Interview: Romanians seem reluctant to take out private health insurance, bringing the market down by an estimated 23 percent last year. Tiberiu Maier, VP of Signal Iduna, says he expects the sector to bounce back in 2011 »page 8
ROMANIA’S PREMIERE BUSINESS WEEKLY
FEBRUARY 7 - 13, 2011 / VOLUME 16, NUMBER 3
INDUSTRY REPORT OIL PRICES THOUGH PUMP PRICES CONTINUE TO HORRIFY LOCAL DRIVERS, THE OIL COMPANIES ACTIVE IN ROMANIA ARE BRACING FOR A DIFFICULT 2011 »PAGE 9-11
E R E H D T D O I T B D T L S O E S GH I H Pundits say the local art market is not yet drawing on its real value, leaving auction houses struggling on a sketchy but expanding industry and collectors hoping for a wider palette of choice »page 12
Photo: Laurentiu Obae
NEWS
3Q
Road repairs
Enterprise business
Strabag has signed contracts with a combined value of EUR 106 million to repair and upgrade national roads DN14 and DN15 » pages 8-9
Remus Cazacu, GM of BIT Software, says the company is focusing on the enterprise sector to attract new clients » page 6
PLUS Retailers in AFI Palace Cotroceni reported sales of EUR 164 mln » page 6 Hotel FM is Romania’s great Eurovision hope » page 10
www.business-review.ro Business Review | February 7 - 13, 2011
NEWS 3
NEWS in brief PROPERTY & DEVELOPMENT
WEEK in numbers
Bucharest airports flew over 7 million passengers last year The Bucharest Airport Company, the operator of Baneasa (Aurel Vlaicu) and Otopeni (Henri Coanda) airports, saw total traffic of 7.03 million passengers last year and over 106,000 landings and takeoffs, according to data provided by the firm. Last year, traffic at the Henri Coanda airport grew by almost 10 percent compared to the previous year, to 4.9 million passengers. The number of landings and takeoffs rose by approximately 6 percent to 76,900 commercial landings and takeoffs on the runways of this airport. Traffic at Baneasa airport increased as well, by 7.5 percent to 2.1 million passengers, while commercial landings and takeoffs rose by 10 percent to 29,700. The Bucharest Airport Company was established through the merger of the two city airports at the beginning of 2010. It oversees the management and operational coordination of the hubs, along with their development and modernization projects.
7 million passengers flew in and out of Bucharest’s airports last year
48 percent of CEOs surveyed by PwC in their annual report said they were “very confident” about growth in the next twelve months
6.5 Photo: Laurentiu Obae
H&M to open first local store in AFI Palace Cotroceni in March Swedish fashion retailer H&M will open its first local store on March 25 in AFI Palace Cotroceni Mega Fun, said AFI representatives. Other H&M stores in Bucharest will be located in Baneasa Shopping City and in Unirea Store. Three more shops will be opened in Iasi, Timisoara and Cluj-Napoca in the Palas commercial center and Iulius Malls. Another outlet will be located in Constanta in the Maritimo Shopping Center, the former Polus Center Constanta.
IMAGE of the week Romanian Walk of Fame inaugurated Florin Piersic is the first actor to receive a star on the local version of the Walk of Fame, inaugurated last week in Bucharest. The
Office vacancy rate 17 percent, might drop to 14-15 percent in 2011, says CBRE
alley is located in the capital’s historical center, in Piata Timpului,
The local office vacancy rate stabilized at around 17 percent in 2010, according to a CB Richard Ellis report. Assuming a similar level of take-up activity in 2011 to that of 2010, and factoring in the much lower level of new supply (around 135,000 sqm), the rate might sink to 14-15 percent, continues the study. Prime rents should not register any major fluctuations in 2011, judging by the overall activity in 2010. In 2010, the investment turnover reached EUR 327.3 million, up almost 45 percent against the volume of last year, according to the same source. The second half of 2010 brought a reduced level of investment transactions compared to the first half (55 percent down). The majority of purchasers in 2010 were foreigners (almost 90 percent of concluded transactions were by companies coming from the UK – 47 percent, Austria – 17 percent, Norway, Italy and Poland); the same was the case on the vendor’s side, where 82 percent of sellers were foreigners. The majority of investment was in the retail sector, which in
olis Theater and the Bucharest Tourism Association.
behind Cocor Store. The project was developed by Cocor, Metrop-
2010 accounted for more than 60 percent of total investment turnover through either shopping centers, retail parks or big boxes. Office was the second most transactioned segment in 2010. The number and volume of institutional residential transactions was low, under 6 percent of the total volume. No investment transactions were recorded for industrial, mixed-use properties or hotels in 2010. The investment market in 2010 was dominated by medium size transactions, with an average transaction worth EUR 23.4 million, and a total of 14 deals.
Sonae Sierra signs Altex for Adora Mall Developer Sonae Sierra has signed up white goods and IT&C retailer Altex for its Adora Mall in Craiova. Altex will lease 1,400 sqm, joining a mix of tenants which currently includes Cora, Cinema City,
Orsay and Best of Bowling. Adora Mall, owned and developed by Sonae Sierra, will have a total surface of 59,000 sqm. It will play host to over 190 shops, service units, leisure facilities and 1,900 parking places. The contract signed with Altex ups the rented surface of the mall to 35 percent at present. Negotiations are in a final phase for another 30 percent of the surface.
INVESTMENTS IBM looks into opening excellence research center in Targu-Mures Software giant IBM is considering opening an excellence research center in Targu-Mures, according to reports from Agerpres newswire. “Negotiations regarding the possibility of opening a center of excellence in research in Targu-
percent fewer new passenger cars were registered in 2010, according to the National Institute for Statistics, ISN Mures started in November last year in the presence of Prime Minister Emil Boc, mayor Dorin Florea and Thomas Reeves, who is global vice-president of IBM Research,” said Targu-Mures city hall officials. IBM representatives took into account the city’s tradition in medicine and pharmacy, its results in research, the quality of its universities and projects that were started at a local level and then expanded, especially those in partnership with emergency service SMURD and the Ministry of Health.
Endava to hire 200 more, open new delivery centers in Romania IT company Endava, based in ClujNapoca, has announced that it will hire 200 more people and open new delivery centers in Romania. “In 2011 we aim to double our capacity, in Cluj and Iasi as well as in Bucharest. By June we want to recruit another 200 people in Romania and we will start to build a new delivery center in Bucharest, where Endava has only had a center of consultancy and regional coordination,” said Valentin Metzger, executive manager of Endava Romania. Currently, the firm has more than 600 employees, half of whom work in its four hubs in Romania. The company will hold recruitment events in Cluj-Napoca, Iasi and Bucharest. In the second half of last year, it hired more than 100 people in Cluj and Iasi. Endava plans to make some infrastructure investments, increasing its of-
www.business-review.ro Business Review | February 7 - 13, 2011
4 NEWS
NEWS in brief fice space from 2,500 sqm to over 5,000 sqm. Apart from the new headquarters inaugurated in Iasi in December, the company has already rented new space in two of the buildings where it has branches, in Iasi and Cluj-Napoca. In future years, Endava representatives say they wish to open new hubs in other Romanian cities such as Sibiu, Targu-Mures and Timisoara. An exact decision as to which city will host a future Endava location in Romania will be made by the end of the year.
Raiffeisen Bank OKs EUR 7 mln loan for food ingredients plant Raiffeisen Bank Romania has lent nearly EUR 7 million for Supremia Group’s investment in a new food ingredients factory. The total value of the investment reaches EUR 9 million. The rest of the sum is covered by the company through EUR 1.7 million of European funds. The food ingredients factory, which is located in Alba Iulia, was built on an area of 50,000 sqm provided by the Alba Iulia city hall. Supremia Group was founded in 2000 with Romanian capital and is owned by the Levente family and Mihaela Bara from Alba Iulia. Currently, the group has 170 employees headquartered in Alba Iulia and offices in Bucharest and Bacau. Supremia’s portfolio has over 1,200 customers in Romania and Eastern Eu-
rope. Its turnover was EUR 24 million in 2010.
MONEY Raiffeisen Asset Management doubles administered assets to EUR 500 million in 2010 The assets administered by Raiffeisen Asset Management stood last year at over EUR 500 million (RON 2194 million), a 105 percent increase compared to the over EUR 250 million (RON 1069 million) asset volume at the end of 2009. The data was published by the Fund Administrators Association. Raiffeisen Asset Management’s market share was 38.2 percent, up from 30.3 percent at the end of 2009. The increase in assets was supported by the interest carrying funds such as Raiffeisen Monetar (an increase of RON 600 million), Raiffeisen Europlus (an increase of over RON 450 million) and Raiffeisen Dolar Plus (with assets of approximately RON 40 million). The protected capital fund Raiffeisen Confort Series 2, which was launched in 2010, now administers approximately RON 40 million, and is also the fund with the largest subscription volume recorded last year among funds investing in shares. The number of investors in Raiffeisen funds rose to 40,000 last year, from ap-
proximately 23,000 at the end of 2009.
TELECOM State will cash dividends from Romtelecom Romtelecom will distribute dividends from the net profit the company posted in 2006 and 2007, with a total gross value of nearly EUR 95 million (RON 404,376,327). The company approved the measure following the General Assembly of its shareholders. The Ministry of Communications, which has a 46 percent stake in Romtelecom, will cash in nearly EUR 43.6 million for the state budget. For 2006 the company approved the distribution of dividends from the net profit of EUR 76.6 million (RON 327,096,771), while for 2007 the total gross value of the dividends is EUR 18 million (RON 77,279,556). Romtelecom’s two shareholders are Greek group OTE International Investments Ltd, with a stake of 54.01 percent, and the Ministry of Communications, which holds 45.99 percent. In a general meeting that took place in October last year, the shareholders approved the distribution of dividends from the total net profit of 2008-2009, worth EUR 27.4 million (RON 116,960,391).
Materna Romania implements USD 4.5 mln application for Moldovan government IT&C company Materna Romania will make and implement an application for the Republic of Moldova’s Ministry of Labor, Social Protection and the Family. The project, which will be developed over the next two years, is part of an integrated USD 4.5 million plan aimed at delivering social assistance services more efficiently. It is financed by the World Bank and will be carried out in partnership with Conseil Sante SA of France. “This project is a big step in the implementation of the e-government system in our country, with all the benefits it brings,” said the labor minister, Valentina Buliga.
LEGAL Biris Goran advises on Publicis Groupe’s takeover of Publicis Romania Biris Goran law firm is advising Publicis Groupe on the takeover of Publicis Romania, Focus Advertising and Publicis Events. “Publicis Groupe’s takeover of the three local companies was a complex transaction, with ramifications in legal areas such as M&A and intellectual property,” said Dan Visoiu, partner with Biris Goran and coordinator of the team working on the Publicis Groupe project. After negotiations that took two years, Publicis Group has reported the end of the first phase of the process: the integration of the three local firms.
TALENT Employee ROI increased by 19 percent in Romania in last two years, PwC study finds Employee return on investment (ROI) has increased by 19 percent in Romania in the past two years, according to the PwC Saratoga Romania 2010 study. The indicator measures the human capital return on investment, which shows the pretax profit produced by an employee for every euro, dollar or RON paid out in remuneration. Moreover, the costs of labor, as a percentage of companies’ total expenses, decreased from 12.2 percent before the crisis to 9.3 percent. At current levels, Romania’s wage bills are over half the labor costs incurred by companies in Western Europe. “With a 1.53 average rate of human capital return on investment, Romania has a similar standing to the United States and is 30 percent above the Western European ranking from this point of view. This should not be understood as the result of higher productivity levels in Romania, but is the result of the lower remuneration/revenue indicator in Romania,” said Peter de Ruiter, tax and legal services leader, PwC Romania. The economic crisis has led to a stagnation in the labor market, a fact highlighted by the falling rate of resignations, which decreased from 18.3 percent in 2008 to just 8 percent last year. Companies have sought to maintain their existing employees and the external recruitment rate dropped by 75 percent from the 2008 level. However, the involuntary termination rate increased seven fold, reaching 7.3 percent. The telecom and technology sector reported the highest revenue per employee, counterbalanced by a high cost per employee. This industry also has a low rate of absenteeism (just 3.2 percent), yet a higher than average staff turnover rate, especially among specialists (14.3 percent).
CONSUMER Hotpot, Google’s HoReCa rating service, now available in Romania Google’s Hotpot service, which offers recommendations for restaurants, hotels and coffee shops, based on the users’ feedback, has included Romania in its country base of now 38. In order to use this service, one must be logged in on their Google account and offer ratings for locations. Depending on the friends’ ratings and choices and on one’s personal preferences, the search for a certain hotel, restaurant or coffee shop will be personalized. Facebook has a similar service to Hotpot, Places Deals. Recently launched in Europe, it offers, on the users’ mobile phone, tips on discounts available in shops, cafes and restaurants.
NEWS 5
www.business-review.ro Business Review | February 7 - 13, 2011
TELECOM
CONSTRUCTION
Vodafone service revenue slips 9 percent
Strabag signs EUR 106 million road construction contracts
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V
odafone Romania’s revenues from services decreased by 9 percent between October 9 and December 31, 2010, compared to the same period of the year before. The company had a total of 9,804,000 clients, up 141,000 on one year ago. The average revenue per user was EUR 6.2. Customers using prepaid services made up 62.1 percent of the total customer base of Vodafone Romania, and prepay clients the
other 37.9 percent. “The average revenue per user was influenced by the re-classification of some categories of revenues in the third quarter of the financial year 2010-2011. Taking out the effect of these accounting adjustments, the average revenue per user would have been EUR 6.7 on the previous quarters,” according to a press statement of the company. ∫ Otilia Haraga
COURTESY OF STRABAG
COURTESY OF VODAFONE
Inaki Berroeta, new CEO of Vodafone Romania
onstruction company Strabag has signed contracts to repair and upgrade Romanian national roads DN14 and DN15A. The combined value of both contracts totals around EUR 106 million, the company has announced. The planning and construction works comprise the widening and improvement of the existing road network, the repair of bridges and the installation of safety facilities. The works will take place on DN14 between Sibiu and Sighisoara and on DN15A between Targu Mures and Saratel. Altogether, Strabag will rehabilitate 150 km of national road. Work will begin in April and is scheduled for completion in March 2013. “Romania’s transportation infrastructure is in the middle of an upswing thanks to state investments. Just last summer, we were awarded the contract to repair DN67B and in autumn, we won the highway project Deva Orastie,” said Hans Peter Haselsteiner, CEO of Strabag SE. The projects DN14 and DN15A are part of the sixth rehabilitation program of national roads in Romania and are financed by funds from the European In-
Hans Peter Haselsteiner, Strabag SE CEO
vestment Bank and the national budget. Strabag is one of Europe’s largest construction groups. With some 75,500 employees, it generated a construction output volume of EUR 13 billion in the 2009 financial year. ∫ Staff
www.business-review.ro Business Review | February 7 - 13, 2011
6 NEWS BANKING
3Q Remus Cazacu GM of BITSoftware
Millenium Bank Romania has EUR 28 million operating income in 2010
M
What will be your targets after your partnership with Microstrategy? One of these is the enterprise sector, where we have clients such as Kraft Foods in various countries in the region. Other clients are RCS RDS as well as hypermarket networks such as Minimax and Intermarche, plus companies in the food industry such as meat, dairy and bottled water producers. The enterprise section represents 30 percent of our turnover, but this market will probably grow since the BI division is relatively new. Secondly, we will pursue the development of the integrated systems where we have clients in oil & gas, distribution, FMCG and electronic equipment services. Here we have more than 150 clients and 3,000 users.
Photo: Laurentiu Obae
What turnover did BITSoftware post last year? Our turnover was EUR 1.1 million in 2010 and this year we estimate we will post a 20 percent growth on last year. We have allocated an entire department to BI in which seven people are currently working. This is in addition to the 34 people who were already working in our office. The three people we hired only recently are certified in database technologies. One of them is a consultant who is certified in Microstrategy who worked abroad and has now returned to Romania.
illennium Bank Romania has reported that its total assets at the end of 2010 reached RON 2.2 billion (EUR 517 million), 11 percent higher than a year before. Operating income went up by 9 percent to RON 117 million (EUR 28 million). Despite the impact of July’s VAT increase, operating costs decreased by 6 percent, to RON 176 million (EUR 42 million). The total volume of loans granted to customers reached RON 1.3 billion (EUR 303 million), registering a growth of 26 percent compared to the end of 2009. Customer funds attracted by the bank rose by 12 percent, to RON 1.2 billion (EUR 281 million). “In 2010, we focused on consolidating our new business model shaped a year before and managed to strengthen our position. The bank’s market share continued to increase on the two strategic business lines: mortgages and deposits,” said Jose Toscano, CEO of Millennium Bank Romania. “In 2011, we will continue our efforts to constantly increase our efficiency, reinforcing our long-term commitment towards the local market.”
Jose Toscano, CEO of Millennium Bank Romania At the end of December 2010, the losses shrank by 38 percent, to RON 99 million (EUR 24 million), while the bank continued its investments in Romania. The financial institution maintains
a solvency ratio of 19.6 percent. As at the end of 2010, Millennium Bank had over 45,000 customers and 731 employees. ∫ Staff
AVIATION
AFI Europe reports sales of EUR 164 million for AFI Palace Cotroceni
Photo: Laurentiu Obae
What is your geographical coverage? We have geographical coverage mostly in Romania, but we also have projects in neighboring countries such as Hungary and Bulgaria. We have offices in Brasov, Bucharest and Oradea. We don’t have offices abroad, we work from Romania. If the business develops, we will also open offices abroad. otilia.haraga@business-review.ro Israel Visel, mall manager at AFI Palace Cotroceni Mega Fun
CV Remus Cazacu 1996 - GM of Bit Software, part of Profuse Holding. He is also a shareholder in the company 1994 He turned the company towards the development of business software solutions 1991 Together with two associates, he founded an IT and networking reselling company that sold hardware and offered support services
R
etailers in AFI Palace Cotroceni Mega Fun registered sales of EUR 164 million in 2010, said AFI representatives. In December alone sales amounted to EUR 22 million, 15 percent up on the same month of 2009. “For us, 2010 was a successful year from which we had a lot to learn, considering that the first year is usually said to be the hardest for any mall,” said Israel Visel, mall manager at Mega Fun. Last
year AFI Palace Cotroceni Mega Fun had on average 50,000 visitors on weekdays and about 70,000 visitors on weekends. Out of its 280 tenants, 34 retailers were replaced in 2010, and the mall currently has an occupancy rate of about 96 percent, said Visel. This year, the company will concentrate on developing the “mega fun concept” while working on improving its business mix by bringing the latest brands
onto the local market, such as Swedish fashion retailer H&M, which will open its first unit in AFI Palace Cotroceni this March, added the manager.He also expressed his confidence that 2011 would bring better results as there are clear signs that the market is recovering, albeit slowly. The opening of the Basarab Bridge alone, which will connect the mall with Victoriei Square, is expected to generate a higher traffic in the area, he said. Meanwhile, real estate investment and development company AFI Europe, owner of AFI Palace Cotroceni, has announced that by the end of 2012 it should complete four new commercial projects, following a total investment of approximately EUR 155 million. Visel said that contracts were already being negotiated for anchor hypermarkets as well as with other tenants. The new projects are: AFI Business Park Cotroceni, an office building located near the mall; AFI Palace B.Noi, a mall located in the Bucurestii Noi neighborhood in Bucharest; AFI Palace Arad will be located in the center of Arad and connected to Atrium Mall Arad; AFI Palace Ploiesti should also be delivered in the last quarter of 2012, following an investment of approximately EUR 35 million. ∫ Simona Bazavan
www.business-review.ro Business Review | February 7 - 13, 2011
NEWS 7
BANKING
WHO’S NEWS
Banca Transilvania sees net profit climb 58 percent in 2010
Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Slawomir Nizalowski (38) has been appointed general manager of Mars Romania after previously serving as sales and financial director for the past four years. Nizalowski has been working for Mars for the past 15 years. He is a graduate of the University of Economics in Warsaw and has been living in Bucharest since 2007.
B
Tzafrir Granat
Photo: Laurentiu Obae
anca Transilvania has reported a net profit of EUR 97.85 million (EUR 23 million) for 2010, 58 percent more than in 2009 but 10 percent less than its initial target for last year. The hike was mainly generated by revenues from interest and strict cost control, said bank representatives, but was also affected by a high level of loan loss provisions. “In 2010 we focused on healthy development. It was a difficult year, but against this backdrop BT evolved in the Romanian banking system. We reached 1.5 million active customers and we came up with a responsible plan, adapted to these times,” said Robert Rekkers, general manager of Banca Transilvania. He added that the management paid close attention to risk management, choosing to set provisions beyond the minimum required level. “All activities have been coordinated to integrate as well as possible the commercial side and risk management,” Rekkers added. Last year, the bank’s provisions reached RON 1.356 million, almost double against 2009. The lender’s cost and revenue ratio
Robert Rekkers, Banca Transilvania GM
improved from 55 percent in 2009 to 48 percent last year, while its credit and deposit ratio amounted to 0.78, against 0.81 in 2009. Bad loans, namely delays of over 90 days in the repayment of installments, reached 7.37 percent of the bank’s loan portfolio. Last year Banca Transilvania increased its social capital by more than 35 percent, to RON 1.47 billion. ∫ Simona Bazavan
BR EVENT Romanian Tax, Law & Lobby Howard Johnson Grand Plaza Platinum Hall February 10, 2011 Now on its ninth edition, Romanian Tax, Law & Lobby is unfolding this week with the purpose of addressing the hottest legal and financial issues pressing the Romanian business community. The event will bring together financial and legal experts, lobby and public affairs professionals and top government representatives. It consists of three sessions, followed by two workshops on topics such as transfer pricing, tax audits and the new public-private partnership law. Confirmed panelists at this year’s event include: Andreea
Paul-Vass, personal adviser to the Prime Minister; Peter De Ruiter, PwC Romania; Delia Dragomir, Salans; Dan Schwartz, Scot & Company Romania; Arpad Csaba Ladanyi, Financial Guard; Guy Burrow, Candole Partners; Dragos Doros, NNDKP Tax Advisory Services; Cristian Radulescu, Taxhouse; Alexandru Rusu, bpv Grigorescu; Blair LaBarge, United States Embassy; Iulian Sorescu, Noerr Finance & Tax; Adrian Luca, Transfer Pricing Services; Marius Stancescu- Riff Holding International; Emanuel Bancila, D&B David si Baias. For more information on the complete program and registrations please go to business-review.ro/events
has been promoted to country manager of Muller Dairy Romania. Since 2008 he has worked as marketing vice-president, being responsible for launching the Muller brand on the local market and later for increasing the brand’s awareness countrywide. Before coming to Romania, Granat worked for Prigat Israel for five years as marketing VP. Between 1995 and 1997 he was deputy sales and marketing director for the ice-cream division of Nestle Israel. Granat holds an MBA with distinction in marketing from the Tel Aviv University and a BA in business management.
communication at Domo for another three years.
Irina Siru (30) has been appointed senior sales consultant by Innerlook. Over the past eight years she has amassed extensive professional experience in sales. Siru has worked for companies such as Dial Telecom and Orange. She is a graduate of the Faculty of Economics from the Academy of Economic Studies in Bucharest and holds a master’s degree in communication from the same institution.
Monica Hategan has been appointed new business director at Euromedia and Betacons. She has over 15 years of professional experience in sales and previously worked for four years at Euromedia.
Ileana Florea
Andreea Brezan
associate and head of the intellectual property division at Chiuariu & Associates Attorneys at Law, has been elected president of the Romanian National Chamber of Industrial Property Attorneys for a twoyear mandate. She is a technically qualified lawyer specializing in patent law, holding BAs in Law and in General Medicine. Before joining the firm, Florea worked for a national IP firm for seven years and for another Romanian law firm for two years.
has been appointed sales manager at Euromedia and Betacons. She previously worked at Affichage Romania where she held the same position. Brezan has five years of experience in sales.
Albert Craiciu is the new marketing director of Cocor. He previously worked for Anchor Grup as deputy marketing director. Craiciu has also coordinated the communication of the French Embassy to Bucharest – The French Institute for five years. He has 15 years of professional experience in marketing and communication and four in retail. Craiciu has an MBA from INDE - CNAM Paris.
Simona Vlad (29) has joined Mercury 360 as PR director. Vlad graduated from the Faculty of Journalism and holds an MA in communication and PR from the National School of Political Sciences and Public Administration. Prior to joining the team, she worked for Cristalex for three years after coordinating internal and external
Miruna Bolea has joined CallPoint Europe, New as implementation manager for Romania. She will be in charge of implementing all new strategic projects which will be run from Bucharest. Bolea has more than 12 years of experience in the customer care interaction. Her experience includes top management positions at large multinationals such as Sodexho and Citigroup. She graduated from the Academy of Economic Studies and holds an MBA and a Certificate in Management Accounting.
Anda Manza is the new country manager of Chellomedia, the content division of Liberty Global. She will be responsible for the and management development of Chello Central Europe’s channel portfolio across Romania. Manza started her career in the cable business in 1993 at Kappa Servexim. Between 2006 and 2008 she built up her own company and was marketing director at the UTV music channel and for DCS. She graduated from the Bucharest Polytechnic University. She also holds a CAN-MBA degree in marketing.
www.business-review.ro Business Review | February 7 - 13, 2011
8 INTERVIEW
Private health insurers await recovery The deplorable state of the local public healthcare system should spell heaven for insurance companies. Romanians however, have not been so eager to take out private health insurance in recent years and the market is estimated to have fallen by 23.5 percent between September 2009 and September 2010. Tiberiu Maier, vice-president of the local subsidiary of German Signal Iduna Group, told BR he is confident that 2011 will bring a recovery.
∫ SIMONA BAZAVAN
The private life insurance market went down last year and this was more obvious on the corporate segment. As this is a small market and because we are talking about large contracts, whenever a contract is signed or canceled this affects the market by as much as a double digit percentage. Overall, the market fell by an estimated 23.5 percent (in Euro) between September 2009 and September 2010, after it reached approximately EUR 6.77 million in 2009. It was a hard year for the industry and this made many players shift towards individual insurance. Legal uncertainty has also affected both insurers and clients. However we have high hopes for 2011 both for corporate and individual private health insurance. People are sick of waiting for the law to change and disappointed that they have to pay both their contributions to the public health care system and private insurance premiums in order to get decent medical services. This is something that they are beginning to get used to. Private health insurance is also more and more in demand by employees, especially in niche industries where the salaries are high. At Signal Iduna we insure people and this includes private health insurance as well as life and accident insurance. On the life insurance segment, 2010 began with a surprising slight increase for traditional policies but the situation changed later during the year as people turned to other saving instruments. As for accident insurance, well this is a personal war of mine. Romanians are not used to buying risk protection. This is something that I have always said. They will always ask, “What happens if the risk doesn’t take place?”. If we put aside mandatory car and home insurance, Romanians don’t have a risk hedging culture.
How well developed is the local private health insurance market compared to the
To what extent is the private health insurance industry affected by healthcare subscription services offered by private clinics? Private health insurance is definitely affected by these healthcare subscriptions. We can’t talk about real competition between the two when we look at the benefits offered by each of them. The simple fact that the client has access to a network of clinics, 300 in our case, is a superior advantage. Also, hospitalization is includ-
Romanians are not used to buying risk protection. [...] If we put aside mandatory car and home insurance, Romanians don’t have a risk hedging culture. ed only by private health insurance. Healthcare subscriptions were developed under the umbrella of occupational health, which is mandatory for all employers. This brought private clinics a favored position and the situation will continue this year also so long as the law doesn’t offer a decent solution.
Photo: Laurentiu Obae
How did the local market for private health insurance evolve last year and what are your estimations for 2011?
situation in other European countries? If I were to draw a comparison with birth, I would say that if other markets are already born, the Romanian market is in a state of conception. Consider the fact that in Germany, Signal Iduna, which specializes in private life insurance and is one of the top five players on the market, has a turnover which is a few times higher than the entire local market. The insurance density in Romania, which is only EUR 80 per capita and per year, is also very low. There are markets in some countries where the density reaches EUR 600-1,000 per capita. Looking at the full half of the glass this also means that from this point on, the market can only grow. This is the target of any insurer that starts operations here.
What is the profile of the private health insurance policy holder? On the individual segment we are talking about people who have experienced the quality of the private healthcare system. They are middle aged people, with above average incomes who have high demands when it comes to the quality of medical services. On the corporate segment there are often companies active in highly competitive industries where such insurance can make the difference for employees when they chose where to work. We are generally talking about profitable firms, because the fiscal benefits of such insurance are closely connected to the company’s financial situation. There is a setback in the Romanian legislation in the sense that private health insurance is deductible for the employer but not for the employee.
To what extent is this industry affected by the general state of the public healthcare system? How would you characterize the Romanian private healthcare system? There is an interesting relation between the two. The worse the public healthcare system, the more opportunities there are for the private healthcare system, including private insurance. People are more and more afraid of having to deal with the public healthcare system and this means that the private system will further develop. Some 99 percent of the services offered by the private healthcare system are ambulatory services. The existing private hospitals cover only simple procedures. There are huge costs involved in setting up a private hospital. Romanian private healthcare providers either aren’t ready for such investments or they don’t want to enter this field yet.
CV Tiberiu Maier 2010 Vice-president of Signal Iduna in Romania May 2007 Product development manager at Signal Iduna February 2007 General director at Porsche Insurance Broker What private health insurance is in your portfolio? We offer three products, Klar, Klassik and Komplett. The difference between them is the number of medical specialties covered. Our unique approach is that the clients have unlimited access to the medical services covered by the insurance. This is why the products are a bit more expensive, but we believe that it is in the best interest of our clients. The monthly premium depends on a large number of factors, including the age and the sex of the person. It starts at about EUR 10-15 and can reach about EUR 80-100 per month.
What are Signal Iduna’s plans for 2011? We will launch an insurance product with international coverage in the next few months and we also intend to add to our portfolio an insurance policy that includes hospitalization. We are aware that this cannot be done in the private healthcare system so we will help our clients financially. The insured party will receive an annuity and we are also in the process of closing some partnerships that will offer our clients access to private medical reserves for more comfort.
simona.bazavan@business-review.ro
www.business-review.ro Business Review | February 7 - 13, 2011
ENERGY 9 The austerity measures taken to reduce the budgetary deficit along with other macroeconomic changes will have a direct impact on fuel demand, from both companies and individuals, say representatives of local oil firms. Despite the gloomy future for oil retail, state enquiries into suspected oil cartels and Romanians’ boycotts of filling stations, oil company officials say fuel prices aren’t open to negotiation as “A company is not a charitable institution.” Specialists have predicted that oil could soon hit USD 110, in part due to the unrest in Egypt.
Photo: Laurentiu Obae
Fuel prices stay high despite pump action
Oil prices recently smashed through USD 100 a barrel for the first time since the 2008 economic crisis, as traders worried that unrest in Egypt could disrupt oil flows through the Suez Canal. Prices surged to USD 101 a barrel for London's main Brent North Sea crude contract, as Egyptian protesters gathered for a seventh straight day amid threats of a general strike. Egypt is not a major oil producer, but is home to the vitally important Suez Canal, which carries around 2.4 million barrels of oil a day – roughly equivalent to the daily output of Iraq or Brazil. Although hundreds of kilometers away, Romanians are keeping their eyes fixed on the Egypt situation as their small victory over hiking fuel prices may not turn out to be a victory at all. Since the beginning of the year, Romanian transporters, taxi drivers – basically everyone who earns their money by using a car – have declared war on the oil companies on the local market: Petrom, Rompetrol, Lukoil, MOL, Agip and OMV. While the protesters who used online social media channels to promote the protest were unhappy with the high price of fuel compared with Romanians’ purchasing power, the companies stated, “A company is not a charitable institution and will always seek to maximize profits.” The protests rapidly caught the authorities’ attention, as protestors said that in the absence of action, they will buy fuel from other European countries. The Romanian state pockets half the value of petrol and diesel oil sales, i.e. around EUR 3.5 billion in 2010, the equivalent of 9 percent of its revenues, based on estimates of the amount of fuels sold on the local market. Around EUR 20 million worth of petrol and diesel oil are sold daily in Romania. According to oil companies, around half the price paid by Romanians at the pump takes the form of excises, VAT or taxes such as the ‘cent per liter’ tax levied in order to pay off the historical debts of the former Compania
www.business-review.ro Business Review | February 7 - 13, 2011
10 ENERGY LOCAL OIL COMPANIES Petrom Turnover EUR 3.036 billion Profit EUR 323 million Margin 10.6 percent
Rompetrol Downstream Turnover EUR 1.240 billion Losses EUR 19.6 million
Lukoil Romania Turnover EUR 778 million Losses EUR 19.8 million
MOL Romania Turnover EUR 448 million Profit EUR 17.4 million Margin 4 percent
Agip Romania (Eni) Turnover EUR 78 million Profit EUR 900,000 Margin 1 percent Source: Finance Ministry, 2009 data
Romana de Petrol (Romanian Oil Company, ROC). Statements from players in the oil sector are confirmed by European statistics, according to which on January 10, 2011 one liter of petrol cost EUR 1.17 on average in Romania, with the tax-less price, i.e. the amount that goes into the pockets of oil companies, accounting for around 50 percent of the direct or indirect taxes that oil companies pay to the Romanian state. The same is true of diesel, where taxes account for around 46 percent, according to European statistics. The bulk of the cash collected by the state from selling oil products comes through excises, which account for 25-30 percent of the end price, depending on the type of fuel.
How fuel prices are determined Fuels have got very expensive in the past few years in Romania. For example, Petrom – which is the largest producer and distributor of fuels in Romania, with a retail market share of around 40 percent – has increased the price of premium unleaded gasoline 95 by some 72 percent in two years (RON 2.87 lei per liter in early January 2009 versus currently RON 4.94 per liter), while diesel Euro 5 hiked by 52 percent (from RON 3.17 per liter in January 2009 to RON 4.82 per liter now). One explanation is that firms charge double or almost triple the actual price of fuel. A levy is introduced in the pump price, called ‘cent per liter’. The sum of USD 0.01 per liter of fuel is included in the sale prices of petrol and diesel to pay off the debt of the former ROC in former Bancorex, covered by the state budget. The
bank lent the ROC – which controlled all al and Romanian standards and audited the refineries in Romania at that time – for by one of the top auditing companies in the world. We are ready to continue to reimports of crude and fuel oil for the winter of 1996-1997, the total sum (including spond to any requests coming from authorities.” Petrom officials added: penalties) of USD 647 million at the exchange rate of that period. When the “Petrom’s prices have a dynamic evolution ROC was divided, each refinery returned based on the international fuel quotations a share of this debt. After Bancorex dis- as well as competition on the market. In appearance in November 2000 it was addition, the prices are influenced by fisdecided to introduce the ‘cent per liter’ cal policy and the exchange rate. The tax tax. Currently, the rate is about RON 3.3 component represents around half of to the dollar. This means that a further the fuel price. Petrom reflects the interRON 0.033 is charged per liter of petrol or national quotations for oil products in a diesel. Then there is the duty, which moderate manner. Petrom prices remain means RON 0.05/liter for gasoline and among the lowest in Romania, and the avRON 0.04 per liter on diesel. Finally, the erage prices charged by fuel operators in Romania are among the lowest in the Eulast charge is VAT, which is now 24 perropean Union. We do not comment the cent. Thus, half of the "pump" price is represented by taxes. The rest is the price of way in which ANAF interpreted the inoil, its transportation, refining and dis- formation provided by the oil companies.” tribution costs and corporate profits.
Production costs Production costs in OPEC and the Caspian Sea, according to some analysts, are about USD 2-3 per barrel. As a barrel has 160 liters, and the rate is about RON 3.3/dollar it means that a liter of oil costs approximately RON 0.06 to produce. By comparison, the non-OPEC countries (Russia, Mexico, Norway) have production costs of approximately USD 8-10 per barrel, meaning RON 0.2 per liter. The Organization of Petroleum Exporting Countries (OPEC) pumps about 40 percent of the world's oil, with the bulk coming from member Saudi Arabia. As President Traian Basescu stated, Petrom produces at a cost of USD 12 per barrel, or about RON 0.25/liter. Factoring in the average transportation cost of USD 10 a barrel (about RON 0.2/liter), the real cost of oil is USD 12-13 for OPEC countries and USD 18-20 for non-OPEC countries. According to Competition Council officials, the price of Euro Super 95 gasoline without tax is between EUR 0.65 per liter in Denmark and EUR 0.53 in Ireland, with a European average of EUR 0.59 per liter. The pre-tax price in Romania is EUR 0.59 per liter, and in Bulgaria, EUR 0.57. For diesel, the EU 27 average is EUR 0.64 per liter before extra charges, while in Romania it costs EUR 0.63 per liter without tax. Petrom, Rompetrol and Lukoil, the biggest domestic players, are oil producers. Petrom produces oil at a cost of about RON 0.25/liter, Lukoil RON 0.2/liter, and KazMunaiGaz (owner of Rompetrol) at RON 0.06 per liter. If we add the other costs (refining, insurance, distribution and transportation), the cost of petrol and diesel should be less than one RON per liter. The pump price is about RON 1.2; VAT, RON 0.083; duty and ‘the cent per liter’ tax RON 0.75; a total of RON 2. The rest, making up the current price, is the company’s profits.
Oil companies’ reaction Regarding the authorities’ investigation, MOL Romania told Business Review it would continue to cooperate and put all the required information at their disposal. Petrom officials also responded promptly. “We do not comment either on the information or the allegations regarding oil companies. We are a listed company, with a high level of transparency and the result of our activity, our pricing policy as well as other relevant information have been comprehensively communicated. All our financial indicators are calculated based on internation-
Small gain for drivers
After days of protests, the biggest players on the Romanian oil market, Petrom and Rompetrol, announced the first price cuts this year, of around RON 0.4 per liter. The move did not come due to protests in filling stations or as a result of politicians' tough statements, but thanks to the elimination of a tax, namely the 'cent per liter’. "Owing to the reduction of the tax component by USD 0.01, after the collection of the tax representing the special fund for oil products (FSPP) was suspended, fuel prices in OMV and Petrom filling stations will fall by RON 0.4 per liter starting 25 January 2011," said representatives of Petrom. In their turn, representatives of Rompetrol, the second biggest player on the domestic oil market, said the company brought in a price reduction of RON 0.3 starting the same day for all types of fuel sold in its network. But if drivers are unhappy, oil companies are finding little reason to celebrate either. “Our estimations show that 2011 will continue to be marked by the effects of the recession. The austerity measures taken to reduce the budgetary deficit
3.5
bln. euro – the Romanian state has poketed half the value of petrol and diesel sales in 2010 along with other macroeconomic evolutions will have a direct impact on fuel demand, from both companies and individuals. The decrease will however continue to lessen, and in the second half of 2011 we could see a stabilization of sales, on the condition that Romania’s economic situation improves. This potential stabilization could be stimulated through the implementation of certain measures to help the private sector and reinforce trust in the country’s economy,” MOL Romania representatives told Business Review. Currently the company has 126 filling stations and a market share of 11 percent. Emma Pinnock, an analyst at UK energy consultancy Inenco, predicted that oil could soon strike USD 110, in part thanks to the unrest in Egypt. "Oil prices
www.business-review.ro Business Review | February 7 - 13, 2011
ENERGY 11
are set to move rapidly towards USD 110 a barrel as a weak dollar, greater global demand and tighter supplies create similar conditions to when prices reached a record high of USD 147 in 2008," she said. "Prices rose by more than 15 percent during 2010 and USD 110 a barrel is looking more likely as we can see similar market conditions to when oil reached a record high in 2008." MOL officials added: "The situation in Egypt has caused the market to worry about the flow of oil in the Middle East – and obviously decisions made by OPEC in the next few months will also have a huge impact on prices."
MONTHLY OIL BASKET PRICE 72.99 77.21 82.33 74.48 72.95 72.51 74.15 74.63 79.86 82.83 88.56 92.83 97.03
Photo: Laurentiu Obae
Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 * USD per barrel Source: OPEC
Fuelling discontent: rising gas prices have hit motorists hard, but oil companies have retorted that they are not charities
www.business-review.ro Business Review | February 7 - 13, 2011
12 BALANCE
Art for the collector’s sake: passion or profit? The financial turmoil has been auspicious for the art market in Romania, which reached EUR 8.3 million in 2010, a 124 percent growth compared to 2009’s figure of EUR 3.7 million. Auction houses struggle on an expanding market, while art collectors do not let themselves get too easily impressed with glamorous events for the local elite. It will take years for local art to reach its real value, say specialists, which sets the stakes even higher. ∫ CORINA DUMITRESCU
Photo: Laurentiu Obae
Painter and art afficionado Vasile Parizescu proudly showcases his life’s collection
When deciding upon the value of an item, Parizescu takes into account its beauty: “I don’t care about the name of the painter, that comes second.” His opinion is sought by art aficionados across the country to confirm a piece of art’s originality. Fakes are not unheard of, so he advises collectors to be wary. One art collector who chose to remain anonymous said that he too collects out of love, yet without ignoring the financial
aspect. Mihai Oancea, another collector, makes a similar point: “I like a work of art, I am attracted by the emotions it conveys and the joy it brings me when I look at it. Later on, I consider information concerning market quotes, indices, forecasts. Of course, I am happy to find out that the work I like has investment potential, but nothing equals the intrinsic value of the piece.” Switching from the collectors’ to the
Art in numbers
Photo: Laurentiu Obae
Vasile Parizescu, founder and president of the Society of Art Collectors in Romania (Sociatetatea Colectionarilor de Arta din Romania, SCAR), as well as a nationally and internationally acclaimed painter, has been collecting art for 58 years. Visitors to his apartment in downtown Bucharest may be overwhelmed to discover works of art of immense value. Paintings lie so close together on the walls that they almost form an expensive wallpaper. The likes of Luchian, Ressu, Petrascu, Ghiata and Pallady, among others, are just a few of his most prized possessions. He confesses to having been an ardent collector throughout his entire life. Currently, art seems to be one of the most profitable areas of investment in Romania, along with gold and real estate, for example, Manuela Plapcianu, CEO at Artmark auction house, emphasized during a recent press conference. Parizescu, however, has never sold any painting in his collection, keeping a he made to his late wife. After his death, he wants some of his works to go to his children and the rest to the Art Museum in Braila. “I have never considered the financial aspect of my passion,” he emphasizes. “I divide collectors in two: those who collect from joy, for their own pleasure, for the house interior that they wish to create in order to get their spirits up, and art ‘intermediaries,’ or those who regard art as a source of investment.” Fortunately, the painter adds, the first category is the dominant one since, after the revolution, some invested in art for financial purposes, but later became enraptured with this field and moved into the first group. This occurs in around 40 percent of cases, Parizescu estimates. Back when he began collecting, art was also available for purchase in installments, which unfortunately, he says, is no longer the case, thus limiting some people’s access. However, Parizescu believes Romanian art is currently underestimated. “One cannot sell a piece by Luchian, who has only created 700-800 works, for EUR 130,000-150,000. Art works have been sold at auctions that should not have gone below EUR 800,000-1,000,000.” Parizescu attributes this to both the financial climate, as well as buyers who want a bargain.
auction houses’ perspective, the art market will reach somewhere between EUR 10-15 million, Artmark CEO, Manuela Plapcianu, predicts. Artmark had a EUR 5.5 million turnover last year and representatives say it is currently market leader among its competitors, with a 48 percent share. For 2011, sales are expected to reach EUR 9 million. However, “these estimations must be regarded in the context of current information and of prognoses which have their own degree of vulnerability, considering the times and the emerging art market,” cautions Plapcianu. A former Bancpost CEO, Plapcianu explains her career change: “Artmark does not just mean an auction house and a cultural center. The Artmark mission is building a functional art market in Romania. By assuming this role, we have also taken on the role of conception, development and marketing of specific market tools: indices, indexes, investment funds, etc. In any business, the ingredients for success are very much alike.” Concerning the undervaluation of local art works, Plapcianu sees the current situation as indeed “aberrant,” but caused by the current supply and demand ratio. This is, however, also regarded as an opportunity by the CEO, as it makes art more affordable. Although frowned upon by other players on the market, Artmark introduced its own art index in 2009, which it aims to audit and turn into a market measurement tool this year. The need for such an index is outlined as follows by the CEO: “One of our tools to stimulate supply is, naturally, the development of demand, by explaining to beginners the investment potential of an art purchase, which is more pronounced
Market value 2010*: EUR 8.3 million Estimated market value 2011*: EUR 10-15 million Most expensive auctioned paintings so far: EUR 175,000 for Nicolae Grigorescu’s “Pastorita” (“The Shepherdess”), EUR 160,000 for Camil Ressu’s “Aise,” EUR 155,000 for Nicolae Grigorescu’s “Bullock Cart” * estimations by Artmark auction house.
Manuela Plapcianu, CEO of Artmark art house and former CEO of Bancpost
www.business-review.ro Business Review | February 7 - 13, 2011
CITY 13 FILM REVIEW
You Will Meet a Tall Dark Stranger Photo: Laurentiu Obae
Luminita Ghildus, Goldart president
Photo: Laurentiu Obae
as the Romanian art market finds itself at important number of heritage works a substantial distance from its value, like should be supported by the state in order to display in exhibitions.” Two of the any emerging market.” The index includes 1,000 Romanian artists, the most works auctioned last year have been loaned to museums across the country: transacted of the last 15 years. Goldart, another local auction house, Nicolae Grigorescu’s “Carul cu Boi” (“Bullock Cart”), which can now be found in estimates it has reached a turnover of EUR the Brukenthal Museum in Sibiu, and 1.4 million, similar to the sum of 2009. Luminita Ghildus, Goldart president, agrees Nicolae Tonitza’s “Golgota,” now on display in Ploiesti, in the Ion Ionescu-Quinthat local art is currently underestimated. In spite of this, the market is still do- tus museum. Papagheorghiu pragmatiing very well in full crisis, as the facts and cally outlines what determines the price figures show. The auction house also got of an artwork: “artistic quality, state of conservation, author – subject – epoque involved in supporting the further development of local art beyond the borders adequacy, exhibition presence, origin.” of Romania, having had, since 1996, a Papagheorghiu says that few foreign gallery of contemporary art at Athenee buyers are active on the scene. However, Palace Hilton Bucharest. So far, 18,000 an art collector in Germany rated Romanian art as having the best price/qualworks of art have left the country, finding new homes in Europe, America and ity ratio in European art. As art collector, painter, writer and sciAsia. On the hotel’s hallway, emerging artists have the chance to display their entist Vasile Parizescu so strongly emwork, whether it consists of painting, phasized, Romanian art finds itself very graphics, collage or photography. Pho- much underrated at the moment. Intertography and graphic works have been war painters, whom the collector conput up for auction by Goldart, Ghildus siders superior to their French counterparts, are one such example. However, adds. A portrait of the local art lover? In the the French refer to Romanian painters as words of Plapcianu, he or she is “active, “L’Ecole Francais” (The French School). dynamic, curious, open, educated and Both collectors and art houses alike are with above average income,” as well as looking forward to the day when local art very responsible towards the purchases. will find a better place on the international art canvass. However, perhaps To Ghildus, the art lover is quite the opcontemporary artists will be more fortuposite of the cliché that Romanian society seems to have created, “an extrava- nate, since, in the words of Oancea, “they have all the necessary instruments to gant outcast who throws away his or her money.” On the contrary, art lovers are build their artistic identity, on the basis of which they will play an important “sensitive people, either rich or poor, doctors, lawyers, businesspeople, politicians, role. It all depends on the projection professors or simple workers, young or that new generations take upon themmore mature, who are thoroughly con- selves.” nected to the cultural environment through education and respect.” Bucur corina.dumitrescu@business-review.ro Mihail Papagheorghiu, manager of Alis, the first Romanian auction house, considers it impossible to define local art aficionados. “They are people of all kinds, with the most varied backgrounds and tastes, united by a financial surplus that they wish to direct, regularly or sporadically, into art.” Although a work of art’s trajectory is not followed after its purchase, the auction houses educate their buyers in the best preservation of their investments. Many of the interviewed specialists agreed that some works belong in galleries, as they should be part of a country’s heritage. As one art collector said, “Most masterpieces should be found in museums and those collectors with an Bucur Mihail Papagheorghiu, Alis manager
Beautiful Pinto makes an impression
∫ CORINA DUMITRESCU Directed by: Woody Allen Starring: Naomi Watts, Josh Brolin, Antonio Banderas, Anthony Hopkins, Gemma Jones On at: Cinema City Cotroceni, Cinema City Cotroceni VIP, Cinema City Sun Plaza, Movieplex Cinema Plaza, Hollywood Multiplex A film by Woody Allen is always a must-see and his latest is no exception. The prolific director might have had his share of not-so-critically-acclaimed mishaps, but this is not one of them. Somewhere between a comedy and a drama, You Will Meet a Tall Dark Stranger showcases Allen’s well-known humor and cynicism, telling stories of the 21st century, whose characters cannot escape a stern destiny. The film sews its plot around a family of three, Alfie (Anthony Hopkins), a well-off septuagenarian, his former wife Helena (Gemma Jones) and their almost chronically unlucky daughter Sally (Naomi Watts). Their already fragile universe collapses when Alfie decides to divorce Helena, since she was ready to accept the inevitable process of aging and he was not,
deciding to regress to the life of an immature adolescent, seeking young love. He does find this love, falling head over heels for prostitute Charmaine (Lucy Punch). Helena, however, falls into depression after being cowardly left by her husband, resorts to alcohol and falls into the clutches of a fortune-teller, who assures her that she will eventually meet “a tall dark stranger”, who will help her fall in love again. Meanwhile, daughter Sally is unhappily married to a “one-hit-wonder” novelist, Roy (Josh Brolin), whom she supports through her job at an art gallery, still requiring financial aid from her nagging and ever-unsatisfied mother. Roy, however, gets his own “tall dark stranger”, in the form of a young woman portrayed by the charming Freida Pinto. Woody Allen’s presence makes itself felt through the narrator’s voice, which stands out as one of the few with an American accent. The director’s presence also adds amusement to the ruthless, yet somehow well-deserved, destiny that the characters get. It also assures the viewer that this is just a story and he or she should not take it too seriously, because, perhaps, in life, things do not always go by the rules.The advantage of being Woody Allen? Well, there are perhaps too many to enumerate, but one of these may be his ability to choose any given actor for his films. In this case, the cast is as impeccable as ever. Although Nicole Kidman was one of the director’s choices for the role of Charmaine, the lesser-known Lucy Punch did pretty well as the clumsy and confused prostitute. This may not be Woody Allen at his best, but given the almost unbearable light comedies and adventure films filling cinemas lately, it’s definitely worth the price of the ticket.
editorial@business-review.ro
EXHIBITION
Hotel FM aiming for top three at Eurovision Hotel FM have been selected to represent Romania at the Eurovision song competition taking place on May 10, 12 and 14, in Dusseldorf, Germany. The trio said, during a recent press conference, that they hope their song Change the World replicates the success of Paula Seling and Ovi last year, whose entry, Playing with Fire, reached third place. Marina Almasan, project coordinator for Eurovision Romania, said that although Hotel FM are not yet as big a name as Paula Seling, for example, they will be helped by a team of professionals (stylists, designers, photographers and a German
manager to prepare the band for the show in Dusseldorf) to achieve their targeted result. This year’s competitors also have the advantage of more preparation time since the national selection competition was held earlier than in previous years. Almasan added that this year’s Eurovision budget is equal to last year’s, reaching an estimated EUR 500,000. However, getting on stage alone in Dusseldorf will cost EUR 100,000. The band is preparing a video and a European tour, with concerts in Chisinau, London, Rome, Budapest, Athens and Sofia. ∫ Corina Dumitrescu
www.business-review.ro Business Review | February 7 - 13, 2011
14 IN TOUCH
QUOTE of the week Memories of 1989… An article published on The Guardian website quoting a 60-year-old surgeon in Cairo, Muhammad Warsi, reported that the highcommand of the Egyptian army had delivered a “hidden message” to Hosni Mubarak after the recent street clashes between supporters and critics of the president. “It is the same message that the elites of the country's society are delivering. They're saying [to Mubarak], 'We loved you 30 years ago. We don't want to humiliate you. We don't want you to end up like Nicolae Ceausescu. Go in peace.'” Mubarak has been in power for the past 30 years.
ROMANIA IN THE INTERNATIONAL PRESS Opposition to Romania’s Schengen entry ‘legitimate‘, says FT
the two countries to the EU unreformed must not be compounded by discarding the best reform incentive,” said the Financial Times.
Even though they may claim with some justification that they are treated a s
Ramnicu Valcea – Cybercrime Central
secondc l a s s members of the European Union, Romania and Bulgaria “have been anything but swift in cleaning up their acts,” said the Financial Times, in a recent article headlined Roadblocks On The Way To Schengen, which analyzes the reasons why the two countries were denied accession to Schengen (the border-free area of Europe). “In Romania, even the will to reform seems to have stalled,” comments the newspaper, adding that the German and French opposition to Romania’s accession into Schengen is “legitimate,” even though it is not entirely “in good faith” since both countries were motivated by electoral concerns. “It was clear that they entered the EU under a cloud; other members are entitled to retain the one big stick left to wield. The rashness of admitting
The unobtrusive town of Ramnicu Valcea has garnered quite an international reputation for itself – as a capital of online felony. “Ramnicu Valcea has only
about 120,000 residents, but among law enforcement experts around the world, it has a nickname: Hackerville. The town is full of online crooks who cruise the streets in expensive European cars,” reported Wired Magazine in its February issue. The magazine reports that the Romanian town is home to a host of hackers, most of them specializing in e-commerce scams and malware attacks on businesses. The article goes on to detail the phenomenon from its beginnings to later, more sophisticated scams that are now being investigated by the FBI.
WHAT WE ARE WORKING ON Otilia Haraga Senior Journalist is working on a story about Romanian firms producing tablets and mobile phones. The competition on this market is very fierce and comes from foreign companies who sell their products here, so is there a market for Romanian producers? otilia.haraga@business-review.ro
Corina Dumitrescu Journalist is preparing a piece on Valentine's Day versus its Romanian counterpart Dragobete, with ideas for celebrating the two 'Romanian style'. Whether you are in favor of an annual celebration or believe couples should show their love every day, you might be intrigued by some of our findings. corina.dumitrescu@business-review.ro
Simona Bazavan Senior Journalist is reviewing the local chocolate market. Chocolate did not escape the general downward trend on the FMCG market. Sales fell in 2010 for the second consecutive year but manufacturers look forward to sweeter results in 2011. simona.bazavan@business-review.ro
EVENTS, BUSINESS & POLITICAL AGENDA February 7 The British Embassy to Bucharest and the Bucharest Stock Exchange organize an event occasioned by the opening of the trading session. By invitation only.
11:00 Porsche Finance Group organizes the “Perfect leasing – innovation in financial leasing” press conference at its headquarters. By invitation only.
February 9 09:00 The IDC ICT in the Utilities & Energy Sectors 2011 conference will take place at JW Marriott Bucharest Grand Hotel. By invitation only.
February 10 ∫EVENT Business Review organizes the ninth edition of the Romanian Tax, Law & Lobby event at Howard Johnson Grand Plaza. For more information about registration and future Business Review events, please visit http://business-review.ro/events
10:30 Belkin organizes a press conference at Crowne Plaza Hotel. By invitation only.
February 18 B. Braun Medical organizes the official opening of a production unit in Timis county. By invitation only. February 22 ∫EVENT Business Review organizes the second edition of the Swiss Business Forum event, gathering embassy representatives and Swiss investors present locally. For more information about registration and future Business Review events, please visit http://business-review.ro/events
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ISSN No. 1453 - 729X
FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALISTS Otilia Haraga, Dana Verdes JOURNALISTS Simona Bazavan, Corina Dumitrescu COPY EDITOR Debbie Stowe COLLABORATORS Anca Ionescu, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu
EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat
ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.31 Office: 031.040.09.32 Fax: 031.040.09.34 EMAILS Editorial: editorial@business-review.ro Sales: sales@business-review.ro Events: events@business-review.ro