Business Review No. 1, January 24 - 30

Interview: It’s countdown to Property Fund listing time! Greg Konieczny, executive VP of Franklin Templeton Investment Management Limited Bucharest and portfolio manager of the fund, talks strategy with Business Review »page 11

ROMANIA’S PREMIERE BUSINESS WEEKLY

DISCOUNT SITES AS SHOPPERS TRY TO SAVE MONEY, WEB-SAVVY ENTREPRENEURS HAVE ADOPTED THE SOCIAL BUYING MODEL FROM THE US TO GET THE BARGAIN HUNTERS SPENDING AGAIN »PAGE 12

JANUARY 24-30, 2011 / VOLUME 15, NUMBER 1

NEWS

All change for ten railway stations Romanian Railways is set to overhaul ten train stations with an estimated outlay of EUR 92 million » page 6 TALENT

M O R F G N I G R EME E D A H THE S

The business of child’s play The Bucharest kindergarten scene is a crowded one but Ada Balint is sure about what makes her venture stand out from the rest » pages 8

bble and u b y t r e p o r p ursting of the ning their b e h t g in w o 2010, foll e sharpe 11 After a tough htening, DIY retailers ar til things pick up »page tig un general belt- rategies and hanging on st promotional

LINKS

Digital marketing The rapidly developing online environment is tearing up the rule book of marketing in Romania » page 16 PLUS Photo: Laurentiu Obae

This week’s restaurant review goes back to the bistro » page 20 It’s Flamenco Festival time next month. Olé! » page 21 Oltenia church murals go on display at the Romanian Peasant Museum » page 21

www.business-review.ro Business Review | January 24 - 30, 2011

NEWS 3

NEWS in brief IMAGE of the week

Photo: Laurentiu Obae

PROPERTY & DEVELOPMENT Hranipex buys unit in Catalunya Industrial Park for EUR 1 million The Romanian unit of Czech company Hranipex has acquired a 2,000-sqm surface in Catalunya Industrial Park for EUR 1 million. The transaction was mediated

by The Advisers/Knight. The surface is 80 percent logistics space and 20 percent office space.

The negotiation process for the transaction took around eight months.

Catalunya Industrial Park is located in Bucharest, in the Popesti Leordeni area.

It was developed by Catalan company ETC Inginerie with a EUR 20 million investment. The class A industrial park offers 12 units totaling 15,123 sqm and 129 parking places.

Hranipex manufactures and distributes furniture edges, glues and cleaning solutions for the furniture finishing process. As well as Romania, Hranipex is active in the Czech Republic, Slovakia, Poland, Ukraine, Germany and Hungary.

It has been present locally since 2007.

Wolf Theiss leases 1,200 sqm in Bucharest Corporate Center for another five years The Bucharest office of law firm Wolf Theiss has extended its contract for 1,200 sqm in Bucharest Corporate Center for another five years, The Advisers/Knight Frank, the agency representing the firm, has announced.

The Wolf Theiss Bucharest office has been in the BCC building since taking occupancy in April, 2006. The class A office building was delivered on the local market in 2006, and was bought before its de-

WEEK in numbers

300 million euro – the value of the second tranche approved by the World Bank from the development policy loan totaling EUR 1 billion

1.5 % economic growth predicted for Romania this year by rating agency Coface

10 billion dollars – the predicted worldwide increase in TV advertising revenue in 2011, according to a Deloitte survey on technology, media and telecommunications

livery, in 2005 by the Austrian group Immoeast.

Located in the vicinity of Piata Victoriei, BCC offers over 12,000 sqm, and currently houses companies such as Generali and Petrom.

30 new sports halls by 2016, Ministry of Regional Development promises The Ministry of Regional Development and Tourism will build 30 new sports halls by 2016. There will be three types of sports halls, of 5,000, 10,000 and 15,000 sqm.

The investment in building the gyms will be approximately EUR 320 million.

The project will be developed through the National Investment Agency which is under the authority of the ministry.

This year the program will require EUR 5 million, while next year the investment will amount to EUR 45.4 million. In 2013 and 2014, the investment required is EUR 101 million each year. In 2015 and 2016, the figure will be EUR 65.7 million each year.

The program will be financed from state budget says the bill drafted by the ministry.

Metrorex takes first step towards development of RON 2.26 billion subway line Subway operator Metrorex has announced that it has published the notice of intent for the “Line 5 – Drumul Taberei – Pantelimon. Tronsonul Eroilor – Staţia Piaţa Iancului” project.

The estimated value of the contract for the new subway line reaches RON 2.26 billion, with the sum coming from both the state budget and foreign loan.

The estimated duration of the project is 30 months from the moment the contract is awarded.

Bridging the gap...

Part of the Basarab flyover could be open to traffic in a few weeks. The section crossing the Dambovita River was finished last year. In the next fortnight the elevators and lighting poles are expected to be set up.

Cars will initially only be allowed on the part between Grozavesti and Calea Plevnei.

According to Bucharest mayor Sorin Oprescu, the full construction works are expected to be finished by the end of March. The estimated price of the passage is EUR 173 million.

NEPI plans BSE listing by March Property investment fund New Europe Property Investment (NEPI), the owner of several projects in Romania, has announced plans to list itself on the Bucharest Stock Exchange (BSE) by March, according to Dan Weiler, corporate finance investment banking executive director at BCR, quoted by Mediafax.

The move would make NEPI the first property investment fund listed on the BSE on the REITs segment. The listing is planned to be a technical one, without an IPO. NEPI is also listed on the Johannesburg stock exchange and the London stock exchange’s AIM segment. The listing documentation will be drawn up by Intercapital Invest and BCR.

Valad reports EUR 6 million CEE rental income in 2010 Valad, the European real estate investment manager, has reported nearly EUR 6 million in rental income for the Central European Industrial Fund (CEIF) in CEE, with approximately 120,000 sqm of space let. CEIF is asset managed by Valad and fund managed by Aviva Investors through a joint venture which was established in 2005. It invests in multi-let industrial property across Central Europe with a primary focus on Romania, Poland, Hungary and the Czech Republic. Valad’s CEE team, which manages a total of 630,000 sqm for CEIF, achieved new lettings during 2010 of 38,230 sqm of predominantly warehouse space, generating an annualized rental income of over EUR 2.1 million. In the same period it renewed leases on 81,431 sqm with an annualized rental value of EUR 3.8 million.

Valad manages 630,000 sqm of space in the CEE and has a team of 16 working out of offices in Romania, Hungary, Poland and the Czech Republic.

www.business-review.ro Business Review | January 24 - 30, 2011

4 NEWS

NEWS in brief NDI Group Expert to open five-star hotel in Sinaia NDI Group Expert will open a five-star hotel in Romanian mountain resort Sinaia next week, following a EUR 2.5 million investment.

NDI Group, the investor in Ioana Hotels, the operator of the hotel, says the investment was targeted at covering an unexploited market niche in the area with the largest ski surface in Romania.

The company says the main competition comes from outgoing tourism, while its sales policy is targeted at individual leisure customers and corporate clients. NDI Group made its first tourism investment in 2007 when it bought the Stana Regala Sinaia chalet.

ENERGY General Electric to be supplier for new projects in Romania General Electric (GE) has teamed up with wind parks developer Mansoon Alma for two projects which will bring some 35 MW of wind energy to the national electricity grid.

According to GE information, the firm will supply 10 wind turbines of 2.5 MW each and will provide maintenance for 10 years for the Silistea 1 project belonging to Romconstruct Top, and also four turbines of 2.5 MW and maintenance works for five years for the Mireasa 2 project owned by Eco Wind Power.

Both projects are located approximately 20 kilometers from Fantanele wind farm. Alma Monsson was the original developer of the Fantanele project, which was bought by CEZ Romania, a major Czech utility company.

Bechtel and two consortia in running to build nuclear units 3 and 4 at Cernavoda...

American company Bechtel International and two consortia have submitted letters of intent at EnergoNuclear – which is handling the construction of nuclear units 3 and 4 at Cernavoda, a project estimated at EUR 3.2 billion, excluding VAT – the Economy Ministry has said.

The first consortium is composed of SNC Lavalin Nuclear (Canada), Ansaldo Nuclear (Italy) and Elcomex IEA (Romania) while the second is led by Atomtechnoprom and includes four other companies from the Russian Federation.

The procurement of the contract “engineering, procurement and construction” conducted by EnergoNuclear started on 16 September 2010 and is scheduled to continue until the first half of 2012.

... as RWE, Iberdola and GDF Suez withdraw RWE, Iberdola and GDF Suez have announced they are withdrawing from the project involving the two nuclear reactors at Cernavoda, which is evaluated at EUR 4 billion. Last year CEZ announced it was withdrawing from the project as well.

Companies left in the project at this

point are Nuclearelectrica, Arcelor Mittal Romania and Enel. The two reactors that the Romanian state plans to build on the Cernavoda platform represent the largest investment project in Romania in the past twenty years.

The venture planned for the first reactor to start in 2017, according to its website. The government currently owns 60 percent.

WB, IMF and EC to finance Romania in two-year agreement The World Bank will grant Romania technical assistance and financing as part of a new agreement that will be signed also with the IMF and European Commission, probably for two years, according to Peter Harrold, country manager of the World Bank for Romania.

He added that the new agreement with the World Bank will be similar to the current one, but the last part of the loan in the current agreement, worth EUR 400 million, will be included in the new agreement, which will be signed in several months.

The value of the loan that the World Bank will grant has not yet been established.

“Romania is very well financed on the currency side. The IMF finances the currency reserve which is why only a precautionary agreement is needed,” said Harrold.

RECRUITMENT Vacant jobs up by 25 percent, reports recruitment website The first two weeks of 2011 have registered a 25 percent increase in the number of jobs available on the recruitment website bestjobs.ro, compared to the same period last year.

Currently the site has 11,600 available positions, in all fields of activity. The areas with the most vacant jobs on the site are: sales/commerce (4,172 available jobs), software/technologies (1,629), marketing (919) and engineering (817).

There are also good signs in the banking and client service areas. An increase in demand for staff may come from companies that were forced to make layoffs on account of the crisis.

RETAIL Carrefour Romania sees sales decrease by 0.4 percent in 2010 French retailer Carrefour has reported sales worth EUR 1.13 billion on the local market, down 0.4 percent against 2009, according to the company’s financial report. It is the second consecutive year when the group’s local division has registered a drop in sales. In 2009 the decrease was 4.7 percent.

Carrefour focused last year on developing its supermarket chain, branded as Carrefour Market. The retailer operates 23 hypermarkets in Romania and its 31st supermarket was opened this December in Cluj. Overall the group reported sales worth EUR 101 billion in 2010, about 5.8

percent more than in 2009. Latin America generated the highest boost in sales (31 percent), followed by Asian markets (18.4 percent) while Carrefour’s sales in Europe went down by 1.4 percent.

workplace (30.28 percent), on the move (8.18 percent) or from school/university (6.45 percent) as well as other places such as at friends’ homes and internet cafes.

Auchan Romania increases social capital by EUR 18.6 million

MACRO

Auchan Romania will increase its social capital by RON 80 million (about EUR 18.6 million) following a decision by its shareholders, reports Mediafax newswire. This will bring the company’s total social capital to RON 186.5 million.

The increase will take place by issuing 800 million shares worth RON 0.1 per share. French retailer Auchan operates a local network of seven hypermarkets and has announced plans to open five new units by the end of 2012.

URBB sees sales go up by 7 percent in 2010 URBB (United Romanian Breweries Bereprod) has reported a 7 percent increase in sales volume and a 3 percent turnover increase for 2010 against the previous year.

Overall, the local beer market is estimated to have dropped by 5 percent last year.

Consumption patterns changed in 2010 as consumers opted to drink beer at home and turned to premium and mainstream brands, said Shachar Shaine, the company’s former general manager.

When deciding to buy beer, consumers were mainly influenced by brand loyalty (37 percent) and second by price (17 percent), according to company research.

For 2011, URBB estimates a 10 percent sales volume increase on all three markets where it is present, beer, soft drinks and mineral water. The company plans to invest EUR 4 million this year, mainly in its Bilbor factory, distribution and other operational investments, said Hezy Ovadia, URBB’s new general manager.

ONLINE Most Romanian internet users go online every day Approximately 90 percent of Romanian internet users go online every day, most of them from desktop computers either from home or from work, according to a study by traffic.ro, which collected data between November 15 and December 15.

Many of the Romanians who surf the internet do not have an income (19.10 percent) while only 3.5 percent make more than RON 7,000 a month. Internet users with earnings make between 1,000 and 5,000 lei (15.65 percent), 500-800 lei (12.57 percent) or under 500 lei (11.22 percent). About 11.01 percent of respondents earn between RON 1,501 and RON 2,000 revenues while 10.13 percent take home between RON 801 and RON 1,000.

Two thirds of Romanian internet surfers (68.66 percent) use desktops to navigate on the internet while 48.21 percent access the web from laptops. Only 12.68 percent go on the internet from mobile phones or PDAs (4.07 percent).

Users access the internet from their own home (90.72 percent), from their

World Bank approves second EUR 300 million loan tranche The World Bank has approved the second loan of EUR 300 million as part of its financing agreement of EUR 1 billion.

“This being the second development policy loan and because there have been many discussions so far, the loan for Romania was introduced in the Thursday session in streamline procedure. In this case, the program is approved without any new debates if no director has information,” said Stefan Nanu, representative of the World Bank in Romania.

The second loan from the World Bank was approved for the first part of last year but the measures agreed for approving the financing were not completed, which led to delays in the approval of the loan.

LEGAL Local law firm extends to Republic of Moldova Danila, Petre & Asociatii (DPA) law firm has expanded to the Republic of Moldova and signed a partnership with local law firm Hanganu, Tanase & Asociatii, through which the law firm expects to increase its turnover by ten percent.

DPA is not the first Romanian law firm to open a subsidiary in Moldova. Tuca, Zbarcea & Asociatii and Musat & Asociatii have also done so, partnering Turcan & Turcan and Popa & Asociatii respectively. DPA already advises two clients from the Republic of Moldova and expects ten more by yearend. The partnership consists of the granting of some specific exclusivities between the two firms.

Hanganu, Tanase & Asociatii has six permanent lawyers and three partners.

AUTO Car sales down 19.3 percent, exports up by 21.5 percent Sales of new cars in Romania dropped last year by 19.3 percent from 2009, to 119,417 units. The market declined by 18.3 percent to 106,328 cars, according to data from the Association of Car Producers and Importers (APIA). The volume of sales registered last year is the same as the 2003 level. Some 12,275 commercial units were delivered, 26.4 percent less than in 2009.

Production and exports fared better.

Last year, 350,912 cars were produced in Romania, 18.4 percent more than in 2009. Dacia produced 341,299 units, Ford Romania 9,558 units and Roman Brasov 55 trucks. Exports increased by 21.5 percent in 2010 compared to 2009, with 314,661 delivered units. Dacia exported 305,087, Ford its whole production of 9,558 units and Roman 16 trucks.

www.business-review.ro Business Review | January 24 - 30, 2011

NEWS 5

RATING

3Q Efthimios Papageorgiou

Coface: Romania to crawl back to 2008 GDP per capita in 2013-2014

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Courtesy of Intralot

international operations manager at Intralot, provider of integrated gaming solutions STOCKEXCHANGE

DP per capita will struggle back to its 2008 level in 2013-2014, according to estimations by Coface, the rating agency.

The firm foresees economic growth of 1.5 percent in 2011, compared to 1.9 percent last year, and an inflation rate of 5.2 percent above the target of the central bank. Romania’s economic growth this year will be the lowest in the Central and Eastern European region, predicts the agency.

Agriculture will continue to have a significant impact on the GDP and foreign investors’ appetite for risk will stay low.

Consumers will continue to be cautious, so consumption will not bounce back easily.

Coface kept Romania’s country rating at B in January and estimates the economy will only see slight growth. The main engines of growth will be export and the rise in industrial production.

“We will post an economic growth of 1.5 percent in 2011 only if we do not create problems for ourselves, especially from the political viewpoint. It is impor-

Romania’s economic growth this year is expected to be the lowest in the region tant that political risks do not have a significant role. There is no risk at an international level that will affect our economy that we can blame,” said

Cristian Ionescu, Coface’s country manager for Romania, Bulgaria and Slovakia. ∫ Otilia Haraga

AVIATION

STOCK EXCHANGE

Premium Aerotec starts production at Ghimbav

Romanian Stock Exchange ‘cheapest in CEE’

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STOCKEXCHANGE

Flying high: Premium Aerotec is planning to extend its new production facility

P

remium Aerotec is commencing the manufacture of aircraft components at the Ghimbav factory, in Brasov County.

According to company information, the production unit is being developed on a 60,000-sqm platform. The new plant will specialize in the production and assembly of metal components for all Airbus series programs (A320 family, A330/A340, A380).

Premium Aerotec is planning to extend the new production facility with a second construction phase later this year.

The company will then employ a workforce of up to 500 at its local production

facilities.

The workload of the new plant in Ghimbav comes largely from orders that had previously been assigned to subcontractors in the euro zone.

The Premium Aerotec facilities are in the immediate vicinity of traditional Romanian aviation company IAR Brasov and Eurocopter’s Romanian subsidiary.

Premium Aerotec has more than 6,000 employees and generated revenues of EUR 1.1 billion in 2009. The company has production plants in Augsburg, Bremen, Nordenham and Varel in Germany as well as in Ghimbav. ∫ Dana Verdes

he Romanian Stock Exchange is the cheapest in Central and Eastern Europe ranked by the price of a share and its accounting value, said Mark Mobius, the executive president of Franklin Templeton Emerging Markets.

“Romania has under-performed over the last five years and I think it is the cheapest market in Central and Eastern Europe, if we consider the price-to-book ratio evaluation,” he said, adding that emerging markets have a high growth potential.

“I believe this year emerging markets will grow three times faster than developed markets. The ratio between the debt of emerging states and the GDP is very small,” said Mobius.

While in developed countries the weight of the public debt in the gross domestic product has increased from 68 to 90 percent over the last 10 years, in emerging states it has dropped from 48 percent to slightly over 30 percent, he also said.

“Emerging markets have a great deal to catch up, but this can only mean there is a lot of potential to be developed. Romania is a frontier country and this makes it more attractive for investors,” said Mobius.

He said that many large funds that have invested on emerging markets are interested in investing in the Property Fund. ∫ Otilia Haraga

How much has Intralot invested on the local market and have you reached break-even?

Since 1992, the year the company signed a contract to supply equipment and software to Loteria Romana (LR, the stateowned lottery company), we have invested about EUR 150 million for software, infrastructure and service in Romania. We have not yet recovered the investment and we'll see, depending on the LR’s revenues over the coming years, if we recover it by the end of the contract, in 2013. Intralot renewed its contract with the LR in 2000, and it runs until 2013.

What are your results in Romania?

Since 2008, the local business has fallen slightly because of the crisis, and the decline has continued this year as well. Loteria Romana’s revenues are falling, and to return to growth it needs to expand its network of agencies and to promote new products. Sales of lottery tickets, although they are popular among Romanians, are in decline. In order to support the network expansion of lotto agencies, Intralot has opened 30 such units in franchise in major cities this year, with an average investment of EUR 15,000 per shop. It was a pilot project, meant to teach our partner how to operate such an agency, but the performance was not satisfactory. Therefore, we have started to close some of these units and furthermore – as the LR isn’t paying attention to our initiative – I think we will drop it soon.

After the contract with Loteria Romana expires, is Intralot still considering entering the Romanian market?

It is premature to say what the company's strategy will be in 2013. We will explore all possibilities. We will see what the regulatory framework is at that time and after this analysis we will make a decision. In this area, the business strategy depends on market regulations and control at the time. The contract signed between Intralot and Loteria Romana prohibits us to provide solutions both to other players on the Romanian market, as well as to directly enter as an operator in Romania. The Intralot business in Romania generates some 10 percent of the group's global turnover, which amounted to over EUR 900 million in 2009. dana.verdes@business-review.ro

6 NEWS

www.business-review.ro Business Review | January 24 - 30, 2011

AIR TRANSPORT

RAIL TRANSPORT

Qatar Airways flies into local market

Romanian Railways to modernize 10 train stations

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ADOPTIONS

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he European Parliament in Strasbourg has debated the issue of international adoptions, an initiative of 62 euro-parliamentarians.

Although the debate covered international adoptions in all 27 member states, Romania was mentioned frequently, as participants addressed the criticism regarding the country’s ban on international adoptions.

The EP will vote on five resolutions on this topic, most of which propose the resumption of international adoptions by states where they have been banned or temporarily stopped.

Romania blocked international adoptions in 2004 under pressure from the European Union, which noted a number of abuses.

Countries such as Hungary, Bulgaria, the Czech Republic and the Baltic countries allow such adoptions. ∫ Otilia Haraga

On track: ten railway stations are set to be modernized will be evaluated from March 24.

The fourth public bidding relates to the modernization of Pitesti train station (EUR 14 million). Offers will be studied from March 17.

The modernization works are being financed from non-reimbursable funds

from the European Commission (69.25 percent) and the state budget (30.75 percent). In deciding the winning contractors, the price will make up 80 percent of the determining factor weight and the technical details the other 20 percent. ∫ Otilia Haraga

CONSUMPTION

2010, the most pessimistic year of the last decade for Romanians, GFK

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a s t year has been pronounced the most pessimistic the country has endured in the last decade, with an annual optimism index of -54, according to the Consumer Confidence Barometer, developed by GFK Romania for the European Commission. However, December added a bit more cheer to Romanians’ outlook, in spite of the year’s general trend. More than two thirds of Romanians stated that their family’s financial situation had worsened in the last twelve months, with only six percent seeing it as better. Over half of Romanians believe that their financial perspectives will worsen, 20 percent more than in December 2009.

Moreover, 87 percent of respondents reckon that the general state of the economy has worsened since 2009. Only 1.5 percent of Romanians think the situation showed any signs of improvement in

Laurentiu Obae

EP debates international adoption again

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omanian Railways will modernize 10 train stations, the body has announced, in Giurgiu, Slobozia, Calarasi, Sfantu Gheorghe, Targu Mures, Botosani, Vaslui, Piatra Neamt, Braila and Pitesti.

The total value of the modernization projects will be approximately EUR 92,43 million, not including VAT. Four public auctions will be held to select a contractor for the works.

The first stage includes the stations Giurgiu (EUR 3.4 million), Slobozia Veche (EUR 6.9 million) and Calarasi Sud (EUR 6.2 million). The evaluation of the submitted offers will start on March 21.

The second stage involves the modernization of stations Sfantu Gheorghe (EUR 9.8 million) and Targu Mures (EUR 10.6 million). Offers will be evaluated from March 15.

The third auction pertains to the modernization of train stations in Botosani (EUR 4.6 million), Vaslui (EUR 6.7 million), Piatra Neamt (EUR 5.9 million) and Braila (nearly EUR 9.9 million). Offers

Laurentiu Obae

art of its 2011 expansion strategy in Europe, Qatar Airways has launched a Doha-Bucharest flight via Budapest.

The Qatari airline will operate four weekly flights on this route with an Airbus A320 aircraft.

“We have dedicated a lot of time to analyzing new routes and new business opportunities and I am extremely pleased to be able to say that the decision to enter this region of Europe was an excellent one,” said Akbar Al Baker, the company’s CEO. International passenger traffic from Asia and the Middle East is constantly growing, creating new connections such as Bucharest via the network hub in Doha and facilitating growth for Qatar Airways and for travel in and out of Romania to these regions, Al Baker added.

Bucharest becomes the airline’s 96th route and the first new destination of 2011.

Qatar Airways is the only Gulf carrier and five star-ranked airline flying to Romania, according to the company, with the airline’s four weekly non-stop services continuing on to Budapest in neighboring Hungary, the carrier’s 97th network point.

The airline operates flights to 22 European destinations and three new destinations will be added this year, the other two being Brussels (January 31), and Stuttgart (March 6).

The route is operated with an Airbus A320 in a two-class configuration, featuring 12 seats in Business Class and up to 132 seats in Economy. ∫ Simona Bazavan

Feeling blue? Romanians were downcast

2010, while hopes for 2011 are not too high either, with only 8 percent voicing optimism.

Inflation was also causing concern, with 72 percent of respondents expecting price increases in 2011. The outlook is slightly brighter in the area of unemployment, with statistics in December 2009 and 2010 almost identical at around 80 percent pessimists, compared to higher figures registered in November and January 2010, of around 85 percent.

Times of crisis have not made Romanians thriftier, however, as 80 percent of respondents say this not a good time for saving, while over 26 percent of Romanians report that they are in debt, the highest percentage in seven years. Only 12 percent are managing to put away any pennies for a rainy day.

The study was carried out by GFK Romania on a sample of 1,000 Romanians, aged over 15, and was cofinanced by the European Commission. ∫ Dana Verdes

STOCK EXCHANGE

Rightful owners of FP shares get tax exemption for BSE trading

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omanians who are the rightful owners of Property Fund shares will not be taxed on the profit if they decide to sell them on the stock exchange after the fund’s listing, said Dana Mirela Ionescu, GM and president of brokerage firm Raiffeisen Capital & Investment, the company in charge of the list-

ing. However, investors who bought the fund’s shares on the “gray” market will pay a tax on the difference between the buying price and the sales price, said Ionescu.

Should an investor have lost their sale documents, the transaction will be taxed at full value, as the purchase price

will be considered zero by default.

Stock market incomes are taxed at 16 percent regardless of how long the shares have been held. The fund’s listing on the Bucharest Stock Exchange is set for January 25. It will be listed directly, without an initial public offer. ∫ Dana Verdes

www.business-review.ro Business Review | January 24 - 30, 2011

8 TALENT

A business that is child’s play Ada Balint is running a business on a very crowded market, but she believes that what differentiates her from the crowd will also be the key to the success of her company. ∫ ANCA IONESCU

WHO’S NEWS

Nicoleta Chiru

has been appointed GM of Velux Romania. Prior to joining the team, Tudor worked for Rehau Romania as national director of the furniture sales division. Over the years he has also worked for Westen Termo, Baxi Romania, Qbis Romania and Marcom.

has been appointed audit manager by Mazars Romania. She is a graduate of the Bucharest Academy of Economic Studies, the Faculty of Accounting and Management Information Systems.

Chiru is also a graduate and affiliate member of the Association of Chartered Certified Accountants (ACCA). She has been working as an auditor of Mazars Romania for more than six years.

has been appointed partner to lead the Bucharest disputes practice of White & Case LLP. With over 15 years of experience as a litigation lawyer, she is specialized in civil and commercial litigation. Neagu received her LLB from the Bucharest Law School and graduated Magna Cum Laude from the Bucharest Academy of Economics, with a diploma in Planning & Cybernetics. She has been a member of the Bucharest Bar Association since 1995.

Established: 2007 Number of employees: 12 Initial investment: EUR 50,000 Number of children / teacher: up to 8

Ada Balint about improving our services rather than the past. The rest is history,” she adds.

According to her, the biggest challenge for her business is to transform every ordinary day into a memorable one for the kids in her kindergarten. “In addition, we offer psycho-educational consultancy services both at individual and group level,” she adds. The local kindergarten market is pretty crowded at the moment: there are about 160 stated-owned kindergartens and another 150 private ones in Bucharest alone.

“A about 40,000 children frequent state-owned infant schools while only 4,000 are registered at private ones.

Therefore, the competition is very high.

The figures speak for themselves,” says the young entrepreneur.

She believes that education through experience – which means that a child is

directly involved in a serious game – is what differentiates Micul Print kindergarten from the crowd. And this seems to be more and more important as the majority of infant schools differentiate through proximity, monthly fees, number of children in a group, facilities, food, hygiene, medical supervisory, educational package and additional activities organized for the children, plus the expertise of the personnel involved in the teaching process.

In addition, the teaching activity at Micul Print takes place exclusively in English, with native speakers being involved in this process. “Plus, we offer an interesting range of activities, from sport, to arts and manners. We try to bring talented people in front of the kids, with Maria Radu as the music teacher being an example,” she adds. As a result, the children of Micul Print kindergarten have won several creativity awards in national competitions.

As for the future, Balint intends to remain coherent in her business approach and to adjust her strategy to the current economic conditions.

editorial@business-review.ro

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

Razvan Tudor

Paraschiva Suica-Neagu

COMPANY PROFILE Micul Print kindergarten

Laurentiu Obae

Ada Balint, the owner and general manager of Micul Print kindergarten, put her fingers into many pies before alighting on her current line of work. She started to work when she was 19 and studying at the Psychology and Education Sciences Faculty in Cluj.

Her first job was as a journalist for Stirea (The News), a local daily paper specialized in cultural issues. Then she decided to work for Transilvania Jurnal, a regional daily paper. This, she says, was where she accumulated most of her current experience both on a professional and personal level.

But after that she decided that variety might be the key to her professional success, so she worked for an advertising agency, a recording studio, a restaurant, a club and a private kindergarten.

“I felt the need to pass through all of these,,” remembers Balint, who decided to set up her own business, Micul Print kindergarten, back in 2007. “I started this business with my soul,” she adds. The entrepreneur believes that both those who work in the private and public sector are involved in business processes. “This involvement is at different levels and scope,”

adds the general manager.

The idea to establish her own kindergarten was in her mind long before she started her business, with the trigger coming in the spring of 2007 when a radio station announced a competition for kids to look for Micul Print (the little prince). “That was the crucial moment when I decided to set up the kindergarten Micul Print,” she says. And it seems that she was driven by a strong motivation as she decided to start working on the location of the kindergarten in June 2007.

Its official launch took place a few months later, in September.

She decided to go into this business because of her experience. “It is something that I know how to do, I can do and I love to do. I don’t believe in businesses built in fields where you don’t have experience. You have to know exactly what you expect from yourself and from those involved in a specific project in order to be able to ask the maximum from them and to remain coherent,” says Balint.

As for the most difficult moments her business has faced, the entrepreneur says there have been plenty and she is pretty sure there will be plenty more in the future. But any problem simply vanishes when she has the satisfaction of a job done well.

“Each difficulty has its own solution when you see a smile on the face of a child or when you notice he or she is happy,” says the businesswoman. Balint has no regrets about the business decisions she has made. “I regret only those decisions I needed to postpone for different reasons,” she says.

Her approach is forward-thinking, with little time for dwelling on the past, as what’s done is done. “I want to think

Stephan Kuhnel has been appointed audit manager by Mazars Romania. He is a graduate of the Business School and holder of a PhD awarded by the University of St. Gallen (Switzerland). Kuhnel is also a member of the Information Systems Audit and Control Association, Internal Auditors’ Institute of Germany, American Accounting Association & Strategic Management Association and

the IFRS Task Force of Mazars. Before joining the firm he worked for Haarmann Hemmelrath in Munich and participated in some projects by St. Gallen University, PwC, KPMG and EY.

Dan Badin has joined Deloitte Romania and will coordinate the direct tax and transfer pricing consultancy team as partner. He started his consultancy career at Deloitte Romania in 2001-2002, and continued at PwC Romania to director level (2002-2010), where he became fiscal consultant for financial institutions.

Luminita Dima associate manager and head of the employment practice of NNDKP, has been promoted to the position of remunerated partner. She has thirteen years of experience in the field of employment law. She joined the team in

2007. Dima graduated from the University of Bucharest Law School and holds an LL.M. in Business and International Cooperation Law. A member of the Bucharest Bar, she also holds a Ph.D. in employment law and is a lecturer at the University of Bucharest Law School.

Radu Damaschin senior associate in the dispute resolution department of NNDKP, has been promoted to the position of remunerated partner.

Damaschin’s expertise covers a wide range of dispute resolution matters.

Damaschin joined NNDKP in 2003. He graduated from the University of Bucharest Law School and has a postgraduate degree in private law from the same university. He also holds a Master’s degree in business law from the Nicolae Titulescu Law School in Bucharest.

Damaschin is a member of the Bucharest Bar.

www.business-review.ro Business Review | January 24 - 30, 2011

9 M&A market reconfirmed Popovici Ni\u & Asocia\ii as the leading transactional law firm

Florian Nitu, Managing Partner Popovici Nitu & Asociatii

What is your firmʼs development strategy for this year?

We will continue the implementation of our private investor orientated sustainable development program, which in spite of the difficult past years, has not suffered major changes.

For 2011 we are keen to maintain our position as the leading transactional law firm in Romania and a first option for the foreign investors in our country and will expand and consolidate our energy, tax, competition and arbitration practice groups.

On the financial end, it may be that fee compression drivers will still be active, but as we managed in the past years, we are confident that we may fill the gap by adding more projects.

How has your client portfolio changed lately? (due to the crisis, current investment opportunities) It is quite inevitable to be confronted with changes during a market turmoil, but level and nature were still positive. We are happy not only that we have maintained all our strategic and traditional clients, but that there are numerous new clients that sought our advise and representation, on areas like healthcare, energy, tax, arbitration and litigation. In addition, after the launch of our tax advisory firm – Popovici Nitu & Asociatii TAX SRL - we have succeeded to extend significantly the cooperation with our existing clients. Of course, we have continued to be involved in M&A transactions and, in spite of the low number of local deals, we have advised more than 20 successfully concluded transactions and another 15-20 joint ventures and real estate acquisitions.

industry investigations conducted by the Competition Council and when we have represented clients in numerous high profile litigation and arbitration files, in Romania and abroad. On the M&A side, we have assisted a French group on the acquisition of 5 wind farms, Immofinanz in a string of acquisitions, including the acquisition of the 100% equity of the companies owning Polus Constanta Mall, Euromall Galati and West Gate Craiova Mall, Innova Capital in connection with the acquisition, through GTS Telecom, of Datek Telecom, Auchan Romania on the acquisition of various real estate properties, and MedLife on the acquisition of 80% of the share capital of Policlinca de Diagnostic Rapid in Brasov, just to name a few.

Which areas are seen as being the ones that will demand legal consultancy the most this year? (example gaming etc) Probably 2011 will continue the trends seen in 2010, with a significant demand of work coming from the energy, healthcare, litigation and tax fields. In addition, it is expected that the State will start infrastructure projects, which will certainly require highly skilled legal advice.

What were last yearʼs major projects for your firm?

We have been involved in various projects and industries, but our main satisfaction is that 2010 was another year when we have advised the biggest number of M&A transactions, when we have been present in almost all the important How have fees for legal services

evolved last year and what is the outlook for 2011?

We have achieved a significant growth rate, also reflected by the turnover, driven by a higher number of new projects, and not by an increase in the fee level. At the end of the day, we are absolutely confident that fees for the known legal solutions shall always go down and only innovation and the cutting edge knowledge will get an extra pay. We are investing in both directions, getting efficiency with the known and bringing in the best talents and resources for the innovation.

How do you see the legal market? Is there room for new players? Do you thing that other law firms will dissolve or merge as in the case of Garrigues?

I still believe that the current market mix of the local and international law firms it is set to survive for long. Save for extraordinary events, I see a couple of local firms dominating the market within the next couple of years. There is always room for new players, particularly in a competitive market. I think that the Garrigues case is not illustrative, as it is a typical example of what may happen with niche practices in general, particularly when the practice is driven by the client language or origin.

The leading transactional law firm in Romania During 2010 we have reconfirmed our established position as the leading transactional law firm, advising the largest number of successfully concluded M&A deals in Romania, according to ISI DealWatch.

In 2010 Popovici Niţu & Asociaţii was involved in more than 20 successful deals, with a value of USD 170 m, in various industries such as Healthcare, Energy, Telecom and Real Estate.

Focusing traditionally to the private sector and to foreign investment projects, Popovici Niţu & Asociaţii is acknowledged by the vast majority of observers and peers as “the transactional law firm” among the market leaders. The Firm was also recognized in the past years for its transactional legal work by Ziarul Financiar and by international legal di-

rectories such as Chambers & Partners, Legal 500 or IFLR 1000. According to Legal 500 EMEA 2010 edition, “clients praise the “commercial and pragmatic approach” of the Popovici Niţu & Asociaţii team, which is known for its strength in transactional work” and also “clients are impressed with rapid feedback on all queries, balanced view on risks and very good quality reporting and transaction documents”.

Popovici Niţu & Asociaţii is one of the key players on the legal services market, acting primarily in private transactions where it generally represents the interests of international corporations.

Popovici Niţu & Asociaţii and Popovici Niţu & Asociaţii Tax SRL group 75 lawyers and tax advisers.

ADVERTORIAL

www.business-review.ro Business Review | January 24 - 30, 2011

10 INTERVIEW

Property Fund ad takes on state as l Romgaz’s “donation” of RON 400 million to prop up a weak state budget to the detriment of the company’s shareholders (including the Property Fund), the opportunity – or lack of it – on the issue of the two national energy champions and the international road show to promote the fund to international investors all rank high on the to-do list of Greg Konieczny, executive VP of Franklin Templeton Investment Management Limited Bucharest and portfolio manager of the Property Fund for this year. He told Business Review that the first major hurdle is the fund’s listing on the Bucharest Stock Exchange on January 25, while an ongoing challenge is to increase the value of the companies in the fund’s portfolio, which has a significant exposure to the energy sector where the state holds a majority.

After years of uncertainty, the longawaited listing of the Property Fund on the Bucharest Stock Exchange is due to take place on January 25. The fund’s administrator – Franklin Templeton Investment Management Limited Bucharest – said through its executive president that recent experience in Eastern Europe indicates that initial public offerings (IPO) are a viable option.

The total value of Eastern Europe IPOs reached EUR 5 billion last year, while the whole of Europe generated EUR 26 billion. In Eastern Europe about EUR 1 billion was attracted by utilities companies alone.

The listing of the Property Fund is major news, and with each day the adrenaline is rising among investors. Transactions involving shares in the fund have exploded over the last year, with about 30 percent of the stock changing ownership.

According to media reports, the estimated value of transactions – based on average prices in the market – reached about RON 2 billion (over EUR 460 million), representing 35 percent of total turnover in shares on the local stock exchange.Foreign investment funds, SIFs, speculators and well known politicians appear on the list of investors who have bought Property Fund shares worth tens of millions of euro between 2008 and now, dreaming of a selling price as much as five times greater than they paid.

Over the past three years, the fund securities have changed hands for between a minimum of RON 0.1 (December 2008) and maximum of RON 0.6 (September 2010), so if the price climbs after the listing to more than RON 0.6, most buyers will make a decent profit.

And investors are starting to smell the money, with brokerage houses seeing a 30 percent hike in value compared with the share’s price in September last year. For instance, Tradeville evaluates a Property Fund share at RON 0.8, following a comparative analysis of similar interna-

tional funds. According to the same source, the fund’s shares traded at RON 0.5 at the end of last year.

The Property Fund’s listing is expected to have a positive impact on the Bucharest Stock Exchange’s operations.

The fund will be the second largest issuer on the stock market in terms of market capitalization after OMV Petrom (SNP), but with a significantly higher free-float of EUR 2.1 billion compared with EUR 0.4 billion for the SNP. The fund’s listing is expected to double the volume of trading on the local stock exchange and will set new quality standards for asset administration.

On the next page, Greg Konieczny, executive VP of Franklin Templeton Investment Management Limited Bucharest and portfolio manager of the Property Fund, tells Business Review about the administrator’s strategy for the fund.

COMPANY PROFILE Property Fund 2010 Profit RON 456.3 million (EUR 108 million) Portfolio The fund includes participations in 83 companies (28 listed on the Bucharest Stock Exchange and 55 unlisted). Its portfolio is 80 percent focused on energy companies State stake The state’s stake fell below 39 percent on December 25, 2010, with private and institutional investors controlling 42 percent and 19 percent share packages Actives The actives’ net value reaches RON 15.3 billion (EUR 3.57 billion), equivalent to RON 1.11 (EUR 0.26) per share Dividends The fund paid dividends of RON 0.0816 per share for 2008 and 2009

www.business-review.ro Business Review | January 24 - 30, 2011

INTERVIEW 11

administrator s listing nears What measures can and will you take in order to change the portfolio’s structure?

clude all interested parties in the discussions.

What are your main concerns regarding Romgaz’s situation?*

Although the portfolio has some of the largest energy companies in Romania, there is still work to be done to increase its overall value for our shareholders, which is one of our primary objectives.

We are analyzing companies one by one and we will share with the shareholders our proposals regarding the portfolio as we have more information to provide.

The portfolio includes over 80 companies and there is significant exposure to the energy sector.

Based on the results of the analysis of portfolio companies, we will determine what investments are most advantageous to our shareholders, irrespective of the sector.

Regarding Romgaz, from the outset, we signaled the government’s inherent conflict of interest in this matter. As majority shareholder the state has voted in favor of a donation to itself and we feel this is truly unacceptable. We believe that the Romgaz issue can be easily resolved and have offered a solution to the government on many occasions. We recognize that the government is in financial trouble and that the deficit needs to be contained, but we have recommended a special dividend from the profit of Romgaz distributed fairly to all shareholders.

The state gets its part as majority shareholder, but the same must happen with the Property Fund, which owns 15 percent of the shares. We really want the Are the companies in the portfolio ungovernment to understand that beyond dervalued? hurting the shareholders of the fund, the We have applied the new National Secu- “donation” can be seen as a dangerous rities Commission (CNVM) regulations reprecedent and will only add to the congarding the calculation of the Net Asset cerns of international investors regarding Value according to international stanthe Romanian business environment. dards, which has been widely adopted in The state might win some short-term both developed and emerging markets. benefit today from going forward with Going forward, our focus will be the this donation, but it will lose much more long-term capital appreciation of our money in the future. A country where the portfolio. government has the authority to impose such arbitrary decisions and ignore miWhat problems have you encountered nority shareholders does not look like an with the portfolio companies? attractive market to international investors.

In most of the companies we have in the If this happens to Romgaz now, who fund portfolio, we only have minority stakes. can guarantee it won’t happen to other What we do is provide active firms in the future? We hope the govmanagement of the portfolio, including ernment understands our position, which taking part in the management of the is ultimately in its long-term interest as companies in the portfolio where possiwell. They are our partners in many comble. panies in the fund, so we want to collabAfter all, we have representatives on orate and have a real dialogue. the boards of some of the portfolio companies and we try to make our views How many lawsuits have you already known, especially as regards improving set in motion and who bears the financial corporate governance and efficiency. We costs? know there are valuable firms in our As far as lawsuits are concerned, it is true portfolio but I am sure there is room for we have had to start legal action where we improvement, and we are willing to offer thought it was in the best interests of our our advice and expertise to bring about shareholders, but decisions to sue are such improvements. weighed up very carefully. We believe it is our role to protect our shareholders’ inWhat are your alternative solutions for terests through any means we consider necessary. the two national energy champions sce-

nario?

With the energy champions, we are asking for a more thorough analysis with regard to their viability and profitability. We think such projects should not be done hastily as they may impact the broader energy industry.

There needs to be more consideration for what this impact might actually be. Of course, our main concern is the possibility that our shareholders might be disadvantaged from the planned mergers.

We want to ensure fair treatment for our shareholders, which is why we recommended to the government that it give more thought to this matter and in-

Who is interested in investing in shares in the fund?

We are involved in an international road show to promote the fund to international investors, which started January 13, so it is premature to assess how much interest there will be in the shares. In general, we’re seeing significant interest in emerging markets such as Romania.

What is the status of the Bucharest Stock Exchange listing of the fund’s shares?

We filed the prospectus with the CNVM on 3 December and on 16 December the

What is your response to the former Hidroelectrica’s GM’s accusations of “amateurism” on your part?

We are pleased to have initiated this discussion, which was our aim in the first place.

We need to engage with the management of the companies and with the government about making these firms more efficient, and as such increasing their value to everyone’s advantage. They can definitely become more efficient with improved standards of corporate governance.

The discussion has started and we are keen to continue raising these issues.

After all, we only want to help with the advice we give and the case of Hidroelectrica is no exception. *After the interview was conducted, Franklin Templeton Investment Management officials reported that RON 400 million had been transferred to the state budget in the form of a “donation” from Romgaz. The Property Fund announced though a press release that it would use all legal means to recover the sum by annulling the Romgaz GSM’s decision of November 30, 2010 which approved this donation. Additionally, the fund has called

Courtesy of Property Fund

∫ DANA VERDES

CNVM approved the prospectus which opens the door for trading on the Bucharest Stock Exchange. In January we will be holding an international road show in major European financial centers to promote the fund to foreign institutional investors. The listing on the Bucharest Stock Exchange will be done on January 25.

CV Grzegorz Konieczny 1995 Joins Franklin Templeton, with responsibilities for CEE excluding Russia -1995 Director of Capital Markets transactions with Bank Gdanski in Poland 1994 Obtains Investment Advisor license from the Polish Securities and Exchange Commission. He holds an MA in Economics and Foreign Trade from the University of Gdansk for a GSM on January 17, to bar all administration council members who voted in favor of the donation and to initiate legal action against them.

For the entire interview please visit business-review.ro/interviews

www.business-review.ro Business Review | January 24 - 30, 2011

12 LINKS

STOCKEXCHANGE

Best buys: consumers’ desire for value in these tough economic times is powering the growth of collective discounts

Cash-strapped shoppers get social buying The low purchasing power brought about by the recession has seen a new online business model emerge, that of social buying. Although such discounts seem well suited to the local market, the model was not born here, but was imported from abroad. Within just one year, a plethora of websites showcasing collective discounts have popped up and pundits expect the value of this market to reach several million EUR this year. Further new sites are on their way. In order to survive fierce competition, some are now starting to carve a niche for themselves. ∫ OTILIA HARAGA How do collective discounts work? The idea behind them is simple. The social buying website works with companies that put forward offers at very significant discounts, sometimes as much as 90 percent. The key is that the respective product must be purchased by up to 10 or 20 people; hence the term social or collective buying. If the required number of buyers is met, then the offer becomes active. If not, the customer keeps the money on their card and does not get the product.

Products on offer come from a wide range of areas – beauty services such as spa and massage sessions, meals at restaurants, cosmetic treatments, training, travel and beyond.

“Social buying is the latest trend in consumer behavior as seen in countless examples in the USA and Europe,” Alina Otelea, sales manager at Golden Deals Romania, tells Business Review. “We believe this industry is a multi-million euro industry in Romania as it allows consumers to discover both online and offline merchants and as such it brings onto the internet a lot of the commerce that is taking place offline.”

But how many such competing sites are there on the local market? According to Cem Tunakan, CEO of Groupon Romania, there is already an impressive number, between 18 and 29, some of which are in the process of being launched. This makes Romania an “educated market” which is already familiar with this concept, he says. “Last year was a test for everybody. The total market in Romania will reach several million EUR in 2011,” Calin Fusu, CEO of Neogen, tells BR. At the moment, the Romanian user is still learning about this type of promotion.

“We expect it will still take some time un-

SITE PROFILES Groupon.ro Launched in Romania by Groupon company of the United States in December 2010.

Currently has deals only in Bucharest but will open up in big Romanian cities such as Timisoara, Cluj, Iasi and Constanta.

17 employees.

Zumzi.ro Opened by Neogen approximately one year ago.

Operates in Bucharest and Sophia but will expand to Timisoara, Iasi, Constanta as well as Chisinau and Belgrade.

6 employees.

GoldenDeals.ro Opened in October, 2010, by XE, which is owned by private equity group Global Finance.

Currently focuses on Bucharest.

More than 25 employees.

DealFever.ro Launched in January 2011 by Adulmec, an independent Romanian-American company.

Currently focuses on Bucharest.

20 employees at Adulmec.

www.business-review.ro Business Review | January 24 - 30, 2011

til the market stabilizes. This will also be influenced by the selection of trustworthy projects on the market as well as the growing awareness of Romanian business owners of the new promotion opportunity,” says Cristina Cojanu, sales and marketing manager of Adulmec online company.

As collective buying is only just establishing itself as a business model in Romania, it is difficult to pinpoint an exact value for the market.

“If we estimate a maximum of 1 million users (who subscribed via the 18-29 competitors – because some subscribe on more websites) and each user spends at least EUR 1 using Groupon or other websites, we can predict the Romanian market to have a total value of around EUR 1 million by the end of 2011,” says Tunakan.

Groupon was the company that launched this business model in the USA. The industry grew from a website called “the Point” launched in November 2007,

by Andrew Mason. At the beginning, the site was created to bring together people with the same interests and help them solve problems and obtain major deals as part of a group. By the next year, due to the public’s interest in this collective buying system, Groupon was launched in Chicago and it took only a few months for the business model to expand internationally. It seems that it is not only Romanians who like a bargain!

The timing when this business model caught on is also important – right after the onset of the credit crunch in the USA. “This business model was launched at the end of 2008 and implemented during the crisis. I believe it was the right business system launched at the right moment,” says Tunakan. This is because consumer behavior changed after the crisis, with people becoming more careful with their money.

“They still needed to dress themselves, to eat, to entertain themselves with their families and friends,” but collective buying websites gave them the option to do so at discounts of 75- 90 percent. Groupon was launched in Romania at the end of last year and now has 17 employees.

“Although it is difficult to estimate the company turnover for 2011, because sales volume depends on subscribers, we are certain to sign up around 800,000 subscribers by the end of 2011. Therefore, if our expectations regarding the number of the subscribers prove true and if each one spends around 70 eurocents, we can estimate Groupon Romania will have a turnover of EUR 560,000 by the end of this year,” say company officials. So far Groupon offers deals only in Bucharest but plans to expand its operations to the biggest Romanian cities such as Timisoara, Cluj, Iasi and Constanta.

It is also working on hundreds of partnerships that will bear fruit over the following months. The deals that have been most successful for Groupon were those that had the biggest discounts – between 83 and 90 percent. Big sellers were trips and beauty services.

In fact, beauty services have become favorites with most clients of such websites.

GoldenDeals.ro, which was launched in October 2010, describes its most profitable sales as those targeting women, such as sessions at the spa or beauty salons. These are followed by entertain-

LINKS 13 ment deals such as laser tag or billiards.

The firm also advertises restaurants, health services, and educational offers.

GoldenDeals.ro was founded by XE, which runs businesses in the areas of online classifieds and e-commerce. XE is owned by Global Finance, a leading private equity group in SE Europe, with investments in companies like Total Soft, Call Point and ICAP. So far, the team at GoldenDeals consists of more than 25 employees. In its first two months of operations, the company sold over 12.000 vouchers.

“For the time being, our main focus is Bucharest. However, we have had offers for all the cities in which the vendor had locations and for products available on order from anywhere in the country,” she says.

The oldest collective buying website on the market is Zumzi, opened by Neogen approximately one year ago. The site now has six employees and has expanded its operations outside Romanian

was launched at the beginning of this borders: it is active not only in Bucharest but also in Sofia, the Bulgarian capital, month by Adulmec SRL, an independent Romanian-American company active on where it goes under the name the online market since 2009. www.dalavera.bg. Neogen will launch “Starting up this kind of website in such similar websites in Chisinau in the a short time was only possible because Moldovan Republic and in Belgrade, Serthe company structure was already funcbia, as well as in Timisoara, Iasi and Contional and the teams already operational,” stanta in Romania. said the company. The Adulmec team “There are already nearly 100,000 peocurrently numbers 20 people and is exple who receive our offers and the partpanding. nership with Neogen/Bestjobs gives us acWhen entering a market where there cess to another 1 million potential clients. is already fierce competition, the need to Each offer registers several hundred purcarve a niche or settle on a certain segchases and we have more than 5,000 orment becomes very important. When ders a month,” says Fusu. However, Fusu DealFever.ro began life this month, it does not attribute this success to the restarted on a niche that appeals to women. cession alone but also to the fact that this is a business that is mutually beneficial for “Because we launched so recently, we are still diversifying our deal portfolio both clients and suppliers.

“The discount offers are very varied, while conserving the niche direction.

This way, we will be able to understand from restaurants and spas to unique experiences such as sky diving,” said Fusu. which deals are the most interesting to our audience,” said Cojanu.

However, fitness and food products sell best with Zumzi.

Elsewhere, the DealFever.ro website otilia.haraga@business-review.ro

www.business-review.ro Business Review | January 24 - 30, 2011

14 RETAIL

DIY RETAILERS Some 15 DIY stores were opened throughout Romania last year. Here is the lowdown on the existing retailers.

Dedeman Local network: 21 units out of which 5 were opened in 2010 2010 estimated turnover: EUR 290 million bauMax Local network: 13 units, 4 of which were opened last year International network: 148 units in 9 countries.

Turnover: WND OBI Local network: 7 units, 3 of which were opened last year International network: over 500 stores in Europe and Russia Turnover: WND Praktiker Local network: 27 units out of which only 1 opened in 2010 International network: around 440 stores in ten European countries Turnover: first nine months: EUR 153.6 million STOCKEXCHANGE

Painting a bleak picture: DIY retailers have felt the full force of the collapse of the construction industry

DIY retailers fight hammer and tongs After a tough 2009, 2010 also proved to be as hard as nails for local DIY (do-it-yourself) retailers. Gone are the times when ambitious expansion plans were being announced and the market still seemed large enough for any newcomer. Like elsewhere in the retail sector, companies have tooled themselves with discounts and promotions in order to survive while hoping that the worst of the crisis is over. ∫ SIMONA BAZAVAN The local DIY market had been growing by as much as 30 percent year on year prior to the crisis. Come the recession, the situation changed considerably. Construction and real estate froze and even small-scale home improvement projects were postponed. In 2009 the market was worth an estimated EUR 2 billion, but had plummeted by approximately 25 percent against the previous year. 2010 wasn’t any better, local retailers say, with the drop being estimated at around 15 percent.

Hopes of an early economic recovery have turned out to be in vain, following the government’s austerity measures.

“November and December especially proved that the economic measures taken a few months earlier have combined with other factors to have a negative

impact on consumption in general. This will surely go on until later this year,” representatives of Obi Romania told BR. In their opinion the recovery of the local DIY market is not likely to take place earlier than 2012.

While a few years ago they boasted ambitious expansion plans, most of the local players have scaled down what in the light of recent economic developments have become extravagant targets.

Nevertheless, 15 new stores were opened countrywide in 2010, four more than the previous year, totaling an investment of over EUR 200 million.

Increasing competition and a shrinking market forced local retailers to reconsider their strategies. “The context has changed significantly. The market’s potential reduced and the competition has strongly increased. New players have entered the market while others ex-

panded significantly. Thus, reconsidering prices, services and product assortments gains a different importance,” Laszlo Florian, sales director at bauMax Romania, told BR. Cutting prices and offering discounts whenever possible have become the tools of the trade. Services have also had to be upgraded as the competition over customers got tough.

Nevertheless, sales kept plunging. “In 2010 the market fell and the positive results registered by some players were generated solely through opening new units,” said Calin Somcutean, retail director of Ambient.

But the recession was not all bad news. Some retailers took advantage of the opportunities brought about by the crisis, such as lower land prices, and continued expanding. Romanian DIY chain Dedeman took the lead last year opening the largest number of new stores.

Hornbach Local network: 4 units (3 in Bucharest and 1 in Brasov), out of which 1 was opened last year International network: more than 130 DIY megastores across Europe Turnover: WND Ambient Local network: 12 units, no new units were opened in 2010 2010 Turnover: EUR 104 million Bricostore Local network: 14 stores, none of which were opened last year Mr Bricolage Local network: 3 stores, 1 of which was opened last year International network: 550 stores in Europe, Africa and America Turnover: approximately RON 75 million

It now operates a network of 21 outlets dedicated to construction materials and interior decorations. Five shops were opened last year alone with the average investment per unit amounting to approximately EUR 10 million.

“We are among those companies that have chosen to constantly expand during the crisis, as we believe that these times bring not only difficulties but also business opportunities,” said Dragos Paval, the company’s president and co-founder.

Through strict process management Dedeman has managed to reach its turnover target for 2010 and at the same time maintain its profit margin, according to Paval. For 2009 the retailer reported a turnover of approximately EUR 252 million and a EUR 21.5 million net profit, targeting a 15 percent sales increase in 2010.

The expansion process should continue in 2011, depending on the general trend of the construction market and

www.business-review.ro Business Review | January 24 - 30, 2011

trywide, the retailer is present in Arad, the number of construction permits the Oradea, Bucharest, Pitesti, Ploiesti and company manages to obtain, the presiSibiu. Throughout last year OBI invested dent added. By 2015 Dedeman hopes to EUR 20 million in opening new stores and open up to five new units each year and plans to keep the same level of investreach a national network of 40 stores. ment for this next year too.

Out of all the foreign players active on Given the current economic context the DIY market, bauMax was the retailer the company plans to monitor costs and with the most dynamic expansion last all non-strategic investments this year. year. The Austrian chain opened four new units in Bucharest, Pitesti, Con- “This way we will be able to take advantage of the business opportunities that the stanta and Timisoara, bringing its local network to 13 stores. “On the long term, market should subsequently offer,” company representatives said. we are planning to have a network of For German firm Praktiker, one of stores in the whole country, first of all in the main players on the local market, cities with over 100,000 inhabitants. (…)

2010 was not the best year for its local We want to continue our expansion plan business. According to representatives of in the same way this year. Consequently Praktiker Group, business in Eastern Euwe will open our second store in Bucharest, namely in Chitila, this spring,” rope failed to pick up as originally hoped in the first nine months of 2010 leading Florian told BR. He said that expansion to overall poor results. had provided the company with a 25 Romania and Greece are the main percent turnover increase compared to markets responsible for this decrease.

2009. “For 2011, we expect a 5 percent turnover increase in like-for-like stores “The fiscal policy measures aimed at stabilizing public finances in the most imand a 30 percent increase in the total national turnover, based on our expansion,” portant countries for Praktiker – Greece and Romania – led to a significant rethe sales director added. Besides expansion, the retailer relies on affordability. duction in available income and private consumer spending. This was reflected in “We simply offer everyday low prices – this lower demand for DIY products, which is our secret. We don’t have discounts or promotional offers but always low prices,” had a significant negative impact on Praktiker’s net sales,” said representatives Florian said, adding that in the future the of the German retailer. The 5 percent VAT company also plans to develop its servhike in July 2010 alone was estimated to ices and product range. have reduced sales of Praktiker Romania The last months of 2010 saw several new DIY stores open. In September, OBI “by a good quarter”.

In the first nine months of 2010, the opened its second store in Bucharest retailer reported net sales of EUR 153.6 and seventh in Romania with a total surmillion for Romania, marking an abface of 10,000 sqm. Part of the German solute decline of 17.8 percent against the Tengelmann Group, OBI is one of the previous year. In the third quarter alone, newcomers on the local market. Coun-

RETAIL 15 sales dropped by 25.5 percent, making Romania the country with the sharpest business decline for Praktiker.

Back in 2008 the German group was announcing ambitious plans for the Romanian market, estimating it would expand its local network by up to five new units per year until 2012. The recession and the macroeconomic developments of 2010, which according to the company have affected the market to a greater extent than it initially forecast, have all forced a reconsideration of large-scale expansion plans. In 2010 Praktiker Romania opened only one new unit in Botosani following a EUR 6.9 million investment.

The store has a surface of 4,300 sqm, smaller than previous units. In addition to this new opening, the company has invested about EUR 3.5 expanding the surface of its stores in Deva and Ploiesti. This brings Praktiker’s total sales area in Romania to more than 180,000 sqm and its total investment in its local network to approximately EUR 270 million.

Hornbach, another German DIY chain active in Romania since 2007, added one more megastore to its local network after finishing an investment of approximately EUR 30 million in Balotesti, near Bucharest, in December. The store has a garden center and a drive-in area, offering about 60,000 products at “permanently low prices”.

With a sales area of approximately 16,000 sqm, the shop is Hornbach’s third location in Bucharest and fourth in the country. It is located in the grounds of the former Prisma commercial center. As for future moves, the retailer is already planning to open another unit in the capital,

according to Mugurel-Horia Rusu, general manage of Hornbach Centrala, the group’s local subsidiary.

Another Romanian player on the DIY market is Ambient. The company was founded back in 1993 and opened its first store in 2002 in Sibiu. It now operates a local network of 12 stores comprising a total sales area of 22,000 sqm. “In 2010 we didn’t open any new stores. We decided that consolidating our existing network as well as offering our customers complete solutions for their projects was the priority,” Somcutean told Business Review. A similar strategy will apply in 2011 too. “As we have done before, we believe that growing the business in a healthy manner is crucial, especially now when the market is on a downward trend,” Somcutean added.

Last year Ambient ended a process of restructuring and repositioning its business, which resulted in two distinct divisions, Ambient Retail and Ambient Distribution. “This transformation together with a new management team, helped us report a positive evolution,” Somcutean said. The company closed 2010 with a EUR 104 million turnover and a similar level is expected this year too.

Elsewhere, French company Bricostore delayed all expansion plans in 2010.

Mr. Bricolage, another French DIY retailer present locally, opened its third store in Iasi last year. Operated by Romanian company Brico Expert, the retailer was expecting a 6 percent turnover increase in 2010 against the RON 70 million reported in 2009. simona.bazavan@business-review.ro

www.business-review.ro Business Review | January 24 - 30, 2011

16 LINKS

Rise of 2.0: digital agencies set new marketing trend The internet, the media channel of preference for the younger generations, may sometimes seem like a marketers’ paradise, with users offering private information willingly, on their blogs or social media accounts, and thus allowing brands to make their messages more and more personal. But there is more to the industry than meets the eye. Digital agencies explain to Business Review what this new, and just as cool, offspring of advertising is all about. ∫ CORINA DUMITRESCU Although some would argue that digital marketing encompasses more traditional media channels, like television or radio, which use modern, digital technologies, the concept is generally acknowledged as internet/e-marketing, as it focuses on the usage of the internet for the promotion of brands.

Whether these brands communicate about their products through social media (with Facebook, Twitter and LinkedIn the most used such tools), Search Engine Optimization techniques, viral marketing or the most common and ever-intrusive banner, it is all about creativity and innovation in this domain, in order to gain the skeptical and often passive viewer’s attention.

Not so long ago, in 2000, the online communication market could more accurately be referred to as “the web design market,” says Bogdan Nitu, general manager of Webstyler, one of the oldest digital agencies on the market, chosen as Agency of the Year in 2010 at Internetics, the Romanian online industry awards.

“The question we needed to answer back then was ‘Why do I need a website?’ In 2000, online meant web development and that was just about it. There were only a few agencies trying to offer professional services and numerous freelancers. Demanding USD 2,000-3,000 for the creation of a website seemed complete madness back then, since a freelancer only asked for USD 100-200,” he continues.

Nowadays, the importance of online has gained a lot more meaning. “To me, online is more than a simple media channel. It’s more like a place where people spend an important part of their lives.

same planet, still humans on both sides And the challenge for brands is finding a of the pond, however the best way to place in consumers’ digital lives,” states compare the two is to just say they are litNitu. “The digital presence of a brand erally two worlds apart.” does not mean just banner formats and The true difference between the two viral spots, but the relationship that it crelies in interaction, he however explains: ates with consumers and the experience “Above all, digital offers a two-way comthat it offers to them,” he says. munication medium between any two Alex Visa, managing partner at Hyparties. Tools used by communicators in perActive, a full service digital agency credigital marketing are just an adaptation ated in 2008 and affiliated to the Lowe & of interaction possibilities available for Partners group in 2009, describes the forthe benefit of a brand.” mula for any digital agency seeking sucOn the same note, Calin Buzea, mancess: “In this medium, it is the consumers, not the brand or the advertiser, aging partner at full-service interactive agency MRM Worldwide Romania, part of who lead the conversation, set the disMcCann Group, believes that the most cussion topics and ultimately have the important differentiator between tradicontrol, will and power to shape how the tional and digital lies in “the power and brand evolves.” influence that clients and consumers exercise. In traditional advertising, their in“The digital presence of a teraction is reduced to a minimum, while, in digital, the consumer is in charge, as brand does not mean just he/she may hold a direct influence on the brand’s image. Other differences banner formats and viral are also found in segmentation and tarspots, but the relationgeting, which are more precise in digital ship that it creates with marketing, as well as in the greater for creativity that this space proconsumers and the expe- room vides.” rience that it offers to On the same theme, Cristian Pantazi, manager, creative director and founder of them,” Bogdan Nitu, the Kaleidoscope digital shop, integrated general manager at into BBDO Group Romania as of 2010, believes that “the difference between the Webstyler two is medium-wise, in the sense that both are based on the idea/concept. (…)

Although many would argue that Not the medium is the message (althere is not much difference between digthough there are still many who believe ital and traditional forms of communithat). The instruments may differ, but at cation, since the two serve the same the basis remains the idea.” purpose, that of brand promotion, Visa Traditional comms have their share of disagrees. “It is quite difficult to list the nostalgia value for those that have made differences and similarities between digthe switch to digital: “I remember with ital and traditional comms. It’s like Eupleasure the times when I was eagerly rope versus North America. Still on the waiting for the newspaper to come out of

Courtesy of Kaleidoscope

Bogdan Nitu of Webstyler

In a digital campaign, it is the qualitative component that counts, “the sentiment with which people remain about the brand after a campaign, the most difficult to measure, yet the most important by far,” Cristian Pantazi, creative director at Kaleidoscope

Courtesy of MRM

Courtesy of Webstyler

Courtesy of HyperActive

Alex Visa of HyperActive

the printer to see what the ad I just published there for one of my customers looked like,” confesses Visa. “On the other hand, having an ad created and than able to see its performance in less than two hours is another unparalleled wonder of the digital world I live and work in.

And I love it. Today I cannot imagine life without Google, the mobile or social networks… or just simply without the internet,” he adds.

Another difference between the two styles, traditional and digital, lies in measuring a campaign’s success, which in the case of the latter is much more precise and can be more easily reduced to facts and figures. As Nitu explains, the results often “depend on the objective, which may be awareness, consumer relationship or sales leads. Objectives may also consist of data collection, consumer profiling or loyalty.” Alexandru Negrea, social media manager at BCR and one of the best-known bloggers of the moment in Romania, adds, “In the case of lead generation campaigns, success is trans-

Calin Buzea, MRM Worldwide Romania

Cristian Pantazi of Kaleidoscope

www.business-review.ro Business Review | January 24 - 30, 2011

LINKS 17 ject, Pantazi adds, ”Digital is a new medium to many, not necessarily in the sense of usage, because we all have Facebook or email accounts (or whatever everybody uses). However, using it to communicate a brand is more complicated. What matters is wanting to learn.”

Turning to the tools of digital marketing. Nitu believes that here, as with more traditional marketing tools, the key to efficiency is “creativity and innovation, regardless of the format. People respond very well to new things, to new experiences. Today, Facebook is in fashion, but tomorrow who knows what will be next in line? Therefore, we must not rely on format/support, but on ideas.

The thing that will always make a difference is the creative aspect.” Negrea recommends Facebook for efficient social

lated as a high conversion rate (e.n. the ratio of visitors who, out of the total viewers, after accessing a website take the ac-

“Not every product needs to communicate online, but the recommendation is to try and then analyze the results,” Alexandru Negrea, social media manager at BCR bank

Courtesy of BCR

tion desired by the brand, e.g: purchase the product). In the case of an image campaign, success equals a high number of visitors on the landing page.”

Or, as Visa more pragmatically states regarding the results of a digital campaign, Last but not least, it still comes down to sales,” although he also puts focus on “Theatre and radio did such targets as “user response to project not disappear when cinetask, number of people getting involved, advocacy and amplification from users,” ma appeared. I believe which also count very much to clients. that digital marketing is Pantazi however draws attention to the qualitative component, “the sentiment simply a new means of with which people retain about the brand promotion, which needs after a campaign, the most difficult to to be integrated into the measure, yet the most important by far” and which goes beyond the typical quanprevious media,” Calin titative coordinates, “users, viewers, the Buzea, managing partner usual.” Buzea says the same.

“We count neither clients nor homeat full-service interactive page views; what we do count is people’s agency MRM Worldwide reactions – how many comments they submit, what their opinion is. We Romania are permanently interested in their feedback.” media campaigns, “since it offers access Digital campaign budgets are also on to a community of 2.5 million Romanians, the rise as proof of their increase in imthe largest such community” and also the portance. However, digital agency manmost accessed website in the world in agers were reluctant to disclose the sums 2010, he adds. and. Visa said the largest budget that he Visa sees this communication tool has ever worked with was in Canada, in 2007, which was USD 3.5 million / year. as more appropriate for business-to-consumer (B2C) approaches (rather than “Where Canada has managed to move B2B). “Nevertheless, we could name two faster than us here in Romania is to tactics that can be considered for use in prove to marketers that online is a feasia wide range of digital projects: e-mail ble and ROI-generating medium worth inmarketing and SEO/SEM.” vesting more than 5-7 percent of the toBut should any brand, regardless of its tal marketing budget in,” Visa says, adding that digital is on the rise here is, as well, area, focus on a strong online presence?

Negrea believes the offline and online since his agency’s 2010 turnover incomponents are of equal importance to creased by over 50 percent compared to a brand, as it should, most importantly, 2009.According to Nitu, it is not the client’s digital background that counts, communicate, irrelevant of the means. since, as he puts it, “The client’s special- “Not every product needs to communicate online, but the recommendation is to ization is not very important, it is his/her try and to analyze the results. (…) As long openness to understanding the digital as the product addresses a wide audience medium” that counts. On the same suband, implicitly, internet users, there are plenty of reasons to communicate with the aid of social networks or blogs.”

All in all, players agree that digital by no means spells the death of traditional, when it comes to brand communication.

“They will coexist and mingle together up to a point,” says Visa. Buzea agrees that, traditional will not be replaced.

“Theatre and radio did not disappear when cinema appeared. I believe that digital marketing is simply a new means of promotion, which needs to be integrated into the previous media. Digital complements traditional, it does not annihilate it.”

Alexandru Negrea of BCR

corina.dumitrescu@business-review.ro

18

www.business-review.ro Business Review | January 24 - 30, 2011

REMCO rocking all over the world out in our industry is a blessing for the clients. Only serious companies will survive. In 2010 we have focussed on the establishment of Remco Afrique as a further support under our business model.

The Dutch and Romanian teams are involved in this operation and at present we are fairly busy preparing proposals for projects in Nigeria, Ghana and Tunesia.”

Jan van Vulpen, General Manager Remco Romania

What is Remco's presence on the industrial construction market, locally and internationally?

“If we talk about the Remco Group of companies as a whole we have offices in The Netherlands, Romania, Bulgaria, Poland and Ukraine and as such active in these countries via our local entities. But apart from that we have a much broader international focus. Our Polish company achieved four contracts in Belarus, the Dutch mothercompany is active in the Dutch Caribbean with a 4.500 m2 project at Curaçao and a 17.500 m2 on Aruba.

Also we are in advanced talks for two projects of 10.000 and 12.000 square metres in Russia. But Remco Romania at present is stealing the show with a 21.700 m2 construction in Gabon. I think we are one of the most dynamic companies in our sector. Never a dull moment!”

What are your expectations for 2011 in terms of new projects and developments?

“Quite positive. We see confidence returning in the market.

Clients and banks increasingly understand the enormous growth – and development potential in Romania and conclude that they can not continue “crying in the corner” about the misfortune of the last two years. We do not need words but acts to guide the recovery and that is what we do”.

How do you see the segment of industrial constructions recovering/ unfolding this year?

“Apart from the traditional projects in the manufacturing and logistics sectors we are of the opinion that especially the food processing will be picking up in the sense that Romania will be increasingly self supporting in this respect if not further transforming to a food exporting country. That is why we are

customer base over as a result of the crisis?

“Definitely! Our customer base rapidly expands and that is not a surprise. At least not for us. In these hectic and uncertain times clients are in desperate need of reliable partners that are worth their trust and that take good care of their money. There have been to many “hit and run” contractors until the peak period 2007/2008 that promised a lot but did not perform. We are known for our high quality, financial stability and willingness to provide our clients with all kinds of financial bonds to protect their advance payments and ensure completion of the project. The word apparently has spread around as we have seen and still spot many serious investors knocking on our door”.

What type of industrial solutions does Remco offer on the local market?

“Simple question, simple answer.

We have extensive – and exhaustive intake interviews with the client to define his requirements with military precision. We want to know everything from their production processes and logistic movements in order to have a very detailed overview. After that our dedicated specialist teams establish the most economical solution based on a broad range of pre-engineered solutions. We have proven designs due to the repetition effect and as such clients are never inHow do you see the potential of volved in experiments”. the local market for industrial Are you planning any changes solutions? or adjustments to your product “Romania simply is a sleeping portfolio? giant. It should and will wake up “Obviously we keep an eye on de- some day and returning to more velopments alike application of economic activity again in all secsolar panels and other energy tors of the economy and continue saving issues, but basically such to catch up with prosperity levels developments are going very seen elsewhere in Europe. For slow. The main thing will be to de- our business this means a lot of velop a series of refrigeration - work. And we are ready for it!” and freeze warehouses as stated What segments show the most earlier in the interview”. growth potential/are more inWhat are your main clients? teresting to explore?

What industries do they come “A recent survey shows that it will from? take Romania some 24 years to “We are somewhat selective in reach 50% of the prosperity levour order acceptance. This may els of Western Europe, 37 years sound arrogant but it is not. Our to reach 75% thereof and 43 success ever since 1996 in Ro- years to close the gap. For a busimania is based on operational ex- nessman in the construction incellence customer intimacy and dustry this is alike a candyshop as that strategy only works on spe- so many things in basically every cific projects and with specific sector still have to be developed. clients. That is why we mainly On the other hand as friend of the work for foreign investors and the nation and the Romanian people I local elite companies. They ap- only wish that by a mixture of preciate our approach very much mentality change and economic and can count on us. We keep tailwinds these periods will be our promises and commitments substantially reduced. The counfrom start to finish of the project”. try and the people deserve it, but it only can be achieved by dediDid you notice a change in your cated – and hard working”.

ADVERTORIAL

What were the main challenges you faced in business development last year?

“In our nearly 40 years of existence we have seen and survived many economic bush fires and financial crises before. So we have seen it all in the past and because of our robust financial position we are not to worried about the crisis and its effects on the business. In actual fact the crisis separates the boys from the men and the shake

What type of strategy did you adopt last year to counteract the effects of the crisis?

“We have not changed our strategy at all. We had -, have and will continue to have a mixture of “operational excellence” (reliability, responsibility, efficiency, superb organisation) and “customer intimacy” by being active with optimal translation of the client’s requirements into project characteristics and by passionately advising during the entire route. We just expanded our geographical coverage by adding the African continent and Moldova to our target audience”.

launching in the next few months “REMCOOL”, a series of refrigeration - and freeze warehouses to serve this part of the market”.

www.business-review.ro Business Review | January 24 - 30, 2011

19

www.business-review.ro Business Review | January 24 - 30, 2011

20 CITY

FILM REVIEW

RESTAURANT REVIEW

IT’S BISTRO TIME, AGAIN Little Fockers ∫ CORINA DUMITRESCU Directed by: Paul Weitz Starring: Ben Stiller, Robert De Niro, Owen Wilson, Dustin Hoffman, Barbra Streisand, Harvey Keitel, Blythe Danner, Teri Polo, Jessica Alba On at: Cinema City Cotroceni, Cinema City Sun Plaza, Cityplex, Hollywood Multiplex, Movieplex Cinema Plaza

mab.media@dnt.ro

editorial@business-review.ro

Laurentiu Obae

ta (all included in the price), so it is honest and without frills. OK, this is not culinary rocket science – rather it is good, fun, filling, comfort food.

We passed on Pork Fillet Mignon with a mustard sauce and a Thai Chicken.

However, we simply could not resist a Duck Confit, which is a leg preserved in its own melted fat for a lengthy period in a refrigerator, and then cooked for ten hours. It was tender and absolutely correct.

But the House still had some surprises for us. Being a Frenchie, the boss would not compromise on the quality of the wines. But we were pleasantly shocked when we drank one of the few Romanian wines on offer, Ecological Feteasca Neagrea. Whooooa there, hold the horses for a minute. What the hell is Eco wine? Does it mean that they grow the grapes with a certain kind of ‘natural manure’, duly accompanied by mushed up soft absorbent paper? I hope not. But beyond all belief, it was rather good stuff.

That means the wine, not the ‘natural’ fertilizer.

And as a most pleasant alternative to the usual suspects of coffee on the menu, there was an amazing and exciting range of sexily flavoured teas, such as: Wild Cherry, Plum and Cinnamon, Green Apple, Mint, Amaretto, Wild Orange and Lemon Love. These were all imported from Germany, and if they gain a foothold with the beautiful people, they will hit the coffee brands hard.

So to get there, you should drive half way up Dacia, and turn left onto Eminescu. Then return down Eminescu in the opposite direction and you will see it on the right.

When Meet the Parents came out ten years ago, the only one in the series lacking the quite conspicuous “Fockers” pun, audiences probably thought that it would be a one-time and memorable comedy.

But this is Hollywood after all and if a story sells, its sequels should too, if properly turned into a franchise that boasts first-class actors.

The ever-so-serious De Niro, so often portraying a damaged mobster or neurotic character, is always fun to watch in a comedic part, usually mocking his previous consecrated roles, as was the case in Analyze This (and, of course, its sequel Analyze That), as well as Showtime. Now, as the Meet the Parents undercover CIA agent assuming the part of a family-driven and calm florist, he is utterly hilarious. Later, as his cover is revealed, the character unfortunately becomes quite predictable…

So, it seemed only natural that after meeting Greg’s future in-laws, his wife Pam should go through the same ordeal (in the first sequel, Meet the Fockers, 2004) and later on, since the two had got married, their children should be the next in line to make another blockbuster’s subject. Now, we have a much more career-oriented Greg Focker, slowly climbing the corporate ladder, who, besides being a good provider for his wife and two children, also has to live up to the responsibilities of his father-in-law’s decision to make him the new Godfocker (pun and Godfather allusion intended). For some guaranteed laughs, some clichés are also added to the recipe. So, in the most recent Focker films, prepare for some hair-raising and quite ludicrous medical moments involving Stiller and De Niro’s characters, to which, in the “sex sells” part, a perky and passive-aggressive Jessica Alba parading her perfect 10 halfnaked body is added.

All in all and in spite of a quite weak storyline, De Niro, Dustin Hoffman, Barbra Streisand, Blythe Danner, Ben Stiller and Owen Wilson definitely make a lineup worth spending an evening or weekend afternoon with. Basically, one cannot fail when putting together such great actors. The question that remains, however, is what will the next Fockers’ series be all about? Or will the major Hollywood producers finally leave some room to the imagination?

Ah, bistro: the low-prices, low-concept model offers excellent value and a changing menu of specials

Bistro David Contant Mihai Eminescu 80 021 310 4765 MICHAEL BARCLAY The number of French bistros in Bucharest is growing, and thank God for that! I am now at the latest one, which opened its doors only one month ago. It bears the name of the owner who is no stranger to aficionados of real French cuisine in this town.

He was imported to Bucharest as the first French chef at the ill-fated and overpriced Heritage nine years ago. Sadly, neither Heritage nor Romania was ready for his high level of talent, so he moved on to Moxa and Bon Ton Palace, and finally to his own bistro on Eminescu.

He is both taking a risk and simultaneously showing his confidence in his ability to succeed by naming the bistro after himself. Let’s face it, throughout the world most French chefs have egos the size of Herastrau Park, so if his venture didn’t succeed, his hurt pride at seeing his name come down would be unbearable.

So he has an added incentive to keep us, the customers, happy! But if he keeps on as he has started he will have nothing to worry about, for it will be a success.

There are no hard rules which define what a bistro is, rather it is easier to say what it is not. It is not an ‘haute cuisine’ hi-camp restaurant with starched tablecloths and starched waiters selling food at the price of a week’s salary. None of that bullshit, for a bistro keeps the décor low, the prices low, the overheads low, and the food does the talking. So, let’s x

have a chat with it!

The House has made a clever move, for they have a fixed-price three-course lunch menu at the superb cost of RON 39.

Just look at that price again, and remember you are eating the creations of a top chef. There is no point in me telling you what I had on my lunch visit, because the menu changes daily. Suffice it to say, it was excellent.

Now let us away to the a la carte menu. It is small and chalked up on a blackboard. When the kitchen has exhausted its supplies for any dish, that name is simply wiped off the board. This is a French bistro tradition and it makes sense.

So for soup there were two French classics, Vegetable Velute and Onion Soup, but surprisingly the French connection ended there and it then went international. I had no complaints as the House told me it was their intention to include dishes from Italy (no thanks, we have too many of them), Mexico, Europe and Asia. Bravo! The nationality of these dishes will change on a weekly basis.

I could not resist a starter of Tartine de Foies, an open toasted sandwich layered with lettuce, hot chicken livers, mushrooms, vegetables and a rich vinaigrette dressing. The selection of main courses was small, no more than six. But again in the tradition of a bistro, this is perfectly correct.

So we had a Salmon Fillet, perfectly grilled on a bed of rice. This was topped with a herb butter sauce. Meat dishes such as our Steak Roquefort were accompanied with potatoes sautéed with tomatoes, a daily selection of vegetables and herbs. Each dish on the menu is complete with vegetables or rice or pas-

www.business-review.ro Business Review | January 24 - 30, 2011

CITY 21

CONCERT

FLAMENCO

It takes three to tango: Flamenco Festival Gotan Project return to 2011 sashays into town Romania in February in February

Dynamic tango trio Gotan Project will stage their fourth return to the Bucharest concert scene on February 28, at Sala Palatului.

The renowned electro-tango group was formed in 1999 by musicians Philippe Cohen Solal, Eduardo Makaroff, Christoph H. Muller, of French, Argentinean and Swiss origins. Gotan Project released the Tango 3.0 album in 2010, after having sold over 2 million copies of their previous releases worldwide.

“It was love at first sight,” said Muller at the end of a previous concert held by the group in Bucharest, in the summer of 2010, referring to the audience’s pos-

itive response.

An estimated 3,500 fans attended the Sala Palatului show.

Gotan Project have become well known for bringing Argentinean folklore into popular culture through an intricate mixture with electro music, turning it into contemporary world music.

Tickets may be purchased online, from www.eventim.ro, or through Eventim chain (from stores such as Germanos, Vodafone, Orange and Humanitas).

Ticket prices range from RON 96 to RON 192. The concert is being organized

by Events. ∫ Corina Dumitrescu

STOCKEXCHANGE

Courtesy of Events

Easy come, easy Go-tan: the tango trio are bringing their act back to Bucharest

Latino music aficionados have one more reason to rejoice: the 2011 Flamenco Festival, organized by the Cervantes Institute, will take place between February 4 and March 10 in several locations across the capital .

Also known as “Classic Flamenco and its new genres”, the festival aims to offer a monograph of the style, from classical music, traditional flamenco music, jazzflamenco fusion and film. Renowned flamenco musicians and dancers will attend the event.

On February 4, the festival will open at ArCub with a recital held by guitarist Rafael Andujar, singer Jesus Chozas and dancers Ana Alonso and Juanma Carillo.

Jose Maria Gallardo del Rey will hold a guitar recital on February 9 at Ateneul Roman (the Romanian Athenaeum) and on February 10 at Sala Radio (Radio Hall).

Pianist Rosa Torres Tardo will perform on February 16 on the stage of the Athenaeum, while violinist Ara Malikian and guitarist Jose Luis Monton will hold a duet on February 21 and 22.

Pop-flamenco concerts will be given by the band Soniquete de Jerez, on Feb-

Flamenco old and new will be showcased

ruary 26 and 27, at ArCub hall. Films dedicated to flamenco will be showcased at Cinema Studio on March 4-10. Titles include Los Tarantos by Rovira Beleta, Camaron by Jaime Chavarri and the recent La Leyenda del Tiempo, by Isaki Lacuesta. ∫ Corina Dumitrescu

CONCERT

Starsailor lead singer to rock The Ark in February

EXHIBITION

The Institute of Cultural Memory (Institutul de Memorie Culturala, CIMEC) and the Romanian Peasant Museum (Muzeul Taranului Roman) are organizing the photography exhibition Churches with Exterior Mural Paintings from Oltenia.

The murals (which date from the 18th and 19th centuries) are held to be an unique artistic phenomenon of late Post

Byzantine art, now so rare in Europe.

The exhibition also contains a series of cultural landmarks and aspects from daily life in Oltenia.

The exhibition is open until January 30, in the Foyer Hall, from Tuesday to Sunday, between 9:00 and 17:00.

The museum is located at Soseaua Kiseleff 3.

Corina Dumitrescu

Courtesy of Emagic

Oltenia church murals showcased at museum

Sailing solo: James Walsh is taking time out from his band Alternative British rock band Starsailor’s lead singer, James Walsh, has included Romania in his solo tour and will perform at The Ark in Bucharest, on February 4.

Starsailor formed in 2001, enjoying four charting albums and ten Top 40 singles in the UK. Their hits include Four to the Floor, Silence Is Easy, Tell Me It’s Not Over and Poor Misguided Fool.

Walsh then decided to take a break from the band in order to focus on his solo career. He looks up to performers such as

Neil Young, Bob Dylan, Nick Drake and the Beatles and collaborated with American singer / songwriter Suzanne Vega for the launch of his first solo album, as well as with other producers and composers. His first EP, Live at the Top of the World, is already on sale.

The concert will be held at The Ark Underground, on Uranus 150, formerly known as Calea Rahovei 196A. Tickets cost RON 50.

Corina Dumitrescu

22 IN TOUCH

QUOTE of the week Basescu lauds labor, slams speculators, blasts bureaucrats “We have got used to living more on speculation and less on actual work. We have to get back to that understanding given to man, to work if he wants to live; to work well, if he wants to live well.”

President Traian Basescu made this statement during a Bucharest Stock Exchange (BSE) event, which also gathered Mugur Isarescu, the Central Bank governor, and several BSE officials.

Basescu said he wanted “to tax” the state’s economic slippages again. He added that many speculators in Romania do not leave a RON behind, and blasted the bureaucrats who have sabotaged the system, people who – in Basescu’s view – believe that paper, pen and sour faces rule over the counter.

www.business-review.ro Business Review | January 24 - 30, 2011

ROMANIA IN THE INTERNATIONAL PRESS The Economist Blog comments on France’s opposition to Romania’s Schengen accession in the “Let Us In” article.

The author of the article advises the French

t o avoid Ro m a nia due to the situation, as well as President Sarkozy’s expulsion of Romanies last summer.

“Bucharest was once known as the ‘Paris of the east’. But Parisians might be advised to steer clear of the Romanian capital, at least until the latest row between the French and Romanian governments blows over.

Relations between the two countries have largely been smooth since Romania's accession to the European Union in 2007. At least until last August, when Nicolas Sarkozy ordered the expulsion of Romanies illegally living in France, most of whom had Romanian citizenship. It wasn't long until accusations of opportunism and even racism came flying France's way.”

The article also draws attention to Romanian foreign minister Teodor Baconschi’s suggestion that the EU might be discriminating against Romania’s Schengen accession: “The Romanians are, pre-

dictably, calling foul. Earlier this week Teodor Baconschi, the foreign minister, suggested that the EU was applying ‘double standards’ to Romania and Bulgaria and risked stoking Euroscepticism among citizens of those countries. The March deadline appears to be a lost hope, but Mr Baconschi is still hoping for accession during Hungary's EU presidency, which ends in June.

The piece also discusses Roma-

nia’s threat to “impose extra obligations on Croatia, the EU candidate country closest to accession. He (e.n. Baconschi) then said that Romania could leave the ‘co-operation and verification mechanism’, a set of rules on tackling corruption to which Romania and Bulgaria signed up when they joined the EU”.

The article continues, “when it became clear that Romania was not in a position to make good on any of these threats, Traian Basescu, Romania's president, backed down, if not entirely gracefully.

Mr Baconschi said that it was ‘a mistake’ to have turned the Schengen issue into such a big deal. But the damage had been done.”

11:00 Casa Artmark organizes a press conference about the local art market and its projects at J.W. Marriott Grand Hotel. By invitation only.

January 26 Ensight Management Consulting organizes a press conference at Carturesti to celebrate its ten-year

anniversary. By invitation only.

January 27 Ernst&Young organizes the 5th edition of its annual conference on taxes at JW Marriott Bucharest. By invitation only.

February 2 11:30 BITSoftware organizes a press conference at InterContinental. By invitation only.

February 10 ∫EVENT Business Review organizes the 9th

Otilia Haraga Senior Journalist

is writing an article about the main areas of investments in healthcare sector.

Healthcare has been capturing the attention of investors since last year, and has seen many mergers and acquisitions as a result. otilia.haraga@business-review.ro

Simona Bazavan Journalist

is working on an article about potential retail investments this year. Consumption went down in 2010 and many local players had to reconsider their strategies. Nevertheless, the recession is not all bad news, and there are still opportunities to be considered as well as room for newcomers. simona.bazavan@business-review.ro

Dana Verdes Senior Journalist

is preparing an analysis of the opportunities of investing in gold and the stock market's most profitable shares. Likewise, opportunities in the local energy sector will be covered, with a focus on the areas expected to be attractive this year. dana.verdes@business-review.ro

EVENTS, BUSINESS & POLITICAL AGENDA January 25 11:00 LeitnerLeitner organizes a press conference on the latest fiscal changes at Grand Cafe Galleron. By invitation only.

WHAT WE ARE WORKING ON

edition of the Romanian Tax, Law & Lobby event.

For more information please visit www.business-review.ro/events.

February 18 B. Braun Medical organizes the official opening of a production unit in Timis county. By invitation only.

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February 22 ∫EVENT Business Review organizes the second edition of the Swiss Business Forum event.

For more information please visit www.business-review.ro/events.

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ISSN No. 1453 - 729X

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 Anca Ionescu, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

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

ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.31 Office: 031.040.09.32 Fax: 031.040.09.34 EMAILS Editorial: editorial@business-review.ro Sales: sales@business-review.ro Events: events@business-review.ro