the provisions of article 20 of the Regulation, but only invalidated the enforceability declaration of the payment order. This resolution, although equitable, is not actually provided by the Regulation. When rendering the solution, the Austrian Court had taken into account a European Court of Justice precedent (cases C-119/13 and C-120/13) stating that as long as the order of payment is not delivered in compliance with the minimum standards in the Regulation, the time interval for the opposition does not start to run. Consequently, under
such circumstances the enforceability declaration cannot be issued. Furthermore, the review procedure is applicable only in the exceptional cases listed in article 20, whereas failure to effectively service the documents is not one of them and an application by analogy of the Regulation is accordingly precluded. Thus, given the ruling of the European Court of Justice, it is not the order for payment which has to be cancelled in such cases, but the enforceability declaration is to be rendered invalid, as the potential service irregularities cannot affect the order for payment. Notwithstanding the benefits of the interpretation of the Regulations, the stand-alone sanction of invalidating the enforceability declaration leads to a series of potential problems which will certainly arise in practice due to differences between Member States' rules of civil procedure. Our example is more than notable, as at least a reasonable question arises in this case: What will be the consequences of an invalidation of the enforceability declaration in cases in which the enforcement procedure has already been carried out (i.e. the amounts provided by the order for payment have been recovered within the enforcement procedure)? It is worth mentioning in this respect that the Romanian Civil Procedure Code does not provide an equivalent declaration of enforceability procedure for court decisions such as the order for payment, so that the invalidation of the enforceability declaration has no correspondent in the Romanian legal system.
a.talamba@schoenherr.eu
www.business-review.eu Business Review | August 2015
AGRICULTURE 21
Local agriculture left gasping after drought Local farmers are still reeling from the drought earlier this year, which has reportedly caused them more than EUR 2 billion of losses. While they may be entitled to compensation, the problems dogging local agriculture do not stop there, say industry representatives.
∫ LAURA GRIGORE Laurentiu Baciu, president of the League of Agricultural Producers’ Associations in Romania (LAPAR), told Mediafax in early August that the drought had severely affected crops this year, costing producers more than EUR 2 billion in sunk investments, and will raise the prices of Romanian products. Meanwhile, the minister of agriculture, Daniel Constantin, said that the authorities would grant specific indemnities to small and large farmers (the latter requiring the approval of the European Commission), claiming that there was no accurate assessment of the effects of the drought on agriculture. According to Mediafax, Constantin said that probably every farmer had incurred losses due to the spring drought. However, crops sown in the autumn of 2014 at the end of the harvest had not been badly affected. For example, for wheat and barley, 2015 results are slightly better than in 2014. While in 2014 the average wheat production per hectare was 3.64 tonnes, in 2015 it is 3.68 tonnes, and the amount harvested, according to the latest data, is 7.5 million tonnes, up from 7.4 million tonnes in 2014. Barley production per hectare stood at 4.03 tonnes this year, versus 3.8 tonnes in 2014, with a total of 1.05 mil-
lion tonnes having been harvested. Rape yields were down, however, at 2.36 tonnes per hectare compared with 2.57 tonnes in 2014. “Spring crops, especially maize and sunflower, are likely to be affected by the drought to a certain degree. We will try identify the worst hit areas, based on farmers’ losses, so as to provide the compensation allowed by the state budget while taking into consideration the losses suffered by individual farmers,” Constantin told Mediafax. “For small farmers, who have had losses of more than 30 percent of their acreage, we will give aid from the state budget under a de minimise scheme that will be established by government decision in September, following the first budget amendment. Damages will be awarded depending on the financial resources received by the Ministry of Agriculture.” For large farmers, whose compensation should be higher, the European Commission has to be notified. “We expect the European Commission's response – whether to grant these schemes from the state budget – will come in a few months, and immediately afterwards we will pay these damages, most likely in early 2016. We are working on preparatory documents in order to ask the European Commission to give us help. If we do not receive this assistance, there is already a govern-
The head of LAPAR also wants to sue the National Meteorology Administration (ANM), because it failed to predict the bad weather that contributed to farmers’ losses. However, ANM management denies any fault and said it had done his duty. “The ANM, from March 1, updated the soil water reserve status daily under operational procedures. Weather forecasts for seven days in advance and for two weeks in advance for each region are updated daily. Data from the European Centre, which estimates the Romanian average monthly temperatures and rainfall over next three months, are also updated daily, so users can see what is going to happen,” said Elena Mateescu, ANM executive director. The National Federation of Unions of Agricultural, Food, Tobacco, Fields and Related Services (Agrostar) says that, besides a clear strategy on the irrigation sector, what is needed are measures to prevent desertification and landslides, maintain soil humidity and similar. “In recent years, extreme weather (such as drought, excessive rain and hail) has become more frequent and the sector is suffering from a lack of coherent policy on the medium and long term. Investments in irrigation have been too low. They never materialize, and where irrigation systems are in place there are very high electricity prices. Romania should have an agricultural policy that takes account of climate change,” said Horațiu Raicu, secretary general of Agrostar. Constantin said that in SeptemberOctober Romania will get an answer regarding its proposed projects under the Juncker Plan (an investment plan for Europe). “If we succeed, then we will improve basic infrastructure for irrigation. Under the Juncker Plan, if our project is approved, we have three alternatives: public-private partnership, loans – which I would not wish to consider – and a bill that we have in Parliament, to allocate a larger budget to the main irrigation infrastructure,” added the minister. Some 90 percent of the irrigation system has been destroyed, so of the 3.3 million hectares irrigated in 1989, only 300,000 hectares are currently being used.
ment commitment working on the two schemes to which I referred,” said Constantin. State aid for farmers affected by drought is subject to European regulation, which bars such aid from exceeding 0.6 percent of GDP. A program of irrigation that was started in 2012 is due to be completed in 2020. It has a record allocation for the post-December period, almost EUR 600 million from European funding for rural development programs from 2007-2013 and 2014-2020. “Currently EUR 128 million has been invested in the implementation of projects serving an area of about 400,000 hectares. And for 20142020 we have already launched the projects application session for values exceeding EUR 430 million,” added Constantin. The agriculture minister said that crops planted in autumn would not incur losses, as efforts were underway to safeguard the harvest. The authorities agreed with farmers to try by the end of August to give them the certificates based on which they could begin to take out the loans they need to begin sowing autumn crops. “And we will do our best from 16 October to facilitate the European Commission advance payments based on the owned surfaces, as we have done for the last three years,” said the official. laura.grigore@business-review.ro
www.business-review.eu Business Review | August 2015
22 LEADERSHIP
Follow me: what makes a great leader? Do you have it in you to head up your organization? And what makes a good leader? From giving trust to setting an example, from specialist training to inherent qualities, from effecting change to creating new leaders, experts in HR and leadership told BR how they believe true leaders are formed.
Mihaela Nicola, The Group
∫ ROMANITA OPREA Leaders in organizations with highquality leadership teams typically display four of the twenty possible types of behavior, a study by McKinsey & Company has found. These four traits (supporting others, operating with a strong results orientation, seeking different perspectives and solving problems effectively) can explain 89 percent of the variation of leadership effectiveness between strong and weak organizations, found researchers. The survey participants were 81 organizations from all over the world (Asia, Europe and North America), from different industries (e.g. consulting, energy, government, insurance, real estate) and sizes (from 7,500 to 300,000 employees). But what else does it take to be a real leader? “A true leader, for me, is a person who is smart, ambitious and confident, inspiring his or her people towards a common vision/goal, helping the team move forward, understanding people’s needs and addressing them individually, and, probably most importantly, building other leaders,” said Mihai ConstantinPau, senior engineering manager at Intel Romania Software Development Center. He went on, “It is hard to reach that level of leadership if you don’t find all
Mihai Constantin-Pau, Intel Romania Software Development Center
Zdravka Demeter Bubalo, MOL Group
the resources within you and you have to work hard to learn, acquire and become it. I think it takes a combination of skills which you’ve got to start developing from childhood.” Constantin-Pau believes that there are some basic skills involved in understanding people’s needs and empathizing that are almost impossible to train for later in life. However, if you have the foundation you can put a lot of effort into developing them. “It will take practice; you will make mistakes (and hopefully learn something from all of them); you will need guidance from people in the various stages of your development (from other leaders you respect a lot); you
will need to learn and be willing to take advice. Ultimately, it will be up to you to find your own way of doing things and to make sure you make the most out of what you are. It’s a beautiful journey that probably never ends, as you will keep learning and becoming better at what you do,” added the Intel Romania representative. On the same theme, Alin Comsa, founder and trainer at Self Trust Academy, commented, “It is very important to understand the difference between management and leadership. Of course, the two have some common points. However, while management is about organizing in order to achieve some set objectives, leadership is firstly about
Principles of leadership l Be charismatic; have the ability to persuade and convince people l Know how to motivate and follow the principle: “Follow me, I’m right be-
hind you” l Understand there is no leader without followers l Have the capacity to take responsibility in any situation and expose your-
self; when you spread the light, you can sometimes burn yourself l Have the ability to present an objective clearly, in a concise manner and
simply (public speaking abilities) l Set an example; continue even when nobody else believes it can be done l Be there for the people you are leading l Be a visionary
Source: Self Trust Academy
motivating groups to reach targets.” He added, “It is leadership when you help a group of people do more than they thought they were capable of, when they follow you because you give them an inspiring example – so you can be a leader when you are an artist, for example; you don’t necessarily have to have a designated team to formally manage.” With a portfolio of clients including Raiffeisen Bank, HP, IBM, UNCAR, Banc Post, AIG Life, Eureko and Phoenicia Hotel, Self Trust Academy provides training in leadership, public speaking, sales and personal growth. The company describes its main goal as helping its clients reach their true potential and gain trust in their abilities and strengths. “A leader can have many less obvious qualities and abilities, including: to be a good psychologist, as it is necessary to understand very well what the members of the team want; general knowledge, as, usually, people have great respect for someone who can intelligently support a conversation; to be a very good speaker, as people readily follow a leader that expresses himor herself clearly, coherently and with impact; and to be someone with interests he or she can be proud of, because it shows openness – such as sport, collections or charity work,” said Andrei Dunuta, leader and founder of the Self Trust Academy. Nevertheless, “a true leader is not only the driver for change, but also responsible for making it happen by taking all business, organizational and people factors into consideration and managing consistent, transparent communication across the organization to minimize uncertainty and streamline change-supporting activities”, commented Zdravka Demeter Bubalo, HR vice-president of MOL Group. She also believes that in a matrix structure with a geographically-diverse workforce, the ability to lead from a distance is a key success factor of a highly-developed leader. “We think that a great leader empowers employees and makes sure the right decisions are made by the right people at the right level, as close to everyday operations as possible, where all the necessary information is available,” added Bubalo. Additionally, the VP thinks that di-
www.business-review.eu Business Review | August 2015
versity plays an active role in leadership, arguing for involving a wide range of mindsets in the decision-making processes and for interest in and dedication to coming up with real innovative solutions across the organization. She says that at MOL Group there is great focus on diversity of nationality and age, and the company’s representatives place special emphasis on developing and supporting women leaders, as in the oil and gas sector, gender diversity still needs to improve, with mentalities lagging in this respect. By contrast, Mihaela Nicola, CEO of The Group; Gabriela Lungu, currently creative director at TBWA \ London; Veronica Savanciuc, CEO and president of Lowe Romania; and Maria Tudor, CEO of Zenith Romania; are all examples of prominent women leaders in the communication field. Nicola told BR, “One has to love life and people in order to constantly bring together their value. Grit makes the difference. Leadership is the rare attitude of constantly seeking new horizons, finding the right path and pace as well as inspiring others to follow. Romania has seen amazing marketing and communication achievements. There are splendid projects coming from companies, media and NGOs.” Henry Ford once said that the secret of success is to offer everything without asking for anything in return. Representatives of Self Trust Academy say that this applies perfectly to the notion of trust. “The secret of gaining trust is to offer it without asking for it in return. The best strategy to build a relationship based on trust, from my point of view, is to give it. People make mistakes sometimes and the leader knows that only by giving trust can they obtain results through people,” said Dunuta. “When someone makes a mistake, the leader is there for them, emphasizing what was good and what needs to be improved, plus what has to be done next time. This is how we build trust. Of course, a concrete strategy to give trust is related to the verb ‘to do’. Let’s not forget – the leader sets an example. When the leader does what needs to be done, firstly he or she generates trust that the objective can be reached.”
Knowledge and research are power A company that has invested money and effort in finding and hiring the best talent will, of course, want to use the most effective methods to develop leaders and continue to grow their skills. So how can an organization maximize the effectiveness of development choices? According to the Global Leadership Forecast for 2014 and 2015, put together by Development Dimensions International (DDI) and The Conference Board, leaders across-the-board said in-role assignments are most effective for developing leadership skills, followed by formal training. According to the research, formal training appears to be more valuable early in a leader’s career to build the
LEADERSHIP 23 foundational skills they’ll draw upon later, and is increasingly replaced by the benefits they receive from developmental assignments as they rise to the top. Coaching from one’s manager was the third most effective method. Even though external coaching is not heavily used or emphasized (only a third of organizations use external coaching regularly), it was incrementally more effective at upper levels and more effective than internal coaching/mentoring for all but the first level. Researchers say that the more complex challenges facing more senior leaders
stand-alone learning means. This is likely to change, however, as more programs incorporate these methods and as organizations integrate technology more deeply into their learning strategies. The study findings were based on survey responses from 13,124 leaders, 1,528 global human resource executives and 2,031 participating organizations worldwide. Researchers were able to draw on diverse perspectives from leaders and HR professionals across four leader levels, based on gender, 48 countries across all regions, 32
Alin Comsa, Self Trust Academy
Andrei Dunuta, Self Trust Academy
MOL Group representatives say that a true leader is someone who acts as a role model and promotes organizational values by his/her behavior, and works hard to achieve business results by engaging and motivating his/her employees. “We are convinced that a true leader has a challenger attitude, which is the key to success both from a corporate and human resources management perspective. That’s why at MOL Group we have developed several challenging talent acquisition and development programs for students and graduates in order to attract young talent at the early stage of their careers, and to accompany them on their way to the top,” said Bubalo. The company’s training and mentorships are delivered under the LEAD umbrella, which is designed and managed in close co-operation with internationally-recognized business schools, the Thunderbird School of Global Management (Arizona, the US) and the Cotrugli Business School (Croatia). LEAD is broken down into three streams: Emerging, Growing and Advanced Global Leaders, intended to equip participants to “set the pace for others” in potential leadership roles. During the program, participants take practical modules focused on leadership skills, industry trends, strategy development and execution and change management. In addition they receive a flexible on-the-job challenge of managing a year-long project which requires the skill set of the position they are aiming for. Experienced leaders act as mentors and participants can present their project to the executive board at MOL Group. “As a result, in one year 32 percent of LEAD participants were promoted to managerial positions, such as CEOs of MOL’s offices in the Czech Republic or in Austria,” added Bubalo.
major industry categories, and multinationals versus local corporations. “At Intel, we are encouraged to take several courses, whether online or face to face. I've attended several such training sessions and the program I liked best was the Gustav Käser Management course, which took place over several months at the company and in- The sky’s the limit cluded both group activities as well as But can anyone be a leader? Alin one-on-one mentoring sessions. Intel Comsa believes leadership ability is in also encourages rotations, giving peo- the DNA of each of us, just as everyone ple the opportunity to exchange expe- has an inherent amount of charisma. rience with teams around the world, “It is true that throughout life, for differget inspired by other cultures and find ent reasons (shortcomings, disappointresources to evolve both at a personal ments, anger, loss) some of us lose this and professional level,” said Constan- natural gift. Leadership is a behavior – tin-Pau. I can’t say it can be taught, but it can be assumed. So, everybody can become a leader if he or she decides to and is willing to make the effort for others. You will be recognized as a leader if you give yourself, if you strive, if you are inl Leadership can happen at any level terested in doing things for the group l The most important leadership in a company is at middle management you are part of,” he concluded. level Others agree that where there is will, l A leader cannot be imposed formally; he or she is established by the will there is a way. “Ambition and confidence are the critical skills needed to of the team become a great leader. If one’s people l The leader influences the culture of an organization skills (the ability to understand peol The leader sets the work dynamic and directly influences the organizaple’s needs and empathize) are there, tion’s results then you, as a good businessperson, l A leader creates leaders will dedicate all it takes to become a l Leadership is not a position to mention on a business card – it is a begreat leader,” added Constantin-Pau of havior that people recognize in you or not Intel Romania.
often require a greater level of sensitivity and impartiality, which makes external coaches more suitable advisors. Ranking last in effectiveness were technology-enabled training methods, such as instructor-led online training or mobile-accessible and social learning applications. These methods may be less appealing when leaders have access to in-person development; however, very few programs currently incorporate technology-enabled methods (only one in eight organizations), and as a result, few leaders may be familiar with them. Currently, these methods are more likely to be seen as supplements to formal learning or developmental assignments than as
Qualities of leadership
Source: Self Trust Academy
romanita.oprea@business-review.ro
www.business-review.eu Business Review | August 2015
24 LEADERSHIP
OPINION Oliver Perkins, MANAGING DIRECTOR OF BRAINOVATETM
What can Romania teach the world about leadership? Oliver Perkins tells Business Review how much Romania has evolved in terms of leadership in the last decade and emphasizes the importance of the new generation of Romanian leaders. When I first came to Romania, nearly 15 years ago, I found a land rich in opportunity and with an openness to “Western style” leadership paradigms. There is still, of course, a thirst for knowledge and an interest in an alternative international perspective. Today, however, I find myself increasingly reflecting on how the world has changed, Romania has evolved and how much Romanians can teach us “foreigners”, in terms of leadership, in the areas of business, the arts and the wider community. There is, of course, no such thing as a Romanian leadership style. Leaders come in all shapes and sizes; they all have different challenges, stories and experiences which shape how they lead. Therefore to define and pigeonhole Romanian leadership as one thing or another would be futile and erroneous. What is interesting, however, is to examine what has been written about the Romanian psyche and national character – Romanians, it is said, are survivors, they are a fun loving, individualistic, traditional, superstitious, family-orientated, passionate, open and educated bunch. Nowadays there is a new generation that is also full of confidence and pride – innovative, entrepreneurial, creative, hardworking and drivers of change. This new confidence and pride exists despite years of economic turmoil, brain drain, and, more recently, a concerted media onslaught primarily in certain sections of the European and in particular the UK press. Perhaps this is one of the reasons why a whole new vibrant community of leaders has appeared on the radar here and abroad – leaders that celebrate openly and confidently their “Romanianness”. We only have to look at initiatives such as the “Bucharest not Budapest”, and “Why don’t you come over?” campaigns or indeed the work of Bucuresti Optimist to see how Romanian leaders at all levels in our society are shedding a positive light on their country and are standing up to be counted. At the time of writing, economic indicators put Romania on a positive footing with growth being among the highest in
Europe. Moreover, it’s been widely recognized that Romania is a world leader in the field of IT. Indeed, just in the last few weeks, the Romanian-run Pangea Communications firm based in San Francisco created a world first in building new software that allows data transfer via traditional voice networks. My own experience working with young people in multinationals such as IBM and Oracle and start-ups such as Qualitance is nothing short of inspirational in terms of their leadership, innovation and international successes. In sport, the arts and music too there is a whole new emerging community actively changing the way Romania is perceived locally and internationally. Simona Halep is a role model for thousands of young people and the award-winning film director Alex Nanau received international acclaim for the hard-hitting documentary Toto and his Sisters. It’s also encouraging to see the number of high profile festival and community projects this year alone, including
Blaj Alive, Untold, Artmania, FITS, Street Delivery, Roaba de cultura, Electric Castle and Summerwell – all proof that Romania is on its way to becoming an arts and music force to be reckoned with. Social change and leadership is evident, in the community, at grass roots level too. If we look back to Klaus Iohannis’s recent presidential campaign or the Rosia Montana issue, it’s easy to see that there is a new generation of leaders, Romanian bloggers, activists and social media campaigners taking a strong stance on who is in power and how the country is being run. Romanians are, slowly but surely, rejecting top-down traditional command and control leadership models – leaders now exist informally at all levels of business and society. This is leadership based upon having a shared vision of a better and happier Romania, a focus not just on self interest but something bigger, a collaborative community-based approach where leaders work together as a force to manage and instigate change.
These leaders are alive and well and living and working amongst us today. They understand the power of positive intentional influence and directly or indirectly inspire, create and develop sustainable leadership in themselves and others. These leaders move us beyond the platitudes of those who hold the traditional positions of power and into the heart of leadership – to our deepest human and societal potential – while asking us to focus on what really matters. Leadership and what it means is constantly evolving and redefining itself – but at its core is a focus on people. Traditional distinctions of leader and follower have become blurred. We all have the power to lead, make a difference, to influence and grow others and make things better. Leadership is no longer about status, privilege and authority. It’s true that, in Romania, the old guard still exists and holds many of the important cards in political life, corruption is forever a concern and high levels of poverty still exist. When I speak to my Romanian friends many say the same thing, namely, that it will take a generation for things to really improve. They could well be right – only time will tell. I am inherently more optimistic. Whilst recognizing change, in certain sectors, may be slow, it is too easy and convenient to focus on the negative. Leaders by definition look towards the future with a focus on the positive. In this respect it’s my belief that with the gradual demise of traditional top-down leadership models, there is a generation of younger inspirational and innovative individuals who increasingly have a part to play. They are the ones who are telling a new story, they are the ones who are gradually shaping, step by step, a bright future for Romanians and for those of us lucky enough to be living here. Indeed, if we look in the right places and at the right people, no matter where we are from in the world, we could all learn a thing or two.
About the author: Oliver Perkins is the managing director of BrainovateTM and is holding a Legacy Leadership Seminar in Bucharest from 13-15 October e-mail: oliver@brainovate.com
www.business-review.eu Business Review | August 2015
IT 25
Markus Lause, Vodafone: ‘Local firms increasingly want to give their staff smartphones’ Vodafone Romania recently launched a series of services intended to improve customer experience, such as the Vodafone Backup +, which offers users 25 GB of cloud storage, and the Smart Archive and video surveillance services in the cloud for businesses. Markus Lause, director of the enterprise business unit, told BR the operator’s priorities going forward. have in our portfolio Office 365 services, which include storage services (One Drive), e-mail, Office online and unified communication options. Office 365 is more suitable for business customers, as it provides 1 TB of data storage.
∫ STAFF What can businesses expect from Vodafone in terms of new offers and services? Mobile and fixed communication is the core of what we do and we need to enable Romanian business productivity. (...) We concentrate on fixed services, the applications as a service (or Service as a Service) segment and we also tackle security areas, through solutions like video surveillance. We will continue to expand our M2M portfolio with new global and local solutions, in order to maintain our M2M leadership on the Romanian market. Vodafone has been ranked as the strongest communication service provider (CSP) in Analysys Mason’s 2015 M2M scorecard for a record fourth time. Additionally, it was awarded the Overall Excellence award which recognizes us as the Best Worldwide M2M its users to send and receive money, as well as pay for products and services. CSP. What is the adoption rate of 4G services among Vodafone's business customers? 4G remains Vodafone Romania’s focus for 2015, with more and more business customers embracing it for the Supernet benefits in terms of experience, speed and security. 4G data traffic for business customers grew spectacularly, and the number of 4G handsets used by our business customers more than doubled. Can you give any recent examples of enterprise clients who have taken up Vodafone's business offer? We are continuously growing our number of clients and, among the latest additions, we can mention Spring Prod Com SRL, the company that runs the Phoenicia chain of hotels.
What is the operator’s share of the SME segment in fixed and mobile services? Vodafone has a strong presence in the SME segment, leading the market. In the last couple of years, our customer base has become more and more convergent, since we introduced Vodafone Office Complet, a complete bundle of fixed and mobile services. We have
tens of thousands of VOC business customers. During the last two years, Vodafone has doubled its fixed services share on the SME segment, through the Vodafone Office Complet package. What are your estimates for the adoption rate of the Vodafone Backup + service? Vodafone Backup + is mainly a consumer/residential service. In business, though, we have developed a strong partnership with Microsoft and we
Markus Lause bio l He has worked as director of the enterprise business unit at Vodafone
Romania since April 1, 2013; l Previously, he worked at Vodafone Germany, where he was enterprise
sales director for a year and a half; l Before that, he had led the enterprise marketing division for four years; l Lause has been working with Vodafone Germany since 2001, starting
with various roles in the business and consumer product management Has Vodafone been involved in any project for the implementation of NFC in Romania so far? In terms of e-payment solutions, Vodafone globally delivers mobile wallet solutions and, in Romania, M-Pesa is a strongly growing service that allows all
l From 1996-2001, he was founder and managing director of the Webactiv
internet agency; l Lause is co-author of the book The Intelligence of Networks (Leben im
Schwarm); l He holds a degree in Business Administration from the University of
Koln and a master’s degree from Henley Management College
What about the Vodafone Smart Archive service? What are your estimates for the adoption rate? This is a recently launched innovative digital solution for archiving business documents. It is a solution designed mainly for businesses which aims to simplify the process of storing, searching and using different types of documents, through a professional and very secure service. Lawyers, notaries, accountants, administrators, assistants, doctors, and even more user categories will find Vodafone Smart Archive an efficient tool and a gateway to digitalize their businesses. We expect to transform the way business is done and Smart Archive is one of the many solutions dedicated to this objective. How many smartphones does Vodafone sell monthly? Vodafone business customers are used to acquiring both devices and services from us, so the majority of smartphones are sold with a subscription. We see that Romanian companies are more and more interested in giving smartphones to all their employees, as they understand the benefits in loyalty and business efficiency. In the last year, smartphone sales have increased by more than 25 percent. Vodafone has tested TWDM-PON technology with Alcatel-Lucent in Europe. Will this technology reach Romania as well? Our 4G network currently covers 100 percent of the population in Bucharest and all 41 county capitals, as well as the major mountain and seaside resorts. The 4G network is currently being rolled out in Romania’s 100 most populous towns and cities. editorial@business-review.ro
www.business-review.eu Business Review | August 2015
26 PROFILE
Toasting a ripening wine market Mihaela Tyrel de Poix, CEO of Romanian wine producer SERVE, talks to BR about the company’s performance in the first semester of this year and the long road the local wine market has travelled over the last 20 years.
∫ SIMONA BAZAVAN This year has got off to a good start for Romanian wine producer SERVE, with the company reporting a turnover increase of 10 percent in the first semester compared to the same period of last year. The market has also toasted an overall increase, and although doubledigit growth rates like before 2008 are unlikely to return too soon, this is no bad thing, Mihaela Tyrel de Poix, the company’s CEO, tells BR. The overall market is more mature both in terms of supply and demand compared to ten years ago, and even more so when compared to the situation at the beginning of the 90s. SERVE was set up in 1993, making it the first privately owned winemaker in Romania after 1990. Today it owns some 110 hectares of vineyard in Cep-
said Mihaela Tyrel de Poix, the late count’s widow, who entered the partnership in 1993. She had graduated from the Polytechnic University in Bucharest but says she found it hard to continue with her old job after the revolution. “Making use of my English and French skills I started representing various entrepreneurs who came to Romania to invest or simply to gather information. One of Investing in posh plonk these entrepreneurs was Guy. With his The story of SERVE starts with Count passion for wine and desire to create Guy Tyrel de Poix, who came to Roma- things he persuaded me to change my nia in 1993 looking to start a wine busi- career and remain in this field. What I ness. Although a dentist by profession, think is most important in a career is to he had a strong background in wine- be able to actually create things and this making back in Corsica, where his fam- is why I made this choice. This is how ily had owned a wine estate for several we both ended up doing this,” she regenerations. “He had Bulgaria, Hungary members. In the beginning, the company foand Romania on his list. He decided on Romania after he saw that there was cused on exports, as back then Romania huge and unexploited potential here,” had several major export markets such
tura and produces approximately 800,000 bottles of wine each year, making it the “largest player among the small ones and the smallest among the big ones,” says its CEO. The company grew alongside not only the local wine industry but also the local business environment as a whole, and can offer today a good gauge of how this sector has developed over the years.
as the UK, Germany and the former socialist countries. However, after the producer lost a contract with British retailer Tesco in 1998, threatening its existence, it shifted the focus to the domestic market. “They got an offer which was three cents cheaper and delisted us. We considered closing the gates as we were left without a business. Back then we exported about 80 percent of our production and 300,000 bottles to Tesco alone,” she says. But the owners gave the company another chance and turned to the domestic market, where in the meantime consumption behaviors had changed enough to create demand for quality wines, adds the CEO. The number of restaurants in Bucharest alone had gone up from about 10 in the early 90s and the first international retail chains were entering the local market. In 2000 SERVE launched a new
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brand of wine, Terra Romana, in addition to its existing brand, Vinul Cavalerului. The biggest challenge during those years was dealing with the volatile business environment of the 90s – what de Poix calls the “savage years” – while the biggest success remain the company’s wines, she believes.
Developing a nose for quality wine
PROFILE 27 also open to new and international trends, as over about five years rose wines have become very popular locally, opening the palate of many wine novices. Red varieties have also become more popular and now represent more than half of the market, says SERVE’s CEO. Further promotion will help boost consumption even further, she adds.
The need for promotion
The Romanian wine drinker has come a “If anyone were to ask me the mistakes long way since the early 90s, says de we’ve made over the years, I would Poix. “Local consumers were very tra- have to say the fact that we overlooked ditional back then. In the 90s they were promotion,” she says. However, given basically at the same level that Western the large initial investments required to consumers were in the 50s,” says the set up a winery, this situation is underCEO. This meant they opted for white standable, she notes. One has to invest varieties over red as the latter were about EUR 15,000 in a hectare of vinewrongly feared to be unhealthy, and yard alone – the price of land not inpreferred sweet wines overall. The main cluded – which will generate income in reason for this was that it was what the about three to five years. But as the market offered at that time. “This was number of private wineries has gone up the consumer we found in the early 90s. considerably over the past 10 years, a When we came with dry wines every- critical mass of producers has been one said they were sour,” remembers de reached in order to sustain promotion Poix. efforts, believes de Poix, who is also the Since then, the situation has president of ONIV, the national associachanged for the better and the local tion of local winemakers. consumer is today much more sophisProducers are now focusing on orticated and knowledgeable. This is ganizing themselves to be able to lobby partly because the supply has diversi- the government and get more support fied since smaller wineries with a focus for the industry. Promoting Romanian on producing quality wines have wines to local and foreign consumers is emerged. Demand has followed suit, es- also an objective. “I believe, and I know pecially as Romanians have started I am not the only one, that wines and travelling and have been exposed to winemaking should become a priority new consumption behaviors. They are for Romania. The export of wine along-
side promoting Romania as a tourist destination would help a lot to improve Romania’s image,” she said. Winemaking and tourism always go well together and de Poix is planning a side investment in a tourist facility in Ceptura after starting to get requests from travel agencies. And the timing is right, as the reputation Romanian wines enjoy outside the country is starting to improve. “Our image abroad as a wine producing country whose advantage is quantity rather than quality is now starting to be forgotten. Slowly things are changing,” she adds.
Toasting a booming industry The Romanian wine industry is probably the local sector with the most dynamic evolution over the past 10 years, says de Poix. While in the early 2000s there were only four private investors, their number has increased to about 300 today. The availability of EU funds from the 2000s has played a major role in this development. And the numbers show that there is still potential for growth. Romania is the sixth largest wine producer in Europe and the 10th largest in the world, with an output of between 5 and 6 million bottles each year. Yet over half of consumers prefer house-made wine to bottled wine, and out of this only around 20 or 30 percent is exported. Nevertheless, the past years have seen considerable development, so
much so that the local wine industry is one of the few sectors where discussions are shifting away from potential and talking about accomplishments. “We have proved there is potential, we are done talking about it and now we are making use of it. And this is something that can be seen. The average quality of products in the market has increased exponentially. While ten years ago there was a 10 percent chance of finding a drinkable wine out there, now the situation is exactly the opposite,” she concludes. simona.bazavan@business-review.ro
SERVE – Company profile: Turnover (2014): EUR 3.5 million Number of employees: 57 Average annual production: 800,000 Vineyard area: 116 ha (60 ha in Dealu Mare and 56 ha in Cogealac) Brands: Vinul Cavalerului, Terra Romana and four cuvees Exports: about 40 percent of production Export markets: Canada, USA, Belgium, Germany, France, Luxembourg and Cyprus
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28 EDUCATION
Non-formal education opens its books With parental confidence in state educational provision low, businesspeople have spotted an opportunity to import international non-formal education courses onto the Romanian market. Local franchise holders told BR what their courses offer children, what’s involved in setting up such an operation and how they see the market developing.
Big opportunity: learning better and faster
∫ LAURA GRIGORE Non-formal education methods imported from the West are now appearing in the Romanian education system, billed as helping children learn faster and better. The effects of non-formal education are enduring because the information is given in a stress-free and fun way for children, say experts. Non-formal education is said to be associated with the concept of lifelong learning and stresses the importance of education in going beyond the formal education system. It may be delivered outside school and through activities not covered by the school curriculum, but still furthers children’s knowledge and development. Currently, in Romania, the annual cost of an international non-formal education franchise program starts at EUR 20,000. However, this is just the tip of the iceberg. To this cost is added the material, training the trainers, plus ongoing capital investment in developing new programs. In Romania, starting an international program of non-formal education involves many obstacles, both legislative and financial, say local practitioners. However, parents are said to be keen on these programs and are willing to invest between EUR 500 and 600 per year. “I am convinced that every parent wants a high-class education for their
children, and, as a result, these parents understand the benefits of such programs. But this education isn’t cheap. The problem is how to put these quality educational programs within reach of as many parents as possible for their children,” Dan Gabriel Sauer, engineer at Young Engineers Bucharest, told Business Review. Cosmin Vranceanu, business development director at Technokids Romania, told BR, “Unfortunately, learning methods in Romania are lagging behind, both in terms of training for trainers and material facilities. These two basic components of the process are not given enough attention by our system. A private entity trying to change these things comes up against the outdated learning mentality imprinted in kindergartens and public schools. Then there is the total lack of support from the Romanian authorities.” He added, “Basically you have to prepare all the necessary professional activity: space, facilities, trainers, programs. Obviously there is a segment of parents who understand the benefits of a non-formal education program but most of them are confused by the changes in the public education sector. This dampens confidence in any form of education. The good news is that, once they interact with the programs, they stick with them and this gives us hope.” Dana Toma, program director at the
Learn with Music franchise, told BR, mon Core State Standards, a set of rules “We have invested a lot in promotion created to track child development in campaigns and every time we have the US education system. “The program tried to emphasize the benefits of chil- is focused on IT education. We say edudren's participation in such a program. I cation because what we do is more than taught this program in America for eight a simple use of technology. Children are years. When I decided to come back to encouraged to think, to express ideas Romania, I decided to bring this kind of and not least to be very creative. One of interactive program for learning English our goals is to show that technology can and music for children aged six months be used differently, not just for enterto seven years, as nothing similar ex- tainment. As is well known, the IT industry and technology development isted at the time.” He added, “Learn with Music in- are expanding exponentially and so volves learning English through music, program costs reflect this. Education is movement and play. We use materials not a business in Romania; we do it with called The Music Class which have been passion and the conviction that we will awarded in the United States at various find upcoming talent here,” said international fairs and exhibitions. Vranceanu The cost of a Young Engineers franThese materials are carefully crafted by a group of researchers and are specially chise depends on the local population. In a town of 200,000 to 300,000, it runs designed for small groups of children.” Toma went on to say that research from USD 20,000-30,000. Sauer said, shows music helps children become “Young Engineers educational programs better learners, and that even a new- are based on principles delivered born emotionally responds to music. It through practical applications, enteralso shows that there is a link between tainment and edutainment. Children mathematical abilities in students and who are just beginning their educatheir musical awareness. “The Learn tional journey cannot know what job with Music program is the perfect way they will do in more than 20 years. to start a child's lifelong educational ca- Therefore, we believe that the best way reer and learn a new language (English) of preparing our children for an unknown future must be based on a in a fun way.” The Learn With Music program is generic approach which inculcates a vacurrently available in Bucharest, Brasov, riety of personal experiences that lead Cluj-Napoca, Constanta , Iasi, Ploiesti, to the development of thought, curiosSibiu, Suceava, Targu-Mures and ity and the ability to solve problems and Timisoara. The annual cost of the fran- develop creative solutions.” In Romania, the organization started chise is EUR 2,500, and the initial investment is EUR 1,000 for a set of last year with two of the four existing instruments and equipment. Parents educational programs: Big Builders for who enroll their child in the program preschool children aged four-six and pay a monthly fee of EUR 40 for four Lego Challenge for those aged seveneleven. “In time, we will introduce the classes. Among the challenges facing the other two educational programs Young Engineers franchise, Sauer cites GaliLEGO and Robotics Software Engithe rigidity of the local public education neering,” added the representative. The system in ignoring such educational monthly cost is RON 180 for four classes. Vranceanu told BR that although programs. “The state education system in Romania has to understand that by some educational franchises have atsupporting the Young Engineers pro- tained success in Romania, the concept grams, children will come to school is still questioned. “We cannot speak with pleasure because they combine about competition when there are only education and entertainment practice four or five IT education companies, with theory. They will learn about compared to a population of 22 million. things, mechanisms, topics and science The problem is not competition but rethat they encounter in everyday life. gaining parents’ confidence in a serious And what could be more beautiful and and professional education system,” he exciting for a child than to use Lego con- said. The firm currently has two locastructions to learn?” added Sauer. “We tions in Bucharest and one in Sibiu and need to understand that complex is in talks over other centers in several thought processes are discouraged by cities that will open in September. The negative emotions such as fear and monthly attendance fee is on average pressure.” Another challenge, he said, EUR 50, but varies depending on prowas finding quality people to become gram and age group. instructors to work with kids. Technokids programs meet Com- laura.grigore@business-review.ro
www.business-review.eu Business Review | August 2015
ENVIRONMENT 29
Eco-Rom Ambalaje GM: ‘Recycling should not require public effort’ Although the first selective collection projects started 11 years ago, the growth pace of local recycling activities has been slow. Cristian Popescu, general manager of Eco-Rom Ambalaje, tells BR what obstacles the Romanian recycling system faces. But he adds that there are countries that are champions in recycling which could serve as an inspiration. ∫ OTILIA HARAGA “Romania’s recycling capabilities as far as packaging waste is concerned have reached approximately 900,000 tons, which is far above what is recycled presently. So we have enough recycling capacities at national level; all we have to do is selectively collect more and do it in an increasingly effective way,” Popescu tells BR. For the past 11 years, the selective collection and recycling of packaging waste in Romania have been mainly supported by the industry. The contribution of Eco-Rom Ambalaje members alone has exceeded RON 5.2 million, according to Popescu. Eco-Rom Ambalaje meets 62 percent of Romania’s obligation to recycle packaging waste, according to 2012 statistics from the National Agency for Environment Protection. “Due to these investments, approximately 50 percent of Romanians have access to a selective waste collection system with containers or colored bags, following partnerships we have signed with 527 local authorities and 100 sanitation companies,” Popescu says. As part of this system, developed by Eco-Rom Ambalaje along with local authorities and sanitation companies, the public has access to approximately 17,000 colored containers. Neighborhoods with houses have a selective collection system in place involving colored bags. At local level, independent selective collection infrastructure has been implemented by the Eco-Rom Ambalaje partners with European funds. Part of this is already deployed across the country, while the rest will become available to the public soon. One of the reasons for the slow progress made by Romania in the recycling field is the fact that the system is still a voluntary one, when it should become compulsory, as is the case in the European states that are now recycling champions, Popescu argues. Since national statistics show that approximately 40 percent of the Romanian population does not even have sanitation facilities, selective waste collection is out of the question, he points out. However, Romania has had to com-
ply with certain legal obligations since 2012, as local authorities had to achieve a 15 percent reduction in the quantity of waste reaching landfills and dumps. Romania is also under the obligation to institute, by the end of 2015, a national selective collection system for four categories of waste: plastic, metal, paper/cardboard and glass. “But at the same time, we do not have clear deadlines for the completion of the management systems implemented from European funds,” notes the general manager. The problems in the system do not stop here. Recycling companies are confronted with various legal obstacles that have to do with the unclear roles that actors in the system should play. The law gives vague definitions of household and municipal waste while waste management data are not consistently and fully recorded. On top of that, the penalties stipulated by law are not applied, Popescu adds. “Recycling should not require an effort from the public. People should have a selective collection system that is accessible and located as close to their
home as possible. They must become aware that collecting waste separately should become a habit and not something to be rewarded. Secondly, laws must be applied strictly, including the penalties in the legislative package,” argues the GM. He also suggests other measures that could be applied, such as charges to use dumps, which would discourage this practice to the benefit of recycling. The “pay as you generate” principle should also be applied, under which each citizen pays a sanitation tax based on the quantity of waste they generate, while separate collection should be free. Garbage chutes for buildings that have more than eight stories should also be done away with. “We should be aware that changing Romanians’ recycling behavior will take time. European countries that are high performers in this field teach us that education and public awareness must come alongside laws and the penalties applied when they are not respected. Such a system can only work on a small scale voluntarily. When we realize this, we will probably get good results in recycling,” says Popescu.
But Romania does not have to start from scratch in this, because it has inspiration sources. Belgium is one of the countries that recycle the most, with an 85 percent recycling rate and 90 percent value extraction from the total waste generated. “Their recipe seems simple: 20 years ago, an efficient selective waste collection system was created in which roles are very clear and Belgians are encouraged and compelled to collect selectively,” outlines Popescu. In Belgium, the selective collection system for the public is implemented based on agreements between the organization in charge, the local authorities and the sanitation operator, on the one hand, and the recyclers, on the other. The system is implemented through igloo-like collection bins or colored bags. Belgium also applies the “pay as you generate” System. Household garbage bags are very expensive; for instance, a 60 liter bag costs EUR 2.5. However, selective collection is free of charge or comes at a cost that is 20 times lower than for household waste, says Popescu. “Since 2010, everyone in Belgium is compelled by law to separate their waste. If they fail to do so, fines can even amount to EUR 175 per person, if recyclable waste is mixed with residual waste. Depositing rubbish at the dump is also very expensive, after the government set a EUR 70 tax per ton of garbage. There are also very high penalties for city halls that do not implement a selective collection system. We are talking about a sum of factors that work if they are applied at the same time and which boost recycling performance,” says Popescu. Romania has some flagship cities in packaging waste recycling. In Sfantu Gheorghe and Zalau, the average inhabitant separately collects over 1 kilogram of recyclable waste per month, three times the average quantity of waste recycled in Romania. For the quality of recycling services, Medias, Deva and Ploiesti are leading the way. And for the degree of involvement in the promotion of selective collection to citizens, Brasov and Targu Jiu deserve a mention, Popescu tells BR. otilia.haraga@business-review.ro
www.business-review.eu Business Review | August 2015
30 CITY
Calendar ∫ TATIANA LAZAR Divan Film Festival Until August 31, Cetate Harbor, Dolj county
The eighth Undercloud will feature 33 performances, book launches, conferences and workshops, at which Romanian actors such as Oana Pellea, George Banu, Matei Visniec, Sanda Manu, Florin Piersic Jr, Marian Ralea,
posed pieces for the Emir Kusturica films Time of the Gypsies, Arizona Dream and Underground. Tickets are available on www.iabilet.ro, www.eventim.ro, www.myticket.ro and www.bilete.ro, at prices from RON 60 to RON 180.
Balkanik! Festival September 11-13, Uranus Garden
The Divan film and culinary art festival is once again bringing the spirit of the Balkans to an old Danube grain-shipping port, with movies, documentaries, debates and workshops. Movies are free of charge, as is camping in Cetate Harbour. This year, three Romanian feature films and five shorts will be screened, while Postcards with Wild Flowers / Ilustrate cu flori de camp, a 40-year-old drama about a woman living under the Ceausescu dictatorship, directed by Andrei Blaier, will be celebrated. Aliyah Dada (2015), directed by Oana Giurgiu, and the multi-garlanded Toto and his Sisters / Toto si surorile lui, from Alexander Nanau, will also be screened. Foodies who frequent the Lacrimi si Sfinti restaurant in Bucharest know what to expect from the fare at Divan: from cheese specialties from the Danubian meadows, local vegetables, Danube fish, pork and veal to fruit pies and plum dumplings, the flavors were put together by Mircea Dinescu, who has managed to recast centuries-old Romanian recipes in a new chapter in national gastronomy.
swingcore, gypsy fusion, brass music and Balkan-psychedelic, and the event attracts everyone from jazz lovers, ravers, globe trotters and couchsurfers to families with kids. A full pass costs RON 85.
Plai Festival September 11-13, Banat Village Museum, Timisoara Since it began in 2006, Plai has grown
Marius Manole, Claudiu Bleont, Vlad Zamfirescu, Gigi Ifrim and Șerban Pavlu will take to the stage. Tickets are on sale on www.bilete.ro for RON 35.
Goran Bregovic August 29, Arenele Romane
Undercloud Theater Festival Until August 31, National Theater Museum The Baro Foro intercultural festival event brings Goran Bregovic and His Wedding and Funeral Orchestra to Bucharest, where he will be joined by Mahala Rai Banda and Gipsy Casual, Rona Hartner & The Zuralia Orchestra and Provincialii. Bregovic is one of the most famous and popular Balkan artists, with strong links to Romania. A career spanning over 45 years has won him fans around the globe. He has collaborated with artists such as Iggy Pop, Eugene Hutz (Gogol Bordello) and Cesaria Evora, and com-
Shantel & Bucovina Club Orkestar, Fanfare Ciocarlia, Ivo Paposov, Lemon Bucket Orkestra and Amsterdam Klezmer Band will bring Balkan rhythms to Uranus Garden and the Ark. Now on its fifth run, the festival consists of three days and three nights of lively concerts and arts and crafts workshops. Uranus Garden is a hidden courtyard in the heart of Bucharest, surrounded by surreal architecture from the 19th century which survived the communist town planning of the 1980s. Musical genres will include electro-gypsy
into biggest world music festival in Europe organized entirely by volunteers, while becoming the most important event of its kind in Romania. It combines music, art, and multiculturalism in a charming location, Banat Village Museum. During the day, attendees relax with painting, drawing, creative activities or music workshops, while in the evening they travel the world through music. A hundred camping spaces are available. editorial@business-review.ro