Romania needs better infrastructure

Romania needs better infrastructure, more qualified workforce, and better living conditions outside big cities

Romania has attracted billions of euros in foreign direct investments over the past three decades, and it has managed to close some of the gap that separates it from the most developed countries in the EU. However, there is still a lot to improve, especially in terms of infrastructure, education, healthcare, and digital skills. And right now, there are plenty of opportunities arising in all sectors of the country’s economy.

By Aurel Constantin

The second day of Business Review’s Foreign Investors Summit started with a speech by Economy Minister Florin Spataru, who explained that there were many things the Romanian economy had to change in order to make use of all the opportunities coming from European programmes and the associ‑ ated non‑refundable financing. “The economy must enter a period of transformation in order to become more sustainable, and we need to take exceptional measures in order to boost ESG invest‑ ment. One of the solutions has to do with changing the way things are done in the manufacturing industry. We have a EUR 300 million programme to support the transition towards a more environmen‑ tally friendly industry, and I will fight to keep the programme going until all the funds are used up,” the minister said. “Then there are the measures being taken towards the development of a circular economy. We have the minimis scheme and we also creating new circular economy projects that we can get funding for. This is how we can create a framework for the economy of the future, one that is more sustainable,” he added. Next steps also include developing strategies for mineral resources, for boosting the competitiveness of the economic sector. “The government will have to make sure that these strategies are followed and put into practice,” Spataru concluded.

“Romania has grown into a major centre for mobile technology, information security, and related hardware research. The country has a well‑earned global reputation for developing strong cadres of computer science, technical, and engineering talent,” stated H.E. Mr David Muniz, Charge d’Áffaires, Embassy of the United States in Romania, explaining why our country was such an appropriate host for the International Telecommunications Union Conference. “However, Romania’s ICT sector is just one of the many industries that have attracted US investors’ interest. Some of our most valu‑ able brands—from the defence, energy, automotive, pharmaceuti‑ cal, consumer products, healthcare, finance, and other sectors—are supporting tens of thousands of jobs and have invested billions of dollars on this market. As we salute the American Chamber of Com‑ merce’s 30th anniversary next year, we would highlight that the number of its US and US‑affiliated members have multiplied ten times to over 500 members today. We can say with pride that our commercial relationship is a critical component of the 25‑year‑old US-Romania Strategic Partnership.”

But Muniz also admitted that not everything is great in Ro‑ mania. “The European Commission’s 2020 Country Report for Romania pointed to persistent legislative instability, unpredict‑ able decision‑making, low institutional capacity, and corruption as factors eroding investor confidence. US companies are echoing these concerns, along with shortfalls in energy and transportation infrastructures that reduce operating efficiency and increase costs. We urge the Romanian government to continue combatting corrup‑

Florin Marian Spataru, Minister of Economy The economy must enter a period of transformation in order to become more sustainable, and we need to take exceptional measures in order to boost ESG investment. One of the solutions has to do with changing the way things are done in the manufacturing industry.

H.E. Mr. David Muniz, Charge d’Áffaires, Embassy of USA in Romania Romania’s ICT sector is just one of the many industries that have attracted US investors’ interest. Some of our most valuable brands—from the defence, energy, automotive, pharmaceutical, consumer products, healthcare, finance, and other sectors—are supporting tens of thousands of jobs and have invested billions of dollars on this market.

Perry V. Zizzi, Managing Partner at Dentons Romania We have been here for 25 years and we represent a large number of clients, so we have seen it all. The fact that Romania is a member of the EU and NATO makes a big difference to foreign investors, especially now when we have tanks at our doorstep. Mioara Iofciulescu, LL.M, EMBA Managing Director at Atlantis Romania I do believe that the workforce is Romania’s biggest asset. I think that US investors also see that. We are a country with hard-working people, and we have proven loyalty to our companies. Investors coming here will find a beautiful country, wonderful people, and plenty of business resources.

Elisabeta Moraru, Country Manager at Google Romania: In the last five years we have done projects to improve the digital skills of more than half a million Romanians. That is a huge opportunity because the digital economy is the area where we are all trying to succeed and I believe Romania can play a more important role in this environment.

Ramona Jurubita, Vice-President of Foreign Investors Council | Country Managing Partner at KPMG Romania & Moldova We’re seeing many problems in Romania today, from the workforce shortage to rising prices and the energy crisis, and we must find ways to tackle these problems and make sure that we can overcome them. One answer is in investments, specifically in US investments. tion, holding consultations with stakehold‑ ers, and conducting impact assessments consistently before enacting legislation to improve the overall business climate and to strengthen its position among EU member nations who also seek to attract US inves‑ tors,” he said.

Ramona Jurubita, Vice‑President of the Foreign Investors Council and Country Managing Partner at KPMG Romania & Moldova, took over from David Muniz and explained that the panel would focus on investments, but also on possible answers to the crisis that we are experiencing today. “We’re seeing many problems in Romania today, from the workforce shortage to rising prices and the energy crisis, and we must find ways to tackle these problems and make sure that we can overcome them. One answer is in investments, specifically in US investments,” she argued.

The information & technology sector is one of the key components of the future economy. Romania is lagging behind other countries in terms of digital education, and this may impact the way the future is shaped. But while Romania as a nation has some of the worst digital education scores, a significant part of its workforce is highly qualified in IT&C. Elisabeta Moraru, Country Manager at Google Romania, noted that Google employs more than 300 developers locally, who are responsible for most of the development being carried out for smart mobile devices. “In the last five years we have done projects to improve the digital skills of more than half a million Romanians. That is a huge opportunity be‑ cause the digital economy is the area where we are all trying to succeed and I believe Romania, as a digital challenger, can play a more important role in this environment.”

Teresa Shafer, Ph.D., Executive Dean for Institutional Affairs at Tiffin University, an institution that has been present in Roma‑ nia for 23 years now, talked about bringing

the US’s applied education practices to Romania. “What makes Romania unique is the fact that there is an open mindset, a strategic mindset among the leaders here, who want the youth and the senior leaders to think differently. Along with my respon‑ sibility of teaching and running part of our programmes, I have the distinct pleasure of working across our international campus‑ es. And we have some that have failed, in countries that don’t have that open mind‑ set, that want to keep doing things the way they always have. That doesn’t work, it doesn’t bring value,” Shafer argued, add‑ ing that she sees new positive changes in Romania every time she visits.

“I do believe that the workforce is Romania’s biggest asset,” said Mioara Iof‑ ciulescu, LL.M EMBA, Managing Director at Atlantis Romania, pointing out that the high number of qualified young profes‑ sionals that are joining the workforce every year is crucial. “I think that US inves‑ tors also see that. We are a country with hard‑working people, and we have proven loyalty to our companies.”

Also on the topic of investments, Perry V. Zizzi, Managing Partner at Dentons Romania, pointed out that Romania was in a good position, geopolitically speaking. “We have been here for 25 years and we represent a large number of clients, so we have seen it all. The fact that Romania is a member of the EU and NATO makes a big difference to foreign investors, especially now when we have tanks at our doorstep. At this point, we are seeing a lot of interest not only from tech investors, but also from investors in green energy or agriculture and clients who are engaged in military procurement.”

ON THE LOOKOUT FOR NEW INVESTMENTS

The topic of the final panel of the 2022 Foreign Investors Summit was finding the proper balance between tradition and innovation for thriving businesses in the years to come, with a focus on FDIs originat‑ ing from two of Romania’s most important economic allies, Israel and Italy. “There are many challenges regarding R&D in medtech, and the most important one is financing,” said Dr Elena Ovreiu, CEO & Co‑founder of the BIOdyssey Health Innovation Hub and Senior Lecturer at the Politehnica University of Bucharest. “When I say that about financ‑ ing, I am referring to Romania. What I saw in Israel was universities producing dozens of startups every year, many of which go global and are backed by research carried out inside the universities. There are many innovation tools available for startups, grants for profes‑ sors, and other types of grants for different levels of innovation. There is also a great amount of collaboration between universities and hospitals, as you cannot have innovation without the involvement of medical institu‑ tions,” she explained.

The situation is different in the manufac‑ turing sector, represented in the panel by Matteo Baldan, Group Chief Financial Officer at Martelli Europe. “In the last two years, we have seen more onshoring of manufacturing and a big increase in demand, despite the fact that we’ve been seeing pessimism on the market since February. We work only with luxury and premium brands. The biggest concern we have is finding local workforce that has the ability to work with automation and digitalization tools.”

Inflation and high energy prices will definitely impact manufacturing, but the solutions lie in more efficient processes or consumption cuts. “The most convenient approach is to reduce consumption, but this is not always possible for industrial process‑ es. Therefore, players should try to secure fixed prices for their energy supply. For the medium term, they should look at installing PV panels in order to produce some of the energy they need,” said Bogdan Asanache, H.E. Mr. Alfredo Durante Mangoni, Ambassador of Italy in Romania Italian companies are operating in a number of sectors here, and the problem is that a significant share of Romanian workers are choosing to go abroad, where they can find better working conditions, public services, education, and healthcare.

H.E. Mr. Reuven Azar, Ambassador of Israel in Romania Two things are at the root of many problems: permits and processing. We are in a global crisis, which means there is less money available for investment, but if you look deeper you’ll see that there is also more reluctance about going to the stock exchange to find money.

Teresa Shafer, Ph.D. Executive Dean for Institutional Affairs at Tiffin University What makes Romania unique is the fact that there is an open mindset, a strategic mindset among the leaders here, who want the youth and the senior leaders to think differently. I have been coming here since 2000 and I can say that there’s been a lot of change over the past two decades.

Matteo Baldan, Group Chief Financial Officer at Martelli Europe In the last two years, we have seen more onshoring of manufacturing and a big increase in demand, despite the fact that we’ve been seeing pessimism on the market since February.

Bogdan Asanache, Country Manager at Econergy Balkan The most convenient approach is to reduce consumption, but this is not always possible for industrial processes. Therefore, players should try to secure fixed prices for their energy supply. For the medium term, they should look at installing PV panels in order to produce some of the energy they need.

Dr. Elena Ovreiu, CEO & Co-founder BIOdyssey. Health Innovation Hub - Senior Lecturer Politehnica University of Bucharest There are many challenges regarding R&D in medtech, and the most important one is financing. What I saw in Israel was universities producing dozens of startups every year, many of which go global and are backed by research carried out inside the universities. Country Manager at Ecoenergy Balkan. He added that there are some EU funds available for green energy, but they are not easy to access, so it may take a long time to get such funds. “There are two aspects that should be highlighted. The first is the infrastructure gap and the second is the scarcity of skilled workforce. In terms of the infrastructure gap, we are certain that Romania can catch up rather quickly, but the lack of the skilled workforce is causing a bigger concern,” said H.E. Mr Alfredo Durante Mangoni, Ambas‑ sador of Italy in Romania. “Italian companies are operating in a number of sectors here, and the problem is that a significant share of Romanian workers are choosing to go abroad, where they can find better working conditions, public services, education, and healthcare. The biggest problem has to do with living conditions in areas that are not close to big cities,” he added.

H.E. Mr Reuven Azar, Ambassador of Israel in Romania, also brought up two key issues that Romania should address: permits and processing. “We are in a global crisis, which means there is less money available for investment, but if you look deeper you’ll see that there is also more reluctance about going to the stock exchange to find money. Foreign investors are looking for assets, including in real estate, and there is money waiting to come in, but all of that hits a wall due to the current issues around permits. The second big issue has to do with pro‑ cessing: sometimes it is caused by a gap in infrastructure, other times by an absence of labs for food sampling, for example.”

One of the biggest areas of opportunity for Romania is the agricultural sector, which should be developed more ag‑ gressively. And even though the largest farms in the country are already owned by foreign entities, there is still plenty of room left for FDIs. “Another major source of opportunities is tourism, with many Israelis now invading Romania, looking for new holiday destinations that are not too far from home. I saw some official statistics that said Israelis were the most numerous foreign visitors in Romania. This is some‑ thing that we can develop much further, and we are already working on it,” Reuven Azar noted.

Identifying the right measures to im‑ prove Romania’s business environment is the most important thing authorities can do right now. “I think the education system should be reformed and that we should see a better link between the school system and the labour market. At the same time, we should try to attract European funds for smart projects in manufacturing and renewable energy. Great importance should also be placed on key infrastructure, its development across large territories of the country, as it would significantly boost the modernisation of these areas. Italian companies are currently based around Timisoara, Cluj, and Bucharest; we have an ongoing project at the embassy to assess other high‑potential areas in Romania in order to generate a new wave of Italian investments,” Alfredo Durante Mangoni concluded.

Ana Maria Tepus Digital Entrepreneur The world is becoming less global and mentalities are getting more divided, therefore all business links should be strengthened. Furthermore, as supply chain issues are causing headaches across the board, it may be a perfect time for Romania to step up.

Mihail Raduta, Accion Labs: Tech and innovation are part of our DNA

With over 15 years of experience as an executive in the Romanian IT industry, Mihail Raduta, Country Manager at Accion Labs Romania, sat down with Business Review to talk about the company’s recent entry on the Romanian market.

By Mihai Cristea

You have recently launched operations in our country, so to kick off our discussion please tell us: what is Accion Labs, why Romania, and what are your company’s core values?

Accion Labs is a a cloud and digital trans‑ formation services company that supports business development through emerging products and technologies. Our new centres in Romania will be integrated into Accion’s global offering and will focus on all areas of Accion’s services offering to customers in North America and Europe.

Our core values are Innovation ‑ striving to do things differently to achieve improved results and create a culture of creativity and innovation, Value Creation – enhancing our brand value with the support of our custom‑ ers, employees, and investors Empathy and Respect ‑ creating an environment that fosters collaboration, honesty, trust, and wellbeing, and Result Oriented – having a sense of own‑ ership, problem solving, better productivity, and focus on outcomes.

What can you tell us about your plans in Romania?

In the short‑term, we want to launch the centre with the core Management team and other team members in Q3 2022 and to build a centre of 100+ people in the first half of 2023. Then, we plan to build an Extended Develop‑ ment Centre focusing on Cloud and Digital Engineering services for a select group of customers. As for the mid and long‑term, say in the next 2‑3 years, we want to build on the foundation to enlarge the development centre and serve as the hub for Accion’s delivery ca‑ pability expansion in the Central and Eastern European regions.

We expect the Romania operation to be a significant part of Accion Labs’s global expan‑ sion strategy, mainly focused on Europe and the US markets.

What are the main areas in which the Accion Labs technologies stand out?

Among the areas in which Accion Labs has demonstrated its expertise at a global level, we can mention the healthcare system, artificial intelligence and machine learn‑ ing, human computer interaction, and data analytics.

One of the largest financial and admin‑ istrative healthcare networks in the United States wanted to consolidate data from multiple business units into a company‑wide consolidated Data Warehouse for their Busi‑ ness Intelligence applications. Accion Labs built a Data Warehouse and consolidated data from multiple business units within the com‑ pany to enable consistent reporting of KPI metrics. The client built multiple Business Intelligence applications that read data from this Data Warehouse, resulting in improved decision‑making through actionable insights. Accion engagement has also helped a tech company build a next‑gen analytics platform that delivers better business outcomes with insightful data based on accurate predictive modelling. We achieved 5x performance im‑ provements by re‑engineering the entire data lake to the analytical engine pipeline. Also, the highly concurrent, elastic, non‑blocking, and asynchronous architecture we designed reduced runtime to around 8 hours, from 30 hours previously while processing 4.6 billion events.

One of the world’s most successful global asset management software companies was facing a problem of data flooding that was generating chaos across its technology infra‑ structure. Accion engaged with this company to plan and implement their unique digital journey. The kick‑off to the discussions happened with the scheduling of extensive deep‑dive sessions wherein Accion engineers highlighted the problems with Relational Da‑ tabase Management Systems, citing that over the years, RDBMS has been the first choice for most organisations to manage their data storage, but the fast‑growing volumes of data have made it imperative for companies to build more robust data management systems that are able to handle the load. In this com‑ pany’s case, the limited capability to integrate unstructured data from smart devices was choking up the system and needed a major overhaul.

Double-digit growth for Nestlé Romania in 2022

With an 11.1 percent growth of its local business, supported by a double-digit expansion on 7 of its 9 divisions, Nestlé Romania aims to double its operations over the next 5 to 10 years. Silvia Sticlea, Country Manager at Nestlé Romania, talked to Business Review about the company’s financial performance both locally and globally.

By Anda Sebesi

Earlier this year, Nestlé Global announced its financial results for the first nine months of 2022, reporting significant organic growth. What were the main drivers of these results?

For the first nine months of 2022, at the Group level, Nestlé saw an organic growth of 8.5 percent, with real internal growth (RIG) stay‑ ing resilient at 1 percent and pricing surging by 7.5 percent.

In the Europe Zone, organic growth reached 7.1 percent, with pricing account‑ ing for 5.7 percent. RIG was resilient at 1.5 percent, following a high base of comparison in 2021 along with supply chain constraints. Foreign exchange negatively impacted sales by 7.5 percent, reflecting the appreciation of the Swiss franc against the Euro. The Zone saw market share gains in coffee, Infant Nutri‑ tion, and plant‑based food.

By product category, the key growth driver was PURINA PetCare, fueled by premium brands Gourmet, PURINA ONE, and PURINA Pro Plan. Sales in Nestlé Professional grew at a strong double‑digit rate, led by bever‑ ages. Water posted double‑digit growth, with strong contributions from international and local brands. Sales in Infant Nutrition also grew at a double‑digit rate, based on strong momentum for human milk oligosaccharides (HMOs) products. Confectionery reported mid‑single‑digit growth, with strong demand for KitKat and seasonal offerings. In the third quarter, our vegan KitKat V was rolled out across 15 European countries. Coffee posted low single‑digit growth, led by NESCAFÉ soluble coffee, and continued strong sales developments for Starbucks by Nespresso. Culinary reported a sales decrease, impacted by negative growth in pizza and noodles. Gar‑ den Gourmet plant‑based products continued to see strong double‑digit growth, reflecting new product launches.

What can you tell us about Nestlé Romania’s results in the first nine months of this year?

Nestlé Romania finished the first nine months of the year with a growth of 11.1 percent, supported by a double‑digit evolution in 7 of our 9 divisions, including Infant Nutrition, Pet Food, Nespresso, Nestlé Health Science, and Coffee. We expect the good overall per‑ formance to continue until the end of 2022. Solidarity with society and its current needs is important to us, and the products donated by Nestlé Romania since the beginning of the year have exceed CHF 600,000 and 90 tonnes of food and beverages. In a period character‑ ised by frequent changes, I am glad to lead a united, strong, and ambitious team, which has demonstrated flexibility and adaptabil‑ ity to further develop a business that brings beloved products into the homes of Roma‑ nian families. Through all of our projects, we reconfirm our commitment to improving the quality of life and contributing to the well‑ being of society at large.

In the third quarter, the OptiXpress brand entered Nestlé's portfolio and launched the Nestlé LITTLE STEPS® 3 range for young children in cardboard packaging designed for recycling and spoon dispensers made of at least 95 percent cane plastic, a renewable resource. On the packaging of JOE Mini, JOE Good Day, JOE Dreams, JOE Original Bar, and JOE Noir Bar, you can already find the Rainforrest Alliance and Cocoa Plan symbols. Nestlé communicates the “100 percent cocoa from sustainable sources” message on 34 percent of its Sweets portfolio.

What are your expectations for the evolution of the Nestlé Group this year from a financial perspective, both locally and globally?

At the Group level, we expect organic sales growth of around 8 percent. The underlying trading operating profit margin is expected around 17 percent. Underlying earnings per share in constant currency and capital ef‑ ficiency are expected to increase. In Romania, we estimate a double‑digit growth, upholding the year to date trend.

Going beyond the details

After almost a decade of operating in Romania, BTDConstruct & Ambient is one of the top 10 construction companies on the local market, according to IBCfocus. Along with its tailored construction management strategies, BTDConstruct & Ambient is working towards becoming a full-service provider by integrating new lines of business. The company’s Head of Business Development, Razvan Parvulescu, sat down with Business Review to talk about the company’s plans for the coming years.

By Anda Sebesi

What is the story behind BTD and how has the company developed since its establishment?

Our company’s story began with a small team of professionals who, back in 2013, set out on a journey to build a general contractor firm that would make a difference on the country’s dynamic and ever‑changing real estate mar‑ ket. The initial team soon grew into a group of experienced innovators in the field of civil engineering, architecture, interior design, and project management, all of whom shared a strong sense of business ethics and a desire to always work in the client’s best interest. Since the beginning, we’ve been feeding into the motivation to push beyond the limits of our plans and develop creative solutions. From the sketch stage to the moment of handing over our construction projects, we’ve upheld our core vision of going beyond the details. Over the years, we have managed to make our mark on some of the most impor‑ tant and impressive residential projects on the market, and now, after almost 10 years of operations—which we will celebrate next year—, we are one of the top 10 construction companies in Romania, according to the inde‑ pendent ranking released by IBCfocus. If we were to look at the financial side, in 2016, with 17 employees, we had a turnover of over RON 25 million and a profit that was close to RON 3 million. The company has grown every year, so in 2021 we had a turn‑ over of RON 304 million, a profit exceeding RON 11 million, and a team of 103 profession‑ als.

What are some of the main projects BTD has developed and implemented?

Our company has multiple projects un‑ derway, including Liziera de Lac, Vulcan Residence, Stejarii Residential Club II, Dan‑ ielopolu, Dimri Residence, Promenada Mall (the underground structure of the extension), Up‑site by Atenor, and Medicover Hospital. At this time, we have contracts totalling more than EUR 150 million. Other major proj‑ ects that have been completed by our team include Win Herastrau, Luxuria Domenii Residence, The Ivy, Gran Via Park, C‑entral Residential, H Victoriei 109, H Pipera Lake, Ibis Styles Bucharest City Center, and many more. The projects we have contracted for the coming year are mainly based on sustain‑ ability and energy efficiency solutions, with a total of 8 major projects with completion dates spanning over the next 1‑2 years.

What is the added value that BTD brings to each of its projects?

Our most important and reliable asset is our team. With the experience and ambition to build using innovative solutions and modern technologies, we have the ability to create tailored construction management strategies that can be measured in terms of costs and time savings, risk reduction, and quality en‑ hancement. The value we add to each project is bolstered by innovative services that make for more creative solutions rather than chal‑ lenges and our team is the key essential here.

The strength of our company lies in the quality of our work, which is made possible by our team of professionals who are trained to carry out highly complex tasks in a timely manner while adhering to the highest quality standards. With this vision in mind, we have brought together professionals with an aver‑ age of over 19 years of experience in this field. We work closely with specialised partners in areas like technical construction consulting or health and safety. Together, we can assist

those who request our services in all stages of their project, from the design phase to construction and operation.

What can you tell us about the digitalization of the construction industry and what are the main benefits for this sector?

The term “brick and mortar” is already outdated. The digital age is here, the digital push is accelerating, and the race is tight. The industry is quickly embracing new technolo‑ gies, from automation to Building Informa‑ tion Modelling (BIM) and analytics tools, encouraged by the current economic con‑ text—but that’s not the only reason. This race forces companies to assess their competitive‑ ness and market position more broadly.

A major upgrade is the use of common data environments and BIM by companies to deliver projects faster and more efficiently. This is a major change from 10‑15 years ago, when teams would gather near the end of the month and review how they were tracking projects using spreadsheets and paper forms.

Technology now allows company manag‑ ers to better understand the production process and whether it is economically ef‑ ficient, as well as the regional characteristics of markets and customer requirements. All these digital benefits result in streamlined processes and improved customer experi‑ ence.

How important is digitalization for BTD?

Digitalization is one of our top priorities and a key factor in the modernisation of the whole local industry. This is exactly why our company has accelerated its digital transfor‑ mation across all business areas since last year to ensure high efficiency and flexibility, allowing us to react more rapidly to new market conditions. Simultaneously, the team at BTDConstruct & Ambient is focused on operational optimisation and improved planning of construction phases, without compromising on the quality of the work.

What can you tell us about sustainability within BTD and how the company approaches this topic?

In recent years, it has become clearer that sustainable projects will occupy the spec‑ trum of new buildings. We have been strong supporters of the industry's move toward tive methods that not only solve an existing problem, but also anticipate future needs. Our company encourages sustainable and efficient development and respect for the environment, our customers, suppliers, and employees and it pays particular attention to risk prevention, health, and safety at work.

Our sustainable development solutions in‑ volve close collaboration between stakehold‑ ers so that the construction’s impact on the environment is minimised. We were among the first companies to integrate sustainable solutions such as thermal insulation, waste

management, and enhanced practices to reduce the construction site's impact on the surrounding community. More precisely, last year we recycled over 2,000 tonnes of waste, we implemented special noise control and anti‑dust discharge panelling in construc‑ tion sites where the landscape allowed, we acquired new, state‑of‑the‑art construction machinery, and we are constantly striving to use more sustainable construction materials.

resource efficiency. One positive aspect is that the need for sustainability is being bet‑ ter acknowledged in general, not just in our country’s construction industry. For example, all the developers with whom we are working have implemented nZEB standards and have included sustainability elements into their projects, and BTD has integrated them in all phases of construction. Recently, there has been a lot of progress in the construction sector along these lines, but the transition process is complex and changing practices will take time. However, a paradigm shift in

real estate development—from the focus on construction costs to the lifecycle or sus‑ tainability of a building over time—is also essential. Moreover, the concepts of sustain‑ ability and energy efficiency must first and foremost be embraced by real estate develop‑ ers and included in the projects they intend to develop. We are optimistic that we will soon begin to see the industrialisation of the construction sector (to include prefabrication and integrated systems), which will lead to a higher level of optimisation.

What are the most important sustainable initiatives the company has implemented so far?

We rely on sustainable development solu‑ tions and on the continuous improvement of our products and services, an asset that allows us to offer our customers alterna‑ What are your plans for 2023?

Development plans for the next few years are based on the same orientation towards sustainable and energy‑efficient projects, as our objective is to strengthen our position in the industry as a quality and detail‑oriented general contractor and builder. We are also working towards becoming a full‑service pro‑ vider by integrating new lines of business.

Romania preparing new startup legislation to boost entrepreneurship

While the European Union has put forward the Startup Nations Standard of Excellence in a bid to boost the creation of entrepreneurial firms, Romania is working on its own legislation that aims to support newly founded firms that are proposing innovative products and services.

By Ovidiu Posirca

The executive arm of the EU has already proposed a common approach for the startup sector, covering aspects ranging from legislation to access to finance and diversity

The need to overhaul the legislation around startups has been highlighted by Sebastian Burduja, the minister of Research, Innovation, and Digitalization.

“Our legislation is 32 years old. I support a new law for commercial entities; I know it’s a ‘Pandora's Box,’ I know many say it’s impossible, but our aim should be to create a new type of commercial entity for innovative startups. They will have much more flexibili‑ ty and will be able to experience much higher growth here, in Romania. This is an impor‑ tant item on our list of goals. And we will need your help, because we are going to have endless discussions in Parliament, with com‑ mercial lawyers, banks, and other entities,” said the minister during the Investors’ Day event organised by Techcelerator. Burduja further quoted World Bank data which shows that Romania has plenty of startups, but that many of them get shut down rather quickly compared to those in other countries.

“Specialists have told us to find a way to finance them. Look at what they have done in Israel, in Silicon Valley, look at Ireland and many other countries. And I came up with this idea of the Romanian Innovation Fund, a ‘fund matching’ initiative through which the government will match the financing of private investors—both VCs and angels. The selection will be made using private sector criteria and methodologies. The state will finance this instrument, but it will interfere as little and as efficiently as possible,” the minister added. The European Commission, the executive arm of the EU, has already proposed a common approach for the startup sector, covering aspects ranging from legisla‑ tion to access to finance and diversity. We have many programmes supporting general‑ ist startups and some initiatives targeted to‑ wards tech startups, but we are still followers instead of leaders in this regard, according to Ionut Tata, CEO of Iceberg Plus. ”Legislation should represent the transla‑ tion of public policy into reality, therefore I would be glad if, at a policy level, we could agree to turn tech startups into a priority

and not just adopt FOMO‑type measures. Let’s not pass laws only to add bureaucratic hurdles to the already complicated life of Romanian startups,” Tata told BR.

OPENING A STARTUP SHOULDN’T COST MORE THAN EUR 100

The EU’s Startup Nations Standard of Excel‑ lence declaration states that across member states, an entrepreneur should be able to establish a startup (legal entity) both online and offline, within one day, for a fee of no more than EUR 100. The EU is also proposing that each member state open a helpdesk that can support startups and scaleups from other European countries that may want to enter its market.

“All day‑to‑day interac‑ tions between startups and authorities (such as company creation, filing of taxes, participation in public procurement opportunities, electronic ID and digital signatures) are designed to be carried out in a digital first manner,” according to the declaration.

Marius Ghenea, managing partner at Catalyst Romania, points out that Romania is relatively advanced in terms of implement‑ ing some EU regulations tailored for startup support, such as the ECSP (Equity Crowd‑ funding Service Provider) legislation. The law was adopted by the Romanian Parliament a few months ago and the first providers are currently undergoing the approval process. Following that, they will be able to passport the authorisation issued by the Romanian FSA (Financial Supervisory Authority) to any other EU country. This will be useful in matching startups in Central and Eastern Europe (CEE) with providers of capital in Western Europe. At the same time, Ghenea suggests that passing a single startup law in Romania would not necessarily represent the silver bullet in fostering the growth of the local ecosystem.

“The problems that startups face are complex, starting with financing needs where the crowdfunding law could help, but we need to continue with public policies that also involve public funding, especially in the form of grants, particularly for research, development, and innovation. Furthermore, bureaucracy needs to be eliminated or at least reduced for startups, and there should be more entrepreneurial education, mentor‑ ing, and other forms of support for startups,” the Catalyst Romania managing partner tells BR. Better policy and education are needed in Romania to encourage the launch of new businesses, according to the Global Entre‑ preneurship Monitor. Established Business Ownership (EBO) in the country remains low (4.1 percent), although the economy has a relatively strong early‑stage entrepreneurial activity despite the pandemic. The report’s authors point out that if more new businesses could

grow into the established phase and have highly visible success, then confidence might gradually increase among the general population, fos‑ tering a stronger entrepreneurial culture and ecosystem in Romania.

“Policies that help new businesses grow and establish themselves will be particularly valuable, such as tax incentives for invest‑ ments and hiring or matching grants that can persuade lenders to increase their entre‑ preneurial portfolio,” authors of the Global Entrepreneurship Monitor add.

EUR 2.4 BILLION IN FUNDING FOR ROMANIAN STARTUPS BY 2030

The adoption of a new startup law is part of Romania’s bigger ambition to become a hub for entrepreneurial companies. The research minister noted that that up to RON 12 billion (around EUR 2.4 billion) in funding will target emerging companies in Roma‑ nia until 2030 under the National Plan for Research, Development, and Innovation. Additional funds can be unlocked through the National Plan for Recovery and Resilience (PNRR) and the Operational Programme for Intelligent Growth, Digitalization, and Financial Instruments (POCIDIF). Asked about more advanced startup‑related regula‑ tory frameworks that could serve as models for Romania, Ghenea notes that the UK and Estonia are among the top achievers in this field. He points out that we have seen better cooperation between Romania and Estonia lately, both in terms of private business projects expanding from Estonia to Romania or the development of various joint business concepts. Estonia has already had 10 startups reach unicorn status, with valuations of more than USD 1 billion, while only one startup with Romanian roots has ever reached the same level, namely UiPath, which is now a pub‑ lic company. The Startup Estonia government agency acts as a one stop shop for entrepreneurs, provid‑ ing an online platform where they can find all the documents and informa‑ tion they need to start a firm in the country. A company can be founded in Estonia in just 15 minutes, while taxes can be done in just 3 minutes through e‑government solutions. The Romanian min‑ ister did not mention Estonia as a model for the new local legislation for startups, but the best practices mentioned in the EU Startup Nations Standard of Excellence could also serve as a development model.

As the EU aims to reach autonomy in strategic industries, ranging from energy to battery and chip production, innovative startups are needed to generate the Union’s economic growth in the coming decade. The stakes are especially high as Europe is com‑ mitted to becoming the first carbon‑neutral continent by 2050. "Germany, for example, recently announced a EUR 30 billion public fund to support technology‑focused startups, and that is the kind of bold move that I would love to see in Romania as well. We won’t be able to compete with 300 million, which is the amount we might have available for the same purpose under current Romanian policy instruments," concluded Iceberg Plus' CEO.

Italian investment community supporting Romania’s OECD accession

With the Organisation for Economic Co-operation and Development (OECD) having initiated accession negotiations with Romania at the beginning of this year, the Italian Embassy in Bucharest held a special workshop on the Anti-Bribery Convention, which is a critical instrument in the country’s efforts to become an OECD member and build a transparent trade and investment environment.

By Ovidiu Posirca

Romania could be accepted in the OECD in the next 2-3 years

The workshop, jointly organised with the Romanian Justice Ministry, was attended by high‑ranking officials in both countries.

“Today's event proved useful in explain‑ ing to practitioners, magistrates, lawyers, and people dealing with corporate compliance programmes about the effectiveness of the OECD Convention in preventing and fighting foreign bribery. Romania has already taken some important steps in this regard,” Alfredo Durante Mangoni, the Ambassador of Italy in Romania, told BR. He added that the event was also aimed at sharing Italy’s experience in terms of corporate criminal liability in the context of the Anti‑Bribery Convention.

As for Romania’s ongoing negotiations to join the OECD, the ambassador pointed out that the country must respond to different standards and benchmarks that are estab‑ lished within each of the 26 technical com‑ mittees that are called to issue their opinion on Romania.

“As far as Italian companies are con‑ cerned, we would of course be very pleased to see that Romania adopts and implements the same integrity, anti‑corruption, account‑ ability, and good governance practices, all of which also have an impact on securing foreign investments,” the ambassador added.

Mangoni went on to explain that Ro‑ manian companies—be they private or state‑owned—that go abroad to carry out international trade and investment must act in compliance with the Anti‑Bribery Conven‑ tion.

According to Antonio Gullo, professor of criminal law at the LUISS Guido Carli Uni‑ versity in Rome, the conference was a great opportunity for the two countries to share experiences in the field of anti‑corruption, which is key in the general strategy to fight economic crimes. Efforts to combat corrup‑ tion are already supported by Romania’s European Union membership, which brings important rule of law benchmarks.

“I would just highlight one, namely the whistleblower protection policy, also a cru‑

cial element in the fight against corruption. I believe that many synergies can be exploited in terms of implementing both EU law and OECD standards,” Mangoni argued.

ROMANIA COULD JOIN THE OECD BY 2025

review) and the proposal of recommenda‑ tions for their improvement. Currently, Romania participates as a member or associ‑ ate in 22 committees (procedures are ongoing for another 3), and as a guest in more than

OECD accession has been one of Romania’s foreign policy objectives since 2004, when it first applied for membership. The Foreign Affairs Ministry (MAE) points out that the country “could join the OECD in the medium‑ term” as it has a “generally favourable assess‑ ment” from the organisation, which cur‑ rently counts 38 members including states in Central and Eastern Europe such as Poland, the Czech Republic, and Hungary.

Lorenzo Salazar, Vice‑Chair of the OECD Working Group on international bribery, told BR that Romania could become a full mem‑ ber of the OECD by mid‑2025 if it gets the approval of all technical committees.

“Once you will have fulfilled all the obliga‑ tions and effectively implemented the OECD convention against bribery, I believe it will be in the interest of not only Romania, but also the OECD to receive you as a new party in the organisation,” Salazar said.

The OECD Anti‑Bribery Convention estab‑ lishes legally binding standards to criminalise bribery of foreign public officials in interna‑ tional business transactions and provides a host of related measures that make this effective. It is the first and only international anti‑corruption instrument focused on the “supply side” of the bribery transaction, according to a description provided by the

organisation. Asked if OECD accession would help Romania attract more foreign invest‑ ment, the Italian ambassador pointed out that it could enhance the country’s business relations with non‑EU states.

HOW ROMANIA COULD BENEFIT FROM JOINING THE OECD

The MAE points out that as an OECD mem‑ ber, Romania would be acknowledged as a functional market‑based economy and a con‑ solidated democracy, which would positively impact the country’s rating and its ability to attract foreign investment.

Romania will also benefit from support regarding public policies from OECD member states through periodic evaluations of the country’s policies in specific domains (peer 40. The country has also adhered to 54 OECD legal instruments and has applied for adher‑ ence to 12 others. “The fight against corrup‑ tion is a crucial challenge for the interna‑ tional community, and it cannot be overcome without the active participation of societ‑ ies in partnership with the public sector,” professor Gullo argued during the workshop, according to a press statement. “On the road to ensuring a level playing field, the integrity of society will also be achieved through the implementation of effective strategies to combat economic crime. Italy has devel‑ oped an internationally acclaimed model of criminal liability for legal persons, with the aim of involving legal persons in the joint management of corruption risks through the adoption of compliance programmes.”

A longstanding commitment to a greener future

Coca-Cola HBC Romania started publishing sustainability reports before they became mandatory. Business Review sat down with Alice Nichita, Corporate Affairs & Sustainability Director, to talk about the actions the company is taking as a result of its commitment to a sustainable future.

By Anda Sebesi

What are the main issues being brought to light by the 8th edition of Coca-Cola HBC Romania’s sustainability report?

Our 2021 Sustainability Report shows the concrete steps we have taken in key areas, such as reducing resource consumption and CO2 emissions, responsible packaging, sup‑ porting people and communities. Above all, the report stands as proof of our commitment to leaving a better world #AfterUs. This is our eighth sustainability report, as we started reporting on this topic before the European directive made it mandatory.

To summarise our progress, we have managed to reduce water intensity in the pro‑ duction process by more than 6 % compared to 2017. We have reduced carbon emissions from direct operations by switching to 100 percent clean and renewable electricity and by using rPET in our packaging. We’ve replaced coolers supplied to customers with energy‑efficient ones, reaching 42 % energy‑ efficient coolers in 2021. We continue to invest in training and development for our people and to provide equal opportunities for all of them, in an inclusive work environment.

In 2021, through our After Us platform, we continued to support vulnerable groups and youth, with our programmes reaching over 8,000 beneficiaries. We got over 15,000 consumers involved in our public awareness campaigns, which were aimed at correctly separating and collecting recyclable waste. Moreover, through the Big Belly network of smart containers we installed in Bucharest, we supported the collection of 34 tons of recyclable waste.

Coca-Cola HBC obtained the Alliance for Water Stewardship certification for all its production facilities in Romania, becoming the sole beverage manufacturer on the local market to hold this type of certification. What does it mean for the company, its consumers, and the local economy?

Water is the main ingredient in our drinks, and access to water is fundamental in our production activity. At the same time, it is a vital resource for communities. We therefore carefully monitor consumption, and our strategy sets clear targets for reducing water consumption and treating wastewater in our production processes. The AWS certification confirms our commitment to responsible wa‑ ter use and motivates us to further invest and innovate, attaining better results every year.

Last year, Coca-Cola HBC adopted a Net Zero target by 2040, which refers to carbon emissions across its entire value chain. What are the key measures the company will take, both in Romania and elsewhere, to achieve this goal?

In 2021, the Group made a commitment to re‑ duce emissions across its entire value chain to net zero by 2040. It is the final destination of a journey that started many years ago. At the group level as well as locally, we are imple‑ menting a series of initiatives that will help us meet our ambitious target. In Romania, these include increased use of rPET, with lower carbon emissions, taking important steps towards a circular approach, switching to 100 percent clean and renewable electricity, providing our customers with energy efficient coolers, and transitioning to transport solu‑ tions with reduced or zero carbon emissions through our "Green Fleet" programme. Only by working together with customers, partners, suppliers, authorities, and local communities can we have a greater impact and contribute to a better world.

What can you tell us about the innovations brought by Coca-Cola HBC in terms of the green packaging of its portfolio of soft drinks in Romania?

All our packages are 100 percent recyclable and 20 percent of our PET portfolio, repre‑ senting the entire mineral water portfolio, is bottled in rPET. Moreover, in 2021, we intro‑ duced KeelClip™, an innovative, minimalist paperboard packaging solution to replace plastic wrap on our multipack cans with recyclable, biodegradable cardboard. We are currently making an investment of over EUR 10 million in our Ploiesti plant, which will allow us to become the first local soft drinks company to produce rPET in‑house and will support our ambition to expand our rPET packaging portfolio. In addition, as the leader of the soft drinks industry, we are offering our full support for the successful implementa‑ tion of the Deposit‑Return System, the bi‑ ggest circular economy project in Romania.

Headless commerce approach accelerates evolution of digital commerce

What is headless commerce and how does it change digital commerce?

From a purely technical standpoint, headless commerce is the separation of the front‑end (what users see) from the back‑end (what store admins see). From a business perspec‑ tive, being able to manage the customer‑ facing aspects of the brand separately from the technology behind them creates multiple opportunities. It allows brands to create and integrate a wide range of shopping experiences without the fear of disrupting the transactional aspects of their business. Moreover, headless commerce is an approach that accelerates the evolution of digital com‑ merce, as it allows retailers to integrate the latest available technologies without making massive changes to their infrastructure or business logic. For a webstore, headless commerce is not just a new technology; it is a strong business strategy that can help it attract new customers and grow rapidly on a competitive market. It is the freedom to adapt to an ever‑growing market.

What functionalities will the online store of the future have?

The rise of headless means that the future will not be about what online stores want to create, but about what customers expect to see. In other words, the stores of the future will have to be everywhere the shopper is. If the shopper prefers video content, then Live Shopping should be the standard. If most of their activity is on social networks, then social commerce should be integrated. It’s that easy. Furthermore, it’s worth noting that traditional and online retail will merge, and we will most likely only be talking about retail. This means that omnichannel delivery will become the new normal.

Additionally, we believe that areas such as B2B will continue to grow and that these B2B stores are going to quickly outgrow the traditional limitations of their market: they will enhance the user experience, offering subscriptions and turning their websites into educational hubs for their business custom‑

ers.

How will live shopping impact online sales? Are companies interested in adopting the live shopping solution?

If we were to look at China, where the live shopping craze started, we would see that the websites that implemented it correctly saw consistent growth in both conversion and retention rates. For instance, whereas a traditional webstore has an average conver‑ sion rate of anywhere between 1.5 and 2.5 percent, the conversion rate of a website that sells through live shopping may vary between Business Review sat down for an exclusive interview with Cristi Movila, Eastern Europe General Manager at VTEX, to talk about how headless commerce is set to change digital commerce, the future of online stores, live shopping and its impact on online sales, and the e-commerce industry as a whole.

By Mihai Cristea

15 and 30 percent on average, according to a study conducted by Gartner, KPMG, and Ali‑ baba. Obviously, this applies to websites with constant live shopping programmes, whose buyers are coming back for the content as much as they do for the products. While we haven’t seen rates this high in Europe, almost 70 percent of customers say that they expect companies to communicate with them in real time, according to Salesforce. This means that live shopping is here to stay.

How would you describe the evolution of B2B ecommerce?

B2B ecommerce is exploding on the local market. Until recently, B2B products were mostly sold by phone or via email, but nowa‑ days the online segment is getting stronger, as more and more stores or marketplaces are being launched in the Romanian online envi‑ ronment. The B2B niche has started to adopt modern e‑commerce technologies, from inte‑ grated marketplaces to omnichannel delivery and even live shopping. A good example of this is Macromex, one of our clients, whose digital business yields great results, even though it is a rather recent development. This is in part due to the implementation of cutting‑edge technology, but also to excellent segmentation and the company’s great efforts of educating the market.