Business Review No. 6 February 28 - March 6

Interview: After six years in the country, Markus Wirth, outgoing CEO of Holcim Romania, gives Business Review an overview of the market during his time here, predicts where the future growth lies and shares his personal insight into the country »page 18

ROMANIA’S PREMIERE BUSINESS WEEKLY

FINANCE NORWAY IS GOING TO PUT UP EUR 305 MILLION FOR LOCAL PROJECTS IN THE AREAS OF PRODUCTION, HEALTH, THE ENVIRONMENT & GREEN ENERGY OVER FIVE YEARS »PAGE 5

February 28 - March 6, 2011 / VOLUME 15, NUMBER 6

FOCUS HOTELS

Hotels hope for hospitable market Alarmed upmarket hotels cut prices when the recession hit.

What now for the local hospitality industry? » pages 8-11 FOCUS

The future of franchise Low-cost local franchises are overtaking their luxury predecessors on the new, tougher market » pages 14-15 BALANCE

Wedding planners BR meets the people who promise to take the stress out of organizing your big day » page 16 PLUS

Every little thing he does is magic: Sting returns to Bucharest in June » page 21 Courtesy of Dreamstime

Wind energy is the next big thing on the market, but will the projects get affordable financing to make it off the drawing board? »page 12-13

What kind of performance did Uniter Theater Club put on for our restaurant reviewer? » page 20

Shakira is bringing her hips to the capital for the first time in May » page 21

www.business-review.ro Business Review | February 28 - March 6, 2011

NEWS 3

NEWS in brief WEEK in numbers

5 billion euros – the value of deposits made by Romanians over the past two years, the peak of the crisis

500 million euros – the value of Romanian IT software and services exports in 2010

107 million euros – the value of the EBRD exit from BRD on the stock exchange

Photo: Laurentiu Obae

IMAGE of the week Bucharest tops the noise charts Bucharest ranks top of a national noise pollution chart drawn up by Enviro Consult, a firm that specializes in acoustic measurement auditing. Some 85 percent of Bucharest inhabitants are exposed to high levels of noise. Constanta and Cluj come next, with 76 percent and 64 percent, respectively, of their inhabitants also enduring a din. The worst affected areas in Bucharest are Magheru Boulevard (Nottara Theater area), Oltenitei, Ferdinand Boulevard (Iulia Hasdeu area), Ghencea Boulevard and Pantelimon (Morarilor area).

PROPERTY & CONSTRUCTION Saint-Gobain Construction Products Romania merges two business units Saint-Gobain Construction Products Romania has incorporated another two business units: Weber, formerly known as Saint-Gobain Weber, a producer and marketer of special mortars, products and solutions for ceramic tiling works and facade thermal insulation systems; and PAM, formerly known as Saint-Gobain Conducte, a marketer of complex products and solutions for sewage and water supply systems.

The move continues the process that started in October 2009 with the merger of Rigips, the producer and marketer of gypsum-based dry and wet products and construction systems and accessories, and Isover, provider of thermal and acoustic insulation products and systems.

In Romania, Saint-Gobain Group includes five companies – Saint-Gobain Construction Products with Rigips, Isover, Weber and PAM Business Units, Saint-Gobain Glass Romania, Saint-Gobain Abrasives, MTI Impex Brasov and Brodrene Dahl.

It has about 1,000 employees and operates 11 production units in six industrial sites in Brasov, Branesti, Calarasi, Ploiesti, Satu-Mare and Turda.

Baumix reports RON 329,000 profit in 2010 Local construction materials producer Baumix went into the black last year, reporting a net profit of RON 329,000 on a turnover of RON 30.2 million. The company’s results were affected by the 30 percent decrease of the market, resulting in a 15 percent drop in turnover, below the RON 36 million in 2009. Its main focus for this year is optimizing costs, increasing profitability and R&D investments.

DTZ Echinox reports EUR 2.8 million turnover for 2010 Real estate consulting company DTZ Echinox reported a EUR 2.8 million turnover at the end of 2010, a slight increase from EUR 2.65 million, the figure

registered the previous year, and an approximate 6 percent profit rate. The most important contribution to the company’s turnover came from its professional services: property management, valuations, and, within the agency, the office sector. The profit registered by the professional departments – property management and valuations – represents 50 percent of last year’s figure.

The strongest year-on-year growth was in the property management and office departments, which doubled their revenue in 2010.

The property management division won early last year contracts for Shopping City Suceava and Shopping City Sibiu, two retail parks owned by Argo Real Estate Opportunities Fund, totaling 133,000 sqm, and the contract for the refurbishment of Iris Shopping Center in Titan, a 14,000-sqm venue owned by Aberdeen Immobilien, with Auchan hypermarket as the main anchor. DTZ Echinox’s office department has mediated the lease of 25,000 sqm of office space in 2010, net take-up, and 32,600 sqm, gross take-up.

CBRE: 94,300 sqm of industrial space rented last year locally The industrial segment rebounded strongly last year, when 39,500 sqm was rented in the second semester of 2010, and a total of 94,300 sqm throughout the year, a report by CB Richard Ellis Romania shows.

Major transactions in the second semester of 2010 included: a division of Röchling-Automotive, AG&Co, pre-leased 5,000 sqm in Warehouses De Pauw Pitesti, Geodis Calberson rented 17,400 sqm in Prologis Logistic Park, and Terwa

www.business-review.ro Business Review | February 28 - March 6, 2011

4 NEWS

NEWS in brief rented 4,500 sqm in Olympian Park Brasov.

Bucharest dominated rentals in 2010, as 53 percent of all transactions were signed here. The capital’s industrial space market is led by the western area, which has direct access to the A1 BucharestPitesti highway, where over 75 percent of the stock can be found.

In terms of the volume of transactions, Bucharest is followed by Timisoara (21 percent of the total), Oradea (13 percent) and Ploiesti (7 percent).

The level of prime rents for Bucharest in the second semester of 2010 was EUR 4.15 per sqm per month. A total of 50,800 sqm new industrial space was delivered in the second semester of 2010. In total, new industrial space in Romania stood at 88,300 sqm.

This year is expected to see the expansion of logistic and production activities in cities such as Ploiesti, ClujNapoca, Timisoara and Arad, while in Bucharest the development activity will be focused on already operational facilities.

Cushman & Wakefield: Romanian prime office rents down 5 percent last year Bucharest came 43rd in a Cushman & Wakefield ranking of most expensive office space locations, Office Space Across The World 2011. 2010 was a tenant’s market, as rents went down 5 percent compared to 2009. An increase is expected this year.

2011 is predicted to see a growth in activity as tenants re-evaluate the need for space, while many contracts that were signed before the recession hit are now close to their expiration date.

There is currently 160,000 sqm of office space in Bucharest, following the new deliveries of 2011, the study shows.

The total value of office space transactions stood at EUR 124 million in 2010, the most recent transaction being the EUR 100 million acquisition of 36,000 sqm of office space in Floreasca 169 by NEPI. In Central and Eastern Europe, both Romania and Bulgaria saw weak demand for office space and a surfeit of vacant lots, which dragged down rents by 5 percent and 9 percent respectively last year.

In the rankings, Hong Kong surpassed Tokyo and London to become the most expensive office location in the world.

Rents in Beijing (the second most expensive location in China) grew by approximately 48 percent.

Prime rents in downtown Bucharest in December 2010 stood at EUR 18.50 per sqm per month, and EUR 11 per sqm per month outside of the city. In Brasov and Constanta rents in the last month of the year stood at EUR 10 per sqm, while in Timisoara they reached EUR 11.50 per sqm.

Omilos Group signs five new tenants for ERA Shopping Park Oradea Omilos Group has signed five new rental contracts for the first operational phase

of ERA Shopping Park, the firm has announced.

These are: a Madam Pondarosa cafe, the multibrands stores Replay and Diesel – Fashion Stagione, local clothing retailer ExpoFashion, and traditional Romanian products stores Florava and Targul Taranului.

The five new tenants occupy a total space of over 1,000 sqm and raise the occupancy rate of the mall to 90 percent.

ERA Shopping Park will have a total built surface of 78,000 sqm and a rentable surface of 62,500 sqm.

STOCK EXCHANGE EBRD sells stake in BRD The EBRD has sold 34,845,050 shares, its entire stake, in BRD – Groupe Société Générale for EUR 107 million.

The transaction took place on the Bucharest Stock Exchange (BSE). KBC Securities NV and KBC Securities Romania acted as brokers. The EBRD became a shareholder of BRD – Groupe Société Générale in November 1999 with a stake of just below 5 percent.

This was part of an effort to provide institutional strength to the recently privatized bank and to help promote its growth alongside Société Générale, which in March 1999 had purchased a controlling stake of 51 percent in BRD. The lender was subsequently listed on the first tier of the BSE in January 2001.

Nick Tesseyman, managing director, financial institutions, said, “Our exit from BRD – Groupe Société Générale comes as Romania’s attractiveness to institutional investors has grown. We are proud to have contributed to making BRD – Groupe Société Générale the successful, strong and attractive financial institution it is today. We remain committed to cooperating with BRD – Groupe Société Générale in Romania and across our business areas and to maintaining our strong relationship with the bank.”

BSE to start trading first municipal bond issue of the year The Bucharest Stock Exchange (BSE) will start trading the first municipal bond issue of 2011. Issued by Bihor county, it numbers 779,864 bonds with an initial nominal value of RON 100 per share.

The issue has as maturity date December 15, 2027. The principal is payable over 34 quarterly installments and the interest is payable quarterly.

COMPANIES

the first half of next year.

Economy Ministry officials have announced that they will start procedures to select the consultancy services provider to privatize Oltchim this year.

Google recruits in Romania for its European offices Google is scouting for programming specialists in Romania to work in the company’s offices in Europe, according to Stirileprotv.ro. Romanian Gabriela Dan is in charge of the recruitment process.

She is an employee in the HR department at Google’s office in Poland.

“We are looking for very good programmers, people who are fond of computers and who could work in our offices in Europe. The best will be hired. In fact, this is one of Google’s principles, the best people will meet other very good people,” said Dan.

Cramele Halewood opens two more wine shops Wine producer Cramele Halewood, part of the Halewood Group Romania, has opened two more Winery Outlet stores, in Bucharest and Brasov. The Bucharest shop is the company’s first in the capital and is located on Mihai Bravu Boulevard, with a total sales area of 40 sqm. The store in Brasov is in the city’s old center, and comes with a new concept, wine shop & bar. It has an extended area of 80 sqm.

The shops will offer both Halewood wines and imported brands, totaling about 400 products.

“For our company, opening new Winery Outlets is a normal step and is part of our medium- and long-term development strategy,” said Dan Muntean, general director of Cramele Halewood. He added that this year the company plans to open further wine shops, the next unit being located in Timisoara.

IAC Group starts construction works at Bals plant IAC Group has begun construction works at a greenfield production facility in Bals, Olt County. The factory, which should be completed by the end of 2011, will produce dashboards, door panels, roof trim and various other components, which will primarily support production at the Ford factory in Craiova.

IAC Group has pledged to invest EUR 58 million in the Bals plant and to create 400 jobs. IAC is the first vendor in the automotive industry to build a production unit in Romania from scratch, to support Ford’s operations in Craiova.

The Romanian government has supported the project through investment aid worth EUR 17 million, which will be disbursed in several tranches.

Oltchim up for sale next year

TCE Holding targets 10-15 percent turnover hike this year

The government has started procedures to sell Oltchim Ramnicu Valcea, state officials have announced. Following discussions between officials from the Romanian government and representatives of the International Monetary Fund, the World Bank and the European Commission, the company will be privatized in

TCE Holding plans to reach a 10-15 percent higher turnover than the figure in 2010 after announcing positive operational profit for last year, which was marked by the beginning of judicial reorganization of one company that is part of the holding.

“We had a difficult year as we started

the TCE Logistica reorganization. Last year was a better one for us than 2009, mainly due to cost reduction on space and company cars, which helped us reach a turnover of EUR 19 million and a positive operating income return,” said Sorin Sofian, CEO of TCE Holding.

TCE Holding launched last year a national network of private postal services, which had reached some 80 units at the end of 2010.

LEGISLATION Opposition to submit no confidence motion over Labor Code Romania’s opposition parties, the PSD and PNL, are preparing a no-confidence motion against the government, if the latter decides to pass the new Labor Code via a vote of confidence in Parliament, Social Democratic Party leader Victor Ponta said last week, according to Mediafax newswire.

The two parties were due to discuss the legislative changes brought about by the new Labor Code with representatives of unions and employers’ organizations this week.

The announcement comes after Prime Minister Emil Boc said last week that the ruling coalition leaders had suggested the government use a Parliament vote of confidence to adopt new labor legislation.

The PM added that negotiations with social partners would continue and the amendments brought by lawmakers would be taken into account.

AmCham Romania supports government initiative to amend labor legislation The American Chamber of Commerce (AmCham) Romania has announced that it supports the government's initiative to amend the labor legislation and reiterated the importance of substantial changes to the benefit of all involved parties: employees, employers and government.

Through approximately 150 proposed amendments to the Labor Code submitted to the Ministry of Labor, Family and Social Protection during the public consultation period, AmCham Romania is lobbying for four major principles: enforcing performance as a basic principle with regard to labor relations; flexible labor relations; applying the collective bargaining agreement concluded at industry level only to signatory parties and removing the provisions related to the national collective bargaining agreement; clearer and simpler legal provisions.

AmCham has proposed the inclusion of performance among the governing principles of labor relations, including hiring and firing employees.

This includes a probation period that will allow the employer to thoroughly assess the potential of the employee, and enable the employee to decide if he or she is suited to the position and company.

NEWS 5

www.business-review.ro Business Review | February 28 - March 6, 2011

FINANCE

TELECOM

Norway to put up EUR 305 million for Romanian projects by 2014

Romtelecom and Cosmote could merge, says state

HE Oystein Hovdkinn, Norway’s ambassador in Romania and Moldova

N

orway will make available EUR 305 million for Romanian projects, its financial allocation to the country for 2009-2014. The agreement with the Romanian Ministry of Finance is expected to be signed by the end of the year. The press conference was attended

by Anne Lise Rognlidalen, country di-

rector for Bulgaria and Romania at Innovation Norway, and HE Oystein Hovdkinn, Norway’s ambassador in Romania and the Republic of Moldova.

The first stage of the project developed by the Norway Grants program in Romania between 2007 and 2009 made available EUR 48 million of non-refundable financial assistance in four sectors, for the benefit of Norwegian-Romanian partnerships among public, private and non-governmental entities.

Grants were awarded to 29 projects, in the following sectors: sustainable production (14 projects, EUR 21,905,151), the environment (7 projects, EUR 8,209,500, health (5 projects, EUR 7,899,450) and energy efficiency (3 projects, EUR 4,210,000).

However, Rognlidalen said the 20092014 grants offered by Innovation Norway will not be exclusively available in these fields. Some 25 percent of the funds will go towards environmental and climate efforts, while local NGOs will receive a minimum EUR 20 million.

When asked to make a comparison between Romania and other beneficiaries of the Innovation Norway program, the Norwegian ambassador said that Romania supported a very good absorption of funds, of around 80-90 percent, compared to the 10-15 percent absorption of

EU funds.

A representative from one of the beneficiaries of the 2007-2009 project funds, the atmospheric science center in Magurele, RADOR, said that access to the Norwegian funds was easier than to the more bureaucratic PHARE funds. Currently, Norway is the largest bilateral fund donor to Romania, said Hovdkinn during the press conference.

Innovation Norway is a Norwegian state-owned company that manages the Norway Grants program in consultation with the National Focal Point of Romania (the Authority for the Co-ordination of Structural Instruments in the Ministry of Public Finance).

Norway Grants is a bilateral cooperation program deriving from the provisions of the European Economic Area (EEA) Enlargement Agreement to which Romania became a signatory in 2007.

The agreement lays down the rules for co-operation between the EU, on the one hand, and Norway, Liechtenstein and Iceland, on the other.

It makes it possible for a non-EU country like Norway to participate in the internal market, while contributing financially to regional cohesion via programs such as Norway Grants. ∫ Corina Dumitrescu

T

he minister of communications, Valerian Vreme, has said the state should sell its stake in Romtelecom after the landline operator merges with Cosmote, as both companies are owned

by OTE. The Romanian government announced last week that it intended to sell its 45.99 percent stake in Romtelecom, the first potential buyer being Greek company OTE, which was supposed to present an offer by the end of last year.

The state wants around EUR 1 billion for its shares otherwise it will list them on the stock exchange. OTE officials asked for a three-month delay, so the offer is now due to be presented in March. Meanwhile, the ministry is taking steps to list Romtelecom on the stock exchange. Vreme said that ministry officials had had meetings with representatives of several investment banks, such as Citibank, Goldman Sachs and Rothschild, regarding a possible listing on the capital market of the state’s stake in Romtelecom.

Romtelecom should have been listed on the stock exchange twice, in 2008 and 2009, but the terms were not met. ∫ Otilia Haraga

www.business-review.ro Business Review | February 28 - March 6, 2011

6 NEWS POWER

TELECOM

High fuel prices give Petrom EUR 520 million profit in 2010

Orange Romania posts EUR 973 million revenues last year

O

MV Petrom, the oil and gas company controlled by Austrian oil group OMV, has reported sales of RON 18.6 billion (EUR 4.4 billion) for last year, a 16 percent hike compared to 2009.

However, its net profit increased more dramatically, soaring to RON 2.2 billion (EUR 521 million), a 163 percent increase y-o-y.

Petrom’s results come after local fuel

O

range Romania posted total revenues in excess of EUR 243 million in the last quarter of 2010, taking the operator’s total revenues for 2010 to EUR 973 million.

“Europe rose 0.9 percent for the year on continued strong growth in Belgium (+5.6 percent), while Romania showed improvement (-7.8 percent) after the sharp downturn in the previous year (16.7 percent),” read a France Telecom press release.

Thierry Millet, CEO of Orange Romania, said: “In 2010 we took several measures to perfect our activity and make it more efficient (franchises, Orange care, offers for smartphones, training programs for our sales team, programs for improving customer experience) and their effects will show in the long run and help us fulfill our strategic objectives over the next five years.”

At the end of last year, Orange had 10.5 million customers, over 60,000 of whom were signed up in Q4, 2010. Compared to the same period of the previous year, the company’s customer base decreased by 5 percent, mainly because of the evolution of the prepay segment. The average revenue per user was EUR 83.1.

“The most visible effects of the de-

Photo: Laurentiu Obae

Mariana Gheorghe, CEO of OMV Petrom

demand plunged 5 percent, as salary cuts and rising unemployment brought down purchasing power and the company’s production decreased by 2 percent.

The difference was attributed to higher fuel prices, in the context of growing international oil quotations, and cost-cutting measures taken by the company, the most important of which was closing Arpechim refinery. Petrom says that fuel prices last year rose 20 percent for petrol and 24 percent for diesel.

"Within a favorable crude price environment, 2010 marked the achievement of a series of strategic projects and strong improvements in our operational performance,” said Mariana Gheorghe, CEO of OMV Petrom.

“In E&P, we started the Hurezani gas delivery system by mid-year, as well as production at new key wells, whilst maintaining the reserve replacement rate in Romania above 70 percent for the third consecutive year. In R&M the economic downturn affected our fuel sales and burdened our margins. Nonetheless, we managed to improve the R&M result by more than RON 500 million, due to structural improvements and optimized operations, with the Arpechim refinery remaining in economic shutdown for most of the period.”

Gheorghe added: “In the G&P business, we made steady progress at our key power projects, the gas-fired power plant in Brazi and the Dorobantu wind farm, both on track to start commercial operations in H2 2011. Based on the strong 2010 preliminary results and financial position, we are considering making a dividend proposal to the AGM in April 2011.”

Petrom sold three million tons of fuel last year, representing about 42 percent of Romania's demand, and estimates stable demand this year as well.

Against the backdrop of positive results, the company is considering distributing dividends for last year, having not done so in 2008 or 2009. ∫ Dana Verdes

Thierry Millet, CEO of Orange Romania grading economic climate on the customer base can be noticed in the prepay segment. However, we are still very content with the evolution of the segment of postpay clients, which continued to stabilize. The customer base registered growth, and the rate of cancelling contracts was lower than during the period before the crisis,” said Millet. ∫ Otilia Haraga

AVIATION

Blue Air not insolvent, Bucharest Court rules

AUTO

F

orza Rossa, Romania’s Ferrari importer, has had 27 orders since the beginning of the year, while the Italian manufacturer has allocated 28 units to Romania for 2011, said the director of the dealership. Forza Rossa will launch two new models this year, Ferrari Four in May-June, and another model, about which no details have been disclosed, towards the end of the year.

This month, the firm becomes the exclusive representative of the Lotus brand

in Romania, Serbia, Montenegro and Moldova, locations where showrooms will be opened by June next year. In Romania, the showroom will be opened this week near Henri Coanda Airport.

On the local market the Ferrari and Lotus dealers are controlled by Camelia and Ion Bazac, former health minister, through Forza Rossa Holding, a company registered in Cyprus (86.3 percent).

The other shareholder, with a 13.6 percent stake, is an Italian citizen, Leo Taroni. ∫ Dana Verdes

Photo: Laurentiu Obae

Forza Rossa announces 27 Ferrari orders

Blue Air officials say the reputation damage caused by the row cannot be measured

B

u c h a r e s t Court has ruled in favor of Blue Air, rejecting claims by Carpatair and Service Excelence for the company to be made insolvent, the airline has announced.

In October last year, the two companies asked the court to declare Blue Air insolvent due to its considerable debt, which the airline denied. Carpatair filed

the case at the Bucharest Court in midMarch, citing an outstanding Blue Air debt of EUR 30,000 for the rental of a SAAB 2000 aircraft to the airline, in September 2009. The low-cost operator, owned by businessman Nelu Iordache, operates more than 50 European routes in 14 states. ∫ Dana Verdes

www.business-review.ro Business Review | February 28 - March 6, 2011

TALENT 7

Taking stock of a positive future With ambitious plans for Transilvania Capital, Bogdan Ceuca remains optimistic about the evolution of the capital market and hopes to secure a merger with a larger broker in the future. ∫ ANCA IONESCU For Bogdan Ceuca, manager of the Bucharest branch of SSIF Transilvania Capital, the stock exchange was both a school and a bold step for his career. He took some specialized courses in brokerage and trading on the Sibiu Monetary Financial and Commodities Exchange in 2003, and one year later became agent of financial services and investments at the Bucharest Stock Exchange (BSE). In 2004, he was appointed branch manager of the newly launched Bucharest branch of Transilvania Capital.

But how did the business start? Back in 2003 Ceuca and his partners took over the operations of Depfa Securities, a financial investment services company that was going to be closed, which had Irish and German branches of Depfa bank as its shareholders. After that, the company became Transilvania Capital, specialized in other financial brokerage activities such as BSE transactions, stocks, derivatives and public securities.

“We tried to merge with other brokers with the intention of creating the largest broker in Romania back in 2007. The merger was supposed to involve Broker Cluj (with a market share of 4-5 percent),

HTI Valori Mobiliare (a 1.5-2 percent market share), Investco (1-1.5 percent) and Transilvania Capital (0.4-0.5 percent),” remembers the young entrepreneur. The merger failed for different reasons but Transilvania Capital didn’t give up on the idea of joining forces with a larger player on the market. “We tried a new merger with WBS Romania, a company specialized in Romanian and international transactions, in the summer of 2009. But that failed too for price reasons. At the moment Transilvania Capital is an independent company and has nine individual shareholders,” says Ceuca.

The idea to set up such a business came as a natural step in 2003, as a result of a favorable context and the opportunity to buy Depfa Securities. “Besides, there was no need to obtain all the authorizations from the National Securities Commission and there was a common interest to start this business,” says the businessman. “There was a need on the market for such firms at that time because many people owned stocks in different marketable companies. In addition, the stock exchange phenomenon was less developed, with few people investing their money on the stock market.”

As for the challenges his business has faced, Ceuca says the current financial downturn started for Transilvania Capital in July 2007, along with the mortgage crisis on the American market, and became more visible during 2008. “We have had three full years of crisis and during this time we have needed to manage our costs in a very efficient manner,” says the branch manager. Although Transilvania Capital is a small company with low costs, it has been hard hit by the current crisis. “Things are anticipated on the BSE three to six months before the real economy. Since

WHO’S NEWS Bogdan Grama is the new general manager of Ulker Central and Eastern Europe, based in Bucharest. He previously worked for Dole Romania as commercial director.

Grama began his career at Mixalim in 1994 after graduating from the University of Electrical Engineering, the Polytechnic Institute of Bucharest. Over the coming years, he held various positions until he began working for Agroalim Distribution in 2003. While continuing his career at Agroalim Distribution, Grama also acquired a degree in Marketing Management at University Romano Americana in 2006 and did his MBA at Inde-ASE Bucharest in 2008.

Saulo Spaolanse is the new country president of Schneider Electric Romania. He is taking over from David Nicholl who now holds a similar position at the company’s division in Sweden.

Spaolanse previously worked for Schneider Electric Brazil where over

COMPANY PROFILE Transilvania Capital Established: 2003 2009 estimated turnover: RON 900,000 2010 estimated turnover: RON 1,700,000 Number of employees: 9 Initial investment: EUR 60,000-70,000 Total investment (estimation): EUR 200,000 was in August 2008 when Merrill Lynch crashed. “This moment was comparable with the big downturn in 1929 in the US, when the price of stock simply collapsed Bogdan Ceuca, manager of Bucharest and many banks crashed,” argues the branch of SSIF Transilvania Capital broker. If he started another business he says it would be important to have partners and shareholders of his caliber.

2008 Romania has posted a negative quarTransilvania Capital operates on a terly economic evolution and this started pretty crowded market, as there are 65 broto be felt on the stock exchange six months kers active on the BSE and SIBEX and in advance. In such a context, our main about five to ten that operate only on the challenges have been to obtain positive international market at the moment. But yields for our customers, also when the Ceuca is not afraid of the competition, seemarket was declining,” adds Ceuca. Acing it as a great opportunity to be the best. cording to him, Transilvania Capital’s market share increased by 25 percent in “Competition makes you better and makes you act in real time. Our quality services, 2008 on 2007. “This evolution was not apperformance and discretion are what difparent immediately but it became visible ferentiate us from the crowd,” says the enduring 2009 when the international econtrepreneur. omy started to recover,” he says.

The company has bold plans for the fuAn entrepreneur who runs such a ture as it has a 0.5 percent market share on business needs to do three things in order to keep his position on the market safe, the BSE and a 1 percent market share on the Sibex market. “We intend to make a thinks the branch manager: to bring added partnership or merger with one or more value to his customers, to offer new prodbrokers, either larger or the same size as ucts and to make mergers or different partnerships with local or international brokers. us, in the future,” according to Ceuca.

Speaking about the most difficult time his business has endured, Ceuca says it editorial@business-review.ro

Business Review welcomes information for Who’s News from readers.

Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro the past eight years he held positions such as national sales manager, business development manager and residential and building business vice-president. Before joining the firm he worked for Roca Ceramic and Robert Bosch. Spaolanse graduated from the Parana Federal University in Brazil with a degree in economics and also holds an MBA in marketing.

lescu will lead the online development and marketing projects as vice-president, development director.

Stefan Cojanu

is the new president of the CODECS Leadership Foundation, following the decision of the general shareholders’ assembly of CODECS. Mihaescu is also the president of the firm’s board of directors. The foundation was set up in February 2001 and has since organized leadership programs like Leaders for the Third Millennium, Professoria and International Baccalaureate.

has been elected president of the Employers’ Association of the Software and Services Industry (ANIS ) by the general shareholders’ assembly. He has over 40 years of experience in the local IT industry.

In 1995 he was Oracle’s first local employee and led Oracle Romania until 2008.

The board of directors includes other new appointments: Anca Cramaliuc (marketing manager of Siveco Romania), Liviu Dan Dragan (CEO, TotalSoft), Sorin Gavanescu (CEO, IT Six Global Services), Dan Garlasu (sales manager at Oracle Romania), Radu Georgescu (president, GECAD Group), Florian Ivan (partner strategy manager, at Microsoft Romania), Andrei Pitis (CEO of Simple Systems) and Adrian Purcarea (country manager of Freescale Semiconductor Romania).

Irinel Burloiu

Claudiu Lungu

is the new marketing director of eMag. By the end of 2010 he had worked for Intel Romania for eight years. Radu Aposto-

has been appointed facility manager by Building Support Services, in charge of coordinating all property & facility man-

Radu Mihaescu

agement operations for the facilities of an international power supplier in Romania. He has two degrees, in electrical engineering and in economics. Previously, Lungu coordinated the admin – technical department at BCR Group/Bucharest Financial Plaza.

Murat Kazaz is the new CEO of Anchor Grup, taking over from Ibrahim Paksoy. In addition to this appointment, the company’s management team saw additional changes.

Irina Irimie was made leasing director after three years with the firm. Irina Schiopu, who has ten years of professional experience in the field, joined the company as marketing & communication director. Albert Pinzaru was appointed legal director. He has 14 years of experience in legal advisory in fields such as real estate, construction and media. Miruna Mitu is the new HR director and Sinan Okumus was appointed business development director.

Kemal Arslan will hold the property management director position and Cenker Tunaboylu will lead the maintenance & development department.

8 FOCUS HOTELS

www.business-review.ro Business Review | February 28 - March 6, 2011

Luxury hotels more hospita after two tou

Gone are the performances achieved by Bucharest’s lu to the economic crisis. Strongly affected by the collaps capital’s four- and five-star hotels have seen their bus in the past two years. While continuing a price war be tributed market share among themselves and in many cline. So far, 2011 has seen no concrete signs of an up international operators announcing plans to enter the ∫ SIMONA BAZAVAN The hotel industry was among the first local industries that felt the full blown effects of the economic crisis, thinks Tinu Sebesanu, CEO of Trend Hospitality Consulting & Management. The first impact came as early as the end of 2008, but the market took a turn for the worse starting 2009. “The four- and five-star hotels in Bucharest were especially affected, as their main business source, foreign business travel, fell,” Sebesanu told Business Review. 2009 turned out to be a tough year, he says, as the industry experienced a sharp decline both in the number of guests and the average length of stay. “There were several factors behind this. On the one hand companies reduced their travel budgets as one of the first cost-cutting measures. On the other hand, the strong penetration of lowbudget airlines made it possible for many businesspeople to arrive in Bucharest in the morning and to leave the same day,” he says.

Faced with this collapse, hotel operators immediately reacted by drastically reducing the rates, the worst possible option, Sebesanu reckons. “2009 was a chaotic year, because most of the operators, both international players and independent ones, panicked and waged a price war, which in this industry has devastating effects on the medium term,” he adds. In the past two years and a half the average daily rate has fallen by 45-50 percent. While back in 2007, guests would pay an average rate that reached EUR 120 and even more in some cases, for a night in a four- or five-star hotel, current average rates are EUR 60-70.

This created a vicious circle and players were pressured to follow suit. “Price cuts were definitely not part of the strategy on the upscale market, but rather an effect of the downsizing in travel budg-

FOCUS HOTELS 9

www.business-review.ro Business Review | February 28 - March 6, 2011

els hope for able market ugh years ets and of the hotels’ need to retain guests and to maintain business volumes,” Sonia Nastase, GM of Howard Johnson Grand Plaza Hotel, told BR. Reducing the daily rates had an immediate impact on revenues, bringing many hotels under the breakeven limit and, in the end, failing to generate an increase in demand. “Price is not the determining factor for this industry. What happened is that the players simply redistributed the market share between themselves but it didn’t generate any new clients,” says Sebesanu. This trend ended only in the summer of 2010, when rates reached a minimal level.

Only after cutting rates did hotels apply restructuring and cost control strategies, but this also should be addressed with caution, Sebesanu believes.

“Cutting costs can only go so far. When we are talking about a five-star hotel, a EUR 5 price difference will never be as significant as the impression made by bad service,” he adds.

Overall, the last two quarters of 2010 saw a recovery in occupancy rates, but not enough to make up for the losses reported up to that point. As for 2011, Sebesanu thinks it will bring more unpredictability. “The limit has been reached both in terms of reducing rates and cutting costs. This creates uncertainty as there are few options left for hotel managers if the market doesn’t recover or economic conditions worsen,” he adds.

This year, hotels will also face pressure to raise prices. “Let’s not forget the effects of the VAT hike which will most likely stabilize this summer,” says Sebesanu. “2011 should be a year of stabilization and we should see a one digit increase for all indicators. My opinion is that in absolute numbers the results will be similar to the figures reported in 2010,” he says. In his opinion the inflation rate and exchange rate will have a strong say in the industry’s overall evolution.

And even if all goes well, the performances reached in 2007 and 2008 are not likely to be repeated any time soon. “Everyone agrees that we will not see the same results as in 2007 and 2008 anytime in the near future. I would say not even in the next ten years,” Sebesanu predicts.

t’s luxury hotel industry prior llapse of business travel, the r business shrink dramatically r begun in 2009, hotels redismany cases saw revenues den upturn and no new major r the local market.

Photo: Laurentiu Obae

No new names for 2011 International hotel operators are always interested in entering any market and Bucharest is no exception, Sebesanu says.

It all boils down to the quality of properties that the market offers and the Ro-

10 FOCUS HOTELS

www.business-review.ro Business Review | February 28 - March 6, 2011

Courtesy of Trend Hospitality

Courtesy of Howard Johnson Grand Plaza Hotel

Sonia Nastase, general manager of Howard Johnson Grand Plaza Hotel

Tinu Sebesanu, CEO of Trend Hospitality Consulting & Management

manian capital is not very appealing in this respect. 2011 will not see the arrival of any big international names, which are already few and far between on the local market, but rather sub brands of already existing players, such as Hilton with Hampton and Ramada with the Days Inn. And as developing a four- or five-star property projects takes on average two to three years and no major projects have been started so far, this will also cause a delay in the market’s development.

come here on business as the city is not perceived as a leisure destination. “This ratio between business and leisure travel is very atypical for a European capital,” adds Sebesanu, stressing that the authorities’ involvement in the matter is crucial.

“Almost nothing has been done over the past 20 years. Consider the fact that we don’t have a city tour, any city break offers, a museum circuit or other basic and not necessarily expensive facilities.”

Hotels could well benefit from an increase in leisure travel as their occupancy rates fall as low as 10 percent during weekends. So far, no more than 5 percent of the overall guests come to Bucharest

Bucharest knows only business Well over 50 percent of the guests of Bucharest’s four- and five-star hotels

any major changes on the market as the for leisure, a figure that Sebesanu thinks potential to see a rise in the number of could go up to 15 percent with the right tourists to Bucharest is limited by the instrategies. “Bucharest has nothing more or less to offer than Warsaw or Sofia. frastructure and the business travel segment isn’t showing any signs of recovery.

Tourists would come here, as an alterA lot depends on the general economic native to other destinations,” the CEO and political context which is not yet concludes. looking like it is back in positive territoThis opinion is shared by hotel ownry,” Georgeta Grecu, director of sales & ers too. “Bucharest still lacks proper promarketing at Capital Plaza Hotel, told BR. motion as a weekend destination and as The four-star unit was opened in 2009 a reliable holiday destination. We see a lot and Grecu says that the priority is to inof effort put into promoting and supcrease the hotel’s market share and to reporting Romanian destinations that are tain existing clients, by focusing on vardifficult to reach, such as the Valea Praious promotions and additional services. hovei, the coast and rural tourism destinations (…)The difference between Ro- “So far we have registered increases both of the occupancy rate and that of the avmania and other countries is that we erage daily rate. For 2011 we are also promote undeveloped and unprepared looking to increase our performance indestinations for advanced and competidicators,” she added. tive tourism while the others are proWhile the overall market is decreasing, moting something they can really offer the demand for highly personalized luxfor a good profit and business,” Adrian ury services is on the rise, representatives Catalin Petre, owner of five-star Carol Parc of five-star Carol Parc Hotel told BR. The Hotel, told BR. boutique hotel, which is owned by the Petre family, reported an increase in its “Everyone agrees that the occupancy rate for 2010 and there are hotel industry will not see plans to further increase the number by 10-15 percent this year. Last year the hothe same results as in tel had about 2,500 guests, 60 percent of 2007 and 2008 anytime in whom were Romanian. The number of leisure tourists was also on the rise, Pethe near future. I would tre says. say not even in the next “While in 2009 approximately 98 percent of our trade was generated by busiten years,” Tinu ness tourists, in 2010 we believe the figSebesanu, CEO of Trend ure was only 65-70 percent. We expect this trend to continue in 2011 and that Hospitality Consulting & leisure tourists, both foreign and RoManagement manian, will not only increase as a percentage but also contribute to the increase of our business volume in general compared to the previous year,” said the There are 11 five-star hotels in Bucharest and another 20 units country- owner.

In 2010 the hotel reduced its rates by wide, containing roughly 3,600 rooms. about 20-30 percent but Petre says that Coming back to the capital, the majority the drop was compensated for by an alof hotels belong to the four-star segmost 15 percent increase in the occupancy ment. In 2010 room supply in Bucharest rate and a higher volume of sales in the grew by 0.5 percent with many projects F&B sector. being abandoned or put on hold. “If all The most important new opening planed projects for 2011 are realized the last year was that of five-star Epoque Homarket will see 170 rooms become opertel in November. D&M Perfect Real Estate ational and 400 more in 2012,” reads the invested EUR 8 million in the unit, which Bucharest City Report put together by is located close to Cismigiu Park in downJones Lang LaSalle. town Bucharest and targets free indeWith few new projects being anpendent travelers (FIT), having been denounced, many of the investments made veloped as a luxury brand. The managelast year went into refurbishment. Athement of the hotel is provided by Trend nee Palace Hilton underwent a EUR 2 milHospitality. The same month the boulion facelift which involved the upgrading of various facilities inside the hotel. tique hotel became a member of the This included renovation works for Worldhotels international network.

Roberto’s on La Strada terrace, the restauAnother player active locally is the rants Brasserie and Le Bistrot, the hotel five-star Howard Johnson Grand Plaza lobby and Le Collonnade. Cafe Athenee Hotel, which reported a 55 percent ocopened last September, marking the cupancy rate for last year, a slight increase completion of the renovation works on the previous one against a backscheduled for 2010. ground of much fiercer competition, NasAthenee Palace was affiliated to the tase said. The share of foreign guests Hilton chain back in 1997. More than ten reached 85 percent of the total. In spite of years later four more units joined the a slight increase in the number of Roranks, one more hotel in the capital and manian guests over the past two years, one each in Sibiu, Oradea and Brasov. The their share doesn’t exceed 15 percent, second DoubleTree by Hilton unit, which the general manager said. Last year the joins the one in Oradea, should open this company invested in refurbishment and year in the capital on the grounds of redesign projects.

Bucharest City Unirii hotel, the former The hotel reported an EUR 8 million Tulip Inn. Hilton worldwide representaturnover in 2010, a similar result to the tives announced last year that they were figure in 2009. “In most European couneither considering or negotiating contries, especially in capital cities, business tracts with other hotels in Cluj, Timisoara, is starting to show slight but sure signs of Ploiesti, Iasi and Craiova. recovery on the upscale hotel market.

Hotel representatives are cautious Add to that the fact that we worked on when making estimations about the marimproving our product and services throughout 2010, for 2011 we foresee a ket’s evolution this year. “We don’t expect

FOCUS HOTELS 11

www.business-review.ro Business Review | February 28 - March 6, 2011

Courtesy of Athenee Palace Hilton

New look: Cafe Athenee at the Hilton Bucharest has recently been renovated

Photo: Laurentiu Obae

The JW Marriott offers visitors a high-end shopping gallery

Photo: Laurentiu Obae

Carol Parc, a boutique hotel, enjoyed an occupancy rise last year after cutting rates

slight increase in both turnover and profitability,” Nastase predicted.

The Howard Johnson brand is owned by the Wyndham Hotel Group, which is also present locally with the Ramada brand. For 2011, the Ramada Plaza Convention Center, a four-star complex consisting of Ramada Parc and Ramada Plaza, announced a EUR 2 million investment budget.

“During 2011 we plan to open two new meeting rooms in Ramada Plaza, direct indoor access for our clients between Ramada Plaza and Ramada Parc, and an indoor semi Olympic pool with a fitness room,” Madalina Belous, public relations manager, told BR. The two hotels reported a 5 percent increase in occupancy for last year and an overall decrease of 15 percent against 2009. “The aim for this year is another 3 percent compared with 2010,”she added.

So far, 2011 has brought positive signs.

“From the beginning of 2011 we have felt cautious optimism. The trend seems to be positive, the average rates remain similar if not slightly higher and occupancy is definitely better,” Belous added.

In addition to Howard Johnson and Ramada, another Wyndham brand will join the fray this year. The first local Days Inn hotel is scheduled to open in the first half of 2011.

2010 was a challenging year for all local players. “Last year did not improve much compared to 2009. The last quarter was a bit over Q4 2009 and we could feel the recovery of the Western Europe markets on the Romanian scene. But this was only in terms of occupancy and number of events, as the revenue was still negatively impacted by the average rate, which was much lower than in 2009,” Medeea Vasiliu, director of sales & marketing at JW Marriott Bucharest Grand Hotel, told BR. 2011 should bring a single digit increase, she thinks. ”For 2011 we target a slight increase over 2010, 8-10 percent in total, but this will depend on what's happening in our source markets, as well as the social and political stability at national level,” she added.

The hotel’s occupancy rate went up by 5 percent last year, with JW Marriott Bucharest Grand Hotel hosting 110,000 guests. Top visitor sources are the USA, Western Europe and Middle Eastern countries.

Last year the hotel also invested over EUR 1.2 million in renovating and upgrading its main conference and event space, Grand Ballroom, and Vienna

Lounge as well. “Renovations continue this year with the new restaurant JW Steakhouse, which will open in March and which took another investment of over EUR 1 million,” concluded Vasiliu.

The increase in occupancy rates seen last year is no guarantee that the market will see a boost this year. “We noticed a positive trend in the market in 2010, especially in occupancy, but it is very difficult to predict if it will continue,” Adrian Adam, marketing and sales director at Radisson Blu Hotel, told BR. About 85-90 percent of the guests are foreigners, mostly from other European countries, and roughly 30 percent of the guests arrive at Radisson Blu through the Rezidor hotel reservation system. A similar proportion, 80-85 percent, is represented by business travel. In 2010 the occupancy rate reached 70 percent. “This is because, following the affiliation of Centre Ville to the Radisson Blu chain at the end of 2010, we currently offer two different products: accommodation for long and short stays, at four- and five-star levels. This allowed us to enlarge our client segmentation; therefore we expect a higher occupancy rate this year,” said Adam. He added that last year the hotel didn’t make price cuts, but rather offered more for the same sum.

In 2010 the site reached its set target of EUR 25 million for the whole complex, including both the Radisson Blu hotel and Centre Ville complex, both of which are operated by Radisson management. “We had an operational profit of 45 percent of the total turnover and this year we expect a growth in revenues and turnover plus a 5-7 percent higher profit,” concluded Adam.

Other five-star hotels in Bucharest include Alexander Hotel, Casa Capsa Hotel, Crowne Plaza Bucharest, InterContinental Bucharest, and Grand Hotel Continental.

simona.bazavan@business-review.ro

31 there are 12 five-star hotels in Bucharest and another 19 units country-wide, counting for roughly 3,600 rooms

12 POWER

www.business-review.ro Business Review | February 28 - March 6, 2011

Romania, like any other emerging market, is exposed to bubbles. Real estate and consumer credit overexpansion taught the country some tough lessons and left a legacy that is still reverberating around the economy. Is renewable energy, the latest big thing, going to be the next bubble? Business Review asked financial specialists what factors are taken into account when assessing a wind farm project and why we haven’t yet seen local wind energy projects financed by international financial institutions. ∫ DANA VERDES

Photo: Dana Verdes

Wind energy projects seek financing gust to get beyond draft stage

In the past two-three years the renewable energy sector – especially wind farms – has been the standout new investment hotspot on the local market. But not all players who announced tens or hundreds of MW worth of projects have made good on their word, with many projects remaining just that.

Wind energy projects have been popping up all over Eastern Europe and the expansion is reflected in the level of credit volume approved by international financial institutions for this type of scheme. Representatives of the European Bank for Reconstruction and Development (EBRD) told Business Review that the bank has made some 16 investments in this sector in its countries of operations over the last three years, with a value of over half a billion euros.

“Last year we concluded nine deals worth EUR 363 million, five deals in 2009 of EUR 124 million, while the funding approved in 2008 was EUR 71 million for two deals,” say bank officials.

Yet Romania hasn’t benefitted as much as the amount of mooted wind farm projects would suggest. EBRD officials say they are considering a number of projects in the wind sector in Romania.

Ana Maria Mihaescu, chief of mission of the International Finance Corporation (IFC) Romania and Moldova, tells BR, “Up until now the IFC hasn’t approved such credit lines in Romania. Currently, the IFC is in the final negotiation phase for such a loan and several other projects are in the analysis phase, at different stages of negotiation.”

According to IFC information, projects

by EdP Renovaveis of Spain and its Romanian partner, Renovatio Group, in Cernavoda and Pestera, in the Dobrogea region, totaling about 228 MW, are in the final phase.

Local banks have been keeping an eye on these types of investments. “The development of the renewable energy market has been closely followed by Banca

www.business-review.ro Business Review | February 28 - March 6, 2011

Comerciala Romana (BCR), as financing this sector has registered an increasing trend.

The value of loans given to finance wind farm projects hiked in 2010 compared with the previous year,” Ioana Gheorghiade, executive director of the project finance department at BCR, tells BR.

Key ingredients for financing

FINANCING A EUR 100 MILLION WIND PROJECT If the projected annual free cash flow is EUR 17 million per year, divide it by 1.4 (= EUR 12 million) which could mean interest (8 percent) and repayments (over 10 years) on EUR 67 million. Then the sponsors will have to find the remaining EUR 33 million in equity. The IFC could put in up to EUR 6.6 million (19.9 percent) of that shareholder contribution, but would then, subject to the 25 percent rule, have just EUR 18.4 million to lend (25-6.6). The project needs an additional EUR 48.6 million in debt to reach EUR 67 million limit, which the IFC can help to raise from international banks (B loans) or work with the sponsor to obtain from other sources including domestic banks.

Source: Example given by Denis Clarke, IFC chief investment officer, at the Wind-Power Romania conference in January 2011

ty and green certificates),” says Gheorghiade.

Loan conditions But how much project finance can banks stump up, and how much has to come from the investor? “There are no specific requirements. A project’s capacity to borrow is assessed based on a number of issues such as the wind measurements, revenue forecast for electricity and green certificates,” say the EBRD officials.

The IFC chief of mission to Romania and Moldova adds, “The contribution varies from project to project, depending on the type of wind turbines chosen, the total investment value, wind resources and the developer’s experience.”

She goes on: “The interest rate and commission levied by the IFC are the same as on the market. We do not compete with banks, but we get involved in projects where the risk is considered significant alongside commercial banks or other market players. Banks are not overly eager to finance wind projects, especially the larger ones. The IFC can gen-

erally provide other benefits to the project: a longer grace or repayment period, an appropriate structure and its own experience of financing wind projects on a global scale.” The corporation contributes 25 percent of loans, of up to 15 years.

The BCR official tells BR, “The interest rate is established taking into account many variables such as credit period, warranties and the client’s financial situation.”Financial specialists say that the warranties required are typical of project finance, meaning the assets financed by the loan (equipment, land, claims transfer, insurance etc).

And the need for million-euro financing will hike as specialists say that the projects on the market are increasingly serious and professional.

“While two or three years ago there were many developers with lower financial power, now we can see some consolidation and an increased capacity to generate funded projects,” concludes the IFC official.

dana.verdes@business-review.ro

Courtesy of BCR

And the future looks bright. “Romania has the largest potential to develop wind energy projects of all Eastern European countries in the next five years,” says Gheorghiade. Yet the road from numbers on a piece of paper to reality is paved with many obstacles, say specialists, as the process for obtaining financing takes from 6 to 12 months.

“Progress on these projects is linked partly to the development of a legal framework for such investments,” say EBRD representatives. “For Romanian projects, probably the most important element at this point in time is the uncertainty surrounding the law, since it has been subject to changes and the implementing legislation is not yet in place. In addition, other issues must be considered, including the experience of the project sponsor and technical aspects such as wind measurements, equipment, grid connection and environmental issues.”

Other finance specialists say that the real estate motto “location, location, location” applies to this market as well. “We believe that the developer’s experience combined with a very good project location can mitigate many of the risks that may arise,” says Mihaescu.

The BCR official adds that another big factor in project assessment is the lack of legal impediments regarding land ownership and authorizations.

“The bank wants to see if the investor is ready to make a solid contribution and has considered the worst-case scenario, taking into account the limits to the predictability of a project’s future revenues (the fluctuating price of electrici-

POWER 13

Ioana Gheorghiade, executive director of the project finance department at BCR

14 FOCUS

www.business-review.ro Business Review | February 28 - March 6, 2011

Franchises go low cost in crisis Prior to the economic downturn, entrepreneurs were typically seeking to develop luxury businesses through franchise. However, since the crisis hit, low-cost franchises have risen to the fore. The phenomenon is a direct result of the financial crunch, since entrepreneurs want to invest only small sums of money and recover their investment quickly and safely. ∫ OTILIA HARAGA

STOCKEXCHANGE

Franchises in the food domain are and will continue to be the most popular, while luxury franchises will be less sought after. “This prediction is based on the consumer’s switch towards his or her basic needs, to the detriment of discretional spending. For more than 40 years, this segment has proved its success and longevity on the market, and it is even more popular during a recession.

Whether we are talking about pizza, hamburgers, coffee, sandwiches or pasta, these ‘tasty’ franchises continue to expand worldwide and business opportunities are on the menu,” says Adrian Gheorghe, managing director of Thinkbig International.

In order to attract more investors, an increasing number of franchisors are offering benefits to those who wish to take on this type of business, such as zero franchise fee or no royalties. Also, some franchisor companies now provide money for marketing.

Romanian franchises are gaining importance on the local market, and are also starting to gain ground in the face of international ones, which still enjoy a faster growth pace, however.

The main difference between a Romanian and foreign franchise is the legal stipulations. “There are countries that have special laws regarding this field, Romania being one of them, while others rely on stipulations in commercial law and EU law. Secondly, depending on the field of activity, each franchisor imposes strict conditions regarding the location and surface, the visual identity of the space, the implementation of certain behavior patterns with clients and the strict compliance of certain suppliers or raw material,” says Constantin Anton, the president of the Romanian Franchise Association.

What a Romanian franchise has to offer, as opposed to a foreign one, is lower costs – both the cost of the franchise per se, but also investments and rent expenses – and more flexible conditions.

“Prices start from EUR 2,000 for a franchise like Spalare in Parcare, can reach EUR 5,000 for one such as GS Bet and can even surpass EUR 10,000 for Eco Refill or Romstal. For restaurant fran-

Shake on it: good communication between the parties is one key to the success of local franchises

chises the sums can be even higher, surpassing several tens of thousands of EUR,” says Anton. Conditions are more flexible since a Romanian franchise has other aces up its sleeve: there is better communi-

cation between the two parties, the offers are adapted to conditions on the local market, plus the concept has already been tested on the market – and this means minimum risks and a higher de-

gree of predictability.

Franchise will increasingly become a key element in consolidating the market economy of countries that are still not very developed, say experts. The num-

FOCUS 15

www.business-review.ro Business Review | February 28 - March 6, 2011

Many franchises are in the food domain

otilia.haraga@business-review.ro

CHEAPEST ROMANIAN FRANCHISES FAST-FOOD Gaufre Petit Piere Fitosica Chipstix King Kebab Mr. Kumpir Noodles Bar

1,300 3,000 5,000 5,000 5,000 5,000

RESTAURANTS New York Pizza

5,000

CAFES Leonidas

5,000

STORES Brooks Doppelganger Effetti Moda Lollipops Original Marines Skiny Tina R

5,000 5,000 5000 5,000 5,000 5,000 5,000

BEAUTY Hera Body Care Cleo Nails Ciufolici Fresh Line Perfect Nails

3,000 5,000 5,000 5,000 5,000

IT Troubleshooters Guide2Romania

5,000 2,500-5,000

SERVICES Jumbo Screen FirstDryWash DryWallTeam Lyoness Fereastra Cora Fereastra Suki Danymond Safety Broker

0 1,970 2,000 2,000 2,500 2,600 3,500 5,000

CAR INDUSTRY Eleven One 2,350 5,000 Rent a Benz All sums are expressed in EUR

Source: thinkbig international

bers of both national and international franchises on the Romanian market are predicted to grow. Their estimated turnover for this year will be around EUR 910 million, originating from franchises in food, specialized retail, real estate, services, clothing and accessories.

Nonetheless, the expected 2011 turnover, like the 2010 and 2009 figures, is lower than the turnovers posted by the franchise industry in 2007 (in excess of EUR 1.2 billion) and in 2008 (over EUR 1.4 billion).

“In countries such as the USA for instance, it is estimated that franchises will generate around 50 percent of the jobs within 15-20 years. The importance of this business concept is also proved by the rate of success: 95 percent. The success rate of a business that one starts from scratch and on one’s own, especially in less auspicious periods, is significantly lower, and lack of experience can clearly result in bankruptcy,” said Anton.

The success rate of a franchise in Romania remains very high, at 89 percent.

“We estimate that there are approximately 120 Romanian businesses that are franchises,” he added. Successful examples on the Romanian market include Romstal, Jolidon, Eco Refill, GS Bet, Agroland, Startonight, Shanghai Restaurant, City Grill, Wu Xing, Millenium Insurance Broker SA (Myinsurance) and Euroins, says the association president.

The Thinkbig pundits cite others that have a good chance of riding the wave of the financial crunch. One is Bella Pizza, with a franchise tax of EUR 10,000, a global investment of EUR 75,000 and royalties of 2 percent of the turnover. Another potential successful venture is beauty salon Perfect Nails, with a franchise tax of EUR 5,000 and royalties of EUR 100 per working table, the global investment being EUR 25,000. Still in the beauty industry, other examples of franchises with good expansion outlooks are Gett’s Hair and Ciufolici. In the fashion industry, Thinkbig representatives mention Tina R, with a franchise fee of EUR 5,000, royalties of 5 percent of the turnover and total global investment amounting to EUR 100,000. Other renowned Romanian franchises include Cristian Tour and Elvila.

The lifespan of a local franchise is increasing, while Romanian ventures also are expanding abroad. At the moment, more than 2 percent of franchises that were very successful at a local level have successfully expanded outside the country. Anton mentions Spalare in Parcare,

Startonight, Eco Refill, Romstal and Jolidon.

Last year, franchises in distributionretail represented 55 percent of the total while the food industry made up another 25 percent. The other 20 percent were split between services, industry, hospitality and other fields.

In 2011, there will be new brands on the Romanian franchise market in domains such as retail, fast food and services, which will have a strong impact on several niche segments of the market.

Currently, discussions are at an advanced level for these franchises to enter Romania, according to Gheorghe. “What I can tell you is that this year there will be some Romanian franchises that will command great interest. One of them will be in the construction industry, and will come with an innovative Made in USA concept but adapted to the local market. There will be another one in Horeca. Of the foreign brands, H&M, Subway, T-Beks, Leroy Merlin and Hampton by Hilton will also appear,” says Anton.

16 BALANCE

www.business-review.ro Business Review | February 28 - March 6, 2011

Setting the stage for ‘I do’ From the planning to the honeymoon, a wedding is never as simple as the album pictures make it seem. Especially if that wedding is taking place in Romania, where this one-off event is expected to make fairytale weddings literally seem like children’s stories. The economic, and perhaps even social, context has however left its mark on this tradition, making it slowly lose ground in an ever more modern Romania. BR analyzed the phenomenon, speaking to the big players on the local wedding scene. show that the groom should only have eyes for his bride. However, when he is not paying attention, the bride gets stolen and a ransom is demanded for her return, which most of the time consists of amusing challenges that the groom has to fulfill, not the actual payment of money.

The chief concern of a Romanian wedding, however, seems to be culinary, even more than the bride and groom’s attire. “Generally, the most important aspect here is the dinner. Outside Romania, there are two-three courses. Here it is a minimum of five, with every kind of drink. One can say that the event turns into a true spectacle that lasts until four or five in the morning, while abroad, the reception itself lasts no longer than fourfive hours,” says Ginga.

To provide more information, wedding fairs are organized on a regular basis in Bucharest and across Romania. Expo Ideal Mariaj, organized by Ideal Mariaj magazine, is one such event that took place on February 25-27 at Sala Polivalenta.

Initial estimations were of around 10,000 visitors over the fair’s three days, with the most popular stands being those exhibiting wedding dresses, says Dobromir.

Another imminent wedding fair is being organized by Jukebox Venue on March 1920 on Str. Turturelelor 11, in Bucharest.

And E-Marriage Fest will take place in Piata Constitutiei, on March 25-27.

∫ CORINA DUMITRESCU

corina.dumitrescu@business-review.ro Photo: Laurentiu Obae

According to data from the National Institute of Statistics, fewer couples got married in 2010 than at any time since 1948. Slightly over 110,000 weddings were held last year, 17 percent down on 2009 and 37 percent down on 2008. Surprisingly enough, the divorce rate has also decreased, falling to 31,000, the lowest number in ten years. On average, one in 4.5 marriages in Romania has ended in divorce in the last 30 years.

Given these trends, how have those working in the wedding business adapted to the times and what do they think of the current situation? Suzanne Dobromir, managing partner at the magazine Ideal Mariaj (a guide for all those planning their wedding or who are simply interested in the subject), believes, “Marriage has remained an important institution and a wedding is the most important event in a couple’s life.”

In spite of this, Romanians seem to prefer the DIY option for their wedding and quite often future brides take upon themselves the role of a wedding organizer and his or her team. Dobromir explains: “Romanians continue to be skeptical about using the full services supplied by a wedding planner. Not because of trust issues, but because they would rather organize their wedding with their family and friends.” She adds, “Unlike weddings abroad, where a lot of money is invested, in our country, a lot of focus is put on gathering the family and friends together.”

But wedding planner Raluca Movila Regiulis, who works at Bon Mariage agency, says, “Romanians’ attitude to wedding organizers has changed significantly in the last five years and we, as the first such company, have felt this change even more keenly. Currently, our client profile is largely the successful young man, who has reached the top on his own and who is well aware of the true value of money, but who is trusting enough to hand over the organization of the entire event to a professional agency.” Regiulis sums up the benefits of hiring a wedding planner as “less stress and more time for them [the couple] to enjoy their truly unique event.”

Has the crisis affected the local wedding business? Regiulis thinks it has. “Indeed, economic reasons have in recent months made clients more careful with their budgets and choose the best pricequality offers, but the situation has not yet made couples miss out on their most cherished dream, their wedding, by limiting their budget or even canceling the event.” The Bon Mariage agency, Regiulis says, registered a turnover of EUR 1 million in 2010. It organized 250 events in

More brides are turning to the professionals for wedding planning

2009, a little over the estimated 200-220 in 2010.

Organizing a wedding may hold some of the glamour that Hollywood films have conferred on this kind of profession, but beyond all this there is the usual amount of toil that any events agency has to deal with. Sinziana Ginga is the events manager at La Noblesse, a full-service agency set up in 2008, with the aid of people who had worked in the field of private events for over six years. Why weddings? “Because you never get bored.

Weddings are an expression of one’s personality and that makes us active all the time and helps us meet people, cultures, traditions and new challenges. The feeling of seeing the happy expressions on the couple’s faces at the end of their ceremony cannot be equaled.”

Going a bit further into the depths of organizing a wedding in Romania, Ginga

recommends starting to organize the big day a year in advance, although some couples have turned up as late as one week prior to walking down the aisle.

Planning a wedding has ten steps for Ginga: the concept, guest list, choice of wedding organizer, budget calculation, location, legal and religious marriage, the music, décor, the bachelor/bachelorette party and the final event planning, best done one week before the day itself.

Foreigners often note that traditions play a very important part in modern Romanian weddings and are often mixed with Western influences. The most beautiful and purest of local traditions are best observed in rural areas. In urban Romania, one of the most conspicuous and curious-to-the-foreign-eye tradition is perhaps the so-called “stealing” of the bride during the reception: this is a custom of unknown origins, whose purpose is to

Romanian wedding customs The shaving of the groom by a close friend The dressing of the bride by the godmother, mother and close friends The bride’s dance or “Nuneasca” The tearing of the cake (“turta”) above the bride’s head The removal of the bride’s veil and its placing on the head of an unmarried girl The “stealing” of the bride and her recovery.

Marriage vs. divorce in Romania* 110,000 marriages, the lowest number since 1948 31,000 divorces in 2010, the lowest number in ten years 1 in 4.5 marriages ends in divorce *according to data from the National Institute of Statistics

BR EVENTS 15 17

www.business-review.ro Business Review | February 28 - March 6, 2011

Swiss investors look forward to economic recovery this year 2010 was a tough year for all companies active in Romania and Swiss investors were no exception. Cost control strategies were implemented across every industry and investment plans put on hold. Nevertheless, the worst of the crisis is behind us, claimed Swiss investors present at the second Swiss Business Forum organized by Business Review last week, adding that there are signs of recovery.

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∫ SIMONA BAZAVAN Romania is a unique case among European economies, reporting four consecutive semesters of recession. Faced with harsher market conditions and the government’s incapacity to generate coherent economic recovery strategies, companies had to reconsider their local business. While addressing the problems that the local business environment is facing, company representatives argued that all is not bleak. “I am convinced that we have reached the bottom line. There are clear signs that the economy is picking up,” said Marcus Wirth, CEO of Holcim Romania. Present at the event, Jean Valvis, president of Valvis Holding, added that Romania continues to hold huge business potential.

However, a lot depends on the much called for stabilization of the legal framework as well as on the commitment of the Romanian political class to come up with sectorial strategies. Romania has what it takes to become an Eldorado for Swiss companies, according to Marc Bruchez, chef de mission adjoint with the Swiss Embassy to Bucharest. From the cement industry to pharmaceuticals and FMCG, Swiss investors have been a strong presence in Romania in recent years.

New areas of interest for Swiss companies are the infrastructure and tourism industries, said embassy representatives.

The second Swiss Business Forum was organized at Capital Plaza Bucharest and was sponsored by Valvis Holding, Horvath & Partners, Heidi Chocolat, Novartis, Holcim and titirez.ro. The event gathered around 70 attendees.

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simona.bazavan@business-review.ro

All photos: Laurentiu Obae

1. Jean Valvis, CEO & general manager of Valvis Holding 2. Catalin Mitroi, country manager Romania and Rep. of Moldova, Geberit International Sales AG, Romania branch 3. Florin Porojan, general manager of Franke Romania 4. Markus Wirth, country manager of Holcim Romania and president of CCE-R 5. The panel included representatives of the Swiss business community in Bucharest 6. Kurt Weber, managing director at Horvath & Partners Management Consulting 7. The event gathered around 70 company representatives 8. Gian Carlo Scalisi, managing director of titirez.ro 9. Serge Gonvers, senior partner at Audiconsult 10. Attendees argued that there are signs that the economy is picking up 11. Marc Bruchez, deputy head of mission with the Embassy of Switzerland in Romania 12. Bojan Jagodic, general manager and country president of Novartis Romania

www.business-review.ro Business Review | February 28 - March 6, 2011

18 INTERVIEW

Six years on: Holcim CEO cements hopes for Romania At the end of March, Markus Wirth will bring his six-year mandate as CEO of the local branch of Holcim to an end, leaving new CEO Daniel Bach in the role. He will however continue as a member of the Foreign Investors Council’s management team, as well as an expert in infrastructure issues within the organization. In the future, he plans to offer consulting to potential investors who wish to build their business in Romania. He met with BR to discuss his achievements on the local market and to offer his feedback on the perspectives of development for the Romanian economy.

CV Markus Wirth 1976-1986: project manager in the Middle East and South East Asia at Holcim Group, then as technical director for Cementos Apasco in Mexico 1986-2000: various management positions at Von Roll Group 2000-2002: manager of a strategic project for the optimization of cement production in Western Europe at Holcim 2002-2004: head of Holcim operations in Serbia 2004-2011: CEO, Holcim Romania

∫ CORINA DUMITRESCU How have you seen the local cement industry change during your stay here?

Ever since my arrival in Romania, the construction market in general and the cement industry in particular have been through a peculiar development. First, it was the 2004-2008 period, in which Romanian construction registered double digit growth, a rate which could not be called sustainable. Then, from 2009, the entire economy felt the effects of the recession and also of the previous unhealthy growth.

From your experience on the local market, what are the major pros and cons of investing here? What would you recommend to make Romania more attractive for investment?

Photo: Laurentiu Obae

Romania is still attractive to foreign investors. This is a big domestic market and the country’s location as a production site for goods to be exported to EU markets is a plus. There are good human resources, which can create an advantage for Romania in competition with other countries in the region. However the transport connections to EU markets are not yet sufficiently developed.

Unfortunately there is still a high level of bureaucracy and delay in taking action from the state authorities, as well as too many unforeseen legislative changes and political instability.

The government should invest more

www.business-review.ro Business Review | February 28 - March 6, 2011

in the infrastructure of the country – this increases the GDP and creates jobs.

Also, I recommend the implementation of the 12 main measures proposed to the government by the FIC in 2010, as an initiative to bring back sustainable growth to Romania.

What sectors of the Romanian economy do you see as the most profitable in the years to come?

The automotive industry has developed products that have been well received on foreign markets. Furthermore there are Romanian companies specialized in developing IT solutions and they might also be successful on export markets.

One of the things I have noticed when inviting people from abroad to visit is that Romania doesn’t have a proper image and marketing. Tourism could become a profitable business provided Romania has a solid country branding and marketing.

“Romania is still attractive to foreign investors.

This is a big domestic market and the country’s location as a production site for goods to be exported to EU markets is a plus.”

When do you think that the local construction and real estate market will begin to recover?

We hope that, starting 2012, both construction and real estate will return to growth, provided certain economic recovery measures are taken – planning for the development of the energy, agricultural and infrastructure sector; defining projects and executing them with multiannual programs; simplifying the access procedure for EU funds and changing the public tender legislation.

They are absolutely necessary and could bring Romania to the same recovery level as other Western European markets.

In terms of green projects, how do you see the situation of Romanian companies?

Have they adapted to the global trend?

How about Holcim, how much has it invested so far in sustainability and what future plans along these lines can you reveal?

Sustainability and green projects are rather new concepts for the Romanian business environment. Fortunately, some local companies have embraced green business principles, but there is still room for improvement.

The entire business strategy of Holcim is built upon the principle of sustainability, materialized in all the company’s actions and aiming at economic performance, environmental protection and social responsibility.

The most recent example is a EUR 14 million investment in an energy efficient project that will begin this year at our cement plant in Alesd.

The project is a unique one in Eastern Europe and will meet roughly 15 percent

INTERVIEW 19 of the electrical energy needs of the plant, using the heat generated during the cement production process.

How would you describe the typical Romanian employee in terms of involvement, level of professional training and management skills?

Romanian employees are very enthusiastic people and their hard work has changed Romania in a positive way in the past six years. In our company they have delivered complete and correct working results.

I was surprised to see that Romanian employees have adapted very fast to this period of crisis, especially the young ones who had never faced a crisis before.

What does a Swiss investor look for when coming to Romania?

All foreign investors are looking for a stable political and economic environment.

The authorities should be more transparent and willing to cooperate with the business community, considering the benefits that could be offered in terms of management and technical expertise for different sectors of the economy.

The investors also need people who are willing to learn and work with dedication. Transport infrastructure is urgently needed in order to attract investors in production facilities as well as tourism projects.

What did you know about Romania when you first came here? With what impression will you leave?

I have learned that Romania’s frequently negative reputation abroad is only a small part of the truth. I have personally experienced that the bigger part of the truth is good people who want to achieve success and move the country forward. I perceive Romania as a beautiful and safe country, with tremendous market opportunities which should be taken advantage of.

What do you consider to be Romania’s biggest assets in terms of tourism? What would you recommend to a foreigner visiting the country, either on business or vacation?

The Danube Delta is a unique paradise. I recommend foreigners spend a few days in a privately managed hotel, pension or home and go on excursions on the water as well as on land.

I have found my favorite places to travel and to go to in the mountain areas, by going north and west from Bucharest.

Wide, untouched nature and the warm hospitality of people living there have given me many great memories.

Visit the monasteries in Bucovina and the Church fortresses in Transylvania.

corina.dumitrescu@business-review.ro

EUR 14 million Holcim investment in an energy-efficient project that will begin this year at Alesd

20 CITY

www.business-review.ro Business Review | February 28 - March 6, 2011

RESTAURANT REVIEW

Photo: Laurentiu Obae

Uniter attracts them. They are not my kind of folk, and I humbly suggest that if you are elegant or a fashionista, you would be uncomfortable being in the company of these ageing hippies.

So where the hell was my waiter? Eventually I found him doing nothing and ordered a simple starter of ‘bruschetta with butter anchovy and capers’. I expected a pureed relish of anchovy, butter, olive oil and capers. But no. It was one piece of supermarket sliced bread, toasted with two anchovies shaved into thin slices, being kept company by five lonely capers.

So being hungry I wanted to order more.

In a restaurant which only had two other tables of ageing degenerates, my waiter was hardly overworked. But I had to search for him again. In fact, I had to leave my table to attract his attention an astonishing FIVE TIMES. So we ordered from their selection of ‘French Pancakes’ a pancake with spinach and bacon, and a further one with chicken and Camembert cheese, but which I anticipated would be filled with Romanian yellow cheese. Both were offered with a topping of sour cream. Yuk! I told the waiter to kill the sour cream and yellow cheese. Naturally, I was ignored on the yellow cheese bit, so I could not eat this dubious Gallic delight. And the kitchen screwed up the pancake. We all know how to make a pancake, but the Uniter version was something else. It resembled a pancake because it was flat and round, but it was dark yellow and swimming in grease. Another failure.

Still hungry and unable to eat anything here, I chose a simple prawn spaghetti.

But I told the waiter I wanted lashings of Making a drama out of a crisis: lazy service and below par food let Uniter Theater Club down white wine and tons of garlic in my pasta. Simple instructions, but again they got it all wrong. There was no wine in it whatsoever and the six prawns I counted were destroyed by the kitchen burning the garlic which would render any dish inedible.

Could the House get any dish right? Well, to be fair to them my steak in green pepper sauce was both generous in size and from the menu. set or two in the middle of the dining area, Uniter Theater Club, Str perfectly tender. But it lacked flavor, as or simply a chap pounding away on the “I am sorry, sir, we don’t have any left.”

George Enescu, opposite did the sauce. In the same spirit, Blondie’s So rather than pursue a predictable comivories of a rather fine piano. Forget the the original Terminus Bar ‘club’ bit – at the end of the day, it is a edy of rejections, I asked him what oth- pork fillet with mushroom sauce revealed a perfectly cooked pork, but the er beers listed on the menu were likewise restaurant and its location is so good it sauce was bland and flavorless. out of stock. must be the envy of the town.

MICHAEL BARCLAY We were tempted to order more, but There are two good things I can say “We also have no Budweiser or Corona,“ he when I read their version of ‘beef said, both of which were my next choicabout the House, namely: the prices are Stroganov’ as being beef steak, mushes! very fair and the place itself is delightfully I am suffering an ‘X rated’ theatrical exrooms and ham, I froze in horror. It So away I went to a glass of their House decorated. It is pure, pristine and polished perience. No, I am not witnessing some should be beef sliced julienne, fried in red wine. Oh no, it was ghastly. Vile be1950s in a pleasant way. It is somewhat theatrical porn, nor am I watching an butter and mixed peppercorns, with yond description. I spat it out. I asked the reminiscent of an old three-star cruise-lin‘adult horror movie’. It is much, much mushrooms and hot mustard, reduced in waiter to show me the bottle and he er. But those are the only good things I worse than that. I am looking at a menu white wine , thickened with fresh cream confirmed that which I had already decan say, because they deserve a good which I doubted the kitchen could produced: it was so-called ‘country wine’. and flambéed with Cognac. To put it trashing, and here it comes! duce, and experiencing indifferent waitsimply, the House got it all wrong and the This is the undrinkable home made It was Blondie’s anniversary of her parters who bring you food only when they menu is far too ambitious for the kitchen. hooch you buy in a plastic two-liter cola ing with her ex, so I celebrated by orderare ready; both of which can best be deI wondered how a place like this, which bottle. How dare they sell this garbage in ing from the wine list the world’s finest scribed as below standard. offers so little, could possibly survive the a restaurant! champagne, Dom Perignon, which was My introduction to this place was through frenetic financial cut and thrust of the By now I wanted to order food, but the very reasonably priced. And the waiter’s some Spanish friends of mine who incompetitive restaurant market here in waiter had disappeared. I left my table to answer? Yes, you have guessed it: “We formed me that last week they graced the town. Well, the cataracts of curiosity fell search for him. There was no excuse for don’t have any, sir.” club, only to be served by a sour-faced from my eyes when I was told that this his disappearance, as the only other dinSo Blondie ordered from the menu, a simmiddle-aged waitress, who threw the aberration was owned and financed by ple Grenadine and fresh orange cocktail. ers were two large ladies wearing multimenu at them and disappeared, the manthe Ministry of ‘Culture’. This may or may ple woolen cardigans over each other and ager grumbled something incoherent at “I am sorry but we don’t have any Grenanot be true. But if it is so, it will be lansporting glasses supported by a rope dine or fresh orange in stock.” them and disappeared and the waiters did guishing in its prime location for ever, and around their necks. And there were four So she asked if she could have a Coke. not appear at all! So, let’s compare my exbeing accountable for commercial prof“I am sorry, we have no Coke, only Pepsi.” other uninteresting male diners, all of perience there. whom were uniformly attired in anoraks, itability to nobody. How sad.

I was getting thirsty listening to this negBut first, let me explain exactly what this or some grubby top with a hood. Yes, my ative exchange, so I felt a beer break place is all about. It is a restaurant with a dear friends, these are ‘arty’ people and coming on and ordered a Pilsner Urquel cabaret. This may be actors performing a mab.media@dnt.ro

Theater of Horrors

www.business-review.ro Business Review | February 28 - March 6, 2011

CITY 21

WORLD MUSIC

POP/SYMPHONY

Eclectic artist Manu Every little thing he does is magic: Sting Chao brings La Ventura to Bucharest returns to Romania

courtesy of Emagic

An Englishman in Bucharest: Sting and his orchestra will take to the stage Chao down: the quirky artist Manu Chao is bringing his multilingual act to town After his energetic concert at B’estfest in 2008, chameleonic artist Manu Chao is returning to Romania on April 16, to Sala Palatului, as part of his La Ventura tour.

Chao is known for his multilingual lyrics, as he sings in French, Spanish, Galician, Portuguese, Arabic, English and Wolof, often mixing several languages in the same song. His music has many influences,

from punk, rock, French chanson, Iberoamerican salsa, reggae and ska, to Algerian rai music.

Tickets are available for purchase on www.myticket.ro and from Diverta stores across the country. All tickets cost RON 108, excluding booking fee. The concert is being organized by Emagic. ∫ Corina Dumitrescu

FILM FESTIVAL

International human rights come under spotlight at documentary film festival

After sold-out concerts in North America, Europe and Australia, Sting’s Symphonicity tour will also go through Romania, as well as other locations in Eastern Europe, plus France, Germany and Italy.

The British artist, whose real name is Gordon Sumner, will perform in Piata Constitutiei in Bucharest on June 6, in a show described as “extraordinary” by the German publication Bild Hamburg and “pure magic” by the Polish Rzeczpospolita.

“Sting and his orchestra are magical rock,” said La Stampa publication about the concert. The Symphonicity tour includes some of Sting’s best known hits, which he performs in symphonically reorchestrated versions.

The song selection includes The Po-

lice’s Every Little Thing She Does Is Magic, Roxanne, Next To You and Every Breath You Take, as well as some of Sting’s solo hits, like Englishman in New York, Fragile, Russians, If I Ever Lose My Faith in You, Fields of Gold and Desert Rose.

The artist will be accompanied on stage by a series of top artists, such as Dominic Miller (guitar), Rhani Krija (percussion), Jo Lawry (voice) and Ira Coleman (bass).

Sting has sold over 100 million records worldwide. His Bucharest concert is being organized by Emagic. Tickets are available for purchase at www.myticket.ro and from Diverta stores across the country. Ticket prices are RON 395, 295, 195 and 135. ∫ Corina Dumitrescu

LATIN MUSIC

Hips Don’t Lie: Shakira includes Bucharest in world tour

dreamstime

Many of the documentaries are being premiered at the festival

One World Romania Film Festival is bringing 37 new documentaries from over 20 countries to Bucharest for its fourth run, with a focus on the subject of human rights. Screenings will take place from March 16 to 21 in four cinemas in downtown Bucharest: Eforie, Union and Corso.

As in previous years, a special screening will be held at Noul Cinematograf al

Regizorului Roman each evening from 17 to 21 March.

Out of the documentaries in this year’s selection, 34 will be screened for the first time in Romania. Moreover, one of the local productions, The Corlat Valley, directed by Stephane Lucon, will have its premiere as part of the festival. ∫ Corina Dumitrescu

Shakira is making her Bucharest debut Colombian singer Shakira, whose hits Loca/Waka, Waka, Hips Don’t Lie, She Wolf, Underneath Your Clothes, La Tortura and Whenever, Wherever have re-

ceived copious airplay on Romanian radio stations, is to play Bucharest. She will hold a concert in Piata Constitutiei in the Romanian capital on May 7, as part of her world tour The Sun Comes Out. Shakira has performed in Romania before, but in Timisoara, back in 2006, when she played in front of 20,000 spectators.

The artist has so far released seven albums, which have sold over 60 million copies, and has won 142 awards throughout her career, including two Grammies, seven Latin Grammies and three Billboard Music awards.

Tickets are available for purchase online, at www.myticket.ro, or offline, from Diverta stores.

There are four price categories, from RON 120 for lawn B (peluza B) to RON 380 for Golden VIP. The concert is being organized by Emagic. ∫ Corina Dumitrescu

www.business-review.ro Business Review | February 14 - 20, 2011

22 IN TOUCH

DEBATE of the week

FROM OUR READERS Talking point: When in Romania, relax like the Romanians (Balance, BR 5)

Labor Code debate goes on The punishment for hiring staff off the books might be jail, said Prime Minister Irina: Emil Boc, speaking about “Historically speaking, the recent changes to the Labor Romanian society has not been educated for a culture Code, which he said should of free time (and here make the labor market I am referring to the conmore flexible and help peo- straints existing in communist Romania). After 1989, I think that more ple find a job faster. Accord- options became available for everyone, ing to the PM, Romania from this point of view and we all went wherever we had the possibility, someranks bottom in the EU for how to compensate for the previous fixed-term work contracts, lack of time. Beyond this momentum, if Romanians are a more static people, this as bosses are reluctant to may be because perhaps we are hire for just 24 months be- “rooted’ to our lands than others.” more cause some EU funded programs can last four years.

The changes include provisions for collective work contracts and expanding fixed-term contracts from Romanian art extolled in 24 to 36 months. Trade the Global Post unions are not happy. The International news agency Global Post offers an encouraging leader of Cartel Alfa union, review of recent Romanian Bogdan Hossu, called the art in an article published on code “a new form of slavery” February 16. Special attention is paid to “a darling of the internaas bosses can replace the tional art”, surrealist painter Adrian workforce overnight.

Ghenie, Cannes award-winning Ro-

Talking point: Wired Magazine dubs Ramnicu Valcea “Hackerville” (BR 4) ZLN: “I've been to Ramnicu Valcea and I had no idea that it was hackerville... During my visit, I noticed that the town was richer than most other Romanian towns (Otopeni is an exception).”

Talking point: Sting’s concert in Romania, announced on BR website (City section) Antoanela: “I saw the concert in Florence. It is a true spectacle. It’s worth seeing and I will certainly see him in Romania.”

ROMANIA IN THE INTERNATIONAL PRESS

Read more about the proposed changes in next week’s issue of BR.

manian directors, local artists flying high in the international charts such as Inna and Edward Maya, as well as local designers gaining global fame. Ghenie is not the only

Romanian artist “hitting the global marquee. Since the mid-1990s, compatriots including Victor Man, Ioana Nemes and Ciprian Muresan have burst onto the art scene.”

The local blooming film industry also wins praise: “The appeal of Romanian cinema goes beyond its minimalist style, whose influence can be seen in films like Sofia Coppola’s Somewhere.

The themes of Romanian films tend to be universal in their appeal.”

WHAT WE ARE WORKING ON Dana Verdes Senior Journalist is writing an analysis on electric cars. She will look at models available on the market, the advantages and disadvantages of this type of vehicles, and will ask market specialists how this automotive segment will move forward. dana.verdes@business-review.ro

Corina Dumitrescu Journalist is preparing a review on the controversial subject of education in post-communist Romania. She is researching how teachers, company managers and HR specialists see the educational background of their students, young employees and interns and asking what measures should be taken to improve the current situation. corina.dumitrescu@business-review.ro

Otilia Haraga Senior Journalist is working on an article about companies’ cloud computing strategies.

As their clients are shifting to cloud computing, IT companies will adapt to this new trend by allocating more time, resources and people into offering these services. otilia.haraga@business-review.ro

EVENTS, BUSINESS & POLITICAL AGENDA March 1 10:30 A press conference held by Fred Cook, president & CEO of GolinHarris Worldwide, will take place at the headquarters of Lowe PR. By invitation only.

11:00 The Employers’ Association of the Software and Services Industry (ANIS) organizes a press conference with its new president, Stefan Cojanu, at Hotel Bucharest City. By invitation only.

12:30 The official launch of a campaign against child obesity, “Si eu vreau sa traiesc sanastos!” takes place at Crowne Plaza Hotel. By invitation only.

March 2 An event to celebrate Rothbard Day in Romania will take place at the Romanian-American University. By invitation only.

March 3 11:00 Microsoft Romania organizes the Cloud Journey event at Crowne Plaza hotel. By invitation only.

12:00 Medicover organizes an event for the launch of a new medical service.

By invitation only.

March 17 ∫EVENT Business Review organizes the third

edition of the Greek Business Forum event at Capital Plaza Hotel. For more information about registration and future Business Review events, please visit www.business-review.ro/events.

STAY CONNECTED WITH US Join BR Group on LinkedIn

March 22 ∫EVENT Business Review organizes the sixth edition of the Annual Investment Awards at Athenee Palace Hilton Hotel.

For more information about registration and future Business Review events, please visit www.business-review.ro/events.

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ISSN No. 1453 - 729X

FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALISTS Otilia Haraga, Dana Verdes JOURNALISTS Simona Bazavan, Corina Dumitrescu COPY EDITOR Debbie Stowe COLLABORATORS Anca Ionescu, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

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