Business Review Issue 34/2013 October 28 - November 3

INTERVIEW: Romania should seek to strengthen its public healthcare, which is currently the only system able to cope with challenging medical cases, says Gheorghe Peltecu, manager of Filantropia Hospital »page 7

ROMANIA’S PREMIER BUSINESS WEEKLY

October 28 - November 3, 2013 / VOLUME 17, NUMBER 34

lture u c i r Ag rt Repo 5 es » pag

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SEEING IN DIGITAL Romania will be among the last European nations to switch off the analog signal and move to digital terrestrial TV. The state has outlined the phases in the process » page 18 NEARSHORING

Shore thing

T OUOW! N

Dutch companies are looking at nearshoring opportunities in Romania, taking advantage of skilled local workers

» page 6

www.business-review.eu Business Review | October 28 - November 3, 2013

NEWS 3

NEWS in brief

WEEK in numbers

FINANCE

300

Romania raises EUR 500 mln from bond issue

specialists are set to join the local Alcatel-Lucent staff over the next two years.

The new recruits will work in the R&D and 4G business lines and will be based mainly at the company’s Timisoara site.

Alcatel-Lucent currently employs 1,300 people in Romania, of whom 900 work in R&D

Slam dunk: Ponta court in the act on US visit During his visit to the US last week, the prime minister, Victor Ponta, met Romania-born former NBA player Ghita Muresan. The two joined teams made up of journalists and members of the PM’s staff and played a game on the Washington Wizards’ court. Afterwards, Muresan gave Ponta a shirt bearing the number 77, his NBA number. The PM in turn gave Muresan a bag of organic products, telling him he could not find them in the US.

HEALTHCARE Gral Medical opens EUR 7 mln

year. The firm currently has 880 employees in Romania, across centers in Bucharest, Cluj-Napoca and Iasi.

Courtesy of gov.ro

Romania raised another EUR 500 million at a new fresh low yield for euro-denominated bonds with a seven-year maturity after reopening the bond issue from September, the Ministry of Finance said last Monday. The yield was 4.15 percent, down from the initial auction on September 12, when the government raised EUR 1.5 billion at a yield of 4.76 percent.

“The spread has improved by close to 70 basis points, also due to the signing of a new agreement with the IMF and the European Commission and by remaining within the deficit targets and economic growth forecasts,” commented Liviu Voinea, delegate minister for budget, quoted by Mediafax newswire. The ministry said the offer was oversubscribed fivefold on the back of a “diversified” demand for the bonds.

hospital in Bucharest Romania’s Gral Medical, a private healthcare provider, inaugurated last Thursday the OncoFort hospital in Bucharest, following a EUR 7 million investment. The hospital, which currently has a capacity Communications minister: of 50 beds, primarily offers services in Romtelecom should be listed on laparoscopic surgical oncology, and also the stock exchange provides treatment for urological and Dan Nica, the Romanian minister of digestive issues. It has an ambulatory communications, said his main option ward and provides a wide array of pre- in the Romtelecom privatization case ventative services. was to list the telco on the stock exchange.

The company suggested the hospital “We may have a dual listing, Bucharestcould serve patients outside Bucharest, London or Bucharest- Frankfurt,” after the authorities closed some public said the minister during the ZF Digital hospitals across the country. Gral Med- event. ical aims to generate around EUR 4 The Romanian state still has a 45.99 million from its new hospital in its percent stake in Romtelecom, while first year of operations, and is planning Greek group OTE owns the major share to increase its capacity to 100 beds. package of 54.01 percent. The contract with the specialized consultant who will advise the state on the sale of the share package it owns in Romtelecom should be signed before November 15, said the minister.

The consultant, investment bank Endava plans two-year local reor a consortium made up of a legal cruitment drive IT solutions provider Endava is planning consultant and an investment bank of to expand its number of local employees international reputation should have over the next two years, the firm said, had an average turnover of RON 1 bilwhile releasing its latest financial results. lion over the past three years, and The company posted a turnover of EUR have been present on the market for 14.5 million in Romania at the end of at least five years. Another sine qua 2012. Globally, Endava notched up a non condition is the absence of any turnover of EUR 50 million for the fi- contractual consultancy relations benancial year 2012-2013, to June 30, up tween the specialized consultant and 43 percent on the same period of last Romtelecom, Cosmote or OTE.

TELECOM

IT

SOFTWARE Bitdefender: stock exchange flotation unlikely before 2016 The head of software company Bitdefender says that the company is not likely to float on the stock market before 2016. “We are now reviewing our strategy for the next three to five years. Bitdefender will not be listed on the stock exchange before 2016. This is because we need to reach critical mass, and the first stage of this will probably happen in 2015,” Florin Talpes, CEO and founder of security solutions provider Bitdefender, said during the ZF Digital event. The company’s main focus regions over the next year will be North America and Western Europe, especially Germany.

EUR 350 mln is the financing that telecom operator RCS&RDS hopes to attract after launching a bond issue on the external markets on October 29. The sum will be used to refinance its current debts, according to Mediafax. The debts, which at the end of last year totaled EUR 838.3 million, will be paid using the bonds which come to maturity in 2020, along with a new loan and liquidity line

EUR 241 mln are the revenues reported by Orange Romania in the third quarter of the year, up 3.2 percent y-o-y. Over the same period, the mobile operator had close to 10.4 million customers, 183,000 up on the previous three months

www.business-review.eu Business Review | October 28 - November 3, 2013

4 NEWS INVESTMENT

3Q Joseph Quinlan Romania seeks US investments in key sectors managing director, US Trust, Bank of America Private Wealth Management

Courtesy of gov.ro

State of play: PM Victor Ponta and US vice-president Joe Biden discuss the growth drivers of trade and investment between the two countries

Why should American companies invest in Europe and not in the BRICS nations?

The case for investing in Europe remains quite strong – the EU is the largest and wealthiest economic bloc in the world.

Respect for intellectual property rights, skilled labor, ease of doing business, competitive partners and suppliers – these are the attributes desired by US firms and hence why many US firms prefer the EU to the BRICs. The latter, to a large degree, are large but poor; there are many barriers to growth and the ease of doing business is lacking.

How can Romania, a country trailing the EU in economic competitiveness, attract more US investors?

To attract more foreign direct investment, Romania has to get the basics right – the nation needs to produce more skilled, educated workers; create the right physical infrastructure so firms have a predictable and adequate supply of energy and credit, and goods move in and out of the country in an efficient manner.

Central Europe, Romania included, is very important to the EU and the transatlantic partnership. Collectively, Central Europe, stretching from the Baltics to the Balkans, is like a mini-China next door to a more developed Europe.

There is a tremendous amount of pent-up demand, infrastructure needs and innovative capacity.

ovidiu.posirca@business-review.ro

suspended operations at one of its survey sites in eastern Romania, following protests. Several hundred people in Pungesti, a town in rural Vaslui County, blocked the access of equipment and staff to a site where Chevron plans to drill its exploration well. The demonstrations later moved to Bucharest, where several thousand people took to the streets, calling for a ban on hydraulic fracturing (fracking), the process of pumping water, sand and a mix of chemicals at high pressure into the ground to crack shale rocks. Critics claim this process runs the risk of polluting ground water and producing earthquakes.

Meanwhile, the company started searching for shale gas in a concession in the Dobrogea region.

America’s experience with shale gas was on the agenda during a meeting that PM Ponta had with US vice-president Joe Biden.

According to the PM, the US shale gas industry has created a million jobs and led to a dramatic drop in prices.

At present, the price of US gas is one

Marching on Military cooperation remains a key aspect of the strategic partnership between the two countries that was sealed in 2011, during the visit of President Traian Basescu to the US. Building works have started on the Deveselu US missile defense shield system in southern Romania. The first phase of the shield is scheduled to come online in 2015 and should enhance NATO’s defense capabilities. At the same time, Romania has agreed to purchase twelve old F-16s – the legendary fighter produced by US engineering group Lockheed Martin – from Portugal. The Ministry of Defense will pay EUR 600 million for the F-16s, designed to replace Romania’s aging fleet of MIGs. ∫ Ovidiu Posirca

Romania aims to replicate US shale miracle Energy investments dominated the discussion, against the backdrop of an ongoing debate in Romania regarding shale gas and its potential contribution to the country’s energy independence.

Two weeks ago, oil major Chevron

Courtesy of Agerpres

Has the global recession dented Europe’s attractiveness for American investors?

No, the global recession has not dented Europe’s attractiveness to US firms. The downturn is cyclical. Plus, there are signs that the EU is finally emerging from recession; the economic backdrop is improving, albeit slowly.

The worst is over in terms of the euro zone; the euro skeptics have been proven wrong.

P

M Victor Ponta pledged stability and predictability to top representatives of large American corporations during a three-day visit to the US. Ponta, who is the first Romanian PM to visit the US in ten years, underlined that the two countries need to further enhance their economic relations under their strategic partnership.

“I don’t know if I will return from America with jobs,” said the PM, when asked if any company had announced investment plans following the meeting.

Ponta met with representatives of various companies active in energy, IT, industry, agriculture and telecom, where the government plans to attract additional US investments. He mentioned IT giant IBM and oil major Exxon among the companies that had put forward employment plans in Romania for next year.

“Companies seek stability in regulations to give them a predictable framework to be able to develop effective business plans and to reasonably anticipate how the regulatory environment will affect their bottom line,” representatives of the US Embassy in Bucharest’s public affairs office told BR. Commercial and economic relationships can be enhanced by revisions to the investment climate to increase transparency, predictability, and stability, they added.

The PM was joined during talks with political and business representatives by cabinet ministers in charge of key portfolios such as energy and the environment.

third of the price in Europe and one fifth of the figure in Asia. Although shale has revitalized American industry, commentators say it is too early to gauge the potential effects of shale gas on the local economy.

Sounding a note of caution, Biden warned Romanian officials to be careful of small companies with a weak financial standing that ignore environmental protection measures to make a quick buck.

The two leaders also agreed on the importance of boosting trade and investments between their two countries.

Biden underscored that a strong rule of law is crucial for “nourishing a healthy business climate” in Romania.

The PM also met with US secretaries for trade and energy and with congressman Michael Turner, co-president of the Romanian Congressional Caucus.

Romania’s acceptance into the Visa Waiver program remains in limbo due to deadlock in Congress over the migration law. Ponta said he was able to secure a new USD 1 billion credit line from the World Bank (WB) at a lower interest rate, following his meeting with Jim Yong Kim, WB president.

Beyond the shale: people of all ages say no to shale gas in the town of Pungesti

www.business-review.ro Business Review | October 28 - November 3, 2013

PHARMA

Romania plans overhaul of drug reimbursement mechanism

Drugged up: new molecules are awaiting inclusion on the list of reimbursed medical products

A

s the local pharmaceutical industry anxiously awaits the first update of the reimbursed medicine list in five years, the government is cautiously structuring the move to prevent an explosion in costs.

Drug producers had submitted applications for 167 new molecules and therapeutic indications by June, to be included on the reimbursement list. Most of them target oncology, followed by diabetes, rheumatology and cardiology.

Specialists within the Ministry of Health had evaluated over 120 files by early October, according to Vasile Cepoi, state counselor of Prime Minister Victor Ponta. The evaluations are carried out through an accelerated procedure, a move approved by the IMF, because the authorities lack sufficient personnel to undertake such complex assessments.

Cost constraints also play a key role in the decision to update the list. This would represent an additional cost for the government, which has also allotted close to EUR 1 billion this year to cover the delayed payments for medicines.

The authorities aim to gradually lower the payment terms to the EU average of 30 days for subsidized drugs.

“In the coming period we have to carefully look at whether we are not spending more than we can afford on a number of cheaper medicines,” said Cristian Busoi, president of the healthcare insurance body, the CNAS, last week. He suggested that patients could pay for cheaper medication themselves, freeing up funds to include new drugs on the list, in a move to provide more cover for expensive treatments.

A study published last week by the Local American Working Group (LAWG) and the Economic Prognosis Institute of the Romanian Academy, found that the state budget would be faced with a bill of between RON 216 million (EUR 48.7 million) and RON 486 million (EUR 110 million) for the updated drugs list.

“However, the economic benefits on the long term of cured patients or avoided deaths could amount to RON 3 billion (EUR 676 million),” said Gregory Reeder, president of the LAWG, an association of ten US-based pharmaceuticals giants,

including Johnson & Johnson and Pfizer.

The study also outlines some of the measures the government could take to pay for the new reimbursed drugs.

For instance, increasing social security contributions by 0.2 percentage points for employers and employees would generate around EUR 68 million in fresh revenues for the state budget, suggests Radu Comsa, managing partner at Mind Research & Rating, a business intelligence provider, who was one of the study’s authors. He added that a one percentage point hike in collected VAT would send another EUR 112 million to the state budget.

“It is important for the list of subsidized drugs to be updated at regulated intervals,” said Violeta Ciurel, head of the healthcare committee at business advocacy group AmCham Romania.

The CNAS director suggested the list would be updated yearly, in line with EU regulations. Updating the list will lead to higher costs for producers, if the clawback tax is not changed, said Comsa. The clawback tax, which has reached its fourth version, kicks in when drug consumption exceeds the allotted budget of RON 6.7 billion (EUR 1.5 billion). Comsa says real consumption is heading for RON 8 billion (EUR 1.8 billion) this year, basically forcing the producers of innovative and generics (drugs with expired patents) to cover the budget gap.

Government fears updated list will bloat costs The country had a bad experience when updating the list in 2008, which led to a 26 percent spike in consumption through pharmacies to EUR 1.1 billion in just one year. The previous update of the list came in 2003.

Cristian Vladescu, general director of the National School of Public Health and Sanitary Management, says the increased consumption was due to the sale of drugs under national health programs in all pharmacies and the removal of certain sale limitations for pharmacies.

As Romania is the second poorest country in the EU, its drugs are some of the cheapest in Europe, leading to an explosion of parallel exports which account for roughly one third of the local pharma market. The country is one of the worst performers for healthcare indicators, with a standardized mortality rate above the EU average, while the infant mortality rate is double the EU average.

However, officials acknowledged that Romanian patients need new drugs, some of which have been available in Europe for some years already. “In certain situations, due to a lack of drugs, we are obliged to send patients abroad (e.n for treatment),” said Cepoi. ∫ Ovidiu Posirca

NEWS 5

www.business-review.eu Business Review | October 28 - November 3, 2013

6 NEWS

Dutch players tap into Romania’s nearshoring potential

WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro

Anca Alexandru

With a dwindling talent pool back home, Dutch companies are looking for nearshoring opportunities in Romania to keep their competitive edge.

46, is the new director of the aggregates and concrete division at Holcim Romania. She has been with the cement manufacturer since 2002, and has held various positions within the concrete division.

Craciunescu is taking over her new role from Bogdan Dobre, 45, who this September was appointed marketing and sales director by the firm.

Madalina Craciunescu

32, is the new HR director of Holcim Romania. She joined the cement manufacturer in 2005. Her worked with the company

Romania’s nearshoring potential is enhanced by its lower cost structures and skilled labor force

∫ OVIDIU POSIRCA Nearshoring, which is outsourcing at shorter distances, first emerged in Romania due to Western companies’ wish to cut costs. However, as local firms started to do more complex work, Romania’s competitive advantage has moved more towards the skilled labor market.

Although wages have gone up, the country is still trailing its Western peers in terms of pay. According to the Netherlands-Romanian Chamber of Commerce (NRCC), local net wages were the equivalent of 25 to 75 percent of those in the Netherlands last year, depending on industry and staff qualification. However, the level of labor taxes and social security contributions are roughly the same as in the Netherlands. “The initial idea was basically to be cheaper than the people in the Netherlands. As time went by, we found out that we are not necessarily cheaper, but we have good quality programmers in our company who are hard to find in the Netherlands,” Bert Steenbeeke, owner of Dutch company BT&T Software Development, told BR. His Bucharest-based company is doing nearshoring for small Dutch firms active in the software business. It currently employs ten people and the headcount is expected to go up in the near future.

“There are fewer people doing computer science in the Netherlands than there are here. We are facing a big shortage of engineers in the Netherlands in the future,” he added. Nearshoring has

proven to be effective in the IT business, but smaller foreign companies have acknowledged that high fliers are targeted by big companies, willing to pay big bucks for their skills.

“There are lots of businesses all over the world trying to find software engineers in Romania and sometimes they just try to get them by money,” said Steenbeeke. He says there are now fewer IT specialists leaving the country. According to Huub Drabbe, economic counselor at the Netherlands Embassy in Bucharest, nearshoring can also be used in manufacturing. For instance, Dutch shipbuilder Damen took over a shipyard in Galati in 1999. The company is currently building a wide range of products in the Danube-based town, from offshore to naval vessels, tugs and workboats.

Local nearshoring launched

guide

In early October, the NRCC launched a guide and white book on nearshoring to Romania. Chamber representatives said this could represent one of the avenues to attracting fresh foreign direct investments to the country.

The guide outlines the main steps for starting and running nearshoring operations in Romania, while also focusing on the specifics of the country’s labor and education sectors.

For instance, Dutch investors should know that the Romanian work environment is more hierarchical than in the Netherlands and that questioning the decisions of superiors is uncommon. ovidiu.posirca@business-review.ro

has involved recruitment and development activities, among others. She is replacing Nicoleta Salajan, who has been promoted to HR director for the Holcim Group in Africa and the Middle East.

Ioana Borangic

30, is the new communication director of Holcim Romania.

She joined the company in 2010 as internal communication specialist. Before that, she had had more than 10 years of professional experience in corporate communication at various multinational companies.

Borangic is replacing Andreea Nicolae, who this March was appointed marketing manager at Holcim Romania.

Nicolae Demetriade takes flight from Tarom

Nicolae Demetriade has resigned as manager-executive director and member of the board of administration of national airline Tarom, according to Mediafax. He said he was stepping down because the appointment of private sector management to the state-owned company was “an illusion”.

Another management change could soon follow. Dan Pascariu, president of Tarom’s administration board, may be dismissed from the position, according to Mediafax, which cites inside sources.

Tarom’s board of administration decided in June to speed up the implementation of a management plan that was approved in March, by appointing Demetriade as manager-executive director. The board had previously expressed dissatisfaction with the performance of the company’s CEO, Christian Heinzmann. As a re-

sult, at the end of June, Heinzmann and Pascariu agreed to reduce the CEO’s term to just one year. This could now be extended again to the initial period of four years, according to Mediafax sources.

Transport minister Ramona Manescu responded to the rumors concerning Pascariu and Heinzmann’s term by saying that all be will decided at a meeting of Tarom’s board of administration which is scheduled for this week.

Tarom is the first state-owned company in Romania to which private sector management has been appointed, as part of the county’s deal with the International Monetary Fund.

The national carrier managed to reduce its losses by almost half to RON 63 million (EUR 14 million) in the first semester of this year and to optimize operations. Operating revenues reached RON 534 million, up from RON 498 million in the first semester of 2012.

Under Tarom’s management plan, the target is to reduce losses to RON 143 million this year and RON 18 million in 2014 and afterwards to report a profit of RON 92 million in 2016 and RON 173 million the following year.

The airline should also increase the number of passengers by 100,000 each year, from 2.3 million this year to 2.6 million in 2016. Another target is to increase the aircrafts’ load factor from 68 percent this year to 75 percent in 2016.

www.business-review.ro Business Review | October 28 - November 3, 2013

INTERVIEW 7

Making the right management diagnosis Romania still needs a strong public healthcare system on the long term and hospital managers acquainted with the inner workings of the medical system, says Gheorghe Peltecu, professor, MD and manager of the Filantropia Hospital, a center of excellence for obstetrics and gynecology. ∫ OVIDIU POSIRCA

CV Gheorghe Peltecu

What are your future plans for the hospital?

I am interested in bringing more medical equipment and forming the next generation of people (e.n. specialists). I have eight people under 36, and no clinic in Bucharest has employed eight people of that age in positions of full responsibility.

Does Romania need to focus more on public healthcare or help develop the private market?

Both. The public system is fundamental in Romania and will remain so because not everyone can afford private treatment. But private clinics will have their limitations in time. They will not be able to face all the challenges on the short term. They will treat a certain share of the people, those especially interested in the hotel aspect (e.n. good accommodation) and in the quality of extra-medical services. When confronted with difficult situations, at present the private system is backed by the public one and it needs to stay this way.

The private system still needs to develop so as to offer choices to everyone. But in Romania, now and for the near future, the public system, in certain elite hospitals, is the still most effective. The fact that it does not offer hotel-like standards can raise some issues, but Filantropia was able to equally combine both top-tier professional staff and adequate conditions. This is the ideal.

How did you come up with the initiative of sending young doctors abroad for specialization and hiring them upon their return to Filantropia? Isn’t this a risky move?

I was the experiment; I lived this. I left the country in 1992 thinking I would never return home. I went anywhere it

Photo: Mihai Constantineanu

How much has been invested in the Filantropia Hospital to date?

In 2009, when we opened the clinic, the total investments amounted to EUR 3 million. Since then, the figure has risen to EUR 7.2 million. This was state funding alone. We also had investments through sponsorships. For instance, HP donated EUR 40,000 for equipment when we created the hospital’s IT infrastructure.

For six years we operated in one half of the hospital, while we built the other one. After another move we improvised for two years without closing any ward.

I operated, I assisted in births – during that period we had 2,200 births on 20 beds, which is inconceivable nowadays.

could have been better for me. I saw there were a lot of good things, but at some point it is more important to be a creator than a piece in a puzzle. I worked in Switzerland, the US and South Africa, but you eventually reach a ceiling that does not allow you to really be a creator because you are the late entrant in a (e.n. already designed) system. In all areas, I was in the elite structures. I did not work in a hospital to make a living. I was in universitary centers. In Lausanne I worked in a university hospital, and in South Africa I was given an academic position.

But something did not fit and so I decided to return, and once I got into teaching here, I realized that if you want to change something you have to be a leader, so I took up management (e.n courses). I did not have a taste for it, because I am not a manager by talent but out of necessity. However, when I started doing it, I did it well, because I learned and applied management principles. You need to have manager papers. People say you should be a manager and not a doctor and I told

them, including the health minister, that there is a transition period that they have not taken into account. The stage of pure-blooded managers will emerge over several years. Managers hastily trained with careers as accountants or legal experts, or even pure managers do not have any connection with medicine.

They manage the funding, and when it runs out they call for the hospital to be closed. An MD in my position, when the money runs out, calls the supplier, gives his/her own word and promises to give them the money when it is allotted and it comes.

A pure manager cannot do this, because he or she cannot give anything in exchange. In addition, such a manager does not understand medical activity, and doesn’t know how to steer operations. It is just numbers to them.

How many MDs are currently working at Filantropia?

There are around 36 MDs, out of whom eight are aged under 36 and were brought on board by me in recent years.

I encourage those returning from

“People say you should be a manager and not a doctor and I told them, including the health minister, that there is a transition period that they have not taken into account. The stage of pure-blooded managers will emerge over several years,” Gheorghe Peltecu, manager of Filantropia Hospital.

1998 to present chief MD of department, Filantropia Hospital 1984-1991 specialist MD in obstetrics and gynecology, Filantropia Hospital 1991-1998 MD in obstetrics and gynecology, Filantropia Hospital 1999 associate professor at UMF Carol Davila 2000-2005 head of the obstetrics and gynecology clinic, Filantropia Hospital 2006 professor, obstetrics gynecology department at Filantropia Hospital and Carol Davila University, Medicine Faculty abroad to work in their free time at different private practices so as to earn a decent living, while discouraging informal payments.

Do you think your specialization model can be replicated by other hospitals grappling with a brain drain?

The model is free. I was the product of this mode of thinking. I had the chance to go into clinics where I learned that if you want to ensure continuity, you have to share it with someone.

The most striking example was at a clinic in the US, where I spent six months. There I learnt mentorship. This philosophy is probably ahead of today’s Romania. For me it is a pleasure.

Have you made any suggestions to the authorities on staff retention programs?

I have always said and proved to everyone that the selection system has to be independent of any political or nepotistic pressure. It is the only way to create quality and the Ministry of Health or administrative structures can contribute by giving a free hand to the person implementing this policy.

How is your hospital doing in terms of budgetary resources?

This year it has been an austerity budget which has not permitted us to make investments. We will get through it relatively easily, because we manage everything going on in the hospital.

This means protocols and standardized operations. Savings are a fundamental criterion and we have made provisions for the end of this year and maybe the first two months of next year. At the Filantropia hospital, patients don’t have to buy anything. ovidiu.posirca@business-review.ro

8 AGRICULTURE

www.business-review.eu Business Review | October 28 - November 3, 2013

Banks find fertile soil in agriculture field Lenders on the local market have come up with a wide range of financial products and services for agricultural players. But entrepreneurs active in this field still face difficulties in getting money to cultivate their businesses. ∫ ANDA SEBESI Many lenders on the Romanian market have shown interest in financing agricultural businesses. Both banks and non-banking financial institutions (IFN) have launched an array of products and services for entrepreneurs who have decided to pitch their flag in this field of activity. BRDGroupe Societe Generale, BCR, CEC Bank, OTP Bank, Banca Transilvania, Patria Credit and Agricover Credit IFN are among them. But what is the reason behind this strategic movement?

All specialists agree that agriculture has a huge development potential, despite being a very sensitive sector to climatic conditions. “Agriculture has a significant weight in our commercial strategy. We intended and have managed to be among the first local banks to offer loans to farmers under the SAPS program in 2013 as well. We know that in agriculture it is vital to have the money exactly when you need it and that’s why we meet the needs of our partners from this field by granting them this credit promptly,” said Stefano Burani, chief business officer at Intesa Sanpaolo Bank Romania, at the beginning of August.

Under a deal signed earlier this year with the Agency for Payments and Intervention for Agriculture (APIA) and the Guarantee Fund of Rural Credit (FGCR), the bank offers loans to finance working capital to its customers in agriculture, both individuals and companies. This is part of the Scheme of Unique Payment on Surface (SAPS) – the 2013 campaign.

The lender’s portfolio also includes loans to finance current activities, lending for specific investments and co-financing products for projects developed through the National Program of Rural Development (PNDR).

All the products are especially created to meet the identified needs of the lender’s customers and benefit from favorable lending conditions, such as extended grace periods or flexible payment schemes that take into account the seasonality of agricultural activities.

Elsewhere on the market, at the

Banks and non-financial institutions are seizing the development potential of the agriculture sector

end of August OTP Bank Romania ture and rural development, anlaunched the AgriBusiness package nounced that Romanian farmers for customers who collect their subsi- would get a 50 percent advance on dies into accounts held with the their surface payments (EUR lender. There are no costs for the ad- 61/hectare) from mid-October. ministration of any bank accounts “About EUR 600 million, which repreopened at the bank, and customers sents the 50 percent advance from the get free access to internet banking surface payments, will go directly to and a 50 percent discount on the com- the farmers in the next two weeks. mission on loan repayments deriving The rest of the sum, up to EUR from borrowing to pre-finance the 160/hectare, will be paid after DecemAPIA subsidies. “Through its addi- ber 1 and I hope that we will complete tional advantages, the AgriBusiness the surface payments by March next package comes as new support for year,” said Constantin. farmers and small agricultural entreHe added that this was the first preneurs that receive APIA subsidies. time when APIA was paying an adIt is a field with a huge potential for vance for the agro-environment development which we actively sup- measures of Axis 2. Payments of EUR port and for which we will create per- 275 million have been made so far. manently helpful products and Furthermore, speaking at the services for our customers,” said Rox- Mediafax Talks about Agriculture ana Hidan, manager of the SMEs divi- event in September, Constantin said sion at OTP Bank Romania. that the Ministry of Agriculture intended to launch many measures at Authorities intend to fertilize the beginning of next year through which farmers could get finance to agriculture At the beginning of October, Daniel the PNDR program for the 2014-2020 Constantin, the minister of agricul- period.

In addition Valeria Tonciu, manager of the FGCR, used the same event to call for a lending fund, adding that farmers’ need to protect themselves against the risks arising from natural calamities should be covered too. “We will have to think about a lending fund and measures that have a multiplying effect in addition to guarantee schemes. We must continue the mechanisms to insure against risks from natural causes and meet farmers’ needs in the event of natural disasters, because the regulations allow us to do so,” said Tonciu.

Last but not least, recently the secretary of state, Achim Irimescu, noted that the new National Program for Rural Development will be simplified and focus on those measures that are extremely important to Romanian agriculture and rural environment.

These include investments and the package of measures for young farmers. anda.sebesi@business-review.ro

www.business-review.ro Business Review | October 28 - November 3, 2013

10 AGRICULTURE

Reaping what you sow: where to invest in agriculture?

Ask any pundit which sector is the most attractive for investment opportunities in Romania and agriculture will surely be among the top three recommendations. But what exactly should one invest in and how does one go about it? BR asked several local businesspeople and entrepreneurs with a background in agribusiness what they would opt for if they were to start a farming business from scratch, and what advice they would give to newcomers in this sector. more money now than 10 years ago, but it is still worth it. Without having done any market research, and this being only my personal choice, I would opt for a business mix between vegetables, salads and berries delivered to local businesses such as restaurants, bakeries and markets. It would have to be organic farming. Owners must be fully involved in agriculture. This isn’t a business where one invests and then enjoys the profits while sunbathing in St. Tropez!

∫ SIMONA BAZAVAN Andreas Feichtlbaue executive director at Biso Romania

Ioan Popa Transavia founder and general director

I would advise someone to invest in agriculture and I would also start another investment myself – because it's one of the major topics right now. Agriculture is related to the world economic situation in terms of food for the people, the energy economy, nuclear energy resources and much more.

The agricultural sector still offers many opportunities in Romania. Good and constant development in this sector should first of all mean investments in production facilities. Secondly and thirdly it should mean creating new jobs.

By production facilities I mean bakeries, animal farms and the meat industry, and not to grow, harvest and sell on the worldwide market. This doesn't create new jobs here in Romania, which is what the country needs.

a lot in recent years at global level and is a viable alternative as a source of animal protein. There is a need to align legislation (tax, VAT) and especially to create prerequisites for better predictability. Thirdly, I would choose orchards and vineyards. I don’t have a background in these industries but I know that we have land which isn’t suitable for field crops but where corn is mostly cultivated.

I strongly believe that orchards could provide a significant change for some areas in Romania. They would generate export resources and ultimately contribute to the water balance of those areas.

Monika Puiu managing director of NHR Agropartners

Grigore Horoi president of the Agricola group of companies If I had the opportunity to start a farming business from scratch tomorrow, I would invest in the following three sectors. First of all, field crops, because Romania has a significant and still untapped potential in this sector. However, the government should address the issue of irrigation and thus reduce weather dependency.

Secondly, I would choose poultry farms. It is an industry that has evolved

I would do the same thing, the same way.

I started the Transavia business more than 23 years ago. The times were different then and perhaps if I were to start the same project over again I wouldn’t have the same success.

With the same determination, I started a new business two years ago and set up the vegetal division to cultivate the grains necessary for chicken feed.

Successful entrepreneurship requires a lot of analysis and evaluation, and this is why I would recommend investing only in areas where one has training and a background. My advice to young people, especially, is to focus on what they are trained for.

George Stanson business manager Romania, Bulgaria, Croatia, Serbia at Case IH & Steyr Balkan Yes, I think it is a good business to start from scratch even now. One would need

If I were to establish a startup agriculture business in Romania, my first choice would be a beef-fattening farm.

I might be a bit biased about it, mainly because I own shares in an Angus beeffattening farm back home in New Zealand. However, there are several major reasons why beef-fattening farms would be a good way to go in Romania today. First of all, from the end-user’s perspective, the quality of the beef on the shelf today is mostly medium to low (…). Another good reason why I would go this way is that most statistics have shown a positive trend in beef consumption in Romania over the last 10 years, taking serious bites out of the historical pork and poultry consumption.

There is also the aspect that being a beef-fattening farmer gives you a way better social life than a dairy farmer, mostly because you don’t have to milk every morning at 5 am. If you check out most high-end steak houses in Bucharest, they have quite a big chunk of the menu built on imported Argentinean beef. This is obviously a shame, because a locally produced high-quality beef cut should be at least fresher than one imported frozen from Argentina.

Last but not least, there are many degraded pastures in the west and northwest which haven’t been enhanced with new grass for 20 years or even longer.

With a very small investment, meaning a simple new generation grass seed (12or 24-month cycle, with high sugar and protein content) drilled directly into existing old pastures, you can create the best farming environment for free-range beef fattening, resulting in one of the best end-quality meats.

For all of these reasons, if I were to invest in a farming operation today in

www.business-review.ro Business Review | October 28 - November 3, 2013 Romania, quality beef-fattening would be my first choice.

Catalin Stroe GM and owner of Ruris

First of all, I think that in order to invest in agriculture, or any other sector for that matter, one must have thorough knowledge of that field as well as the necessary criteria to recruit a team of professionals. I think Romania's agriculture has enormous potential, which can be efficiently exploited. Whether we are talking about large and highly mechanized modern farms or small farms, any project can be successful with the right training and dedication. Unfortunately, Romania’s industrial sector is well below the level we would like it to be and it will take time and huge resources to resuscitate it. Given this, agriculture can be an important sector for the economy and it should be supported.

I personally would choose to invest in agriculture, be it technical plants, medicinal herbs, organic crops, or other high added-value crops, and I would also opt for processing facilities for these crops (…). I would recommend integrated businesses which cover cultivation as well as processing as these can be more effective. Also, for this type of business there are insurance solutions which can reduce the risk.

Camelia Sucu president, Class Living; owner, Iconic Food Wine & Design and Piata de Gros Abundia

AGRICULTURE 11

I chose to invest in a wholesale market – Piata de Gros. It is not actual farming, but part of a value chain, from an agricultural ecosystem. A wholesale market is located at the crossroads between what the land has to offer and the needs of customers from urban areas, be they small entrepreneurs or large retailers. Piata de Gros relies heavily on the proper functioning of collection centers, which encourage farmers to form associations, primarily for their own benefit. Precisely because the implications are so great and because the entire ecosystem depends on so many variables, the modernization of wholesale markets can only be done through public-private partnerships (…).

This happens all over the world, at least with the major wholesale markets that I’ve seen. Thereby, the investment that I chose to make is a long-term one (…). I like businesses with a long-term vision and if you asked me for advice regarding a short-term and secure agriculture income I wouldn’t know what to recommend.

I like to build long term and create prerequisites for prosperity rather than to quantify the immediate return on investment.

PARTNER CONTENT

Aurelia Visinescu winemaker and managing director of Domeniile Sahateni

Although investments in the Romanian agriculture experienced a certain growth over the last few years, the need for investments in infrastructure and equipments, necessary for a proper agricultural development, has been also highlighted and should be taken into consideration.

Moreover, investment opportunities in the Romanian agriculture mainly rely on the low prices of farmland as compared to other Western countries, as well as on a good quality of the soil.

In this regard, not only available farmland, but also agricultural developments offer the possibility of both drawing attractive Greenfield investments and taking over existing agricultural operations.

Moreover, the possibility of EU-residents, residents of the countries which are part to the European Economic Area Agreement (“EEAA”) and companies established in accordance with the laws of a EU-member state, or EEAAmember state, to acquire agricultural land, forests and forestry land in Romania with same rights as Romanian persons starting with January 1st 2014, has been highly promoted in the media.

This has definitely drawn attention to the Romanian farmland, even if foreign entities already had the possibility to acquire ownership over such, by means of limited liability companies established for this purpose.

The enactment of a draft law regarding the sale purchase of farmland located outside the city limits, by natural persons, and the establishment of the authority for the administration and regulation of the estate market (the “Draft Law”), which was proposed by the Ministry of Agriculture earlier this year, for the stated purpose of “regulating once

For me, it is clear that if I started a business tomorrow, I would still choose agriculture. I would cultivate vines and make wine, because that's what I like to do and what I am good at. It is not easy to invest in a start-up without having had contact with the area where you want to do business. One must research, carry out market and feasibility studies and only afterwards invest.

I think there are quite a few opportunities to develop a farming business in Romania, especially given that despite the fact that we are mostly an agricultural country, we have ended up importing most of the food products we consume.

However, it is difficult for anyone to recommend a farming sector that would guarantee success. The recipe for success has a lot of ingredients which have to do with the individual behind the investment. simona.bazavan@business-review.ro

Green light for Romanian agriculture investment – yet more to be done

by Ana-Maria Goga, Partner

Attractiveness of investment in the Romanian agriculture has been in the spotlight for some time, both nationally and worldwide.

and for all the sale of farmland between natural persons” (if any clarification was needed?!) and “to counter potential effects of the right of EU-residents to acquire lands in Romania, starting with January 1st 2014”, will still not affect the possibility of acquiring farmland without restriction by means of limited liability companies.

While most restrictions provided in the Draft Law above would be avoided by acquiring farmland through limited liability companies established for such purpose, the Draft Law regulates observance of a preemption right to be established by such Draft Law in favor of co-owners natural persons, neighbors natural persons, holders of a farmland lease agreements, persons of up to 40 years conducting agricultural activities in the administrative territory where the respective farmland is located, and the Romanian State.

Such preemption right shall be exercised, according to the specified ranking, within 30 days as of registrations of seller’s sale offer.

As regards farmland acquisitions in Romania, a major challenge is the lack of cadastre, whereby cadastre of farmland at national level is of major importance.

Consequently, the State should act in a dynamic manner with a view to accomplish the cadastre of lands in Romania and the land book registration thereof.

Therefore, the Romanian Senate already approved a draft law with regard to the “First Land book registration” (“prima intabulare”), which is currently under debate with the Deputy’s Chamber. According to such draft law, holders of title deeds over farmland are entitled to register and fulfill the requirements regulated by Law No. 7/1996 on cadastre, free of charge.

The accomplishment of cadastre at national level is aimed to bring significant advantages to agriculture and to the Romanian legal system, such as: financing and proper development of agricultural projects (including effective EU-funds absorption), a proper clarification of the legal status of farmland and, last but not least, a higher degree of reliability of the civil circulation.

Ana-Maria Goga, Partner

www.business-review.ro Business Review | October 28 - November 3, 2013

12 AGRICULTURE

Cooperative skepticism ploughs through prospects of agricultural development Buying cheaper inputs, selling produce for higher prices and gaining easier access to know-how are just some of the benefits farmers get when joining forces and forming associations such as cooperatives. BR talks to the representative of one such organization to find out how it actually works and why, despite the obvious advantages, the model has not yet caught on locally. ∫ SIMONA BAZAVAN “Increasing productivity (…) and reducing production costs in some agricultural sectors will not be achievable, or at least not beyond a certain limit, unless there is a shift towards associations and collective actions, in general,” warned the EU’s agriculture and rural development commissioner, Dacian Ciolos, once again in September.

Everyone agrees that getting farmers to set up and join cooperatives and other similar associations is a solution to many, if not most, of the problems Romania’s agriculture sector is dealing with at present. Low productivity and competitiveness, price volatility for both inputs and produce, and land fragmentation are the most pressing.

As for the benefits the farmers themselves get by setting up and joining co-

Despite its advantages, the cooperative model has not yet caught on locally

operatives, higher negotiating power is just one of many. “It is very simple from a mathematical perspective. It is one thing to negotiate the price when you’re

selling a tonne and another thing to negotiate when you’re selling 100 tonnes.

In the Danish milk sector, 80 percent of producers are members of farmers’ co-

operatives, in the Netherlands some 7580 percent and in Spain about a half of all farmers are part of such associations,” said Ciolos earlier this year. Members of an agricultural cooperative have the advantage of negotiating better prices for both inputs and produce. This is especially valuable for small farmers for whom relations with distributors boil down to a “take it or leave it” approach.

Better negotiating power coupled with increased production capacity also helps when selling the produce, especially to large retail chains which have strict requirements regarding the quality and continuity of deliveries.

All in all, cooperatives can be helpful for all farmers as it is easier for them to build a profitable business when they are part of associations that sell valueadded products.

continued on page 14

ADVERTORIAL

Romanian agriculture to become less weather-dependent

First agriculture mutual fund launches in Romania – the PRO AGRO Mutual Fund At the beginning of 2014 we will have in Romania the first mutual fund accredited by the Agriculture Ministry.

Authorities are encouraging the establishment of a unique fund, mainly because it will be funded better and will become stronger.

The fund will essentially represent an instrument for price stabilization and will offer financial compensations to its members, agricultural producers, for the economic losses generated by diseases of their animals or crops, environmental disasters, as well as for

the losses generated by events of uninsurable risk.

A mutual fund will basically secure the revenues of Romanian farmers. There have been years, as was the case in 2012, when the draught affected over 3.7 million ha of land, meaning approximately 40 percent of Romania’s arable land. In the case of wheat, things were worse. 30 percent of the field crops of 2011 were affected by the draught. Among the crops affected by the draught, over 1.2 million ha belong to small subsistence farms, with areas between one and ten ha. In total, over 500,000 individual farmers were affected. The existence of a mutual fund in Romania would considerably reduce the damages incurred by the farmers through the sharing of their operational risks and by completing the agricultural insurances of which they benefit.

Within this context, the National Federation PRO AGRO launches the first Mutual Fund in Romania – the PRO AGRO Mutual Fund. In order for a mutual agriculture fund to be accredited, there needs to be proof that it is made up of

members working at least 30 percent of the country’s arable land and that it represents all agricultural sectors. PRO AGRO encompasses 14 professional entities, representative for the Romanian agriculture. From intra-professional organizations on the product area, federations, unions to federations of employers representative at a national level in the area of producing, processing, storing, distributing and selling agriculture products.

Joining a mutual fund is made through signing an adhesion request, and, under the terms of current legislation, joining will become an unavoidable option.

Farmers who do not wish to participate as members within the mutual fund will undertake penalties of 80 percent of the support granted by the national budget.

The PRO AGRO Mutual Fund will benefit from a co-financing of 65 percent of public funds (European and national). As such, for every 1 euro deposited by a farmer with the mutual fund, a contribution of 2 euros from public funds is returned.

The farmer who has already joined the

PRO AGRO Mutual Fund will receive, besides the standard compensations already mentioned (for cases generated by diseases of animals/plants and weather incidents) and compensations for the losses provoked by natural disasters (draught, flooding or frost). These will be made possible once the National Program for Rural Development 2014 – 2020 comes into force.

It is important to know that, unlike the insurance policies that are renewable every year, members’ contributions to the mutual fund are capitalized annually. Moreover, the mutual fund can negotiate on behalf of his members contracts with insurance companies, and obtain better contractual terms.

Consequently, starting next year, Romanian farmers will have better control over their production and implicitly over their revenues. Insuring the farmers, the mutual fund, indirectly, will also ensure the market for agricultural products, with lower price variations.

www.business-review.ro Business Review | October 28 - November 3, 2013

AGRICULTURE 13

PARTNER CONTENT

About association in agriculture

Cristian Popescu, Managing Associate, Popovici Nitu & Asociatii

Cristian Popescu Managing Associate, Popovici Nitu & Asociatii

It has become a truism that the agricultural area of Romania is highly fragmented (e.g. 13.3 million ha are being worked by 3,859,000 agricultural enterprises, of which 99.2% are enterprises without legal personality represented by small farmers – individual farms, certified natural persons, sole partnerships – with an average area of 1.95 ha/farm) and that a modern and efficient agriculture requires the association of small farmers and consolidated surfaces.

Moreover, within the public area there are a lot of discussions regarding the necessity of farmers’ association, the benefits of association (e.g. obtaining stronger positions in negotiations with seed and fertilizer suppliers or cereal buyers, in building production delivery chains or in obtaining higher subsidies from European bodies) or the measures of financial stimulus (on national or European level) of these associations.

Also, in terms of a very low degree of association, there are attempts of identifying originating

factors for these facts (e.g. the laws on restoration of land ownership rights that led to fragmentation, the farmers’ lack of information), of implementing certain punitive measures for those who refuse to enter associations (e.g. decreasing agricultural subsidies) or of financial stimulus of those who would sell the land in view of consolidation.

Without challenging the absolute good-faith of these initiatives, discussions or even legislative measures towards their purpose – obtaining an efficient agriculture, we believe that at least some of the answers and explanations should be searched deeper.

Beyond aspects of general sociological order (the very low degree of social trust – 60% of Romanians do not trust their peers), which do not represent the object of this analysis, we should ask ourselves – what legal impediments may encounter 50 farmers in Oltenia or Moldova (assuming that each of them possesses 2 ha of land) who would enter an association for planting sunflower?

In our opinion, beyond any potential financial or economic difficulties, the difficulty of legally holding, or figuratively speaking, the difficulty of embracing the legal form of the ownership right or the right of use upon those certain land plots, in the framework of association, due to the lack of cadaster and real estate registration with the land book, represents the main issue.

For lack of real estate registration with the land book, it shall prove to be extremely difficult or almost impossible to include that certain land in the share capital of a company or to set up a usufruct right in favor of an agricultural partnerships or agricultural association.

Also, the lack of cadaster and real estate registration with land book of agricultural land plots entails a series of blockings regarding the land plots’ location, exchanges in view of consolidation, selling or setting up securities over them in view of financing potential agricultural projects.

In addition to this, the lack of land registration and the lack of a clean record of land plots and owners may lead to issues related to proximity, multiple selling or multiple declaring of those certain areas for obtaining agricultural subsidies.

In the formal picture of the credit and the business plan, the ownership right or the right of use upon agricultural land plots must embrace the same legal forms.

Currently, the majority of the large farmers in Romania are trying to obtain, with many difficulties, areas of agricultural land as compact as possible, based on the so-called „use exchange conventions” with other farmers - a process weighted by the lack of cadaster identification data in GPS system, which would provide a precise location.

How easily could the 50 farmers obtain an area as compact as possible if their land does not present cadaster identification data? In practice, it is almost impossible.

At the moment, in Romania, of the more than 3,000 territorial and administrative units, the land registration works have reached an end in no more than 5-6 localities (according to the latest information provided by the National Agency for Cadaster and Land Registration). The process of land registration of the entire agricultural area should be a public task undertaken by the Romanian Government integrally, both financially and organizationally, as soon as possible.

Romania benefits from a proper

law regarding association1, which is, however, inefficient and it eventually becomes a form not supported by a proper content as long as the terms prior to implementation are not fulfilled. It is useless if an agricultural association receives a higher subsidy per ha than a farmer with 2 ha of land, if only 5-10 of the 50 farmers can legally fructify the ownership right.

In addition to the above, we should enhance the idea that the consolidation process of the agricultural land is a matter of market evolution and maturity.

Consequently, in order to obtain a consolidation as proper as possible, apart from the land registration process, the state must preserve a land market governed by clear and balanced rules (unfortunately, the latest legal initiatives kept in mind for 2014 appear to be rather restrictive, leading to a foreclosure).

1 According to the governing law, Romanian agriculture includes the following forms of association: agricultural companies (Law no. 36/1991 on agricultural companies and other forms of association in agriculture), agricultural associations (Government Ordinance no. 26/2000 on associations and foundations, approved by Law no. 246/2005), agricultural partnerships (Law on agricultural partnership no.

566/2004) and groups of producers (Ordinance no. 37/2005 on the recognition and operation of groups and producer organizations, for marketing of agricultural and forestry products).

www.business-review.ro Business Review | October 28 - November 3, 2013

14 AGRICULTURE PARTNER CONTENT

continued from page 12

Farming partnerships, a more cost-efficient approach to farming

It also gives them a stronger voice in an increasingly competitive agribusiness market where they can no longer rely on the authorities alone to defend their interests. In time, cooperatives can grow into complex businesses, well adapted to market conditions, where each member has a clearly defined role.

However, despite these benefits and the success farmers’ cooperatives enjoy in the most developed European farming sectors, the model has not yet caught on locally. “Romanians lack the gene of association (…) and where there are two, there are already too many,” said Laurentiu Baciu, president of the League of Romanian Farmers’ Associations (LAPAR). A general reticence concerning cooperative forms rooted in the communist period, when cooperatives were assembled by force, is certainly responsible to a large degree for local farmers’ attitude towards this business model. As is the fact that lack of information about how cooperatives actually work nowadays still fosters fears over the loss of control over assets and decision making when joining such an association. However, these are not the only factors responsible for the lack of enthusiasm. The authorities are frequently singing the praises of farmers’ cooperatives but they have yet to come up with a clear strategy, or even individual measures, which would offer farmers more concrete incentives to set up or join cooperatives. “Such associations don’t appear out of blue and even when they do get started, they don’t survive and evolve unless they are supported,” said Ciolos this September, during a Mediafax conference. First of all, for this to happen, there is a need for a clear and simplified legal framework regarding the various forms of association and fiscal incentives for farmers who are members of farmers’ cooperatives, he commented. Secondly, the authorities need to support collective investments, something which could be included in the National Program for Rural Development (NPRD) for 2014-2020 which is currently being drafted. Local authorities have indeed suggested that the future NPRD will feature concrete measures to support the development of forms of associations such as cooperatives.

by Radu Noslacan, Associate

The idea of farmers’ entering into partnerships in order to avoid loss and boost productivity seems quite imperative in Romania, considering that according to all statistics in the sector, the farming area used on an average by a farming unit is approximately 3-to-4 ha (as compared to an average of 55 ha in France).

First, it is important to note that Romania does not lack a legislative framework giving farmers the opportunity to enter into partnerships under various forms. Consequently, the Romanian law explicitly regulates typical forms of partnership for the agricultural sector, such as (i) agricultural companies provided under Law No. 36/1991, (ii) agricultural cooperatives regulated by Law 566/2004 and (iii) farmers groups and organizations provided under Government Ordinance No. 37/2005.

Each of the aforementioned forms of partnership may be subject to criticism.

Just for example, an agricultural company requires a minimum of ten members in order to be established, which reduces the dynamic of their gathering for purpose of establishment. Similarly, cooperative members (the “stakeholders” in agricultural cooperatives) cannot hold shares exceeding 20% of the share capital of the agricultural cooperative, a provision that does not stimulate major farmers to enter into this kind of partnerships.

Certainly, besides such criticism, each form of partnership has several benefits, the most important being the pooling of resources for the members, the cost efficiency and the profitability of agricultural establishments. Besides that, farmers are encouraged to enter into partnerships in specific ways.

For instance, agricultural cooperatives are exempted from payment of the tax on agricultural cooperatives during the

first five years as of establishment and from payment of custom duties for imports of farming machinery, tools or irrigation equipment. Moreover, under Measure 142 established under the National Program for Rural Development, 100% non-reimbursable public aid (mostly EU - money) is granted to certain groups of farmers as of January 1st, 2007 until December 31st, 2013, for the purpose of improving the quality and the quantity of agricultural production.

Despite such benefits, the number of forms of farming partnerships is still insignificant. According to the latest General Agricultural Census in 2010, the number of agricultural units with legal personality is less than 1% of the total number of agricultural units in Romania, while in France, a country with a long tradition in agriculture and with one of the highest agricultural productions at EU level, around 30% of the agricultural units are organized under the form of an entity with legal personality, according to the French statistics.

The reasons for such scarce interest of the farmers in Romania to enter into partnerships are coming from the lack of information as regards the benefits implied, as well as the lack of professional training in the field of farming.

Moreover, the historic context makes Romanian farmers to become more reluctant at any form of partnership resembling in any way to the collectivization conducted during the communist regime.

However, during the past years, an increase in the number of farmers partnerships have been registered. According to the latest General Agricultural Census in 2010, an increase by 34.6% of the number of agricultural units with legal personality has been noticed during 2002-2011.

Furthermore, there are reasons to hope that the situation is to improve in the next years, given that, after Romania’s accession to the EU, the agricultural producers are under increasing pressure in the absence of customs barriers that were protecting them before 2007 against foreign competition.

Radu Noslacan, Associate

Strength in numbers But even before the effects of the forthcoming PNDR kick in, those who have already set up and joined farmers’ cooperatives say it is worthwhile. Francisc Bodo is one of the 19 members of the recently formed Viitorul Agricol Alexandria farmers’ cooperative. The members, who he says are “mostly local investors”, cultivate a total of more than 22,000 hectares of land with field crops. The cooperative hopes to attract more members in the future and has set the goal of reaching a combined turnover of some EUR 25-30 million in two years’ time, said Bodo.

So, why set up the cooperative in

the first place and how does it actually work? “It is very hard to achieve performance when one’s forces are dissipated everywhere. Cooperatives are the only way, especially when we are talking about field crops,” he said. The members run their businesses as normal and outsource at cooperative level only those activities which they agree upon. Inside the cooperative, decisions are taken through a board of administration but the actual management is done by an independent executive team.

Higher negotiating power resulting from combined forces is one of the main benefits, agrees Bodo. The need for this became particularly pressing earlier this year, when higher production than the previous year pushed down grain prices. Local farmers, the small ones in particular, have subsequently complained that they were left at the mercy of a handful of traders who dominate the market. Had they been able to negotiate prices through a cooperative, their balance could have looked very different, he argues. Things could even evolve to the point where farmers no longer need traders at all and are able to conduct export operations themselves by using the cooperative’s infrastructure.

Greater negotiation power is an important benefit but it is not the only one, says Bodo.

“It boils down to running costs. The ideal would be for each member to get on with his or her business, which is farming, and divide all the costs that they agree can be divided with the other members. We have 19 members. Why pay 19 accountants when we could pay one or two to do the job for everyone?” he reasons.

Joining a cooperative also gives farmers access to services which would otherwise be out of reach. “Say one needs to hire a specialist for a technological or crop-related problem. This can cost thousands of euros. A farmer who cultivates, let’s say, 2,000 hectares of land and sells his crops at prices similar to those on the market this year, which have wrecked the budgets of most farmers, will not be able to hire that specialist by himself. But it is a completely different situation when costs are divided between members,” he outlined. Despite all these advantages, farmers’ cooperatives are still not popular in Romania. This is not to do with the legal framework, but rather the underdevelopment in rural areas with everything this entails, thinks the Viitorul Agricol Alexandria representative.

Since cooperatives are so beneficial, what should the authorities do to foster the formation of such associations? Just one thing: to do their job, recommends Bodo. They should set clear development objectives for the local agriculture sector and strategies through which these objectives can be reached. The rest should follow naturally, he concluded. simona.bazavan@business-review.ro

www.business-review.eu Business Review | October 28 - November 3, 2013

16 EU ELECTIONS

Get out the vote: countdown to European Parliament elections gets underway Every five years, EU citizens choose who will represent them in the European Parliament, appointing MEPs as ambassadors for their interests in the EU decision-making process. In May 2014, around 400 million eligible voters are set to decide the future make-up of the European Parliament. BR took a look at the Romanian chapter and how the big picture is shaping up. ∫ OANA VASILIU The European elections of May 22-25, 2014, will give the people of Europe the opportunity to decide the political direction they want the EU to take.

Moreover, how the 2014 elections reshape the European Parliament – the only directly elected EU institution – will, for the first time in the EU’s history, determine who leads the European Commission, the EU’s executive body.

Furthermore, MEPs recently approved the EU’s long-term budget for 2014-2020 and will now decide each year, together with national governments, how taxpayers’ money is to be spent.

The voting system Under the Lisbon Treaty, elections to the European Parliament are largely governed by national electoral laws and traditions. Each member state therefore decides whether to use an open or a closed list system. However, there are common EU rules which stipulate that the elections must be by direct universal suffrage as well as free and confidential.

MEPs must be elected on the basis of proportional representation, from six each for Malta, Luxembourg, Cyprus and Estonia to 96 for Germany, giving a total of 751. EU citizens living in an EU country other than their country of origin are entitled to vote and stand in European elections in their country of residence.

The vote will take place from May 22-25, 2014. Taking into consideration the Romanian tradition of voting on Sundays, the local election day for the European Parliament will probably be May 25.

The Romanian chapter Currently, Romania is represented in the European Parliament by 33 members, whose group allegiances are as follows: 14 in the European People’s Party (EPP), 11 in the Progressive Alliance of Socialists and Democrats (S&D), 5 in the Alliance of Liberals and Democrats for Europe (ALDE) and 3 non-attached members (NI), according to an official European Parliament document released in April 2013.

In Romania, a press conference looking forward to the official launch of the electoral campaign was held in

For the 2014-2019 period Romania will be represented in the European Parliament by 34 MEPs, according to data provided by Romanian Information Office of the European Parliament

the presence of Marian-Jean Marinescu, vice-chair of the EPP (Christian Democrats), Corina Cretu, vice-chair of the S&D, Adina Valean, vice-chair of the ALDE and Madalina Mihalache, head of the EP Information Office in Romania, on September 20.

The campaigning will take place in 2014, one month prior to May 22-25, the official dates of the European elections.

Asked by journalists if they would run in next year’s elections, the three MEPs invited to the press conference replied that it had not been discussed officially by the national parties that they represented in the European Parliament, but that it was likely they would.

However, none of the speakers would divulge their party’s candidate for president of the European Parliament, although they admitted that some rumors were circulating. Contacted by BR, the press officer of MEP Renate Weber reconfirmed she hoped to run in the forthcoming elections,

but, again, said the national party had not officially discussed the candidates for the new-look European Parliament.

Corina Cretu commented that this election campaign should improve the image of Romanians and Bulgarians throughout the EU, as some MEPs have already voiced their concerns about the work permits that will be available to citizens of the two countries from January 2014.

The best known Romanian MEP is probably Adrian Severin, who represented the European Parliament’s socialist group before he was expelled in March 2011, having been implicated in the cash-for-influence scandal that forced the resignation of two EU legislators.

Currently, Severin is standing trial in Romania for allegedly agreeing to take money from fake lobbyists more than two years ago in return for introducing amendments to draft EU laws in the European Parliament.

Severin, a heavyweight of the S&D

group at that time, was caught with two other MEPs – Austrian Ernst Strasser of the EPP and Zorah Thaler of Slovenia, another Socialist – by journalists from the UK’s Sunday Times who were posing as lobbyists.

Romania’s anti-corruption agency, the DNA, charged Severin with corruption over the allegations. The politician protested his innocence last month in the national press, but said he was not sure whether he would win the case.

The Euractiv.com news website reports Severin, who had nursed ambitions for the job of EU foreign policy chief, which eventually went to Catherine Ashton, protested that there was nothing wrong if his “consultancy services” were remunerated.

Since the first local election of MEPs, back in 2009, four Romanian representatives have resigned: Ramona Manescu, who represented the ALDE until August 25 this year, and is currently Romania’s minister of transportation, Cristian Busoi, who

www.business-review.ro Business Review | October 28 - November 3, 2013

EU ELECTIONS 17

The visuals announcing the European Parliament election campaign are translated in 24 languages. The campaign runs under the slogan ‘This time it’s different’

oana.vasiliu@business-review.ro

Major factors that define the European identity

Main things that strengthen the feeling of European citizenship

Main challenges facing the EU and its Member States going forward

The single currency, the euro

A European social welfare system harmonized between the Member States (health, pensions, etc.)

Unemployment

The values of democracy and freedom

ACT. REACT. INTERACT. The communication campaign

Having the right to vote in all elections held in the Member State where you live, even you are not a citizen of this Member State

Recognition of national qualifications in every EU country, with no need for fresh examinations

Social inequalities

Member State public debt

60% 50% 40% 30%

RO 21%

EU 32%

RO 32%

EU 33%

RO 47%

EU 55%

RO 38%

EU 31%

RO 42%

RO 33%

EU 40%

RO 42%

20%

EU 42%

The official run-up to the 2014 European elections started on September 10, when the European Parliament launched its awareness and information campaign. The campaign will continue beyond the elections themselves, until the newly voted-in Parliament in turn elects the next European Commission president.

Act.React.Interact. is the slogan the EU is using to encourage its citizens to participate in shaping a better Europe. By voting, you can influence the decisions that touch your life as well as the lives of over 500 million people. EU officials promise that the European Parliament will react to the demands of the citizenry, as its job is to listen to the multitude of voices in Europe and provide real answers. The decisions we make together have an impact on the day-to-day life of every European citizen, they say.

paign, she added, is to highlight the difference from earlier stages of the EP’s activity, encapsulated by the slogan, “This time is different”.

“The context is very different from previous years. We are in a situation where Parliament has more power following the Lisbon Treaty and it wants to make this connection between voting and the appointment of a new president of the European Commission,” said Mihalache.

CITIZENS’ VOICES THROUGH EUROBAROMETER*

EU 23%

also represented the ALDE until June 27 this year, George Becali, who was a non-attached member until December 18, 2012, when he applied for a chair in the Romanian Chamber of Deputies, and Romava Plumb, who represented the S&D in the European Parliament until May 6, 2012 and is now Romania’s minister of environment and climate change.

EP, which is set to elect the future president of the European Commission,” said Madalina Mihalache, head of the EP Information Office in Romania.

She added, “It is nonpartisan. It will highlight the impact of Parliament’s decisions on daily life, but will not be at all connected to the campaigns that the European political parties and the national parties will conduct in their countries and at the European level.”

The main message of the cam-

RO 56%

506.8 million EU citizens Around 400 million eligible voters 37.4 million eligible first-time voters 28 member states EUR 16 million is the cost of the electoral campaign for all 28 countries and 24 languages EUR 0.0316 per EU citizen or EUR 0.0388 per eligible EU voter *information provided by the European Parliament, September 2013.

“The objectives of this communication campaign are to inform European citizens about the European elections and, in particular, to help them better understand the impact of decisions taken at EU level, including by the European Parliament, upon their lives, our lives, everyday life.

Perhaps one of the most important things that differentiate this campaign from others in the past is that the impact of citizens’ voting will have a greater impact upon the establishment of a political majority in the

EU 41%

2014 EP Campaign Facts and figures*

*according to data from the European Parliament Eurobarometer 79.5, August 2013. The data reflects opinion at EU level compared to Romania

10%

www.business-review.eu Business Review | October 28 - November 3, 2013

18 LINKS

Romania starts along the digital path Romania will be among the last European countries to switch off its terrestrial analog signal and make the transition to digital terrestrial television, which is set to happen on June 17, 2015. The Romanian telecom watchdog has published the intermediary steps towards this goal, and industry representatives are trying to anticipate potential obstacles along the way.

Digital signal: Romania will switch off its terrestrial analog signal by 2015 and go digital, which allows better image and sound quality

∫ OTILIA HARAGA “Analog terrestrial television has already been switched off in most countries in Europe and all European countries are expected to complete the digital switchover by 2015, if not sooner. In Bulgaria, analog broadcasting ceased this fall, and Hungary and Ukraine will complete the transition process in 2014. By 2015, all the countries in the region will have definitely switched off analog terrestrial television, as per the commitment Romania made by signing the Geneva agreement in 2006,” Catalin Marinescu, president of the Romanian telecom watchdog ANCOM, told BR.

Digital terrestrial television has certain advantages over analog television such as a higher quality of video and audio transmission and a higher data transmission rate, and it opens the gate for new technologies such as DVB-H (digital video broadcasting – handheld) and HDTV (high-definition television).

Digital terrestrial television also facilitates a more efficient allocation of the spectrum because it allows the reception of more programs on a single channel as opposed to just one program per channel, as in the case with analog terrestrial television.

“In Romania, most viewers use cable TV, for which they pay a monthly fee, others pay for satellite

(direct-to-home) reception, others have installed their own satellite antenna, others receive TV programs for free with an individual antenna, and some have IPTV. So, we are talking about a competitive market, with various types of platforms, with costs and benefits, advantages and disadvantages, but also with a customer base that believes the pros exceed the cons,” Marinescu told BR. He explained that digital terrestrial television is in fact an alternative for users in Romania. It will not replace the current outlets of broadcasting/transmission, but only complete the range of services that consumers have at their disposal.

The Romanian telecom watchdog ANCOM will allocate five national dig-

ital multiplexes in the DVB-T2 standard, four national digital multiplexes in the UHF (ultra-high frequency) band and one national digital multiplex in the VHF (very-high frequency) band.

ANCOM will also allocate regional digital multiplexes, the number of which remains to be decided, depending on the need, after the national ones are allocated.

One of the four multiplexes in the UHF band will be allocated under certain conditions: it can broadcast public and private stations after June 17, 2015, provided it ensures coverage of 90 percent of the population and 80 percent of the territory by December 31, 2016.

“The level of the license taxes has

www.business-review.ro Business Review | October 28 - November 3, 2013 not yet been set. ANCOM estimates that by mid-November, the bill that regulates this aspect will be completed and put up for public consultation. Taxes resulting from the auction will be revenue for the state budget,” Marinescu told BR. Apart from the license fees for acquiring a multiplex, investments will also be made by operators who intend to go onto this market, depending on their model of business.

The government approved the strategy for the transition to digital terrestrial television and published the government decision nr. 400 in the Official Gazette on July 3 of this year.

Last week, the telecom authority laid out the steps towards this goal.

“If no unforeseen events occur and the procedure takes place according to the proposed calendar, we hope to announce the winners of the five digital television licenses before April 30, 2014.

Basically, the future operators of the licenses will have at their disposal more than 12 months until the transmission of terrestrial analog TV programs cease, namely June 17, 2015,” said Marinescu.

According to the calendar laid out

by ANCOM, by mid-November 2013, the government bill that stipulates the license taxes and the procedure for allocating the licenses as well as the bill setting out the procedure for allocating the digital multiplexes and the preliminary task books will be completed and put up for public consultation.

By the end of the year, consultations and the approval of the documents should be completed. In January 2014, the selection procedure should be launched.

The procedure of allocating the multiplexes should be finished by the end of April 2014.

By June 17, 2015, the digital switchover should be complete.

Promotional campaign, the key to a smooth transition Apart from the time-sensitive steps, the state will implement a campaign to inform the public about the transition to digital terrestrial television.

The National Audio-visual Council (CNA) in partnership with the Romanian public television service will roll it out.

“The CNA officially announces that it has started a campaign to inform and promote the strategy of transition from analog terrestrial television to digital terrestrial television. We have pressed the ‘On Air’ button,” said Laura Georgescu, president of the CNA, during the International Digital Forum.

The institution will use the expertise of other member states such as Macedonia and Poland, which have already completed the digital switchover, and Hungary, which

will complete the process before Romania.

To this end, the CNA has already signed partnerships with telecom regulator ANCOM and the Association for Digital Communications.

“The second partnership we have signed is with the public television service, which will be our main partner in broadcasting videos for promoting the transition to terrestrial television,” said Georgescu.

The CNA is also about to sign a partnership with the public radio broadcaster.

The first meetings with SRTv (ed. note: which runs the national public television station TVR) to plan the implementation of the campaign will take place very soon, said Claudiu Saftoiu, president and general manager of SRTv. Radiocom (The National Radiocommunications Company) has the largest analog terrestrial television broadcasting network in Romania, running two terrestrial TV channels – TVR 1 and TVR 2 – while 40 percent of its revenues come from television broadcasting.

The institution has already implemented two pilot projects in the classical digital standard DVB-T (digital video broadcasting – terrestrial) in Bucharest and Sibiu.

“We should not forget that major investments were made when passing from tube transmitters to advanced transmitters over 2004-2008, also ensuring 95 percent coverage for the channels TVR 1 and TVR 2. These investments were made with the warranty of the Ministry of Finance and there are in fact loans that are being reimbursed. All this has created the need to upgrade the two broadcasting networks by moving to the digital standard. We are in discussions with big banks in Romania to find viable financing solutions for this project, which we aim to complete by June 2015,” said Gabriel Grecu, general manager of Radiocom.

The estimated value of the project is EUR 20 million, according to Grecu.

“This transition requires vital decisions,” he added. “SNR’s activity is mainly in broadcasting, so not taking the necessary measures to be prepared by 2015 would mean a deplorable end for this company, which, of course, we don’t want to happen.”

In the first half of 2014, Radiocom will implement the DVB-T2 (digital video broadcasting – second generation terrestrial) on the TVR 2 analog infrastructure.

“There might be obstacles in implementing the project because of weather conditions. However, we believe that by July 2014, we will have provided digital emission for 40 percent of the population, and the impact on analog reception will be minimal,” said Grecu. otilia.haraga@business-review.ro

LINKS 19

www.business-review.eu Business Review | October 28 - November 3, 2013

20 CITY

The fall harvest of Romanian cinema The themes dealt with by the recent releases of the New Romanian Cinema’s (NRC) filmmakers match each one’s artistic personality. And yet, a closer look at the five titles that have premiered since late September shows some “elective affinities” amongst the directors. ∫ ANCA IONITA When Evening Falls on Bucharest or Metabolism, director Corneliu Porumboiu reflects on the filmmaking process and the aesthetic changes brought about by the transition from film to digital camera. The conversation between Paul (Bogdan Dumitrache), a director who is about to make a movie, and his main actress, Alina (Diana Avramut), enables Porumboiu to embark upon a detailed analysis of the positive aspects of shooting on 300-meter celluloid film, which constrains the director to a maximum 11minute take. Aesthetic rigor is lost with the digital camera, which can shoot for hours, without pause, argues Paul. The regular moviegoer might find the whole debate uninteresting and too long, despite the selfirony that permeates the film from the beginning to the end. However, the topic of Porumboiu’s latest movie looks like a step aside by the Police, Adjective director from the NRC’s subjects of interest, a step that gives him the opportunity for self-reflection, thereby putting in perspective the first part of his filmography and, with it, the New Wave itself.

With the recent release The Japanese Dog (Câinele japonez), director Tudor Jurgiu also steps outside the NRC coverage area, looking into rural Romania and its people, so far totally ignored by local filmmakers. A family drama, the movie focuses on the communication issues between old Costache (Victor Rebengiuc) and his son Ticu (Serban Pavlu), who emigrated and married a Japanese woman, and has now brought his wife and son to visit his father, whose house was almost entirely destroyed by the floods. Rebengiuc’s performance reminds the Romanian viewer of his powerful Moromete character (in the Stere Gulea film of the same name), the very embodiment of the proud and stubborn peasant, who derives his wisdom and his vital energies from an ancestral bond with the earth he is working.

Cainele japonez The Japanese Dog Romania, 2013 Director: Tudor Cristian Jurgiu Screenplay: Ioan Antoci, Tudor Jurgiu Starring: Victor Rebengiuc, Serban Pavlu, Ioana Abur, Alexandrina Halic, Kana Hashimoto Premiere: October 18

Victor Rebengiuc as Costache, in a film that explores the topic of globalization

Also a family drama, but this time with a different kind of twist, is Roxanne, the debut of director Vali Hotea (who has so far worked in television), who also wrote the screenplay with Ileana Muntean. Inspired by a real-life

Roxanne Romania-Republic of Moldova, 2013 Director: Vali Hotea Screenplay: Vali Hotea, Ileana Muntean Starring: Serban Pavlu, Mihai Calin, Diana Dumbrava, Anghel Damian, Valeria Seciu, Adrian Vancica Premiere: October 12 Anghel Damian, Ingrid Bisu and Serban Pavlu

www.business-review.eu Business Review | October 28 - November 3, 2013 situation, the film is a psychological analysis of different human typologies that relies heavily on the acting skills of the protagonists.

While checking his Securitate file, nosy middle-aged Tavi (Serban Pavlu) discovers that he is the father of a baby that resulted from a brief highschool affair with Roxana. From this point the story unfolds more or less as expected, yet maintaining the viewer’s interest, with Pavlu in top form.

The real outsider on the NRC’s landscape is the English-language A Very Unsettled Summer, the dramatization of a short story by author Philip O Ceallaigh, an Irish writer who has lived in Bucharest since the early 2000s and was also one of the copy editors of Business Review during those years.

Director Anca Damian, who wrote the screenplay along with O Ceallaigh, chose an international cast which includes two Romanian rising stars – Ana Ularu (Maria) and Diana Cavaliotti (Irina) – and Game of Thrones actor Jamie Sives in the role of a Scot-

O vara foarte instabila A Very Unstable Summer Romania-Czech Republik-Sweden-UK, 2013 Director: Anca Damian Screenplay: Anca Damian, Philip O Ceallaigh after a story by Philip O Ceallaigh Starring: Jamie Sives, Ana Ularu, Kim Bodnia, Diana Cavaliotti, Teo Corban Premiere: November 1

tish journalist (Daniel) who lives in Bucharest.

In the part of the narrator and confidant of the main characters, Maria and Daniel, is Danish actor Kim Bodnia. The plot is constructed around the Maria-Daniel-Irina love triangle and the idea of the fictionalization of reality, a postmodern view on storytelling, spiced up with several erotic scenes.

The film falls, as I’ve mentioned, outside the realism box and its “slice of life” aesthetics and can be put in the same category as Porumboiu’s Metabolism.

This is why, despite the hot scenes that act as a trigger for a larger audience, the targeted public is rather the niche of film lovers who are interested in reflecting on film as an art in the 21st century.

The dream-reality duality that opens a liminal space is the idea around which director Bogdan Mustata has built his latest movie Lupu (Wolf). For the 16-year-old eponymous character (Bogdan Vasilescu), the reality of the girl next door Clara (Ada Condeescu) and the old couple of neighbors is unsubstantial, dissolving into a dream-like state. In an interview given ahead of the premiere of the movie, Mustata said his main goal with this film was to achieve a palpable atmosphere of dream-like reality, a “pulsation” of this intermediary space.

The film’s aesthetics remind the Romanian viewer of pre-1989 local cinema and the refuge it took in the symbolic format, from the leverage of Social-Realism.

At a glance, it looks like Romanian film directors are ready to abandon the New Realism that made them internationally famous and move into a new era. How local and international audiences and critics will respond remains to be seen. debbie.stowe@business-review.ro

Ana Ularu stars in the English-language A Very Unstable Summer

CITY 21 FILM REVIEW

Gravity

Sandra Bullock as newbie Dr. Ryan Stone working alongside veteran astronaut Matt Kowalski, played by George Clooney Bullock is newbie Dr. Ryan Stone, a DEBBIE STOWE bio-medical engineer on her first mission after the sudden death of her child drove her to reevaluate her Director: Alfonso Cuaron life. Both actors are playing familiar Starring: Sandra Bullock, George versions of themselves, and the Clooney slow, controlled opening sees them On at: Cinema City Cotroceni, Cinema exchange easy banter while performCity Cotroceni VIP, Cinema City Sun ing routine tasks on the telescope – or Plaza, Grand Cinema Digiplex, Grand as routine as it gets when you’re Cinema Digiplex Ultra, Hollywood 350 miles above the surface of the Multiplex, Movieplex, Romtelecom earth.

IMAX, The Light The chitchat is beside the point. All In space no one can hear you scream. your focus will be on the extraordiNot so in Gravity, the stunning new nary CGI images of the earth and drama from Alfonso Cuaron. In the space unfolding against the overMexican director’s cosmos, not only whelming silence of the cosmos, can the viewer hear the characters punctuated by Kowalski’s lengthy scream, but we can hear every la- stories, tinny music and some back bored breath, as the movie juxtaposes and forth with Houston.

Of course, Houston is soon telling the vastness of the universe with the them they have a problem. The pesky vulnerability of human beings.

The human beings in question are Russians have mistakenly attacked Sandra Bullock and George Clooney. one of their own satellites, sending No other actor appears physically space debris soaring around the (though Apollo 13 actor Ed Harris galaxy – the 3D is used here to striking voices Mission Control in a nice filmic effect – and the Hubble is hit. From allusion), making Gravity effectively what looked like a leisurely IMAX a two-hander. Cuaron’s casting is as- documentary, Gravity then segues tute: Bullock and Clooney are widely into a more conventional duo-in-peril considered to be among the most like- thriller, one which probes bigger able actors in Hollywood, and being philosophical themes related to the in their sole company for an hour and arbitrariness of life and death, human a half never grates or bores. (Indeed, resilience and the survival instinct. the Ocean’s Eleven charmer must This is Bullock’s movie. Given the marank pretty high on the list of famous jority of solo screen time, she knots people one might choose be stuck together a mature performance from elements of the ditzes, geeks and alone on a space station with…)

Clooney plays veteran astronaut bruised tough cookies she normally Matt Kowalski – actually he just plays plays to give us a believable hero we George Clooney (as he always does) can root for. She’s not the obvious wearing a space suit. He’s up at the choice for the role, but her performHubble Space Telescope on one last ance shows she has come a long way job before retiring. (When will these from trying to keep a bus above 50 would-be pensioners learn? Last jobs miles an hour. before retiring must be the most dan- Gravity has its predictabilities and imgerous thing in movieland aside from plausibilities. But they do not mar the showing another character a photo of overall effect of this powerful and reyour picturesque wife and child back markable film. home just before you go to war. Or being married to Harrison Ford.) debbie.stowe@business-review.ro

www.business-review.eu Business Review | October 28 - November 3, 2013

22 IN TOUCH

DON’T MISS DON’T MISS: HALLOWEEN PARTIES

The traditional jack o’lanterns carved for the Halloween celebration

as it is said to look very much like vampires’ castles in Hollywood movies. The tour costs EUR 897 and includes transport, accommodation, meals, a Halloween party and museum entry.

The Halloween party at the Ghika Palace is now on its sixth run, this year under the name of “The End of The World Party”. On October 25, there will be two stages, where Other Man, Charlie Boy, Rotepercutor, Giuser and many others will entertain the crowd.

The entrance fee is RON 20. Over 18s only.

On October 26, Colectiv presents I Kill You @ Monster Party 4, to which guests can come dressed as a victim or attacker and act out their dark fantasies. The atmosphere will be provided by Dub Pistols Sounds System, and the party will run from 22:00 until morning. oana.vasiliu@business-review.ro

∫ OANA VASILIU Although Romania has no tradition of celebrating Halloween, Bucharest clubs are doing their best to transform this imported celebration into something unique and fun for local revelers.

Legendary club Hard Rock Café celebrates Halloween with a Trooper concert, on October 31, at 21.00. Ticket prices: RON 30 or RON 50, for VIP seats.

Bragadiru Palace will set aside a dance zone among tombs, spider webs and skeletons, created by American artist Brett Johnson, where ghoulish guests can dance until dawn. On the palace terrace, guests can enjoy a snack or buy a Halloween costume and have their faces painted to join in the spirit of the occasion. The event takes place on October 26, from 22:00, and the entry price is RON 30.

In Old City, Bastards Club is giving out free Bloody Bastard and Punch all night long. If your costume is outstanding, the organizers have more surprises for you. The party is on October 31, from 22.00.

The travelers’ pub, Journey Pub,

offers a Scary Journey, on October 31, from 22.00. Everyone in Halloween costume gets a 10 percent discount.

Bankers Night Out is holding a private Halloween circus, to which eccentrics from the industry are welcome. The fun starts on November 1, at World Trade Plaza Pullman, from 23.00. To attend, register through your office email (bankers only).

Halloween party in Dracula’s homeland The Transylvanian Society of Dracula (TSD) is organizing for the 22nd year a Classic Dracula Society Tour, which runs from October 29 to November 3, with vampiric stops in Bucharest, Sighisoara, Hunedoara, Sibiu and Brasov. For those in search of adventure, the TSD promises that the Count will be meeting everyone in person on October 31. At his request, his society is throwing a Halloween party in a 15th-century fortress. The tour comprises sightseeing in Sighisoara, the birthplace of Prince Vlad Dracul; Hunedoara, a beautiful place with an incredible castle; Sibiu, with a stop at the tomb of Prince Mihnea – Vlad's son; then Brasov, to Bran Castle, the “American Castle Dracula” (since 1960), 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

BUSINESS AGENDA October 28 -29

CEO Clubs Romania organizes the Kings and Kingmakers forum and workshop, an event focusing on coaching and leadership, at Radisson Blu Hotel. Hendre Coetzee, global executive coach and founder of the Center for Advanced Coaching, will be keynote speaker.

By invitation only.

October 29 09:30 -11:30 The Association of Commercial Receivables Management (AMCC) organizes a press conference at Novotel Hotel. By invitation only.

14:00 -17:00 AmCham Romania organizes a workshop for its members covering best practices for documenting intra-group services at its HQ in Bucharest.

October 31-November 1

∫EVENT Business Review or-

ganizes the fourth Focus on Agriculture during the INDAGRA Expo Show, bringing together government officials, pundits and agribusiness investors, to outline the benefits of the Common Agricultural Policy (CAP) for Romania, at Romexpo exhibition center in Bucharest. Registration is open.

Find out more at www.businessreview.eu/br-events

November 5 09:00 -10:30 AmCham Romania organizes the SMEs & Entrepreneurs Meeting for its members at its HQ in Bucharest.

Halloween fever has been taking over Romania for a few years now

EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi SALES & EVENTS Sales managers: Ana-Maria Nedelcu, Oana Albu, Raluca Comanescu Sales executives: Ana Maria Andrei MARKETING Ana-Maria Stanca, Catalina Costiuc, Iulia Mizgan PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

10:30 The Romanian-German Chamber of Commerce and Industry organizes a press meeting on the importance of technical education at its HQ in Bucharest. By invitation only.

PUBLISHER Bloc Notes Media ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 EMAILS editorial@business-review.ro sales@business-review.ro events@business-review.ro