INTERVIEW: The era of major investments in Romania’s renewable sector is over, according to Martin Zmelik, country manager of the Czech utility group CEZ in Romania, which operates a 600MW wind farm locally »page 10
ROMANIA’S PREMIER BUSINESS WEEKLY
BVB turns to IT
SEPTEMBER 15 - 21, 2014 / VOLUME 18, NUMBER 30
THE BUCHAREST STOCK EXCHANGE (BVB) IS INVITING IT &C COMPANIES TO LIST IN A KEY MOVE DESIGNED TO INCREASE THE ROLE OF THE CAPITAL MARKETS FOR START-UPS AND ENTREPRENEURS » PAGE 4
With PE investments in Ukraine falling to a five-year low of EUR 19 million in 2013 and the country hit by ongoing conflict, Romania is in a good position to attract fresh investment from the region, say dealmakers» page 6
UKRAINE’S LOSS, ROMANIA’S GAIN? PROPERTY
LINKS
Mall systems go
Under suspicion
Prodplast Imobiliare has begun work on a EUR 60 million shopping mall in Obor which is expected to be completed in the first half of 2015
Local IT company Siveco is being investigated for tax evasion, accused of creating a criminal network of 50 firms that carried out fictitious transactions
» page 8
» page 11
www.business-review.eu Business Review | September 15 - 21, 2014
NEWS 3
NEWS in brief
WEEK AHEAD September 15 Back to school The new school year officially begins today and will continue uninterrupted until winter break, which starts on December 19, according to the schedule announced by the Ministry of Education.
ENERGY Halliburton eyes local oil and gas sector US oil services group Halliburton is looking in Romania for new business in mature oil fields and in the development of new fields off the coast, according to a government statement. Prime Minister Victor Ponta last week met Joe Rainey, eastern hemisphere president of the American company. The PM said he wanted Romania to become a hub for US oil firms.
September 18 IDC's ICT in the Utilities & Energy Sectors 2014 This IDC Energy Insights event will explore long-term trends in the utilities industry. The event brings together leading industry and technology experts, creating a platform to address key issues facing IT executives in the energy and utilities sectors. For more information, contact Cristina Pasla, conference manager, at cpasla@idc.com. 8.45, Hotel Intercontinental.
Government ponders IPO for OPCOM
LEGAL Parliament passes cut in CAS The Chamber of Deputies approved last week a five percentage point reduction in the social insurance contributions (CAS) paid by employers. The bill had been rejected by President Traian Basescu, who asked MPs to reexamine it. His request was turned down. The cut should be enforced from October and would cost the state budget EUR 192 million in the fourth quarter of this year. The measure has not been vetted by the International Monetary Fund.
Government backs reduction of construction tax to 1 percent The government is aiming to cut the construction tax adopted this year from 1.5 percent to 1 percent from 2015, with the collected funds to be distributed to local authorities, said Ioana Petrescu, minister of finance. The tax impacted primarily the infrastructure of energy and telecom companies. It is levied on the book value of constructions and has to be paid in two installments.
Photo: Mihai Constantineanu
Romania’s energy exchange OPCOM could be listed on the Bucharest Stock Exchange (BVB) after its transfer from grid operator Transelectrica to the Department of Energy, in one of the prospective moves being considered in a bid to extend its shareholding structure, said Razvan Nicolescu, the delegate minister of energy, quoted by Mediafax newswire. He said the listing could take place before the IPOs of large energy companies Hidroelectrica and Oltenia Energy Holding, which should come in late 2015, according to analysts.
T party: telecom duo celebrate connection Bucharest was adorned with a T as sister companies Romtelecom and Cosmote celebrated their new brand identity under the name Telekom Romania, as part of the Deutsche Telekom family. The campaign included a series of dedicated interactive events in Bucharest, Iasi and Cluj-Napoca under the tagline “Turn on Magenta”. By the end of the year, 43 corporate stores will be entirely renovated to reflect the new identity.
TRADE US-Romania trade exceeds USD 1.4 bln in H1 Trade with the US amounted to over USD 1.4 billion in the first six months of the year, while American direct investments in Romania reached USD 1.2 billion, making the country the 12th biggest foreign investor in Romania, according to data cited by the Ministry of Economy. Commentators say US FDI to Romania does not include investments made by American companies through subsidiaries in Western Europe.
Romanian exports hit record high of EUR 4.8 bln in July Exports rose by 12.7 percent in July against the previous month and 6.6 percent against July 2013 to a record high of EUR 4.8 billion, according to data from the national statistics office, the INS. Imports amounted to EUR 5.3 billion in July,
up 4.8 percent compared to the previous month and 10.5 percent against the same period of last year. Romanian exports reached EUR 30.3 billion in the first seven months, while imports stood at EUR 33.6 billion. The trade deficit grew by EUR 248 million to EUR 3.3 billion in the first seven months compared to the same period of 2013.
BANKS Local banking system lost EUR 114 mln in June Banks in Romania sustained losses of around EUR 114 million in June, reducing their combined profits to EUR 47.5 million after the National Bank of Romania (BNR) asked lenders to remove some bad loans from their balance sheets. The move led to a reduction of over EUR 455 million in provisions in the same month, according to Mediafax newswire.
September 19 Gabroveni Inn opens The restoration, extension and functional remodeling of Gabroveni Inn, which began in 2008, has been completed and the historical building will be reopened to the public this Friday as ArCuB’s new headquarters. The restoration process cost EUR 5.2 million. September 16-19 Stand-by agreement evaluation in Brussels A delegation made up of government and Central Bank representatives will be in Brussels to participate in the next evaluation mission of the IMF's standby agreement with Romania. For the first time since the evaluations began, Romanian officials will meet representatives of the IMF, World Bank and European Commission outside the country and without the participation of the Presidency or political parties.
MOST READ www.business-review.eu 1 Romanian IT company Siveco
under investigation for tax fraud
2 Romanian soldier dies in military exercise in Germany
3 Confirmed by Juncker: MEP
Corina Cretu to have the Regional Policy portfolio
4 New national strategy to boost
Romania’s competitiveness highlights 10 economic sectors
5 Beraria H will have its grand opening on September 12
www.business-review.eu Business Review | September 15 - 21, 2014
4 NEWS MEDIA
STOCK EXCHANGE
Russia Today could enter local media market
D
an Musetoiu, former director of programs for The Money Channel, is planning to launch a new project under the name Russia Today. Musetoiu has applied to the National Office for Inventions and Brands (OSIM) to register the trademark “Russia Today,” according to reportervirtual.ro. The TV producer confirmed to DailyBusiness.ro that he is planning to launch a product under the brand. Asked if it will be an offshoot of the Russian channel of the same name, he declined to comment. Musetoiu has extensive experience working in television. He was previously program director for The Money Channel, but is no longer working for the TV outlet. He was also general producer in the news section of B1 TV. Before working for B1, Musetoiu was general producer for Agro Channel TV. Prior to that, he was part of the team that founded Publika TV station in the Republic of Moldova. Musetoiu was also a correspondent for the public channel TVR in Detroit, in the United States, and hosted shows
for the public television broadcaster. He has worked as a news producer at Antena 1 and general news editor at Pro TV and National TV. Russia Today (RT), the Russianbased international cable and satellite television channel, was launched by the country’s state-owned news agency Ria-Novosti in 2005. The channel, which is headquartered in Moscow, presents round-theclock news bulletins, documentaries, talk shows and debates, as well as sports news and cultural programs on Russia aimed at the overseas news market. RT operates as a multilingual service with channels in three languages; the original English language channel was launched in 2005. RT has been widely accused of providing disinformation and commentary favorable to Russian foreign policy. Several of the TV station’s employees publicly announced their resignation in protest at the outlet’s pro-Putin spin and biased content. ∫ Otilia Haraga, Diana Petrescu
BVB woos IT firms with overhauled trading system
Radu Georgescu, GECAD Group (left), Andrei Pitis, ANIS, Ludwik Sobolewski, BVB, Dragos Pislaru, GEA Strategy & Consulting
T
he Bucharest Stock Exchange element; thirdly, it is a way of making (BVB) is seeking to lure high flying an exit; and, last but not least, it firms in the IT sector to list by also lets investors have corporate promising an overhauled trading plat- governance. If we manage to bring the form and increased visibility and financ- IT industry on the stock exchange, this will be a huge step for us all,” said ing options for companies. Ludwik Sobolewski, CEO of the BVB, Georgescu. “I would absolutely support the listing said that the alternative trading system (ATS) would be relaunched later this of IT&C companies on the BVB. A listing year and would have a wider focus, from on the stock exchange is the best thing that can happen to a company.” start-ups to established companies. When asked why he has not yet listed “This market offers new possibilities to businesspeople interested in devel- any of his own companies on the stock opment,” said Sobolewski. He added exchange, the entrepreneur answered, that it will not be just for IT related com- “I always have projects that need financing panies. On September 23, a workshop but from my point of view, the Romanian will take place in Bucharest for candi- stock exchange has not existed until dates interested in listing. A similar now.” Around 10-20 local IT&C firms workshop will be organized in Cluj the could be candidates to float on the ATS, next day. The CEO launched a similar commented the entrepreneur. The first port of call for an up-andmarket in Poland during his tenure as head of the Warsaw Stock Exchange. coming entrepreneur is the so-called The platform, called New Connect, has three Fs (friends, family and fools), which proven popular amongst entrepreneurs pundits say is a popular starting point and over 400 companies have listed for financing entrepreneurial projects in technology, IT, and online. here in the past seven years. Another option to consider is scouting for a business angel. Seed or business Strong IT listing history According to Andrei Pitis, president of angel financing is becoming a frequently the Employers’ Association of the Soft- taken path, as are venture capital funds, ware and Services Industry (ANIS), the which are a little more rigid. The bank Romanian IT industry has a good image is another option, if the entrepreneur is abroad and can generate confidence able to put on the table a very clear incapital, which can get foreign investors vestment project and guarantees. Dragos Pislaru, general manger of onboard. “For the past ten years, I have been GEA Strategy & Consulting, said that saying repeatedly that the only thing there are “exceptional oases” in ten key truly missing from the Romanian econ- sectors of the Romanian economy, not omy is a functional stock exchange. The just in IT, citing energy and bio-economy stock exchange has changed from what as fast-growing industries. At the moment the BVB is working it was five to seven years ago and now has an element of stability,” said Radu with the Financial Supervision Authority Georgescu, founding partner of GECAD (FSA) and the government to remove some of the red tape and additional Group, a technology company. “For IT entrepreneurs, the stock ex- costs that could dent the attractiveness change is very important for various of the platform for retail and institutional reasons. Firstly, it is a way of attracting investors. ∫ Otilia Haraga, Ovidiu Posirca capital; secondly, it provides a marketing
www.business-review.eu Business Review | September 15 - 21, 2014
EU
Romania secures plum regional policy portfolio in Juncker Commission
Corina Cretu
R
omanian social democrat MEP Corina Cretu was last week appointed EU Commissioner for Regional Policy, thereby landing one of the most sought after portfolios in the new European Commission (EC) led by Jean-Claude Juncker, the EC has confirmed. With an allocation of EUR 351 billion, or about a third of the EU’s total budget, for the period 2014-2020, regional policy is the second largest budgetary area after agriculture. The money is available through Structural Funds and the Cohesion Fund and is meant to help “reduce structural disparities between EU regions, foster balanced development throughout the EU and promote real equal opportunities for all”. Cretu, 47, is a member of the Social Democrat Party and has been an MEP since 2007. Between 1992 and 1996 and again from 2000 to 2004 she was spokesperson and presidential counselor to former president Ion Iliescu. Before becoming a politician, she worked as a journalist. Although Cretu graduated
from the Cybernetics Faculty at the Academy of Economic Studies in Bucharest, she has little professional experience in the economic field, which has previously prompted questions about her suitability for the position. Romania’s other proposal, besides Cretu, was Dacian Ciolos, the former Agriculture and Rural Development Commissioner. Top appointments in Juncker’s 28strong team include Italy’s Federica Mogherini as the EU’s High Representative for Foreign Policy and Security Policy, a position considered the most influential after that of president-elect, the UK’s Jonathan Hill as Financial Stability, Financial Services and Capital Markets Union Commissioner, France’s Pierre Moscovici as Economic and Financial Affairs, Taxation and Customs Union Commissioner, Ireland’s Phil Hogan as Agriculture and Rural Development Commissioner, Denmark’s Margarethe Vestager as Competition Commissioner and Slovenia’s PM Alenka Bratusek as Vice-President for Energy Union. The Commission has to prove that it can change, commented Juncker in the official announcement. “After years of economic hardship and often painful reforms, Europeans expect a performing economy, sustainable jobs, more social protection, safer borders, energy security and digital opportunities (…). Today I am presenting the team that will put Europe back on the path to jobs and growth. I have given portfolios to people – not to countries,” he added. The proposed team includes five former PMs, four deputy PMs, 19 former ministers, seven returning commissioners and eight former MEPs. Nine of the new 28-member lineup are women, a target set by president-elect Juncker. ∫ Simona Bazavan
BANKING
Conversion of swiss franc loans could harm lending activity, cautions Ghetea
R
adu Gratian Ghetea, president of the Romanian Banking Association, has warned that a court ruling ordering the conversion of Swiss franc loans into RON will not help lending recover. A court in Galati ruled last week that Volksbank must convert a loan taken out by a customer in swiss francs into the local currency at the exchange rate when the loan was taken out, with an additional increase of 10 percent. One of the contract clauses stipulated that conversion could be requested by the borrower if the exchange rate increased by 10 percent from the moment when the loan was taken out.
In addition, the court ordered the scrapping of the bank’s risk commission, as it was deemed abusive, and ordered the lender to pay it back to the client, reported Mediafax newswire. According to media reports, Volksbank said it would challenge the ruling. “The sums are not negligible, the impact of changing lending conditions in various ways – at the exchange rate from the moment the loan was granted, the transformation at the client’s request from one currency to one other than the RON transformation – the effect is very significant and the ARB has submitted the information it had to Parliament,” said Ghetea. ∫ Ovidiu Posirca
NEWS 5
www.business-review.eu Business Review | September 15 - 21, 2014
6 FOCUS
Cautious private equity looking at Romania over Ukraine woes CEE-based private equity (PE) funds are looking at Romania, which attracted EUR 70 million of investment last year, in response to the unfolding crisis in Ukraine. Dealmakers say funds remain cautious and it is still too early to tell if fresh investments will reach the local market. ∫ OVIDIU POSIRCA
Cristian Nacu partner, Enterprise Investors
Nadia Badea partner, Clifford Chance Badea
Radu Georgescu founding partner, GECAD Group
PE investments have accelerated in the past two years in Romania, increasing more than twofold year-on-year to EUR 70 million in 2013, according to a report by the European Private Equity & Venture Capital Association (EVCA). Exits, meanwhile, fell to EUR 42 million last year from EUR 120 million in the previous year. As the conflict in eastern Ukraine gets worse and the country’s whole economy is brought to the brink of collapse, some dealmakers are saying that funds could seek shelter in neighboring countries. “The Ukraine crisis brings bad things
for Ukraine and a lot of good things that were happening in Ukraine unfortunately have to leave from there for other markets. They are heading towards Poland, the Czech Republic and Romania. Inevitably some good things will come to Romania,” predicted Radu Georgescu, founding partner of GECAD Group, who is a prolific investor in the tech sector. The EVCA report found that Ukraine was able to attract only EUR 19 million in fresh PE investments, while exits amounted to EUR 106 million. Cristian Nacu, partner at Poland-
Mihai Pop, manager, transaction assistance department, EY Romania
we are not expecting a strong impact, but funds that were already targeting the region will find Romania a more interesting market and we can already say there are positive effects in this direction,” Pop told BR. Sectors that could be attractive for PE include infrastructure, energy, agriculture and real estate, according to Nadia Badea, partner at law firm Clifford Chance Badea. Badea cited a report by the law firm that showed that socalled PE “dry powder” (cash reserves) is at near-record levels and likely to drive future activity. “While the US market is accelerating and Europe’s PE activity remains subdued, we are seeing an increasing focus on southern Europe opportunities,” Badea told BR. She suggested the PE industry was more cautious today, due to Cornelia Bumbacea a combination of factors including the partner, deals, PwC Romania fallout of the financial crisis and the current geopolitical context. The Ukrainian conflict has also based private equity fund Enterprise Investors, said it was still too early to claimed its first victim in the private eqgauge investors’ appetite for new funds uity sector, with three former Goldman in CEE. “The test will take place when Sachs bankers cancelling a USD 2 billion the procedures for raising new funds investment venture that targeted the start. In the meantime, the existing Russian market, reported business daily funds in CEE will have been invested,” Financial Times (FT) earlier in September. The paper cited sources who said Nacu told BR. The changes triggered by the Ukrain- that DMC Partners had abandoned efian conflict could spur investments in forts to raise funds this summer due to markets perceived as more stable, such the worsening situation along the as Romania in the regional context, Ukraine-Russia border. The fund was supposed to invest the money in fastcommented Pop of EY Romania. “New private equity constructions growing companies in emerging marhave a significant maturity period, so kets, including Russia, Africa, Turkey Courtesy of PwC Romania
Courtesy of GECAD Group
Moving to safer ground
Courtesy of EY Romania
Courtesy of Clifford Chance Badea
Courtesy of Enterprise Investors
Active deals involving PE in Romania accelerated in the first months of this year, according to Cornelia Bumbacea, partner of deals at professional services firm PwC Romania. Taking into account only publicly disclosed data, the total aggregated value of mergers & acquisitions (M&A) in Romania exceeded EUR 100 million this year, according to Bumbacea. “On average, a private equity fund closes two or three deals per year. However, in the aftermath of the economic crisis many funds have adjusted their investment strategy. One important aspect of this re-adjustment is the investment threshold,” Bumbacea told BR. “Some private equity funds are now looking only at large deals at European level, while others have adjusted to smaller-scale deals, in line with the new market realities. Negotiations with local entrepreneurs usually take longer than expected, with some transactions failing to materialize, for various reasons,” she added. With more companies in PE funds’ portfolios set to reach maturity in the coming period, M&A activity in this sector should pick up, especially in 2015, suggested the PwC Romania partner. She said these firms could be targeted by other industry players or even by other PE funds. Mihai Pop, manager in the transactions assistance department at professional services firm EY Romania, added that, traditionally, investment funds do deals of between EUR 5 and 50 million, something that has not changed in the past two years.
www.business-review.ro Business Review | September 15 - 21, 2014
FOCUS 7
Private equity activity in Romania and Ukraine (EUR mln) Romania/Ukraine Investments
Romania/Ukraine Exits
2008
294
354
52
5
2009
221
38
12
9
2010
119
96
23
88
2011
66
63
31
2
2012
28
43
120
20
2013
70
19
42
106
Source: Central and Eastern Europe Statistics 2013 special paper published by EVCA and Asia. The European Bank for Reconstruction and Development (EBRD) announced this summer that it was stopping new investments in Russia. The lender was a traditional backer of early private equity funds in the country, according to the FT.
Fewer venture capital projects Although PE usually makes investments starting at USD 50 million, venture capital funds can start at USD 2-5 million, commented Georgescu, when asked why financing in the seed and start-up phases of Romanian enterprises is limited.
Private equity funds have been involved in some local venture capital projects, mostly in the Romanian IT sector, according to Bumbacea of PwC Romania.
“Generally, private equity funds are looking for mature companies, with a clear and established market segment, with competent management and good growth perspectives. This is why they are more reluctant to finance start-ups,” she explained. The report by EVCA found that investments in later stage ventures in Romania reached close to EUR 3 million last year, trailing regional champions Poland with EUR 9 million and Hungary with EUR 8 million. Ventures in these countries also provided seed and startup financing, while in Romania there was none, according to the report. “Out of the investment funds present in Romania, there are some that prefer (e.n. to invest) in the early stage – not as part of seed/start-up, but in businesses that have already been tested before the first accelerated growth,” said Pop of EY. Nacu of EI added that seed and startup financing is limited because such
Private equity/venture capital investments in Romania and Ukraine in 2013 (EUR mln) Romania/Ukraine Later-stage venture 2.9 Growth 9.8 Replacement capital 9.4 Buyout 47.8 Total 70 Source: Central and Eastern Europe Statistics 2013 special by EVCA
0 11.4 0 7.5 19 paper published
“New private equity constructions have a significant maturity period, so we are not expecting a strong impact, but funds that were already targeting the region will find Romania a more interesting market and we can already say there are positive effects in this direction,” Mihai Pop, manager in the transactions assistance department at professional services firm EY Romania funds are almost nonexistent in the country. ovidiu.posirca@business-review.ro
www.business-review.eu Business Review | September 15 - 21, 2014
8 PROPERTY
BRIEFS Asking prices for Bucharest homes up by 2 pct in August, says Imobiliare.ro The average asking price of apartments in Bucharest was EUR 1,076/sqm at the end of August, up by 2.1 percent y-o-y, according to data from online real estate platform Imobiliare.ro. Prices were unchanged against the previous month. The average asking price of old flats (those built before 1990) stood at EUR 1,013/sqm at the end of August (up by 1.3 percent y-o-y) while newly built apartments were put on the market at an average of EUR 1,178/sqm (up by 0.4 percent y-o-y).
SPDI buys 122 Bucharest apartments for EUR 3.3 mln Secure Property Development & Investment (SPDI), a property development and investment company incorporated in Cyprus, has paid EUR 3.3 million for 122 apartments in Bucharest, the firm’s third investment in Romania this year. The flats cover approximately 11,700 sqm and are located in four separate residential complexes in different areas of the capital. Out of the 122 apartments, 87 are rented and are estimated to generate a net operating income of approximately EUR 270,000, according to the company. The transaction involves an exchange of assets for shares.
AFI Europe gets EUR 32 mln loan from BCR for AFI Park 2 and 3 Real estate investment and development company AFI Europe has taken out a loan of EUR 32 million from Banca Comerciala Romana (BCR) to finance the completion of the second and third buildings of its 65,000 sqm AFI Park office project in Bucharest. Out of the sum, EUR 17 million represents an investment loan for AFI Park 2 and the remaining EUR 15 million is a development loan for AFI Park 3. The developer delivered the second building of AFI Park in April and the third will be completed in December.
Construction company Tehnologica Radion enters insolvency Tehnologica Radion, one of Romania’s biggest construction companies, has entered insolvency at its own request, according to Mediafax newswire. The first hearing in the case will take place on September 15. The firm, which specializes in road, bridge, tramway and hydrotechnical construction, is owned by local businessman Theodor Berna, who is currently under arrest on tax evasion and moneylaundering charges in a case with damages estimated at over EUR 100 million. Prosecutors have previously sought the seizure of the company’s assets and accounts. Tehnologica Radion reported a turnover of approximately EUR 80 million and a EUR 900,000 net profit in 2013.
Prodplast Imobiliare begins works on EUR 60 mln shopping mall in Obor The 25,000 sqm shopping mall that Prodplast Imobiliare, controlled by Romanian businessman Florin Pogonaru, is developing in the Obor area of Bucharest will be completed in 2016 and is expected to generate between EUR 6 million and EUR 7 million of rental income in the first year, the company has announced. ∫ SIMONA BAZAVAN Veranda shopping mall will require an investment of EUR 60 million, with the money coming from Prodplast’s own funds, but also from a bank loan for which “negotiations are in an advanced stage”, said Andrei Pogonaru, member of the board of administration of Prodplast Imobiliare and the son of Florin Pogonaru. The mall is being built on the grounds of the former Prodplast plastics factory, which has been relocated. It is situated in the Obor neighborhood of Bucharest, one of the capital’s traditional commercial areas, right next to the Obor farmers’ market. Some 20,000 people are expected to come here each day to do their shopping. Veranda is being branded as the first green and proximity mall in the city and is meant to be complementary to the existing traditional retailers in the area, stressed Pogonaru. “We’re bringing a new model of shop-
Anca Damour, director of Carrefour Property, Neculai Ontanu, mayor of district 2, and Andrei Pogonaru, board member at Prodplast Imobiliare
ping center which has been successfully tested in other European capitals such as Prague and Paris. We want to serve the people living near Obor market, while at the same time we are the closest shopping mall to downtown,” he said. Prodplast Imobiliare estimates that the project has a primary catchment area of approximately 166,000 households or about 430,000 people. All in all, some 8 million visitors are ex-
pected in the first year. With a gross leasable area (GLA) of 25,000 sqm available on two floors, Veranda will have 1,200 parking places and feature 15,000 sqm of green space. Depending on the mall’s performance, it could be extended with additional space in the future, said Pogonaru. Out of the total GLA, 10,000 sqm has already been leased by Carrefour, the mall’s anchor tenant, which will open its 11th Bucharest hypermarket there. The remaining 15,000 sqm will be divided into approximately 100 stores for which leasing contracts have already been signed for periods of up to 30 years, said the businessman. The developer estimates that over the coming period, half of the remaining space will be leased as well. CBRE Romania is the exclusive leasing agent for the project. Prodplast Imobiliare was created in 2008 when it broke off from local plastics manufacturer Prodplast. simona.bazavan@business-review.ro
Praktiker starts expansion under new ownership Omer Susli, the businessman who took over insolvent Praktiker AG’s local network in February, has invested EUR 1.5 million in opening a store in Targu-Jiu, the network’s 28th branch and the first to be inaugurated under the new ownership. ∫ SIMONA BAZAVAN The new store that DIY retailer Praktiker opened last week in Targu-Jiu, southern Romania, is the first addition to the network since 2010. It has a sales area of approximately 4,000 sqm, a smaller surface than the around 7,000 sqm average of the other 27 Praktiker outlets, and required an investment of approximately EUR 1.5 million, according to the company. Praktiker’s expansion will continue with the addition of a shop in Giurgiu, Susli told BR in an interview in July. The businessman, who controls several other companies active in the construction field, took over the 27 Praktiker branches in Romania this February from the insolvent Praktiker AG. Results following the takeover have been positive, and after five consecutive years of falling sales in Romania, the local Praktiker network is on course to recover its losses by the end of 2014, said the new owner, attributing this to
Recently, the company announced an operating profit of RON 12 million (approximately EUR 2.7 million) and that it plans to open 18 stores over the next two years, according to Mediafax. The German retailer has been present in Romania since 2002 and saw its sales peak at EUR 292.4 million in 2008 with a network of 25 outlets. As market conditions worsened and competition increased over the following years, Praktiker saw sales drop and losses increase. Last year, the firm reported sales of approximately EUR 130 million, less than half the level posted in 2008, and Omer Susli, owner of Praktiker a EUR 16.3 million net loss. The local DIY market has been changes to the retailer’s strategy. These through major changes over the past include the introduction of new prod- couple of years. OBI closed its local ucts and product categories and cus- stores and bauMax sold its network to tomized offers and price cuts for loyal French Adeo earlier this year. Last year, customers. “The new Praktiker will be Kingfisher, the biggest European home a customer-driven store. Right now cus- improvement retailer, bought the 15 tomers want a good price-quality ratio,” local Bricostore branches from French said the businessman. The entire repo- company Bresson. sitioning campaign should start bearing results by yearend, Susli predicts. simona.bazavan@business-review.ro
www.business-review.eu Business Review | September 15 - 21, 2014
PROPERTY 9
Anchor Grup plans to resume work on Metropol office project Real estate developer Anchor Grup, part of Turkish Fiba Holding, is in the process of selecting a contractor and could resume works on the 35,000 sqm Metropol office project in western Bucharest this autumn. ∫ SIMONA BAZAVAN The Metropol office project in Bucharest was supposed to be delivered in the second half of 2009, but works on the site were brought to a halt when the crisis started. More than five years later, the developer is planning to resume works. “We recently met with the board and in autumn we will start – or we are expecting to start – the 35,000 sqm office building. We have already begun to talk to international players,” said Yurdaer Kahraman, global CEO for commercial real estate properties at Fiba Holding, last week, adding that more information will be made public in the coming weeks. Metropol is located in west Bucharest, close to the Plaza Romania shopping mall and the Anchor Plaza office project, also developed by Anchor Grup. In the meantime, the developer is going ahead with the renovation of its
Yurdaer Kahraman, Fiba Holding
two local malls, Bucuresti Mall and Plaza Romania. Works started in May this year and are on schedule to be completed in 18 months, said Kahraman. The entire budget for the two malls is EUR 26 million, 60 percent of which will go to Bucuresti Mall, which is presently more than 85 percent occupied. At Plaza Romania, the refurbishment process will also include turning 8,000 sqm of the mall’s surface area into office space. When works are com-
pleted, the mall will cover 40,000 sqm. Plaza Romania began operating in 2004, but started to lose business five years later when AFI Europe opened the AFI Palace Cotroceni mall in the vicinity. Bucuresti Mall was opened in 1999, making it the first modern shopping mall in the country. The 40,500 sqm site is also facing more competition as two major shopping malls, ParkLake, developed by Sonae Sierra and Caelum Development, and Mega Mall, developed by NEPI, will be delivered in the same part of Bucharest over the next couple of years. Anchor Grup representatives said the two malls have been reporting stable results but refused to comment on the actual numbers. Moreover, Kahraman revealed that the company was considering investing in a new mall on the local market. “There are still doable locations in Bucharest,” he said, without detailing any concrete development plans. simona.bazavan@business-review.ro
BRIEFS Adama completes Iasi residential project following EUR 1.7 mln investment Real estate developer Adama has delivered the last development phase of Copou Bellevue, its residential project in Iasi, eastern Romania. The scheme consists of a five-storey block with 50 apartments which required a EUR 1.7 million investment. The money came from Adama’s own funds. Some 75 percent of the flats have been sold since March, according to the real estate developer. The finished Copou Bellevue project comprises four blocks with 170 apartments.
Flanco rents 5,000 sqm in H. Essers logistics center near Bucharest IT retailer Flanco has rented a surface of 5,000 sqm in the H. Essers logistics center near Bucharest, in order to reduce time wasted supplying its stores, the company announced last week. Flanco will use the new space to deposit 1.6 million cubic meters of products every year. The center is owned by Belgian company H.Essers which has developed logistics space covering a total of 30,000 sqm close to the A1 highway.
www.business-review.eu Business Review | September 15 - 21, 2014
10 INTERVIEW
CEZ sees end to local renewable rush Martin Zmelik, country manager of CEZ Romania Group, part of the Czech utility firm, reckons that the era of major projects in the renewable sector is over. He says that CEZ is not ‘actively seeking’ investors for its EUR 1 billion wind farm in Dobrogea, which has been hit by changes to the incentives system. The company is currently looking to consolidate its local operations instead of expanding through the acquisition of new ones, revealed Zmelik. like to optimize the overall performance in terms of best practices and processes implemented. So this is our current priority.
∫ OVIDIU POSIRCA
How do you plan to reduce losses in the distribution segment? The losses have really been our main priority for the last two years. It’s definitely a long-term mission and I think now we are, let’s say, in the third year of our strategy focusing on the losses. What we have achieved up to now is full and transparent control over the energy balance. Secondly, we are working with specific parameters on the technical and non-technical assistance to really understand the causes, and we’re trying to identify the right areas and regions to change our investment program, first of all to really change the point of view regarding technical losses and also in terms of prevention and stopping commercial losses, because this is a very big part of our overall losses. So far this year we have had very positive results and this is the first year we have seen a decrease in both parameters, in the absolute volume of losses and also in the percentages.
Is the wind project profitable at the moment, given the changes in the incentives scheme? I will not tell you if the project is profitable or not, but the changes significantly influenced the return on this investment. That is obvious. There are several parameters influencing this result, and we expect there to be further changes that will balance the whole system.
CV Martin Zmelik Zmelik started working for CEZ Group in 2005 as director of international operations. He came to Romania in 2010, worked as COO and was promoted to country manager of CEZ Romania Group in July 2014. He is a graduate of the Management Faculty within the University of Economics in Prague and holds an MBA from the US Business School.
How much has CEZ invested locally since entering Romania in 2005? The whole group has invested over EUR 2 billion. One half was invested in renewable and the other half through acquisition and the investment program in CEZ Distributie. What is the latest on the litigation with Electrica? We are awaiting the final result of the arbitrage. All the necessary information that has been requested by the arbitration (e.n. court) in Paris, we have delivered. We have open books; from the beginning we stated that we were longterm investors and our intention was not to hide any information or not to follow the law or the regulations. We pay attention to this, and of course we believe that all the proofs that we submitted will show that we did our investment program properly. I think we are the ones that really invested in the distribution network. We are putting over RON 200 million (around EUR 45 million) annually into the network and we are going to continue. The (arbitrage) decision will be made by the end of this year. The International Court of Arbitration has its own timing and it is really hard to predict. Of course, I think the best thing for everyone is to receive an answer as soon as possible, so as to close this chapter and
Changes in the legislation? That is the ideal solution, of course.
Photo: Mihai Constantineanu
Is the current backdrop in the energy sector favorable to starting new investments, if we take into consideration for instance the low wholesale electricity prices? We are not planning big new acquisitions/investments. Regarding other investments, we will definitely fulfill our commitments to our customers and I strongly believe this is a long-term industry so you should be very careful about suddenly reconsidering the investment strategy. At the moment, we have our five-year commitment to ANRE in terms of the volume of investments, but we are lacking on the revenue side because there has been a drop in consumption. Oltenia is one of the regions heavily affected by this. We are seriously analyzing the source of this because there is not one reason – it’s quite complicated. We have our own macroeconomic experts working on it to better understand the performance of the economy, because that is one part of the problem. Of course, there are some partial parameters we have already seen: there is the drop in consumption from some big clients, which are also facing problems on their side. We’re also seeing problems like the seasonal ones. The best hope is to come up with a proper understanding of what is happening in the macroeconomics at the end of the year, because the GDP is going up slightly, but consumption is going down.
really focus on the investment program and working with Distributie. CEZ had initially said it was looking to sell its wind farm in Romania, but has now changed its mind. Why is that? Categorically, we are not actively seeking any investors because nowadays we are focusing on something else. We would like to really go through the notification process (e.n. for the farm) in Brussels (e.n. with the European Commission) and to complete our dialogue with state representatives because some of our wind farms are in a very complicated situation that needs to be somehow solved. They ended up somehow between Brussels and Bucharest in terms of notification of the legislation. Under the current legislation our wind farm needs to go through an individual notification process because it exceeds a certain threshold of installment capacity, so the notification needs to be done individually. It is not us but the Romanian state that is tasked with the notification process for the wind farm and this is ongoing and not yet completed. So our primary focus now is to fix the entire environment around the wind farm. We are focusing on improving its performance, because we see there are areas where we can do better, and in the future we would definitely
Can we say that the rush in the renewable sector in over? I think the peak is over, which we’re also seeing in our region through our distribution company as we are connecting several renewables. The era of the major projects is definitely over. CEZ is reportedly looking to buy Enel’s operations in Slovakia. What about the Enel assets in Romania that are also up for sale? At the moment we are in a situation where we would rather consolidate our operations here than expand. One of the reasons why we are not expanding is that we need to solve the problems around the wind farm. This is our priority and also shapes our appetite to invest here in Romania. We would rather make investments in expanding our current activities so we will continue where we know very well that we can do better, or where we can lead on the market, like energy efficiency – this is definitely the direction, but don’t expect any typical acquisition transaction from us. Could Romania lose new energy investments because of what is happening in Ukraine? I would say that instead Romania may gain some, for two reasons: first of all I still believe this is a very attractive market, very secure, with proper authorities with whom we always have open discussions. Secondly, as a general rule, if one of the emerging markets is closing, the others may benefit, and Romania is one of the emerging markets with a stable environment, so I would instead say that this might be an opportunity. ovidiu.posirca@business-review.ro
www.business-review.eu Business Review | September 15 - 21, 2014
LINKS 11
Local IT firm Siveco under investigation for tax fraud Siveco is among a number of companies under investigation by the fiscal authorities for tax evasion. Irina Socol, president of the Romanian software developer, was detained on Tuesday morning for questioning. ∫ OTILIA HARAGA The president and shareholder of Siveco Romania was held on temporary arrest and grilled by prosecutors for several hours. Other suspects in the case will be investigated but have not been detained, after most confessed their crimes when they were questioned on Monday, according to Mediafax. The official statement that the company sent to Business Review reads: “Criminal investigations and procedures regarding a series of punctual activities by Siveco Romania are targeting the president and general manager of the company, Irina Socol, and one of the vice-presidents of the commercial division, Aurora Crusti. The company is cooperating fully and transparently with the authorities regarding any legal documents. The company fully asserts its innocence and will prove that neither Siveco, Irina Socol and Aurora Crusti nor other Siveco representatives have committed any crime.” It went on: “The company is not and will not be affected at operational level, and is being run according to parameters. We will shortly detail the continuity plan, based on the agreement of the shareholders. Once more, we reaffirm the high local and international standards that we have met over time and we continue to observe. There is no obstacle in the way of respecting all the contractual commitments towards the clients and suppliers and we will remain the same trustworthy partner based on two years of flawless professional service.” As well as Siveco, several other companies are currently under investigation by the fiscal authorities on tax evasion charges. “To avoid the payment of taxes to the state budget, the representatives of a company that develops IT programs are suspected of creating a criminal circuit made up of over 50 companies that made fictitious transactions worth approximately EUR 10 million over 2009-2013,” said a spokesperson for the Romanian Police, quoted by Mediafax newswire. Siveco is suspected of falsely acquiring services for the creation of IT programs from various “ghost” companies. The programs were never developed, depriving the state budget of EUR 3 million in revenue.
Irina Socol, president, general manager and shareholder Siveco
Some of the firms that allegedly supplied bogus IT services to Siveco belong to Rroma individuals in Sintesti who were also involved in the scrap iron businesses. “This blow strikes directly at the heart of the IT industry. The skills of Romanian programmers and their technical abilities are among the few domains where we can prove our competitiveness at global level. And Siveco, the company led by Irina Socol, is the leader of the software industry in Romania,” commented GSP journalist Catalin Tolontan on his blog, adding that the PM, Victor Ponta, should wonder what the Romanian state can do to avoid a repetition of the situation. “Isn’t the government worried? It is easy to blame it on individual insanity and greed but what if this is a modus operandi?” Investigators seized computers and documents after searching the headquarters of companies involved in Bucharest, Ilfov and Giurgiu as well as the homes of the individuals under suspicion. Ten people have been questioned in the case. The searches were carried out by officers from the Direction for Fraud Investigation (a Romanian Police department), under the coordination of the Prosecutor’s Office (the Bucharest Court of Appeal), as well as police officers from Giurgiu and Ilfov county, with support from the Special Operations Direction. “This morning, we were required to provide information for searches conducted by the authorities. The financial and commercial activity of the
company has been based, for more than two years, on respecting all the legal national and international norms. We are fully cooperating with the authorities. We are also very transparent in placing at the disposal of the public information regarding the ongoing investigations made by the authorities, as we obtain it,” Siveco Romania officials told Mediafax newswire. One of the main IT firms in Romania to have signed contracts with public institutions both in Romania and elsewhere in Europe, as well as in Asia and Africa, Siveco has developed projects in eLearning, eHealth, eCustoms and credit bureau in the United Arab Emirates, Azerbaijan, Turkey, the Republic of Moldova, Bulgaria, Kazakhstan, Algeria, Serbia, Saudi Arabia, Cyprus, Macedonia, Bahrain, Kuwait, Egypt, Oman, Morocco, Belgium, Luxemburg and Belarus. Its major local projects have involved the IT education system, developed for the Agency of Payments and Interventions in Agriculture, the single informatics system for the National Health Insurance House, the new computerized transit system, an eCustoms solution implemented by Siveco for the National Customs Authority in Romania and Turkey and the informatization of the Credit Bureau in Romania. In 2013, Siveco posted a consolidated turnover of EUR 65 million. In the first nine months of 2014, the company signed 15 contracts with state institutions, with a total value of EUR 70 million. Its management board is made up of Irina Socol, president and general manager, Alexandru Radasanu, vicepresident of R&D, Daniela Bichir, vicepresident of HR & quality, Florin Ilia, vice-president, Aurora Crusti, deputy vice-president for the commercial commission, Doina Binig, vice-president of strategy and chief operating officer, and Bogdan Ciungradi, financial vice-president. The company’s shares are split between Siveco Netherlands BB, with a 42.73 percent participation, Siveco International (32.91 percent), Socol (11.11 percent), Radasanu (7.71 percent), Florian Gabriel Ilia (2.71 percent), Siveco Romania (2.51 percent), Aurora Ecaterina Crusti (0.13 percent) and Daniela Bichir (0.13 percent). otilia.haraga@business-review.ro
BRIEFS Romania to invest nearly EUR 4 bln in IT&C by 2020 Romania should invest EUR 3.9 billion to meet its IT&C targets by 2020, which include growing broadband coverage, e-government use, online sales and the number of employees in the sector, as part of the National Strategy Digital Agenda for Romania, published by the Ministry for Information Society, according to Mediafax newswire. The development of the broadband network will attract EUR 3.1 billion, which accounts for the bulk of the investments.
Huawei plans EUR 130 mln local turnover Huawei Technologies Romania aims to post a EUR 130 million turnover this year, a slight growth over 2013, when the company registered EUR 127 million, according to Mediafax newswire. Huawei Technologies Romania currently has 900 employees, of whom 700 are Romanians. Over 2007-2012, the Chinese group invested EUR 90 million in its Romanian subsidiary. An additional EUR 6 million was invested in the opening of the fourth Huawei global services center, which provides technical support to customers in Central and Eastern Europe, Scandinavia and Western countries.
UPC clients can tailor their telecom packages Customers of telecom operator UPC Romania now have the opportunity to customize their telecommunications provision by picking the TV channels, internet and telephony services they want in their package, after the company introduced a new portfolio, which allows for 1,000 possible combinations. UPC also announced the launch of the Fiber Power 500 Mbps service, which offers internet speeds of between 60 Mbps and 500 Mbps, in eight Romanian cities: Bucharest, Timisoara, Cluj-Napoca, Ploiesti, Iasi, Galati, Constanta and Alba Iulia.
Vodafone enhances mobile data experience with Supernet launch Telecom operator Vodafone Romania, which had 8.5 million customers on June 30, has launched Supernet, marking a new development in mobile data services, which allows higher speeds, network stability and security in the network for its customers. All Vodafone customers will benefit from substantially higher speeds when surfing the internet from their smartphone. 3G speeds will reach 43.2 Mbps while users of 4G services will have download speeds of up to 300 Mbps.
www.business-review.eu Business Review | September 15 - 21, 2014
12 FILM
Films of the fall: local premieres line up for big screen Seven Romanian premieres will be hitting the national and international silver screens this autumn, covering a range of subjects, from well known local stories of the 20th century to contemporary comedies. What is surprising is the fact that almost half of the 20 Romanian premieres expected in 2014 are debuts or second features, with most of the films receiving support from the National Centre for Cinema. tember 12, is the second feature from Corneliu Gheorghiță. It stars French actor Serge Riaboukine, winner of the Bronze Leopard in Locarno for his turn in Peau d’homme cœur de bête (1999).
∫ OANA VASILIU Director Dan Pita has managed to finish his movie Kyra Kyralina more than 20
The Romanian movie, which premiered at the Transylvania International Film Festival (TIFF) in June, tells the story of Leduc, a French real estate developer, who is preparing Baile Herculane, an old Romanian thermal resort, for renovation. A Roman fresco in a crypt delays the project, so he tries to burn it down, but locks himself in a courtyard by mistake. He stays trapped for days, as the neighborhood is deserted. Leduc then tries communicating with the few remaining residents and degenerates from a civilized being to a beast. Gheorghe Ifrim, Adrian Văncică and Mihai Călin play the main characters in Răzvan Săvescu’s new comedy, which also had its world premiere at TIFF this summer. America, venim! (America, here we come), which will be in cine-
EUR 100,000 budget was covered by the director himself, and the film stars Claudia Pavel, Cătălin Ciurdar, Vlad Corbeanu, Robert Radoveanu and George Constantinescu. Probably the most eagerly awaited premiere of this autumn is Q.E.D. (Quod Erat Demonstrandum), directed by An-
Courtesy of Ancuta Iordachescu
Courtesy of Kyra Kyralina
drei Gruzsniczki and starring Ofelia Popii, Sorin Leoveanu and Florin Piersic Jr., which has garnered several international awards, such as the Rome Special Jury Prize and the Siberian Golden Taiga International Debut Film Festival’s top award. The black and white movie focuses on a mathematician’s decision to publish a paper in a magazine edited by an American university without asking permission from the communist authorities. This action triggers a chain of events that will change the lives of his friends. The movie will premiere in Romania on October 10. Last but not least comes Poarta Alba,
Courtesy of Poarta Alba
years after first contemplating the project. The EUR 1.5 million result, which goes on show from September 5, is a baroque affair, which reconstructs the life of a 1920s dysfunctional family with impressive interiors, costumes (Oana Paunescu) and music (Adrian Enescu). Based loosely on the plot of the homonymous book by Panait Istrati, it is pitched as a set of interlocking narratives concerning a young gay man in a world that was somewhat more liberal sexually in the latter years of the Ottoman Empire. But the movie is in fact a family story seen through the eyes of the young man, focusing on two female characters. Kyra (Iulia Dumitru) is the libertine mother of Dragomir (Stefan Iancu as a youngster and Corneliu Ulici as an adult) and Kyralina (Iulia Cirstea), and attends exotic parties with foreigners in an effort to find her daughter a husband. She, however, is terrified of her own husband, Rotarul (Mircea Rusu), who beats both his wife and children. The story concentrates on the search for love and happiness in a world of fear, revenge and excess. Cripta (The Crypt), released on Sep-
mas from September 19, tells the story of five actors, a director, and a small child with a huge teddy bear, who are crossing the ocean from Targoviste to perform in New York. To make some extra money, the actors decide to start working with a local agent, a Romanian living in the US. The agent promises them a major tour, but nothing goes according to plan. Gheorghe Andrei’s debut independent feature Planşa (It Takes Two to Fence) will premiere on September 27, telling the story of Alex (Silvian Valcu), a former fencing champion, who is returning to the sport as a coach. When Anda (Olimpia Melinte) signs up for classes, Alex becomes her trainer, but their professional relationship develops into something more. This comes to the attention of Mircea (Marian Adochitei), Anda’s boyfriend, who is a member of the same club. The tension mounts until Anda is forced to choose between fencing and Mircea. Kiki Vasilescu is another independent director releasing his first feature film, Terapie pentru crima (Cuckoo with a Gun) this autumn, on October 3. The starting point for this black comedy was Luc Besson’s hit, Léon. “I was thinking what might happen to Matilde when she grew up, and I imagined her coming to Romania and taking a job, until one day she quits and becomes a hit woman. From that point I wrote the independent story of a young Romanian woman who wants to be a hit woman. She starts looking for a first contract but soon she moves into another hit man’s territory,” Vasilescu told the publication Film New Europe. The
Courtesy of America, venim!
Courtesy of Cripta
directed by Nicolae Margineanu, who continues the investigation of the communist era. He presents a feature about the concentration camp at Poarta Alba and the construction of the DanubeBlack Sea canal. The plot follows three students (Cristian Bota, Sergiu Bucur and Madalina Craiu) caught while trying to cross the Danube, two of whom are sent to the notorious camp. oana.vasiliu@business-review.ro
www.business-review.eu Business Review | September 15 - 21, 2014
CITY 13
Old City Center gets new Gabroveni Inn finally opens to public
International events organizers meet in Bucharest
Six years after the first steps in the reconstruction of the Gabroveni Inn, the inauguration date has arrived. Over September 19-21, the public is invited to the inn’s public spaces to see the results. The new-look building was conceived as a multifunctional cultural center.
Allen Xenius Grige
Courtesy of ArCub
The inn now hosts a theater, the visual arts, professional training, administration, and cultural and tourist information
∫ OANA VASILIU Once upon a time…
Courtesy of ArCub
Gabroveni Inn was first mentioned in an 1818 document by Dionisie Fotino and then again in 1822, by L. Kreuchely, Prussia’s agent in Bucharest. According to the latter, at that time there were seven large inns without a church in the city: Filipescu, Golescu, Manuc, Papazoglu, Constantin Voda, Zamfir, and Gabroveni. Although significantly smaller in size than similar edifices, Gabroveni Inn lived its glory days over 1825-1850, mainly due to its proximity to the shopping area of Lipscani. In 1824, it was already listed among Bucharest’s most important inns. Along with a change to the street numbering in 1887, a series of modernization works took place, coordinated by architect I.I. Rosnoveanu, and Gabroveni Hotel became GabroveniUniversal Hotel. In 1911, Ruse Rusescu owned the edifice. The damage incurred after 1967, when the first process of preservation began, worsened after 1990, all of which made the old building, which had a structure similar to that of Hanul cu Tei (the Linden Inn) a real danger to passers-by. The edifice became a shelter for homeless people and suffered numerous fires, which led to its almost complete destruction.
The cost of the facelift By the end of 2006, the Gabroveni Inn was included on the List of Historical Monuments and put under the administration of ArCuB, Bucharest’s cultural center. From 2008, the reconstruction, extension and restyling of the site was part of a project financed by the Financial Mechanism in the European Economy Area, implemented by the Romanian Ministry of Cultural and National Patrimony and by the Bucharest City Hall, with a budget of EUR 5.2 million, although the official costs were EUR 4.2 million. The rehabilitation and extension of the inn included several stages: the
preservation, consolidation and reconstruction of the building and its trade passage, followed by the extension of the existing edifice with a new wing on a vacant piece of land nearby. The project also included a special approach to the masonry, part of which was replaced brick by brick and, where possible, repaired by refilling each brick with concrete insertions. The story is told in The Story of the Inn – Cultural Center ArCuB, a bilingual book that will be available in Romanian and English to mark the opening of the building. oana.vasiliu@business-review.ro
The International Festivals and Events Association (IFEA) Regional Conference 2014 will be hosted this year at Bucharest’s Center for Cultural Projects – ArCuB (an IFEA member), in its recently inaugurated Old Town location, Gabroveni Inn. The program of the four-day event (September 18-21) includes conferences, seminars and master classes on topics such as events sponsorship, networking, partnerships with cultural institutes and event case studies. Allan Xenius Grige, IFEA Europe chairman, says the first edition of the conference was held in 1992. “Knowledge of sponsorship, networking, evaluation methods, communication and programming is crucial as competition for attention and attractiveness between events, cities, and countries is growing. I am sure that the program, as well as the setting on the occasion of the anniversary of Bucharest and the opening of the Gabroveni Inn, will be quite exciting for our delegates,” says Gringe. The international speakers at the conference in Bucharest will include Trevor Davis, project manager for the winning Copenhagen and Aarhus bids for European Cultural Capital (2017) and the founder of Copenhagen International Theater (KIT), who has founded many high-profile, groundbreaking public events. William Culver-Dodds, IFEA vicechair, is an expert in event and festival development. He was CEO of Harrogate International Festivals for 15 years where he transformed the organization from a stand-alone summer music festival into a year-round cultural powerhouse with a turnover of over GBP1 million and audiences in excess of 100,000 annually. Culver-Dodds created the Theakstons Old Peculier Crime Writing Festival, the world’s leading celebration of crime fiction, as well as a host of international outdoor performance arts festivals and events. 86-88 Lipscani St. For more details about the conference go to: www.arcub.ro. Anca Ionita
www.business-review.eu Business Review | September 15 - 21, 2014
14 ART
Will the state find EUR 20 mln to keep Brancusi sculpture at home? A
Courtesy of Artmark
rt lovers are wondering if PM Victor Ponta will accept the culture minister’s challenge to find EUR 20 million to prevent The Wisdom of the Earth (Cumintenia Pamantului) by Constantin Brancusi – probably one of the Romanian sculptor’s most important works still in his homeland – going abroad. Currently in a private collection, the piece has been put up for sale. At the beginning of the month, auction house Artmark organized an event called “Showcasing Romanian avant-garde art, from Private Collectors, on exclusive display”, where the gallery displayed Brancusi’s sculpture alongside other works of art up for auction later. Artmark invited the Romanian Ministry of Culture to bid, and Kelemen Hunor, the minister, has called upon PM Victor Ponta to find the money to keep the sculpture in the country. “This sculpture The Wisdom of the Earth should become state property if the owners are selling it. Romania should make an effort,” said Hunor, quoted by Hotnews.ro newswire. “We aim to open discussions, to form a commission and, if we get a positive decision about buying the sculpture and the price is right, then we must get more funds from the budget”, added Hunor. On September 10, the government told the Ministry of Culture to open negotiations regarding the acquisition of the sculpture, according to Mediafax’s sources. The Romanian state should now exercise its right of first refusal in order to prevent the piece from going under the hammer, within 30 days of receiving official notification, given by Artmark on September 3. Otherwise the work could end up in the world’s most visited modern art gallery, Tate Modern, through the efforts of Maria Rus Bojan, art critic and member of the gallery’s acquisition committee. If so, it would complete the Tate’s Brancusi series, and the gallery has said that it will take the opportunity to acquire the piece. Two
private Romanian collectors are also in the running, Mediafax reports.
We did it once – let’s do it again Also present at Artmark’s event was Doina Lemny, a researcher at the Pompidou Center from Paris, who, like Rus Bojan, believes that The Wisdom of the Earth must remain in the country through a national pitch. The news was picked up on by several national newspapers, with the comments section indicating a widespread willingness from the public to donate the money.
FOUNDING EDITOR Bill Avery PUBLISHER Anca Ionita EDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - senior journalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai Constantineanu
ISSN No. 1453 - 729X
LAYOUT Beatrice Gheorghiu ART DIRECTOR Alexandru Oriean
The campaign is not without precedent. In the 1880s, a national subscription drive was initiated to fund the construction of the Romanian Athenaeum under the banner “Donate one leu for the Athenaeum”. Following a positive response, in 1886 French architect Albert Galeron started work on the design of the building, and soon after it was opened.
The work depicts a woman whom critics describe as very focused on herself, her face emanating a mystery that transforms her into a universal portrait, similar to the Thinker of Hamangia. The material used is limestone crinoid, a very common rock in the Paris of the 1900s. Brancusi used a block of stone from the catacombs of the city, the Savonnieres grottos, the sculptor told the first owner of the sculpture, Gheorghe Romascu, when he bought the piece in 1911. The work was confiscated by the communists in 1957 and given to the Museum of Art, but the sculpture was returned to the family after 51 years, and is currently on display at Cotroceni National Museum. Lemny added that this was a key piece in Brancusi’s development, made soon after the artist and his mentor, Auguste Rodin, parted ways. “What does The Wisdom of the Earth mean? What does wisdom mean? It is the woman’s inferiority – she is in a humble posture to look at her inner self, to meditate. This is why this sculpture is essentially Romanian and should remain in Romania, with all the sacrifices we could currently make,” she said, pointing out that other nations like the US also hold national pitches for the purchase of art. “The sculpture isn’t a bronze. It is one of the few carvings by Brancusi. Currently, in private collections worldwide there are only six works of art – in wood or stone – that can be put on the market and sold to a private collection or a museum,” said Alexandru Baldea, director of Artmark.
Brancusi brings big bucks
The 1907 sculpture captures the philosophy of Brancusi, which has its roots in the pre-Christianity tradition.
The biggest recent transaction involving one of Brancusi’s works saw Madame LR, a wooden sculpture, go for EUR 26 million at Christie’s Paris auction house. In June 2014, Christie’s sold another of the Romanian’s works, a simple gypsum study of The Kiss, in New York, for EUR 5.4 million. ∫ Oana Vasiliu
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The story behind the sculpture