Investors still reluctant to splurge on local properties
WHERE ROMANIA TALKS BUSINESS November, 2016 / Volume 20, Issue 10
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8
Romania AIMS to attract FDI TO poorer areas with NEW bill
36
Seasonality wanes on marcomm market this year
40
VIENNA DEVELOPING THE SMART CITIES CONCEPT IN ASPERN
42
Getting competitive Photo: Mihai Constantineanu
www.business-review.eu Business Review | November 2016
EDITORIAL 3 REAL ESTATE
• Editorial •
Anda Sebesi • Editor-in-Chief •
6 Retail and residential next to ride the ‘green wave’
8 Investors still reluctant to splurge on local properties
9 High-class homes pick up steam
COVER STORY
Better late than never For the first time since it shook off the yoke of communism back in 1989, and approaching its celebration of ten years since European Union accession, Romania has finally managed to come up with a draft country strategy. The paper, called Competitive Romania, was drawn up by the current technocrat government, led by PM Dacian Ciolos, with the support of the National Bank of Romania (BNR) and the Romanian Academy. The strategy encompasses 41 economic goals that call for 90 measures to be achieved and a total estimated budget for 2016-2020 of EUR 16.9 billion (about 10.5 percent of GDP) for implementation. The Ciolos cabinet’s endeavor to devise a strategy to help Romania become competitive on the medium and long term is unique from at least two perspectives. First, the current government’s
10 Competitive Romania 16 Romania’s FDI outlook: high-tech industries and competitive costs for workforce
22
Romania’s future investment in IT to be boosted by IoT trends
28 Romania vying for fresh R&D investments with IT talent pool and lower taxes
COUNTRY FOCUS 34 Local firms set to learn from Polish regional business expansion model
36 Pole position: local Polish investment gains prominence
constant efforts to prioritize projects. This is a significant step forward, as the various priorities that Romanian ministers have set would cost a total of about 300 percent of GDP to implement, or nine annual budgets. Such a huge sum suggests that there are actually no priorities at all; it is just a wish list, say pundits. Second, all the objectives and measures outlined in this strategy have an estimated budget for their implementation. There is still room for improvement in the strategy, but at least we have a draft. Better late than never. All we can do now is hope that the next government will consider it a starting point and a reference for making Romania (more) competitive.
CITY 46 Thirst for opportunities: alcohol brands drink in the culture
50 The long journey of raising funds for art
52 HBO Romania’s The Silent Valley to shake up local and regional audiences
54 Bringing up baby in Bucharest
FOUNDING EDITOR: Bill Avery, Editor-in-Chief: Anda Sebesi, DEPUTY Editor-in-Chief: Simona Bazavan Journalists: Georgeta Gheorghe, Otilia Haraga, Romanita Oprea, Ovidiu Posirca, Oana Vasiliu, HEAD COPY EDITOR: Debbie Stowe Copy Editor: Eugenia Pupeza, Photo editor: Mihai Constantineanu, ART DIRECTOR: Raluca Piscu publisher: Bloc Notes Media, Address: No. 10 Italiana St., 2nd floor, ap. 3, Bucharest, Romania, Landline: Office: 031.040.09.31 Executive Director: George Moise, business development director: Oana Molodoi, Sales DIRECTOR: Ana-Maria Nedelcu Sales CONSULTANT: Valeria Cornean, EVENTS DIRECTOR: Oana Albu, Marketing: Adina Cretu, Marius Andronic, Patricia Neamtu Production: Dan Mitroi, Distribution: Eugen Musat EMails: editorial@business-review.ro, sales@business-review.ro, events@business-review.ro
ISSN NO. 1453-729X
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4 NEWS
WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Carmen Adamescu has been promoted to partner in the business assistance department at EY Romania. She has more than 18 years of professional experience in the IT industry and has been part of the EY team since 2012. Prior to that, Adamescu worked for IBM for 13 years. She graduated from the Physics Faculty with a major in nuclear physics and got an MBA from the Open University in the UK. Nihat Bayız is the new general manager of Romanian home appliance company Arctic. He took over the helm from Hasan Ali Yardimci, who was promoted to president of Beko USA Inc, a position at Arcelik Group, the parent company of Arctic. Bayız has been part of the Arcelik Group for 22 years, assuming leadership positions in R&D, product and factory management. Prior to his current role, he had acted as the head of product management for Arcelik Group since 2012.
Ana Dumitrache has been appointed cocountry head of real estate developer CTP Romania. She will coordinate operations with CTP CEO, Remon L Vos. Dumitrache has extensive experience in real estate and finance, having been active in the banking sector. As co-country head, she will be responsible for funding, finance & accounting, and focusing on business development in particular. page 5
Investment: Two new nuclear reactors at Cernavoda cost EUR 6.5 billion
Iohannis hopes negotiations with Chinese over nuclear investment will be concluded next year By Ovidiu Posirca The Romanian president, Klaus
ment by the Romanian state.
development of units 3 and 4
Iohannis, says that nego-
State-owned Nuclearelectrica,
just as a way to produce more
tiations with China General
the operator of Romania’s exist-
electricity, because it allows
Nuclear Power Corporation
ing two nuclear reactors, inked a
us to close units that pollute
(CGN) over the construction
memorandum of understanding
too much or are inefficient and
of two new nuclear reactors in
with the Chinese for the new
worn out,” said Iohannis during
Cernavoda could be finished
investment last November and
a visit to Cernavoda.
next year.
negotiations have been carried
The development of the two nuclear reactors is already considered a strategic invest-
Bucharest’s modern office stock to reach 2.6 million sqm by 2019 By Simona Bazavan
According to market esti-
out since then with a series of
mates, the construction of the
extensions to the deadline.
two reactors requires an invest-
“We should not imagine the
delivered by 2019, according to data from real estate services firm Colliers International. This will take the capital’s total stock of modern office space, meaning projects rated between B+ and AA+, to 2.6 million sqm. “This volume will be part of projects that have been announced so far and which are presently scheduled for completion in 2018 and 2019. However, given how the market and their
About 600,000 sqm of office
leasing will evolve, this timeline
space is currently in the pipe-
could be extended to 2020 or
line in Bucharest, planned to be
2021,” said George Didoiu, associ-
ment of at least EUR 6 billion.
www.business-review.eu Business Review | November 2016
NEWS 5
Chamber of Deputies adopts draft law on CHF loan conversion
Cristina Hanganu has been appointed communication & CSR director of Lidl Romania, a newly created position within the company. She has over 20 years of experience in the communication field, having worked both for multinational and local companies that include Connex (currently Vodafone), Michelin, Media Pro, Intact Media Group and various communication agencies.
By Georgeta Gheorghe The plenum of the Chamber of Deputies has adopted a draft law on CHF loan conversion, which eliminates the CHF 250,000 threshold. The bill was passed with 248 votes in favor. According to the draft law, loans in Swiss francs are converted into RON at the
The Chamber of Deputies passed the draft law on October 18
exchange rate valid on the day the contract was signed, with the conversion being made
the parties resort to the courts.
by the committee there is only
He added that another
one eligibility criterion, namely
the credit converted into RON
amendment specifies that “at
that the provisions of the pres-
will be negotiated with the
the request of clients, banks that
ent law only benefit clients.
client, taking into account the
converted loans to Swiss francs
Paragraph 2, regarding the CHF
principle of good faith and
can go back to the CHF loan and
250,000 threshold, was elimi-
professional requirements,
make the conversion as per the
nated,” said Nica.
so that payment obligations
provisions of the present law.”
cannot be more burdensome
Nica added that the com-
(PSD) MP Ana Birchall, who
for the client, said Ciprian Nica,
mittee took into account the
proposed the draft law, said
vice-president of the Legal
fact that some borrowers had
the vote was a “compensatory
Committee of the Chamber of
negotiated with the banks the
gesture” and an opportunity
Deputies. According to Nica,
conversion of credits. “According
for MPs to end a social crisis
only in exceptional cases will
to another amendment adopted
started in Romania in 2015.
by addendum. The costs of
ate director of the office agency
slowly blur in tandem with a
with the consultancy.
growing preference for mixed-
The Barbu Vacarescu-Flore-
use developments, according to
asca area of Bucharest will see
Colliers International representa-
its position as one of the main
tives.
office poles in the capital further
Social Democratic Party
Elisabeta Moraru is the new head of Google Romania. She is replacing Dan Bulucea, who was promoted earlier this year by the company to business manager for the Asia-Pacific region. Moraru joined Google in April 2012 as industry head. Prior to that she worked for Xerox (February 2011 to March 2012) and Microsoft (2007 to 2011). Moraru also has a background in the public sector where she worked for the Ministry of Administration and Internal Affairs for three years until 2007. Between 2005 and 2009 she was lecture assistant at the Journalism Faculty in Bucharest.
Some 360,000 sqm of office
consolidate as its stock is set to
space is planned for delivery in
reach some half a million sqm of
Bucharest this year alone, ac-
office space. In the meantime,
cording to company representa-
other parts of the city, such as the
tives. The following year another
center-west, have been attracting
210,000 sqm should be added to
a growing number of new office
the market, out of which 120,000
developments. Beyond next year,
sqm will be in center-west
though, the line between areas of
Bucharest, 49,000 sqm in Barbu
the city that have a clear office,
Vacarescu-Floreasca and 40,000
residential or retail profile could
sqm in Dimitrie Pompeiu.
Rene Schob has joined KPMG as partner in taxation services. He has more than 17 years of professional experience, out of which nine were spent as managing partner of other international consultancy firms in Romania. Schob joins KPMG after serving as country managing partner of audit and tax advisory firm Mazars for the past two years.
www.business-review.eu Business Review | November 2016
68 INTERVIEW REAL ESTATE
Retail and residential next to ride the ‘green wave’ Razvan Nica, managing director of BuildGreen, a company that offers developers and property owners consultancy for securing green building certifications such as BREEAM and LEED, tells BR about how demand for such certifications is on the rise and how residential will soon follow suit. By Simona Bazavan
ABOUT Razvan Nica, managing director, BuildGreen Razvan Nica founded BuildGreen, the first company in Romania to offer sustainable building and certification consultancy services, in 2010. Prior to that, he coordinated the first BREEAM certification ever obtained by an office building in Romania (Euro Tower by Cascade Group). He has over ten years of experience in real estate and more than 60 projects certified to date..
Has interest in securing sustainable building certifications for real estate projects gone up among local developers and property owners?
Methodology) and LEED (Leadership in Energy and Environmental Design), which do local developers tend to prefer?
in 2013 made its certification criteria stricter
I think that overall there is a larger number
the past few years. The first LEED certifica-
The simple answer to that is yes. They do
of BREEAM-certified buildings. The first one
tion for new buildings in Bucharest was
place a greater importance on securing such
was in 2010 and by 2014 another six or seven
Skanska’s Green Court.
certifications. Interest started in 2008 and
projects had joined in. BREEAM’s upgrade
which in turn made some developers turn to LEED which has grown at a faster rate over
Developers are always looking to optimize
2009 and in 2010 it finally took shape. At first
their costs and this is why most opt for one
it was a novelty for the local market. The first
certification or the other based on costs and
developers were pioneers and they tried to
the difficulty of attaining it. Some develop-
introduce these certifications for market-
ers I have worked with have initially asked
ing reasons as they offered them a means to
me for an analysis of the two systems and
differentiate on an increasingly competitive
the impact each will have on the project and
office market.
the overall budget in order to take a decision.
As time went by, developers also saw that
There are also situations when a project is
the conditions they needed to meet in order
better suited to one certification system or
to secure such certification also helped with
the other. It depends on location, technical
the project management and quality control
requirements and other aspects.
of their properties. That is why over the past few years we have seen developers put in place a clear policy around green certification, such as Skanska, Portland Trust, Globalworth and more recently NEPI as well. Finally, such certifications act like a quality checklist for a building because the criteria one needs
Fewer developers are dedicated to either BREEAM or LEED and stick to their choice regardless of the fact that, for example, BREEAM was upgraded earlier this year or that a new version of LEED comes into force at the end of November. Demand for both certifications is growing but I expect the share to remain at about 60-70 versus 3040 in favor of BREEAM.
to meet are very clear and objective. I would say that all of the class A office stock delivered this year in Bucharest is certified.
When it comes to choosing between BREEAM (Building Research Establishment Environmental Assessment
How much do the developers or owners of an office project in Bucharest allocate on average to secure a green certification? There are variations from one project to another. It all depends on the moment
www.business-review.eu Business Review | November 2016
REAL INTERVIEW ESTATE 79
the developer decided to start the certification process as well as the project’s initial plans. In some cases the project is so good that one doesn’t need to intervene too much in order to secure a certain rating. The desired rating is also important – “silver”, “gold” or “platinum” for LEED or “good”, “very good” or “excellent” for BREEAM. One thing is for sure, I can’t agree with the suggestion that certification costs 10-20 percent of a project’s construction budget. Under no circumstance. I would say it represents no more than 5 percent of the construction budget of a class A office project in Bucharest.
Is demand for green certification also growing among retail projects? Yes, demand is growing and after office, I believe, retail and industrial are coming behind and residential will follow. Presently there is only one retail project certified as a new building and that is Coresi Shopping Resort Brasov. For several projects curof being certified interested in
existing buildings there are rently in the process and owners are securing such
certifications. Their main the same as
motivation is that of office
developers – re-
ducing mainte-
nance costs and
optimizing facility
management costs. the fact that they align
And there is also themselves to this grow-
ing trend. It is a corporate policy for many. For example Iulius Mall is LEED certified for “existing buildings” and we also certified two of NEPI’s projects about one year ago. We are currently managing the certification of 16 shopping centers in Bucharest and secondary cities.
Do you expect the trend to expand to residential projects as well? We know that there is already a BREEAM-certified residential project in Cluj-Napoca. This is not a coincidence as in Cluj-Napoca there is a subsidies system in place for this. Over the next two years we will have at least one certified residential project in Bucharest as well, regardless of any subsidies. There is a delay in Bucharest because as far as developers are concerned there hasn’t been demand for green certified housing so far. Buyers simply haven’t been demanding this and so for developers there was no reason to take on this cost. Nevertheless, I am convinced that Bucharest will soon follow suit. I think this will be a natural evolution for residential projects that target clients with above average incomes. These are people that work in certified office buildings and they see the benefits and understand the relevance of such certification.
How many projects are you working on at present and what was your turnover last year? We are working on around 30-40 projects in various stages at present.
consultancy or assist the general contractor. About half of this year’s
Such projects take about two years to complete. So far this year we
contracts involve the certification of new projects. Our turnover last
have signed 19 new contracts, about double last year’s figure. There
year was around EUR 250,000 and this year I hope we will go beyond
are projects where we do certification and others where we only offer
that.
www.business-review.eu Business Review | November 2016
8 REAL ESTATE
Investors still reluctant to splurge on local properties Country risk, high financing costs and the lack of prime assets available for sale will most likely see this year’s volume of investments in the acquisition of real estate assets fall short of 2016’s level, says Silviana Badea, the national director and head of capital markets with JLL Romania.
This would suggest that they are more likely opportunistic and looking for value-added assets that enable an immediate and easy gain rather than a long-term approach,” she explained. One major reason for this is Romania’s perceived country risk, which is also reflected in high financing costs on the local market, she believes. Financing conditions have improved about seven local banks now open to granting
posting double-digit increases and the key in-
loans of between EUR 10 million and EUR 50
terest rate is at an all-time low. However, this
million at margins of about 2.8-3 percent for
has not yet brought about higher investments
prime properties. However, Romania contin-
in the acquisition of commercial properties
ues to lag well behind markets such as Poland
on the local market, said Badea. The overall
or the Czech Republic where financing condi-
investment volume amounted to EUR 400
tions allow investors more attractive yields,
million in the first nine months of 2019, up
pointed out Badea.
by a meager 6 percent y-o-y. Moreover, the
Another reason is the lack of prime assets
overall volume is expected to be in the range
available for sale on the local market. Should
of EUR 600 million – EUR 700 million by year-
there be a prime shopping mall with a proven
end, similar to 2016’s level, whereas around
track record up for sale in Bucharest, there
EUR 1 billion would be closer to the market’s
would be seven to ten investors interested in
potential, said Badea.
buying it, she said. However, such projects
“For us, this is something of a puzzle if we
E
target internal yield rates of 13-15 percent.
significantly over the past year and a half with
By Simona Bazavan
Silviana Badea, JLL Romania
long negotiations, cautious investors that still
are not up for sale at present, she noted. After
look at a market such as Hungary with which
the buzz of recent years on the industrial
we can compare ourselves,” she pointed out.
market there is nothing left to buy except
Yields are about 200-250 basis points higher
perhaps entire portfolios, and as far as office
in Romania than in Poland or the Czech
projects are concerned, investors’ interest is
Republic but only 50 basis points above Hun-
dampened by fears of oversupply given the
gary, she said. While economic indicators put
large number of projects in the pipeline.
Romania in a better light than its neighbor,
The bottom line is that investors are will-
conomic data make a strong case for
Hungary fares better in terms of investments,
ing to consider the local property market,
Romania to be on the radar of inves-
she noted.
a fact proven by the entry of several new
tors looking to acquire real estate
Over five negotiations are underway
players over the past couple of years, stressed
assets in Central and Eastern Europe this
involving assets worth over EUR 40 million
JLL’s head. “However, they pay great atten-
year. The 5 percent economic growth posted
each, which could be closed by yearend and
tion to the way they choose their projects
in the first semester was the highest in the
thus boost the market’s dynamic, she sug-
and unlike 2007 when they bought anything
EU, industries like IT&C and retail have been
gested. “On the other hand, we have seen
at any price, they are now very careful about the sustainability of rents on the long run and competition,” said Badea. As for the fact that Romania doesn’t garner the same interest as other countries in the region, this is not necessarily a bad thing. “What is happening now in Poland or the Czech Republic, where yields have reached 5 percent in secondary cities, cannot be sustainable on the long run and once investors see that this appetite is a bit too enthusiastic, they will turn their attention to us and we will reach the EUR 1 billion we are targeting,” she concluded.
www.business-review.eu Business Review | November 2016
REAL ESTATE 9
High-class homes pick up steam A new residential project is being kick started north of Bucharest some ten years after its owners first bought the land, and is intended to ride the wave of Bucharest’s growing segment of premium housing. By Simona Bazavan
can build their own houses as long as these respect the developers’ master plan. Another option is to choose from some of the houses already built on the site. Huf Haus, a German manufacturer of high-end prefabricated timber and glass houses, has opened two show houses in the project which are also available for sale for EUR 1.25 million and EUR 3 million, respectively. Next year the developer wants to build another four houses which will be designed by local architects and which will be available for sale for price tags of between EUR 250,000 and EUR 450,000. Dumbrava Vlasiei should feature another four development phases which will add blocks of flats and retail areas to the gated community, say company representatives. Starting the next phase depends on how sales evolve, said company representatives.
Fresh momentum for the premium market Demand for premium housing has been rising in recent years to the point where sales now represent about 5 percent of the entire residential segment, indicate data from consultancy Regatta Real Estate. Buyers are made up of both those looking for a home as well as a growing number of investors for whom buying premium properties is a lucraHigh hopes: first two local Huf houses are on sale for EUR 1.25 mln and EUR 3 mln, respectively
tive alternative to keeping their money in a bank, argue consultants. Regardless of their
the local real estate market, yet it has
L
of land surrounded by forest in
recently announced ambitious plans
Dumbrava Vlasiei, near Balo-
for the years to come. The company is owned
testi, but actual works on
by Rey Muraru and Lorna and Colin Jackson,
the project started last
all new names in the local real estate industry
year. So far the devel-
but who have been working in the field across
oper has invested
the Channel. Romanian Muraru met his
EUR 40 million,
partners and worked with them on several
which went on
residential projects in the UK. Dumbrava
buying the land and
demand for premium
Vlasiei, the scheme they have kick started on
infrastructure and
housing over the
the local market, is their first project outside
landscaping works
past couple of years
the UK.
for the first develop-
oreco Investments is a new entry on
“We’ve seen more opportunities for development in Eastern Europe and particularly in
profile, buyers are showing a growing interest In 2006 the three bought 90 hectares
ment phase. The company has now
in the off-plan acquisition of such properties, which come at a hefty price. About 30 percent of the premium properties up for sale in Bucharest have price tags of over EUR 1 million, according to Regatta Real Estate. The growing
has thereby put fresh momentum behind new developments. Some 550
Romania. When we first came we felt that we
set an ambitious target: it wants
had the necessary experience to put together
to sell the first 140 plots of land – meaning
scheduled for delivery in Bucharest in 2016
a project which is competitively attractive
about 20 hectares – over the next three years.
and 2017, more than double the volume of the
in terms of what is happening in Bucharest,”
Buyers must be willing to pay approximately
previous two years, according to data from
said Lorna Jackson.
EUR 150/sqm for the land plots where they
real estate services firm DTZ Echinox.
new premium apartments are
10 COVER STORY
Photo: Mihai Constantineanu
Competitive Romania
www.business-review.eu Business Review | November 2016
www.business-review.eu Business Review | November May 2016 2016
COVER STORY 11 14
Approaching the tenth anniversary of its accession to the European Union, Romania finally has its first country strategy for the coming years. The document, drawn up by the current government, aims to make the country a competitive spot on investors’ map. Ranked 53rd worldwide from a competitiveness perspective, it’s clear that Romania needs to rev up all of its engines to become an added-value player on the international scene. By Anda Sebesi
A
fter a long period of transition when it faced many ups and downs, Romania is now a stable economy that has a real chance of becoming a competitive player on the European
Union scene. With economic growth of 1.5 percent in the second quarter of 2016 compared with the previous three months, Romania posted the biggest economic expansion among the 28 EU members, according to Eurostat, the statistical office of the EU. In addition, the local economy registered the highest economic growth in the bloc (5.9 percent) in the second quarter of 2016, compared with the same period of 2015, followed by Slovakia (3.7 percent) and Spain (3.2 percent). “The reported 2016 growth, the largest in the region, is also due to tax breaks and salary increases in the public sector which are considered ‘economic steroids’ by some economic analysts covering the region, leading to unsustainable growth,” says Serban Toader, senior partner at KPMG Romania. In such a context, Romania needs to capitalize on its recent positive economic developments in order to lay the foundations for its sustainable and long-term economic growth. As a result, earlier this year the technocratic government led by the prime minister, Dacian Ciolos, launched a country project called “Competitive Romania”. Consisting of measures to reduce the economic gaps between Romania and its European peers, the project aims to define a clear strategy so that the level of local GDP per capita can converge towards that of more developed European countries. Hence, an optimum use of capital, labor force and productivity is the only way the local economy can be encouraged to grow in a sustainable manner at 3 to 5 percent a year, the document says. The project was developed with representatives of the presidential administration, the Romanian government, the National Bank of Romania (BNR) and the Romanian Academy. As the Romanian president, Klaus Iohannis, stated at its launch, the new strategy for Romania is designed with the current European context as a model. “Now is the time to focus on what’s next, both worldwide and in Romania, and I have already said that there is a need for a new post-accession country project. It has not been developed, in 2007
www.business-review.eu Business Review | November 2016
12 COVER STORY
or later. We are now preparing to celebrate ten years since Romania
by introducing unprecedented solutions. Solutions exist and there
joined the European Union and only now are we starting to think of
are premises for them to be developed. We need to work to acceler-
creating a post-accession strategy,” said Iohannis at that time.
ate their implementation,” adds the representative of D&B David and Baias.
How competitive is Romania…
In her opinion, one of the key elements in taking steps towards
According to the World Economic Forum Competitiveness Report,
innovation and increased competitiveness is investment in new
Romania has posted a significant improvement in the perception of
technologies meant to improve, make more transparent and shorten
its competitiveness at international level in the past decade. While
administrative processes, including inter-institutional ones. “The
in 2006-2007 the study ranked Romania 68th out of 125 analyzed
main factor that allows other countries to make better usage of
economies, its most recent edition places Romania 53th out of 140.
structural funds is the ease with which market players have access,
Regionally, the report
control and participate
puts Romania behind
in the projects financed
the Czech Republic (31st)
throughout such funds,”
and Poland (41st), but
adds Constantin.
ahead of Bulgaria (54th),
As Toader of KPMG
Hungary (63rd) and Slova-
highlights, Romania
kia (67th). “Over the last
continues to benefit from
ten years, Romania has
a good macroeconomic
had ups and downs with
environment, a respect-
respect to its competitive
able market size, as well
profile, especially com-
as a pretty efficient labor
pared to other economi-
market, although relative
cally-advanced EU coun-
productivity still has to be
tries. If we look at various
improved. “Unfortunately,
statistics, today Romania
we continue to lag behind
is still behind the peak
in strategic areas such as
of the last ten years, but
infrastructure, especially
these variations are not
roads and railways, quality
uncommon among the
of healthcare and innova-
group of countries in the
tion, where we need to
CEE region,” adds Toader
invest heavily in the com-
of KPMG.
ing years,” adds the senior
According to Miriam Constantin, senior associate lawyer at D&B David and Baias, the
partner. Romania’s competitiveness was based on different factors after
coordinator of the public sector services team within PwC Romania,
the ‘90s. Despite the fact that before its accession to the EU Roma-
all the competitiveness reports conducted in recent years underline
nia was competitive both in terms of its low-cost labor force and
that the lack of administrative capacity in public institutions, the
low-priced assets, it was not enough for foreign investors. Romania
inefficient management of infrastructure projects, medical and
had a lower productivity than other EU members and offered an un-
educational systems and the instability of the fiscal and public acquisition regulations, are obstacles for Romania on its way towards greater competitiveness. “All of these areas are in connection with an existing and functional system that calls for improvements rather than radical changes,” says Constantin. She warns that, although the institution-
friendly economic and business environment, governed by frequent legal changes, corruption and a laborious fiscal system. With EU accession, both foreign investments and access to
al framework can serve a wide range of needs, some competencies
European funds and programs for integration made Romania a com-
are still overlapping and there is a lack of clear lines between duties
petitive market at European level. It offered both a low-cost labor
to eliminate conflict of interest. In addition, public sector special-
force and capital and higher economic growth than its EU peers.
ists are still under-professionalized while resources are allotted
“In the past few years, these competitive advantages, which all the
improperly. “We have evolved towards refined needs that require
countries that joined the EU had in their time, have started to erode.
improvement of the existing institutional tools and not necessarily
This is also the case for Romania, which is no longer as interesting
www.business-review.eu Business Review | November May 2016 2016
COVER STORY 13 14
as the new countries within the EU borders are now,” says Dragos
players in Romania that bring added value for the local economy,
Cabat, managing partner at RisCo Business Intelligence. He warns
with IT being the spearhead.
that, at least for now, Romania’s steeper economic growth than its
Romania has the sixth highest number of certified IT specialists
EU peers is its only element of competitiveness. “This offers the
per capita in the world, thanks mainly to the local multilingual edu-
illusion rather than the confidence that some potential earnings will
cational system, which focuses on technical skills. “Romania has all
be transferred into investments and education. Problems in access-
the premises to be a center of excellence in IT as we have IT&C spe-
ing European funds and the massive emigration of the labor force,
cialists that are recognized and hunted on the international market,”
including highly-qualified workers, reduce Romania’s competitive-
says Constantin of D&B David and Baias. At present, the five main
ness further,” says Cabat.
Romanian university centers generate about 5,000 specialists each year. “For the foreign companies that are active in the IT sector,
… and how profitable are its companies?
Romania delivers polyglot
Banca Transilvania, Coca-
percent of IT specialists
Cola, HBC Romania, Auto-
speaking English flu-
mobile Dacia, Mega Image,
ently. We can see similar
Transavia, Michelin Roma-
percentages with other
nia. What do these names
international languages,”
have in common? They are
adds Constantin. She adds
all among the 100 most
that the conditions on the
profitable private compa-
local market for building
nies in Romania, ranked
national businesses in
by their net profit in 2015,
IT&C are currently good.
based on data provided by
“It also seems that we
the National Trade Register
are quite attractive to the
Office (ONRC).
largest IT&C companies
The cumulated turn-
professionals with 80
worldwide,” she says.
over posted by the top ten
Meanwhile, Victor
players in the 2015 ranking
Iancu, senior manager at
is RON 60.03 billion (EUR
KPMG Romania, high-
13.5 billion)* while their
lights the importance of
profits reached RON 7.08
the IT&C sector to the lo-
billion (EUR 1.59 billion)
cal economy, saying that
and their number of em-
Romania comes across as
ployees about 60,000. In addition, the combined profits registered
an excellent destination for IT&C-intensive businesses. Recent years
by the top 100 companies, which employed in total over 174,000
have brought an increase in SSCs being established in Romania by
people in 2015, was RON 14.46 billion. Banking, retail and automo-
major international companies. “Both these examples have a com-
tive are the industries with the most representatives in the Top 100,
mon plus-factor, human resources. We still produce a valuable and
while FMCG, construction, pharmaceuticals and IT are among the
skilled work force and this is one aspect we need to preserve and
industries that have fewer players on the list. Half of the names in the Top 100 are located in Bucharest, while Cluj, Arges, Timis, Arad, Alba, Ilfov, Brasov, Constanta, Caras-Severin, Tulcea,
develop further. This should be considered in a context where de-
Mures, Bacau, Satu Mare, Prahova, Galati, Harghita, Braila, Dambo-
mographic statistics are showing an alarming decrease,” says Iancu.
vita, Salaj and Dolj also host Top 50 firms.
Automotive is another sector where Romania can make its footprint visible and generate added value. Because of the massive
IT rules added-value
investments made in the past decade, the car parts industry has
Despite all of its economic developments, the extent to which
managed to exceed to some extent its status as a low-cost workforce
Romania can be considered an economy that generates a high added
supplier to become a creative and added-value player, especially in
value remains one of the hottest issues for the local business envi-
the production of car engines, research and design. “These sectors
ronment. As pundits say, service providers continue to be the main
generate significant turnovers so they can be considered success-
www.business-review.eu Business Review | November 2016
14 COVER STORY
ful,” says Cabat. He adds that there are also
ernmental level. If I were to choose one word
other fields, like research – in biotechnology
to describe what we need to do to improve
and engineering – which, despite their added
Romania’s perception, that would be ‘stability’
value, generate turnovers which are too small.
– economic, social, political,” concludes Iancu of KPMG.
Production remains Romania’s Achilles’s heel
Is Romania a talent pool?
Except for the car parts industry, where Ro-
Without any doubt, Romania represents a
mania combines the advantages of a low-cost
talent pool, pundits say, while warning that it
workforce with facilities for foreign invest-
is not the only country that can play a role of a
ments, the economy unfortunately remains a
talent provider for both the local and inter-
supplier of low-processed industrial products
national market. “It is not just Romania that
and a player in industries of volume or with a
exports talent abroad. There is also Bulgaria,
low added-value. “Through its geographical
Poland, Hungary and other Eastern European
position, Romania can be a bridge between
countries. The total volume of so called ‘talent
the EU, Russia, Middle East and China. But, to be so, there is a need
exports’ is higher as Romania has a considerably larger population
for adequate infrastructure that our country doesn’t have now and
than its neighbors,” says Andrei Ion, manager of CEB/SHL Romania
there are no signs of improvements in the next period. In such a
talent management company.
context, Romania has lost ground as an attractive target for foreign
In his opinion, a lack of career and development opportunities
investments to Poland, the Czech Republic, Bulgaria and other
and low compensation are the main reasons why Romanians leave
countries outside the EU,” says Cabat of RisCo. In his opinion, at
their workplace. “There is no best ratio between the capacities of
present Romania is more attractive to Asian investors that want ac-
the talent fund and the opportunities that the business environ-
cess to the common market, warning that in this case Romania may
ment offers. Hence, a significant part of the workforce will migrate
face fierce competition from the more developed EU countries that
towards more attractive business environments from the career
intend to attract foreign investors from the same geographical area.
development and earnings perspective,” says Ion. He adds that the Romanian workforce lacks business, innovation and leadership
How do foreign investors see Romania?
skills. “In order to become attractive and retain our talents, it is
As Toader of KPMG says, Romania is a better place to do business
important for Romania to change from a country rich in specialists
than many others, but there are recurrent, objective demands
into one that cultivates talent in business administration, leadership
coming from foreign investors, such as the need for more physical
and innovation,” concludes Ion.
infrastructure, especially highways to link various parts of the country and also allow easier acces to our western EU neighbours. Other important aspects that seem to impact foriegn investors’ perception are the predictabilitaty of fiscal and monetary policies, as well as the efficiency of public funds management and spending. “Romania is perceived as one of the most stable European emerging markets, both from the economic and geopolitical perspective. It is a point of stability in an extremely volatile region, only if we think of events in Ukraine, Turkey and the recent political and economic developments in Hungary and Poland,” says Constantin of D&B David
From the investors’ perspective, Sorina Bradea, co-founder and
and Baias. But, she believes that Romania definitely needs a coher-
managing partner at Thomas International Romania, says the fact
ent and strong branding campaign, meant to position it as a safe
that Romania has people that are curious, ambitious, eager to learn
and attractive destination for investments, as a country with higher
and willing to demonstrate it, is an advantage. But she warns that
economic growth than the European average, and as a production
there are some disadvantages too. “In some areas like Banat, Cri-
center with high added value in sectors with advanced technology,
sana and part of Transylvania, a qualified workforce is not available
like IT and automotive.
in terms of number of specialists. In addition, people are migrat-
“While there are certainly mixed feelings about Romania’s at-
ing from small towns to larger ones so foreign companies in small
tractiveness as a business destination, I believe we are more and
towns face difficulties in finding specialists or local coordinators,”
more present on foreign investors’ agenda. Things are definitely
adds Bradea.
moving forward in this area; however, we need to capitalize on this momentum and plan future actions strategically, especially at a gov-
* sums are calculated at an annual average exchange rate of EUR 1 per RON 4.44 (2015), source: BNR
www.business-review.eu Business Review | November May 2016 2016
COVER STORY 15 14
OPINION Andrei Ion, manager of CEB/SHL Romania talent management company
The four myths of Romanian talent “Romanians are smart!”
ranked 45th out of 65 in the latest PISA evaluation,
Genes play a significant role in forming individual
being outperformed by other states in the region such
intelligence. The genetic differences between Roma-
as Turkey, Greece, Slovakia and Poland.
nia and other countries in the region are practically none. On the contrary, Romanians perform worse
“Romanians are innovative”
at general intelligence tests than other nationali-
Combining information about individual skills in
ties like the Americans or British. There is no solid
innovation with data about social and economic con-
evidence to conclude that we have higher cognitive
ditions that facilitate innovation, the Talent Report
skills than other countries.
Study (CEB 2012) grouped countries in four clusters, depending on the context of innovation and the avail-
“The availability of intelligence”
ability of talent for innovation. Romania is part of the
Romania is not different from the perspective of per-
fourth cluster (an unfavorable context for innovation
sonal structures relevant to achieving performance
and low availability for innovation) alongside Greece,
in different professional contexts. The student “Olympics” argument
Egypt, India, Poland and Brazil. The study ranked different states based
is worse than useless (10 or 100 student Olympics don’t mean a “talent
on the number of certifications obtained by their active population.
fund”). Performance at the Olympiad does not depend on intelligence
Romania was ranked eighth for IT skills, being outperformed by other
only. Intelligence is just a condition.
states in the region like the Czech Republic (first), Poland (second) and Russia (fourth). Romania failed to rank among the states that supply
“Romanians have general culture” or “the Romanian education sys-
talents in business administration (Poland was fourth) or essential busi-
tem is high performing”
ness skills (Czech Republic came eighth). Despite the available talent in
High performing students are the result of a high performing educa-
Romania, excluding the IT industry, it is not competitive compared with
tion system. The OECD conducts ongoing tests on an impressive
other EMEA countries. Romania, Poland and Slovakia are the only three
number of students across over 60 countries with the help of PISA
EMEA countries that posted a drop of 35 percent in the talent pool (ac-
(Programme for International Student Assessment). Romania was
cording to the CEB, Global Talent Monitor, Q2, 2016).
www.business-review.eu Business Review | November 2016
16 COVER STORY
Romania’s FDI outlook: high-tech industries and competitive costs for workforce The authorities have been trying in the past few months to change the perception that Romania is a low-tech country attracting foreign investors that are looking for a cheap labor force. With foreign direct investments this year set to exceed the EUR 3 billion registered last year, the government has been talking extensively about turning Romania into a destination for complex investments, be it in the automotive or aerospace industries.
A
By Ovidiu Posirca
s the
targeting both
departing
companies making
head of
greenfield invest-
InvestRomania,
ments, as well as
Manuel Costescu,
smaller firms plan-
put it, “Today,
ning to increase
companies are
their headcount.
not looking at
According to
Romania as a
InvestRomania
country that can
data, EUR 1 in state
offer cheap labor,
aid had a multipli-
but are heading
cation effect of 3.5
towards a highly-
in the 2007-2014
qualified work-
period.
force, at competitive prices.”
opening of a EUR
Romania looking to simplify communication with investors through two agencies
52 million plant
The authorities are
by commercial
looking to make it
aircraft producer
easier for foreign
Airbus Helicopter
companies or indi-
near Brasov. The
viduals pondering
fresh investment
an investment in
completed this au-
Romania to make a
tumn, had a state
decision.
aid component.
In the near future,
Foreign investments made in the past few months include the
Then, there is car
the government
parts manufacturer Faurecia, which opened a EUR 12 million plant
plans to launch BusinessRomania, an agency for the promotion of
for automotive seat covers in central Romania in September.
foreign investment and trade.
The document recently put out by the government on making
“In addition, it is planned that all requests from foreign investors
Romania competitive states some of the driving principles for en-
and Romanian exporters will be redirected by government authori-
hancing direct investments in the country. This includes a reduction
ties towards InvestRomania and TradeRomania for a common and
in the waiting period for getting various permits and a more efficient
coordinated approach and to create an inventory of projects so as to
procedure for securing state aid.
establish an integrated approach at national level,” Costescu told BR.
Romania is continuing its state aid program for new investors,
The government is also to looking to open local InvestRomania of-
www.business-review.eu Business Review | November May 2016 2016
fices so that more foreign investment can be channeled into areas
COVER STORY 17 14 whether the tax incentives apply to their activity,” Pascu told BR.
that have been ignored by companies for over two decades, such as the north-eastern and south-eastern parts of the country.
Recent developments in streamlined legislation and controversial bills
How can Romania attract more R&D investment?
The modernization of the pub-
Although in recent years, some
line with EU standards and the
of the most visible investments
creation of regulation for vo-
have been in the automotive
cational education have been
industry, especially in the case
among the measures rolled out
of car parts makers working
in recent months in order to
for the Dacia and Ford brands,
improve the business environ-
as well as for other companies
ment in Romania, both for
outside the country, Romania
local and foreign companies.
lic procurement legislation in
The government has also
has been able to convince
approved a new bill that aims
some investors to develop complex research & development facilities. Car parts maker Continental has an R&D center in Romania, while Renault has in Romania its second largest research facility outside
to incentivize the unemployed to find a job in another part of the country. This would help companies that have manufacturing units in western Romania, in towns where the unemployment rate is so
France, Renault Technologie
low that there simply aren’t
Romania (RTR), which accom-
enough workers. Although, in
modates a large array of facili-
theory, it sounds great to bring
ties from product design to the
people from areas that don’t
actual testing ground for new
offer enough job prospects
car models.
to areas with thriving economic activities, the media
“We believe Romania will continue to attract inves-
has reported on cases in which
tors because of the positive
people preferred to stay at home on a lower income than
macroeconomic indicators and prospects for improvement, which are becoming more and more attractive compared to other markets in the region,” Miruna Suciu,
move to another county, away from their family. The risk of legislation changing overnight has not disappeared
managing partner at law firm
completely from the local
Suciu Popa, told BR. According
market, and investors re-
to EU statistics office Eurostat,
main cautious. For instance,
Romania posted the biggest
the renewable sector, which
economic growth rate in the
attracted billions of euros in
bloc, a 6 percent hike in GDP, in
fresh investments, has been in
the second quarter.
the red for the past two years after the government changed
Monica Pascu, tax manager
the incentives scheme in 2013.
at professional services firm
This year, the banking industry
KPMG, said that taxpayers prefer state aid when planning an investment because it presents fewer
issued warnings regarding the outlook for home lending in Romania,
challenges, which also applies to R&D ventures.
after the approval of the debt discharge law in May. This piece of
“One of the main difficulties in applying the existing tax incentives related to R&D is the lack of clarity as to how R&D activities
legislation, which was heavily criticized by banks, allows mortgage holders to return their homes to the banks and thereby be free of all
are defined. To solve this, the Ministry of
debt. Although only around 4,000 people
Education should set up the R&D Experts
have made such requests to banks up to
Registry as soon as possible. Companies,
now, the lenders are seeking to overturn
employees and the tax authorities would
the law at the Constitutional Court, and
then be able to consult the registered
a verdict was expected in late October.
experts, in order to assess whether certain
Bankers claim it is not fair that the bill also
R&D projects qualify as applied research
applies to existing contracts and not only
and technological development and, hence,
new ones.
www.business-review.eu Business Review | November 2016
18 COVER STORY
Transition to a green economy holds many opportunities The transition from a “brown economy” to a green one entails a complete rethink of the economic model to one that generates growth and prosperity without exhausting the natural systems that sustain us. As with every challenge, the key to achieving sustainable growth is to unlock and seize the opportunities that open up during transition. By Georgeta Gheorghe Overhaul of energy sector is critical for greening the economy
2015-2050 stands at EUR 115 million (0.002
The implementation of mitigation mea-
efits, the total discounted net cost stands at
sures and solid investments in the energy
a negative EUR 86 million.
percent of GDP). Considering all the ben-
sector are crucial in moving towards a greener economy. In Romania, the decoupling of economic growth and energy
Water management can cut demandsupply gap, counter climate change
consumption, started in the 1990s, is
Standing at 2,000 cubic meters per capita
advancing, along with the development of
per year, water availability in Romania is
less energy intensive-sectors and a decline
currently less than half the European aver-
in heavy industries. Still, Romania’s energy
age of 4,500 m3. However, demand for wa-
intensity remains one of the highest in the
ter is increasing, in the agriculture, industry
EU, releasing 58 percent of the country’s
and hydropower sectors, but less when it
GHG emissions. At present, a World Bank study shows, 46 percent
comes to household consumption. Due to its vulnerability to climate
of primary energy and 40 percent of electricity is generated by coal
change, water management programs are necessary to ensure the
and oil. Moreover, future growth is expected to trigger an increase in
sector’s ability to meet demand.
energy demand, pushing GHG emissions up. Renewable’s share in primary energy, up from under 1.8 percent
Unless adaptation measures are implemented in the water sector, the WB says, agriculture will be seriously affected by climate change,
in 1990 to 13 percent in 2012, continues to grow. However, wind
with some crops set to record up to 35 percent yield drops. The irri-
power players warn, due to lack of support for investors, their in-
gation sector holds the biggest investment potential, followed by fer-
dustry’s net loss grew last year
tilizer application optimization
by RON 1.9 billion. Total losses
and increasing crop variety.
in 2014 and 2015 amounted to
The WB estimates investments
RON 4 billion, said the Roma-
costs at between EUR 1.8 billion
nian Wind Energy Association
(0.05 percent of GDP) and EUR
(RWEA).
11.0 billion (0.32 percent), with revenues exceeding investment
Better land management could save cash Romania’s forests can play a major role in climate change mitigation.
in all scenarios.
The country still has Europe’s largest remaining tract of virgin and
Improving waste management, transport and building greener buildings
naturally-regenerated forests, which sequester carbon and can help
According to the WB, out of the three sectors above, urban transport
counter the effect of GHG emissions. According to the WB study, the
represents the second-largest source of GHG emissions in Romania,
land use, land use change and forestry sector removed each year
while buildings account for the biggest share of energy consump-
around 27 percent of emissions produced by other sectors between
tion. In particular, heating represents 57 percent of total energy use.
2000 and 2011. However, deforestation has reduced Romania’s for-
Municipal solid waste disposal accounts for around 2 percent of Ro-
est cover to 29 percent, compared to the EU average of 40 percent,
mania’s overall emission portfolio. Should the region Bucharest-Ilfov
a 2014 study found. Climate change is already causing drying, an
meet relevant EU targets on recycling and diversion of biodegradable
increase in biological risks and slowing forest growth.
waste, emissions will fall by 80 percent. Moreover, an implementa-
According to WB estimates, the costs of afforestation and sustainable management of protection and production forests over
tion of a low-carbon development strategy in the region could cut local GHG emissions by 37 percent by 2050.
www.business-review.eu Business Review | November 2016
20 COVER STORY
Supermarkets become mediators in local organic agriculture sector Despite accelerating growth in recent years, the Romanian market of certified organic fruit and vegetables is still emerging, shaped by a range of factors.
R
By Georgeta Gheorghe
omania exports most
vegetables market is very young,”
products grown by its
Andreea Mihai, Carrefour market-
organic agriculture sec-
ing and communication director,
tor abroad, as raw materials. The
told BR. “For Romanian custom-
domestic market, meanwhile, is
ers, organic fruit and vegetables
largely unstructured, shaped by
are still an area of exploration. But
irregular supply and demand that
they are more and more interested
cannot easily be quantified. The
in local organic products.”
relationship between the two is
According to the 2015 Retailer
regulated by supermarkets, which
Scorecard, a survey conducted
have taken on the role of media-
every year by WWF Romania, only
tor and are becoming a significant
three local supermarkets were
factor on the market. Neverthe-
selling Romanian organic fruit and
less, Romania’s organic agriculture
vegetables. Recently, Lidl repre-
sector has tremendous potential
sentatives told BR the chain had
for growth.
established partnerships with over
After Romania joined the EU, its
100 Romanian providers, while in
organic agriculture sector experienced a period of sustained expansion, which has picked up in the past few years. Between 2010 and 2014 alone, the surface used for
the near future, local products will reach Mega Image stores, company representatives announced. However, the supply of Romanian organic fruit and vegetables
organic agriculture increased by 60 percent, from 182,000 to around
is not a steady one. “The percentage is variable and highly influ-
290,000 hectares. Concurrently, the number of operators in the
enced by seasons,” Mihai noted. In addition, collaboration between
organic agriculture sector rose, from 3,155 in 2010 to 26,736 operators
producers and retailers is still in the nascent stages. “It is too early to
involved in the production,
have a mapping of the regions
processing and sale of eco-
where the producers are com-
logical products in 2012. Out
ing from,” she added. In addi-
of them, 26,390 are producers.
tion, there is a lot of room for
In particular, the number of
improvement when it comes to
agents involved in processing
the range of products available.
increased from 48 in 2007 to 120 in 2014. Nevertheless, the share of
“Unfortunately for organic products not many are certified,” Mega
local land cultivated with organic grains, vegetables and vine is still
Image representatives told BR.
insignificant, standing at less than 1 percent of the total land used for agriculture. According to the Ministry of Agriculture and Rural Development
To this, retailers respond by sourcing their products from other EU countries, such as Greece, Spain, Italy and the Netherlands. On the long term, they plan to develop partnerships with producers
(MDRAP), 80 percent of Romania’s organic products are exported to
and position themselves as a mediating factor on the market. For
countries like Germany, Austria, Italy and the Netherlands, the main
this purpose, Lidl has developed a program with the University of
suppliers of processed organic foods in the EU. At the same time, Ro-
Agronomic Sciences and Veterinary Medicine of Bucharest. “Within
mania imports a significant share of organic fruit and vegetables to
the program, we offer our business expertise to local farmers so that
supply the local market. Overall, in 2011 Romania imported organic
they can further improve their businesses,” Lidl representatives said.
products to the tune of EUR 75 million. On the back of an increase in interest in organic food, and in
“Our suppliers are planning their crops in accordance with our estimates, and we try to diversify production every year,” Mega Im-
Romanian organic products, supermarkets have taken on the double
age representatives told BR. “We are currently in talks with produc-
task of building relationships with local producers and boosting
ers that are willing to convert their fields,” said Mihai, “[so that] after
awareness for the sector. “The Romanian certified organic fruit and
three years we will be able to replace imported products.”
www.business-review.eu Business Review | November 2016
22 COVER STORY
Romania’s future investment in IT to be boosted by IoT trends With the local software and IT services market set to register double-digit growth rates in the coming years, from the current level of EUR 3.6 billon, multinational and local firms expect new demand stemming from the Internet of Things trend, meaning that our electronic devices will reach an unprecedented level of inter-connection for which new software solutions will be needed.
C
By Ovidiu Posirca
lose to
the country’s
90,000
GDP in 2015 and
people
this figure is set
were employed
to increase in the
in the market
future, accord-
last year and the
ing to industry
constantly grow-
estimates.
ing demand for IT
“What we
services has also
should not forget
pushed up the
is that this sector,
wage expectations
with its significant
of senior profes-
growth, is mainly
sionals, who have
based on software
become some sort
development
of “stars” on the
teams working on
local labor market.
foreign products.
Companies in Ro-
Intellectual prop-
mania are paying
erty, the effective
their most senior staff to the tune of several thousand euros each
product, is usually not registered in Romania, so it will not generate
month and these specialists are constantly receiving offers from
a benefit for us. We will stay in the country with reduced taxes on
other players on the market.
wages, while the costs of IT specialists will go up, sometimes mak-
IT remains one of the few industries for which the government
ing the acquisition of such services prohibitive for local companies.
has
I think
been
that it is
praised,
vital to
due to
stimu-
its deci-
late
sion to
entre-
exempt
preneur-
IT pro-
ship,
fession-
the
als from
devel-
paying
opment
16
but
percent
also the
income
acquisi-
tax. Au-
tion of
thorities
soft-
consider the technology sector one of the country’s strategic growth
ware products for the local and foreign market,” Alexandru Lapu-
avenues in the coming years. IT generated around 5.6 percent of
san, CEO and co-founder of Romanian IT company Zitec, told BR.
www.business-review.eu Business Review | November May 2016 2016
The export of software and IT services is set to reach EUR 2.5
COVER STORY 23 14 constant development of team members can make the difference
billion this year, which is more than double the value registered four
between two employers, even at the expense of the salary or other
years ago, according to a report commissioned by the Employers’
material advantages,” said Lapusan of Zitec.
Association of the Software and Services Industry (ANIS). “We need both more and better qualified
The future of IoT in Romania
people to maintain current growth rates
Although the development of projects under the
for the tech industry in Romania,” Valerica
smart cities and IoT concepts is still in the early
Dragomir, executive director of ANIS, told
stages in Romania, we will see more demand from
BR. However, Valentin Metzger, CEE deliv-
companies doing such projects in the coming years,
ery director at IT company Endava, thinks
which will also mean more business for IT firms.
that the tax exemption for IT profession-
“I am convinced that in the next five years,
als should be maintained because it will
everything related to the offline application of tech-
encourage investments in the country.
nology for the use of communities will gain ground,
“In addition, we would like to see an
client companies will align themselves to the IoT
upgrade and simplification of this law
trend and the suppliers of IT services will introduce
so that the application base is extended
services and innovative projects in their portfolios,”
to an increased number of roles in the IT
said Lapusan of Zitec.
domain,” Metzger told BR.
Pelinescu of Luxoft Romania added that IoT “has become imperative when it comes to delivering the
IT firms looking to offer clear career prospects for fresh graduates Aside from the constant competition on
integrated, easy to use and sustainable products and services demanded by clients worldwide.” Companies will also need in the future to analyze
the market for skilled developers, the IT
and extract value from the data in the IoT, machine
sector is aiming to recruit some of the best
learning/artificial intelligence fields, added Metzger
graduates by offering tailored training
of Endava.
programs and a smooth transition from university to company life. “Young Romanian IT professionals lack
Which city will become the next IT center? Bucharest and Cluj-Napoca are currently the two
a clear sense of what their career path
cities with the most profitable companies develop-
should be like. This is because they are not
ing software, but more investors are deciding to
familiar with what it means to work inside
expand their operations in other locations such as
a company and they don’t know how to
Iasi and Brasov, for instance.
deal with complex projects. Fortunately,
Of course, the large cities will continue to attract
they are very talented and easily adaptable.
companies because they find it easier to recruit
Also, we can be really proud of having one
graduates from the university centers here. For
of the best software engineering schools in
instance, e-commerce giant Amazon said in October
the region, which each year gives us new
it was planning to hire 400 new people for its de-
generations of young professionals eager to learn more,” Bogdan
velopment and technology center in Iasi, where it already has 600
Pelinescu, managing director at IT company Luxoft Romania, told
workers. Elsewhere, German carmaker Porsche chose Cluj-Napoca
BR.
over Bucharest for the development of an engineering center, citing
Metzger of Endava added that some of the challenges faced by
the presence of two universities, the lively start-up scene and the
large companies when hiring fresh graduates are related to the
dynamic IT and auto market, according to a recent interview Marius
identification of the right specialization and ownership of their own
Mihailovici, location manager of the local subsidiary, gave to BR.
actions.
Executives in the local business and process outsourcing industry,
All the IT companies that BR talked to said they had specialized
which currently employs some 100,000 people, are also analyzing
training programs, which are
new smaller towns where they
becoming some sort of internal
could they expand their op-
schools, in which employees
erations. Galati, Targu Mures
are kept up to date with the lat-
and Craiova are some of the
est tech trends and can receive
cities which in recent years
training for new certifications.
have attracted new invest-
“Most of the time, a package of benefits that focuses on the
ments, both in the IT and BPO sectors.
www.business-review.eu Business Review | November 2016
24 INTERVIEW
How Romania became a Technology Powerhouse Outsanding talent pool, the digital infrastructure and services offered combined with experience make a Romanian company attractive for investors. Plus, economic context and industry’s strengths line up to create opportunities for Romania’s technology output. By Anda Sebesi In which technologies are investors from Romania most interested?
even more attractive because of its high
We’re currently living a dramatic develop-
current time, with real possibilities to reach
ment in both technology itself and the way
10 percent this decade), which means it will
it influences the business world around
benefit from the interest of all stakeholders
it. What we are witnessing is the rise of
as a strategic development area.
contribution to the GDP (6 percent at the
disruptive new paradigms, bringing a wave of change that will sweep the economic land-
ABOUT BOGDAN PADIU, CEO TEAMNET GROUP Bogdan Padiu is CEO of Teamnet Group, one of the leading system integrators in Central and Eastern Europe, with offices in seven countries. Padiu started programming out of passion, in 1994, amassing relevant experience and developing his expertise. In 2001, he decided to start his own business in the IT field, founding what is today known as Teamnet Group. With an EMBA from Wirtschafts University of Vienna, his career encompasses 20 years of experience in business development, business strategy, project management, enterprise software and cloud technology.
the current growth for the IT industry and make Romanian companies increasingly attractive.
scape. So, currently, companies from various
What are the main advantages of a local company in the eyes of investors?
industries are scrambling to catch that
I believe three big factors intersect to create
from an outstanding talent pool, created by
wave, especially if it is outside their main area of activity. We’re seeing a lot of interest in Romanian technology expertise, whether it is in a support role or directly as IP development assets in these areas, like Internet of Things, Immersive Interaction, Symbiosis with Artificial Intelligence or Cyber Physical Security.
In your opinion, what are the main issues that an investor looks at when deciding to invest in a Romanian company? The decision to invest is certainly one that depends on many variables and so one should take into account many factors – not all of them related directly to the company itself. The overall state of the economy, for example, is an important one. Right now Romania is a very attractive destination from this point of view, having one of biggest growth rates for 2015 and being expected to maintain that very positive trend for the coming years. I’m referring to tax reductions, and the existing and coming reduction to VAT, for example. Geopolitically, Romania has been a remarkably stable country throughout the last decades, even when facing the volatile situation in the region. If we were to go deeper, the IT sector is
The first one is talent – Romania benefits
www.business-review.eu Business Review | November 2016
INTERVIEW 25
a combination of specialized education and
veloped in order to expand Teamnet Group
product and product creator that happens in
work opportunities. The 100,000 people the
at regional level.
some of the more exotic locations developing global IT technologies. A Romanian
industry employs give it first place in Europe
product developed for the Romanian market
specialists. There is a good collaboration be-
How big is Romania’s potential in the technology sector now?
tween institutions and private organizations.
I feel that we are still undervalued as an
transition to export much easier and more
For example, Teamnet has several partner-
industry – so there is tremendous growth
seamless.
ships with technical universities in Romania,
potential for investments. But what’s even
aimed at developing educational programs
more exciting is the increase in Romanian
that create relevant and modern expertise for
entrepreneurship: original IP that is created
How competitive is Romania in the technology industry now?
students.
and developed right here, and that can be
As one of the fastest growing economies in
exported.
the EU and with a strong IT industry that has
when it comes to the number of IT certified
The second factor is the digital infrastructure and services offered, which are some of
Teamnet is one of the proponents of origi-
can have global appeal as well, making the
enjoyed continuous growth for years, I think
the best in Europe from a business stand-
nal Romanian IP – we’ve innovated in many
Romania is uniquely positioned to become
point. Romania has a real chance to build on
of our areas of activity and our products are
one of Europe’s IT powerhouses in the near
that and exploit the increased adoption of
now deployed throughout the region, as we
future. As one of the leading technology
current technologies like Internet of Things,
have offices in seven countries and plan to
companies in the country and the region, Te-
for example, which relies greatly on con-
expand further. Our emergency response
amnet will build on this trend, by investing
nectivity. At the same time, investors look at
integrated systems and our unmanned flying
significantly in new products and services.
how a new technology meets current needs,
vehicles have found great interest abroad.
Innovation is at our core and our entire range
for instance the cadastre topic. Through our
And I think that’s where Romania’s potential
of solutions confirms this, bridging that gap
solutions, we facilitate the modernization of
lies – in becoming a technology
between business and technology.
land management systems by integrating solutions that can collect and process
How did Teamnet influence Romania’s development from a technological perspective?
a high volume of data. Also, at Teamnet, we promote their interfacing with mobile devices and
Teamnet is a pioneer in the in-
with UAVs, systems applicable
dustry. We began to research and
to developing countries targeted
develop technological solutions
by the World Bank’s initiative in
in Romania, when their potential
this field.
wasn’t anticipated by the market.
The third factor is experience. Historically, outsourcing coming from major western technology companies has been one (and still is, to a slightly lesser
A current example is that although exporter of original Romanian IP. This is a goal we work intensely towards.
degree) of the main drivers of Romanian IT growth for more than a decade. Still, Roma-
the local drones industry is still at its beginnings, Teamnet is the only company in the country which has already exported 100% Romanian Enterprise UAVs at regional level and that NATO acknowledges for its
up of veterans in the field of technology. And
To what extent is Romania perceived as a player that brings its added value in the technology field?
the combination of creativity and experience
Aside from the factors mentioned previously,
is very attractive.
I think there are a couple of key differentia-
competences for the technological develop-
tors, when it comes to foreign perceptions
ment of our country, thus contributing to the
What is the value of the total investments attracted as a result of the partnership between Teamnet and the World Bank?
of the Romanian technology industry. The
implementing of the INSPIRE Directive in
first is a cultural compatibility with the
Romania, standard set by the European Com-
top players in the field. The mix between a
mission for all Member States.
The investment plan has been conducted
very well prepared, multilingual and highly
in three rounds so far by the International
skilled labor pool and the cultural proximity
112 solution, the most important system of a
Finance Corporation, a member of World
to Western Europe makes our country one of
country. Did you know that in 2015 Romania
Bank Group: EUR 5 million in 2014, EUR 1.36
the top choices when it comes to IP creation
has been declared the country with the best
million in 2015 and EUR 4.5 million in 2016.
and development for both European and
112 Emergency Calls Center in the European
The financing obtained as of 2014 from pres-
North American companies.
Union, according to the results reported by
nian companies – even start-ups – are made
tigious financial institutions such as the IFC
Another is that Romania is both a creator
“Romanian Hirrus”, after the participation at Unified Vision trials. We also anticipated the importance of GIS
Teamnet has also developed the national
the European Emergency Number Asso-
and Black Sea Trade and Development Bank
and a market for technology, so we don’t
ciation? And the list of such examples can
has been based on the business strategy de-
have that cultural separation between
continue.
www.business-review.eu Business Review | November 2016
26 COVER STORY
Capital market prepares for upgrade to emerging status with privatizations pipeline With daily equity trading on the Bucharest Stock Exchange (BVB) at EUR 7.3 million in the first nine months of the year, up 2 percent on last year, the BVB has this year rolled out a series of initiatives designed to attract more retail investors to the market and is currently preparing a new program to convince more local firms to list on the stock exchange.
W
By Ovidiu Posirca
ith no
executive.
listing of a
company in more
Several SEOs preparing for listing
than two years,
Miruna Suciu,
the executive team
managing partner
of the BVB has
at law firm Suciu
focused on bring-
Popa, says that Ro-
ing SMEs onto a
mania could have
special market
gotten more state-
called AeRo. Some
owned companies
large state-owned
of the firms present here have already sold bonds. For instance,
to launch initial public offerings in the past two years, claiming,
Romanian IT training company Bittnet raised RON 4.18 million by
“Such an initiative would be very well received, given the sound eco-
selling three-year maturity bonds at a fixed interest rate of 9 percent
nomic fundamentals of Romania and the volume of contributions
per year this summer.
received by private pension funds.”
“For the last three years and especially
“Of course, the transition from a frontier
since the launch of AeRO in February 2015,
market to emerging market status depends
a number of companies have debuted on
on the value of transactions, the size of
this market, either introducing shares or
the companies listed on the Bucharest
bonds to trading. We are advocating solu-
Stock Exchange, as well as on the access of
tions in the fiscal area that are intended to
institutional investors with large available
ensure fundraising through the market is
funds to the Romanian capital market, and
treated equally to financing from banks,
Hidroelectrica’s announced listing, as well
and incentives for individual investors,”
as the sale of the minority package in OMV
Ludwik Sobolewski, CEO of the BVB, told
Petrom by Fondul Proprietatea, may be
BR.
decisive for the Bucharest Stock Exchange,”
The head of the BVB added that after three years of reforms, the Romanian capital market is more accessible to foreign investors in the technical sense – for instance,
Suciu told BR. She suggested that state-owned salt producer Salrom and national post operator Posta Romana could be among the viable candidates
through the procedure for securities ac-
for listing by the end of 2017.
counts opening.
The government approved in October a
“Foreign investors are very sensitive to
memorandum in which the sale of minority
corporate governance issues. In that matter,
stakes in state-owned companies deemed
the BVB introduced a new, fully modern
strategic was announced. The operators of
Code of Corporate Governance for the listed
the airports and ports in Romania are on
companies, together with a new system of
this list, alongside rail freight player CFR
compliance. Consequently, FTSE, one of the most renowned institutions classifying markets, and relying for that
Marfa. The IPO of Hidroelectrica should happen in around six months,
on the feedback from international investors and intermediaries, put
according to a recent estimate by the minister of energy, Victor
Romania on the so-called Emerging Market Watch list,” added the
Grigorescu.
www.business-review.eu Business Review | November 2016
27 - PARTNER CONTENT -
Financing opportunities of 2017: state aid reported to and approved by the European Commission.
particular areas of Romania. •
Yearly budget: ~50 million euros
Romania continues to welcome investors to access several types of available incentives, un-
Such incentives can be granted to large,
der different types of regional state aid schemes
medium-sized and small (both newly set-up
which are available for access up to 2020:
and existing) enterprises, depending on the type of investment, the field in which the
G.D. 807 / 2014 supporting investments having a major impact on economy
investment is to be implemented and the
•
Initial investment in minimum 10 million
for. Incentive granting is conditioned by
euros in tangible and intangible assets in
obtaining the financing agreement of the
one of the eligible fields of activity
responsible authority, as preliminary to
The eligible expenses are constructions of
investment launch and subject to fulfilling
all kind (up to 375 euros/sqm), leasing costs
the eligibility criteria applicable both to the
of buildings (up to 5 euros/sqm/month),
investor and the investment. The state aid
new technical installations, machinery and
incentive is payable after the eligible expen-
equipment and intangible assets.
diture is totally or partially paid, according
Yearly budget: ~145 million euros
to the financing agreement.
•
•
Still being one of the leading FDI recipients in the region, Romania has a competitive, investmentconductive business climate and continues to offer a wide range of financing tools and fiscal incentives. A glance at next year’s financing opportunities reveals one of the most advantageous financing resources, namely state aid, granted either as cash reimbursement for up to 50 percent or more of eligible costs associated with an investment project.
G.D. 332/2014 supporting investments promoting regional development by jobs creation
financing opportunities looks promising for
•
Initial investment that generates within
ly beneficial state-aid schemes, as stimulat-
maximum 3 years at least 10 new jobs (out
ing investments leads to economic growth
of which at least 3 for disadvantaged work-
and helps create regional synergies. This
ers), in one of the eligible fields of activities.
win-win partnership comes hand in hand
The eligible expenses are the salary costs
with a series of long-term commitments
for all new employees recorded for a period
to be undertaken by both parties and the
of 2 consecutive years, within the limit of
business environment salutes the Romanian
the medium national gross salary.
government’s extensive support granted to
Yearly budget: ~100 million euros
investors in order to turn business opportu-
•
•
As aforementioned, a glance at 2017’s the economy: Romania has drafted mutual-
nities into value-added projects.
G.D. supporting investments carried out by SMEs (draft version) •
Initial investments of a total value of minimum 4,5 million lei (exclusive of VAT), the equivalent of ~1 million Euro.
In a nutshell, the regional state aid represents a transfer of Romanian state resources
provisions of the state aid scheme applied
•
The eligible expenses are constructions of
to private beneficiaries (companies) that
all kind (up to 375 euros/sqm), leasing costs
carry out their investments in Romania, and
of buildings (up to 5 euros/sqm/month),
it is an addition to the already available EU
new technical installations, machinery
funds or de minimis aid. Romanian state aid
and equipment and intangible assets. The
schemes have been drafted in accordance
percentage of reimbursement can reach
with EU legislation and have been already
up to 70% for small enterprises located in
Manuela Furdui, Managing Partner, Finexpert
www.business-review.eu Business Review | November 2016
28 COVER STORY
Romania vying for fresh R&D investments with IT talent pool and lower taxes The authorities are simplifying the tax legislation and looking to increase funding for research and development in a bid to attract both foreign and domestic companies that can develop locally technologies and products that can be sold worldwide. By Ovidiu Posirca He told BR, “The government currently has under development a fund of EUR 100 million, focused on high-end industries with added value.” The former government official did not elaborate on this comment, but he stated that 5.6 percent of GDP is currently generated by the IT industry alone.
Romania looking to advance in EU R&D expenditure ranking According to players in the IT industry, although Romania has a lot Talking finance: The funding of R&D in the EU stands at 2 percent of GDP
T
he R&D field has a special section in the Competitive Roma-
of skilled engineers, there is a lack of product specialists that can identify market trends and bring new business. “We are exporting a lot of IT, but we are doing it as man-hours, no
nia strategy document, which was presented recently by the
matter if we are talking about smaller or multinational firms,” Alex-
government. It includes some measures that have already
andru Lapusan, CEO and co-founder of local IT firm Zitec, told BR.
been mentioned by the private sector, such as the development of an ecosystem around Extreme Light Infrastructure – Nuclear Physics (ELI-NP), the close to EUR 300 million cross-border project that will
And then there is the ongoing problem of the lack of sufficient specialists, primarily in the IT segment. Companies have been calling for years for closer cooperation with
host the most powerful lasers in the world. Some 100 researchers are
technical universities educating, for instance, software engineers.
already working on the project, which should be fully operational in
And the number of students enrolled in such schools is not that high compared to the EU
2018.
average. For instance,
The country has already attracted key R&D investments from carmakers Renault and Porsche, as well as from car parts maker Con-
in 2013, only 5.3 per-
tinental. In addition, technology giant Siemens is doing R&D in three
cent of tertiary educa-
centers across Romania.
tion graduates were in science, mathematics
“The automotive industry is very well represented in our country, as most major automotive components providers have set up fac-
and computing, while
tories here. Considering the amount of R&D performed in general,
the EU average was
in the automotive industry’s search for safer and more efficient
10.5 percent, ac-
technologies for the future, focusing on the setting up of more auto-
cording to Eurostat.
motive R&D centers in Romania seems like a logical next step. This
Around 9,000 gradu-
also naturally builds on the pool of IT skills which is well developed
ates in Romania got a
in our country,” Monica Pascu, tax manager at professional services
university diploma in this sector. In engineering, manufacturing and
KPMG, told BR.
construction, however, the country fares better. Nonetheless, it should not be forgotten that Romania spent 0.39
Lower taxes in place for researchers
percent of its GDP on R&D in 2013, while the EU 28 average was 2
The recent approval of a tax exemption on the 16 percent income
percent. In 2014, Romania came last in the EU by this indicator. But
tax levied on employees in the R&D field shows that the government
the authorities have ambitious plans and the media reported this
is focusing on enhancing such investments, according to Manuel
summer that the government was talking with carmakers about
Costescu, departing head of InvestRomania, the government agency
setting up a plant for electric vehicles, although for such high caliber
tasked with handling foreign direct investments projects in the
investments, low taxes are only one small piece in companies’
country.
decision-making chain.
www.business-review.eu Business Review | November 2016
29 - ADVERTORIAL -
ABB introduces YuMi®, its dual arm robot to Romania
ABB, the leading power and automation company, HAS announced that YuMi, the world’s first truly collaborative robot, IS showcased at Magi*k, an interactive exhibition which opens today and runs through November 15, 2016 at the Sala Dalles in Bucharest.
while ensuring the safety of those around it.
300,000 robots worldwide and of over 900
Thanks to its dual-arms, flexible hands, universal
industrial robots in Romania alone. ABB is a
parts feeding system, camera-based part location
market leader in Romania in the Robotics do-
and state-of-the-art motion control, YuMi has
main, the main applications served including
equal application in any small parts assembly
welding, painting, packaging, palletizing and
environment.
handling. ABB also offers preventive mainte-
“We are excited about the new possibilities
nance to the solutions implemented for its
YuMi brings to Romania. Specifically designed
Romanian customers. With YuMi, ABB is once
to replicate human attributes, YuMi is a game-
again pushing the boundaries of robotic
Magi*k is part of “Creative Sweden,” an event
changing innovation providing complete
automation by fundamentally expanding the
focused on design, technology, science,
solutions to our customers in the automation
types of industrial processes which can be
education, authenticity and innovation and
of small parts assembly domain.” – said Tomasz
automated with robots.
aims at bringing together and making known
Wolanowski, Country Managing Director of ABB
the accomplishments of Swedish companies
in Romania.
ABB (www.abb.com) is a leading global technology company in power and auto-
YuMi can operate in very close collabora-
mation that enables utility, industry, and
ences and workshops, expecting over 30,000
tion with humans thanks to its inherently safe
transport & infrastructure customers to
visitors.
design. It has a lightweight yet rigid magnesium
improve their performance while lowering
in Romania through exhibitions, confer-
skeleton covered with a floating plastic casing
environmental impact. The ABB Group of
collaboration, bringing innovation and
wrapped in soft padding to absorb impacts. YuMi
companies operates in roughly 100 countries
productivity to ABB’s Romanian customers
is also compact, with human dimensions and hu-
and employs about 135,000 people.
in the manufacturing and assembly field. It
man movements, which makes human coworkers
is a perfect robotic co-worker able to work
feel safe and comfortable.
YuMi heralds a new era of human-robot
side-by-side on the same tasks as humans,
ABB has an installed base of more than
www.abb.com/ro e-mail: abb.office@ro.abb.com
www.business-review.eu Business Review | November 2016
30 COVER STORY
Top 100 private companies ranked by their 2015 net profit Rank Company County Industry Net profit (RON) Turnover (RON)
Average number of employees
1
Banca Transilvania SA
Cluj
Banking
6,435
2
Banca Comerciala Romana SA
Bucharest
Banking
2,417,668,444
2,733,577,313
3 Continental Automotive Products SRL Timis 4 Dedeman SRL Bacau
963,426,958 2,881,886,296 6,047 710,056,865 2,848,850,558 2,381 Manufacturing of automotive parts Retail 563,025,627 4,361,619,720 7,656
5 Automobile Dacia SA Arges 6 BRD Groupe Societe Generale SA Bucharest
Manufacturing of cars Banking
447,938,323
19,164,558,589
13,884
445,422,092
2,568,052,821
7,195
7 Raiffeisen Bank SA
Bucharest
Banking
437,564,405
2,068,346,596
5,298
8 British American Tobacco (Romania) Trading SRL
Bucharest
Wholesale trade of tobacco products
435,868,993
7,350,865,953
715
9 Cameron Romania SRL Prahova
Manufacturing of equipment for extraction and construction
332,036,396
1,284,647,037
1,103
10 OMV Petrom Marketing SRL Bucharest
Retail of fuels in specialized stores
331,008,143
14,776,387,601
222
11 Orange Romania SA
Telecommunications
262,151,267
4,585,755,248
2,386
12 Coca-Cola HBC Romania SRL Ilfov
Bucharest
242,721,956 Production of non-alcoholic beverages, mineral waters and bottled waters
2,112,882,161
1,511
13 Unicredit Bank SA
Banking
1,164,830,489 1,696,555,756
2,909 1,605
Bucharest
14 Silcotub SA Salaj
Manufacturing of steel tubes and accessories
222,054,978 220,946,025
15 Holzindustrie Schweighofer SRL
Alba
Wood industry
206,262,204
1,984,902,242
2,055
16 Citibank Europe Plc, Dublin – Romanian Branch
Bucharest
Banking
200,711,760
358,774,546
217
17 Delphi Diesel Systems Romania SRL Iasi
Manufacturing of car parts
178,685,205
1,881,153,589
1,724
18 Societatea de Investitii Financiare -Transilvania SA
Financial brokerage
158,597,060
675,319,836
52
Brasov
19 Arctic SA Dambovita
Manufacturing of home 139,691,781 appliances
1,784,345,197
2,942
20 Societatea de Investitii Financiare Oltenia SA
Financial brokerage
132,405,011
260,339,602
52
21 Nidec Motor Corporation Romania SA Arges 22 Carrefour Romania SA Bucharest
Manufacturing of engines, electric generators and transformers Retail
128,617,273
63,593,955
288
127,672,891
5,149,498,472
7,985
23 Holcim (Romania) SA
Manufacturing of cement 127,564,354
1,123,282,485
744
24 Azomures SA Mures
Manufacturing of fertilizers and nitrous products
1,728,273,019
1,413
25
Heidelberg Cement Romania SA
Bucharest
Manufacturing of cement 119,824,299
748,137,902
752
26
Heineken Romania SA
Bucharest
Manufacturing of beer
1,205,906,433
1,102
27
CRH Ciment (Romania) SA
Bucharest
Manufacturing of cement 105,740,276
852,095,747
461
28
Pro TV SRL
Bucharest
Media (TV)
104,556,136
635,976,760
896
29
Mega Image SRL
Bucharest
Retail
102,841,396
3,562,917,265
8,077
30
Societatea de Investitii Financiare Moldova SA
Bacau
Financial brokerage
100,340,327
289,335,539
30
Dolj
Bucharest
123,271,101
111,026,822
www.business-review.eu Business Review | November May 2016 2016
COVER STORY 31 14
Rank Company
County Industry Net profit (RON) Turnover (RON)
Average number of employees
31 Global E-Business Operations Centre SRL Bucharest
Business and 99,399,594 management consultancy
336,554,854
2,363
32 Linde Gaz Romania SRL Timis
Manufacturing of industrial gas
545,771,116
453
33 Autoliv Romania SRL Brasov
Manufacturing of car 94,320,935 parts
3,051,791,239
8,124
34
Lease and sub-lease of 92,582,413 its real estate properties
70,027, 191
1
35 Mediplus Exim SRL Ilfov
Wholesale trade of 88,026,548 pharmaceutical products
3,360,058,016
885
36 Max Bet SRL
Bucharest
Betting activities
86,743,062
326,007,798
924
37
Procter&Gamble Marketing Romania SRL
Bucharest
Data processing, 83,370,366 web page administra- tion and related activities
120,244,648
298
38
Allianz-Tiriac Asigurari SA
Bucharest
Insurance industry (except life insurance)
81,757,849
1,289,658,694
1,421
Ilfov
Car dealership
81,704,411
2,018,086,693
136
40 Contitech Romania SRL Timis
Manufacturing of car parts
81,307,378
667,932,630
1,622
41
Engineering and technical consultancy
79,840,221
941,307,574
282
42 Gaspeco L&D SA Bucharest
Brokerage in the com- merce of fuels, miner- als, metals and chemi- cals for industry
77,503,372
444,564,734
216
43
Financial brokerage
75,324,568
140,229,318
48
44 Michelin Romania SA Ilfov
Manufacturing of automotive parts
74,373,092
2,081,101,283
2,823
45
Fan Courier Express SRL
Bucharest
Delivery industry
74,090,191
399,323,193
1,723
46
Zara Bucuresti SRL
Bucharest
Fashion retail
73,290,295
504,765,479
789
86,772,319
5
Societate Dezvoltare Comercial Sudului (SDCS) SRL
39 Porsche Romania SRL
Schlumberger Logelco Inc. Panama Ciudad de Panama
Societatea de Investitii Financiare Banat-Crisana SA
Bucharest
Bucharest
Arad
94,976,874
47 Clarimar Impex SRL Bucharest
Extraction of decorative and construction stones 72,587,503
48 Mol Romania Petroleum Products SRL Cluj
Retail of fuels in specialized stores
72,111,545
4,421,926,935
201
49 J.T. International (Romania) SRL Bucharest
Wholesale of tobacco products
71,757,771
3,219,410,302
675
50
IBM Romania SRL
IT consultancy services 67,975,000
744,599,760
2,172
51
Generali Romania Asigurare Reasigurare SA Bucharest
Insurance industry
67,954,975
743,899,008
433
67,860,374
227,281,024
433
Manufacturing of aircraft
67,551,975
239,531,325
720
Bucharest
52 TMD Friction Romania SRL Caras Severin Manufacturing of car parts 53 Premium Aerotec SRL Brasov 54
Constanta South Container Terminal SRL
Constanta
Naval services
66,284,953
182,683,506
450
55 56
Societatea de Investitii Financiare Muntenia SA Agricost SA
Bucharest
Financial brokerage
63,855,737
219,742,905
11
Braila
Agriculture
63,387,377
365,271,060
924
57 Fildas Trading SRL Arges
Wholesale of pharma- ceutical products
62,832,439
1,676,006,372
712
58 Coficab Eastern Europe SRL Arad
Manufacturing of electric and electronic cables
62,799,111
1,413,212,084
424
59 Pumac SA Bucharest
Lease and sub-lease of 62,394,563 its real estate proper- ties
0
1
60 Danya Cebus Rom SRL Bucharest 61 Baneasa Developments SRL Bucharest
Construction of resi- 61,419,295 dential and non-resi- dential buildings Lease and sub-lease of 61,130,425 its real estate properties
174,901,167
57
208,995,551
185
www.business-review.eu Business Review | November 2016
32 COVER STORY Rank Company
County Industry Net profit (RON) Turnover (RON)
Average number of employees
62 Samsung Electronics Romania SRL Bucharest 63 Hewlett-Packard (Romania) SRL Bucharest 64 Henkel Romania SRL Bucharest 65 Bitdefender SRL Bucharest 66 Astra Rail Industries SRL Arad 67 Garanti Bank SA Bucharest 68 Transavia SA Alba 69 Euro Auto Plastic Systems SRL Arges 70 Avon Cosmetics (Romania) SRL Bucharest 71 Arcada Company SA Galati 72 Aviatia Utilitara Bucuresti SA Bucharest 73 Timken Romania SA Prahova 74 Auchan Romania SA Bucharest 75 Profi Rom Food SRL Timis 76 Aerostar SA Bacau 77 Cetelem IFN SA Bucharest
Wholesale of IT products 60,077,620 Wholesale of IT and 58,657,328 software products Manufacturing of 58,294,763 cement, concrete and gypsum Software industry 57,604,725 Manufacturing of roll- 57,538,654 ing stock Banking 57,070,785 Agriculture 56,183,013 Manufacturing of car 55,362,800 parts Retail 55,203,148 Railway construction 55,155,346 Lease and sub-lease of 54,856,219 its real estate properties Manufacturing of car 53,216,151 parts Retail 52,898,610 Retail 52,569,277 52,268,445 Manufacturing of aircraft Financial services 52,175,494
3,308,303,515 288,941,948
122 345
640,882,215
497
387,037,483 609,850,538
708 2,452
406,844,603 462,311,203
944 1,145
466,571,419
615
497,741,928 295,389,397 5,154,186
351 239 32
358,926,633
891
4,444,160,904 2,547,961,743 329,763,579
9,430 7,354 1,659
353,738,348
658
78 Contitech Fluid Automotive Romania SRL Satu Mare
Manufacturing of gum products
51,922,806
674,563,777
1,538
79 Computer Generated Solutions Romania SRLBucharest
Call center
49,801,568
190,611,562
2,300
80 Lear Corporation Romania SRL Arges 81 Dinamo 1948 SA Bucharest
Manufacturing of car parts Sports
48,740,126
771,486,370
4,070
48,691,828
18,922,507
70
82 Ipsos Interactive Services SRL
Market research
83 Metaleuroest SRL Prahova
47,102,745 Lease and sub-lease of 46,917,197 its real estate properties
216,681,610 1,087,434
844 2
84 Romaqua Group SA Harghita 85 Zentiva SA Bucharest 86 Unicredit Consumer Financing IFN SA Bucharest
Production of 46,809,430 non-alcoholic beverages, mineral waters and bottled waters Manufacturing of 46,204,961 pharmaceutical products Financial services 45,856,216
632,129,861
1,895
396,824,592
497
361,346,148
272
87 Coral SRL Tulcea
Construction of 46,204,961 residential and non-residential buildings
396,824,592
497
88 Triplast SRL Mures 89 SAP Romania SRL Bucharest 90 Arabesque SRL Galati 91 Premier Restaurants Romania SRL Bucharest 92 Koyo Romania SA Teleorman 93 A&D Pharma Holdings SRL Ilfov 94 Genpact Romania SRL Bucharest
Manufacturing of plastics 44,945,406 Software 44,925,500 Retail 44,823,643 Restaurants 44,716,877 Manufacturing of car 44,672,316 parts Business and 44,262,719 management consultancy Support services 44,258,872
136,937,833 183,889,316 1,548,539,425 511,884,423 344,875,867
150 371 2,603 2,892 1,462
4,068
1
95 Ursus Breweries SA Bucharest 96 Oscar Downstream SRL Ilfov 97 Hutchinson SRL Brasov 98 Selgros Cash&Carry SRL Brasov 99 ERB Retail Services IFN SA Bucharest 100 Romcab SA Mures
Manufacturing of beer Wholesale of fuels and derivatives Manufacturing of gum products Retail Financial services Manufacturing of fiber optic cables
Source ONRC
Bucharest
404,753,142
2,811
44,176,488
1,582,551,058
1,419
43,838,264
1,763,935,788
372
43,503,572
382,048,533
996
43,215,460 42,805,423
2,934,450,404 119,724,907
3,745 133
42,130,193
837,073,867
500
www.business-review.eu Business Review | November 2016
34 BR EVENTS
Local firms set to learn from Polish regional business expansion model Polish companies have dealt in the past with some of the challenges facing Romania at the moment – the lack of a complex road network and an insufficient number of skilled trades people – but this didn’t stop the country from becoming one of the economic tigers of Central and Eastern Europe. Polish firms have now ventured into Romania to fuel their international expansion, seeking higher growth rates, as the market back home has become saturated, said officials during the first Polish Investors Forum organized by Business Review magazine. By Ovidiu Posirca
“
There is already a critical mass of Polish companies on the local
Sectors that attract Polish capital
market,” said Marcin Wilczek, the Polish ambassador to Roma-
Financial services, manufacturing and B2C businesses are of particu-
nia. He added that there are now more than 800 companies
lar interest to private equity investors, explained Jakub Lerner, associ-
with Polish capital on the local market whose combined investment is
ated partner at Noerr Warsaw.
close to the EUR 500 million mark.
“We have three projects for investments in Romania from Poland,” said the international lawyer. He also mentioned some of the
How Polish companies became key players in the region While Romania’s GDP is set to expand by around 5 percent this year, Poland has kept up strong growth in output for a decade, on the back of foreign direct investments and European funds. “In 2005 it was so hard to convince Polish companies to move into the EU, outside the country’s own borders,” said the ambassador. Now, Polish companies are looking at Romania as a core market, said Cristian Cornea, executive general manager of Can Pack Romania, an aluminium packaging company. “We have a very good IT infrastructure, we have the geographical position, very suitable for various business scenarios,” said Cornea, the lack of qualified workforce. “Romania is missing 4 million people at peak capacity,” said Cornea, referring to the Romanians who have moved abroad. He added that it was crucial for the country to attract foreign investments in the production sector. The GM said that multinational firms that need skilled employ-
instance, there is a lack of electrical engineers and qualified operators of robotics equipment.
Marcin Wilczek, The Embassy of Poland in Romania
2 Cristian Cornea, Can Pack Romania
>>>>>>>>>>
firms simply can’t afford to do so. The executive explained that, for
1 >>>>>>>>>>
ees have developed their own training programs, but smaller-sized
Photos: Mihai Constantineanu
who added that a serious problem for companies in the future will be
The Can Pack representative said that from his experience, at least 25-30 percent of blue-collar workers resign after one month. Aside from the ongoing issue with the workforce, Cornea considers missing logistics and infrastructure a business opportunity, underlining the fact that there could be more companies providing rail cars on the local market.
There is already a critical mass of Polish companies on the local market
We have a very good IT infrastructure, we have the geographical position, very suitable for various business scenarios
www.business-review.eu Business Review | November May 2016 2016
COVER BR EVENTS STORY 35 14
challenges faced by a foreign legal expert working in Romania, citing the fairly low competition thresholds, the lack of sufficient case law following the roll out of the New Civil Code five years ago and the current legal regime for the acquisition of limited liability companies. “For political reasons, Poland and Hungary have not had good coverage in the international press in the recent period, compared to Romania,” said Lerner. He noted that Germany is a gateway to West-
Romanian companies invited to cooperate with Polish economic players By Ovidiu Posirca
ern Europe for Polish companies. Then there is CEE – Romania is the
ABOUT
second largest economy in the region after Poland and thus a natural
Wlodzimierz Sadzik, counselor, head of the Trade and Investment Promotion Section of the Embassy of the Republic of Poland in Bucharest
expansion target for Polish businesses, according to the Noerr Warsaw representative. For Tomasz Ignaczak, general director of KRUK Romania, the debt collection firm, the local market has offered significant opportunities in terms of employees. The company has 600 people in Romania, but he said that a growing number of local managers are getting jobs in Italy, Spain, but also in Poland, countries where KRUK has operations. One of the main examples of Polish capital being put to work in Romania has been the case of retail chain Profi. Polish equity fund Enterprise Investor announced this spring that
How close are Romania and Poland in terms of trade?
it was considering all options for the retail player, which it acquired in
For many years Romania has been a very important economic partner
2009. Back then, the company operated 67 stores, while by the end of
for Poland. We have a long history of successful and dynamic coopera-
September 2015, Profi had reached 448 units.
tion. In 2015 our bilateral trade turnover amounted to a record value
“Leading international private equity houses are interested in
of more than EUR 4.5 billion. In 2016 our bilateral trade should exceed
buying Profi,” said Lerner of Noerr Warsaw. In April, EI fund took over
the historical value of EUR 5 billion. It means an increase of over 10
Noriel Group, the biggest toys and games retailer in Romania, claim-
percent. Poland exports a wide range of goods to Romania includ-
ing that it was looking to replicate the development model seen in the
ing machinery and equipment, mineral products, agro-food items,
case of Profi.
furniture and many others. On the other side, Poland imports from Romania mechanical equipment, metal products, motor vehicles and spare parts, wood materials and many other products. Our largest investors in Romania include: Maspex Tymbark (soft drinks and food products), Ciech (soda products), Profi (network of supermarkets), Can Pack (beverage cans), Pryszynski (roofing tales), Forte (furniture), Barlinek (wooden panels), Porta (construction woodwork, doors), Asseco (computer services), Orlen Asfalt (asphalt bitumen), Idea Bank (banking services), Kruk (financial services) and many others.
What are the benefits and challenges of the Romanian economy? Every year more and more Polish companies are interested in entering the Romanian market. There are good prospects for further investments, not only in the industrial area, but also in the financial sector and services. Of course, we realize that Romania also has a lot of problems and still much to be done. The biggest barriers to further
3
For political reasons, Poland and Hungary have not had good coverage in the international press in the recent period, compared to Romania
Tomasz Ignaczak, KRUK Romania
economic regulations, poor absorption of European funds, and lack of
>>>>>>>>>>
>>>>>>>>>>
Jakub Lerner, Noerr Warsaw
dynamic economic development are the large bureaucracy, unstable
4
qualified employees in industrial sectors. But fortunately, in all these cases Romania is making a lot of progress.
How can Romanian firms team up with Polish companies? There are a lot of possibilities for cooperation with Polish companies in such areas as automotive, electronics, biotechnology, renewable en-
Romania was the first foreign market for KRUK in 2007
ergy, the food sector and many others. We are ready to provide further information and assistance in this area. So we encourage Romanian companies to contact the Trade and Investment Promotion Section of the Polish Embassy in Bucharest.
www.business-review.eu Business Review | November 2016
36 COUNTRY FOCUS
Pole position: local Polish investment gains prominence A growing number of Polish companies have been venturing into Romania in the past few years. Close to 450 firms have launched local operations in search of new growth avenues outside their home market. By Ovidiu Posirca
T
he local business environment already
retail investors and to ease the access of for-
has some key figures of Polish origin,
eigners with capital on the market. The BVB
Polish firms present in the main economic sectors
especially on the capital market. For
is also working to grow the market for smaller
Poland is currently one of the emerging inves-
instance, the head of the Bucharest Stock
companies that can get financing on the
tors in Romania, with total FDI in the country
Exchange (BVB), Ludwik Sobolewski, came
capital market, instead of going, for instance,
amounting to EUR 446 million at the end
to Bucharest in 2013 after managing
of 2015, according to data from the
the Warsaw Stock Exchange, which
National Bank of Romania.
under his tenure developed a new
Nevertheless, firms with Polish
market for SMEs from scratch. Then,
capital have quickly covered the
there is Greg Konieczny of Franklin
whole spectrum of the economy,
Templeton, the Pole who has been
from financial services to construc-
managing the closed-end fund Fon-
tion, IT, manufacturing and FMCG.
dul Proprietatea. During his admin-
According to an analysis by ICAP
istration, the FP was also listed in
Romania, 445 companies had more
London and the executive has been
than 10 percent direct Polish share-
one of the strongest promoters of the
holding as of August 2016. However,
implementation of corporate gov-
only 263 firms had declared finan-
ernance principles in state-owned
cial data by December 2015. These
companies. Sobolewski is currently working with his team to make the BVB more accessible for
companies accounted for EUR 840 to banks, following the model implemented
million in turnover and had 5,916 employees
in Poland.
at the end of last year.
www.business-review.eu Business Review | November 2016
COUNTRY FOCUS 37
The wholesale and retail trade sector ac-
group Maspex Wadowice got the green light
counted for 46 percent of the total number of
from the Romanian Competition Council to
companies, while the manufacturing industry
take over water bottler Rio Bucovina.
registered 54 percent of the total number of employees.
Active dealmakers on the local market
The buyer owns several juice, instant
Capollini in 2013. In the financial sector, Idea Bank, the lender created by Getin Holding after the acquisition of Romanian International Bank,
drinks and snack brands in Romania, includ-
reported its first profit in the first half of 2016,
ing Tymbark and La Festa, and has been pres-
EUR 1.6 million, and increased its portfolio of
ent locally since 1996.
loans. In addition, a new Polish player
The financial and retail sectors have
entered the local financial market in
seen some deals that have involved
October. Credit Value Investments,
Polish players in the past few years.
a provider of debt financing, said it
For instance, last year AmRest Hold-
was looking to provide local SMEs
ings took over the Starbucks fran-
with EUR 100 million in financing
chise in Romania and Bulgaria, in a
across the whole credit spectrum, in-
move estimated at EUR 16 million.
cluding senior and mezzanine debt.
This summer, the Polish operator of
The company hasn’t yet opened an office in Romania, and will initially
the franchise reported a 25 percent increase in gross earnings in Romania, the
The Rio Bucovina deal is the third acquisi-
manage local operations from Poland. The debt collection sector is home to
highest among countries where AmRest oper-
tion the Polish FMCG player has made in
ates the coffee shop brand.
Romania after buying the pasta brand Arnos
several Polish players, including Kruk, which
in 2007 and the snack brands Salatini and
employs 600 people.
Earlier this year, Polish food processing
www.business-review.eu Business Review | November 2016
38 HR
Romania looking to attract investments in poorer areas with worker mobility bill With some parts of Romania having been grappling with a chronic lack of investment in the past few years, the government has rolled out a National Mobility Plan designed to help residents of disadvantaged areas relocate to other parts of the country where there are more jobs and fresh investments. By Ovidiu Posirca
professional courses, mainly for school leavers, according to Penes of Smartree. At present, there is high demand for relocation services from industries that are currently booming, such as automotive and manufacturing, for which there is a shortage of qualified staff. Companies are also looking for unemployed workers in logistics and construction. Lucian of Musat & Asociatii added that Romania is probably not the only country in the EU dealing with a low rate of staff relocation, and policymakers can roll out certain initiatives to boost the process. “In countries without a strong ‘tradition’ of work relocation within their borders, like the former communist countries, support for such relocation through legislative measures should be a target in order to attract investments in certain areas and to mitigate the risk that existing investors move to other countries due to the lack of human resources,” said the law firm partner. But the experience of one foreign investor that tried to hire people in a poorer area of Romania may suggest that the government’s mobility initiative should have been implemented years ago. In September, car parts market EKR-Elek-
Raluca Penes, Smartree
T
Ileana Lucian, Musat & Asociatii
trokontakt, part of German group Nexans, scrapped its investment plans for an EUR 18 million production plant for car cable
he measure should also help employ-
bor market by offering employers for the first
wiring systems in Targu Jiu, southwestern
ers in the manufacturing sector, for
time RON 900 a month for each employed
Romania, because it could not find enough
instance, who are struggling to find
NEET, for 12 months,” Lucian told BR.
people to hire, national business daily Ziarul
new workers in the country. Bosses have also
Up to now, companies had to manage the
Financiar reported that month. The company
been trying to convince people to relocate to
relocation of employees on their own based
said the investment project, which was also
another part of the country, but their success
on their needs, stated Raluca Penes, HR
eligible for state aid, was stopped because of
has been limited so far, according to pundits.
coordinator at Smartree, the recruitment
challenges in recruiting personnel and the
consultancy.
dynamic of staff expenses. Aside from the is-
“In recent years, due to the lack of quali-
sue of relocating staff, Romania also faces the
How does the relocation work for companies and employees?
fied personnel in certain geographical areas,
While this facility is new as regards the
one of the solutions was relocating work-
Romanian citizens who exercised their right
force from underdeveloped industrial areas,
sector, representing a foreign company, re-
to free movement of labor in EU/EEA regions,
especially in the east of the country,” Penes
cently warned that around 4 million Roma-
for the unemployed, it represents a signifi-
told BR.
nians at their peak performance, who would
RON 3,500 up to a maximum of RON 15,500,
Sectors where relocation is in high demand
according to Ileana Lucian, partner at law
Aside from the support of transport and
firm Musat & Asociatii.
accommodation expenses for employees
“The new enactment also encourages
An executive in the local manufacturing
be a great fit for local companies, are working
cant increase in the compensation that they could receive in the event of relocation, from
challenge of a massive brain drain.
that choose to relocate to another part of the
NEETs – 16- to 24-year-olds Not in Employ-
country, some of the multinational compa-
ment, Education or Training – to enter the la-
nies present in Romania are also providing
abroad.
www.business-review.eu Business Review | November 2016
40 BR EVENTS
Next industrial revolution to effect massive changes in business and society Today’s digital society is standing on the brink of an unprecedented industrial revolution that will dramatically change both the way people live and work, and also the way companies in the IT and telecom field run their operations. This means new opportunities for those who are able to ride this wave, but also challenges, because of the pressure to do so. Pundits attending the Technology & Telecom event organized by BR discussed how this will affect their businesses. By Otilia Haraga
“
We are facing a greater transformation than we have been used to until now. 5G will be commercially available in 2020, but before that we have many challenges in front of us. We need
Romania. A project proactively detecting problems before they are even noticed by the customer is currently being implemented by Deutsche
to change the way we work. We are dealing with virtualization and
Telekom, announced Timos Tsokanis, chief technology and infor-
customer oriented strategies. Add to this the digital society context
mation officer at Telekom Romania. “Instead of the traditional NOC
we are in, and this will mean a full transformation of our operations,”
(network operations centers), there is software looking at network
Mihai Tudor, head of service quality & efficiency management at Or-
parameters in real time and deciding how we can improve a certain
ange Romania, said during BR’s seventh Technology & Telecom event.
parameter in a certain area. This is a pilot project we are implementing
One of a list of challenges that operators are adapting to is what Tudor calls the “IT-zation of the network. There will be a lot of space for NFV (network function virtualization),” he predicts. Other telecom representatives on the panel agreed with this vision. Dragos Spataru, head of the telephone and mobile communications division at RCS&RDS, says that the trend points towards virtualization and adding on more software. “Virtualization and on-demand services have been coming over the last seven years. Building a network involves coping with so many services, and the need for more capacity and services is pushing us forward. As an enterprise, it makes sense to pay for a service only when you use it. Virtualization/ software solutions and whatever can help you keep the costs down will work in the future.” Customer experience is another challenge on the big telco’s list, given that investments are still needed in this field. Spataru says that at the moment, collecting data is becoming easier; however, analyzing the collected data is the real challenge. “We will try to implement to identify a problem before the customer does,” says Spataru. Proactively solving customers’ issues is one of the strategies that most operators are using. “One of the things that I check every morning is what our customers tell us about the network. I have an app on my phone where we check the feedback we get from customers. We get more than 100,000 pieces of feedback per month. The second area in which we have invested is customer experience network performance, which means that we look at the network performance starting from the customer. Often the network can look clean but the customer is experiencing problems,” said Catalin Buliga, chief technology officer at Vodafone
Photo: Mihai Constantineanu
artificial intelligence to spot some problems. It’s always best to be able
Left to right: Catalin Buliga, Vodafone Romania Dragos Spataru, RCS & RDS
www.business-review.eu Business Review | November May 2016 2016
COVER BR EVENTS STORY 41 14
in Greece and now in Romania. This results in a proactively improved
cars, you really need to get to that 1 millisecond delay. The benefits for
customer-experience,” he outlined.
the customer will be seen between 4G + and 5G,” said Buliga.
Orange Romania has launched an application called The Fun Kit,
Higher speeds and shorter delays will bring changes to the ecosys-
which enables users to vote on which areas 4G coverage should be
tem, but not all of them good. For instance, the number of cybernetic
extended to. Following the vote, Orange intends to expand the 4G
threats is expected to increase.
network across the 20 most popular counties. In terms of network rollout, operators are complaining that the authorities’ reaction is not keeping pace with the required speed of implementation. “The challenge is coming from the environment. So
Malware is a billion-dollar business. For every dollar spent, hackers make 1,400 times more, according to Liviu Arsene, senior e-threat analyst at Bitdefender. To the conventional threats known from previous years, such as
many times, to get authorization to roll out infrastructure does not de-
banker Trojans (like Zeus, Carberp or SpyEye), information stealers
pend on us. The regulatory environment and administration can still
(especially password stealers), and spam sending Trojans, new threats
make a lot of improvements to help us roll out our investments. This is
have been added, such as ransomware, exploit kits and advanced
the biggest and only challenge that we still have,” complained Buliga.
persistent threats. The bad news does not stop here: approximately 60
New technologies are knocking at the door: just four years from now,
percent of targeted malware is aimed at small and medium businesses
technology buffs can expect the launch of 5G, which is being hailed
because they have fewer resources to invest in security.
as a major upgrade, but also brings new challenges. “5G is going to be
Cybercriminals are also organizing into outsourcing companies.
a gradual transformation because it needs to enable applications that
Malware is now available as a service, in the form of malware creation
depend on it. (…) This is going to cost a lot of money but it will enable
toolkits selling for between USD 100 and USD 10,000 – some are even
all the things that we see around. It’s going bring a lot of investments
free of charge. There are hourly updates to these malware toolkits,
in the country,” predicted Tsokanis.
as well as technical support for “customers” included. “We found a
In terms of the new benefits that 5G will bring, Buliga argues that
ransomware kit somewhere at around USD 3,000,” said Arsene.
there will be two major transformations: the speed of the network
The costs to businesses are astonishing. Some 74 percent of small or-
and the bandwidth, and very short delays. While with 4G, delays are
ganizations reported a security breach last year. The cost was around
around 40 milliseconds and with 4G+ around 25 milliseconds, with 5G
USD 99,000 per crypto-malware or ransom attack.
the delays will be just 1 millisecond. “For some apps like self-driving
At the moment, Romanian companies are not prepared to fight this threat. According to Arsene, Romanian firms are still living with two mentalities: that “this will not happen to me” and that “this will not happen to me twice in the same month.” The reality is quite different. Many small and medium organizations have reported more than one security breach per month. a “The industrial revolution 4.0 is blurring the physical and digital divide,” commented Marius Filipas, Microsoft services delivery manager director at Microsoft Romania. He said that 50 percent of CEOs in the Top 500 believe that their main priority is the digital transformation. The view of the visionaries is that every company in the world will become a software company. Filipas gave as an example Amazon, which is the biggest retailer in the world, but has zero salespeople. This means that the focus will shift even more in the future. He is not alone in this view. “The pillars of digital transformation are redefining customer experience, something that has already started, digitizing core business operations, which is going on right now, and reshaping companies’ business models, which will be going on in the near future,” pointed out Teodor Blidarus, managing partner at Softelligence Romania. He added that in 2008, there was a great rupture of trust between consumers and operators of financial services. “I would say that in the not too distant future, payment companies will be tackling customer relations and banks will be dealing with risk management,” he predicted. The way customers are dealing with financial institutions has
Vangelis Karelis, Accenture Consulting Mihai Tudor, Orange Romania Timos Tsokanis, Telekom Romania
changed. “Customers have migrated towards digital and now the problem is to create services that cover their needs. Digital will increase twofold while office interaction decreases,” forecast Robert Anghel, head of digital channels, ING Bank Romania.
www.business-review.eu Business Review | November 2016
42 MARCOMM
Seasonality fizzles in this year’s marcomm market Not even the summer vibe managed to slow down full service projects and campaigns that took over agencies’ lives this year. By Romanita Oprea may offer. We also felt, more than
He says he has tremendous admiration for
ever, that we had more brand
brand managers and marketing managers that
awareness on the market and this
have an eye for creative ideas and the heart to
directly impacted our develop-
go for it, sometimes risking their job to make
ment – being more visible, due
them happen.
both to our results and our grow-
more relevant note consumption is grow-
us to continuously attract new
ing on virtually all FMCG sectors, “so, yes,
opportunities,” said Raluca Ene,
it’s been a challenging beginning of the year,
managing director at Chapter 4
with the first and second trimester very ac-
Romania.
tive. What I am very busy with, however, in
Other PR agency representa-
T
The economy is posting growth, and on a
ing client portfolio, has helped
times like this, is with managing the people
tives that BR spoke to said the
right, our people, because a lot of this posi-
same. According to Sorina Mihai,
tive economic climate translates into a very
managing partner at Porter
busy period in the agency, thus a potentially
Novelli, 2016 has so far been a lot
stressful time for my colleagues. In times like
busier than the previous ones for
this you always have more to do, faster, so
the company. “It might be true as
another thing you need to look at, as head of
he last two-three years in the Roma-
a general trend. Still, seasonality is influenced
the agency, is if your product does not dilute,”
nian marcomm industry all started
by the types of clients an agency communi-
added Tranca.
with big hopes and expectations,
cates for and their business peaks during the
But is this buzzing and working hard also
project proposals and new business. How-
year. We always believed a diverse portfolio
starting to reflect on finished campaigns or
ever, this year, they’re slowly beginning to
would ensure constant activity in client
is it just a desire to satisfy a client’s point of
fade away after the first or second trimester.
service, strategy and creative departments, as
view? Are campaigns seeing the light of the
Also, summer used to be a time when many
well as the solid development of the agency.”
day or are they still mostly proposals, ideas,
agencies closed their doors, sent people on
There is also enthusiasm from the clients’
meetings and more meetings with no pal-
vacation or simply told them to take it easier
side that is translating into more work and
pable end result? In the Chapter 4’s represen-
on the work front. However, so far at least,
attention for the agencies. Sorin Tranca,
tative point of view, the answer depends on
2016 is proving to be a very atypical year; it’s
managing partner at TBWA\ Friends, sees a
the market and on the type of business. Most
proving to be a year of non-stop projects. The
lot of enthusiasm and new energy, most of
small businesses try many options before
energy, desire and optimism of the first half of
its clients boasting encouraging figures and
working out which is the right communica-
the year didn’t fizzle out during the summer,
being more satisfied with market conditions,
tions tool for them. As it turns out, PR is
which used to be, more or less, an easier and
at the moment, he says. “Nobody wants to
usually not the perfect fit for their business
more relaxed period of time for the marcomm
work with gloomy, dark people who fear los-
objectives, so often times the agencies offer
industry. “We have actually never stopped
ing their job, especially when you’re trying
their general experience and a lot of consul-
receiving offer requests over the year. From
to sell them creative ideas. And I feel I don’t
tancy before closing any deal. “On the other
this point of view, it has been a very active
say this enough, so bear with me as I will say
hand, larger businesses, more attuned to us-
year, with potential clients constantly looking
it again and again and again: ‘creative’ ideas,
ing PR services, have become more efficiency-
for the best communication solutions for
that is ideas that can transform a business or
oriented and, therefore, also more demanding
their needs, at a moment when our industry
a brand, always have a risk attached. They
in terms of ROI and the measurable results
itself faces changes and transformations in
are not easy to buy into, because you kind
they expect. For us, this sometimes means
terms of the expectations clients have as well
of have to risk along with your partners, and
expanding our portfolio of services with
as the range of services we, as PR agencies,
sometimes it’s not easy,” commented Tranca.
activities that haven’t traditionally been
www.business-review.eu Business Review | November 2016
MARCOMM 43 experiments and progressive thinking, who trusted our advice and whose brands stand for something meaningful. Enthusiasm and passion always pay off. And they are essential to building trust between us and the clients because, in the end, we want to do great things for companies that want to build great brands,” said Mihai. Still, Tranca is more reserved, stating that investment in advertising has not even come close to a decent ratio vs. growth. The TBWA\ Friends managing partner thinks the crisis has left some deep marks on local business
Raluca Ene, Chapter 4 Romania
Sorin Tranca, TBWA Friends
habits, because “idea” budgets (creative, strategic, executional) are still much smaller
specific to PR, but have become part of the
been finalized, we strongly feel it is only a
than before. “Sometimes, yes, I will admit,
content management strategy we are building
matter of time before these companies take
I am frustrated by this Becali-like approach
together with our clients,” added Ene.
the final leap to choose an agency,” concluded
to doing things: everything must be better,
At the same time, the dynamics of a PR agency’s work and proposals is very much
Ene. What about the budgets? Is agencies’ work
faster and cheaper simultaneously in Romania, while truly believing that we can win the
influenced by the industries it services. This
becoming more appreciated or not, in the
UEFA cup with a fraction of the investment
year, Ene has been approached and had talks
eyes of the client? Sorina Mihai is convinced
major clubs do. Consistent success requires a
with several businesses from growing, active
that good strategy and inspiring creativ-
different mentality.
industries, for which PR was, until now, not
ity will always be appreciated by the client.
a priority. However, as the economy is mov-
“Nevertheless, sometimes budget or time
are your partners now, you cannot under-
ing full-steam ahead and demand for these
constraints pressure us to adapt the ideas and
mine their expertise and dismiss their feed-
segments is growing, this situation is bound
rethink the creative solutions. But this comes
back all the time. Being a great club (brand)
to change. “Therefore, while there have been
with the territory. Over the past few years, we
means collaboration and a truly nurturing
new business opportunities that have not yet
have managed to attract more clients open to
climate,” concluded Tranca.
The public and the players and the coach
www.business-review.eu Business Review | November 2016
44 SMART CITIES
How Vienna is steaming ahead on development under smart cities concept Walking through Aspern, a district of Vienna, might seem like a regular neighborhood stroll, but some of the buildings here are fitted with sensors monitoring everything from room temperature to water consumption and air quality, as part of a massive EUR 5.5 billion development program.
Some 2 million pieces of data are generated every day in Aspern and the information will help the consortium to come up with innovative solutions for the production of energy in cities. The Austrians started to build this city from scratch in 2008, on the grounds of a former airport, and it will cover 2.4 square kilometers in total. At the moment there are around 6,000 people living here and over 2,000 jobs. The target of the project is to have 20,000 inhabitants and jobs. At the end of the 20 years of development, there will be 10,000 apartments in total. The first people moved here in 2015, two
By Ovidiu Posirca
years after the metro line linking the district to the rest of Vienna was put into operation. In the development stage, the construction firms have focused on sustainability, while keeping costs down. For instance, an artificial lake was constructed in one of the outskirts of the district, and the concrete dug up from there was used to build the apartments. This was a measure that saved both money and time, because the trucks didn’t have to bring the material from another part of the city. The construction phase of the project runs through to 2028 and the whole development will cost EUR 5.5 billion.
Who is moving in and how is energy put to work? The developers are saying that ultimately, they want Aspern to be an urban area where everybody finds a home and job, be it individuals or families, on higher or lower All photos: Siemens
incomes, as well as with different educational backgrounds. And the way in which the residential part of the project is handled reflects this principle. The mixed-usage project under developInvestment: The development of Aspern district needs EUR 5.5 billion
W
ment in Aspern will accommodate large office buildings, aside from the apartments and
hen you see children playing in
developed in public-private partnership
retail areas. A new train station is planned
the park and adults going shop-
called Aspern Smart City Research. The
that will be sited on the rail links between
ping or running, you wouldn’t
initiative, which has a five-year budget of
Bratislava and Vienna. The surface areas of the flats range from
imagine how much tech is present here with
EUR 38.5 million, is backed by technology
the ultimate goal of making urban areas
conglomerate Siemens, which has the biggest
25 to 160 sqm and there are subsidized rent
around the globe make better use of energy,
stake in this project of 44.1 percent, together
schemes available of up to EUR 10 per sqm.
which would also bring cleaner air and lower
with the companies providing energy to the
For those looking to buy an apartment, prices
costs for inhabitants.
Austrian capital, Vienna Business Agency and
range from EUR 2,500 to EUR 3,000 per sqm.
It’s all part of a complex research project
the property developer Wien 3420 Holding.
In terms of energy production, some of
www.business-review.eu Business Review | November 2016
SMART CITIES 45
used in the school building with kindergarten.
Romania planning to implement smart city principles in Alba Iulia Future of the city: 20,000 people and jobs will be found in Aspern
Similar to what’s happening in Aspern, authorities in Romania are trying to implement smart cities principles in an Alba Iulia pilot project with the help of private companies. The town will be included in a research study carried out by Siemens in several cities across Europe. Researchers will look at ways to improve the traffic and energy consumption in the city. 5G technology is also set to be tested here.
Infrastructure: Authorities plan to roll out the solutions researched at Aspern across Vienna The mayor of Alba Iulia Mircea Hava
the buildings are fitted with solar panels and
vices provided by utility firms such as flexible
have heating pumps. However, Aspern is
energy tariffs that would also take into ac-
suggested that getting the label of smart city
linked to the central district heating system,
count prosumers – consumers that will also
will attract more tourists. Some 7,000 people
because the ultimate goal of the research
generate their own electricity and feed it into
visited Aspern last year, more than the cur-
project is to come up with solutions that can
the smart grids.
rent number of inhabitants.
The energy markets are also set to benefit
Although a lot is being said about smart
rent residential stock. In addition, the build-
from this research. For instance, the produc-
cities in Romania, the pace of implementa-
ings are fitted with batteries, for the storage
tion of energy will become more efficient
tion of such projects has been rather slow.
of energy.
based on weather conditions that are verified
For instance, Bucharest got a smart traffic
in real time.
system that broke down because a cable was
be applied in the rest of Vienna, to the cur-
Right now, the research is being car-
severed during construction works on a road.
How will the research help inhabitants and municipalities?
ried out based on data provided from three
This spring, a pilot project under the smart
The researchers are currently collecting data
buildings. Student lodgings are fitted with
cities concept was rolled out in a Bucharest
and running different scenarios in order to
solar panels, batteries and electrical heating
park.
develop new ideas under smart concepts,
cartridges. In addition, 213 apartments are
which include the user, the buildings and the
equipped with seven different heat pumps,
infrastructure that can accommodate,
markets.
hybrid panels for solar-thermal generation
for instance, the Internet of Things (IoT),
and PV, geothermal heat accumulators, hot
authorities should actually look at the PPP
working with a massive pool of data that
water accumulators, batteries and apartment
legislation, which investors say is not work-
should lay the groundwork for future ser-
automation systems. Similar systems are
ing properly.
At present, the research consortium is
But before putting in place the new
www.business-review.eu Business Review | November 2016
46 GOING OUT
Thirst for opportunities: alcohol brands drink in the culture Local BTL strategies seem to be coloring the cultural scene, offering promotions and surprises to those attending festivals and events across Romania. Over the summer, Business Review sat down with some of the most fashionable alcohol brands in Romania, Absolut Vodka, Campari, J&B and Staropramen, to find out how they link their products with the hottest events on the cultural calendar. By Oana Vasiliu ers. During the festival, we invited guests to the Absolut Cocktail Bar, where they were able to customize their own bottles of vodka. At this event alone, more than 240,000 consumers interact-
By Oana Vasiliu
ed with the on-site brand in the Untold perimeter,” Radu Moldovan Petrut, marketing director of Pernod Ricard, told BR. Through each brand activation, consumers
Photo: Absolut Vodka
who come in contact with Absolut Vodka should have a memorable experience, starting from the product itself to the universe created around it. For example,
Carousel of good ideas for consumers
this year, the brand offered
Bean good: coffee tops the beverage charts
intake per day is 630 ml, excluding water and
subscriptions to Untold Festival and ac-
milk. Furthermore, 1 in 10 adults consume at
commodation in the special camping zone,
According to a GFK study released this June,
least one drink a day in bars, restaurants and
everything winnable through an online
one out of four Romanians consumes alcohol
ter-races, and the daily frequency increases
game, where every action of the player would
on a daily basis. Throughout the year, the
by approximately 20% in the summer.
turn into a real experience at the festival, said officials.
amount of alcohol drunk varies, peaking in the warm season, April to September. Ro-
Viva vodka!
manians’ favorites are beer and homemade
“Undoubtedly, a successful activation of the
The Italian job
wine, with consumption changing with the
Absolut Vodka brand for June 2015-June 2016
“Over June 2015-June 2016, the Aperol
season: in summer, beer is most popular,
was our participation in the first edition of
caravan campaign had its biggest success,
while wine is consumed especially in cold
Untold, both in terms of awareness and sales.
its purpose being to bring Aperol Spritz to
weather. Looking at the general share of con-
The PR and communication campaign last
mid-level consumers, and create a pretext for
sumption, it emerges that Romanians prefer
year secured a reach of over 80 percent of the
socializing. When you say Aperol Caravan,
hot beverages, mainly coffee and coffee-
target group. The activation started with a
thoughts immediately turn to the moving
based mixes – accounting for almost half
bus which travelled from Bucharest to Cluj-
Aperol bar, the sparkling symbol of celebra-
of the total number of drinks drunk. Over a
Napoca, the #AbsolutRoadToUntold. During
tions and atmosphere. Last year, the caravan
third of beverages imbibed are soft drinks,
activation, ‘absolute heroes’ were challenged
aimed to find four brand ambassadors and
while alcohol represents only 16 percent of
to demonstrate the skills needed to become
this year, we decided to focus on our special
the total consumption. The quantity of fluid
pure absolute fairytale character travel-
activations at fun festivals such as De La
www.business-review.eu Business Review | November 2016
48 GOING OUT
Hoya, JEMF, Airfield and Electric Castle,” said
acapella for the public inside the airplane.
Beer we go
Andreea Neagu, brand manager at Gruppo
(…) In terms of sales, this Blending Spirits
“One of the most successful activations that
Campari.
campaign had the greatest impact in the last
we have launched so far is the Tapwriter
three years,” Raluca Sava, brand manager at
writing machine, the first beer draft that can
Diageo, told Business Review.
be controlled by a typewriter. People were
Aperol officials say that as it is an aperitif and also a drink suitable for fun, the firm invests in Spritz moments to spread and create
A festival is an opportunity to reach the
challenged to activate the beer tap by typing
recognition for the perfect Aperol Spritz 321
consumer that every brand wants to exploit,
the continuation of an existing story into the
serving suggestion. “Our desire is to improve
but most importantly, the brand wants the
sheets of the typewriter. Then, when certain
the festival experience, which is why we
benefits from the image, attachment and
letters were typed, the tap activated and filled
invest in everything at the festival, from fur-
brand loyalty of consumers, so it can be
the beer glass,” said Teodora Agafitei, brand
niture to other items that
manager for Staropra-
visually show how faithful
men. The beer brand
the brand is. The budgets
has launched an online
we allocate to festivals do
cultural platform where
not offer a return on invest-
news and articles from the
ment, but any combination
Romanian cultural scene
of this type has long-term
can be found. “Beyond
benefits in terms of awareness, loyalty or
associated with a moment or an enjoyable
beautiful, clear and entertaining communica-
recruiting new consumers,” added Neagu.
experience. “Sometimes, scale campaigns
tion, a brand today has to come with facts
For example, at this year’s Electric Castle,
developed for festivals are influenced by
and evidence of love in order to consolidate
besides the moving Aperol
the existing relationship
Spritz bar and lounge, the
with consumers and to
company brought a hot air
attract new categories of
balloon and rides could
consumers. A brand needs
be won by buying Aperol
to go where consumers
Spritz. Therefore the festi-
are and where they would
val experience was connected directly with
previous sales, so the relationship between
like to be found in order to facilitate new
the drink.
revenues and investment in communica-
experiences and enrich and improve on those
tion is very tight. In other cases, for example
experiences consumers already live,” said
Whiskey in a jar
Agafitei. Staropramen’s
“2016 was a busy year for
roots are in the spirit of
J&B, and our communica-
Prague, a city with a strong
tion has evolved because
cultural heritage. Since it
we wanted to be relevant
entered urban Romania,
to the new generations of consumers. In
at Electric Castle, we wanted to provide an
the brand has had to adapt to local values.
November 2015 we launched the Blending
original experience for participants, our bet
It did this, identifying here huge cultural
Spirits campaign, inspired by the brand’s
on the festival. (…) At the perimeter of the
potential, which officials want to capitalize
DNA. Since then, ideas and
on in the long term. “With
energies resulting from
each of these events, our
‘Blending Spirits’ meet-
excitement grew with
ings can be found on our
the artists and cultural
dedicated platform, www.
managers with whom we
blendingspirits.ro. Most ap-
worked. So we naturally
preciated by our consumers
wanted more, to expand the list of partnerships
were blends between original music, between Adda and Macanache,
festival we had a dedicated space accommo-
and especially to begin to communicate in
Alex Velea and Robin and The Backstabbers
dation – J&B village, a private jet from Bucha-
a more authentic, effective and relevant
and Delia and Doc. Also part of the campaign
rest to Cluj-Napoca, the acapella concert and
way with our core target, which puts a high
was our presence at Electric Castle, where
a special festival kit bag with rubber boots, a
value on experiences with really valuable
consumers, competition winners at J&B Lem-
raincoat and a bottle of whiskey inside. We
substance. (…) Thus, the story of Oameni si
onade Twist, journalists, bloggers and vlog-
believe that through the activation at Electric
Gusturi (People & Tastes) was designed from
gers had an experience at 10,000 meters. The
Castle, we managed to offer a unique festival
the outset as one of identification and urban
10 km-high party in the party jet powered by
experience, form loyal customers and gener-
revival, addressing both culture creators and
J&B featured Delia and Adi Despot singing
ate real engagement”, added Sava.
consumers,” concluded Agafitei.
www.business-review.eu Business Review | November 2016
49
- ADVERTORIAL -
Holograma 3D eyes further growth on video services market beginning we focused on video services and
bringing our contribution to the success of
our main objective has been to always offer our
a wide range of events: product launches,
clients new solutions based on the latest equip-
conferences, congresses, fairs, exhibitions,
ment there is. We have always tried to innovate
festivals and concerts. Important names in
and this is why in 2008 we introduced in Romania
our portfolio include: Orange, UPC, Samsung,
a holographic projection system, a completely
Renault, Autoitalia, Bayer, 3M, Accenture,
new system on our market.
Coca Cola, The Mission, Summer Well, Forbes, Becks, Telekom, Rompetrol, OMV-Petrom,
How has your product and client portfolio
Servier, Sanofi, Zentiva, HaHaHa Production
evolved over the years?
and Nikon.
Our product portfolio has been in constant evo-
There is increasing demand for the latest generation video solutions, says Alexandru Roibu, managing director of Holograma 3D.
lution both in terms of numbers and especially
How do you see this market further evolving?
in terms of the quality we offer. We are active
Over the last period we have seen a lot of re-
in an industry where technology is changing at
quests for new solutions, either holographic
a fast pace and we want to keep up with that.
projection systems or interactive and 3D
We started with conventional displays (plasma
video mapping, which goes to show that our
screens, video projection systems, LED screens)
clients too are focusing on presenting them-
and we have grown to the point where we now
selves in new ways and thereby attracting
When did you enter the local market and
offer both conventional systems at full HD
as much as possible their clients’ attention
what are your main accomplishments so far?
resolutions as well as holographic systems which
to their products and services. We think this
We started operations in Romania at the
vary in terms of size and use.
trend will continue and our main challenge
beginning of 2007 by offering audio-video equipment rental services. From the very
Over the years we have worked for important companies with a global presence and others,
will be to be able to offer these innovative solutions within existing budgets.
www.business-review.eu Business Review | November 2016
50 PATRIMONY
The long journey of raising funds for art The woman, carved from limestone, sits with her folded arms tucked behind her knees and looks enigmatically ahead. She is regarded as one of Romania’s finest modernist artworks and has been the talk of the town since going on sale. BR outlines the most important milestones of this piece of Romanian patrimony. By Oana Vasiliu
1907: The work dates from the same creative period as Brancusi’s celebrated sculptures The Kiss and The Prayer, during which the artist explored concepts such as universal Photo: Adi Bulboaca
value, expressed in starkly minimal forms. For The Wisdom of the Earth, the sculptor used a block of stone from Paris’s catacombs for the body of the statue.
1911: The statue was purchased by engineer
Brancusi’s Wisdom of the Earth
and art lover Gheorghe Romascu from the artist himself.
1957: It was forcibly confiscated by the Art
paid by October 31, 2016.
government building. The banner features the image of the sculpture alongside the Roma-
Museum’s Communist leadership.
May 19, 2016: The government and Min-
nian flag and the message “Brancusi is yours,
1989: After the fall of dictator Nicolae
istry of Culture launched the national public
just as this country is also yours.”
Ceaușescu a lengthy trial started to return the
fundraising campaign “Brancusi is mine”
sculpture to its legal owners after 51 years.
(Brancusi e al meu) for the collective purchase
July 19: The Minister of Culture announced
of Brancusi’s Wisdom of the Earth.
that 7,920 people had donated to the sculp-
2008: The owners recovered the statue.
ture fund during the Electric Castle festival.
Funds: EUR 5 million. September 2014: The owners announced
Since the beginning of the fundraising campaign, over EUR 305,000 had been raised.
they were putting the sculpture on the mar-
May 23: Romanian PM Dacian Ciolos joined
ket and Artmark auction house notified the
the government’s effort to buy the work, do-
Romanian state about the potential EUR 20
nating his April salary, almost RON 15,800.
Funds: EUR 306,773 July 22: Romania’s Ministry of Culture
million sale.
Funds: + EUR 3,500 March 2015: The Romanian government
launches text message donations for the Brancusi sculpture.
negotiated with the owners of the statue,
June 20: A banner promoting the public
agreeing on a price of EUR 11 million, to be
fundraising campaign was placed on the
August 18: Uber also took part in the
www.business-review.eu Business Review | November 2016
PATRIMONY 51
campaign, offering every Uber rider taking the
September 15: Romanians donated over
culture minister Corina Suteu announced
car-sharing service to the BNR Museum until
EUR 525,000 by transferring money into the
on Facebook. Another donation of over EUR
September 16 the opportunity to donate half
Ministry of Culture’s accounts, some EUR
11,000 came from the Bucharest National
of the fare to the Ministry of Culture for the
62,000 through eMag.ro, over EUR 158,000
Theater.
sculpture.
through the campaign’s website brancusiealmeu.ro, and over EUR 85,000 via text
August 30: Romanian DIY retailer Dedeman
September 30: The official campaign for
donated EUR 127,000 for the sculpture, the most significant financial contribution made
Funds: + EUR 121,327
messages.
Funds: + EUR 525,617
the public fundraising campaign ended.
September 26: The Russian Embassy in
Total Funds: EUR 1,273,668
by a private company in the public fundraising campaign so far.
Bucharest donated EUR 100 to the campaign.
Funds: + EUR 127,000
“The embassy joins the action and makes a
October 12: The government decided to
modest financial contribution to the fund
meet the remaining costs to purchase the fa-
September 2: French retailer Carrefour
created for this purpose,” wrote the Rus-
mous sculpture. Almost EUR 10 million from
joined the campaign, donating 1 percent of
sian Embassy in Bucharest on its Facebook
the state budget will be added to the EUR 1.3
the sales of private label products in its local
page, leading to many negative comments in
million raised from public donations to cover
hypermarkets and supermarkets.
response. A protest was initiated calling on
the cost.
Romanians to gather in front of the Russian
September 14: Romanian IT group Bitde-
Embassy in Bucharest and return the dona-
October 12: The government also decided
fender donated EUR 100,000.
tion in 1 cent coins.
to set up a special fund, called the Brancusi
Funds: + EUR 100,000
September 27: Famous local artist Adrian
art in the future. It will be managed by the Na-
Ghenie sold one of his paintings for EUR
tional Cultural Administration Fund (AFCN),
September 15: The national TV broad-
70,000 through the Thaddaeus Ropac Gallery,
which is under the Ministry of Culture, and
casting service cancelled a telethon for the
and donated the money to the national fund-
the money will come from private donations,
acquisition of the sculpture, which had been
raising campaign. The Romanian Academy
sponsorship, and from the state budget.
previously announced for September 18.
also contributed EUR 40,000 to the campaign,
Fund, which will be used to buy other works of
www.business-review.eu Business Review | November 2016
52 UPCOMING
HBO Romania’s The Silent Valley to shake up local and regional audiences HBO Europe is putting a focus on developing original drama as it builds on the success of a raft of adaptations across its core Central and Eastern European territories. For the past few years, HBO Europe been working on producing local movies with Romanian actors, and one of the first is expected to bring some challenging themes to local screens. By Oana Vasiliu
T
he subscriber-based satellite service
The new HBO Europe production features
appearing in a movie and then being part of
launched its latest fresh drama, The
actors Theodor Soptelea and Vlad Balan,
such a production is ideal for any actor, but
Silent Valley / Valea Muta, on October
making their screen debuts, Rodica Lazar (Or-
unfortunately, the situation in Romania is a
izont, Carmen, Live) and Emilian Oprea (De ce
bit difficult, while theaters can’t offer jobs to
23, on HBO and HBO GO. According to the broadcaster, Valea Muta
eu?, Autoportretul unei fete cuminţi) in major
the new wave of actors, salaries are pretty low
explores the mutual attraction between two
roles. The cast of the miniseries also includes:
and not everyone has the chance to follow
teenage boys, whose clandestine rendezvous
Corneliu Ulici, Alexandra Fasola, Ovidiu
these steps. HBO offers visibility and a great
becomes fraught with emotion when they
Niculescu, Mihai Calin, Alina Berzunţeanu,
learning process of what true professionalism
witness multiple killings in a remote moun-
Mihaela Trofimov, Remus Margineanu and
really means because the quality of the pro-
tain area. Based on the Norwegian show
Ioan Tiberiu Dobrica. The production is
duction is pretty high. Every Romanian actor
Eyewitness, the series takes a realistic and
directed by Marian Crisan (Orizont, Rocker,
should benefit from this kind of professional
unprejudiced approach to the relationship
Morgen), and the director of photography is
treatment.”
between two teenagers confronted by events
Tudor Mircea (Comoara, Cand se lasa seara
that test their feelings and identities. Ele-
peste Bucuresti sau metabolism, Rocker).
expected to prove controversial for Roma-
Asked by BR if a leading role in an HBO
nian viewers, Antony Root, HBO Europe’s
ments of thriller and drama intertwine while
Directed by Marian Crisan, the drama is
the investigation of the murder case (led by
mini-series could be considered the peak of
executive VP of original programming and
Elena Zamfir, an ambitious prosecutor, who
a Romanian actor’s career, Lazar replied, “I
production, told The Hollywood Reporter.
is also Filip’s adoptive mother) advances,
don’t know and I don’t think anyone has an
“Something that may not have been seen as
and the relationships between the characters
answer to that. Every single performance has
particularly controversial for Norwegian audi-
reach sensitive thresholds that transform into
its characteristics and every time is different
ences will play very differently in Romania,”
hard-to-manage conflicts.
so there are no rules, in Romania, or world-
he said to the publication.
Valea Muta guides its audience among
wide. I truly believe that you need the luck of
Valea Muta will be available to HBO
controversial topics: prejudice, the under-
the draw. Everything should be considered
Europe subscribers in 19 countries, including
belly of the contemporary families, the
a step in your career, an experience that will
its core territories of Hungary, the Czech Re-
chasm created between the generations,
improve your skills and capabilities of becom-
public, Slovakia, Poland, Romania, Bulgaria,
the dysfunctional relations between state
ing a better you on stage. This job we had can
Moldova, Slovenia, Croatia, Serbia, Kosovo,
institutions, the discrepancies between social
be improved only by doing it, better or worse,
Montenegro, Macedonia and Bosnia and Her-
stratification, and an organized crime net-
but doing it.”
zegovina. It will also be available to viewers
work, which perpetuates suffering, injustice
Oprea, the other leading actor, added
of HBO Nordic in Sweden, Norway, Finland
and poverty in a world full of contrasts, add
“This journey of becoming an actor, from
and Denmark and in the Netherlands via HBO
HBO officials.
university, then acting in a theater, then
Nederland.
www.business-review.eu Business Review | November 2016
54 EXPAT EYE
Bringing up baby in Bucharest In our regular look at life here from an outsider’s perspective, BR’s resident expat presents seven reasons to raise a child in Romania, and one reason not to.
afternoon, perhaps in April or October. You’re strolling round the local park with your little one, who’s sensibly dressed in a coat, and en-
By Debbie Stowe
Pros
Con Hat mania. Picture the scene. It’s a mild
joying the spring/autumn breeze. You won’t table. And when your offspring responds to
get far before a bystander warns you darkly,
You can take your child out late.
being wheeled round a gallery by repeatedly
“That child should have a hat on.” “But it’s 16
In the UK, babies and toddlers are often being
screaming (because what a great echo it has!),
degrees!” you reply, astonished. Doesn’t mat-
prepared for bed from about 5pm. If you go
other art lovers smile indulgently. What a
ter. The Baby Hat Police will get you. It might
out with your infant in the evening, especial-
relief!
be warm, you might be about to get into your car, you might even be indoors. Your kiddo’s
ly to a restaurant or other adult-orientated venue, you’ll be about as popular as Donald
Grandparents!
hatlessness will be remarked upon. It’s not
Trump in a women’s changing room. Not so
Many British baby boomers, having lucked
that Brits won’t judge your parenting – they
in Bucharest, where the Latin family vibe
out on the property market, are now busy
will (although they’re not so stringent about
(think of those convivially nocturnal family
chasing autumn years’ fulfillment – tak-
hats on mild days). But they’ll never tell you
gatherings in Spain) means your little ones
ing cruises, volunteering, doing courses…
to your face.
can roam freely after the sun goes down.
In short, not making themselves available
(This was annoying before I became a parent,
for round-the-clock babysitting. So selfish!
but it’s great now.)
Romanian seniors are much more likely to be seen pushing their grandchildren around the
Parks are safe. Few would dare set foot
park than off on a coach tour of Croatia or at
in a British park after sunset – when they
art class.
become the preserve of threatening teens drinking cider. Maybe it’s because most Brits
Childcare is affordable.
live in houses and so have their own garden,
Of course, not every parent is lucky enough
and therefore have less need for public green
to have nearby grandparents to rely on, and
space, or maybe it’s the presence of guards,
if you don’t, you might need paid help. The
but Bucharest’s parks have a welcoming fam-
average cost of sending an under-two to
ily atmosphere until late at night.
a nursery full time in Britain is EUR 240 a week – a week! So nearly EUR 1,000 of your
The smoking ban. Before March 16th,
paycheck is eaten up by having just one child
doing things in Romania while pregnant or
looked after. Here, not only are nursery fees
with children was a real problem, owing to
more reasonable (perhaps excluding those at
the smokiness of almost everywhere (except
the fanciest international schools), but you
malls, some posh cafes and museums and
can probably also stretch to a wonderful bona
galleries). Since then, you can safely drag
(nanny) to help out in your own home.
your brood anywhere you fancy going. Why not get them started young La 100 de Beri?
Brexit. Who wants to raise their kids in a
(Joke.)
close-minded, xenophobic country where talking in a foreign language can prompt a
Romanians like children.
passing knuckle-dragger to shout, “Speak
Okay, some Brits like children as well. But,
English!”? Sadly, such thugs feel empowered
unless you pick a really family-friendly café
and legitimized since the UK’s senseless act
or restaurant, if your little darlings start act-
of self-sabotage (the EU referendum vote).
ing up a bit, you’ll get The Look from your
Much better for your young ones to grow up
nonplussed fellow customers. In Bucharest,
in a country where (most) people believe that
most people actually laugh and say hello,
things are getting better, which is forming
rather than tut, and genuinely don’t seem
closer ties with other nations, not retreating
to mind if your fleeing toddler eludes your
to isolationism and bringing economic disas-
grasp and pops his head out from under their
ter upon itself.
www.business-review.eu Business Review | November 2016
56 CITY
The Girl on the Train FILM REVIEW
By Debbie Stowe
DIRECTOR: Tate Taylor STARRING: Emily Blunt, Rebecca Ferguson, Haley Bennett, Justin Theroux, Luke Evans, Allison Janney, Édgar Ramírez, Lisa Kudrow ON AT: Grand Cinema & More, Cine Globe Titan, Hollywood Multiplex, Cinema City Cotroceni, Cinema City Cotroceni VIP, Cinema City Sun Plaza, Cinema City Mega Mall, Cinema City ParkLake, Cinema City VIP ParkLake
movie enters classic whodunit territory. Hawkins’s book relies on interior monologue to explore the complicated psychology of its trio of protagonists, and by necessity, the film is poorer in that regard. We don’t come to understand the characters to the same depth, and, while troubled Rachel gets enough screen time to be fully fleshed out, Anna and Megan remain opaque. However, director Tate Taylor manages to condense a rich storyline for film reasonably
Rachel (Emily Blunt) is a sad, alcoholic divor-
well, with, for example, the true nature of
cee, whose recollections of events cannot be
Rachel’s relationship with her ex, Tom, dealt
relied upon – or can they? Megan (Haley Ben-
with through a nice cameo by Friends’ Lisa
nett) has a loving relationship with her de-
Kudrow. Rachel’s hazy, shifting memories are
voted husband – or does she? Anna (Rebecca
also conveyed fairly convincingly through
Ferguson) is really lucky to have a beautiful
the visual medium.
family – or is she? Appearance and reality are hard to disen-
Blunt gets the meatiest role, and it’s possibly her best performance yet, capturing
tangle in this somber psychological thriller,
the complexities of Rachel: the sadness, the
based on the 2015 smash hit Paula Hawkins
rage, the vulnerability, the delusions, the
novel. The book switches between the view-
bitterness and the courage. The character
points of the three main characters, giving
has, however, been “Hollywoodized” from
diary-style insights into their psyches and
the frumpy fatty of the novel, whom nobody
home lives, which jump forward and back in
would be desperate enough to go out with.
time – a framework the movie has retained in
Even drunk and with no makeup, she still
a largely faithful adaptation (aside from the
looks like Emily Blunt.
action having been moved from London and its surrounds to New York). The women are connected by their neigh-
Taylor’s supporting cast do what they can with their roles, despite their more limited screen time preventing them from delving
borhood: Rachel’s ex-husband Tom (Justin
too deeply. Unusually for Hollywood, the
Theroux) shares their former marital home
men are of less importance than the women
on Beckett Road, in a sleepy Westchester sub-
(although Theroux, Mr. Jennifer Aniston, is
urb, with his new wife Anna and their baby. A
probably used to that).
few doors down live the apparently loved-up Megan and Scott (Luke Evans). Rachel’s daily commute to the city takes
At times, the narrative does move slowly, although the 112 minute running time is justified in allowing the director to squeeze in
her past both houses, and to avoid torment-
as much from the book as possible. The plot
ing herself by peering through the windows
is juicy with various twists, as characters’
at her ex and his picturesque new family
back stories are gradually and tantalizingly
when the train stops at a nearby signal, she
revealed. Events do veer into soap opera ter-
fixates on Megan, and daydreams about how
ritory, but it’s a very high-end and satisfying
wonderful her life must be.
soap opera.
But, despite the picture-perfect ap-
Having read the novel first, this reviewer
pearances, all is not rosy in the gardens on
can’t really speak to the success of the big
Beckett Road, and when one of the women
reveal. But, by the time the train is pulling
becomes imperiled, hidden connections
into its final destination, the ride has been
between the residents are revealed, as the
gripping enough.
www.business-review.eu Business Review | November 2016
58 CITY
Cultural calendar Pierre Alechinsky and the Writers Until January 2017, National Museum of Art of Romania
By Oana Vasiliu
with his traditional Arabic instrument the oud, presenting his latest album, which will be released in March. He will be joined on stage by American drummer Mark Guiliana. Youssef built his own oud in the 70s. The instrument, shaped like a pear, is believed to have been the ancestor of the acoustic guitar. Tickets
of Thrones, and Craig Parker,
for the Bucharest concert cost
famous for his role in Lord of
RON 120, 150 and 180, and can be
the Rings. Tickets are available
bought online from Eventim.ro.
through the Eventim network.
Bucharest Art Week November 4-12, several locations
Jean-Michel Jarre concert November 11, Cluj-Napoca
been seen by millions of people around the world, the new live show promises again to be an immersive musical journey, with 2016 will see the Godfather of
Jarre set to showcase new music
The first major presentation of
The theme of the event – now on
Electronic Music, Jean-Michel
from his two-part LP, Electron-
Pierre Alechinsky’s graphic oeu-
its third run – is The Lesson of
Jarre, perform a spectacular live
ica, alongside classic material
vre at the museum. Sixty-six
Nature. “The intentions of this
show in Romania for the first
from previous albums such as
works selected from the collec-
curatorial proposal, which will
time. Famed for staggering visu-
Oxygene and Equinoxe. Ticket
tion of the Centre de la Gravure
define Bucharest Art Week 2016,
als and the use of cutting-edge
prices are between RON 110 and
et de l’Image Imprimée in La
as it resumes a kaleidoscope
digital technology, which has
495.
Louvière (Belgium) explore the
format – solo and collective exhi-
close relationship established
bitions, discussions and lectures,
between text and image as
workshops and artists’ residenc-
illustrated by the collaboration
es – are to explore, in a dialogue
between the artist and famous
with artists, theorists and the
writers such as Michel Bu-
audience, the way in which
tor, Eugène Ionesco, François
a series of extremely diverse
Nourissier and Emil Cioran.
artistic practices, together with observations and philosophical
Dhafer Youssef concert October 27, Radio Hall
inquiries, start from and/or stop at nature, how they strip it, question it, and imagine it in keeping with new scenarios,” says guestcurator Oana Tanase.
East European Comic Con November 11-13, Romexpo East European Comic Con, the biggest comic convention in Romania, will present this autumn Tom Wlaschiha, best known for his role as Jaqen H’ghar in the Tunisian musician Dhafer
second, fifth, and sixth sea-
Youssef returns to Romania
sons of smash TV series Game