Business Review No. 15, May 2 - 8

Talent: How does a leasing firm bounce back from a 90 percent reduction in business during the recession to double its turnover?

Business Review asked Anca Greu, general manager of Acces Finance Leasing Broker »page 7

ROMANIA’S PREMIERE BUSINESS WEEKLY

May 2 -8, 2011 / VOLUME 16, NUMBER 15

CHILD SAFETY ONLINE HOW SAFE ARE YOUR KIDS ON THE NET? BR LOOKS AT THE MAIN THREATS FOR YOUNG SURFERS AND WHAT PARENTS CAN DO ABOUT IT »PAGES 10-11

Self-storage, a multi billion-euro business around the globe, has no history in Romania.

Danu Temelie, managing partner at pioneering firm EuroMiniStorage, reveals how he is planning to overcome this »page 8

RESTAURANT

NEWS

Casting asparagus

Disconnecting people

Crowne Plaza is hosting a masterclass demonstration with the venerable vegetable. Join the culinary cut and thrust! » page 12

Mobile phone giant Nokia announces that it is shedding 120 jobs in Romania and scaling back operations at its local R&D center » page 4

Courtesy of EuroMiniStorage

ANYTHING IN STORE?

www.business-review.ro Business Review | May 2 - 8, 2011

NEWS 3

NEWS in brief

3Q Laurentiu Dinu Accreo Romania GM

WEEK in numbers Photo: Laurentiu Obae

1.68

What are Accreo’s plans in this context?

We hope that by the end of this year we will have about another 30 new projects in our portfolio to join the current 30. Accreo focuses on large companies and projects that range from renewable energy and energy efficiency to green-field. It has been managing projects worth about EUR 30 million since last April.

We will definitely have problems, starting with the negotiation for the new funds package available for Romania after 2014, unless we have good results this year. A good level of absorption, given the difficulties in communication among companies and state consultants, is a challenge.

After that Romania will not be able to adopt an exclusively centralized mechanism. At this time the regional model will be another source of concern because funds will be allocated mainly to regions.

More worrying is the lack of impact of projects and the obvious fragmentation.

What is the state of the local consultancy market?

It is currently a learning-by-doing process, strongly linked to how the absorption of EU funds works in Romania. From my point of view, the level of absorption should triple compared with last year’s results to ensure significant development in the consultancy market and that Romania does not face the danger of disengagement from structural funds from December 31, 2012. While last year Romania absorbed up to EUR 2 billion this year the figure should exceed EUR 5 billion. dana.verdes@business-review.ro

Agerpres

What is the absorption rate of European funds in Romania?

Through Axe 4 Romania has about EUR 160 million available for this year. At the end of last year, there was a fund reallocation of about EUR 110 million for the operational program for increasing economic competitiveness and the energy axis. This demonstrates companies’ relatively high interest in renewable energy projects.

No correct figure for the absorption rate can come before 2014-2015.

While until now Romania has focused heavily on quantitative absorption, fro m now on it should focus on implementation. If you look at the much quoted figure of 12 percent of total structural funds (excluding funds for agriculture) you will see that over 90 percent of this figure is actually pre-financing, which means the refund rate is marginal. Financial corrections are expected.

million – the estimated number of people currently employed unofficially in Romania

IMAGE of the week Radio-activism The Green Party last week organized a protest against the siting of new nuclear plants on Romanian territory. The protest took place in Victoriei Square, 25 years after the devastating Chernobyl accident. A few dozen supporters of the party called for the gradual shutdown of the Cernavoda reactors. The nuclear power plant in Cernavoda, the only one in Romania, produces around 20 per-

FDI to rise to EUR 5.8 billion in 2014 Romanian FDI is projected to increase to EUR 5.8 billion in 2014 from the EUR 3.6 billion predicted for this year, according to the government’s draft convergence program for 2011-2014, cited by Mediafax newswire.

After falling 25.6 percent in 2010 against the previous year, FDI covered 54.3 percent of the country’s current account deficit.

This year, FDI inflows should make up nearly 64 percent of the current account gap, according to the government’s estimations.

Romania’s convergence program is subject to annual revisions and will be sent to the European Union pending government approval.

MACRO Number of employees falls to 4.1 million The National Institute of Statistics has announced that the number of employees in Romania dropped to 4.1 million at the end of October 2010, a decrease of

billion euro – the estimated amount of social contributions lost from these undocumented workers

6.2% the drop in consumer credit in the first quarter of this year, which fell to EUR 8.6 billion

COMPANIES Agricola Bacau Group sees turnover hike 10 percent in Q1

cent of the country's electricity.

INVESTMENT

4.5

300,000 workers compared to the same period of 2009.

The data show that 62 percent of the total number of employees earned less than a RON 1,500 gross salary, which was the case for 58 percent of personnel in 2009.

The survey on salaries, which is done annually, was carried out on 23,900 institutions and reflects the average gross salary earned by full-time employees and the total number of workers.

State arrears at RON 1 billion at the end of March State arrears amounted to RON 1 billion (EUR 245 million) at the end of March, which was within the limits set by the International Monetary Fund (IMF), according to Gheorghe Gherghina, state secretary in the Ministry of Finance.

He said the arrears of the central administration were under RON 200 million (EUR 49 million) while those at a local level amounted to RON 841 million (EUR 206 million).The arrears of the central budget, the social insurance budget and local authorities reached RON 1.1 billion at the end of last year and must go down to RON 900 million by the end of this year, according to an agreement with the IMF.

Agricola Bacau Group has reported a RON 104.85 million (approximately EUR 25.6 million) turnover for the first quarter of 2011, ten percent up on the same period of the previous year. The company’s poultry sales alone have climbed by 39 percent in volume and 48 percent in value.

BCR lends EUR 23 mln to Martifer for 42 MW wind farm Banca Comerciala Romana (BCR) has inked a financing agreement worth EUR 23 million with industrial company Martifer in order to develop a 42 MW wind power plant in South-East Romania. BCR was assisted by DLA Piper while for Martifer the legal consultant was law firm Bulboaca si Asociatii.

OMV Petrom will distribute RON 1 billion of dividends OMV Petrom shareholders have approved the distribution of dividends totalling RON 1 billion (about EUR 244 million), meaning a gross value per share of RON 0.0177. The majority shareholder, the Austrian group OMV, will receive gross dividends of RON 511 million, the Ministry of Economy, which holds 20.6 percent, will get RON 206 million and the Property Fund, with a participation of 20.1 percent, RON 200 million.

www.business-review.ro Business Review | May 2 - 8, 2011

4 NEWS TELECOM

Nokia lays off 120 workers, cuts R&D operations in Romania

Courtesy of Nokia

Stephen Elop, president and CEO of Nokia

F

innish company Nokia will axe 120 jobs in Romania, in line with its global strategy to reduce its labor force and consolidate its operations, the mobile giant has announced.

Nokia ran its operations in Romania in two separate fields, with a handset assembly production unit in Jucu and a research and development center in the Olympia Business Center.

The company said that operations in the R&D center would be slashed. Activity in the Jucu plant will remain unchanged.

“Nokia envisages that by the end of the third quarter of 2011, the current projects carried out in this location will be completely diminished. R&D operations will continue to be developed in other Nokia centers around the globe. We estimate 120

people will be affected. No changes are planned to take place in the Nokia plant in Jucu,” said the firm in an official press release.

Nokia’s R&D division was opened after the company acquired Intellisync, which had a subsidiary in Romania, in 2006. Currently some 4,000 people work for Nokia Romania.

Globally, the communications firm will shed 3,000 people by the end of 2012, with most jobs set to be lost in Denmark, Finland and Great Britain. These measures are part of the company’s aim to cut unaudited IFRS operational expenses by EUR 1 billion in the services and devices division by 2013, compared to 2010.

The Finnish firm also announced that it intends to develop a strategic collaboration with Accenture which will see the transfer of the Symbian software development activities, as well as an additional 4,000 Nokia employees, to Accenture.

“At Nokia, we have clear goals regarding the way in which we will move forward, which will see us regain and consolidate our position of leader on the segment of intelligent devices, mobile handsets and the strategy to minimize interruptions at the level of our operations.

However, due to this new strategy, we will have to make a reduction in our workforce,” said Stephen Elop, president and CEO of Nokia.

Otilia Haraga

BR EVENT

Employment: Recent Changes and Challenges for the Labor Market Ramada Plaza Hotel Europe Hall May 4th 2011 The second Employment: Recent Changes and Challenges for the Labor Market Event organized by Business Review takes place this week at the Ramada Plaza Hotel in Bucharest.

The event will focus on the legal and managerial implications brought about by the recent changes to the Labor Code.

Expected to lead to the creation of plenty of jobs, the new Labor Code was welcomed by most companies as it has been tipped to foster more flexibility in the employer-employee relationship and stimulate competitiveness on the local labor market.

Companies and industry and crossindustry organizations have been calling for changes to the law for a long time and have largely welcomed the amendments. These include: temporary arrangements, internships for recent graduates and individual work

performance objectives.

Speakers at the event include Valentin Mocanu, state secretary with the Labor Ministry; Marilena Balabuti, head of the legislation bureau with the Bucharest Labor Inspectorate; Tiberiu Csaki, partner with Salans law firm; Iulian Patrascanu, managing partner with Fine Law; Irina Stanica, head of the employment and pensions department with Noerr; Miriana Matei, Human Resources Business Partner, Schneider Electric Romania; Camelia Slivneanu, HR Director, Aerotravel; and Anca Podoleanu, Executive Director, HR Club.

The two conference sessions at the event will be followed by two workshops organized by Salans on the practical aspects of the latest changes to the Labor Code and Fine Law on the management of the closing of work contracts.

For more on the event and how you can attend please check www.business-review.ro/events.

www.business-review.ro Business Review | May 2 - 8, 2011

6 NEWS TELECOM

STOCK MARKET

RCS&RDS to sell shares to employees at preferential prices

Property Fund continues with portfolio diversification

R

alyst said there was precedent for this, citing the case of NewCom, in which both RCS&RDS and Romtelecom acquired shares.

At the end of May, the shareholders of RCS Management, which is directly controlled by businessman Zoltan Teszari, with a participation of 58.92 percent, will discuss taking out a loan of up to EUR 40 million as well as the purchase by the company of a limited number of its own shares.

In the first quarter of the year, RCS&RDS signed two financing agreements, a syndicated loan of the forward start type amounting to EUR 206 million to pay back some loans that had come to term and another syndicated loan of EUR 125 million.

The telecom company has 422.06 million shares at a nominal value of 0.1 lei, split between Cable Communications Systems (based in the Netherlands and making up 88.9 percent), RCS&RDS (5.04 percent), Zoltan Teszari (2.03 percent), Csaba Ianos Ludescher (1.1 percent) and another 15 individuals with participations of under 1 percent, according to the Trade Registry.

RCS&RDS has operations on markets in Romania, Hungary, the Czech Republic, Slovakia, Croatia and Serbia.

Otilia Haraga

Photo: Laurentiu Obae

CS&RDS will sell certain employees and representatives of the companies in the group shares at a preferential price.

RCS Management will take out a loan of nearly EUR 40 million to buy a batch of its own shares. These measures are on the agenda of the General Meeting of Shareholders at the end of May, according to Mediafax newswire.

The agenda stipulates the granting of some stock to “certain employees, categories of employees, managers or representatives of companies in the RCS&RDS group.”

Nicu Pana, independent telecom consultant, told Business Review, “This is an expected move by RCS&RDS. The company has done this before precisely because it is a way of giving incentives to the management.”

He added that this strategy is coming under wider discussion now because recent media reports suggested that RCS&RDS would be willing to pay USD 300 million to acquire competitor UPC Romania.

Representatives of the two companies did not confirm rumors about this transaction.

“An equally possible scenario would be for UPC to be sold between RCS&RDS and one of its competitors,” said Pana. The an-

Mark Mobius of Franklin Templeton

T

he Property Fund is looking to diversify its portfolio with new investments in the financial sector representing 2.7 percent of its net asset value, including BRD shares, an increase in the stake it holds in ALRO, gaining exposure in Austrian companies present in Central and Eastern Europe of 1.7 percent of the net asset value, and dropping stakes in small companies (both majority and minority stakes).

The fund is estimating that it will have dividends of RON 420 million out of its 2010 profits, up from the RON 179 million from its 2009 profits. It is currently evaluating the benefits of a secondary listing on another stock exchange, with potential destinations including London, Warsaw and Vienna.

“There’s not much we can buy [in Romania]. In order to have more to buy we need large companies,” said Mark Mobius, executive chairman of fund manager Franklin Templeton Emerging Markets.

At a presentation on the potential of emerging markets, Greg Konieczny, executive VP, Templeton Emerging Markets Group and fund manager of the Property Fund, said that a “number of policies have not been conducive to higher growth” and that a “change in the entire approach is needed to encourage investment.”

Last week’s general shareholders meeting of the Property Fund brought about changes to the structure of the fund’s body of nominees. Two candidates supported by the Finance Ministry have been elected to the current line-up: Doru Petre Dudas, general manager in the Finance Ministry, and Simion Dorin Rusu, an advisor to economy minister Ioan Ariton.

The two are replacing Corin Trandafir, the representative of the Nicolae Malaxa heirs, and Monica Maurer, who had been representing the Finance Ministry. She was removed from the body of nominees at the proposal of the Finance Ministry. Other members of the body are Bogdan Dragoi, state secretary with the Finance Ministry, Cristian Busu, also supported by the Finance Ministry, and Sorin Mandrutescu, recommended by Wood & Co. The Property Fund was set up by the Romanian government in December 2005 to compensate people whose assets were abusively expropriated by the communist regime, especially in cases where restitution in kind was not possible. Compensation was awarded by the granting of shares in the Property Fund, proportional to the loss. The Romanian government meets the value of compensation claims by reallocating shares from its holding to eligible claimants. It is intended that the Romanian government will over time become a minority shareholder in the fund.

PROPERTY FUND SHAREHOLDERS

WHO’S NEWS

Number of Shareholders 1 7,744 125 310 287 8,467

% of Shares 36.79 28.28 20.40 8.66 5.87 100

Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro

Agata Jakoncic

Andreea Florea

is the new regional director for the Balkans of pharmaceutical company Merck Sharp&Dohme MSD. She has previously served as country manager of MSD Romania. In her new position, she will coordinate Romania, Bulgaria, Macedonia, Kosovo, Serbia, Montenegro, Bosnia Herzegovina, Slovenia, Croatia and Albania. Jakoncic took over the local management of MSD in 2007, and was in charge of integrating MSD and Schering-Plough operations after the latter was taken over by Merck & Co.

has been appointed brand strategy coordinator by BrandTailors.

She has been with the company since 2008 when she started out as office manager. Six months later she was promoted to project manager and later brand adviser for product and service branding services.

Florea has been involved in creating brands such as Naturlich, Azuga Apa de Izvor, Covasna Taramul Apelor, Generis and HapiHap and consolidating the Raraul, Laptic LaDorna, Antena 1, BCR Open, Fulga, Kandia and Magura brands.

Source: The Property Fund

Type Ministry of Finance Romanian private individuals Foreign institutional shareholders Foreign private individuals Romanian institutional shareholders Total

www.business-review.ro Business Review | May 2 - 8, 2011

TALENT 7

Market awaits new lease of life

Photo: Laurentiu Obae

Leaving the security of her job at Raiffeisen Leasing and going it alone in the industry was not an easy decision. But Anca Greu has significant experience to draw on – and is hoping that this will see her firm, Acces Finance Leasing Broker, through the choppy economic waters and emerge to double its turnover.

as she started to gain experience by promoting multiple leasing products and services.

Her career has helped her a lot in de∫ ANDA SEBESI veloping her own business, as the entrepreneur worked for many years in the financial industry as contract manager, For Anca Greu, general manager of Acces chief of the contract department and senFinance Leasing Broker, the leasing inior relationship manager for Raiffeisen dustry has always been a major profesLeasing. The courage to set up her own sional challenge, and she decided to set up business proved well founded. Greu wanther own firm in this field in 2004. “Aled to be a player on the leasing brokerage though I founded my company in Demarket and was soon enjoying success. cember 2004, it became operational two and a half years later in June 2006, once I “The growth was gradual with the portfolio of customers exceeding my expectastopped working for Raiffeisen Leasing as tions. We posted a turnover of about EUR an employee. Setting up my own business 300,000 in 2008 – from brokerage servicin the leasing industry was the perfect es alone – and a profitability rate of about challenge for me. It gave me the oppor50 percent,” remembers the businesstunity to continue my professional journey woman. in this field as an entrepreneur and in coAcces Finance Leasing Broker’s target operation with several leasing compawas very clear: companies, which countnies,” says the young entrepreneur. In ed for 95 percent of its portfolio. “Leasing addition to her job satisfaction, she benefited from rapid personal development, brokerage was a very good sales channel

for some leasing companies that saw the potential at that time. It was very hard for me to stop working with the team from Raiffeisen Leasing and I realize that I was risking a lot when I decided to give up working as an employee to become an entrepreneur,” she says. “Now I can say that after the first two months of activity, I knew that I had made the right decision. Plus, the potential I had foreseen initially proved to be greater than I had expected.”

But the economic turmoil hit her company very badly at the beginning of 2009, when the business contracted up to 90 percent because of a major reduction in the number of active partners and investments in the local economy. “Only one-two partners out of 15 leasing companies that were collaborating with us continued to finance new transactions in 2009,” says Greu. “But we are still on the market, balanced and offering the same quality of services, seeing a slow increase in demand and resuming cooperation with some of our old partners – leasing companies.”

Greu says that from September 2008 there were plenty difficult moments because of the cautious behavior of leasing companies. But despite the hard times and all the challenges, she has held onto her core beliefs: “I still think that healthy principles and adjusting your business to the legal, fiscal and political environment is the only way to achieve long term success.”

If she started another business Greu probably wouldn’t change anything because she is mature enough as a professional to understand that each business has its negative and positive sides. “You need to be wise and patient. I have always been a supporter of the bright side of people’s mistakes. There are imperative

and give your business a significant impetus,” says the entrepreneur.

Speaking about the main challenges for her business, she says that her position as mediator between lender, customer and dealer is a real challenge as their expectations are different and sometimes even opposed. “Besides, it is about promoting leasing brokerage on an emerging market where there are many customers who need the way this process works to be explained to them,” she says.

As for future plans, Greu says that the current goal for her company is to pass through the current economic crisis by trying to research, prepare and develop new opportunities. “I am considering the potential of consultancy for accessing EU funds and developing the approved projects. I intend to create partnerships with lenders for corporate credit and to develop a territorial network in the main cities of Romania on the long term. This goal has been on stand-by since 2008,” she concludes.

anda.sebesi@business-review.ro

COMPANY PROFILE Acces Finance Leasing Broker Established: 2004 Operational: 2006 2008 estimated turnover: EUR 300,000 2009 estimated turnover: EUR 40,000 2010 estimated turnover: EUR 50,000 2011 estimated turnover: EUR 120,000 Number of employees: 5 and 30 collaborators Initial investment: EUR 10,000 Total investment: EUR 95,000

www.business-review.ro Business Review | May 2 - 8, 2011

8 INTERVIEW

Growth in store on a cautious market

∫ SIMONA BAZAVAN What is the story of EuroMiniStorage? How did you decide to come to Romania?

EuroMiniStorage was conceived as an idea in 2006, 2007. I had been involved in an archiving business that had operations in five countries in Central and Eastern Europe. After selling the business, I looked for something to do. I had some partners, some Canadians, who were involved in the real estate business in Central Europe and we figured: self storage.

This is such a huge industry. By way of comparison, Hollywood, which had one of its best years in 2007, had a USD 9.8 billion turnover globally. Self storage is a USD 23 billion industry in the US. We saw that Central European self storage worked: it worked in Poland, the Czech Republic, Slovakia, Latvia and Estonia. It is a cross border, cross climate and culture business. If you were able to pinpoint the cultural nuances, you could make the business work. So we thought, there’s a booming real estate market and a vibrant economy; the indicators that would say if self storage were required are there. So we basically took a gamble, bought two pieces of land and invested EUR 4 million of our own equity to build two buildings in Bucharest and Budapest.

We bought the land in 2007, built the facilities in 2008 and 2009 and opened them in 2010.

How does the situation at the end of 2010 compare to the company’s initial targets?

Our target was to get market penetration, meaning to get people using our services, and this we have achieved. We’ve signed over 500 contracts since the day we opened and we have over 300 customers that are in at this time. We’ve got across the understanding that it is a short term, flexible solution, including security, individual alarms, CCTV, access control, a room that you can rent today for 30 days. The growth has been okay.

SELF STORAGE worldwide

23 billion – the value of the self storage business in the US

What we haven’t achieved was obviously the revenue per unit. We had to reduce prices significantly. From our original business plan we have reduced our achievable rent by over 50 percent. The average price that people pay in Prague or Poland is over double what they pay here.

Presently 60 percent of the built units are occupied, which was our initial target.

We will fill some of the existing space by the end of this year and our goal is to get as many people as quickly as possible to use it and understand it, to like it, to recommend it and to use it again.

We would like to have about 600 clients by the end of the year. In the next phase we will build another 200-300 smaller units, which have been the most popular, and try to fill them up by the end

Romanians love discounts.

They like to have a high price and get it cheaper of the year.

Have people here in Bucharest become accustomed to this kind of service?

Our biggest obstacle initially was to get people to come here to see the facility.

We’ve gotten excellent exposure and people understand what the product is. It is a very long term process in the sense that you don’t always need to target the immediate need. It’s the education, the awareness of the product as an alternative that is essential. Many people are simply driving by and see the building but the internet has been by far the most effective way of educating the customers. The need for storage has always been there – all you have to do is to inform people.

You mentioned plans to build new units in other locations here in Bucharest. What is the current status of this project?

We are still looking at land. We have identified a few plots. We are still watching how the market is recovering, if there are consistent long term signs of the return of the market. This should become clearer in September, October. This summer will be a test and we’ll see how it goes. We would like to have acquired a piece of land by the end of the year.

What is your customer profile and what do they usually store?

It’s a real mix. We have young kids that store their motorcycle and their hobby stuff; middle aged people with kids; older people who understand the concept and store valuable things; people who have

Courtesy of EuroMiniStorage

Although a well established business in Western economies, self storage is a relatively new service in Romania. One year after starting operations locally, Danu Temelie, managing partner of EuroMiniStorage, the first and so far only self-storage facility in the country, talked to BR about how the company is challenging local consumers’ lack of awareness of the service and the insolvency case it overcame.

Danu Temelie, managing partner of EuroMiniStorage been transferred out of the country, rent out their apartments and put some of their belongings here; and a lot of people who are renovating. There are also companies who use EuroMiniStorage as their center for distribution. As for what people store, it is nothing out of the ordinary – from furniture to jet-skis and boats. There is a very specific list of what people can’t store but other than that they can store whatever they want. They can also insure the goods and get access to transportation through our partners.

Are Romanian customers different from other Europeans?

Romanians love discounts. They like to have a high price and get it cheaper. Romanians are really into negotiating and need to feel that they have won something.

If you tell them that it’s fifty percent off, they want another 10 percent. It’s not always how much it is, but the fact that at the end of the day they got a discount. One of the things here is that people don’t always follow the rules. In Hungary on the other hand, customers just want cheap.

They don’t care what the discount is. And they are much more disciplined in how they do things.

But I think that Central Europe in general has a different way of doing business than Western Europe. The initial perception when we opened was that people had a fear of security. When we first started everyone said, “Romanians will never trust it here.” Once you explain to them that there is an alarm on every unit, they buy their own lock and they are the only ones who have a key, there is access control and 24/7 security, it was something that was overcome very quickly.

How do you see the business evolving over the next few years?

One of the things that make this a very challenging business is the long term investment return. It is not a two-three year business where you can fill it and flip it. It takes five to six years to fill this thing up and to get it to 85-90 percent capacity.

You need to have multiple locations and you need a very long term vision. Romania is a macroeconomic anomaly. According to the statistics a lot of things should not be happening and yet they do.

The country has huge opportunity to become a very successful and vibrant econ-

omy. We’re in this for the long term. I need to continue the growth that we’ve had in the bad times and if it gets a little bit better then I’ll be happy. But we’ve started in the worst possible time possible and we’ve succeeded and I am confident that it will only get better.

The average price that people pay in Prague or Poland is over double what they pay here What can you say about the insolvency case filed against EuroMiniStorage?

We had an experience of the Romanian legal system that was quite eye opening. The constructor (a Romanian company, Alliance Construct, e.n.) had claims against us – not debts, but claims. We had a huge delay in the delivery of the building so we also had claims against Alliance and we also put them into insolvency. The day we were put into insolvency their claim was EUR 275,000. We had no other outstanding debts and we had more cash in the bank than we owed so by definition we were solvent; indeed we had just secured another EUR 500,000 from our bank to cover operating losses during our growth phase and yet we were still deemed to be insolvent. But we came to an amicable settlement about a month ago and we are now no longer in insolvency.

simona.bazavan@business-review.ro

COMPANY PROFILE EuroMiniStorage 2010 Turnover about EUR 180,000 2011 Investment plans: EUR 500,000 EUR 600,000 to complete the existing Bucharest storage facility Customer base: Almost half and half split between companies and individual customers Rental price: A 6 cubic meters unit goes for EUR 36 a month plus VAT Location: 42J Theodor Pallady Boulevard

www.business-review.ro Business Review | May 2 - 8, 2011

TALENT 9 PARTNER CONTENT

ANRE and the Government propose new amendments to the famous law on renewable energy For the last few months, all attention in the Romanian renewable energy sector has been centred on the outcome of the authorization of the support scheme Monica Cojocaru regulated by Law (Constantin), attorney220/2008 on the at-law, Schoenherr si promotion system Asociatii SCA for the energy generation from renewable energy sources by the EU Commission. The uncertainty surrounding the support scheme has led to a slowdown of investments in renewable energy projects. The lack of predictability of the cash flow questions the bankability of the projects and thus financing institutions are reluctant to finance renewable energy as long as the support scheme is not confirmed. Support schemes seem to be going through a “crisis” in the region. As an example, the Bulgarian Parliament has recently adopted a new renewable energy act, which sets forth a less appealing support scheme. The main change consists in the fact that the applicable feed-in tariff will be determined only upon completion of the construction of the project. In effect, investors in green energy in the Bulgarian market may not estimate the applicable feed-in tariff (and thus, the project cash flow) until completion of the capital investments. Moreover, the guaranteed term of the off-take agreements has been shortened.

In view of the process of getting the support scheme authorized by the EU Commission, the Government proposed a draft emergency ordinance having as object the amendment of the Law 220/2008. The draft amendments to the Law 220/2008 have been posted on the websites of ANRE, the energy market regulator, and of the Ministry of Economy.

Comments may be submitted until 2 May 2011.

The amendments proposed aim to address the concerns raised by the EU Commission during the informal communication with the Romanian Government.

Below we have selected the main amendments proposed in the draft made public on 27 April 2011: ANRE shall monitor the renewable energy producers that benefit from the support scheme and shall prepare annual reports. Should such a monitoring process emphasize that the applicable support scheme triggers an overcompensation of the renewable energy producers, ANRE shall take measures to reduce the granting period of the support scheme and/or to decrease the number

of green certificates granted according to the scheme contemplated by law 220/2008. However, in the event of a downward adjustment of the scheme, the amended scheme shall not apply retroactively, in the sense that it will apply only to those projects that become operational after the entry into force of the amended scheme. “Overcompensation” is defined in the proposed amendments as an internal rate of return 10% higher than the reference internal rate of return for the specific technology that has been considered in the authorization process of the support scheme.

The proposed amendments address an issue that has been intensively discussed, namely the cumulating of subsidies and green certificates. The Government proposes the principle of reducing the number of green certificates granted to a certain technology proportionally with the ratio between the amount of the subsidies and the reference investment value, according to a decision that is individually issued by ANRE. The reference investment value shall be based on the calculations provided by the Romanian Government to the EU Commission as part of the state aid notification process.

The number of green certificates granted for renewable energy produced from biomass is differentiated based on the technology and the fuel used. Only two green certificates (instead of three, as in the current version of Law 220/2008) shall be granted for technologies based on biomass, biogas and bioliquids, except for biomass resulting from energy crops, which will still be incentivized with three green certificates.

The draft proposal stipulates an individual obligation applicable to the producers that operate or own renewable energy projects with an installed capacity in excess of 125 MW/plant and that are eligible for the support scheme. The obligation consists of providing ANRE with the necessary documentation to allow the EU Commission to analyse the respective project, pursuant to the provisions of the Community Guidelines on state aid for environmental protection 2008/C82/01. It appears as the applicability of this individual obligation has been requested by EU Commission (DG Competition), although there are arguments against it.

Other changes are contemplated in the proposed amendment; however the above will most likely be the main topics of the public debates and criticism that are expected to follow.

www.business-review.ro Business Review | May 2 - 8, 2011

10 LINKS

Romanian children still surfing among online sharks Words such as ‘sexting,’ ‘grooming,’ ‘identity spoofing’ and ‘cyber-bullying’ may sound like gibberish to some parents, but the dangers are real. These words define actual risks to which children surfing the internet are exposed, with local youngsters among the most vulnerable, according to European research. What are the threats, and how can less computer literate parents keep their children safe online? ∫ OTILIA HARAGA To be able to understand the dangers of living in a global village, one must be aware of the dimensions of the internet.

“Any society will have its share of dangerous individuals. If we assume that this ratio is just 0.01 percent and estimate the number of internet users at 2 billion, it is easy to see that when sitting at the computer, a child can connect with a very high number of dangerous people,” George Petre, threat intelligence team leader at BitDefender, tells BR. Sexting, which means sending messages or images of a sexual nature, is one of the most common scourges of cyberspace. And Romanian children are the most exposed in Europe to this phenomenon, as 22 percent of them have seen or received sexual messages online, according to the 2010 EU Kids Online II survey, financed by the European Commission Safer Internet program.

“In many European countries, sexting is seen as a worrying phenomenon. In Romania, on the other hand, there are no such concerns, since teenagers do not perceive this as a problem, and parents do not learn about the issue due to lack of communication within the family,” George Roman, of Salvati Copiii, tells BR. Another online threat is identity spoofing. This is where chat and instant messaging are used by dubious individuals to contact people that they do not know, often assuming the identity of someone else. An example might be an adult male posing as a teenage boy to chat online to girls.

Bullies are also at work in the virtual arena. While this does not exclusively involve children, cyber-bullying is defined as harassment of the victim with the aim of destroying his or her sense of self-worth. The cyber-bully will use psychological torture, insulting and humiliating his or her victims, even threatening violence. Often, the victims are too ashamed to report such incidents.

Romanian children are the most exposed in Europe to harassment both onand offline. Some 41 percent of them say they have been upset by other children over the past year (online and offline), while 13 percent admitted this had happened on the internet.

And the threats can be even more sinister. Child grooming – adults trying to lure children into meetings so they can abuse them – is one of the highest risks your children will run when surfing the internet. Through this initial online con-

tact, a child can end up in the clutches of pedophiles or human trafficking networks.

Nearly a third (32 percent) of Romanian children say they have communicated online with someone they had not met face to face, while 13 percent of them even went on to meet that person.

“Just as in real life we wouldn’t let our kids to talk to strangers when they’re playing on the street, we should teach them to behave the same way when using PCs,” Ovidiu Talianu, business development manager at Panda Security Romania, tells BR. But threats to a child’s well-being are not always so easy to pinpoint. Some very real, albeit less conspicuous, dangers lie in the unfiltered information children can access when they are online. The games they play can encourage violent behavior and in some cases youngsters can be lured into joining extremist movements via the internet. They can also place bets in online casinos. IT-savvy teenagers could be tempted to commit cyber-crime, without their parents even suspecting, and then face the legal consequences.

Teenagers may also lack the experience to judge what is appropriate information to put online. “Information posted on the internet is indexed by thousands of search engines and replicated in many places, and is therefore nearly impossible to delete. In recent years, employers have started to check potential candidates using search engines and social networks,” says Petre. Last but not least, tips on how to procure drugs are abundant on the internet.

Unlike in other EU countries, Romanian children are more likely to access the internet away from home. Only 86 percent of Romanian children go online at home compared to 100 percent in the Netherlands and 99 percent in the Czech Republic.

And local youngsters spend more time on the internet than the European average, with 70 percent of children in Romania surfing the net daily or almost daily. The average age at which children in Europe go online for the first time is nine years old, the same as in Romania. In Northern European countries such as Sweden or Denmark, the figure is even lower, with children as young as seven accessing the internet.

And only a minority of parents in Romania is aware of the online adventures of their children. While 13 percent of local children who use the internet say they have been harassed online, only 2 percent of their parents know about it.

“Unfortunately in Romania, parents are

www.business-review.ro Business Review | May 2 - 8, 2011

LINKS 11

Courtesy of Panda Security

Courtesy of BitDefender

George Petre, threat intelligence team leader at BitDefender

Oliviu Talianu, business development manager at Panda Security

not sufficiently informed. This is due both to lack of awareness of online dangers, and to the fact that young people are more knowledgeable about the internet than their parents and use it more than their parents and teachers,” says Roman.

This is because Romania, like Bulgaria, Poland, Lithuania and Turkey, is a country of so-called digital natives, where children know their way around the internet better than their moms and dads.

programs in order to win new customers and convert users of free products to buyers of paid ones. Paid-for products offer the whole package of facilities for the user’s protection.

“One of the main differences between free and paid-for parental control programs is the protection against attempts to de-activate the program. In security products, these functions of protection are well implemented,” says Petre.

Parental control products can be purchased as part of an internet security program supplied by anti-virus companies.

In this case, these applications are included with the products at no extra cost. Alternatively, parents can purchase separate parental control applications which cost about EUR 30 a year, but this does not include any other protection. “It is always better to buy a total solution which includes all kinds of protection,” advises Talianu.

Even though parental control programs are designed to make internet surfing a safer experience for children, they do not work wonders. An actual figure as to how much these programs have helped is hard to ascertain.

“We would be lying if we said a number. The only way to decrease the risks is education and direct control from parents.

Just as strangers can contact grown-ups through information they provide on social networks, they can also contact your children, who may be more vulnerable,” warns Talianu.

Surfing into the danger zone One of the key ways to limit a child’s exposure to internet harm is to know where and how these things can happen.

Most children use the internet to check e-mail, download music and movies and listen to the radio. More than 80 percent of kids interact on social networks and watch videos, films and TV. Almost 58 percent of them search for information for their homework or for leisure activities (travelling, music, cinema, etc). And just under 42 percent talk across messenger, Skype or chat services, according to Talianu.

“Facebook statistics show that from one month to the next the average age of users drops. Even so, Facebook is not children’s favorite social network, they are more attracted to social networks that are more entertainment-oriented such as MySpace and Hi5,” says Petre.

Only half of Romanian parents monitor their children’s activities on the internet by checking their profile on social networks and the websites they have accessed. The majority of parents, 87 percent, forbid their children to have a social media account, download music or films and use instant messaging. Last but not least, 79 percent of mothers and fathers are more active, explaining to their children which websites are safe and actually helping them to look for information on the internet.

Technology can also help. A parental control program can restrict access to various website categories, depending on the age of the child. Parents can choose to block sites with pre-established unsuitable age categories, or may configure these categories themselves. Such software can also limit access to certain applications. And it is ‘shutting-proof,’ which means it will resist attempts from children to close it.

Parental control programs come in both paid-for and free of charge versions. Some companies offer free security

otilia.haraga@business-review.ro

ONLINE LOWDOWN Romanian children Most common threats: Sexting, identity spoofing, bullying, child grooming 32 percent of kids say they have communicated online with someone they haven’t met face to face 86 percent of children go online at home, compared to 100 percent in EU countries Nine is the average age at which children go online for the first time 13 percent of kids who use internet say they have been harassed online 2 percent of the parents of kids reporting harassment know about it

www.business-review.ro Business Review | September 6 - 12, 2010

12 CITY RESTAURANT REVIEW

Dying for asparagus Masterclass Demonstration at the Crowne Plaza, on 5 May. Phone 0723 657 809 MICHAEL BARCLAY

Courtesy of Crowne Plaza

Would you take a human life and kill for a vegetable? I would, if someone was stupid enough to mooch off my dinner plate. But I draw the line at killing thousands of people over a veg.

But this is precisely what happened in antiquity when in Egypt, many generations of Pharaohs declared that the asparagus was so serenely beautiful, only they could cultivate it, and if anyone other than the Court was found in possession of it, it merited a death sentence.

And I understand why. For thousands of years, and right up to modern times, the asparagus has been recognized as nature’s most luxurious natural production. And to this day, it still inflames passions, although not enough of them to kill – or maybe I am wrong. Think of this: In 1939 Hitler invaded Czechoslovakia for two reasons, namely: he wanted to give his troops a taste of real Pilsner beer, because they all knew German beer was then, and still is, crap! But Hitler was a vegetarian (a universally recognized fact) and he craved GREEN asparagus which

was plentiful everywhere except Germany, who only had inferior WHITE asparagus. OK, it is a humorous bar story, but it highlights one important fact.

You see, Germany obdurately clings to the absurdity of growing asparagus without sunlight, thereby denying it the production of chlorophyll and making it an albino hybrid. Utterly foolish in my opinion because it makes it vaguely sweet and wimpy. A bit like Mrs. Merkel’s German Government Cabinet!

But for once, Britain and France unite and agree in the furious debate over white asparagus vs. green. In fact, almost all of Europe loves the firm, crispy, strong flavor of natural green over unnatural white asparagus.

So this plant grows in warm climates in Northern Europe, North Africa, a fraction of China and the USA in dry sandy soil. Therefore it is a rare product. On its own, it tastes wonderful. But in the hands of a Master Chef it can be raised to celestial heights. It is like taking Ghetto rap music and turning it into a symphony. And this is what the Crowne P is going to achieve this week on Thursday 5 May at 18.30.

You will be welcomed with a cocktail and then you take a seat in front of an open kitchen. Chef Ashlie Dias has positioned his masterclass presentation at a level whereby all the guests can prepare

Jewel in the Crowne: asparagus is a king among vegetables his dishes easily in their homes. Careful thought has gone into the choice of dishes. Given that we will be full with meat over the Easter holidays, the dishes will be a meat free extravaganza. That means that even loopy vegetarians can treat themselves to a night out on Thursday. So his choice will be: l Asparagus with baby shrimp salad and caviar vinaigrette l Asparagus tempura with prawns and ponzu sauce l Asparagus risotto, truffle oil and parmesan froth l Asparagus papillote (cooked in a bag) with clams, prawns and thyme butter

You can relax and watch the show, or even participate! But it does not end there. After the presentation, you will be invited to a gourmet’s dinner delight consisting of all of Ashlie’s asparagus creations plus a dessert, and all washed down with some fine wine.

At the time of going to press, the House was considering charging RON 140. This is a bargain for an entire evening’s entertainment, plus a fourcourse meal with wine and coffee. So what are you waiting for? Make a reservation now.

mab.media@dnt.ro

www.business-review.ro Business Review | September 6 - 12, 2010

CITY 13

FESTIVAL

FESTIVAL

EUROPAfest jazzes up Bucharest on 18th birthday

Dance star Roger Sanchez in the house at B’estfest 2011

Courtesy of JM Events

Jazz, blues, pop and classical combine

May 7-13, for more information please check www.business-review.ro/city.

Emagic

EUROPAfest, which turns 18 this year, will gather over 300 musicians from 45 countries, showcasing jazz, blues, pop and classical music at various locations across Bucharest.

It will take place for a week, and will also feature major music contests, such as the fifth Bucharest International Jazz Competition.

The first day of the festival is dedicated to Europe Day, during which jazz, blues, pop and classical music will all get an airing. Over the following days, jazz, blues and pop concerts will be given by well-known European musicians, both in traditional and unconventional concert venues.

The fifth Bucharest International Jazz Competition, an important event in the professional Romanian jazz field that began in 2007, is bringing 30 bands from 25 countries. The competition will be followed by jam sessions and workshops, under the guidance of international specialists.

The second contest under the EUROPAfest brand is Jeunesses International Music Competition, a well-known competition both nationally and internationally. In 2011, the instrument in the spotlight will be the flute.

Caffe Festival, a series of concerts for those who want to rediscover the pleasure of listening to music in an unconventional space, will offer an alternative to the more formal performances elsewhere.

EUROPAfest 2011 ends on May 13, with the Gala, an evening that will see the top artists of the festival perform and the winners of the two contests announced.

Events will take place at Arcub (Batiste Str. 14, www.arcub.ro) and several other locations across the capital. ∫ Corina Dumitrescu

Dance act Roger Sanchez One of the big names in house music, Roger Sanchez, is the most recent confirmation for B’estfest 2011. He will play on the first day of the festival, July 1, at the newly established green location in Tunari, on the shores of the Pasarea Lake.

Born in New York in 1969, Sanchez began his career in the early 1990s, with the launch of his debut hit Luv Dancin. During a career of almost two decades, he has

released 23 albums and compilations, 18 singles and 28 remixes, won a Grammy award, started his own music label and presented a radio show with over 12 million listeners.

Sanchez’s best known hits include Another Chance, You Can't Change Me, Nothing 2 Prove, Turn On The Music and Lost, and his work has featured on various remixes. It was in fact a remix that won the artist a Grammy in 2003, for his version of No Doubt’s Hella Good. As well as No Doubt, Sanchez has collaborated with Michael Jackson, Jamiroquai, Daft Punk, Lenny Kravitz, Garbage, Alicia Keys, Anastacia, Kylie, Madonna, Depeche Mode, Brandon Flowers and Robbie Williams.

So far, the festival lineup includes Mika, Skunk Anansie, Flogging Molly, Asian Dub Foundation, Lamb, Pendulum, House of Pain and Hadouken.

Tickets for the fourth B’estfest cost RON 125 for one day, while a pass for the whole three days is RON 265. Camping access will be an extra RON 15. Tickets are on sale in the Diverta chain and at www.myticket.ro.

Tickets can also be purchased at the entrance for RON 150 per day with a three-day pass going for RON 285, but only on the first day of the festival. ∫ Corina Dumitrescu

www.business-review.ro Business Review | May 2 - 8, 2011

14 IN TOUCH

RESTAURANT SELECTION Business Review gives you a selection of top Bucharest restaurants. You can check the full-length versions of all the reviews by our resident restaurant critic, Michael Barclay, on our website www.business-review.ro.

CULTURAL EVENTS CALENDAR

EVENTS, BUSINESS & POLITICAL AGENDA

Bucharest Opera House May 4 Felicia Filip recital

May 4 Part of the Legal Business Series, Business Review organizes the Employment event at Ramada Plaza Bucharest. For more information about registration and future Business Review events, please visit www.business-review.ro/events.

Otilia Haraga Senior Journalist

May 5 19:00 Ballet night: Fallen Angels

Arcade Cuisine: International Address: Ion Cantacuzino 8 Reservations: 0753 999 333 www.restaurantarcade.ro Over the last nine years, Arcade has become a gastronomic institution in this town. This is a top quality, sophisticated chophouse that can compete with the best alternative restaurants in town which could cost twice the price.

May 6 19:00 I Quatro Rusteghi

Heritage Cuisine: Fusion Address: Polona 19 Reservations: 021 210 8850 www.heritage-restaurant.eu After five years of making mistakes along with constant changes of management, chefs and directors, it appears that Heritage has finally got it right! This month they brought the mountain to Mohammed by importing a Michelin-starred chef.

May 15, 19, 28 19:00 Falling Angels, by internationally acclaimed choreographer Jiri Kylian

La Veranda Cuisine: Seafood Address: Crowne Plaza, Poligrafiei 1 Reservations: 021 224 0034 www.laveranda.ro Here we have a House that challenges you with a choice of preparations, and for the first time ever, they even offer you a selection of fish sauces. The standards of have been raised to a point that the Crowne has regained its culinary crown.

Osho Cuisine: American: steak and grill Address: Primaverii 19 Reservations: 021 568 3031 www.osho-restaurant.ro They modestly call themselves a steakhouse, but it is much, much more than that. If you enter it from the front of the building, you will find yourself in a shop which sells all of the chophouse’s products, ‘over the counter’ at retail prices.

Taverna La Zavat Cuisine: Greek Address: Popa Nan 16 Reservations: 021 252 2956 www.taverna-lazavat.ro The second best fish restaurant in town.

It is relatively cheap and has a comprehensive range of fish on its menu. The location is a bit of a dump, though this keeps the prices low.

ISSN No. 1453 - 729X

WHAT WE ARE WORKING ON

May 8 19:00 Maria Callas tribute May 11 19:00 Rita May 13 19:00 Evgheni Oneghin

George Enescu Philharmonic May 4 Romanian music chamber concert On the bill: George Enescu May 5 On the bill: Ludwig van Beethoven, Johannes Brahms May 8 Europe Day Concert The National Museum of Art of Romania March 26 - May 29 Rotonda Auditorium Marianne, the Creators’ Muse The exhibition is part of a series of events organized on the occasion of the International Day of the Francophony (March 20) and is included in the Parasela Fashion Festival.

The National Museum of Contemporary Art April 13 – May 17 Chile, Beyond Landscape Projects by: Emilio Marin, Alejandro Aravena, Elemental, Andres Schulz, Juan Antonio Bustos, Gustavo Torres, Cristian Undurraga, Supersudaka, Estudio America, Bebin & Saxton Architects, Veronica Arcos, Lateral.

Romanian Peasant Museum May 4 13.00, 15.00 Workshop for making musical instruments Participation fee: RON 20

May 5 Fujikura Telecom Romania organizes a conference at Crowne Plaza Hotel. By invitation only.

The GS1 Romania Association organizes a meeting of its steering committee at Crowne Plaza Hotel. By invitation only.

18:30 Maastricht School of Management organizes an MBA Master Class at Putul lui Zamfir no.36, 4th floor. This event is free of charge and open to the public, but space is limited. To reserve your place send an email to event@msmro.org.

May 10 19:30 Elite Art Club UNESCO (Jeunesses Musicales Romania) in partnership with the Bucharest National Opera and the Romanian Philharmonic George Enescu hold the Grand Opera Gala at the Bucharest National Opera.

May 11 ∫EVENT Business Review organizes the second British Business Forum at JW Marriott Grand Hotel Bucharest.

For more information about registration and future Business Review events, please visit www.businessreview.ro/events.

May 18-20 The 2011 Romanian Lighting Convention takes place at the JW Marriott Grand Hotel. Guests at this year’s event include architects Paulo Mendes da Rocha, winner of the 2006 Pritzker prize, Gaetano Pesce, and Romanian-born Canadian Dan Sergiu Hanganu. Access is by registration, within available seating.

is working on a report on employee mobility and how firms are striving to adapt their infrastructure to this reality. As companies hire younger and more tech-savvy employees who do not expect to be stuck in the office all the time, IT departments must support a wider array of mobile devices and operating systems, which poses information security challenges. otilia.haraga@business-review.ro

Corina Dumitrescu Journalist is preparing a piece on the local brand packaging market. Romanians’ preferences for certain shapes or colors, international brands’ adaptability to the local market and the growth perspectives of the brand packaging business will all feature. corina.dumitrescu@business-review.ro

Simona Bazavan Journalist is researching a report on British investments in Romania. With UK investments in Romania amounting to EUR 4 billion, British businesspeople are among the most long-standing foreign direct investors in the country. More than 4,000 UK companies are active in Romania. simona.bazavan@business-review.ro

STAY IN TOUCH WITH US Join BR Group on LinkedIn

May 24 ∫EVENT Business Review organizes the third German Business Forum event at the Crowne Plaza Hotel. For more information about registration and future Business Review events, please visit www.businessreview.ro/events.

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FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALISTS Otilia Haraga, Dana Verdes JOURNALISTS Simona Bazavan, Corina Dumitrescu COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

PUBLISHER Anca Ionita EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

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