Business Review No. 9, March 21- 27

Talent: Iulius Bedea, president of the Association for the Integration of Sustainable Development, has changed an NGO into a real business, offering consultancy services and running social projects for the local community in Hunedoara County »page 9

ROMANIA’S PREMIERE BUSINESS WEEKLY

Server Scalability Cost cuts Applications Network Security Maintenance

WOMEN IN BUSINESS

MARCH 21 - 27, 2011 / VOLUME 16, NUMBER 9

ART, FINANCE AND IT ARE AMONG THE MANY INDUSTRIES WHERE WOMEN HOLD BIG ROLES. BR TALKS TO TOP BUSINESSWOMEN TO FIND OUT THE TRUTH ABOUT THE GLASS CEILING »PAGES 10 -13

BLUE SKY THINKING Private Performance Availability Infrastructure

Resources Platform Software Public

Control Architecture Accessibility Data

IT pundits are tipping cloud computing as the next big thing, and the major software giants are singing its praises. BR finds out what advantages this new technology offers, and how its proponents are answering their customers’ safety concerns »page 8-11 NEWS

FOCUS

MONEY

PLUS Greek cheek: a menu is ANCOM advances Retail details Exchange rates found wanting More broadband spec- Improving current re- The RON is at its trums will be made tail outlets rather than strongest level against » page 21 available as Romaniracing to adopt new the euro for months.

Hilton signs franchise ans continue to emformats is the way Where now for the agreement for Doublebrace the net, say the ahead for this sector, local currency? BR Tree hotel in Ploiesti authorities say industry insiders asks the experts » page 4 » page 6 » page 16 » page 18

www.business-review.ro Business Review | March 21 - 27, 2011

NEWS 3

NEWS in brief STOCK EXCHANGE

WEEK in numbers

Six brokers race to intermediate state’s 9.84 percent stake in Petrom Six brokers are interested in intermediating the secondary public offering to sell a 9.84 percent stake in OMV Petrom.

The 9.84 percent of the petrol firm on offer, which has an estimated value of EUR 500 million, will be the largest transaction in the history of the Bucharest Stock Exchange. The Economy Ministry plans to launch the offer by mid-year.

The finalists are: the union formed of Banca Comerciala Romana, J.P. Morgan, Erste Group Bank, SSIF Intercapital Invest SA; the union formed of Renaissance Capital Limited, EFG Eurobank Securities, BT Securities, SC Romcapital SA; the consortium made up of Morgan Stanley & Co International plc, Raiffeisen Capital & Investment SA, Raiffeisen Centrobank AG; the consortium made up of Nomura International Ltd, Alpha Bank Romania, Alpha Finance Romania; the consortium made up of Unicredit Caib Securities Romania SA, Goldman Sachs International, Unicredit Bank AG; the consortium made up of UBS Limited, ING Bank NV, ING Bank NV Amsterdam, Bucharest branch.

4

million – the number of Dacia cars manufactured in the Mioveni plant since its establishment

15 million euro – Romania’s account deficit in January

80 Photo: Laurentiu Obae

LEGAL TPA Horwath targets 14 percent turnover rise this year Financial consulting firm TPA Horwath Romania expects to register a 14 percent hike in turnover this year, to EUR 3.3 million, due to the development of its main areas of practice, the firm has announced.

TPA Horwath reported a turnover of EUR 2.9 million last year, 13 percent more than the previous year. According to company information, some EUR 1.5 million from last year’s total turnover came from its accounting services.

The firm also expects a 10 percent increase in staff, from its current total of 71 full-time consultants.

The TPA Horwath portfolio currently contains over 300 clients, both local and international companies, working mainly in the fields of construction, energy, real estate, industry, manufacturing and distribution.

The firm has been present on the Romanian market since 1998.

Downward pressure on asset values drives restructuring and distressed debt market A combination of pressure on asset values, debtors seeking support from lenders and investors taking action over debtor defaults are the key drivers of the restructuring and distressed debt activity market, according to a seminar entitled “Current trends in the international financial markets”, organized by Gide Loyrette Nouel.

The pre-crisis complexity of the financial environment and over-leverage have been among the most important factors in recent restructuring activity, said the two speakers at the seminar: Claire

IMAGE of the week Long time coming Messages such as “Your city is about to change” and “We’re finally here” sprung up in Bucharest last week as part of the outdoor campaign announcing the opening of the first H&M store on the Romanian market. Local fashionistas will be able to shop in the first outlet, set to open in AFI Palace on March 25. This will be followed the next day by another opening in Unirea Shopping Center.

Pointing, from the London office of GLN, and David Malamed of the Paris bureau.

As high levels of liquidity have left many borrowers struggling to maintain their current debt levels, even companies that emerged from the recession in a good financial state are facing difficult conditions as maturing debt fails to be refinanced in debt markets with tight liquidity and debt levels under pressure.

Gide Loyrette Nouel established a Bucharest office in 1998, and has a team of 18 lawyers locally. In CEE, the firm has offices in Warsaw, Moscow, Budapest, Istanbul, Kiev and St. Petersburg.

DLA Piper enters Romanian tax market DLA Piper has announced the launch of a dedicated tax practice, DLA Piper Tax, and the appointment of two tax consultants. Tudor Nedelea joins DLA Piper as a tax director and will be coordinating the activity of the recently established practice.

The second new member of the team is Laura Constantin, indirect tax consultant.

She has over six years’ experience in both Romanian and international taxation and specializes in VAT.

PeliFilip announces 92 percent litigation success rate Law firm PeliFilip has announced that its litigation & dispute resolution department had a general success rate of 92.5 percent in litigation in 2010. The corporate area had a success rate of 95.2 percent, real estate 94.4 percent, and the labor law litigation area scored an 83.3 percent rate. The firm’s litigation & dispute resolution practice is made up of seven lawyers, coordinated by Catalin Alexandru.

AUDIT KPMG opens China Advisory Practice in Romania KPMG has opened a local subsidiary of its

million euro – the amount under consideration by the Black Sea Trade and Development Bank for several financing partnerships

China Advisory Practice, which offers professional audit, tax and advisory services adapted to the needs of Chinese companies, the firm has announced. The practice will support both Chinese companies active in Romania, and local firms with an interest in doing business in the Chinese market.

“Given China’s dynamic economic growth, and the entrepreneurial spirit of its business leaders, it is hardly surprising that Chinese business is looking to develop in Romania, and that Romanian companies are keen to be part of the Chinese economic miracle,”said Serban Toader, senior partner at KPMG in Romania.

Toader predicted “huge opportunities in the future for an increase in Chinese investment in Romania and Romanian investment in China.”

KPMG operates in Romania from offices in Bucharest, Cluj-Napoca, Constanta, Iasi and Timisoara. Another office is based in Chisinau. The firm currently employs more than 600 partners and staff, both Romanians and Moldovans, and expatriates.

RETAIL Two new restaurants and Springfield store open in AFI Palace Cotroceni AFI Palace Cotroceni has announced the opening of two new restaurants, Al Wady and Thang Long, and a Springfield store.

Lebanese eatery Al Wady has an area of 170 sqm and also includes a café and lounge area. Thang Long is a Vietnamese

www.business-review.ro Business Review | March 21 - 27, 2011

4 NEWS

NEWS in brief restaurant with an area of 64 sqm, while the third new addition, clothing retailer Springfield, has a 165-sqm store.

Sprider Stores puts EUR 1 mln into second Oradea shop Greek clothing retailer Sprider Stores has opened its 17th local outlet and its second in the city of Oradea, western Romania, following an investment of approximately EUR 1 million, according to the company.

Located in the Era Shopping Park, the store has a surface of 850 sqm and introduces a new interior design concept.

“In our initial expansion plans, Oradea was one of the first cities, other than Bucharest, that we targeted as it has over 600,000 potential customers from

the city and the Bihor region,” said Constaninos Pipinelis, general director of Sprider Stores Romania.

Oradea becomes the second city after Bucharest where Sprider Stores operates more than one unit.

planning to reach break even at the end of the year,” he said.

HOSPITALITY

Stirixis begins operations in Romania

Hilton Worldwide signs franchise agreement for DoubleTree hotel in Ploiesti

Greek company Stirixis has started operations in Romania. The company offers consultancy and design services with a focus on retail and HoReCa. Alexander Athanassoulas, CEO of Stirixis, told Business Review that the company has an investment budget of approximately EUR 200,000 for this year.

“In 2011 our biggest challenge will be to create a team that can operate using the know-how we have in Greece. We are

Hilton Worldwide has signed a franchise agreement with Valdor SRL to open a DoubleTree by Hilton hotel in Ploiesti, the hotel chain has announced.

The project involves the refurbishment and upgrading of the Prahova Hotel, which will have 242 rooms, two restaurants, a terrace bar and a Precor fitness center.

DoubleTree by Hilton plans to open three hotels in Romania over the course

of the next year in Oradea, Bucharest and Ploiesti.

The Ploiesti outlet is the seventh Hilton Worldwide hotel in its brand portfolio that is operational or being developed in the country.

PROPERTY Colliers International & DTZ Echinox appointed leasing agents for Real4You projects in Romania Colliers International & DTZ Echinox have been appointed co-exclusive leasing agents for the commercial projects of Real4You in Romania, in Bucharest, Targu Mures, Satu Mare and Focsani.

Real4You Group will develop several shopping centers in Bucharest and throughout Romania, branded as Mega Mall. A 70,000-sqm facility will be developed on the site of the former Electroaparataj plant, in Pantelimon neighborhood.

The countryside shopping centers will be between 18,000 sqm and 22,000 sqm each and will be anchored by a hypermarket or a supermarket.

Jones Lang LaSalle to provide property management services to Swan Office & Technology Park Jones Lang LaSalle has secured the property management mandate of the Swan Office & Technology Park located in the Pipera North business district, the firm has announced.

Swan Office & Technology Park is an institutional standard business park which provides office accommodation.

The business park offers approximately 28,000 sqm in three buildings and up to 520 parking places.

POLITICS Government survives eighth no-confidence motion The Romanian government has survived its eighth no-confidence motion after the opposition failed to raise the necessary number of votes to defeat it.

The motion was submitted by the opposition over the country’s new Labor Code, on which the government sought lawmakers’ votes through a confidence motion last week.

Following this procedure, under the Constitution, the new Labor Code bill is passed and needs only to be approved by President Traian Basescu in order to become law.

The motion required 236 votes to pass, but fell 24 votes short of its target, as only 216 lawmakers voted, 212 for and four against, with one annulled. As on previous occasions, MPs from the ruling coalition abstained.

Only five MPs, four from the Liberal Democratic Party (PDL) and one from the Democratic Alliance of Hungarians in Romania (UDMR) voted, all against the motion.

www.business-review.ro Business Review | March 21 - 27, 2011

6 NEWS

BR EVENT Financial markets in are in turmoil, global warming is hitting, food prices are at an all time high, oil running out, there is an increasing number of natural disasters, the world population keeps on growing. What is a good investment in such uncertain times?

The amount of agricultural land on the earth is no longer increasing. For many years food production could be raised by simply reclaiming more nature and turning it into agricultural land.

Now the percentage of nature is decreasing to a dangerously low level to be able to fulfill its buffer function and because the best lands were taken first the remaining land that could still be developed is on average of a low quality. Using land for urban developments and infrastructure is reducing the amount of productive land in many countries continuously as well. What happens in the economy with a good of which there is with a fixed (or decreasing) amount and an increasing demand?

Not only is the world population still growing, but it will keep on doing that in the coming decades as well. Predictions are that we will have to feed a word population of close to 10 billion people in 30-40 years time. Another factor that will increase the demand for food is the changing consumption patterns in emerging economies. China is of course the first example that comes to mind but also Brazil, Indonesia, India and others add to the picture.

Food consumption habits are changing greatly and the population in the emerging economy countries is imitating the Western pattern of high meat consumption and over-eating. The most important change is increased meat consumption which triggers a very high demand for animal feeds imported from the world markets. Today we are back at the highest price level ever for food and the UN is warning of the effects of the predicted further price hike.

The situation in Romania Romania has still cheap land from medium to top quality but the situation is very different in Transylvania and the rest of the country.

In Transylvania soil quality is mostly excellent and it has sufficient precipitation for most crops. On sloping land it is in most cases still good for animal husbandry.

Consolidation of larger plots takes time because of the fragmented ownership and often-unclear legal status but consolidating is a good investment for investors with a good strategy and some patience.

In other parts of the country large plots which are fit for efficient farming are available but irrigation is needed for most crops. Soil quality is in most

cases medium to good. Infrastructure is quite good.

Land of high quality is available for very low prices even though land prices have been going up steadily for the last 15 years. Several investor groups from Germany, Italy and Switzerland have been making use of this strategy successfully in Romania in the last 10 years.

At the same time, vast areas of fertile land are spoiled in many ways.

Probably the three most important ones are: Pollution. The use of fertilizers and much more serious pesticides causes the accumulation of harmful substances in the soil.

Erosion. Mainly water and wind erosion is causing enormous loss of valuable fertile topsoils. Current agricultural practices are still allowing these things to happen.

Irrigation. Unlimited irrigation is not only depleting water resources but can easily lead to salination which makes crop production impossible.

If land is not managed well the increase in value is easily lost again. Investors will have to think about the management as well because just renting out is risky. The best solution will be to establish a farming practice that secures the land values.

Organic farming is becoming mainstream and has been growing with more then 10-30% per year for 30 years now. Which industry can say that?

Establishing organic farms on the land will open up access to niche markets with higher prices and will avoid many of the risks mentioned before.

When the land is used for organic farming then: A niche market with higher prices can be reached.

The quality of the soil improves by raising the humus contents and avoiding erosion.

There is no risk with environmental hazards or clean ups.

Organic farms can create breathtaking natural beauty and add to a secure long term healthy food supply of the world. Not the highest production or biggest amount but sustainable high quality production are the visionary words.

Wil J. van Eijsden Owner and Director at Agri+CULTURA Transilvania srl buffalo.wil@gmail.com Wil J. van Eisden will be speaking at the International Investment Forum Howard Johnson Grand Plaza Hotel March 31, 2011 For more information on the event please go to www.business-review.ro/events

ANCOM to introduce new mobile broadband bandwidth this year

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h e state will complete its plan to introduce broadband mobile communication services in the 25002690 MHz and 790-862 MHz bandwidths by the end of the year, according to Catalin Marinescu, president of ANCOM (the National Authority for Administration and Regulation in Communications).

At the beginning of 2012 a public auction will be open to operators.

“In fact, the outlook is good that in the first semester we will have granted the licenses and stimulated investments in mobile broadband. For the licenses, we will adopt Germany’s model, stimulating coverage in the selected areas,” added Marinescu.

Romanians will use a predicted 7.5 million laptops and PCs and over 26.7 million mobile phones each day by 2015, according to Nokia Siemens Networks.

The firm estimates that traffic greater than 13,221,544 Terabytes per year will be generated. Higher broadband speeds will come from Long Term Evolution technology.

“Due to the progress made by devices, networks and new services, there has been a boom in the use of mobile broadband, which transformed the habits and expectations of users. They are starting to use more sophisticated applications and services than the just e-mail and in-

Courtesy of Nokia Siemens Networks

Is there any secure investment left in unsecure times?

TELECOM

Dragos Chivu, Nokia Siemens Networks ternet surfing. LTE offers higher network efficiency, optimum use of the spectrum and impressive speeds,” said Dragos Chivu, country director of Nokia Siemens Networks in Romania at a press conference during which the company showcased its LTE technology.

He added that Nokia Siemens Networks intends to bring broadband services to rural areas too.

“The Romanian authorities declared that the switch to digital television will be made by 2015. In this context, operators will soon be able to expand their broadband services coverage by exploiting the digital dividends that will become available as a result,” said Chivu. ∫ Otilia Haraga

LEGAL

Litigation, competition law boosts Reff & Associates deals to EUR 1bn

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eff & Associates, the affiliated law firm of Deloitte Romania, assisted clients in benchmark local transactions with a total value of over EUR 1 billion in 2010, it has announced. “In a shrinking market we managed to keep a stable business, we continued to consolidate our team, and revenues were maintained at the same level as in previous years,” said partner Alexandru Reff.

In 2010, the firm assisted the investment fund New Europe Property Investments in the acquisition of Iris Shopping Center in Pitesti and office complex Floreasca Business Park. These were two of the top deals last year in this sector, with a combined value of over EUR 140 million.

In the area of M&A, lawyers from Reff & Associates acted as legal counsel to a group of five banks (BCR, BRD, UniCredit Tiriac Bank, Raiffeisen Bank and Financiara) as shareholders of Romcard, in the 100 percent sale of their stake to Provus Service Provider. At the same time, the team was involved in various sales and acquisitions of businesses in several industries, such as IT, agriculture, insurance, services and production. In the banking & capital markets sector, Reff & Associates is currently involved in a series of loan restructuring mandates, with values ranging between EUR 45 million and approximately EUR 200 million.

Some of the main transactions completed last year involve new financing deals worth over EUR 100 million, granted mainly for the development of real es-

tate projects. One such example is the financing deal between Bank of Cyprus and the developer of the commercial center Colosseum in Bucharest. The transaction, announced in 2010, was completed in February 2011. The banking team also assisted Westdeutsche Immobilienbank AG with a large loan facility granted for the development of a class A office building in Bucharest. “In 2010, the corporate lending market was still dominated by loan restructuring mandates, but both banks and borrowers put to good use the experience of the last few years. At the same time, the market saw the first signs of recovery and banks showed increasing interest in financing new projects,” said Andrei-Burz Pînzaru, partner at Reff & Associates and coordinator of the firm’s banking & capital markets practice.

As in 2009, restructuring and reorganization work was an important area of legal activity at multiple levels (corporate, corporate governance, employment relationships, contractual relationships) and in different domains. “Last year we managed to consolidate the competition law team and expand the practice areas by adding new domains, including state aid and anti-competitive practices.

We have continued to work on mandates involving economic concentrations alongside our colleagues from the M&A team, offering complete services during the transaction process,” said managing associate Florentina Munteanu. ∫ Dana Verdes

www.business-review.ro Business Review | March 21 - 27, 2011

LEGAL

bpv Grigorescu and Stefanica & Florea merge to create bpv Grigorescu Stefanica

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INSURANCE

Aviva Romania sees subscribed gross premiums slide 12 percent in 2010

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he local subsidiary of Aviva insurance group has reported a 12 percent decrease in subscribed gross premiums, attributed to the decline in the bancassurance segment and the effects of the financial crisis on the public’s ability to plan ahead financially.

However, paybacks also fell in the second half of the year, added Mihai Popescu, general manager of Aviva Group Romania.

Damages of over EUR 2 million were paid out in 2010, a 56 percent increase on the previous year, due to the fulfillment of workplace loss coverage obligations, in the context of growing unemployment.

The number of private pension holders (the second pillar) increased by seven percent to nearly 400,000 and administration funds rose by 80 percent, reaching RON 284.4 million.

“Throughout last year, the number of empty bank accounts continued to fall, but irregular payment continued due to the unfavorable economical context,” said Popescu. ∫ Corina Dumitrescu

AIRLINES

Tarom’s GM resigns, takes up deputy position

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uxandra Brutaru, general director of Tarom, the Romanian stateowned airline, has resigned from her position but announced that she will remain with the company as deputy general director. Brutaru has served as general manager since December, 2008.

The GM said her decision was motivated both by personal reasons and the salary she was paid.

“My resignation is also salary related but this isn’t the main reason. I am a mother, I have a child who is starting school and doesn’t get to see me,” said Brutaru, according to Mediafax newswire.

As part of the government’s austerity measures, the salaries of all general managers of state-owned companies were reduced last year, to the level of a state secretary’s pay.

Courtesy of Tarom

aw firms bpv Grigorescu and Stefanica & Florea have announced the completion of their merger, following which they will start operating as bpv Grigorescu Stefanica.

The merger process, which began in October 2010 and became effective on March 15, combines bpv Grigorescu’s corporate, projects, regulatory and litigation practices with Stefanica & Florea’s litigation, procurement, energy and utilities departments. The merger will result in a six-partner strong partnership.

Catalin Grigorescu, who will serve as managing partner of the new firm, said the merger is in line with his company’s growth strategy. “We will have even more litigation, energy and public sector advice capabilities,” he added.

Daniel Stefanica, founder of Stefanica & Florea, joins the merged firm as partner in the litigation department which he will co-head with Liz Minea.

Stefanica said, “With litigation practices increasing in size and complexity, we’ve been challenged by our clients’ demand for complex corporate and transactional advice. Instead of cooperating with bpv Grigorescu in completing highlevel work, we decided to join forces permanently under a discrete merger process. We believe this combination is a natural fit that will create a highly leveraged business model. The merger also gives us the benefit of the combined international expertise of the member firms of the bpv Legal Alliance.”∫

NEWS 7

Ruxandra Brutaru, outgoing Tarom GM

Brutaru added that her decision to resign had nothing to do with the political attacks coming from the Social Democrat Party (PSD) with regard to the losses posted by Tarom in the past two years.

Olguta Vasilescu, spokesperson of PSD, announced last Thursday that Brutaru had resigned from the general manager’s position, for which she received a monthly gross salary of RON 6,600 (approximately EUR 1,570). The deputy general director position’s comes with a gross salary of RON 15,000 (approximately EUR 3,580).

While the general manager’s salary is paid by the Ministry of Infrastructure and Transport, the remuneration for the deputy general manager’s post comes directly from Tarom. ∫ Simona Bazavan

www.business-review.ro Business Review | March 21 - 27, 2011

8 NEWS WHO’S NEWS

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

Madalina Suceveanu will take over the role of chief technology officer of Orange Romania. She is replacing Thierry Souche whose term will end and who will return to France.

Suceveanu will become the first woman in France Telecom with a top management position in the technology department. She joined the firm in 1997 as network planning expert and in 2000 became technology group manager, and network director in 2008, after which she was appointed technical director.

She graduated from the Faculty of Electronics and Telecommunications in the Polytechnical University in Bucharest.

Tudor Nedelea joins DLA Piper as a tax director of the firm’s recently established tax practice.

He previously worked for PwC Romania and has over 10 years’ experience in this sector. His areas of practice include assignments in M&A processes, business restructuring schemes and various corporate tax consultancy projects with a focus on the life sciences and pharmaceutical sectors. Nedelea is a member of the Romanian Chamber of Tax Consultants and of the Association of Chartered Certified Accountants, UK.

before the tax authorities during tax inspections, tax reviews and VAT compliance. Prior to joining DLA Piper, she was a member of the Indirect Tax team at PwC Romania and PwC Brussels.

Ioana Marcu joins the board of directors of Orange Romania as human resources manager. She has more than 10 years of experience in management and consultancy. Her collaboration with Orange Romania started in 1997 when she became part of the customer care department. In 1997 she became corporate & major accounts manager and then regional corporate sales manager. In 2007 she started working for Accenture Romania where she managed outsourcing operations in HR in Romania and then in Europe. Marcu graduated from the Academy of Economic Studies, Services and Tourism in 1996 and has also attended classes at the Ecole Superieure de Commerce in Bordeaux, France.

Lori Collin has been promoted to head of tenant representation by the Jones Lang LaSalle’s Romanian office. He joined the company in January 2008. As senior consultant of the local staff, Collin was responsible for corporate accounts such as Microsoft, MasterCard, Cisco, Merck Sharp & Dohme, Intel, EXL, Lenovo and most recently Volksbank Romania.

Laura Constantin

Ovidiu Mihaila

joins DLA Piper Tax as indirect tax consultant. She has over six years’ experience in both Romanian and international taxation and specializes in VAT. She has been involved in VAT projects, such as analysis and optimization of business structures from a tax perspective, chain transactions, assistance and representation of key clients

joins Accreo Romania as consultant. He has over four years’ experience in management and consultancy, in investment projects in energy, research and development, HR and other industries. Before this Mihaila worked for Occasio Europe as business development manager. He has also worked for MHL Group as trainer/consultant. He graduated from the Faculty of International Relations from the Babes-Bolyai University in Cluj-Napoca.

LEGAL

Tuca Zbarcea & Asociatii reports EUR 22.4 million gross revenues for 2010

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projects in various areas of practice,” said aw firm Tuca Zbarcea & Asociatii Florentin Tuca, managing partner with has reported EUR 22.4 million in Tuca Zbarcea & Asociatii. gross revenues for 2010, slightly Gabriel Zbarcea, also managing partdown from the EUR 22.7 million regisner, commented that approximately 95 tered in 2009. percent of the firm’s reported gross revThe firm earned most of its revenues enues had come from the private sector. last year from energy and natural resources, corporate and M&A, and litiga- “Our profits and lawyer productivity soared in 2010, but that was largely due tion and arbitration work, each conto a mix of cost-cutting measures, new tributing 25 percent. client wins and diversification in existing Throughout 2010, it also won various clients` advisory work. The economic roles on high-profile projects, acting on conditions remained tough and 2011 will behalf of a raft of international clients most likely continue to be an up-andsuch as Rompetrol Rafinare; Sofiprodown year, despite signs of slow ecotéol/Saipol; and Gabriel Resources Ltd. According to Tuca Zbarcea & Asociatii, nomic recovery,” he added.

For 2011, the firm expects a flat year the figures do not include the income with zero revenue growth. Plans for the generated by its secondary office in Clujyear include a more active presence at a Napoca or the revenues derived from the regional and international level, further firm’s separate insolvency and intellectual internal team appointments and lateral property units. hiring, and the launch of new business “We have managed to keep work levservices. els up, despite challenging market conStaff ditions, thanks to a range of notable

www.business-review.ro Business Review | March 21 - 27, 2011

Doing business in AIDD of better off communities Iulius Bedea transformed a simple NGO into a real business, offering consultancy services as well as developing his own projects. He is also one of the pioneers of so-called social entrepreneurship. ∫ ANDA SEBESI Iulius Bedea, president of the Association for the Integration of Sustainable Development (Asociatia pentru Integrarea Dezvoltarii Durabile, AIDD), chose to set up an NGO back in 2002 but later decided to transform it into a real business. He subsequently started to offer consultancy services for social and economic development, the management of projects financed by the European Union and training for European business development.

But AIDD also runs its own social projects for the local community in Hunedoara County.

Bedea’s studies have helped him a lot especially local public authorities, are during his career, as he graduated from faced with a dearth of consultants spetwo masters programs (one in psycholocialized in attracting European funds, gy and the other in the economy and management of regional development). building and implementing projects.

On top of that he also took some special- “There was a real need for such services. An NGO with expertise in this field can be a ized courses in project management, costbenefit analysis, building, implementing, trustworthy partner and consultant for creating and developing projects of crucial monitoring and the evaluation of projects financed through structural instruments. importance to a specific area,” says the business consultant.

The idea to offer consultancy through Asked about the most difficult moAIDD came when Bedea spotted a gap on ment his business has faced, Bedea replies the local market. “I chose this field of acthat it was when the payment for two mativity because I thought that there was a jor AIDD projects was delayed by six need for an interface between the public months. “There were very difficult times authorities and citizens. We can better because those two projects alone could identify problems, needs and opportunicover the operational and HR costs. I also ties for development because we are in tried to take out a loan from some lenders permanent contact with civil society. In but I didn’t succeed because they couldaddition, we are able to find solutions to n’t lend money to an NGO unless it could build and implement irreversible publicprovide a financial or real estate guaraninterest projects at local level,” says the tee. Which is very difficult or even imyoung entrepreneur. He set up AIDD possible for such a player,” remembers Bedrawing on the experience he had gained dea. But he sees difficulties as challenges in the civil society environment. Its main rather than obstacles. “We managed to get objective was to implement projects intended to meet local social-cultural needs, through this tough period and the major benefit of it was that I learned what it truwhich would be developed both in Simely meant to implement a real, sustainable ria (his birthplace) and Hunedoara Counproject,” says the entrepreneur. ty. Later on he added consultancy servicIf he started another business, Bedea es for social projects to his portfolio. doubts he would change anything major “After a detailed analysis of Hunedoara because the kind of company he runs County and some specific communities, I needs permanent adjustments to the new created in partnership with the public market conditions and economic enviauthorities some strategies meant to inronment. “I would probably have switched crease the absorbency of European funds my interest to another area of activity in the region,” says Bedea. “I intended to where you can find more highly qualified build sustainable projects especially at the personnel,” adds the businessman. And institutional level. This is why AIDD esevery project is unique. “For me, each projtablished the Center Europe Direct with ect is a challenge that starts when I read the financial support of the European the guide for financing and goes to the Union in 2008.” completion of the project,” he says.

Bedea’s business enjoys significant The consultancy field is a pretty crowdpotential, as at present many institutions,

TALENT 9 COMPANY PROFILE AIDD Established year: 2002 2010 turnover: EUR 63,500 2011 estimated turnover: EUR 70,000 Number of employees: 5 Initial investment: RON 2,500 Total investment: RON 20,000 ed market at the moment as many players are fighting over a limited number of potential customers. In Bedea’s opinion, the key to succeeding in this field is to find the right service for the right need and to be able to offer it at the highest quality standards. Plus, consultancy services generate long-term benefits that are not immediately visible to customers. “It is not enough to gain the trust of a partner or a customer. You need to maintain this trust, and to do so it is crucial to be informed about everything that happens in your field of activity. Besides, more important than this is to make your customers understand your services,” says Bedea.

He adds that at the level of Hunedoara County, AIDD has a market share of about 5 to 7 percent, with his projects, reliability and promptitude being the main factors that differentiate his business from the crowd. In the future, Bedea intends to identify new resources and opportunities for development, consolidate the implemented projects and create a favorable context to increase AIDD’s level of sustainability.

editorial@business-review.ro

www.business-review.ro Business Review | March 21 - 27, 2011

10 FOCUS

A man’s world? B women debate th

Sisters are doing it for themselves nowadays. Stories of discr important positions on the local market. Art, philanthropy, fu and beauty are only some of the domains in which women we cess, in a world where gender discrimination is declining – it easy was it really for these women to reach their current pos have for those who wish to follow their lead? BR spoke to pr

∫ CORINA DUMITRESCU Despite the 21st century being well underway, women still face numerous challenges in order to attain top management positions. Livia Aninosanu, programs director at CPE, the Center for Partnership and Equality, told BR, “Women, the major risk group for poor work-life balance, have been very much affected by the economic climate, as they tend to be employed in vulnerable fields and in vulnerable jobs. Women in Romania often find themselves in the position of having two jobs, as they also end up having to do domestic chores. Studies have shown that Romania is the number one country ranked by the time spent on housework.”

Today’s women therefore shoulder a double workload: their paying job and managing their homes.

But several programs are encouraging women to make a stand for themselves and start their own business. One such, Antreprenoriatul la feminin (Entrepreneurship for Women), co-financed with European funds, aims to inform women, aid their professional development and give them equal access on the labor market in Romania. The program targets 1,008 women intending to start a business or simply develop their entrepreneurial skills and will last for 32 months. Some of its total value of EUR 4,113,810 will also go into getting a better assessment of the market right now, since the most recent numbers on local female entrepreneurship date back to 2001.

With a similar ambition, Women in Business (Femei in Afaceri) is an association addressing female professionals, recently set up by local entrepreneur Alice Botnarenco. She founded the association to help female entrepreneurs, either at the start of their businesses or at the idea stage. “We wish to involve experienced women – who can inspire others through their stories of successful businesses – in the association’s activities,” Botnarenco told BR. The website lists such success stories. One of the associa-

tion’s first projects was networking meetings, built around a certain theme (finding a good lawyer for example). And there is a social networking component: the idea of Women in Business emerged on the internet, in September 2009, on Facebook and Linkedin, Botnarenco says, and now groups on these sites give specialists’ answers to questions posted on entrepreneurship.

www.business-review.ro Business Review | March 21 - 27, 2011

FOCUS 11

? Businessthe glass ceiling

discrimination seem to be fewer, with today’s woman holding py, furniture, the car market, shipping, communication, IT en wear the trousers. Their stories are of professional sucg – it’s all about big ambition and excellent skills. But how t positions, what have they learned and what advice do they to professionals from a myriad of backgrounds to find out.

The art and beauty of business Irina Wagner, the owner of a business selling hand-painted porcelain along with other types of personalized items, has a background in finance, logistics, project management and marketing, and is a graduate of the Academy of Economic Studies in Bucharest and of an MBA program. She runs the Wagner business with her sister. The most challenging

part of Wagner’s professional life so far may come as a surprise: “I think that the most difficult part of my career (as an employed woman) was to interact with other women, who were generally higher up the hierarchy of management than me.

There was tension, born from the spirit of competition and conflict between generations. People above a certain age tend to think they know everything and hard-

www.business-review.ro Business Review | March 21 - 27, 2011

12 FOCUS

Alice Botnarenco, Femei in Afaceri

Camelia Sucu, Class Living

ly listen to young people.” Discrimination has affected Wagner, but only in a positive manner and on account of her intellect, she notes with amusement. But men were not the source. “I think that men can be allies or appropriate managers to women in business and the chemistry of these relationships can often lead to positive results. Again, the only people I admire professionally are men, who were also my mentors at a certain time.” Wagner’s experience suggests that it is women who discriminate against other women.

However, women can also collaborate amicably, she adds. “Since I represent my own business, because we are dealing with the beautiful arts, women are naturally our customers. With no competition, but only shared interest in the beauty of porcelain, the relationships are generally harmonious.” The only discrimination that Wagner confesses to have truly endured relates to her age, not her gender. “I have never felt negative gender discrimination, but maybe on account of my age. Romania is a country that respects white hair and all that comes with it in a management position.”

So how do the genders square up in management positions? “From what I've seen so far, male managers leave their emotions and feelings aside and take decisions more easily and in a more business-focused way.” Women, she continues, are better planners, respect deadlines more, and are more “emotional, moody, intuitive, empathic, creative, always competitive and human.” Sometimes women seem to prefer finding the right spouse and starting a family, because of the education they have received which still guides them towards that. What’s more, Wagner continues, “Only two-three types of women are promoted by the media, all retouched in Photoshop, forever happy, beautiful and carefree. The media promotes these images and girls want to reach the results directly and from very early ages. Consequentially, there comes disappointment and lack of focus on self-made careers.”

Of course, not everyone buys into these images. Manuela Plapcianu, CEO of Artmark auction house, has put a lot of focus on her education, simply because, she says, learning is a part of “reinventing myself and constantly exploring and developing new abilities.” She has achieved or graduated from the Faculty of Energetics, a banking college, an Executive MBA with Washington University / Asebuss, a certification in Business Excellence and coaching with Columbia University. Before becoming involved in the art business, she worked for 15 years in banking and held various management

positions, culminating with that of CEO. Career or family? Plapcianu believes that it can be a false choice. “When one enjoys what one’s doing, one identifies fully with one’s projects. Consequently there can be no dichotomy between one’s personal and professional life or between the boardroom woman and the weekend woman. You can’t have certain faults or qualities half the day and the opposite ones for the other half.” Discrimination has never been an issue on a personal level, she adds, although the wider picture is different. “I have faced a sort of ‘national’ discrimination and received various signals that I belonged to a minority culture, especially in the 90s.”

When it comes to gender differences, Plapcianu believes that “there are no female managers and male managers.

There are successful managers and failed ones.” Another well known woman manager is Camelia Sucu, owner of the luxury furniture retailer Class Living. Sucu has a background in medicine, having graduated from the Carol Davila University of General Medicine in Bucharest and even practiced at Victor Babes Hospital in Bucharest for three years as a general physician in the early 90s, she reveals.

But she became co-founder and owner, with her business partner at the time, of the Mobexpert Group, and later took over Class Mob and rebranded it as Class Living. In 2006, she was nominated a member of the Leading Women of the World Association and granted a most successful businesswoman award in 2006.

She puts a lot of focus on equal gender opportunities in her company. “In terms of female empowerment, my faith in the capabilities of women is proved by my willingness to delegate and empower women as managers in my company.

Fifty percent of them are women.”

Rucsandra Hurezeanu, beauty firm Ivatherm’s founder and GM, is another prominent female figure on the local market. Coming from a family of medics, Hurezeanu followed suit, graduating from medical school and then taking a pharmaceutical marketing master’s at Ecole Superieur de Commerce de Paris.

Afterwards, she took an EMBA and obtained her PhD in infectious medicine. After experience in the local and French pharmaceutical industries, she founded her own firm of beauty products, based on thermal water extracted locally from the Herculane source. She has not faced discrimination, she says. “The success of a brand or a business-focused value is appreciated, regardless of the gender of the person at the top. Whether you’re a man or woman, you need the same leadership and negotiating skills, the same knowl-

Rucsandra Hurezeanu, Ivatherm edge on which business strategies are founded, as well as relationships with partners, colleagues and adversaries.”

Ivatherm, probably in large part due to its profile, is mostly formed of women and, importantly, women managers, adds Hurezeanu.

Drawing on her experience in France, Hurezeanu recollects, “Women are extremely appreciated in French culture, and my years spent in Paris gave me a lot of confidence in my abilities and capacities. French women are independent and interested in their careers, while displaying exuberance and feminine charm.” Sadly, not all women enjoy such esteem. In Ukraine, where Hurezeanu recently began a collaboration, “There is a business environment undoubtedly dominated by men.” Locally, success involves “effort and patience” and knowing one’s goals from the earliest years of one’s career.

Two expats, owners of “the first Greek gallery in Bucharest”, Eleni Skiadopoulou and Melina Krokou, also shared their experience as female managers with BR. Skiadopoulou has a background in photography and English literature, which she studied in London, while Krokou studied Public Relations in France.

Throughout their work with female Romanian artists, the two have been impressed with their perseverance. What they say to young women across Romania is that “professional success comes by itself if you are dedicated enough to what you do. It’s not something you have to aim for; it’s the result of your commitment and your work.” Moreover, role models should not only be sought in the contemporary world, as one can also find them “in history or in books”.

Aiding future professionals Tincuta Baltag, general manager of the Dinu Patriciu Foundation, a local NGO with an annual budget of USD 7 million dedicated to the support of the local education system, has an education background, but mostly considers herself to be self-taught. “I learn a lot from my constant reading, from the people I meet and the situations I encounter.” With a very diverse career, she confesses to having had one goal. “I have had the same major concern: being involved in social projects and encouraging others to join in social activities.” Barriers have been an issue for Baltag in the shape of her own perception and “initial lack of confidence”.

She also believes that in order to reach her current professional standing, she has had to put a lot of focus on work. “I think I have always worked harder than most men I know. It was something I thought

I had to do in order to gain experience but also trust and reputation.”

Baltag flags up an interesting phenomenon – and one not limited to Romania. “If we look at the academic results in schools, we notice that girls do, on average, better than boys. We also have more young women graduating from university than men. And yet, when we look at the labor market, we see far too few women reaching top management positions.” This educational ambition is perhaps because women have only had access to schooling relatively recently, compared to men, Plapcianu suggests.

“The majority of women started to study less than 100 years ago while men’s educational programs have a history going back more than 2,000 years.” Somewhere along the way, however, women lose the momentum they had in school.

In Romanian society, which is very traditional, says Baltag, “there is quite strong opposition to women pursuing a career. In fact, some say that you cannot be a good wife and mother and a top professional at the same time. Women who do not stay home to raise children are sometimes dismissed as bad mothers.”

Fathers who work are not subject to the same criticism. The mother of a six-yearold, with a second baby on the way, Baltag believes that it all comes down to time management and a good partner to achieve a balance between family and career. “If you can divide your time between family and work efficiently and no one loses out, you can definitely achieve both. Also, if you have a partner that assumes his own responsibilities in the family and is not appalled by having to participate in housework, then everything is easier.” Moreover, in order to achieve success in their careers, Baltag advises young women to “take it slowly, one step at a time”. She adds, “It does not help to be named a manager immediately after graduation: it might be better to start with an entry-level position, learn, study and prove your value.”

Working in the communication industry, be it in PR or advertising, is one of the top choices for students nowadays, and most colleges in this domain find themselves overwhelmed by applicants.

Tereza Tranaka, managing partner at Oxygen Public Relations, has often been involved in mentorship efforts for such students. She has an educational background in the US, where she got her bachelor’s degree in Journalism and Communications from the University of Maryland, and also holds an MBA. She chose to start her own business, after having gained experience both in the US and Romania on the client and agency side, mostly due to her drive to obtain independence “from parents, from corporations, from dysfunctional systems, from rigid environments, from men.”

Unlike her predecessors, Tranaka believes that gender is not an issue in Romania: “I haven’t encountered special challenges due to my gender. In fact, I feel quite fortunate to be a woman here. We are quite an open culture and I feel that opportunities for women and men are fairly equal, even when climbing up the hierarchical ladder.”

Breaking the mold Most of the professions touched on so far are female dominated. Women have however proven to be successful in IT, the car business, shipping services and tax

www.business-review.ro Business Review | March 21 - 27, 2011

(the EU) is based on trust, encouragement advisory. and promotion.”

Local e-business solutions software Iuliana Zurba, IT manager at Tibbett company Siveco’s president and general Logistics Romania, feels that the dismanager Irina Socol founded the firm in crimination she has experienced has 1992, along with her husband, as proof of been positive. “When things are not gothe fact that men and women can work ing as they should (an application is very together for good results. She has a technical background on the local market, slow, a server is not responding in the expected amount of time), I feel my having graduated from the Polytechnic colleagues are a little bit more underInstitute of Bucharest in 1981, the Faculty of Automatics Computer Science, standing than if I had been a male IT manager.” and also worked as senior engineer, Tax advisory is also a domain where project manager and then software expert for the Research Institute for Automation, women managers have made their mark.

Mihaela Mitroi, partner at PwC Romania, Research Institute for Information Techcorporate tax, and coordinator of the nology and National Commission for Intax and legal services retail and conformation Technology. Contrary to exsumer group for the whole EMEA repectations, gender discrimination has gion (Europe, Middle East and Africa), as not hampered her. “Our industry is an inwell as a member of a number of profesnovative one, including in terms of gensional associations, is one such example. der approach. Major global IT corporaThe biggest challenge for women, Mitroi tions have female managers. On our argues, is not reaching management poboard, four of the seven members are sitions, but “the leap between middle women.” Moreover, Socol adds, “The management, where women are present woman-man differentiation in business in large numbers, to the top tier, where is a cliché. The business world is for men are generally prevalent.” courageous people, with vision, deterMitroi is another strong believer that mination and strong will. Men or women, they know how to collect and use es- “compared to other countries, Romania tends to be more open to the idea of sential information in order to commit to women in leading positions. This is largecrucial decisions. They are the models for ly due to our communist legacy, when their teams through the power of examideological imperatives led both to highple and collective performances.” er employment ratios for women, as well When Socol has needed to travel the as to their access to decision-making poworld for professional purposes, she ensitions.” This was one of the rare positives countered no discrimination, she adds. “I aspects of communism. “Today’s sociehave never felt that I am treated differty offers women the chance to successently from a businessman. Especially at fully have a career, raise a family and lead the EU level, there is an increased interest in supporting women entrepreneurs. a balanced life at the same time. I am talking not just about tools and institutions The spirit in which we are seen from there

FOCUS 13

Tincuta Baltag, Fundatia Dinu Patriciu

Irina Socol, Siveco

such as nurseries, kindergartens, schools, babysitters and private tutors, but also about the sharing of tasks between men and women in modern families. Men have started to get involved more and more in day to day family activities.”

Iulia Nartea, country manager at UPS Romania, the local branch of the international express carrier and package delivery company, started working in the transportation industry in 1992 as an economist in the special transport department at Romtrans, the former authorized service contractor for UPS in Romania, she says. Nartea argues that “All women have come up against some kind of preconception or prejudice at some point in their lives.” She adds that she has avoided this in her current position, since her superiors were also women.

Alice Botnarenco is a female entrepreneur, active in the car business. An

economist by profession, she started the firm Rent a Car Kapitolium in 2005, having began her career abroad at 18, as an investment broker. Her biggest challenge so far has not been gender-related, she says, but “maintaining the business and developing it”. She recently started the Women in Business association mentioned earlier to support female initiative on the local market, but claims never to have been treated differently from men.

Women role models are omnipresent in Romania and in spite of some lingering forms of prejudice, professional success is no longer impossible. Common features like ambition, valuing education and a desire to create a balance between family and career seem to connect all these women. And there are many more success stories out there.

corina.dumitrescu@business-review.ro

www.business-review.ro Business Review | March 21 - 27, 2011

14 LINKS

Doing business in the clouds Cloud computing has a couple of aces up its sleeve, both for large companies and SMEs. First, it has the advantage of scalability, letting companies control their computing power and pay only for what they use. Secondly, it allows infrastructure outsourcing, which can relieve users of IT administration burdens. This makes cloud computing no longer just a prophecy but a reality to which both IT providers and consumers are adjusting. However, concerns remain regarding the confidentiality of data stored in the cloud. ∫ OTILIA HARAGA

STOCKEXCHANGE

“Cloud computing is one of the single biggest shifts in computing that we've seen in recent years. In Romania too, companies are realizing that it makes business and economic sense. The cloud is no longer the future of IT – it's already here and has become mainstream,” Dan Bulucea, country manager of Google Romania, tells Business Review.

A global report by IDC released last month states that the services and distribution sectors, which include retail, wholesale and transportation, currently make up the largest share of public IT cloud services at USD 3 billion, and that the sector is expected to grow to USD 8.5 billion by 2014. The worldwide cloud systems management software market should reach USD 2.5 billion by 2015.

Quoting data from IT and telecom market data firm Gartner, Bulucea says that 43 percent of CIOs want to make the transition to cloud-dominated infrastructure. “IDC predicts that, over the next four years, public IT cloud services will grow by more than 20 percent to become a USD 30 billion industry,” he says.

But there is a long way to go. “We believe that cloud computing services have not yet reached a sufficient degree of maturity to be able to talk about a market exclusively dedicated to cloud computing,” Liviu Gherman, fusion middleware sales manager at Oracle Romania, tells BR. At the moment, efforts are being made to boost awareness and education.

“We can say that the number of marketing events dedicated to this subject is relatively high, and major IT organizations are making significant efforts to educate companies,” Gherman continues.

At the moment there are no studies in this field to give a clear idea of Romania’s cloud computing status. “If we include infrastructure, platforms and software, I es-

timate the value of the local cloud computing market at around EUR 20 million.

I am convinced there will be a two-digit growth over the coming years,” Dragos Manac, CEO of cloud computing solutions integrator Appnor MSP, tells BR. At the moment, Romania is on a par with countries in the region regarding the adoption level of cloud computing, but somewhat behind Western Europe and the United States. Dan Gheorghe, senior manager of management consultancy at PwC, tells BR this is due to low support from suppliers of cloud computing solutions in the region.

Over the next two years, there will be significant progress on a commercial level regarding office-type applications such as e-mail, text editor, graphic presentations and tables. But business support applications such as ERP and CRM will have to wait, predicts Gheorghe.

And of course, the investments in infrastructure and systems will need to reach maturity. Meanwhile, the suppliers and producers of cloud computing services will have to come up with proof of sufficient security measures to convince potential clients that they are able to ensure the confidentiality of the information. As long as data is stored on external servers, the question of security will remain a valid one. “Security has always been the first item on the agenda in discussions related to cloud. But we can answer with a different question: how can we trust others with our money? We might be tempted to say we don’t, but in reality our money is entrusted to banks and companies such as Visa and Mastercard. Of course, there are many levels of security when it comes to money. The same is also true when it comes to data stored in the cloud. Any cloud application comes with restrictive default settings and security is always a priority,” says Manac. At the level of the European Union, the Data Protection Directive (Di-

Head in the clouds: more users will turn to cloud computing, say IT pundits

rective 95/46/EC) imposes some restrictions upon the circulation of data outside the EU. Manac mentions Germany, which obliges its companies to keep data only on German territory. This is understandable, he explains, given that access could be gained to confidential data. “However, I believe that anything that exceeds the minimum restriction or red tape level is harmful in the long run,” he says.

Even if this were the case in Romania too, and the regulation framework did not allow data to be hosted outside Romanian territory, the government could host its own cloud services, says Zoli Herczeg, national technology officer at Microsoft Romania.

Under EU law, data can be transferred to countries outside the EU if the country or company provides an adequate level of protection. The directive also limits how users’ personal data can be deployed. “I actually think that the directive is quite good in this regard. Many social applications are suspected of min-

ing users’ personal data to build profiles which they can later use for different purposes, probably the most harmless one being to provide customized advertising.

Dan Bulucea of Google Romania

www.business-review.ro Business Review | March 21 - 27, 2011

Dan Gheorghe of PwC

LINKS 15

Dragos Manac of Appnor MSP

very big firms the cost of the infrastruc(…) Some even predict that a new wave ture is not such an issue and, if anything, of social platforms will soon emerge that a company that has constantly significant will be peer-to-peer instead of cloud needs in terms of computing power based and would be totally independent of any company,” Florin Dumitrescu, might get it done cheaper using its own hardware,” says Dumitrescu. software architecture consultant at But a large company could, in some Ducons Software Consulting, tells BR. cases, derive benefits from the cloud.

Some European countries are stricter than others regarding their in-the-cloud “They can make their internal infrastructure more efficient by adopting parts of transfer policies to other countries. cloud architecture and creating what is Meanwhile, small and medium encalled a private cloud. Secondly, from terprises seem to be the most willing to make the transfer to cloud computing, time to time, they might want to run comsince they have more to gain from it. plicated statistical calculations with huge amounts of data and they could rent “Big companies are a bit reluctant to move cloud servers for that,” he adds. their software and data outside their Gheorghe supports the view that the own yard. They feel that they have more size of the company does not matter. control as it is and that they are indeWhat matters more is the degree of stanpendent from third parties. Also, for

Liviu Gherman of Oracle Romania

Zoli Herczeg of Microsoft Romania

dardization that the respective firm has The adoption of cloud computing servreached. “For fewer than 100 users, the ices can save 40-50 percent of costs over process is very short and can be done in a period of three-four years, Marius just several hours if it only covers office Georgescu, cloud solution sales professional at Microsoft Romania, tells BR. applications,” he says.

Oracle Romania’s cloud computing “In such a scenario, we must also take into customers are from the public sector, consideration another advantage of cloud banking, insurance, telecommunication, services such as updates to the newest energy and commerce. “We are taking versions without any supplementary both about large firms as well as small and cost for clients,” says Georgescu. He adds medium sized companies – many of that in the case of traditional solutions, these clients have adopted the cloud the total cost of ownership over the same computing concept to some degree,” says time span will involve high supplementary cost. “In three-four years, producers Gherman.

Microsoft Romania also has hundreds will launch new hardware and software of clients from all segments, including the versions which require both new investpublic sector, Todi Pruteanu, platform ments and migration services.” strategy manager at the company, tells BR. As usual, the bottom line is money. otilia.haraga@business-review.ro

www.business-review.ro Business Review | March 21 - 27, 2011

16 RETAIL

STOCKEXCHANGE

were on a downward trend, being the worst affected by the fall in frequency of shopping trips, with an 8 percent drop (in value),” said Raschip.

Discounters were by far the most active players. Rewe Group announced that its local Penny discount network registered a 4.3 percent turnover increase last year, recording “above-average development”, according to the company’s financial report. The performance reported in Romania is followed by the results in the Czech Republic (+3.8 percent).

The retailer opened seven new Penny Market stores countrywide last year. In Romania Rewe Group operates the Billa, Penny Market and Penny Market XXL networks.

The trend will most likely continue.

“Proximity stores, supermarkets and discount stores are the main players when it comes to the estimated number of new units to be opened over the next two, three years,” Luiza Moraru, head of retail department at CBRE Romania, told BusiTrolley dash: the rapid race of retailer expansion in recent years has slowed as the effects of the financial crisis reached Romania ness Review. These formats allow small scale investments and faster network development as the related bureaucracy of opening such units – construction permits, traffic conditions, sticking to certain urban development projects – is also smaller, Moraru explained.

“This year there will be more openings of discount stores and supermarkets and fewer of very large units,” Spiridon agrees.

In his opinion Kaufland is a special case, as it seems to have found the winning solution in times of crisis: the optimum surface to cover the right product portfolio, smaller than a hypermarket but with similar to that of a discount store.

If the diversity of its retail industry is proof of a market’s maturity, then the local food prices The 62nd Kaufland hypermarket was retail industry makes for a rather dull, monotonous and clearly underdeveloped one. opened earlier this year, the fourth unit the German discounter had opened Less affected by the crisis than other retail segments, the food industry is preparing that since the beginning of 2011. Kaufland’s local network expanded by thirteen hyfor a new development phase. Expansion plans are still in the cards, but different permarkets last year. times call for different investment strategies and a more flexible and innovative ap“On the medium and long run, we will see an increase in the number of proach to the market. proximity stores with small to medium sales areas, with a reduced but very carefully selected product portfolio and a level of service which will be customer next couple of years are an increase in priyears ago the priority of any retailer was ∫ SIMONA BAZAVAN orientated and very much improved,” to continue territorial expansion, chains vate label products, under the condition Spiridon concludes.

A glance over the development of the must now concentrate on upgrading that the price quality ratio improves, and Nevertheless, big projects are still in food retail industry in Romania over the a further standardization of product porttheir networks. “There will be interest in the cards. Carrefour, the largest European past few years shows the very dynamic folios. Nevertheless, as modern food reimproving existing locations by optiretailer, has announced plans to open two growth of modern retail against tradimizing the product portfolio and overall tail becomes more and more saturated, big new hypermarkets this year. Carrefour tional, from a market share of only 29 perbetter stock management and improving players will have to turn their attention to has announced that it will open this Sepcent in 2005 to 45 percent last year, actraditional formats. “If food retailers in Romerchandising,” added Spiridon. tember its eighth hypermarket in mania do not find a way to manage this cording to Raluca Raschip, consumer While there is much talk about the adBucharest, located in the Colosseum restill sizeable market segment they will vantages of introducing new retail forgoods director at GfK Romania. The figtail park. The new unit will have a surface mats, this shouldn’t be an option so long leave it to the direct suppliers and their ure is expected to reach 54 percent by of approximately 8,000 sqm. distributors,” cautioned Weiss. But as as existing ones aren’t optimized, experts 2015. So far, predictions for 2011 strike a “For the Carrefour group in Romania someone’s loss is often somebody else’s argue. “Romania already enjoys a broad cautious tone. “Modern food retail will this new hypermarket is proof that we gain, this means that there is room for set of different retail formats. The current register a slight increase compared with will continue to expand on the large forretail landscape is not suffering because smaller scale investors. “The food retail is 2010 and will continue to see its market mat,” said Patrice Lespagnol, executive divery country-specific and very localityshare go up against traditional retail,” of missing formats – but because estabrector of Carrefour Romania. A second hyspecific and this is an important advanlished formats are not running optimalSorin Spiridon, manager with Ensight permarket will open in October in Bototage for local players,” Alexander Athanasly,” Weiss told Business Review.

Management Consulting, told Business sani, bringing the French retailer’s local soulas, CEO of Stirixis, told Business ReIn his opinion the borderlines beReview. 2011 should be a year of stabinetwork to 25 hypermarkets. view. While going head to head with big tween the different shop formats and lization but another two, three years will Romania Hypermarche, the company players is not an option, coming up with their category management have become be necessary to return to a sustainable operating the Cora hypermarket chain, less and less clear in the past two years. a very well targeted and strategically pogrowing market environment, thinks announced that it would open two more sitioned concept can prove the winning Michael Weiss, partner at A.T. Kearney. Price became the ultimate determinant as Cora hypermarkets in Arad and Drobeta solution in a market which will become shopping decisions were less driven by International retailers active in Romore and more service demanding, Turnu Severin in 2011. The latter was brand choice and even less by a certain mania have reached national coverage opened last week. Earlier this year the Athanassoulas argued. shop format, thinks Weiss. “This trend and further territorial expansion is showcompany also announced a EUR 100 milwas even accelerated by the retailers as ing signs of slowing down, as competition lion investment in its first mall on the loExpansion plans for 2011 several of them diluted their market proamong them is increasing. But concal market, in Constanta, under the name According to GfK data, in 2010 the share file by a very pragmatic category mansumption will eventually pick up, bringof Corall. Two similar commercial centers of modern retail went up by 2 percentage agement based on the slogan ‘sell what ing about a more educated and deare planned in Brasov and Bacau over the points against the previous year. “Both you can sell’,” he said, adding that there manding consumer. Along with these next two years. will be a clear correction of this shift. hypermarkets and discount stores saw a trends, retailers’ market approaches are simona.bazavan@business-review.ro one percent increase while supermarkets Other trends anticipated by Weiss for the also undergoing changes. While a few

Retail details make the difference

www.business-review.ro Business Review | March 21 - 27, 2011

18 MONEY

Romanian financial investment (with high interest rates for both banking investments and government securities), but financial investors’ appetite for risk has been very volatile in recent years.

“Against a strong appreciation of the RON is the Central Bank’s reluctance to have a powerful RON, given the importance accorded to exporters in the process of getting the country out of recession, the depth of local markets, which are much less developed than other markets in the region, a poorer economic performance than countries in the region and the political and legal uncertainty,” says Bucsa.

As Rozalia Pal tells BR, “An improvement in the sovereign rating outlook would have a significant impact on the RON's strength, encouraging appreciation.”

All eyes on the Central Bank Courtesy of Dreamstime

Local businesspeople have been monitoring the progression of the EUR/RON exchange rate

Where next for strong RON? The Romanian currency has appreciated to its highest level since May last year.

Chief economists are predicting it will reach 4.1 RON/EUR by the end of the year, and 4.05 RON/EUR at the end of 2012. Business Review asked the major banks on the local market what factors are influencing the local currency, what can be expected from the Central Bank and why the Swiss currency has gone wild and registered such large day-to-day variations. ∫ DANA VERDES The Romanian currency continued to appreciate last week against the euro, as the Romanian National Bank (BNR) announced an official rate of 4.17 RON/EUR, a level not seen since May last year. But with an eye on the political instability and international events that are leaving their mark on the foreign exchange rate, local economists are reluctant to predict that the RON’s appreciation will continue.

Dan Bucsa, chief economist at Bancpost, tells Business Review, “On the short run, the RON could slightly appreciate against the euro and the dollar, helped by investors’ appetite for risk, IMF support and higher interest rates than on EU emerging markets. I do not think it will go below 4.1 RON/EUR. In the second half of the year, it might reach over 4.2 RON/EUR.” A more optimistic outlook comes from Banca Comerciala Romana economists. “Our exchange rate prognosis indicates a slight RON appreciation towards the level of 4.1 in December this year,” Florin Eugen Sinca, analyst with the macro and fixed income securities research team at the BCR strategy and market research department, tells BR. But it depends on the conditions, says the

BCR representative. “We count on the fects on the consumer price index, councontinuation of the IMF and EU agreeterbalancing the effect of rising prices ment which will consolidate foreign inworldwide. In addition, encouraging opvestors’ trust, on exports continuing timism and accelerating consumption their good performance seen so far this may favor economic recovery,” says Pal. year and on the improvement of EU The appreciation of the national currenfunds absorption.” cy should reduce imported inflation, but Meanwhile, Rozalia Pal, chief econothis did not happen in January and Febmist at UniCredit Tiriac Bank, predicts a ruary this year, which shows that import stronger RON will prevail towards the end prices are still tight, despite reduced deof next year. “According to current bank mand, says Bancpost’s chief economist. forecasts, we expect a slight depreciation “However, a stronger RON makes imports of the RON against the euro by mid-year, cheaper, which is good for importers’ infollowed by a new assessment, up to 4.2 comes. Romanian exports will be less RON/EUR at the end of the year. By the competitive if the RON strengthens. This end of the year I do not expect to see 4 was not seen in January 2011, when exRON/EUR, but over the longer term we ports exceeded imports by EUR 91 million. expect 4 RON/EUR. At the end of 2012, This is the first monthly trade surplus in our forecast for the exchange rate is 4.05 international goods trade that Romania RON/EUR,” said Pal. has recorded since 2005. Export contracts are concluded for periods longer Who wins from a stronger than one month and, therefore, a stronger RON? RON could affect exporters’ external Economists say that a slender RON apcompetitiveness from the second quarter preciation would benefit borrowers with of this year,” says Bucsa. debts in foreign currencies, and help reduce inflationary pressures. Moreover, A note of caution sustainable RON appreciation, they add, The Bancpost chief economist believes that if the RON comes down to 4 can improve investor sentiment and conRON/EUR, such an appreciation will be fidence in the economic outlook. “The long lasting. Yields are very attractive for RON’s appreciation may have positive ef-

The UniCredit chief economist says, “The Central Bank will intervene on the foreign currency market especially in the event of excessive and rapid movements of the exchange rate. On the inflation front, we expect a change of attitude from the BNR, meaning a more restrictive monetary policy.”

Bucsa believes that the Central Bank has sufficient foreign reserves to influence exchange rate movements, if desired.

“In recent years, the Central Bank pledged to promote exchange rate stability and if we look at the EUR-RON trajectory from January 2009 to March 2011, we can see that it was in the range of 4.1-4.3 RON/EUR for 80 percent of trading days,” says the Bancpost chief economist.

Why is the CHF sky-rocketing?

The Swiss currency (CHF) has hiked since the crisis started, registering large rate fluctuations from day to day. Economists say that the CHF has strengthened globally, not just in relation to the RON, with movement being determined by the investors’ risk appetite and interest rates.

“The appreciation of the CHF against the RON is a direct consequence of the Swiss currency’s value against the euro on the global markets. The fiscal problems some EU member countries are facing and the political turbulence in North Africa and the Middle East have decreased foreign investors’ confidence in the European currency and persuaded them to turn to the safety offered by the CHF,” says the BCR representative. “The country’s low level of public debt, the competitive structure of its exports and its good economic performance during the crisis have tilted the balance in favor of the Swiss currency on the foreign exchange markets.”

On top of that, Bucsa argues that the CHF is a currency to which international investors look in times of lower risk appetite (a refuge currency along with the USD and Japanese yen).

“Investors’ preference for the CHF is due to the high liquidity, strong economy and, especially, the prudent reforms implemented in the Swiss financial system, the most advanced in the world,” says Bucsa. As the European Central Bank (ECB) will probably increase interest rates from an estimated 1.00 to 1.75 percent, it remains to be seen how the major currencies will respond and how the RON will fare. dana.verdes@business-review.ro

www.business-review.ro Business Review | March 21 - 27, 2011

20

Greek tragedy drives investors to Romania Despite the crisis affecting both the Greek and Romanian economies, Greek investors are keeping the local market on their map, said company representatives, speaking at the third edition of the Greek Business Forum organized by Business Review last week. ∫ SIMONA BAZAVAN At the end of 2009 the total amount of Greek foreign direct investments (FDI) to Romania amounted to EUR 3.281 billion, according to the National Bank of Romania.

In the first 11 months of 2010 another EUR 405.75 million was invested, according to statistics from the National Trade Register Office (ONRC).

How much of this represents capital increases made by Greek banks – a strong presence in Romania – as well as other Greek companies active locally, is debatable, argued company representatives present at the event. While in 2010 there were fewer big-scale Greek investment projects in Romania, the situation is expected to change over the next couple of years.

In part, this pick-up could be driven by the domestic business environment, which shows clear signs of recovery, albeit a slow and cautious one, said Greek businesspeople.

Positive signs are coming from real estate, healthcare and retail to mention but a few.

The 1.5 percent GDP increase estimated for this year is also bringing the promise of better times.

At the same time, the difficulties that the Greek economy is currently facing itself could turn out to be a strong incentive for Greek companies to search for better business opportunities outside the country.

Romania has the potential to attract a good share of these investments, suggested Greek businesspeople present at the event.

The third edition of the Greek Business Forum gathered around 70 attendees and was organized at Capital Plaza Bucharest.

Baker Tilly Klitou and Eurobank EFG were sponsors of the event.

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editorial@business-review.ro

All photos: Laurentiu Obae

1. Efrossyni Mita, economic & commercial affairs counselor with the Embassy of Greece to Bucharest 2. Mamas Koutsoyiannis, managing director of Baker Tilly Klitou 3. Dimitra Marini, general manager of EFG Eurobank Property Services SA 4. The panel brought together company managers and representatives of the Greek Embassy 5. Georgios Poukamissas, Greek Ambassador to Romania 6. The panel tackled topics such as the recovery perspectives of the local economy 7.

George Verikios, group CFO of Marinopoulos Bros Group 8. The event gathered around 70 company representatives 9. Michalis Sotiriou, president of the Hellenic-Romanian Chamber of Commerce and Industry

www.business-review.ro Business Review | March 21 - 27, 2011

CITY 21

RESTAURANT REVIEW

A Greek myth – it’s not that good!

Photo: Laurentiu Obae

Greece is the word: the prices are cheap but most of the menu has gone AWOL

Santorini, 17 Decebal, tel 021 326 8098 MICHAEL BARCLAY There are many social asses in the world who would try to impress you by appearing to be learned. So the greatest misquote of all time catches them out when they say, “Beware of Greeks bearing gifts.”

Stupid. If you ever read the Classics you will know it was Virgil who stated in

But they had no trolley. I doubt if they had The Aeneid, “I fear the Danaans even if all of the mezzas, for I asked for their they bring gifts.” Greece wasn’t mentioned because it did not exist at the time. ‘mushrooms stuffed with Roquefort’ and predictably they had no Roquefort.

I raise this subject because Greece is a So Blondie settled for a baked eggland of many misconceptions, one of them being that Greek cuisine is a fun, plant with feta cheese, which was simply what it said it was. I chose the famous raucous, boozy, music laden extravaganza. It is not! Unlike their neighbors, tourist staple of Moussaka, which was OK, given that it is so simple to make with poTurkey, who developed their beautiful tato, eggplant and minced meat. and varied cuisine with Oriental influI wanted to give my poor, suffering ences, Greece looked inward to the waiter an order he could fulfill, so I asked Mediterranean, with the result that their for Grilled Calamari, but I added that I cuisine is rather bland and ordinary. wanted it brushed with olive oil and garBut they do have the world’s finest lic. It was a disaster. It was burned, overolives, Kalamata, which the House had on the menu. I asked for them but… no. cooked and as tough as shoe leather.

Worse, it was not cooked in olive oil, They lied. They had none. The waiter’s and they gave me a small bowl of oil and apologies for having almost nothing of garlic on the side. I left it uneaten. At RON that which I ordered was to become a 30, it was not expensive, but their other mantra. fish, such as Red Mullet and Dorada, was So let’s look at the menu which I am pricy at around RON 120. If they could about to expose as a litany of non-existent screw up my Calamari, I have no doubt dishes. There were 150 dishes in all which that they would treat the more expensive was a boast I knew the House could not fish in the same fashion. support. But I wanted wine and I felt comBut I must eat something Greek. forted by a list of over 20 familiar old Those who have visited that land will be friends listed on the menu. But they aware that the very bedrock of Greek food didn’t have them. Only a sweet Murfatis lamb. Sure enough, they listed plenty lar and an expensive Greek. So I went for of it on the phantom menu. beer and, likewise, of the seven beer opSo I asked for their ‘Lamb roasted on tions, they only had three in stock. a spit’. No, they didn’t have any.

I asked for the mezza trolley so I OK, let’s go for a ‘Lamb Ribs’. None could choose from the 50 or so mezzas Well, how about ‘Lamb Stew’. Nothing. (small starters) they had on their menu.

‘Lamb with Lemon’? No. ‘Lamb with Artichoke’? No. “Good God” I asked.” Just what lamb dishes do you really have?” “Chops,” said the waiter.

I was determined to find at least one dish I could praise. So in desperation, I ordered a ‘Piquant Chicken’. How could they get this wrong? They did. For although the chicken was tender, it had no seasoning whatsoever, piquant or otherwise. It was just fried chicken, and that’s that!

However, I can say a few positive words about Santorini. Their prices are excellent with mains costing around RON 30, and starters far less than that. If you remember its previous name of ‘El Greco’ you would doubtless recall that it was tired and needed a total facelift. Well Santorini did that and it is all bright and breezy now.

I left them as hungry as hell, having eaten nothing. But what a surprise awaited me. For the once boring street of Decebal (which I remember had only two restaurants in 1996), is boring no more and now proudly boasts more restaurants, bars and coffee shops than anywhere else in the country. It was so vibrant and buzzing. After Santorini I ate somewhere else in the street, but more of that later.

mab.media@dnt.ro

www.business-review.ro Business Review | March 21 - 27, 2011

22 IN TOUCH

ROMANIA IN THE FROM OUR READERS TALKING POINT: INTERNATIONAL New school of thought: Romanian education under scrutiny PRESS FT: Another narrow escape for Prime Minister Boc Emil Boc has proved himself to be one of Central Europe’s great escape artists, writes the Financial Times, after the prime minister survived yet another noconfidence vote in Parliament last week.

The no-confidence motion attracted 212 votes – 24 fewer than it needed to pass – and Parliament has approved the labor law changes that were the final requirement to meet the terms of its EUR 20 billion bailout from the International Monetary Fund and European Union in 2009.

The labor changes follow last year’s severe austerity package, the passing of a cost-cutting 2011 budget, and new laws on pensions and public sector wages. Romania now plans to secure a new EUR 5 billion precautionary facility from the IMF in April, the FT writes.

The popularity of the governing coalition has taken a nosedive, the FT writes, while President Traian Basescu has said the government should find ‘another governing style.’

I must begin with congratulations for the article; it was a very satisfying read, although I have tasted most of the dilemmas you have investigated first hand. What you say fits my experience in various positions in the Romanian, British, American, Spanish and German higher education systems.

Clearly, I cannot claim to have built a career in any of these, but still. The paradox Dr. Tanasescu mentions reminds me of a classic argument in the very old and large debate between private and public institution models in higher education. I should ideally provide some statistical backing that I do not have now at hand [possible, if you wish to continue the conversation]. Here goes: The statement “excellence remains constant, while more people have access to education and training” does not absolve local universities from their current failure to reinforce rather then muddy this distinction. Neither public not private universities in Bucharest appear to take this seriously. When there is some sense of the problem – rare enough – any association with incentives provided to the student body is remote, at best. When such incentives are provided, they seem informal – effective, perhaps, for the individuals, professors and students alike.

Irrelevant to the institutions. I am not asking for heroic restraint, just a grounded sense of possibility.

The situation is neither disappointing nor incomprehensible, as the private sector, for better or worse, started in the terribly un-enviable position of competing

with a more or less public good [the free bulk diplomas – state or boiler room provided]. The argument of self-enforced standards customarily thrown at this problem is not quite what got either the continental or British systems going historically: not exactly a secret, but not much inspiration either – unless anyone is prepared to tackle enforcing a fast track to a few hundred years of debatable historic turns. Economics has many discontents, but only abstract actors...

Long story short, I believe that the roots of university standards in a competitive labour market are neatly evident in a rarely cited statistic: the number of applicants per post-graduate slot, across countries. Across countries and systems, there appears a matching paradox to the above cited: there are hundreds, sometimes thousands / slot, sitting entrance exams in low-income countries [China, Turkey and India are notorious for this]; merely dozens at most at the top tier institutions in UK and the US. To what extent either system of selection identifies, cultivates and uses the natural supply of talent, that's another debate for another day. [...]

Ana Veler Kennedy School of Government Fellow, Harvard University '00; Churchill College, Cambridge University '02

Feel free to send us your views, at editorial@business-review.ro. Submissions may be edited for length and clarity.

WHAT WE ARE WORKING ON Otilia Haraga Senior Journalist is working on an article about the arrival of Long Term Evolution technology in Romania and its likely impact on the telecommunication market. The telecom authority plans to introduce broadband mobile communication services in new bandwidth frequencies by the end of the current year. otilia.haraga@business-review.ro

Corina Dumitrescu Journalist is researching a piece on social integration in Romania. Measures to help people with disabilities will be discussed, as well as the challenges of finding yourself in such a situation in a society that seems to be ignoring your presence. corina.dumitrescu@business-review.ro

Simona Bazavan Journalist is preparing an article on airport infrastructure. A series of investment projects targeting regional airports have already been announced and others could follow. The new PPP law could also help stimulate such investments. simona.bazavan@business-review.ro

EVENTS, BUSINESS & POLITICAL AGENDA March 21 18:00 FPP organizes the book launch of a volume on entrepreneurship written by Marius Ghenea. The event will take place at InterContinental Bucharest. By invitation only.

March 22 10:15 The Association of Romanian Brewers organizes a press conference at Radisson Blu Hotel. By invitation only.

A VAIO event will take place at the Loft Lounge. By invitation only.

March 22 ∫EVENT Business Review organizes the sixth

edition of the Annual Investment Awards at Athenee Palace Hilton Hotel.

For more information please visit www.business-review.ro/events.

March 23 11:30 Franke Romania organizes a press conference at the Galleron restaurant. By invitation only.

March 28 The 2011 Business of Luxury Forum will take place in Bucharest at the Epoque Hotel. By invitation only.

The Association of Romanian Brewers organizes a press conference at Radis-

son Blu Hotel. By invitation only.

A VAIO event will take place at the Loft Lounge. By invitation only.

March 30 10:00 The RENINCO Association organizes a press conference at Hotel Novotel. By invitation only.

April 7 10:00 The Dinu Patriciu Foundation organizes a conference on the return to Romania of young people who studied abroad. The event will take place at Athenee Palace Hilton. By invitation only.

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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

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