FOCUS CLOUD COMPUTING: Organizations are becoming more receptive to the advantages of cloud technology, though the public sector is still trailing behind, industry experts told Business Review »page 8
ROMANIA’S PREMIER BUSINESS WEEKLY
APRIL 7 - 13, 2014 / VOLUME 18, NUMBER 12
Misu Negritoiu will become Financial Supervision Authority president, tasked with overhauling the activity of the regulatory body, which has been rocked by charges of corruption »page 5
ASF RELOADED
Tax & Law THE NEW INSOLVENCY CODE AND THE REVISION OF THE FISCAL CODE CAME UNDER DEBATE AT LAST WEEK’S TAX & LAW CONFERENCE ORGANIZED BY BUSINESS REVIEW »PAGE 6 NEWS
Food to waste? Romania’s rate of food waste is higher than the European average of 179 kg per capita per year, said the agriculture minister
» page 4
www.business-review.eu Business Review | April 7 - 13, 2014
NEWS 3
NEWS in brief BANKING
by the end of the year, both in Romania and abroad.
Raiffeisen profit up 16 pct last year
TELECOM
ENERGY Gabriel Resources axes 367 local jobs over Rosia Montana delays Rosia Montana Gold Corporation (RMGC), the miner controlled by Canada-based Gabriel Resources, said last week it was cutting jobs and scrapping local assistance programs as it sought to scale back operations in response to what it described as the “unjustifiably long delays” in the approval of the gold and silver mining project at Rosia Montana. The company said that 1,000 families would lose their source of income following the move. Aside from the 367 workers who were directly employed by RMGC, more than 100 jobs through social programs financed by RMGC would go due to the scale-back program, said the firm.
INSURANCE
Vodafone boosts 4G speeds, launches new mobile payment service
Agerpres
Raiffeisen Bank International’s post-tax profit in Romania rose 15.8 percent year-on-year, from EUR 86 million in 2012 to EUR 100 million last year, as a result of lower payments in the profit tax account. Earnings before tax increased by 3.1 percent to EUR 101 million. Operational income was up 1.7 percent over the interval, from EUR 458 million to EUR 465 million. Net income received through interest was down 7.2 percent to EUR 281 million, while revenue from fees and commissions climbed 18 percent to EUR 168 million. Net income from transactions increased 50.8 percent, to EUR 14 million.
Vodafone Romania has announced new investments into growing the coverage and speed of its 4G network from 100 Mbps to 150 Mbps at national level, once the company comes into the possession of the license it won in the September 2012 tender, in the coming days. The company announced it would immediately raise its 4G speed from 100 Mbps to 150 Mbps. In the new fiscal year April 2014-March 2015, it will increase the number of 4G sites to cover 70 percent of the urban population. The company has also launched a new service on the market, M-Pesa, which allows customers to make and receive payments via mobile phone without the need for a bank account.
All the presidents: celebrating ten years in NATO President Traian Basescu and two of his predecessors Ion Iliescu (far left) and Emil Constantinescu (right) attended a ceremony organized last week at the Cotroceni Palace to mark the ten-year anniversary of Romania’s joining NATO. Declining an invitation to attend the ceremony, the prime minister, Victor Ponta, said it was “Basescu’s party and has nothing to do with NATO,” according to Hotnews.ro. Also present at the event, US charge d’affaires Duane Butcher commented, “Romania has strengthened the alliance immeasurably since it joined in 2004. You’ve steadfastly and repeatedly Orange expands 4G network to contributed to NATO operations, crisis management, and to transatlantic 90 cities, starts 4G+ tests Orange Romania has announced that it security.”
MEDIA Bortun Olteanu merges with People Public Relations Agency Bortun Olteanu and People Public Relations Agency have announced their merger, forming Daescu Bortun Olteanu. Over the past fiscal year, the two agencies posted a total turnover of more than RON 6 million. The combined portfolio of the two agencies includes clients such as Gillette, Duracell, Adidas, Siveco, Wellborn, Baneasa Developments, Philips, AOC, Subway, E-Boda, King, Logitech, Glenfiddich, The Pole and Rombat, The Institute and the Civil Society Gala.
Gothaer’s gross written premiums up 75 percent to EUR 15 mln in 2013
PROPERTY
Gothaer Asigurari Reasigurari, the insurer controlled by Germany’s Gothaer Group, said its gross written premiums had risen by 75 percent to around EUR 15 million in 2013, while its number of customers doubled to over 52,000 against the previous year. The biggest shares in its portfolio were held by the property and engineering line, with 42 percent, and CASCO, with 30 percent.
Austrian S+B Gruppe to build EUR 17.5 mln hotel next to Otopeni airport Austrian developer S+B Gruppe is planning to start the construction of a 250room hotel next to the Henri Coanda (Otopeni) airport in Bucharest by the end of this year or in early 2015, after finally obtaining the necessary building permit, said Alfred Michael Beck, one of the company’s shareholders, last week. The project will require an investment
of around EUR 17.5 million. The hotel will be built on a 40,000 sqm plot of land which the company acquired in 2004 for an estimated EUR 2.5 million.
RETAIL Carrefour to launch Supeco discount format in Romania
will be expanding its 4G telecom network to reach 90 towns and cities, representing over 45 percent of the country’s population. The operator will also be testing a 4G+ network in six cities. The latter will allow data transfers at speeds of up to 300 Mbps, with the network equipment to be supplied by Huawei, according to Mediafax newswire. Starting April 7, Orange will expand the 4G network to cover more than 45 percent of the national population.
French retailer Carrefour is hiring store managers for the new Supeco stores it will open in Romania, according to a recruitment ad on bestjobs.com. The first three branches will be opened in Giurgiu, Ramnicu Valcea and Targoviste. The Supeco retail brand is so far only present in Spain, where it was launched last year, according to Mediafax.
www.business-review.eu 1 Wizz Air Romania launches new
Newly launched Revicare aims for EUR 10 mln in sales this year
2 EDP Renovaveis secures EUR 30
The producer of Revicare, a new cosmetics brand launched last week in Bucharest, wants to reach sales of EUR 10 million this year by opening several stores in Romania and starting exports to Spain, the Canary Islands, Greece, Turkey and India, said the company. The first Revicare shop was opened last week in Bucharest’s Old Center and the company’s two owners – Rohit Ahuja, an Indian businessman who has been in Romania for about six years, and Sandra Popescu – want to open more units
MOST READ routes, adds new plane to local fleet mln of financing for six solar farms in Romania
3 Forbes: Romania powers up, stepping in as entrepreneurial tech hotbed
4 Romanian high-school students win top positions at NASA contest
5 Romanian police investigates media companies, ProTV denies fraud accusations
www.business-review.eu Business Review | April 7 - 13, 2014
4 NEWS AGRICULTURE
WEEK AHEAD April 7 Eurosfat 2014 Bringing together high-ranking European officials and candidates at the Euro-parliamentary elections with representatives of the business community and civil society, the Eurosfat conference is a forum to debate policies and put forward suggestions. The European Institute for Participative Democracy Quorum, is behind the event, which will tackle hot topics such as Romania’s Schengen integration, labor force mobility and the ins and outs of the European electoral process. Log on to the eurosfat.eu website for more information. People’s Palace, 08:00, www.eurosfat.eu
Bucharest FAO conference warns about food waste, talks up family farming
April 8 E.ON Romania A member of E.ON Group, will announce its 2013 financial results and long-term plans.
April 10
April 10-13 Construct Expo The 21st edition of Construct Expo, the international trade fair for construction technologies, equipment and materials, will take place at Romexpo Exhibition Centre. Construct Expo brings together industry professionals, giving them the opportunity to become part of a network and share experience.
April 11 Upcoming legislation Law no. 17/2014 regulating the sale and purchase of land outside city limits, amending law no. 268/2001 on the privatization of companies managing agricultural land in public and private ownership, will come into effect today, 30 days after it was published in the Official Gazette. The law grants anybody, including foreign citizens, the right to acquire agricultural land, but certain categories have priority (coowners, tenants, neighbors and the Romanian state).
Agerpres
Innovate Now Conference Is a one-day open-enrollment conference designed for the Romanian market. The event will give a local audience a chance to meet and listen to Steve Shapiro, one of the foremost authorities on innovation culture and business practices. Other speakers will join Shapiro for a day of interactive discussion and debate, with a practical focus on business issues in the broader context of large-scale, global trends. More information on how to register is available on the innovatenow.ro website. Crowne Plaza Hotel Bucharest, 08.00
Waste not, want not: over 1.3 billion tonnes of food are wasted around the world every year, says the FAO
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bout 179 kg of food per capita is wasted every year in Europe and Romania’s average is above this level, said Daniel Constantin, deputy prime minister and agriculture minister, last week. He made his comments as Bucharest hosted the 29th Food and Agriculture Organization (FAO) European Regional Conference (ERC) and the 38th session of the European Commission on Agriculture (ECA). Food waste and promoting family farming as a solution for food security worldwide were two of the main topics discussed during the events. “Food waste is not an abstract concept but a phenomenon that affects us all. We see it taking place everywhere there is food – in stores, in restaurants, in our own homes, in schools, in farms and even during the transport of food products,” said Constantin. Households are responsible for 42 percent of the food waste in the EU, producers for 39 percent, retailers for 5 percent and catering for 14 percent, according to EU research. Addressing the matter would reduce pressure on production, especially in the context of food shortages and rising food prices, and would also
benefit the environment, he added. Drawing attention to this matter is even more important considering that about 60 percent of today’s food waste could be eliminated through education and technology, said the minister. He admitted that in Romania the matter is seldom discussed but that the authorities are planning to find out the real extent of the problem. Over 1.3 billion tonnes of food are wasted worldwide every year, according to FAO data. This represents a whopping third of the food produced for human consumption and USD 750 billion in costs. At the same time, 842 million people suffer from hunger, malnutrition and food insecurity. Similar quantities are wasted in industrialized and less industrialized countries alike, although in the case of low-income countries, much less food is wasted at the consumer level. The FAO believes that if food losses and waste could be halved, the required increase of available food to feed the world population by 2050 would only need to be 25 percent, rather than 60 percent according to recent projections. Given the nature and causes of the phenomenon, halving food losses and waste is a
feasible target, according to the FAO. Family farms are a solution to fighting food loss and waste, especially in emerging countries, believes Constantin. “It is proven that family farms can meet the challenges related to food shortages and the underdevelopment of rural areas and at the same time they can be encouraged to practice sustainable farming, thus achieving the goal of integrated and sustainable development,” he said. Romania’s National Rural Development Program (NRDP) for the 20072013 period has benefitted 60,000 small farms and the NPRD 2014-2020 will also feature measures dedicated to small farms, said Constantin. The United Nations has declared 2014 the “International Year of Family Farming” as a means to promote international awareness and help each country to come up with plans aimed at strengthening the contribution of family farms to eradicating hunger and reducing rural poverty. The 29th FAO ERC and the 38th session of the ECA brought around 350 delegates from 55 countries to Bucharest. Romania last hosted an FAO event in 1976. ∫ Simona Bazavan
www.business-review.eu Business Review | April 7 - 13, 2014
NEWS 5
FINANCE
Negritoiu takes helm at beleaguered ASF Increasing the confidence that local consumers of financial products have in the strength of the Financial Supervision Authority (ASF) is the main priority of Misu Negritoiu, who was approved by Parliament as the new president of the regulator last week. Negritoiu’s appointment comes against the backdrop of a fully fledged scandal that has engulfed the ASF in the last three months, culminating with its former president Dan Radu Rusanu being taken into custody on corruption charges. The regulator was also involved in controversy over the disproportionate pay of its nine board members. The budget-finance special committee in Senate held a hearing last month over the excessive wages at the ASF. Daniel Daianu, who became the authority’s interim president on February 25, following Rusanu’s arrest, said during the hearing that he would reduce his monthly wage of EUR 12,800 by 30 percent, and apologized to the public for the scandal. Negritoiu, who has spent the last 17 years at Dutch lender ING, said during last week’s Parliamentary hearings that the main issue at the ASF was not the level of the wages, but the fact they did not reflect the performance of the employees. “We have to strengthen the supervision and control functions, to assure people that they have public confidence and that they are protected. Over 10 million consumers are connected to this market, not only through RCA (e.n. mandatory car insurance),” said Negritoiu, quoted
ASF Council Misu Negritoiu – president Daniel Daianu – first vice-president Mircea Ursache – vice-president Corneliu Moldoveanu – vicepresident Ion Giurescu – vice-president Gheorghe Marcu – non-executive member Albin Biro – non-executive member Marian Sarbu – non-executive member Victor Ciorbea – non-executive member
by Mediafax newswire. “The institution has to be rebuilt and reprofessionalized. This is what I pledge and I plan to do it. I need time. Of course we have to repair its image,” added Negritoiu, who will assume his role at the ASF on May 1. Parliament also approved the appointment of Victor Ciorbea, who served as prime minister from 1996-1998, as nonexecutive member on the ASF board. Negritoiu was asked if he had collaborated with Ceausescu’s infamous secret police (known as Securitatea) during Romania’s communist period. “Regarding collaboration with the Securitatea, I remember 20 years ago, when I was in Parliament (…) Today it is easy to verify these things. I was not (e.n. a collaborator) and I can tell you one more time if you want. I can hand you some interviews I gave 20 years ago,” Negritoiu told MPs. MPs also asked Negritoiu if he had been involved in transactions processed by ING Bank with banks in Cuba and Iran. ING paid USD 619 million to settle this probe in June 2012. Some US dollar transactions were carried out through ING’s offices in France and Romania, according to Bloomberg newswire. Negritoiu said the only transaction was carried out before his mandate and that he had been tasked with verifying these issues. The ASF began operating in April 2013, following the merger of the bodies that regulated the stock exchange, insurance and the private pensions market. “The main challenge in the coming period is to reestablish a climate of trust in the insurance market and its regulator. Such confidence, once gained, will lead to an increased awareness of the role and importance of insurance as a financial protection tool,” Florentina Almajanu, general manager of the National Union of Insurance Companies in Romania (UNSAR), told BR. She added that the association will fully support the ASF in this role. Ludwik Sobolewski, CEO of the Bucharest Stock Exchange (BVB), declined to comment on Negritoiu’s appointment.
CV Misu Negritoiu September 2012 – April 2014 chairman, ING Bank Romania January 2010 – September 2012 CEO, ING Bank Romania August 2006 – January 2010 general manager, ING Wholesale Banking Romania 1996 – 1997 MP 1994 – 1996 chief economic adviser to President Ion Iliescu 1973 – 1978 economist ILEXIM, Foreign Trade Company
The ASF has flexed its muscles this year in two separate investigations on the capital market and insurance sector. It sent Romania’s biggest insurer Astra into special administration, claiming it was under-reserved and could not pay claims in the event of a natural disaster.
The regulator also handed down a fine of RON 313, 850 to Harinvest brokerage and rescinded its license after clients found out their money had disappeared. Several employees were barred from trading on the capital market. ∫ Ovidiu Posirca
www.business-review.eu Business Review | April 7 - 13, 2014
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Romania aims to pass key tax and insolvency bills this year The rewritten Fiscal Code should be submitted to Parliament for the final vote this summer, while the new Insolvency Code will undergo the same treatment in less than one month, said officials during the 13th Tax&Law conference, organized last week by Business Review. 1
Code starting this year and the change in the fiscal year based on the accounting year. “The decision to move the fisDan Manolescu, state secretary at the cal year closer to the accounting year Ministry of Finance, said that certain will make accountants’ and inspectors’ provisions regarding income tax are still work easier. We aim to change the prounder discussion, along with other visions so that all companies can choose measures on specific income, and on a different accounting year from the calthe fiscal framework regarding the endar year,” said Manolescu. Mariana Vizoli, deputy general manstock exchange. “In terms of local taxes, we are planning to restructure the tax ager of the directorate of VAT legislation on buildings, depending on the use of and customs regulations at the Ministry the building. We will have further dis- of Finance, outlined the main changes cussions to clarify it and we hope it will in VAT that were enforced this year. This go before Parliament in May or June,” includes the implementation of the optional VAT cash accounting system and said Manolescu “The rewriting means we will have a the extension of situations in which new document with another structure VAT adjustments are not carried out for and from this point of view we have goods that were destroyed, lost or tried to rearrange a little the titles in the stolen. On the topic of VAT, Delia Catarama, Fiscal Code and the way in which they are correlated. We have direct taxes in tax partner at Viboal FindEx, a tax conone place, and the same for indirect sultancy, outlined cases in which adtaxes. The income side is connected to vanced invoicing was considered by tax authority ANAF as a loan, meaning that contributions,” added Manolescu. the company that received the invoices was not allowed to deduct VAT. Changes in VAT Among the recent fiscal changes intended to help the business environ- Experts tip Romania to ment, he named the rollout of become holding destination legislation for holdings in the Fiscal Manolescu of the Ministry of Finance
∫ OVIDIU POSIRCA
suggested that the rollout of new provisions for holding companies in the Fiscal Code will create the opportunity for local entrepreneurs to reorganize their businesses and bring back some structures to Romania from other destinations. “For the first in Romania we have provisions regarding holdings that can be used locally,” said Florin Gherghel, head of the tax department at Noerr Finance & Tax. Under the new rules, a Romanian company will not levy profit tax on revenues from the sale or assignment of participation titles held by a Romanian or foreign company located in a state that has signed a double taxation avoidance treaty with Romania. However, the first company needs to hold for an uninterrupted period of one year a minimum of 10 percent of the share capital of the company in which it holds the participation titles. The same goes for revenues generated from the dissolution of another Romanian or foreign company or for dividends received from a Romanian/foreign company (from a non-EU country that has concluded a double taxation avoidance agreement with Romania). Authorities have also eased conditions for exempting dividends from an
EU subsidiary from profit tax, with the required period of a 10 percent shareholding quota dropping from two years to one. In addition, one of the conditions which a EU company has to fulfill in order not to pay dividend tax on dividends received from a Romanian company has been relaxed, namely the period for a 10 percent shareholding has dropped from two years to one. Emilia Moise, head of the tax department at Grant Thornton Romania, the accounting firm, said during a workshop following the conference that Romania could become an alternative to Cyprus and the Netherlands as a friendly destination for holdings. ANAF has also started to increase audits for transfer prices, according to Adrian Luca, director at Transfer Pricing Services. “The new principle in the field of transfer pricing is that profits have to be taxed where valued is created,” said Luca. He also chaired a workshop on transfer pricing solutions for fiscal protection following the conference. Companies that do not have transfer pricing files will be fined up to EUR 3,000 and if the file is not done property the firm risks readjustments for trans-
www.business-review.eu Business Review | April 7 - 13, 2014
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All photos: Mihai Constantineanu
actions which can be in the tens of millions of euros. Essentially, on transfer prices the ANAF wants to make sure that prices for transactions between connected companies are in line with industry averages so they do not reduce their taxable profits. Cristina Saulescu, senior tax consultant at PKF Finconta, the tax consultancy, outlined the main European rules covering aggressive fiscal planning and the measures taken by Romania to deal with it. She recommended companies revise contracts, especially those within the group, and scrap circular transactions, self-cancelling and self-compensating transactions, to avoid these being deemed aggressive fiscal planning by authorities. Nadia Oanea, tax advisory department coordinator at Baker Tilly, presented the ways in which businesses can be structured more efficiently. She touched on the operational advantages of business restructuring along with the smart solutions for cash flow management and cutting financing costs, including cash polling and the flexible management of investments through holding structures.
Controversial provisions in new Insolvency Code Government emergency ordinance no 91/2013, which approved the adoption of the New Insolvency Code, contains provisions that hinder companies’ recovery from insolvency, noted Simona Milos, president of the National Institute for the Training of Insolvency Practitioners (INPPI) and one of the authors of the new code. The member of the consortium said it was unable to dispossess the tax authority ANAF of priority in the distribution of funds from insolvency, although this was the recommendation of the IMF and the World Bank. “At a European level there are few countries that prioritize budgetary receivables when it comes to insolvency. There are a few exceptions related to labor reports, social security, pension
insurance – for social purposes,” said Milos. “We are among the few countries that encourage the tax authority to sleep and accumulate huge debts and penalties that cannot be recovered in an insolvency procedure, but instead we are blaming the low rate of recovery on the insolvency practitioner, who is not doing enough.” Milos expressed her hope that the new Insolvency Code would be passed by Parliament in a month, adding that last week the Chamber of Deputies was debating the ordinance approving the code. Under the new code, the duration of the reorganization plan has been reduced from three years to one, with the option of extending it by 12 months. Milos said this facilitates filing for bankruptcy and bars the debtor from repaying historic debts. Furthermore, the reorganization plan will have to be passed by creditors holding 50 percent of the total receivables, from a previous proposal of 30 percent. Milos of the INPPI said this would allow the biggest creditor to dominate the receivables table and makes the voting based on categories of receivables useless. Another provision impacting the new Insolvency Code is the introduction of the possibility of foreclosure for holders of current receivables, which could generate a series of conflicts between previous and current creditors or between current creditors granting financing and other current creditors. “In the new code we also find provisions regarding group insolvency, which is an attempt to regulate this aspect,” said Professor Radu Bufan, PhD, of the INPPI. Andreea Deli, partner at law firm Deli&Asociatii, described the approach to the budgetary receivables in the New Insolvency Code, adding that around 200,000 firms go into administration across Europe each year. In Romania, the figure stands at 35,000. Financing opportunities for companies going through insolvency will be
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1. Panelists discuss the fiscal changes rolled out in 2014 2. A speaker outlines perspectives on transfer pricing during a specialized workshop 3. Attendees of the workshop on fiscal updates 4. Dan Manolescu, Ministry of Finance 5. Emilia Moise, Grant Thornton Romania 6. Adrian Luca, Transfer Pricing Services 7. Andreea Deli, Deli & Asociatii 8. Nadia Oanea, Baker Tilly 9. Florin Gherghel, Noerr Finance & Tax 10. Luisiana Dobrinescu, Dobrinescu Dobrev 11. Cristina Saulescu, PKF Finconta 12. Delia Catarama, Viboal FindEx 13. Simona Milos, INPPI 14. Stan Tirnoveanu, ZRP Insolvency 15. Diana Rizea, Noerr improved under the New Insolvency Code, said Stan Tirnoveanu, co-managing partner at ZRP Insolvency, who presented the provisions that could streamline the procedure. “Most of the new elements aim to streamline the procedure by unfreezing assets, ensuring financing, increasing predictability and imposing standards regarding the activity of the insolvency practitioner,” said Tirnoveanu. Luisiana Dobrinescu, lawyer at Dobrinescu&Dobrev, outlined the recent changes in the fiscal procedure norms and the actions that can be taken to prevent fraud by debtors that damages
creditors, in the first three years since the start of the insolvency procedure. On cross-border insolvency the new code does not bring significant changes, according to Diana Rizea, senior associate at Noerr. She outlined provisions in EU regulations that allow the opening of the main insolvency procedure in the member state where the debtor has its principle place of business and of a secondary provision in the member states where the debtor has a headquarters, without previous recognition of the main procedure. ovidiu.posirca@business-review.ro
www.business-review.eu Business Review | April 7 - 13, 2014
8 FOCUS CLOUD COMPUTING
Cloud computing the next commodity Talk of the cloud has started to travel higher up the hierarchy in companies hoping to use it as a springboard to innovation. However, in the public sector, the transition to cloud is a different kettle of fish, as the legislation is incomplete and outdated. The EU is taking steps to ensure legal unity and solve the data privacy issues that are clogging the decision-making process. ∫ OTILIA HARAGA Cloud adoption forecast in Romania
Nicoleta Boaru, corporate services manager at Accace
Courtesy of Zitec
Adrian Blidarus, managing partner at Softelligence
Courtesy of Accace
Courtesy of Softelligence
Alexandru Lapusan, CEO at Zitec
Courtesy of Ymens
Courtesy of Interactive Intelligence
Courtesy of SAP Romania
The local cloud computing market is forecast to reach EUR 150 million in 2017, with annual growth of an estimated 30 percent, while the global market is predicted to surpass EUR 150 billion in 2016, with annual growth of 15-18 percent, Bogdan Balaci, CEO of Ymens, tells BR. One trend he identifies has been dubbed “the birthplace of valueadded services”, meaning the adjacent services that complement business solutions used in the cloud. He also notes that companies are no longer interested in using only Software as a Service (SaaS), but also platforms (PaaS) and infrastructure as a service (IaaS), which leads to a new IT consumption model named XaaS, or Anything as a Service. There is a gap between the Romanian and Western markets, Valentin Tomsa, GM of SAP Romania, tells BR. However, he believes this could become an advantage for Romania because local firms are much more open to adopting new service and technology models without being restrained by the need to recover previous IT investments. He says that the cloud services that are most in demand locally are those dedicated to HR management. “At the moment, all major cloud solutions are provided by companies in the United States, of which the largest are the Amazon and Microsoft clouds. Romania is a consumer of these solutions, and there are numerous local software companies developing for them. In terms of revenues from cloud computing services, Romania is a small player both at global and regional level. We do not have data for the Amazon cloud, but as far as Microsoft Azure is concerned, Romania only just makes it into the top ten for Eastern Europe, after countries such as Russia, Poland, the Czech Republic and Hungary,” Alexandru Lapusan, CEO and co-founder of Zitec, tells BR.
Valentin Tomsa, GM at SAP Romania
Marcin Grygielski, territory manager Eastern Europe, Interactive Intelligence
Bogdan Balaci, CEO at Ymens
Public sector lags behind in cloud adoption
Public cloud solutions are definitely out of the question due to special legal requirements that state institutions must comply with when they use applications storing data. Of course, private cloud or hybrid cloud solutions could be possible. Discussions are probably ongoing with cloud providers and it remains
to be seen how they will turn out,” Adrian Blidarus, managing partner at Softelligence, tells BR. Razvan Stoica of GTS Telecom quotes the European Agency for Network and Information Security (ENISA) which described Romania as “hesitant” in the public cloud area.
The public sector continues to play catch-up in cloud adoption, agree most experts. “State institutions in Romania have invested and are investing massively in hardware and infrastructure, in projects that are parallel with cloud.
www.business-review.eu Business Review | April 7 - 13, 2014 “There are two main factors for sucHowever, things are slowly starting to move in a new direction. cess. Firstly, there is the eligibility of Stoica tells BR that a tender was re- cloud projects for EU funding over the cently launched and the ICI (National 2014-2020 financing period. Secondly, Institute for Research and Develop- there is a need for market regulation ment in Informatics) will build a cloud in order to have certified G-cloud priplatform for government agencies, vate operators,” says Balaci. which will be financed from EU funds. Lapusan mentions another cloud Personal data privacy issues implementation in the public sector, yet to be addressed which benefitted the Ministry of Edu- “The lack of transparency in the chain cation. “The website listing high- of outsourcing/subcontracting the school admission results was processing of personal data by the migrated onto the Microsoft (Win- cloud provider, the lack of a common dows Azure) cloud in 2011. This was global framework of data portability the first year in which the website was and the uncertainty regarding how adavailable and it worked well, also in missible it is to transfer personal data high-traffic periods, for the publica- to cloud computing providers outside tion of results,” says Lapusan. SEE are probably the risks that the On a wider scale, cloud solutions state, as a potential user of cloud servfor the public sector are becoming a ices, is exposed to, and is not willing very hot topic in 2014. Balaci says that to run, at least under the current legal in the UK such solutions are known framework,” Nicoleta Boaru, corpounder the name of G-Cloud. rate services manager at Accace, tells In Romania, only a few public insti- BR. tutions have decided to use cloud soPlayers face a series of security islutions. sues regarding the processing Balaci explains that G-Cloud and storage of personal data. While means that the usage of pre-defined the national legal framework is defibasic services (like unified communi- cient, efforts are being made at Eurocation, document management, pean level to address this issue, Boaru budgetary execution) on a cloud plat- adds. form is regulated and imposed as the The EU intends shortly to adopt a main procurement model, in order to legal framework protecting individuensure financial sustainability, inte- als’ personal data processing and free gration and to address the lack of spe- circulation, she notes. “The current cialized human resources in the field. form prefigures the setting up of an
CLOUD COMPUTING FOCUS 9 authority for monitoring personal data at EU level, as well as significant fines when the personal data protection regime is not respected. Once adopted, the framework will be applied directly in EU member states,” says Boaru. The best example of the lack of transparency that Accace cites is when the cloud provider subcontracts to third parties a series of services involving the processing of personal data. “In this situation, the easiest way to ensure user protection would be to impose through this framework the introduction of contractual stipulations to ensure that these processing services are subcontracted only with user agreement,” says the manager. According to Boaru, in Romania, personal data processing and free circulation fall under Law 677/2001, which does not expressly refer to cloud services. The law applies to operators with local offices, Romanian diplomatic missions/consulates, and operators that are not established in Romania but use any type of resources on its territory. She points out that the fundamental principles of the EU legislation on data protection have been transposed in Law 677/2001, which also sets the penalties for breaking the law. Fines for breaking the law can vary between RON 500 and RON 50,000. The National Supervisory Authority for Per-
sonal Data Processing is the institution in charge of identifying breaches and applying the penalties, says Boaru. “The main challenge is that from the legal viewpoint, with personal data, the procedure to license an operator requires licensing the entire chain – the entity that works with the client (bank or insurance company), the provider of the solution and the hosting provider. On top of this, certain information can only be taken out of Romania with prior notification of the state, which slows down and discourages the adoption of cloud-based solutions in these industries. What’s more, European regulations forbid the transfer of data to embargoed countries or countries that do not have a safe harbor agreement with the EU, which can become relatively difficult to control,” explains Blidarus.
Cloud paves the way for new type of organization The CFO’s say in a company’s adoption of new technologies is increasingly important. CFOs are choosing cloud solutions to modernize their organizations’ processes, according to Empowering Modern Finance – The CFO as Technology Evangelist, a global survey carried out by Oracle and Accenture with Longitude Research.
continued on page 11
10 FOCUS CLOUD COMPUTING
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www.appnor.com/contact contact@appnor.com, Tel: (+4) 021 569 46 50 (+1) 650 318 18 11
Cloud Servers, Private Cloud, VoiP&Hosted PBX, Implementation of Google Apps for Business (Google Docs, Gmail, Calendar), Postini Mail Services, Chromebooks, Geo and GSA
N/A
Sebastian Pite Presales Manager sebastian.pitei@gtsce.com
Public, hybrid and private cloud IaaS services, virtual machines, virtual hosting, storage and back-up; platform built together with VMware for virtualization, CISCO for processing power, NetApp for storage and ComVault for backup
N/A
Gecadnet
www.gecadnet.ro Tel: (+4) 021 303 2070
4
Infotrend Data SRL
www.infotrend.ro contact@infotrend.ro Tel: (+4) 031 4326 425/426/427
5
Interactive Intelligence Group Inc.
www.inin.com, info@inin.com +1 317 872 3000
3
6
7
8
9
Maguay
Microsoft Romania
Pras Consulting SRL
SAP
10
Star Storage
11
Softline Romania
12
13
14
Softtelligence
YMENS
Zitec
www.maguay.ro office@maguay.ro Tel: (+4) 021 210 38 33
Microsoft public cloud solutions: business and productivity solutions, Office, email, unified communication, CRM solutions. Public cloud related services: consultancy in choosing the suitable solutions, migration and implementation assistance. Private cloud solutions: SystemV, turn-key virtualization and management platform which includes virtualization solution, infrastructure management, physical server, storage. Private cloud related services: Consultancy, configuration, deployment, support Microsoft Exchange Server, Microsoft SQL Server, Active Directory, Microsoft Office 365 (Microsoft Exchange Online, Microsoft Lync, SharePoint, Office Web Apps), Exchange Hosted Services, Cloud advisory services Interactive Intelligence CaaS (Communication as a Service) has become the cloud contact center solution of choice for mid-size to large, mission-critical contact centers and business operations
Mercury 360, AmCham, Axxess Capital Partners, Romanian-American Foundation, SIEL INVEST, SERVICE AUTO SERUS, Best Business Travel and many more
Anchor Group
Emerson, global ININ customer with office in Romania.
Development of Private Cloud Projects, Solutions for consolidating and developing IT infrastructure, Server-optimized equipment for Public Cloud Services
Electrica Serv. More on www.maguay.ro
www.microsoft.ro info@microsoft.com Tel: (+4) 021 204 70 40
Accessible enterprise solutions for SMEs: Office 365, Windows Intune, Windows Azure and Microsoft Dynamics CRM Online
AFAN, Softelligence, Provident, Relians, GSbet, Zitec, EBS Romania, Electrica Serv, University of Bucharest, Electra Instal, ITChannel, MedCenter, Senior Software, Dimitrie Gusti Village Museum
www.pras.ro, info@pras.ro Tel: (+4) 0372 705 618
Microsoft Office 365, Microsoft Windows Intune, http://www.udocx.com/
Provident, Macromex, Sustainalytics, Educativa, Technosec, Global Remote Services, Zebra Pay
http://www.sap.com/romania/ind ex.html, info.romania@sap.com +40312252800
applications for HR, financial, acquisitions, sales & marketing SAP Jam collaborative solutions, in-memory computing SAP HANA platform, Ariba solutions for business networks
N/A
www.star-storage.ro office@star-storage.ro Tel: (+4) 021 242 13 95
StarVault: Connectivity, Collocation, Managed Collocation, Managed Hosting, Dedicated Server, Dedicated Storage, Cloud Server, Cloud Files, Remote Back-up, Remote Replication, Virtual Tape Vaulting, Managed Security Monitoring, Hosted Corporate Website, Hosted eCommerce Website, Hosted CRM, eArchive
Top companies from retail and banking, the public sector, national and international companies
www.softline.com.ro www.softline-group.com info@softlinegroup.com Tel: (+4) 021 387 34 40
Softline Cloud Solutions, Microsoft Office 365, Google Apps, Panda Security, Zscaler
Wide range of clients from domains such as: transport, services, construction, architecture, media, education, consultancy
Software e-Business solutions based on CRM, BI, Web and Mobile, hosted in the cloud and integrated into the clients’ environment such as SAP, Oracle, Microsoft AX, Microsoft NAV. Certified in CRM, BI, SQL Server, Windows Azure, NET, HTML 5, CSS3 and JavaScript
MOL Romania, AON, Agricover Credit, Ambient, Blue Air, Raiffeisen, BCR Leasing, ING, Libra Bank, Allianz Tiriac, Egis, Garanta Asigurari
www.ymens.com, 031 9201 contact@ymens.com
Cloudsourcing solutions to private and public organizations such as consulting, support, administration and maintenance, BPO (business process outsourcing), AMS (application management services) or IT outsourcing and security.
N/A
http://www.zitec.com/, contact@zitec.ro, Ionut Cocias (Business Developer) cloud@zitec.ro +40 (0)31 710 01 14
Consultancy and auditing for cloud migration (Amazon AWS, Microsoft Azure, Rackspace), development and maintenance for cloud applications (Amazon AWS, Microsoft Azure, Rackspace), assistance in Microsoft Azure cloud services acquisition. Certified as Amazon AWS Advanced Technology Partner
Videopublishing.com, Zipongo.com, Paravion.ro, Borealy.ro, Rechizitelemele.ro
www.softelligence.ro office@softelligence.ro,Teodor Blidarus, managing partner teodor.blidarus@softelligence.ro +40 722 563 650/+40 31 425 19 08
Cloud services providers are listed alphabetically
www.business-review.ro Business Review | April 7 - 13, 2014
“The local cloud computing market is forecast to reach EUR 150 million in 2017, with annual growth of an estimated 30 percent” Bogdan Balaci, CEO of Ymens continued from page 9 The survey included 1,275 CFOs, top and middle executives from organizations with annual sales of over USD 250 million from all over the world, out of which 670 respondents are working in the EMEA region. Over two thirds of respondents agreed the CFO was a strong supporter of the transformative power of technology, and nearly three quarters of financial directors believe technologies such as cloud, mobile solutions and social networks will change the way the budget is drawn up and managed. Some 28 percent of survey interviewees were already using cloud solutions to support the budget
CLOUD COMPUTING FOCUS 11 planning and forecast, while another IT – the time has come when impor33 percent intended to transfer them tant decisions regarding technology to cloud over the next year. Further- are made outside the IT department more, 24 percent had adopted a and the CIO’s office. The main thing cloud-based system in certain depart- that will influence cloud adoption ments for basic finance, while 45 per- will no longer be budget economies but innovation, since top companies cent were planning to do so. “Financial directors today are will invest in cloud as a basis for the creating financial organizations that new competitive offers,” Tomsa tells adopt cloud technologies and other BR. He adds that the IDC predicts that disruptive technologies to use the by 2016, new IT investments will inpower of digital solutions and propel volve business executives as the main the company forward,” says Scott decision makers in more than half of Brennan, director for Accenture the cases. In Romania, the top management strategy in finance & enterprise has a very positive attitude to cloud, performance. The maturation of big data, cloud, “due to its low upfront investment, mobile solutions and social networks rich functionality and the possibly to have brought organizations to a criti- focus on the core business, and they cal point where they need to re-assess often like the elasticity of the cloud,” their digital strategies, concludes the Marcin Grygielski, territory manager for Eastern Europe, Interactive Intelreport. About 70 percent of respondents ligence, tells BR. He adds, “The financial departbelieve these technologies will change the way in which they are ment also sees cloud solutions as posleading and managing their financial itive, due to their predictable costs processes within the company. Only 5 and the fact that cloud providers percent of respondents complained allow them to control capital expenthat the lack support from the top ditures by using an operating expense management was an obstacle to budget instead.” In IT departments it’s a different adopting new technologies for finanstory. Even though it should be the cial operations. “The main trend that can be seen driver for technological change, IT globally, but also in Romania, is the has “the least positive attitude tofact that cloud services are no longer wards the cloud,” says Grygielski. related to TCO (Total Cost of Owner- “What cloud does is to force the IT deship). We are no longer talking about partment to start working differently
by shifting from technology management to vendor management. Not many IT departments are willing to give up key control of their business infrastructure,” he explains. Balaci shares his company’s experience when dealing with clients. He says Ymens talks cloud with top and middle managers. Generally, top managers turn to cloud in order to optimize their business processes and focus on their core activities, while middle managers enquire about cloud in an attempt to reach greater efficiency in their departments, Balaci tells BR. He says that CFOs see cloud as an answer to transform CAPEX into OPEX and to optimize overall investments. On the other hand, IT departments’ perceptions of cloud are mixed, he says. “Some IT managers see cloud solutions as the future of technology and are racing to embrace them in their company, while others have a more reticent approach as they wrongly perceive cloud as a solution that diminishes their importance in the company. When it comes to cloud migration I believe that cloud will enhance the importance the IT department has in the overall business, not only regarding technology consumption inside the company,” concludes Balaci. otilia.haraga@business-review.ro
www.business-review.eu Business Review | April 7 - 13, 2014
12 WELLNESS
Jog on: Romania runs towards a fitter future Local runners have long been a fixture at worldwide athletics competitions, with a sporting culture that predates the First World War, when the Romanian Athletics Federation became affiliated to the International Association of Athletics Federations. BR found out if this activity has now gone mainstream.
All photos: Mihai Constantineanu
Mens sana in corpore sano: Romanians are embracing the idea that only a healthy body can support a healthy mind, and more are hitting the road to keep their bodies in top condition
∫ OANA VASILIU The increasing number of marathons and other such sporting events makes one wonder whether Romanians have started to understand the importance and benefits of doing physical activity. In 2014, 32 marathons are scheduled in several Romanian cities, with Bucharest hosting the most important running events of the calendar. According to the study Sport in Romania – The link between Brands, Companies and Sports conducted by Quantix Marketing Consulting, 50.7 percent of Romanians participate in at least one sporting activity per year, and over 90 percent of respondents believe that exercise can improve their health. “Romania has had several athletes that have distinguished themselves in worldwide competitions since the last century. What happens now is that we have started to build a sporting pyramid,
with a very good base formed of hundreds of thousands of amateur runners that participate in competitions,” said Bogdan Antohe, managing partner of SmartAthletic, a sports events company. According to the results of the latest Eurobarometer survey on sport and physical activity, released in March by the European Union, 59 percent of EU citizens never or seldom exercise or play sport, while 60 percent of respondents in Romania said they did so at least once a week.Although the nation is not as physically active as Northern Europe, which scored above 70 percent, the number of local races is rising every year, for children, amateurs, professionals and even runners with special needs. “I’ve been doing sports events for ten years now and the results are amazing. For example, the first Bucharest International Marathon had 800 participants, while in 2013, six years later, some 8,000 runners lined up at the starting line. Triathlon Challenge Mamaia
Upcoming events April 13, Mamaia resort, the Sand Marathon April 13, Cluj Napoca, AROBS International Marathon April 26, Bucharest, The Color Run May 4, Bucharest, Wings for Life World Run May 17-18, Petrom Bucharest International Half Marathon May 21, Cluj Napoca, Run with Donath June 7, 2 Mai resort, Offroad Triathlon June 21, Poiana Brasov, DHL Relay Carpathians Marathon (swimming, biking, and running) has posted similar growth, with 100 participants in 2008 and almost 1,000 five years later. When it comes to kids’ events, Trikids had 50 participants three years ago while the last edition had over 600,” says Antohe.
Getting into gear If you’re tempted to join the movement, what will you need to start pounding the pavement? A complete jogging outfit can vary from RON 120 to several tens of thousands. Antoniu Nituleasa, operational director of Genco Romania, gave the following example for high-end attire and recommends Nike products, the Miller running t-shirt (RON 129.99), Filament Tights (RON 179.99) and Asics GelKayano running shoes (RON 809.99). At Genco Romania, Nike and Adidas brands are the best sellers. When kitting themselves out, athletes should focus on footwear. “Running shoes are very important, because they give a valuable boost of energy that increases both the quality and duration of running,” said Adina Militaru, head of marketing at Puma Balkans. oana.vasiliu@business-review.ro
www.business-review.eu Business Review | April 7 - 13, 2014
14 CITY FILM REVIEW
WHO’S NEWS
The Second Game
BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Ciprian Gorita
On the ball: former referee Adrian Porumboiu reminisces with son Corneliu
DEBBIE STOWE Director: Corneliu Porumboiu Starring: Corneliu Porumboiu, Adrian Porumboiu On at: Elvire Popesco, Cinemateca Union, NCRR A standard movie lasts about an hour and a half. So does a football match. Corneliu Porumboiu has fused the two in his latest experiment with film, form and function. The Second Game consists of a rerun of a 1988 DinamoSteaua match, without the original sound, as Porumboiu and his father Adrian (who refereed the game) watch and chat about it. Proceedings start like many Romanian New Wave works: absurdly. A blizzard rages as the officials emerge to a thick layer of snow, the support-
ers huddled under umbrellas. Today the game would be called off, and the anything-goes nostalgia of 1980s football is a movie highlight – at least for fans of the beautiful game. Not that there is much beauty in this particular game, with the conditions hindering fluid passing. But images of a more innocent age of football – sponsor logos either entirely absent, or so faint they can barely be discerned, a mere smattering of advertising hoardings, one of which was for Bucur Obor market, not to mention the 1980s mullets – may charm supporters sick of (alleged) Qatari World Cup bribery and pampered players writing off sports cars, snorting coke and sexting. As may a young Dan Petrescu and Gica Hagi. The innocence did not extend off the pitch. In one of the meatier sections of commentary, Porumboiu
FOUNDING EDITOR Bill Avery PUBLISHER Anca Ionita EDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - senior journalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai Constantineanu
ISSN No. 1453 - 729X
LAYOUT Beatrice Gheorghiu ART DIRECTOR Alexandru Oriean
Senior details how both clubs had tried to bribe him, something the football bigwigs had sought to hush up. Background about the teams’ links with the army and the Securitate (the Communist-era secret police) will also interest those unfamiliar with Romanian football history, though this will not surprise local audiences. In the main, though, the commentary is meandering, with minutes spent debating the merits and application of the advantage rule, and banal observations on obscure historical players and officials. It’s sometimes interrupted by incoming texts, phone calls and mobile phone interference. At other times father and son go quiet, watching the action (the word is used loosely). If all this sounds rather boring, then the director knows it. The game is long and nothing happens, notes Porumboiu Junior at one point; “It’s like one of my films.” In his recent works, he seems to have been gradually stripping away conventions of drama and development. While 2009’s Police, Adjective was slow, it was a procedural of sorts and built to the resounding climax of Vlad Ivanov’s belligerent speechifying. Last year’s When Evening Falls on Bucharest or Metabolism, about an affair between a tedious film director and actress, was more inward-looking and less rewarding. In The Second Game, even more movie staples – editing, cinematography – are jettisoned. The conceit is unusual, and football fans and film geeks will find some pickings, but overall it seems more suited to a modern art gallery than a cinema. As the credits roll, the screeching violins of Vivaldi’s Four Seasons provide the most drama of the day – a droll sign-off from a knowing director.
has joined KPMG in Romania as a senior manager in advisory, in public sector consulting, where he will be supporting EU funds and infrastructure projects. Gorita brings 13 years of experience in the public sector, where his most recent position was high level counsellor in the Department for Infrastructure Projects and Foreign Investment. He previously worked for the Ministry of Transport, and prior to that for the Ministry of Finance, where he coordinated the government’s Public Private Partnership (PPP) unit. Earlier in his career, Gorita also worked for the Ministry of European Integration, where he was closely involved in Romania’s EU accession negotiations. He has given lectures on negotiation at the International University Institute for European Studies, Gorizia, Italy.
Vasile Varvaroi has been promoted to GM of Cargill Romania. Starting this June he will coordinate the local presence of the US food industry group with a special emphasis on business in the field of grains and oil seeds. Varvaroi has been with the company for more than ten years, working both in Romania and in Canada. In 2012, he rejoined the Romanian team in a regional position as production line representative for grains and oil seeds in CEE (Romania, Russia, Ukraine, Hungary, Slovakia, Poland and Bulgaria). The new GM is replacing Martin Schuldt, who will return to Germany to take over the regional position previously held by Varvaroi.
debbie.stowe@business-review.ro
EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi SALES & EVENTS Sales managers: Ana-Maria Nedelcu, Oana Albu, Raluca Comanescu MARKETING Ana-Maria Stanca, Ana Maria Andrei, Iulia Mizgan PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat
PUBLISHER Bloc Notes Media ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 EMAILS editorial@business-review.ro sales@business-review.ro events@business-review.ro