Business Review Issue 10/2014 March 24 - 30

INTERVIEW: The unpredictable claw back tax remains a challenge for the pharma market, worth around EUR 2.6 billion last year, while growth hopes rest on the update of the reimbursed drugs list, says Adrian Grecu, GM of Abbott Products Romania »page 6

ROMANIA’S PREMIER BUSINESS WEEKLY

PROPERTY

MARCH 24 - 30, 2014 / VOLUME 18, NUMBER 10

THE EUR 60 MILLION FIRST PHASE OF THE CORESI BRASOV RETAIL PROJECT IS DUE TO BE DELIVERED IN Q1 OF 2015, AND ITS DEVELOPER IMMOCHAN WILL THEN EXPAND INTO RESIDENTIAL »PAGE 10

GAS GAME Romania’s program to hike gas prices by the end of this year could lead to job losses and lighter state coffers. But delaying the IMFbacked deregulation would prove tricky, say experts » page 4

LINKS

FILM REVIEW

Catalytic converter

No place like Rome

Private equity and venture capital fund Catalyst Romania has taken over a 23 percent stake in Simartis Telecom, fund officials have announced

Oscar winner The Great Beauty, a poignant portrait of decadent Italian A-listers, will open BIFF. Is it good, bad or ugly?

BR’s critic found out

» page 8

» page 14

www.business-review.eu Business Review | March 24 - 30, 2014

NEWS 3

NEWS in brief

WEEK AHEAD March 24 Social media marketing seminar AmCham is hosting an interactive seminar about social media marketing, facilitated by Elena Badea, head of market enablement with Ernst & Young. Participation is free, limited to two attendees per company. Email amcham@amcham.ro. AmCham Conference Room, 14.00-17.00

March 26

All photos: Mihai Constantineanu

Getting their craic on: Bucharest celebrates St. Patrick’s Day Thousands of people marched last week in Bucharest’s St. Patrick’s Day Parade, which saw revelers process along Kiseleff Boulevard all the way to George Enescu Square. The parade included floats designed with the national colors of both Ireland and Romania, along with 150 Irish, Bulgarian and Romanian dancers and musicians. To mark the same occasion, the Intercontinental hotel in Bucharest was lit up in Ireland’s traditional green, after last year saw the “greening” of the Palace of Parliament.

ENERGY Carpatica grants EUR 7 mln financing to Tinmar for solar installation Banca Comerciala Carpatica said it had granted a loan of EUR 7 million to Romania’s Tinmar, an electricity trader and supplier, for a solar installation with an installed capacity of 8.5MW in southern Romania.

The installation is part of a larger solar farm with an installed capacity of 18.5MW in Giurgiu County, which became operational last summer.

In the last two years, the trader has developed solar installations with a combined capacity of 50MW. Martin Solar Energy, a member of Tinmar Group, is developing the 8.5MW park. Last year the company registered a turnover of EUR 350 million.

Romania postpones CE Oltenia IPO until autumn A 15 percent stake in the Romanian state-run energy holding CE Oltenia will be listed on the stock market in September or October instead of June, as initially agreed with the International Monetary Fund, as the assisting broker has asked for more time to assess the company’s coal reserves. The new deadline could be communicated “around April” according to officials, after the appropriate discussions with international financial institutions.

According to the state’s deal with the IMF, at the end of June, 15 percent of the government’s stake in Oltenia Energy Complex and Hidroelectrica was to have gone public; however, given recent developments, none of these IPOs will happen as originally planned. The Hidroelectrica IPO will most likely be postponed as the company has reentered insolvency.

FINANCING ‘Cluster Mobilier Transilvan’ attracts EUR 6.5 mln financing The first Romanian competitiveness pole in the furniture industry had attracted financing of EUR 6.5 million by last week. In the north-west of Romania, Cluster Mobilier Transilvan received the funds for an integrated package of projects submitted in 2012, based on a strategy for the next ten years.

The innovative aspect of the process is represented by two research projects, developed in tandem with Cluj-Napoca’s academia, and meant to provide new products and services for the national and international business environment.

The end-results will be introduced in the manufacturing scheme.

Cluster Mobilier Transilvan includes ten projects financed through POSCCE, Operation 13, the Development of Support Structures for National and International Business.

IT Local shoppers embrace tablets and smartphones The percentage of Romanians using their tablet to make purchases over the internet has tripled in the last year, with 16.9 percent of citizens who go online using the devices in question. At the same time, the number of smartphone users that shop online increased to 19.2 percent in the last year, according to a Daedalus Millard Brown report.

Almost one in five buyers had used their tablet to make an online purchase in the last six months, the increase being all the more surprising since a year ago the figure was only 4.8 percent.

Some 35 percent of online shoppers own a tablet today, compared to 13 percent in 2013. Tablet owners also use their devices to get information on products and services (29 percent) and to compare prices (21 percent).

The number of online shoppers that own smartphones has increased from 44 to 58 percent between 2013 and 2014, but smartphones are predominantly used for information (42 percent this year compared to 35 percent in 2013).

The laptop and PC still reign supreme, however. Some 86 percent of people who made a purchase online in the last six months used one of these terminals.

Open MBA Seminar – Where did all the money go?

The seminar, held by the BRCC in partnership with the University Of Sheffield, will focus on motivational concepts that can help “buffer” the decline in financial resources available. Dr. Leslie Szamosi, senior lecturer and academic director of the Executive MBA Program, will be speaker. Entrance is free. For further details, email avasile@city.academic.gr. Hilton Hotel Bucharest, Regina Maria Hall, 18.30

March 27 Maximum Achievement presented by Brian Tracy Professional speaker and best-selling author Brian Tracy is hosting a Maximum Achievement conference, aimed at anybody who wishes to excel in their professional and personal lives. For details, email transilvaniabizseminars.ro. Willbrook Platinum Business and Convention Center, 172-176 Bucharest-Ploiești Road, 9.30.

March 26-29 Romenvirotec 2014 – International trade fair for technology and environmental protection equipment Major market players will exhibit new products and technologies. Visitors can get up-to-date with market trends, purchase products and services at advantageous prices and negotiate directly with suppliers.

Romexpo, C2 Hall

MOST READ www.business-review.eu 1 Reporters Without Borders: U.S. press freedom ranks BELOW Romania

2 Basescu signs the Law for Green Certificates

3 Welcome to the Deutsche Telekom family: Romtelecom and Cosmote will change their names

4 The complete St. Patrick’s Day guide for Bucharest

5 Ukraine is scary! Marc Anthony postpones Romanian gig

www.business-review.eu Business Review | March 24 - 30, 2014

4 NEWS ENERGY

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

Ionut Gheorghe

Razvan Nicolescu

the Romanian minister of energy, was appointed last week to take over as president of the administrative board of the Agency for the Cooperation of Energy Regulators (ACER). He had served as the board’s vice-president since 2010. Nicolescu was appointed member of ACER’s administrative board in December 2009 by the Council of the European Union. Nicolescu graduated from the Power Engineering Faculty of the Polytechnics University in Bucharest and attended an MBA program at Solvay Business School between 2006 and 2008.

Over the years he has held various positions in the energy sector, including that of director at Petrom.

Catalin Oroviceanu

has joined D&B David si Baias, the law firm affiliated to PwC Romania, as managing associate in the corporate and competition law department. He has significant experience in negotiating and structuring complex deals, involving all the phases of a transaction process. Oroviceanu began his career at D&B David si Baias, where he worked between 2001 and 2007. He later moved to a local law firm and the Bucharest office of an international law firm. He has been a member of the Bucharest Bar since 2002 and holds a PhD from Titu Maiorescu University in Bucharest.

R

epresentatives of big gas consumers warned last week that Romania’s plan to fully deregulate the gas market by October will see prices soar by 72 percent, triggering a wave of company closures that will generate massive job cuts and losses to the state budget.

The country runs the risk of losing EUR 6.3 billion in GDP and over half a million jobs if gas prices for industry are aligned with the EU average by the end of this year, says a Deloitte report, commissioned by CONPIROM, the local employers association comprising representatives from the industry, agriculture, construction and services sectors in Romania.

“Firstly there should be more time for the development of infrastructure that allows gas imports. Also, we should have more time to develop local resources. Storage capacities need to be developed as do rules for operating them,” said Valeriu Binig, director, financial advisory services, energy & resources and corporate finance, at Deloitte Romania.

The report suggested a transition period of 8 to 14 years would be enough for the development of alternative supply sources. Offshore and shale gas explorations are still in early stages and the country’s potential as a transit destination was dashed by the failure of the Nabucco gas pipeline project last year.

Local gas scene ‘is duopoly’ According to CONPIROM representatives, the local gas market is currently dominated by state-owned gas producer Romgaz and Austria’s oil major OMV Petrom, while the only importer is Russia’s Gazprom. The Deloitte report notes that historically Romania has paid more for imported gas than spot prices on the biggest trading centers in Europe.

“Gas consumption in Romania fell dramatically in 2013; we are in the first year in which our consumption has got close to domestic production.

In 2012, consumption was 12.4 billion cbm at a production of around 11 billion cbm. From August 2013, producers started to store their gas underground, because there was no demand for it, arbitrarily increasing the price of gas,” said Ioan Niculae, president of InterAgro, the agri-business group. Niculae is the richest Romanian with a EUR 1.1 billion fortune, according to Forbes’ list published in 2013.

The businessperson has several fertilizer plants, but said that most of them have closed since 2013, when deregulation was rolled out. At present,

Agerpres

is the new marketing director for Dacia and Renault in Romania.

The 38-year-old previously held the position of marketing director for Infiniti and has been part of the Renault Romania team since 2006. He has over 19 years of professional experience in the fields of marketing and communication. Gheorghe began his career in the auto industry with AutoItalia, where he worked as group marketing, communication and PR manager. He is a graduate of the Academy of Economic Studies (ASE) in Bucharest and holds a master’s degree in Communication and Public Relations (SNSPA).

Accelerated gas deregulation risks over 500,000 jobs, says big industry

Aurelian Voia, general director of Cesiro (left); Vasile Turcu, CONPIROM president; Ioan Niculae, InterAgro president

InterAgro has an ongoing supply deal with Gazprom, and Niculae says imported gas will be cheaper than the domestic supply from April 1, when prices will be hiked by 24 percent. He expects domestic gas to be priced at USD 382 for 1,000 cbm from October.

Jerome Lionet, general manager for Romania at Saint-Gobain Glass, said, “The gas price increase will mean the end of exports for us.” The glass maker currently exports most of its output to the East, where gas prices are lower.

Ionel Bors, country manager at ArcelorMittal Galati, said the steel maker was already burning cash and its gas costs would grow by EUR 40 million if deregulation were fully implemented. He added that these costs would result in higher steel prices, further denting the company’s competitiveness.

Representatives of other sectors such as textiles and ceramics have also warned that the spike in gas prices would further cripple their businesses.

Industry generates one third of GDP The report points out that Romania is one of the EU members that still have a strong industrial arm, generating 32.5 percent of GDP in 2012, against the EU average of 19.1 percent.

Players say deregulated gas prices will reduce this contribution by 50 percent.

The full deregulation of the gas market for industrial consumers has been agreed with international lenders including the International Monetary Fund (IMF) and the European Commission, the executive arm of the

Romania’s gas imports in 2011 Russia 86 percent Austria 13.5 percent Hungary 0.5 percent 32.5 percent – industry contribution to Romania’s GDP

Source: Deloitte report

EU. For households, prices will be gradually deregulated by 2018, and social protection measures will be rolled out to support vulnerable consumers.

A joint mission of the IMF and EC is set to arrive in Bucharest next week, to review Romania’s progress under a new EUR 4 billion precautionary agreement.

Binig suggested that any attempt to delay deregulation had to be carefully planned by Romania, and should have diplomatic and economic policy components. Otherwise, infringement procedures could be started against Romania for failing to meet agreed deadlines.

Big electricity consumers have issued similar warnings in recent months, arguing that ecotaxes are driving costs up, which may force them to relocate production. Aluminium maker Alro, controlled by Russia’s Vimetco, is considering a partial closure of local production facilities, claiming it cannot cope with electricity costs inflated by renewable incentives. ∫ Ovidiu Posirca

www.business-review.eu Business Review | March 24 - 30, 2014

NEWS 5

HR

Number of temps stays steady at over 52,000, says ARAMT

Courtesy of ARAMT

Annemarie Muntz, EuroCiett president

O

ver 52,700 people were employed in temporary work in Romania in 2013, close to the figure in 2012 (52,214 temps) and almost double compared to 2010, when the total stood at 29,926, according to the Romanian Association of Temporary Work Agencies (ARAMT).

Some 62 percent of temping assignments exceed three months, 29 percent last between one and three months and 9 percent are short-term (less than one month), said the association. Compared to 2012, temping assignments of over three months rose by 50 percent, while assignments of under a month decreased by 50 percent. According to ARAMT members, in 2013, temporary work was widespread in services (35 percent) and production (34 percent). Agriculture accounted for 5 percent of the temporary employment market, construction 2 percent, and other areas 24 percent.

ARAMT members estimate that they account for about 70 percent of temporary employment activities in Romania, with a combined turnover of over EUR 216 million in 2013, up almost EUR 40 million on the previous year. This represents an increase of over 20 percent versus 2011 and 60 percent against 2010.

Furthermore, the International Confederation of Private Employment

Agencies (CIETT) noted in its 2014 report that the total number of individuals doing temping work in Romania was 220,000 (in 2011, the latest year for which data were available), the daily average number of agency workers reached 16,200 while the agency work penetration rate was 0.2 percent for 2012. Annemarie Muntz, EuroCiett president, told the conference that this percentage was very good, as other countries such as France or Germany had used this type of process for many years and their percentage stood at almost 2 percent. At European level, the penetration rate has gone down to 1.6 percent, while worldwide it stands at 0.9 percent. According to the same source, the number of private employment Romanian agencies was 129, with 66 branches and 655 internal staff.

On average, 23 percent of Romanian agency workers have completed higher education, while 12 percent had no secondary education. Industry players argue that this shows agency work can play an important role in helping both low- and high-skilled workers gain valuable experience on the labor market.

AMRAT held its first conference last week, looking to highlight the benefits of temporary work for local employees and employers. âˆŤ Oana Vasiliu

www.business-review.eu Business Review | March 24 - 30, 2014

6 INTERVIEW

New drugs key for health of local pharma market Adrian Grecu, general manager of drug maker Abbott Products Romania, says the local drugs market faces a flat year after reaching EUR 2.6 billion in 2013, unless new molecules make it onto the reimbursement lists. With RON 163 million (EUR 36.8 million) in local sales last year, the company is aiming to continue growing in 2014, despite the unpredictable claw back mechanism and the inflexible drugs budget of the healthcare insurance body, the CNAS. ∫ OVIDIU POSIRCA

CV Adrian Grecu

What does the local pharmaceuticals market lack?

Financing and predictability, and maybe longer-term planning for the health sector, which I do not think we have at the moment.

How do you expect the pharmaceuticals market to do this year, because Cegedim forecasts a flat year?

This is also my prediction. I think Cegedim’s estimate is pretty close to the reality. From my point of view, Cegedim was not that explicit in that report and I think that even the growth mentioned there (e.n a 2.7 percent increase in RON) will probably be determined by new molecules, provided they are introduced onto the reimbursement list. Otherwise, if we exclude those molecules, the market might actually register a downturn.

Could you describe Abbott’s operations in Romania?

Firstly, Abbott is a diversified company in the healthcare sector. We operate in many fields and I am general manager of the established pharmaceuticals division. At the same time, we have other divisions of diagnostics, glucose tests for diabetes patients, and molecular chemistry –laboratory tests. Each

Photo: Mihai Constantineanu

How does Romania stand out for Abbott in the region?

The lack of predictability hurts us the most. This is what I have to explain to my managers, and sometimes it is very difficult because even for me it is unclear why things went one way or another. The light at the end of the tunnel is that Romania still has the potential – this is still true – but it depends how long investors are willing to wait.

Historically, the pharmaceutical market grew handsomely until the crisis. It was from another starting point – some years had to be recovered in terms of treatment – but since the crisis things have become uncertain and unclear. We are in a “sit and wait” stage in terms of investments or the next steps. We do not plan to leave this country.

division has a commercial head, who works independently, but are all part of Abbott Products, the company’s name in Romania.

How many people do you employ in the pharmaceuticals division?

We have around 150 people. Out of this total, around 100 employees promote and present our portfolio of products to physicians. Given the evolution of the market, we will probably not make any changes to the structure. At least, at this moment I do not expect any change to the structure.

How do you think sales will do this year?

Our sales last year amounted to RON 163 million, according to Cegedim.

This year, we expect a similar level. We expect to grow in line with the market.

We want to outpace the market but at minimum move in line with the market.

Does Abbott aim to introduce new drugs onto the subsidized list?

No, Abbott Products Romania does not have new molecules on the reimbursement list because our business model is a little different from the one we had up to two-three years ago, when the AbbVie spin-off took place.

What are your sales tactics in Romania?

We do not sell products. In Romania

we work as a marketing entity. We promote our products, their therapeutic benefits, all indications for which the drug is prescribed, to physicians prescribing them.

Are you discussing any change in the claw back tax with the authorities?

We want a predictable tax. More important than anything, we need to be able to forecast certain costs in a judicious manner. That p (e.n the percentage used in the calculation of the amount one producer has to pay in claw back), which is announced quarterly, referring to the fourth quarter in 2013, was not in line with what we in the industry had expected. If we look at Cegedim data, the market did not grow in the fourth quarter (e.n it fell 2.4 percent to RON 3 billion), but the p has significantly grown. If we look at percentages in the first three quarters, which were fairly constant at around 15 percent, in the fourth quarter it jumped to 20.3 percent. This was a surprise for me. After you have three consecutive quarters that are somewhat predictable, the 20.3 percent took me by surprise, and also probably other players in the market.

So I want it to be predictable. Secondly, the tax was always supposed to be temporary. I would like to hear that the authorities are planning to scrap it.

This was an aid instrument in a difficult period, when Romania was going

December 2011 to present general manager, established pharmaceuticals division. Abbott Laboratories, Romania November 2010-November 2011 director, India commercial operations, Abbott Laboratories, Singapore October 2009-October 2010 director, commercial integration, Russia, India China area and CIS region, Abbott Laboratories, Singapore 1990-1996 - Bachelor of Science in Physics-Chemistry, University of Bucharest 1998-2000 - IESE, University of Navarra, MBA in general management through a crisis and faced budgetary issues. But after two consecutive years of economic growth, with the economy heading in the right direction, I was expecting the drugs budget to look better, and, implicitly, the level of claw back to fall, but I see it is going in the opposite direction.

The claw back is paid proportionally based on the market share of a certain player. This is another big problem with the tax, because it is not something you can predict based on your own sales. It relates to what happens on the whole market and requires you to estimate what each player is doing or what significant event might take place, because new patients were enrolled (e.n. on national treatment plans) for hepatitis or oncology, and this could be one of the reasons why expenses went up. It is almost impossible to predict.

How will the potential update of the reimbursed drugs list impact Abbott’s business?

The authorities should in one way or another make sure that the impact of the new list is fair to all players on the market. Undoubtedly, the update of the list without any other change in the market will lead to an increase in the claw back. It is logical, because the drugs budget is fixed so any new treat-

www.business-review.eu Business Review | March 24 - 30, 2014 ments that could be more expensive than the market average will lead to a higher claw back. If this is not done in a judicious manner, it could hit us, and we do not have any drug on this new list.

Have you made any proposal to the Ministry of Health, as a company member of the Romanian Association of International Medicine Manufacturers (ARPIM), on how to manage the risk associated with the update of the reimbursed drugs list?

There are ongoing discussions. ARPIM always wants to team up with the Ministry of Health to find solutions to help the system and the patient. Various proposals have been made. For instance, price volume negotiations have been proposed for certain therapeutic areas, or the setting of a certain quantity of product that has to be purchased, or payment based on the efficiency of drugs in certain therapeutical areas.

Former health minister Eugen Nicolaescu said the list of reimbursed drugs would be updated this spring. Do you think this deadline is still valid?

If we look back over the last year, there were more deadlines mentioned. I would refrain from making any forecasts, but hopes are high that it might happen in April, as this was the last promise.

Are parallel exports impacting your business in any way?

There are two aspects here. Parallel exports are legal from the point of view of European legislation on trade. However, each producer makes a production forecast depending on market demand. We have data, either from Cegedim or from our own estimates, on how many patients are using our product and production is adjusted to cover the need. When bigger than normal quantities are exported, then issues emerge surrounding meeting the needs of Romanian patients. From this point of view, we are a little bit worried if it surpasses certain levels.

We are somewhat caught in the cords because from the point of view of the Competition Council, we are not allowed to do anything, but on the other hand we know that what we supply is enough to cover the needs of local patients. It is a delicate situation and we try to control it as much as we can.

Have you had stock supply issues because of parallel exports?

Up to now, there have been no significant problems in our portfolio. We have not had any complaints or distributors saying that the product was not enough or pharmacies saying they did not have enough for patients. But I have heard all kinds of stories in the market.

Especially in the oncology domain?

Yes, but we do not have any oncology

INTERVIEW 7 products so we have not had to face this problem.

Can the problem of parallel exports be ďŹ xed in any way? The government said last year it was planning to ban these exports.

The main problem is the legislation on having the lowest prices in Europe, which personally seems to be the correct approach if we consider the size of the economies of all the countries in the EU. Like it or not, we are, along with Bulgaria, one of the poorest countries in the EU. So I think it is probably normal that a country such as Romania would have lower prices than a developed country such as Germany. But when one producer is making an effort to supply at that price, hoping that Romanian patients are treated, but that drug might actually return to where it came from, then an unpleasant situation is created, to say the least. So one of the solutions we proposed was agreeing for prices – this is currently being discussed – to be brought to the average for the EU or reference countries. This should be the official price, but the reimbursed one would remain in the current system so that the risk of parallel exports could be limited.

Can we hope we will one day see drug producers doing research and development in Romania?

We should have a strategy, not only for health, but in general for drugs and health investments. If a country wants to attract an investor in a certain field, it needs to create conditions for attracting the investor, define a longterm strategy and stick to it. So the investor sees there is a plan, that the investment is protected and that the trained people are there. At present, I do not think we meet these conditions, when compared to other countries in the world. This might happen, but there needs to be political will, a clear action plan.

In terms of talent and geographical position, I think we would be suited to having R&D, and historically we have been a strong country in the production of drugs, but we have lost this over time. Research laboratories are based in developed countries that offer greater predictability for investments, such as Germany, France, Switzerland, the Netherlands and the UK. What can you tell me about your international management experience?

Prior to taking this position in Romania, I worked in Singapore, where I covered the Russian, Indian and Chinese markets, and the greatest professional benefit was the interaction with other cultures, both at the level of doctors and the public, and inside the company.

I have seen other healthcare systems, financing schemes for drugs, and there are great differences between these countries. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | March 24 - 30, 2014

8 LINKS

BRIEFS Rogalski Damaschin becomes PROI WorldWide partner

Private equity and venture capital fund Catalyst Romania, which invests in technology, media and telecom SMEs, has announced it has taken over a 23 percent stake in Simartis Telecom via capital growth.

Mihai Sfintescu partner in 3TS Capital

Pro TV CEO says no ongoing negotiations for channel sale

∫ OTILIA HARAGA

Pro TV officials have denied reports that the television channel might be sold off. “There are no ongoing negotiations at the moment” for a possible takeover of Pro TV or other stations in the group, to Gazprom or any other entity, Aleksandras Cesnavicius, the company’s current CEO, told Hotnews.ro.

In January, rumors surfaced that Central Media Enterprises (CME), the mother company of Pro TV, was considering selling the companies and brands it owns in Romania. In March, the local media reported that Gazprom was among the companies interested in buying Pro TV. Lithuanian Aleksandras Cesnavicius took the helm of the Pro TV station several months after the resignation of Adrian Sarbu as CEO of Pro TV’s mother company Central Media Enterprises.

Sarbu’s resignation was followed by the departure of others at the top. On this issue, Cesnavicius commented, “I noticed at the beginning of my term here that the management structure in the company was complicated, and when there are too many people involved, the responsibilities are less clear and the execution process is slower. All the decisions I have made were justified by professional reasons. It wasn’t a ‘witch hunt’. Now we have a management team that is dynamic, well integrated and with clear responsibilities.”

On the matter of the employees, Cesnavicius said he did not plan to make drastic changes.

The CEO said the company would invest in new products.

The fund said that the investment would take place in two stages. “The first installment of the money, which represents 60 percent of the funds, will go into the company’s account this week while the second will come when certain business targets are met,” said Mihai Sfintescu, partner in 3TS Capital.

Simartis Telecom develops products and services for GSM operators. The most important is Bubble, a mobile marketing and X-menu tool for promoting the services of GSM operators.

“The main target of the investment is to develop the firm commercially, namely the global sales capacity and global penetration. The development will be centered on Bubble. We will adjust it from a business model in which operators can acquire the products to a managed services model,” said Razvan Ionescu, CEO of Simartis.

In Romania, Simartis clients include Orange Romania and RCS&RDS. The company was founded by Alexandru Voiculescu, vice-president of business development, and Ionescu. In 2013, Simartis Telecom posted EUR 1.4 million in revenues. Estimated revenues for 2014 are around EUR 2 million.

“The partnership with Catalyst will help us become a global competitor. In the coming period, we have ambitious plans regarding the development of the sales force and international support and the promotion of our solutions. We wish to boost our capacity to deliver projects simultaneously to multiple clients and help them benefit rapidly from our solutions,” said Ionescu.

Catalyst Romania, the first private equity fund dedicated to Romania, is fi-

Courtesy of Catalyst Romania

Courtesy of Catalyst Romania

Rogalski Damaschin Public Relations has been selected by PROI WorldWide, the largest global network of independent PR companies, to become its local partner. Rogalski Damaschin will provide communication services for the clients of PROI WorldWide member agencies that have projects in Romania, but also for locally based clients with regional or global needs.

The partnership will offer the local agency access to the know-how of the 60 partner agencies all over the world, said officials. The selection process started at the beginning of 2014 and involved five competing local and independent PR agencies.

PROI WorldWide is the largest network of independent communication agencies, comprising 60 members and 4,400 clients from 50 countries.

Rogalski Damaschin Public Relations is specialized in consumer PR and corporate PR.

Catalyst Romania takes over stake in Simartis Telecom

Razvan Ionescu CEO of Simartis

nanced mainly through the European Investment Fund (EIF), via the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative of the European Commission, European Investment Bank and EIF, to promote SMEs’ access to financing.

The EIF accounts for 70 percent of Catalyst Romania’s funds. “The total value of the Catalyst fund is EUR 15.1 million but this capital can grow. It depends on the value of the investment, but we could be talking about Catalyst investments in six to ten companies in various sectors of the targeted industries,” said Camelia Dragoi, mandate manager, regional business development, at the EIF. JEREMIE is part of the Increase of Economic Competitiveness Operational Programme, co-financed via the European Fund for Regional Development.

“In Romania, we are currently involved in consultations with the authorities. We believe that equity instruments must be made available.

We are also trying to promote an instrument of the accelerator type like in Bulgaria, and we are trying to get involved via these equity instruments financed from structural funds across the whole chain of investments, from pre-seed investments to accelerators and investments in more mature companies. In Bulgaria, there is also a co-investment fund that invests opportunistically alongside existing funds in a pre-established ratio,” said Dragoi.

According to the manager, Bulgaria has dedicated more consistent resources to the JEREMIE initiative than Romania. “In total, the participation fund in Bulgaria reaches EUR 350 million, while in Romania it is only EUR 150 million, of which EUR 50 million was re-

ceived last fall. There is no specific reason for this; it depends on every government and their approach to structural funds. This has made it possible to create various types of funds for various companies in Bulgaria, depending on their maturity. The interesting project we want to replicate in Romania is the accelerator and seed fund one,” said Dragoi.

JEREMIE has three instruments in Romania: a warranty instrument (managed by the EIF and implemented by BCR, Raiffeisen and UniCredit), the risk capital instrument, which financed Catalyst (the first PE dedicated to Romania and co-financed from structural funds), and the financing instrument (granting loans with partial interest rate subsidies for SMEs, in collaboration with Banca Transilvania, BRD-Groupe Societe Generale, ProCredit Bank and Raiffeisen Bank), available since March 2014.

Catalyst Romania invests between EUR 200,000 and EUR 2 million in local SMEs mainly in the TMT sector. Apart from Simartis, Catalyst has also invested in Avocat.net. The fund has a lifespan of ten years and invests in companies for a period of two to five years.

The targeted firms are local market leaders or companies that can become global competitors. Apart from the EIF, via the JEREMIE program, which is the most important contributor to the Catalyst capital, the other investors in the fund include BT Asset Management (BTAM), a member company in the Banca Transilvania Financial Group, 3TS Capital Partners, as well as other private investors. The fund is managed by 3TS Capital Partners. 3TS Capital Partners is one of the largest private equity and venture capital funds in CEE. Investments into the 3TS funds total EUR 300 million, made by the EIF, EBRD, Cisco, OTP, Sitra, KfW and 3i.

“At the moment we’re seeing many entrepreneurs who have interesting products in various stages of development, but they are either not completed, or not commercially validated. We wish to see accelerators help these projects come to life because in that area, access to financing at the start is very difficult.

This would help Romania come onto the market with its own products. At the moment, there are many IT outsourcing companies on the market but for the next generation of companies, we would rather place more accent on exporting Romanian intellectual property,” said Sfintescu. otilia.haraga@business-review.ro

www.business-review.eu Business Review | March 24 - 30, 2014

LINKS 9

After Axigen exit, entrepreneur Radu Georgescu invests in UK e-commerce startup Tynka Romanian Gecad Group has announced it has invested in Tynka, a startup from Newcastle, Great Britain, developed by a team of graduates. The value of the transaction was not disclosed.

Radu Georgescu’s current investments: l Gecad Met (www.gecadnet.ro, www.gecadshop.ro) has two main business lines: providing professional IT security and infrastructure services and licensing software produced by globally known companies. Some of its partners are blue chips, such as Microsoft, Autodesk, Trend Micro, Kaspersky Lab and IBM l Otomed Medical Center private centre of audiology, speech therapy and psychology l Tynka: mobile apps for iPhone and Android and websites for students

Geordie sure: entrepreneur Radu Georgescu is investing in a Newcastle startup

ties and events of interest both off and on campus. They can use the platform to join student groups, conRomanian Gecad Group has an- firm participation in certain activities, nounced it has invested in Tynka, a buy tickets for events, and even buy startup from Newcastle, Great Britain, items from other students via the Nodeveloped by a team of graduates. tice Board function.

“Students spend a lot of time trying The value of the transaction was not to see what’s interesting on campus. disclosed.

Gecad will also advise the team of Tynka helps them discover and monyoung entrepreneurs behind Tynka itor the activities and events that inand help the company reach its busi- terest them. When I was a student, I ness targets. Gecad focuses on early- found it hard to keep up with whatstage investments in technological ever was happening on campus, and now I hope Tynka has solved this and e-commerce companies.

“We support in particular young en- problem. Furthermore, the e-comtrepreneurs and companies that are merce engine incorporated in the apfocusing on niche sectors. Tynka has plication allows the user to make the upside of being created by stu- transactions and payments. Students dents, who understand the needs of can even find buyers for books they those who are the same as them. We no longer need, bikes or sports equiphope we will be able to expand the ac- ment,” said Stephen Irvine, CEO and tivity of this company to global level,” founder of Tynka.

Tynka launched the beta version said Radu Georgescu, founding partof its platform in February, and alner in Gecad Group.

Tynka is an application that lets ready has over 10,000 subscribers. By students keep up-to-date with activi- the end of the year, it plans to cover

∫ OTILIA HARAGA

most universities in Great Britain.

The firm also has other investors such as Northstar Ventures investment fund, based in Newcastle, which is backed by the European Regional Development Fund and the European Investment Bank.

One week ago, Romanian company Gecad sold Axigen Messaging, which Georgescu started developing in 2004, to four local entrepreneurs with investments in the IT industry, for an undisclosed sum.

Upon selling Axigen, Gecad Group announced it would continue to support the entrepreneurial community in Romania and invest in technological and e-commerce companies.

Georgescu has built various technological businesses from scratch over the past 20 years, some of which he has since made an exit from. While he remains the central figure in Gecad Group, Georgescu has sold several technological products and companies in the past.

In 2003, he sold the RAV Antivirus security solution to Microsoft, while in 2010, he sold online payment integrator Gecad ePayment, currently called PayU Romania, to South African group Naspers.

Finally, in October 2013, he sold Avangate to Francisco Partners, which marked his third international exit in ten years. otilia.haraga@business-review.ro

BRIEFS Ymens to invest EUR 1 mln in cloud development in 2014 Cloud provider Ymens has announced that it will launch cloudsourcing services on the local market, becoming the first cloud broker in Romania. “Ymens has chosen to be a cloud broker, practically a hub of cloud services, a ‘one-stopshop’ for its clients,” said Bogdan Padiu, CEO of Teamnet Group, which owns Ymens.

The firm will invest approximately EUR 1 million this year in developing its technology platform and cloudsourcing solutions. Within this model, cloud services are combined with consultancy, support, IT infrastructure maintenance and administration, business process outsourcing (BPO) and application management services (AMS). Cloud solutions or services will be offered based on a monthly fee.

According to IDC, the cloud growth rate will be five times more dynamic than IT growth in general by 2017, while the SaaS (software as a service) sector will represent about 60 percent of cloud revenues at that time.

Growth for data services and TV to continue in 2014, predicts EuroGsm Demand for mobile data packages and television services available for both TV and smartphones grew last year, and the trend is expected to continue this year as well, due to the growing penetration of tablets and smartphones, according to a local telecom player.

“Last year, the growth in demand for integrated packages which comprise onnet and national minutes, data services and smartphones and tablets at special prices, continued. We expect a growth in data consumption this year as well, along with a hike in the number of users of intelligent devices,” said Zoltan Halmai, commercial director at EuroGsm. The company singled out as an interesting trend the rise in demand for tablets at preferential prices, along with data and television services, especially among parents, who buy these devices to support their children’s education.

A new available service expected to gain ground, available in the EuroGsm portfolio from July 2013, is television, as multimedia content is offered on various types of screen, from TVs to smartphones and tablets.

On the prepay segment, the EuroGsm representative said that average sums spent on smartphones and tablets are stagnating, due to strong competition among players on the market.

However, with post-pay offers, the budget differs depending on the package the customer chooses. Due to the diversity of services and benefits, clients can acquire smartphones and tablets at no cost.

www.business-review.eu Business Review | March 24 - 30, 2014

10 PROPERTY

BRIEFS Benevo postpones construction of Bucharest mall, appoints new head of retail Real estate developer Benevo, controlled by Canadian businessman Michael Topolinski, has announced it will push back the start of construction works for the Victoria City shopping mall in Bucharest to the summer. The previously slated start date was the beginning of the year.

Benevo has also announced the appointment of Burcu Uygurcetin as the new head of retail. She has previously worked for GTC Romania in the same position, and Anchor Group.

Immochan to expand into residential after opening Brasov mall in March 2015 The EUR 60 million first phase of the Coresi Brasov real estate project will be delivered in the first quarter of 2015, probably March, announced Immochan Romania, last week. The next month the company wants to start the construction of 2,000 apartments, as part of the same project, in partnership with a local developer.

Policolor relocates Bucharest factory

Photo: Immochan Romania

Local dye manufacturer Policolor will relocate its automotive paint factory from Theodor Pallady Boulevard in eastern Bucharest to the Chemical Platform in the Militari neighborhood in western Bucharest. The company is currently in the process of selecting a firm to design the new factory which should have a yield of 4,000 tons per year, similar to the potential of the current factory.

Dedeman to open four new stores in 2014 Romanian home improvement and DIY retailer Dedeman opened last week a EUR 13 million outlet in Sibiu, the 37th in its network, and announced plans to open at least another three stores this year. By comparison, in 2013 the retailer opened six new outlets and reported an estimated a turnover of around EUR 580 million.

Ali Ergun Ergen, managing partner of TBE Solutions (left); Tatian Diaconu, general director of Immochan Romania; Raluca Crisan, marketing manager of Immochan Romania

∫ SIMONA BAZAVAN

Approximately 65 percent of the Coresi Brasov retail project is leased at present, but this is expected to go up to 80-85 The lower volume of office space in percent by the beginning of summer, central-western Bucharest, compared said Ali Ergun Ergen, former CEO of Anto the center-north area, has led to chor Group and Baneasa Developments average rents moving towards similar and now consultant for the project, in a levels in the first few months of this press conference last week.

The project is set to become the year, according to ESOP representatives.

At the same time, there has been a largest modern shopping mall in the slight decrease in rents downtown, as city of Brasov when it is completed well as in the south and east. However, next year. It is part of a wider real estate overall, rent levels are expected to be scheme which Immochan Romania, stable this year, according to the com- the project’s developer, says will take some 15 years to complete. Because of pany. the new concept it proposes, that of a Salesianer Miettex opens EUR ‘shopping resort’, the opening of Coresi Brasov next year will mark the launch 6 mln factory in Oradea Austrian company Salesianer Miettex, of the next generation of shopping active in the field of renting and wash- malls in Romania and break new ing linen for hospitals and hotels, has ground for local developers to follow, opened a factory in Oradea, following said Ergen. There is greater focus on the entertainment component, and the a EUR 6 million investment.

The factory is located in the Eu- project aims to attract shoppers by ofrobusiness Industrial Park and covers fering them more than a destination to a total area of 3,600 sqm. It has a ca- shop, according to Immochan Romania pacity to wash 25 tons of laundry per officials.

The first phase of Coresi Brasov, day, servicing western Romania and which required a EUR 60 million ineastern Hungary.

ESOP: office rents in western Bucharest pick up

vestment, will comprise an Auchan hypermarket (13,000 sqm) and a commercial gallery (32,000 sqm) which in turn will feature some 130 stores, a cinema multiplex (with eight projection rooms), a food court (3,500 sqm) and an entertainment area (1,500 sqm), said Tatian Diaconu, general director of Immochan Romania. The company is the real estate division of the Auchan Group, which operates a network of 31 hypermarkets in Romania. The developer has completed works on the hypermarket’s structure and some 40 percent of that of the commercial gallery, said Diaconu.

So far Immochan has signed deals with Inditex, which will be present in Coresi Brasov with all its retail brands except Zara Home, and Kenvelo, and it is now negotiating with H&M, New Yorker, Waikiki and Koton. New names on the market will join the tenant list and there could also be some relaunches of players who left the local market and will be returning, hinted Ergen. One novelty will be the creation of retail spaces dedicated to craftsmen from the area of Brasov.

Coresi Brasov is being developed on a 100 ha plot of land that was part of the Tractorul industrial platform in Brasov (190 km from Bucharest) which Im-

mochan bought in 2012. It is located some 1.5 km from downtown Brasov and will benefit from a catchment area of 500,000 inhabitants of Brasov (which has a population of around 250,000, according to the 2011 census) and other neighboring areas. Immochan representatives also estimate that the project will attract some of the 800,000 tourists that come to Brasov and the region each year.

In addition to the building of the mall, the project will expand over the coming years to comprise several other retail boxes (DIY, furniture, sports and electronics stores) and service stations.

Reaching into residential April 2015 should mark the beginning of works for a residential development on the grounds of Coresi Brasov, announced Diaconu. Set to include an estimated 2,000 apartments, it will be developed by a selected partner, which he said would most likely be the developer of the Avantgarden 2 residential project in Brasov, Kasper ImoInvest.

Discussions are in an advanced stage, but the actual form the partnership will take has not yet been decided and the final deal has not yet been signed, he added. One possible partnership option could be for Immochan to sell the 36 hectares of land for the residential project to the developer, added Diaconu.

As for including an office component in the project, the general director said this was not in the plans, at least not at present, as rent levels in the city are so low that it would not make business sense.

A crowded market In addition to Coresi Brasov, another three retail projects have been previously announced in Brasov – Korona, developed by Polish Echo Investments, a Cora retail project and an extension of the Carrefour hypermarket in Brasov, done by the retailer in partnership with NEPI – but construction has not yet started on any of them.

Brasov can absorb another 50,00055,000 sqm of modern retail space, according to a study carried out by Immochan, said Diaconu. simona.bazavan@business-review.ro

www.business-review.eu Business Review | March 24 - 30, 2014

AGRICULTURE 11

Romania begins negotiations with EC over rural investments Romanian farmers should be able to submit some early financing requests – including for investments in farms – under the National Program for Rural Development (NPRD) 2014-2020 over the coming months. reached, the program can be applied in its entirety, once the Romanian authorities draft all the necessary procedures, added the commissioner.

∫ SIMONA BAZAVAN Last week, the Romanian authorities sent to Brussels the first draft of the National Program for Rural Development (NPRD), announced Daniel Constantin, the minister of agriculture and rural development. The program will regulate how local farmers can gain access to the approximately EUR 8 billion of EU funds available between 2014 and 2020.

However, before the local authorities and the European Commission (EC) reach a final formal agreement on the program’s contents, Romania, along with all other member states, can start project sessions for some of the measures, said Dacian Ciolos, EU commissioner for agriculture and rural development. Speaking during a visit to Bucharest last week, he added that this will apply to investments in farms, among other measures, and could happen over the next few months.

“I understood from Minister Constan-

Fewer measures but better targeted

EU commissioner Dacian Ciolos

tin, with whom I talked a few weeks ago, that for some measures Romania will make use of the option provided by EU regulation to begin project sessions before the formal approval of the NPRD, as long as procedures are clear and there is an informal agreement between the EC and Romania on the content of those measures,” he explained. As soon as a formal agreement over the NPRD is

Romania’s EU allocation for investments in rural development for the 2014-2020 period is down by about EUR 100 million compared to 2007-2013, but Ciolos believes this is not a setback. “I think Romania should be content with the fact that it managed to maintain a similar budget for rural development, as most EU countries saw cuts, in some cases significant cuts of up to 18-20 percent (...),” said Ciolos. He added that Romania will see its direct payments go up between 2014 and 2020 – by about 47.5 percent – while other member states will experience cuts here as well.

Under the first draft of the NPRD 2014-2020, the EUR 8 billion allocated by the EU to Romania for investments in rural development will be available

through 14 measures. This was down from the 24 measures in the NPRD for 2007-2013 and will allow a better focus on the needs of local farmers, said authorities.

Special focus will be given to investments in production for both small and large farms, with a dedicated program for investments in orchards, the integration of production chains and incentives for young Romanians looking to set up a farming business in rural areas.

Ciolos stressed again that the reformed Common Agricultural Policy (CAP) takes into consideration the specific structural situation of Romania’s agriculture and allows players to modulate the way EU funds are spend. However, in order for Romania to benefit from the facilities proposed by the reformed CAP, local authorities have to take “strategic decisions over the coming months regarding the next four, five years,” urged the commissioner. simona.bazavan@business-review.ro

www.business-review.eu Business Review | March 24 - 30, 2014

12 RESTAURANT

A myriad of Mediterranean meals from casual eats to fine dining Bucharest diners have embraced Mediterranean food with gusto, with restaurants serving this cuisine having been on the scene for several years now and doing a lively trade. BR scoped out the latest Mediterranean-rebranded eatery, Retsina. ∫ OANA VASILIU

Corporate background Over 35 Interested in casual to fine dining Average bill RON 200

Greece is the word: Retsina scours international markets in its Greek owner’s homeland for its ingredients

Other Mediterranean options in Bucharest Mesogios 49 Jean Louis Calderon St./ 021 317 1355 The oldest and most reliable fish house in town serves a wide variety of fresh dishes cooked in a straightforward, simple, Mediterranean manner.

Bellini 2 Ion Ghica St./021 310 2978 If you close to Universitate and crave an Italian dish, this is the place to go. Pasta fans should try the tortellini al forno or the cannelloni della nona al forno. The fish dishes are also a specialty, and there’s a wide range of pizzas.

Charme 12 Smardan St./021 311 1922 A minimalist design, classy atmosphere and well-balanced menu that combines

Gargantua 69 Jean Louis Calderon St./021 211 4041 This lovely place is eccentrically attractive inside, but also boasts a delightfully leafy terrace on the fringes of Icoanei Gardens. It is best visited for lunch or dinner, as it is not a place to chill out with just a drink.

some fine pasta dishes, including seafood and fish, with generous steaks and a good selection of desserts.

Courtesy of Retsina

Client profile

Courtesy of Retsina

In December 2013, Romanian businessman Florin Radulescu sold the premium Osho restaurants in the Primaverii neighborhood to Georgios Malideros. The Greek businessman made a EUR 180,000 investment in the venues, acquiring almost EUR 120,000 of new kitchen equipment such as Josper grill-ovens – a novelty on the Romanian market, but which are common sights in Michelinstarred restaurants and used by top chefs such as Gordon Ramsay and Jamie Oliver.

Malideros is projecting turnover growth of 30 percent, with Retsina set to contribute 40 percent. Former owner Radulescu declared in October 2013 that Osho would reach a EUR 2.8 million turnover, from EUR 2.5 million in 2012. Regarding the average occupancy rate, Malideros also hopes that his restaurants will be fully booked for lunch and dinner. The average bill for both outlets remains RON 200.

The Greek businessman chose to rebrand Osho Fish as Retsina, upgrading the menu and promising fresh Mediterranean fish and seafood two to three times per week. The menu will therefore rotate, depending on what types of Mediterranean goodies can be found on the international markets in Greece. “We are still adjusting the menu as we want to serve almost every type of Mediterranean flavor, from East to West,” said executive chef Iosif Stefanescu.

Retsina’s specialties are ouzo seafood linguini, black cod, coq with mushroom ragout, and speck and strawberry risotto, along with retsina wine, which has been produced in Greece since ancient times. Cooking expert Sheila Lukins has dubbed it the “quintessential Mediterranean wine”, applauding it as an accompaniment for all types of Mediterranean cuisine, according to the GoGreece portal.

Sturgeon general: fancy fresh fish?

Osteria Gioia 16 Ion Mihalache Blv./021 311 3750 From the starters list try the delicious oven-baked pancakes with fontina cheese, porcini mushrooms and parmesan cheese – but the menu’s forte is its pastas. Highlights are the sophisticated tagliatelle with Saint Jacques scallops flambéed in cognac and shellfish sauce, and the simple linguine with tomatoes and fresh basil. oana.vasiliu@business-review.ro

www.business-review.ro Business Review | March 24 - 30, 2014

CITY 13

DON’T MISS

BUCHAREST INTERNATIONAL FILM FESTIVAL March 26-April 2 On at: NCRR (the Romanian Peasant Museum), Cinema Studio, Elvira Popescu Cinema, Cervantes Institute The festival brings audiences both independent, small-budget productions and more prominent films awarded at major international festivals.

It will open with Oscar winner La Grande Bellezza (reviewed overleaf), which premiered at the 2013 Cannes Film Festival where it was screened in competition for the Palme d’Or. For this edition, Andrei Cretulescu, artistic director of the BIFF festival, has selected nine movies for competition, as follows: 52 Tuesdays (directed by Sophie Hyde), Filth (Jon S. Baird), In Bloom (Nana Ekvtimishvili, Simon Groß), The Selfish Giant (Clio Barnard), Short Term 12 (Destin Cretton), The Strange Little Cat (Ramon Zürcher), Stories We Tell (Sarah Polley), Upstream Color (Shane Carruth) and Violet (Bas Devos).

Furthermore, this tenth edition of the festival will screen some of the latest multi award-winning Chilean films – made by directors and producers who have turned Chilean cinema into one of

Baird boy: British film Filth, directed by Jon S. Baird, is the story of a junkie cop

the most relevant in the world – in commemoration of the 40th anniversary of General Pinochet’s military coup which ended with the execution of President Salvador Allende and the commence-

ment of a military dictatorship. Focus: Chile will feature the following works: Gloria (2013, directed by Sebastian Lelio), for which Paulina Garcia won the Best Actress Award at the Berlinale –

screened in the presence of the director; Carne de perro (2012), the ambitious and shocking debut feature film from writer-director Fernando Guzzoni, awarded in Gothenburg – screened in the presence of the director; La Pasión de Michelangelo (2013), the second film

by Esteban Larraín, a disturbing drama with strong religious overtones inspired by actual events that occurred during the Pinochet regime; Las niñas Quispe (2013), the directorial debut of Sebastian Sepulveda, awarded in Venice in the parallel section Settimana internazionale della critica; Matar a un hombre (2014, Alejandro Fernández Almendras) which comes directly from the Sundance Film Festival, where it won the Grand Jury Prize; the classic documentary Salvador Allende (2004, directed by Patricio Guzmán); and La danza de la Realidad, the first film helmed by veteran Alejandro Jodorowsky after a 23-year break, which premiered at Cannes 2013 in the Quinzaine des Réalisateurs section.

More details about this film festival can be found on www.b-iff.ro oana.vasiliu@business-review.ro

www.business-review.eu Business Review | March 24 - 30, 2014

14 CITY FILM REVIEW

The Great Beauty (La grande bellezza) DEBBIE STOWE Director: Paolo Sorrentino Starring: Toni Servillo On at: The Great Beauty opens the BIFF (see previous page) on 26 March.

Imagine an arty music video that lasts two hours, twenty-two minutes. Imagine La Notte or La Dolce Vita, updated for the “bunga bunga” era. Imagine a meander among Rome’s beautiful and damned, a series of salons where ageing A-listers yak about their ennui in empty art galleries and teeming techno clubs.

Sic, La grande bellezza. This is a movie so lavish, so lush, so elegant, so elegiac, that you can almost – almost – forgive it for its total lack of plot. Scratch that – it’s not a movie. It’s a visual poem for a decaying and decadent eternal city with a cast of caricatures (not characters) confronting the morning after the night before. Sic transit gloria mundi.

The Dante who leads us through the seven circles of Rome’s glitterati is Jep Gambardella (Toni Servillo), a sardonic high-society journalist now looking down the barrel of old age. Jep never made good on the promise of his blistering early novel and instead settled for a comfortable career (his apartment terrace overlooks the Colosseum) interviewing “celebrities” and writing about “art”. In a surreal scene he watches a pompous performer whose act consists of running naked into pillars, a droll dismissal of modern artistic expression.

Lounge lizard Jep flits between parties, shooting the breeze with other dissolute Eurotrash – clubland impresarios, fading strippers, failed writers, flabby socialites and depressive MAWs (model, actress, whatever). Nuns, bishops and the odd saint also join the carnival – director Paolo Sorrentino brilliantly juxtaposes Rome’s religious and profane sides. This is encapsulated in an eclectic soundtrack, which runs from an a capella nun chorus to kitschy club classics like We No Speak Americano.

The Great Beauty dazzles with its cinematography, bursts of perception and fashionable freaks. The opening se-

Notte again: The Great Beauty is a “bunga bunga” update of Italian classics like La Notte and La Dolce Vita

quence (which typically has nothing to do with the rest of the film) is glorious, worth seeing even if the overall movie leaves you cold. Which it might: its listless lack of direction is trying, as Jep seems poised to reject his shallow lifestyle, but – like similarly jaded paisan Michael Corleone – is always pulled back in. Major characters disappear and

die, but it never interrupts the music.

It is all – from the barnstorming beginning to the languid yet compelling closing credits – absorbing. But, like its forebears La Dolce Vita and La Notte, this is essentially pretentious rich people banging on about their angst-ridden lives for 142 minutes.

As a comment on Italian malaise and

the vulgarity of the Berlusconi era, it is more focused, and quotable moments abound. A brash young actor boasts to a moody model of his film roles: “I’m playing a Pope in one, and a junkie on the road to recovery in the other.” That’s La grande bellezza.

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