Going Dutch: Companies from the Netherlands are interested in investing in
MEDIA ROUND-UP
the Romanian shipping and logistics industry, says Bernard Wientjes, president of the Confederation of Netherlands Industry and Employers »page 7
ROMANIA’S PREMIERE BUSINESS WEEKLY
THERE IS LITTLE GOOD NEWS FOR HARD PRESSED MASS MEDIA FIRMS WITH CLOSURES, REDUNDANCIES AND PAY CUTS ALL MAKING HEADLINES. BR FINDS OUT MORE »PAGE 8
September 12 - 18, 2011 / VOLUME 16, NUMBER 31
NEWS
Lending law
BUY THE FARM?
The Central Bank wants to tighten criteria on both retail and corporate loans, with foreign currency lending particularly affected, and has come up with a draft regulation package » page 6
Romania’s farmland is among the cheapest in Europe, suggesting fertile profits to be harvested. But who will reap them?
NEWS
»page 10-11
Two become one Generali Romania, the result of the merger of Generali Insurance and Ardaf, is officially in business. The seventh biggest player on the local insurance market is getting a EUR 3 million image campaign » page 6 CITY
Champagne supernova
iStock
Photo: Laurentiu Obae
RESTAURANT Pizza the action: Did the 300-seat terrace at Pizza Maxx score Maxximum marks when our critic dropped by to sample its lowpriced fare? » page 12
Jean-Jacques Cattier, whose family firm is behind the high-end Armand de Brignac cuvee, talked bubbly with Business Review » page 13 ENESCU FESTIVAL Bucharest’s flagship classical musical event continues, with iconic conductor Daniel Barenboim in town. Check out BR’s selection of events this week » page 13
www.business-review.ro Business Review | September 12 - 18, 2011
BUSINESS AGENDA September 12 11:00 Visa Europe organizes an event to mark the beginning of a campaign promoting card internet payment at Carturesti Verona teahouse. Catalin Cretu, GM Romania Visa Europe, will attend. By invitation only.
NEWS 3
NEWS in brief WEEK in numbers
4.8
September 13 10:00 Bitdefender is organizing a press conference to mark the launch of its new brand identity at the Parliament Palace. By invitation only.
percent – the unemployment rate at the end of August, raising the jobless total to 437,811, according to the National Agency for Work Force, ANOFM
September 13 11:30 AmCham Romania and the Foreign Investors Council organize a press conference to present propositions for changes to the fiscal code, fiscal procedures and customs procedures and regulations at Union International Center. By invitation only.
17,806 the number of homes completed in the first semester of this year, according to data from the National Statistics Institute, ISN
September 13 15:00 Sony organizes an event to mark the launch of a new line of digital cameras at Casa Seciu, near Ploiesti. By invitation only.
September 15 18:30 The WU Executive Academy is organizing Info-Sessions for its MBA programs at the Commercial Council of the Austrian Embassy, in Bucharest. Registration in advance is necessary to attend the event. September 16-17 Agora Group and Siveco Romania organize eduVision 2020, an international conference on education and eLearning trends, at Parliament Palace. Daniel Funeriu, minister of education and Valerian Vreme, minister of communications, will be among the guest speakers. By invitation only. September 22 18:30 Maastricht School of Management Romania (MSM) is organizing an MBA Master Class on the systems thinking approach with visiting professor Khaled Wahba at its headquarters, in Bucharest. The event is free of charge, but booking in advance is necessary.
Agerpres
September 15 10:00 AXA Life Insurance organizes a press conference to present its new savings and protection program at Verona Garden, Carturesti. By invitation only.
6.3 IMAGE of the week Having a field day The long-awaited opening of the National Arena, marked by last week’s Romania-France football match, provoked criticism over the state of the pitch. The French press compared it to a “field of potatoes,” and UEFA has asked for it to be replaced. The turf was laid by Max Boegl and Astaldi.
IT&TELECOM Bidding for electronic health insurance card begins again The National Printing Company has restarted the bidding for the introduction of the electronic health insurance card, a contract that is estimated at approximately EUR 26 million, VAT included (RON 110.8 million), according to Mediafax newswire. The first procedure was cancelled after Ericsson Romania filed a complaint on the grounds that the documentation broke the public acquisition law and restricted the access of applicants. The new participation announcement was published on September 5 on the website e-licitatie.ro. The contract will last nine months and will be financed by the National Printing Company. According to the task book, prospective bidders must have posted a turnover of at least EUR 49.5 million (RON 170 million) over the past three years. The national card will be issued individually to each applicant and sent by mail to his or her home.
Romtelecom puts EUR 1.4 mln into NextGen Romanian telecom operator Romtelecom has injected yet another RON 6 million (approximately EUR 1.4 million) into the social capital of its cable company NextGen Communications, according to Ziarul Financiar, quoting the Official Registry. The increased social capital of NextGen Communications will be RON 219,074,020, the equivalent of EUR 51,790,346. NextGen is wholly owned by Romtelecom, which bought it in stages.
RETAIL Adesgo foots EUR 25,000 bill from opening second outlet Romanian fine socks and stockings manufacturer Adesgo has invested EUR 25,000 in opening a privately-owned shop in downtown Bucharest under the Diamond by Adesgo name. The first such store was opened last year on the premises of the Adesgo factory in the capital. The company plans to open similar
percent – the decrease in the level of investments in Romania in the first semester of the year shops in Bucharest, Iasi, Constanta, Brasov, Timisoara and Craiova. For the first semester Adesgo reported a turnover of RON 24.3 million (approximately EUR 5.7 million) and expects higher sales in the second half of the year following the launch of new products and the opening of its second store. Adesgo works for several retailers in Europe and the Middle East such as Tesco (in the UK), Hema (Holland), Falke (Germany) and Dunnez (Ireland). Since 2002 its majority shareholder has been Loar BV, part of Israeli Argaman Industries.
Billa invests EUR 1 million in redesigning Iasi store Billa Romania has invested over EUR 1 million in modernizing its outlet in Iasi, the company has announced. The entire interior store architecture was redesigned with a focus on the fresh food area, which has been enlarged by over 70 percent. Part of German Rewe Group, Billa has been present in Romania since 1999. Its local network consists of 55 supermarkets countrywide.
Grand Cinema Digiplex opens at Baneasa Shopping City Baneasa Developments will open the Grand Cinema Digiplex in Baneasa Shopping City on September 23. The new facility, which required a EUR 19 million investment, covers a total surface of 14,000 sqm and has over 2,600 seats. The cinema has 13 screens adapted for 3D projections. Access is through the first level of Baneasa Shopping City commercial cen-
www.business-review.ro Business Review | September 12 - 18, 2011
4 NEWS
NEWS in brief ter. Besides the cinema halls, the venue includes a lobby and exhibition area called Imagika, where movie launches will take place, and the Eye-Fi Café Bar, say officials.
PROPERTY US Embassy in Bucharest moves to new Baneasa HQ The US Embassy in Bucharest is moving to new headquarters in Baneasa, at 4-5 Dr. Librescu Boulevard, as of September 14. The new premises, which have a 4.5hectare surface area, are north of Baneasa mall, close to the Tunari woods. The facility was built to a green building design and met construction guidelines imposed by the United States Green Building Council (USGBC) and the Leadership in Energy and Environmental Design (LEED) program. Ecological paint and materials meant to reduce chemical and heat emissions into the atmosphere were used. Around three quarters of the site is green space that is home to drought-resistant trees and plants, which reduces water consumption. The public transport system (RATB) has created a new stop on the 301 route close to the embassy to encourage the use of public transport.
Electroputere Parc announces 92 percent occupancy rate Electroputere Parc Craiova has announced an occupancy rate of 92 percent. Built on the structure of a former industrial facility, the shopping mall will open this November as scheduled, DTZ Echinox, the company responsible for leasing the project, has announced. Initially designed with a total leasable area of 55,000 sqm (GLA), 1,900 parking spaces and over 120 stores, the project has been extended to over 71,000 sqm.
MedLife leases 3,000 sqm in former Rompetrol HQ Medical services provider MedLife has leased 3,000 sqm in a building on Calea Victoriei which used to host the Rompetrol HQ, CBRE has announced. The first few floors are expected to accommodate a medical clinic serving patients from the downtown area of Bucharest.
CONSTRUCTION Astaldi to build USD 166 mln section of A2 highway The Romanian Transportation Ministry has selected Astaldi and Max Boegl Romania to build a 20.5-km highway section
from Cernavoda to Medgidia, part of the road (A2) that connects Bucharest to the Black Sea city of Constanta. The value of the contract is USD 166 million and the section has to be completed in 15 months. Funding for the infrastructure project will be provided by the European Investment Bank, the European Commission through cohesion funds and the state budget. In April, Romania cancelled its contract with French company Colas, which was supposed to deliver the CernavodaMedgidia section, on the grounds that the firm had hiked the price by EUR 8 million.
POWER EBRD grants EUR 30 million loan to Romanian oilseed processing company The EBRD is granting a EUR 30 million syndicated financing package to Expur SA, a local oilseed processing company. Expur crushes rapeseed and sunflower seed and produces crude rapeseed oil, refined edible sunflower oil, as well as rapeseed meal, sunflower meal and biodiesel, for both domestic and export markets. The new facility to finance Expur's
working capital requirements is in addition to existing EBRD financing totaling EUR 80 million. Half of the new EUR 30 million loan will come from the EBRD’s account, and the remaining sum will be syndicated to Société Générale and Rabobank. Expur is owned by Saipol SAS, the French leader in oilseed crushing and vegetable oil refining.
STOCK EXCHANGE Adidas and SAP shares to be traded on BSE The listing committee at the Bucharest Stock Exchange (BSE) has issued favorable notices to start the trading of shares in Adidas AG and SAP AG on the international tier of the ATS, the alternative trading system of the BSE. The trading start requires the approval of the BSE board of governors. Adidas AG is one of the largest shoe and sportswear makers, with worldwide sales in 2010 of over EUR 11 billion and a market cap of EUR 9.5 billion. SAP AG, another company headquartered in Germany, is the global leader on the ERP (enterprise resources and planning) market.
www.business-review.ro Business Review | September 12 - 18, 2011
6 NEWS BANKING
INSURANCE
Central Bank seeks to tighten retail lending regulation
Newly formed Generali Romania to put EUR 3 mln into promotion campaign
T
G
he Romanian National Bank is planning to supplement its regulation on retail and corporate loans in foreign currency, through a draft regulation package that is under public debate until September 20. This will also impact consumer loans in foreign currencies, which are not protected from currency exchange risks. The bank wants to decrease the volume of loans in foreign currencies taken out by customers operating with the local Romanian currency (RON). The banking sector will have 90 days to update its lending packages to reflect the new provisions. “These changes will significantly reduce the sums in foreign currencies that can be lent, in respect to revenue. Those who choose to borrow in RON will be less affected,” said Vlad Elias, managing partner at Cooper Pear, a financial consultancy. The new provisions will apply to subsidiaries of EU Member States’ credit institutions that are present in Romania. The central bank also states that a loan for housing investment needs to be guaranteed by a mortgage, whether it is with the sole purpose of acquiring or maintaining ownership of land and/or a building, or for extension or modernization works on a building. Consumer loans will be treated differently from housing loans. Customers seeking a consumer loan will have to provide guarantees totaling 133
percent of the loan value with an initial maturity of maximum five years, a substantial decrease from the current maximum rate of 20 years. These provisions do not apply to medical or student loans. For housing loans, the debtor must come up with a deposit of 15 percent of the value of the property for financing in the local currency (RON), which increases to 30 percent for loans in Euro and 40 percent for financing in other foreign currencies. The maximum level of indebtedness will also be a factor in the following: the exchange rate shock: 35.5 percent for EUR, 52.6 percent for CHF and 40.9 percent for USD; the 0.6 percent shock on all currencies for interest rates and 6 percent for the revenue shock. At the end of July, due payments for loans totaled RON 10.8 billion, representing 7.85 percent of all loans granted in foreign currencies. However, due payments in the local currency (RON) are in the same range, reaching RON 8.9 billion after the first seven months. At the end of July, banks had granted loans in foreign currencies totaling RON 137.7 billion, 72 percent more than loans given in the local currency, which reached RON 80 billion, according to data from the central bank. Financial institutions have granted retail loans in foreign currency worth RON 67.7 billion, out of which RON 37.5 billion represents consumer loans, and RON 28.9 billion home loans. ∫ Ovidiu Posirca
enerali Group officials have announced that Generali Romania will officially start operations in Romania, after the merger between Generali Insurance and Ardaf. The newly formed company becomes the seventh biggest player on the local insurance market, with a combined market share of 6.7 percent in the first half of 2011. In 2010, Generali Insurance held a 6 percent market share of the life segment and 8 percent of the non-life segment. In March, shareholders of Generali Insurance and Ardaf decided in favor of the merger of the two companies by absorption. In August, they and the Romanian Insurance Supervisory Commission approved the merger and the following month the process was finalized. Speaking at a press conference last week to announce the move, Gianluca Colocci, responsible for merger and acquisitions operations for Generali PPF Holding, said that Romania had potential in the growth of its population and GDP, along with the low insurance penetration. Colocci predicts further growth in the life and non-auto insurance segments and named Romania, Russia, Poland and Turkey as growth clusters for the Generali Group. Adrian Marin, CEO of Generali Romania, said that the newly formed company has a balanced portfolio: 48 percent
auto, 19 percent life, 24 percent property, 6 percent liability and 2 percent travel. Marin added that the firm will have over 500 partners, including insurance brokers, banks and leasing companies. Marie Kovarova, member of the supervisory board of Generali Romania, said that the merger process would last approximately one year. She added that Ardaf and Generali Insurance have different client profiles and are targeting different customer segments. Generali Romania will benefit from the complementarity of the two distinct brands in gaining ground on the local insurance market. Ardaf is well established in the retail segment while Generali is perceived as a powerful brand, mainly in urban areas. Hence the two separate brands and networks will be kept and a multi-brand strategy will be established for Generali Romania. EUR 3 million will be allocated to promoting the image of the new insurer. On the long term, Generali Romania wants to increase its market share to 10 percent. Marin will lead the new management team at Generali Romania. He has held various positions at Generali Insurance. He was deputy managing director before becoming CEO of the newly formed insurer. ∫ Ovidiu Posirca
www.business-review.ro Business Review | September 12 - 18, 2011
NEWS 7
INVESTMENT
Dutch companies target Romanian logistics and shipping industry D
Photo: Laurentiu Obae
utch Vopak, a global provider of independent tank terminal capacity to the chemical and oil industries for the storage of liquid chemical products, is interested in investing in the port of Constanta, Bernard Wientjes, president of the Confederation of Netherlands Industry and Employers (VNO– NCW), told BR last week at the end of his visit to Romania. “They want to make some investments in Constanta. There is a storage company there which is fully owned by the Romanian state and Vopak would be interested in some form of joint venture, to buy this company or extend it because they have storage capacity all around the world and because they see that Constanta could be a very interesting place for the future,” said Wientjes. He explained that logistics is a target sector for the Dutch authorities and that the Romanian logistics industry, especially the port of Constanta, is of key interest to investors from the Netherlands. Discussions with the Romanian authorities touched on the European Gateway Platform, a PPP project funded by the Dutch public and private sector with
Bernard Wientjes, VNO-NCW president the aim of making the port of Constanta a gateway to Central and Eastern European markets.
“We are happy with the cooperation between Rotterdam and Constanta but we want to take the next step, which would mean more involvement. This could mean some kind of joint venture, which would perhaps be the best solution as Rotterdam has done the same in many other places, like Qatar for example. They bring knowledge, and of course Rotterdam is the most modern and advanced harbor in Europe, so this joint venture could be a win-win situation,” Wientjes added. Other areas of interest for Dutch companies in Romania are agriculture and energy, stated the president, adding that Dutch investors are generally satisfied and positive about doing business here. However, bureaucracy still remains a burden as do delays in refunding VAT, he went on. “The VAT is a problem in this country for many of our companies. Not because it is 24 percent – this is not so important – but because when a company pays it in advance it has to wait six months to get it back,” he said. Another issue Wientjes mentioned was the lack of educated workers, espe-
cially in the field of logistics. To remedy this, Dutch representatives offered support in creating a faculty or department in one of the Romanian universities dedicated to this field. ∫ Simona Bazavan
COMPANY PROFILE Vopak Headquarters: Rotterdam, the Netherlands Presence: Operates in 31 countries worldwide Industry: Offers storage and trans-shipment solutions at 80 terminal on all continents Established: 1616. In its earliest form the company provided storage and related services to trading companies 2010 Turnover: EUR 1.1 billion. Listed on the Amsterdam AMX index.
www.business-review.ro Business Review | September 12 - 18, 2011
8 LINKS
Papering over the cracks: local mass media adapts to survive Romania’s mass media industry is going through turmoil: publications are closing down or downsizing, lay-offs are becoming more and more frequent while circulation and sales figures are plummeting. Measures taken recently by press bosses across the board only serve to further underline the drama. BR surveys the scene.
Photo: Laurentiu Obae
Reading between the lines: the mass media must adjust to extreme market conditions
∫ OTILIA HARAGA "The mass media is currently at a crucial point in its evolution," Dan Matiescu, CFO of Intact Media Group and coordinator of Intact Publishing operations, told BR. "The greatest challenge is financing for development. Compared to that, nothing else matters much." After two tough years, the local entertainment and media industry has stabilized and is beginning to show signs of recovery, according to PwC's survey Global Entertainment and Media Outlook 2011. The industry is predicted to register an average growth rate of 8.8 percent per year between 2011 and 2015. The value of the market should increase from USD 2.5 billion in 2010 to USD 3.8 billion in 2015. This will make the Romanian media and entertainment market the third fastest growing in the region after Turkey (with a 13.2 percent growth) and Russia (11.7 percent). However, in absolute terms, it will re-
main the smallest in the region. “Given the wealth of free content available, E&M CEOs have to adapt their business models to capture the shifting nature of consumer demand. The bottom line is that in order to continue to create quality content, and deliver it over the internet, someone has to pay,” said Bogdan Belciu, partner in advisory, PwC Romania. Last year, the total local advertising spend was EUR 316 million, on a par with the figure five years ago. It dropped by 9 percent across the whole year. Print has been the worst hit, plummeting 30 percent in 2010 on the previous year, with a EUR 26 million advertising
Circulation CLICK figures
spend that will fall even further this year to EUR 24 million. TV continued to lead with EUR 209 million last year, but will sink to EUR 198 million. Radio will tread water, only decreasing by EUR 1 million from EUR 21 million last year. The only domain that seems to be prospering is the internet, which increased in 2010 by 30 percent on the previous year. Internet and cinema advertising are set to go from EUR 26 million in 2010 to EUR 34 million this year. It is estimated that the total advertising spend in 2011 will reach EUR 306 million, according to the latest study Media Fact Book, released by Initiative. However, this prediction was made before a new economic crisis loomed from across the Ocean. In the mass media field in Romania, the downturn is already taking a heavy toll, in the form of owners closing down publications, re-sizing, salary cuts and late payments. Just last week, businessman Elan Schwartzenberg, who in April bought 92 percent of the shares in Realitatea Media from controversial figure Sorin Ovidiu Vantu, called a press conference to officially announce the start of insolvency proceedings for the group. The procedure will last three years and has the aim of “protecting the company from everything that is happening outside.” “I am the biggest creditor of Realitatea Media,” said the businessman, but did not wish to comment further on how this situation had arisen. He explained that Realitatea was faced with two great problems: debts run up in the past “that are not necessarily justified,” and the economic context forcing the company to reduce its expenses, equipment and headcount to survive. “Our accounts are blocked and the management did not manage to pay the taxes to the state,” said Schwartzenberg during the press conference. Relations between Schwartzenberg and Sebastian Ghita, owner of Asesoft, who is in charge of the management of the company, are very good, and the latter may even acquire shares in the media company. Print titles are also struggling. Adevarul, part of Adevarul Holding owned by businessman Dinu Patriciu, has cut its number of pages from 64 to 48. The title lost its leader position in the quality daily category in Q2 this year, with 40,555 copies sold per day, to Romania Libera, with
LIBERTATEA ADEVARUL
40,820, confirmed BRAT data. According to media reports, Adevarul Holding will restructure its local editorial offices, cutting 39 down to just 4, in Bucharest, Iasi, Cluj and Timisoara, to which the other staff will be subordinated. Another 20 journalists from the Bucharest editorial office were made redundant. The firm is also experiencing some cash-flow problems. Last week, general manager Peter Imre announced that salaries would be two weeks late. One of the most stable media groups on the Romanian market, Intact Media Group, has recently brought all its newspapers and magazines under the umbrella of one single company, Intact Publishing. Jurnalul National, Saptamana Financiara, Fin.ro, Felicia, Good Food, Top Gear and Focus will from now on be published under this brand. Last year, Intact also brought its television channels under the umbrella of one company, Antena Group. "The main reason is the efficient use of resources, from HR to administrative. Of course, there will be better representation both in the sales and distribution departments via a consolidated package," said Matiescu. The only publication that will not be included is Gazeta Sporturilor, because "it has already made a series of important steps in its multimedia development strategy and its inclusion in this new entity would only tone down its rhythm," he added. The print division of Intact Media Group currently has approximately 800 employees. "We do not intend to close any publication, since this is the aim of consolidation. On the contrary, we will develop and launch new products and not only on the Romanian market," said Matiescu. However, the group will make new launches rather than acquisitions."Our group is a greenfield and has developed through organic growth," he says. On the theme of acquisition, a major such transaction took place in the industry quite recently, when Ringier announced the total purchase of Edipresse Romania, which included publications such as Elle, Avantaje, Look!, Psychologies, Viva, Întamplari Adevarate, Povestea Mea, Lucru De Mana, Povesti de Viata and Baby, Popcorn magazine and the custom publishing division.
otilia.haraga@business-review.ro
JURNALUL GAZETA ACADEMIA PRO SPORT NATIONAL SPORTURILOR CATAVENCU
EVENIMENTUL ZILEI
2010
207,370 148,410
116,680
66,170
42,450
33,170
23,860
22,480
2011
180,280 103,100
40,555
31,170
35,140
27,010
17,070
15,850
www.business-review.ro Business Review | September 12 - 18, 2011
WHO’S NEWS Liliana Damianov (38) has joined LGT Bank AG as its new senior relationship manager, with full director responsibilities for the Romanian market. Having worked as country director for Romania at Bank Gutmann in Bucharest, Eurobank EFG Group and Unicredit-Tiriac Bank Romania SA, Damianov has many years of experience on the Romanian market. She graduated from Westminster College (USA) in finance and investments and the Romanian Academy of Economic Studies. Alina Stancu-Birsan has joined PeliFilip as partner. Her main practice areas are energy & natural resources, projects & infrastructure, corporate and M&A. Her background also includes diverse experience in other areas such as banking & capital markets and privatizations. Stancu-Birsan has previously worked as associate – projects (energy and infrastructure) at Linklaters Lon-
WHO’S 9 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 don and associate at Linklaters Miculiti, Mihai & Asociatii SCA Bucharest.
tice covers corporate and employment matters.
Catalin Alexandru has also joined PeliFilip as partner and coordinator of the firm’s dispute resolution practice. His expertise includes a wide range of disputes varying from domestic and international arbitration to tax litigation and other administrative lawsuits (including public procurements), competition cases, as well as civil and commercial litigation. Alexandru has also worked for D&B David & Baias SCA as associate lawyer.
Alice Apetrei has joined the Bucharest office of Wolf Theiss as an associate in the real estate practice group. A member of the Bucharest Bar since 2009, Apetrei has a master’s degree in business law. She has over two years’ work experience at Musat & Asociatii law firm in Bucharest and her practice covers real estate and corporate matters.
Luminita Gheorghe has joined the Bucharest office of Wolf Theiss as an associate in the employment & restructuring practice group. A member of the Bucharest Bar since 2009, Gheorghe holds a master’s degree in international and comparative law and one in European business law. She has over three years’ work experience within international law firms based in Bucharest and her prac-
Silviu Barbalata is the new training manager of Codecs. He joined the company in 2008 and has since worked in the marketing and sales departments. Barbalata is a graduate of the Marketing and External Trade Faculty at Spiru Haret University and holds a master’s degree in marketing from the Academy of Economic Studies in Bucharest. Ana-Maria Bogdan has joined Grapefruit as managing di-
rector and will lead the agency from the office in Bucharest. She has 12 years of experience in the marketing and digital domains in industries such as telecom, retail, banking and media & advertising. Bogdan started her career in 2000 at Ogilvy Interactive, and then worked for companies such as Zapp/Telemobil, Altex, Kanal D and ING. The last position she held before joining Grapefruit was internet channel development manager at ING. She graduated from an executive MBA at the University of Sheffield and two master’s programs in communication and public relations. Violeta Luca has been appointed marketing director of Romanian IT&C retailer Flanco. Previously, Luca worked for Whirlpool Romania where she was commercial manager from June 2007. She is a graduate of the Academy of Economic Studies in Bucharest and has 10 years of experience in the electro-IT domain.
www.business-review.ro Business Review | September 12 - 18, 2011
10 FOCUS
STOCKEXCHANGE
Fields of gold: commentators believe that the current low prices of local farmland herald great potential
Romanian farmland set to cultivate future growth
and the total surface – than other EU countries in Central and Eastern Europe. In these countries, investors’ interest in farmland started a few years earlier than in Romania,” representatives of Colliers International and Terra Kapital told BR. A hectare of agricultural land in Hungary, Poland or the Czech Republic is priced between EUR 5,500 and EUR 7,000 while in Romania it varies between EUR 2,300 and EUR 3,500 per hectare for large plots with an acceptable consolidation degree, show data from the same source. For plots that are smaller than five hectares, the price goes down to an average of EUR 1,500. “Since the beginning of 2011, the upward price trend has accelerated, exceeding EUR 3,000 for large consolidated plots,” say the same representatives. The most sought-after farmland is in the Wallachian Plain, southern Romania, and the Western Plain. Although pundits agree that the market is heading for consistent future growth, there are discrepancies between supply and demand. Investors, especially large foreign companies and investment funds, are looking for big, consolidated plots, something that is hard to find in Romania where severe land fragmentation remains a problem. Owners, on the other hand, overvalue their assets. “Right now the market is influenced by high expectations from owners who in many cases consider their plots just right for a real estate project or a wind farm or solar energy project,” Anca Parascan, partner, head of the real estate and construction department and Nicolae Ursu, senior associate at bpv Grigorescu Stefanica, told BR.
Land fragmentation remains main stumbling block
The market may be rising but despite the positive outlook, the number of actual transactions so far this year remains low. “Since the beginning of the year, the transactions have mainly involved small plots – in the range of tens of or less than ten hectares – with the total surface acquired countrywide amounting to about 50,000 hectares,” said representatives of ColThe Romanian minister of agriculture, liers International and Terra Kapital. Valeriu Tabara, is probably the most opTransactions involving large plots have timistic voice on the future of local farmbeen very few, with about five to six land. A few weeks ago he confidently presuch deals taking place in the past eight dicted that Romanian agricultural terrain months, totaling 15,000 hectares, accould be sold for more than EUR 25,000 a hectare in a not too distant future, advising local farmers to be patient and not to sell their land just yet. Current prices are ten times lower than his expectation and although also predicting an upswing, real estate pundits are more reserved in Country Average price (EUR/ha) their forecasts. The Netherlands 34,000 According to DTZ Echinox, farmland Ireland 30,000 prices have returned to the levels regisDenmark 23,000 tered in 2002 and 2003, averaging beBelgium 20,000 tween EUR 1,000 and EUR 3,000 deUK 14,500 pending on the plot size, soil quality Italy 14,500 and region. In a few years’ time prices Spain 12,000 could be back to where they were in Greece 12,000 2007 and 2008. “On the medium and long Germany 10,750 run, the price of local farmland could Poland 7,000 come close to the Central and Eastern EuFinland 6,000 ropean average. However, we think that Czech Republic 5,500 it is very unlikely it will reach the prices Slovakia 5,500 seen in countries like Holland or Denmark Hungary 4,500 where a hectare of agricultural land often Latvia 3,000 surpasses EUR 20,000,” argued Grigorica. Lithuania 2,900 But in regional terms too, Romanian Estonia 2,900 farmland comes with a low price tag. Bulgaria 2,500 “The Romanian market is smaller – both Romania 2,500 considering the number of transactions
Romanian farmland is valued on average at less than 20 percent of its Western European equivalent, making it a fertile investment opportunity, especially for foreign investment funds. After a couple of lean years, the market is starting to show signs of recovery, reaping the harvest of upward global trends. ∫ SIMONA BAZAVAN
Average farmland prices in EU countries
Source: Colliers International and Terra Kapital
“Currently we are in negotiations with several foreign investment funds that are interested in buying thousands of hectares of Romanian farmland, either for growing traditional cereals or biomass plants,” Marius Grigorica, senior business analyst with DTZ Echinox, told BR. Soaring food prices worldwide and an ever increasing global population make farmland a valuable and sought after asset and a safe alternative investment option. In Romania, the good quality of the soil, large surfaces of available land and, most of all, cheap prices have made many foreign companies and investment funds buy land and many more state their interest. “In the past few years, Italian, Danish, British, German and Lebanese investors have made massive acquisitions of farmland, totaling tens of thousands of hectares,” Grigorica added. Investment funds and companies like Nordcapital of Germany, FirstFarms, Ingleby and Jantzen Development from Denmark, Finnish Tornator and Austria’s Cascade Empire are just a few of those who have bought land here. Also, two of the largest farmland owners in Romania, Maria Trading and Delta-Rom
Agriculture, are companies controlled by foreigners. The 2010-2011 national agriculture census reveals that there are about 8.2 million hectares of arable land in Romania, placing it in fifth position in the EU, after France, Spain, Poland and Germany. “Although the market for farmland has yet to experience an extremely spectacular ‘boom’, considering the high interest that foreign investors have in this sort of land – for agricultural use or for other purposes, especially wind farm projects – and also bearing in mind that the price of local land is still cheaper than in the rest of Europe plus the good quality of the soil, we predict that interest in transactions involving farmland will maintain its pace if not accelerate on the medium and long term,” Ioana Grigoriu, associate with the real estate practice of Nestor Nestor Diculescu Kingston Petersen, told BR. The Romanian real estate market has experienced the full blown effect of the economic crisis. When it comes to farmland and forests, the market has been less affected, and looking both at global trends and the local offer, things should take a turn for the better in the years to come. Demand is on the rise and prices are set to follow suit.
www.business-review.ro Business Review | September 12 - 18, 2011
FOCUS11 frastructure and the fact that many plots have not been cultivated for many years, which requires an additional initial investment from those interested in buying the land for agricultural purposes. But even in spite of these problems experts remain optimistic that the market will grow.
Stopping foreigners reaping cheap local farmland
Courtesy of DTZ Echinox
Courtesy of NNDKP
Ioana Grigoriu, associate with the real estate practice of NNDKP
cording to the same source. The main reason is that Romanian farmland remains very fragmented. According to Grigorica, about 25 percent of the country’s agricultural land is divided into plots of under one hectare while investors are mainly looking for over 1,000 hectares. “For example, a compact plot of 1,000 hectares can often be obtained only by buying land from 500 to 900 individual owners, which makes the consolidation process very difficult,” he explained. “This aspect can generate legal ‘complications’ for the buyers who have to negotiate with a large number of sellers. Considering that investors in farmland are usually investment funds that are used to a certain degree of sophistication both in their commercial approach and the way they negotiate and draw up the acquisition contracts, bottlenecks can appear because most sellers want a simple approach and expect the sale contract to be less than two pages,” added Grigoriu. The lack of cadastral documentation and the high costs of obtaining it also add to the challenges the local market faces. “This can generate other practical issues as an owner cannot obtain the cadastral documentation required for land tabulation while there are no regional cadastral maps,” said Grigoriu. The authorities are trying to address the issue, she added. On September 1, the Ministry of Agriculture published on its website a draft law that pledges financial support and incentives for consolidating farmland. A tax on farmers who don’t cultivate their land could also be passed into law by the end of the year, creating additional stimulus for owners to sell up. “The legislation related to land restitutions and the way tenures were issued in the first decade after 1990 still creates problems, especially in confirming the tenures’ validity, any disputed borders, lack of access of some properties to roads and so on,” added representatives of bpv Grigorescu Stefanica. They also stressed that if the authorities undertook a general and free cadastral campaign, thus creating a national database of all properties, this would solve many of the existing problems. Other setbacks encountered by investors include the lack of irrigation in-
Marius Grigorica, senior business analyst at DTZ Echinox
The low price of local farmland is good news for potential investors but it gives headaches to local authorities. “I am personally a bit worried by the appetite that some foreign companies have for local farmland. And this is not based on basic nationalism but on the fact that the law should set some limits,” said Teodor Baconschi, Romania’s foreign affairs minister, earlier this year. He argued that he had noticed from discussions with his foreign counterparts increasing demand for local land by foreign investors, mainly from China, North Africa and the Gulf countries, and as long as local land is still
very cheap, Romania risks ending up with a large number of foreign land owners. Under Law 312/2005 foreign citizens and companies registered outside Romania will not obtain the right to own land in Romania until seven years after Romania’s EU accession, which is 2014. But foreign investors can circumvent the legislative restriction on buying agricultural land in Romania by setting up local companies, and many are believed to have done so. Authorities in Bucharest have previously said that they are considering asking the European Commission to prolong the period during which Romania can restrict the purchase of local agricultural land by non-resident foreign citizens beyond 2014, despite the fact that the EC advised both Romania and Bulgaria to ditch the restriction sooner than the end of that year.
simona.bazavan@business-review.ro
www.business-review.ro Business Review | September 12 - 18, 2011
12 CITY RESTAURANT REVIEW
It’s cheap, but not perfect Pizza Maxx, Splaiul Independentei, tel 0724 473369 MICHAEL BARCLAY
Photo: Laurentiu Obae
So for a month Blondie was nagging and moaning that we should go to Pizza Maxx, because it was, in her opinion, such good value. However, it must be said that to her, “good value” simply means cheap. I was curious to see if the House could combine quality with cheap prices. So let’s go and see. To get there, drive along the river, past the Opera House, and you will see a huge complex overlooking the river. It houses the Disco Maxx and Pizza Maxx. Parking on their small lot is a problem, so you would be advised to block another diner in, and leave your phone number on your screen. The terrace is huge, with seating for 300 people. There is no décor to speak of, just plain, dark, all-weather tables and chairs. But on a positive note the service was prompt. The menu arrived, revealing just as many grilled dishes as pizzas. And the prices… yes they really were cheap; for every dish, whether it be a grill or a pizza, had an average price of RON 13. Beat that! As there was no bread or oil on the table, I asked for the usual cruet of olive oil and vinegar. Our girl brought the cruet, but it contained a flavorless yellow oil which was absolutely not olive oil! Clearly the House was exercising some cost saving methods, and as you will see, this was not the last of them. I also asked for a side of freshly shaved Parmesan. But no! What I was given was the inedible, cheap, stale, tinned Parmesan dust. Awful. At these prices, we decided to go for a wide spread of the menu. So off to a salami pizza. I am used to waiting for 15 minutes for a pizza to bake, but incredibly it arrived in five minutes. It soon became apparent why, as the base was as thin as a razor blade. So too was the topping. It was correctly baked in a wood fired oven, and it tasted fine, but I needed more substance. So I ordered a pizza Calzone. Again, it arrived in a record five minutes. It should contain Mozzarella and ham (it did) and be accompanied by a side of red-hot chili olive oil (it was not) and a further side of herb infused tomato sauce (it was not, but I did get a spoonful of tinned tomato instead). It tasted fine, and at RON 14 can I really complain about the omissions? That matter is open to debate. Blondie ordered her favorite spaghetti carbonara at RON 13. This simple dish has a sauce made from egg yokes, bacon, optional cream and grated Parmesan. Since we have already established
Upper crust: a well priced pizza
that they don’t have real Parmesan, the dish was imperfect – nonetheless she loved it. Being a hot day, we were gasping for an ice cold beer. Again they were well priced with a large draught Cuic at RON 4 and a large Heineken at RON 6. No problem here. Acceptable wines were priced around RON 35, and there was a choice of five cocktails at RON 10 each. Too full to eat any more pastas, we passed on their focaccia (bread baked in olive oil and flavored with oregano) at RON 5 and we further examined the menu. So off to their grills. If you know Romanian food, you can correctly anticipate the contents of the menu. For example, there was tochitura at RON 14, chopped chicken in cream and mushroom sauce at RON 12, two pork cutlets at RON 13, three pieces of mititei at RON 11… and so on. In most cases each dish was accompanied by either a mountain of mamaliga or chips (cartofi prajiti). In the case of chips they even list their weight on the menu. What is the point of that? So we had a chicken ‘saramura’ (salted chicken) at RON 13, which although this is a crude peasant dish with salt traditionally used as a preservative, was grilled to perfection and arrived moist, tender and full of flavor. So the question remains as to whether you can expect perfection at these low prices. Certainly you can, but reality states that you cannot, certainly not in Bucharest. So this means I fully recommend it, albeit with all its numerous imperfections.
michaelbarclay32@gmail.com
www.business-review.ro Business Review | September 12 - 18, 2011
CITY 13
LIFESTYLE
The Ace of Spades of Champagne ∫ ANCA IONITA
Courtesy of Cattier
Jean Jacques Cattier
What is the secret to running a family business?
How competitive is the industry? Of course there is competition, but it is not tough. There is room for everybody, for the big name producers and for family businesses like ours as well. The specifics of the industry bring out solidarity between the small vineyards, which provide the grapes and the buyers. One important part of the business is to find the right distributor for each and every country you want to be in. For Armand de Brignac, I have to say, since it has become so famous, distributors are looking for us, and not vice versa. We cur-
rently produce between 50,000 and 60,000 bottles per year. The blend used for de Brignac is that of a genuine Champagne, meaning Chardonnay, Pinot Noir and Pinot Meunier, all grapes coming from villages rated Grand Cru and Premire Cru.
anca.ionita@business-review.ro
Courtesy of Cattier
For the owner of the Cattier family business, the creation of a super prestigious cuvee champagne has been a challenge that he met
Jay-Z has brought international fame to the Armand de Brignac brand produced by Champagne Cattier by using it in his music video ‘Show Me What You Got’. But among connoisseurs, the brand was already famous: in 2009, FINE Champagne Magazine ranked it first in its 1,000 champagne brands wine-tasting list. Where did the story begin? Ten years ago, my son, our commercial director and I were thinking of creating a new product, a super prestige cuvee, that would be positioned at a higher level than Dom Perignon or Cristal, which are the two most prestigious champagnes in the world. In terms of the design of the bottle, we thought of doing a metal coating, in gold, and to create a recognizable emblem all over the world, because the name Armand de Brignac is difficult to pronounce in other languages apart from French. The original “de Brignac” name was registered by the Cattier family sometime in the early 50s. It was suggested by my mother, who had been reading a novel featuring a character named de Brignac, whom she fell in love with.
Vocation. The champagne-making business was started by my grandfather, who produced the first champagne under our family name, Cattier, at the end of World War I. But my family had owned vineyards near Reims since 1763, in a well known vineyard area in France, which has a Premiere and Grand Cru classification. So there is a family tradition in the champagne business. My parents didn’t oblige me to work for the company, but I considered it a vocation, and so does my son. He studied oenology at university, and right now helps me run the family business. Our company employs 35 people, out of whom eight are dedicated specifically to the Armand de Brignac brand.
Armand de Brignac Gold Cuvee
www.business-review.ro Business Review | September 12 - 18, 2011
14 IN TOUCH GEORGE ENESCU FESTIVAL PROGRAM: RECOMMENDATIONS September 12 Lights and shade of interpretation.
– Concerto no. 2 for piano and orchestra in G Major Sz. 95; G. Enescu – Symphony no. 2 in A Major op. 17 Great Orchestras of Staatskapelle Berlin
the
World.
Great Orchestras of the World. National Radio Orchestra Grand Palace Hall, 19.00
The Atheneum, 20:00 Lights and shade of interpretation. Lecture delivered by pianist Alfred Brendel Great Orchestras of the World. The Mariinksy Theatre Symphony Orchestra Mihail Jora Hall of the Romanian Radio Society, 19:30 Conductor: Valery Gergiev; Conductor of the choir: Dan Mihai Goia; Program: R. Shchedrin – Naughty Limmericks; G. Enescu – Symphony no. 3 with choir in C Major op. 21; M. Mussorgsky / M. Ravel – Pictures of an Exhibition September 13 21st Century Music. Enescu and his contemporaries Gulbenkian Symphony Orchestra The Atheneum, 17.00 Conductor: Lawrenece Foster; Soloist: Dana Ciocarlie – piano; Program: Ch. Ives – 4th of July; L. Bernstein – Symphony no. 2 – The age of anxiety for piano and orchestra; G. Enescu – Suite no. 3 in D Major "Villageoise" op. 27; B. Britten – Variations and Fugue on a Theme of Henry Purcell op. 34 (The Young Person's Guide to the Orchestra) Great Orchestras of the World. Staatskapelle Berlin Grand Palace Hall, 19.30 Conductor and soloist: Daniel Barenboim; Program: W.A. Mozart – Concerto no. 24 for piano and orchestra in c minor KV491; A. Bruckner – Symphony no. 7 in E Major September 14 21st Century Music. Enescu and his contemporaries Hungarian National Philharmonic The Atheneum, 17.00 Conductor: Zoltan Kocsis; Soloist: Boris Berezovski – piano; Program: B. Bartók – Dance Suite Sz. 77; B. Bartók
ISSN No. 1453 - 729X
pet; Opera – Folk Music from Shanxi; Zhao Songting – Flying Partridge Three Strains of Yang Pass – Traditional Piece; A. Dvořák – Songs My Mother Taught Me; The King of Chu Doffs His Armor – Traditional Piece; Wang Danhong – Dreaming beside the Plum Blossom; Zou Hang – Drunk Dancing Devarajas Mulan joins the Army – arranged by Xu Xiaolin; Deep into the Night – A Peking Opera Piece
Conductor: James Gaffigan, Program: Cl. Debussy – La cathedrale engloutie O. Messiaen – Turangalîla Grand Palace Hall, 19.30 Conductor and soloist: Daniel Barenboim; Program: W.A. Mozart – Concerto no. 22 for piano and orchestra in E flat Major KV482; Fr. Liszt – Symphony for Dante’s Divina Commedia S109 September 15 Recitals and chamber music. Virtuozii from Bucharest The Atheneum, 17.00 Conductor: Ton Koopman Program: J. Haydn – Symphony no. 104 "London Symphony" in D Major; W.A. Mozart – Concerto no. 23 for piano and orchestra in A Major KV 488; W.A. Mozart – Symphony no. 41 "Jupiter" in C Major KV 551 Opera and ballet. Oedipe
September 16 Recitals and Chamber Music. Fine Arts Quartet The Atheneum, 17:00 Program: J. Haydn – String Quartet no. 1 in G Major op. 77 R. Schumann – Quartet no. 1 in a minor op. 41 G. Enescu – Quintet with piano in a minor op. 29 Great Orchestras of the World. Wiener Philharmoniker Grand Palace Hall, 19.30 Conductor: Franz Welser Most; Soloists: Fanny Clamagirand – violin; Antoine Tamestit – viola; Program: W.A. Mozart – Sinfonia concertante 320d for violin and viola in E flat Major KV 364 G. Enescu – Intermezzi for string orchestra op. 12 A. Dvořák – Symphony no. 5 in F Major op. 76 Concert offered by UniCredit Ţiriac By Midnight. Camerata Salzburg The Atheneum, 22.30
Bucharest National Opera, 19.00 Oedipe by George Enescu op. 23; Libretto by Edmond Fleg
Conductor: Cristian Mandeal; Soloist: Isabelle Faust – violin; Program: F. Mendelssohn Bartholdy – Overture "Midnightsummer dream" op. 21 F. Mendelssohn Bartholdy – Concerto for violin and orchestra in e minor op. 64 F. Mendelssohn Bartholdy – Symphony no. 4 "Italiana" in A Major op. 90 By Midnight Concerts are sponsored by UniCredit Ţiriac September 17 21st Century Music. Enescu and his contemporaries. Manderling Quartet Small Palace Hall, 11:00
Leon Stein – Quintet for saxophone and string quartet; M. Ravel – String quartet in F Major 21st Century Music. Enescu and his contemporaries. KammarensembleN The Atheneum, 17:00 Conductor: Frank Ollu Program: Karin Rehnqvist – Anrop Carmen Cârneci – Semanterion – Toaca Cristian Marina – High anxiety Karin Rehnqvist – Inrop Doina Rotaru – Clocks Ivo Nilsson – Rotorelief Suite for speaking conductor and ensemble Karin Rehnqvist – Utrop World Music. Mario Brunello – Odusia Orchestra d’Archi Italiana Mihail Jora Hall of the Romanian Radio Society, 19.00 Program: Improvisation – Odusia Armenian Traditional Sacred Song Berber Traditional Folk Song Manuel De Falla – Nana Ana Sokolovich – Vez Giovanni Sollima – Spasimo, De Harmonia, Peste Raffaello – Il naufragio, Porta dei Greci, De Harmonia, Via Dolorosa Great Orchestras of the World. Royal Liverpool Philharmonic Orchestra. Grand Palace Hall, 19:30 Conductor: Vasily Petrenko; Program: G. Enescu – Suite no. 2 in C Major op. 20 W. Walton – Concerto for violin and orchestra (1938-9) S. Prokofiev – Symphony no. 7 in c sharp minor op. 131 Concert sponsored by Mezzo September 18 Great Orchestras of the World. Royal Liverpool Philharmonic Orchestra. Grand Palace Hall, 19:30 Conductor: Vasily Petrenko; Program: I. Stravinski – Symphony in 3 movements (1942-5) S. Prokofiev – Concerto no. 3 for piano and orchestra in C Major op. 26 S. Rachmaninoff – Symphony no. 3 in a minor op. 33 Concert sponsored by Mezzo
Program: Jackdaws Play in the water – Traditional Piece from Chaozhou Pup-
Special guest: Amy Dickson – saxophone; Program: G. Enescu – Quartet no. 2 in G Major op. 22; Alphonse Stallaert – Quintet for saxophone and string quartet;
By Midnight. Kamerata Salzburg The Atheneum, 22.30 Conductor: Cristian Mandeal, Program: F. Mendelssohn Bartholdy – Concerto no. 1 for piano and orchestra in g minor op. 25; F. Mendelssohn Bartholdy – Symphony no. 2 "Lobgesang" in B flat Major op. 52
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World Music. Forbidden City Chamber Orchestra Mihail Jora Hall of the Romanian Radio Society, 19.00