PREMIUM HANDSET MARKET WILL NOT DECLINE DESPITE CRISIS, SAY MOBILE NETWORKS; SEE PAGE 9 NEWS
Businessman Gabriel Popoviciu, an investor in the Baneasa project, was held overnight and questioned by anti-corruption investigators See page 4
ANALYSIS
Romania will receive a EUR 20 billion package from a group of institutions led by the IMF – but the loan comes with several conditions attached See page 8
ANALYSIS
Oil companies are trying to compensate for lower fuel consumption in Q1 of this year by developing the non-oil side of their business See page 12
BUSINESS REVIEW www.business-review.ro
ROMANIA’S PREMIERE BUSINESS WEEKLY
MARCH 30 - APRIL 5 , 2009 / VOLUME 14, NUMBER 11
MANAGEMENT U-TURN
Romanian companies have started to re-shuffle management and bring in turnaround leaders to fix what has been done wrong, making of the crisis an opportunity for local managers to learn from their past mistakes STOCKEXCHANGE
See pages 10-11
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NEWS
BRIEFS
GRAND ARENA MALL BERCENI RENTS SPACE TO DEICHMANN SHOE BRAND é Grand Arena Mall Berceni has rented a space to German shoe retailer Deichmann, the brand’s first step on the Bucharest market. Recently, another anchor, Carrefour, announced it had rented 8,000 sqm of space in the mall, which offers 50,000 sqm GLA overall. PAUL BAKERIES OPENS IN BANEASA SHOPPING CITY é Moulin D’Or, the company which owns the franchising rights for Paul Bakeries, has launched the second branch of the bakery in Bucharest, after a first unit on Calea Dorobantilor. The units are the franchise’s first entries on the Eastern European market. Paul Bakeries is represented by Maxime Holder, CEO, and Antoine Raberin, international director. ZENTIVA ROMANIA REPORTS HIGHER NET PROFIT OF EUR 6.3 MILLION IN 2008 é Pharmaceutical company Zentiva Romania posted a net profit of EUR 6.3 million in 2008, 5.4 percent more compared with 2007, while the company’s turnover increased by 13 percent, according to its financial results. The company’s market value is estimated at EUR 41.35 million, according to the Bucharest Stock Exchange. In Q1 of 2008, Zentiva Romania posted EUR 1.55 million net profit, up 37.12 percent against the same period of last year. Its shares are traded on the second tier of the BSE. 4
The largest mixed real estate project in Romania, the Baneasa project, has gone under the scrutiny of the Romanian anti-corruption unit DNA, which last week held Gabriel Popoviciu, the investor behind the Baneasa project, in a 24-hour custody hearing. Cornel Serban, former head of the General Direction for Information and Internal Protection (DGIPI), Petre Pitcovici, head of operations with the General Anticorruption Direction (DGA), and Ioan Alecu, former rector of the University for Agricultural Studies and Veterinary Studies (USAMVB) in Bucharest were kept in custody with Popoviciu. Popoviciu, who has been avoiding the media glare, allegedly tried to influence the outcome of the case file on the Baneasa project’s partnership with the University of Agricultural Studies, which was investigated by the anti-corruption unit. Popoviciu, who has invested in several businesses in Romania, including the Howard Johnson, Ramada Plaza and Ramada Parc hotels in
COURTESY OF OCTAVIAN ANDRONIC
INTERAGRO CLOSES SIX PLANTS, 6,700 LAID OFF é Interagro Group, owned by businessman Ioan Niculae, will lay off the 6,700 employees working in the group’s six chemical products plants. This move was mooted in 2008 when the businessman said he was considering canceling production at the six plants, due to their poor performance. Niculae was awaiting a government ordinance following which the chemical products sector would have benefited from state aid. As the ordinance was not forthcoming, Interagro will no longer support this kind of activity, according to company representatives.
Anti-corruption unit starts hearings on Baneasa project investigation
A rare picture of businessman Gabriel Popoviciu
Bucharest, plus the Pizza Hut, KFC and Ikea franchises, entered a partnership with the university, which owned the 220-hectare plot in Baneasa. The project, which has already seen the delivery of a shopping mall, office buildings, residential units and an Ikea store, is expected to be completed in 2015, at a EUR 2 billion investment. It was built by Baneasa Investments from 2000.
The DNA investigation looked at the agreement between the University of Agricultural Studies and Popoviciu's firm, which led to the creation of Baneasa Investments, in which the university holds 49.8 percent of the shares. The university opted for a yearly fixed sum of EUR 560,700 until the project returns its first profits. In 2008, expected to be the first profitable year, the university was to receive EUR 3-4 million in profit, Baneasa representatives previously told BR. The USAMVB plot was previously a research farm, losing some $200,000 per year. However, commentators say the partnership was not based on a bid, as others were also interested in building a project there, including local businessman Gigi Becali, who claims to have filed a complaint with the anti-corruption unit back in 2001. Popoviciu and the three others under investigation have been freed from DNA custody, and are not allowed to leave the country, as the investigation continues. Corina Saceanu
Flamingo sells indirect distribution division to Asesoft Flamingo International has announced it had sold its indirect distribution division to Asesoft Distribution. The value of the transaction was not made public. “The object of the transaction is that Flamingo cedes to Asesoft some contracts of indirect distribution, which represents just a component in the entire distribution of the group,” said company officials. In 2008, the contracts in question represented 15 percent of the entire turnover of the company. Flamingo will continue the business of direct distribution, accessing corporate clients and infrastructure projects in the IT and communications area. “Through this acquisition we will manage to increase our business this
year even though the market will drop, so we are in the framework as far as fulfilling our targets is concerned,” said Iulian Stancu, general manager of Asesoft Distribution. “We have decided to concentrate our efforts on the direct distribution side, which generates a stable and constant profit, maintaining its growth potential on the medium- and long-term segment in spite of the current economic situation. We preferred to keep a single component which we will develop and improve to the maximum and to focus only on the final customers.” Flamingo aims to address final clients both through large distribution contracts of the wholesale type but also through the retail component of the
group, since both market segments still have, in spite of the current economic situation, a good potential for increase on the medium and long term. In 2008 Flamingo International posted a turnover of EUR 203 million, which represented a 16 percent increase compared to the previous year. The company also posted losses of EUR 10 million. Flamingo has been listed on the Bucharest Stock Exchange since 2005. Asesoft Distribution posted a turnover of USD 127 million, which represented a 22 percent increase compared to the previous year. In 2009, the company aims to post a turnover of USD 130 million. Otilia Haraga
La Poste pierces Romanian market by acquiring Hit Mail The French Post has entered Romanian market through its subsidiary Mediapost, after it acquired 60 percent of the Hit Mail group from its owner Marian Seitan, who will control the remaining 40 percent of the company’s social capital after the transaction. Hit Mail, which specializes in direct marketing services in Romania and posted a turnover of EUR 7.8 million in 2008, consists of five companies, according to the firm. Before this transaction, Mediapost previously made two other acquisi-
tions, in Portugal in September 2008, and Spain in December 2008. Last year, La Poste had a net profit of EUR 529 million, representing a decrease of 44 percent, and does not expect an increase for this year, according to the company. Overall, the group turnover rose to EUR 20.83 billion in 2008, up 0.2 percent versus 2007, according to the group’s financial report. Within the newly formed company Mediapost Hit Mail, Marian Seitan will lead managing operations as managing director, while Nathalie An-
drieux, general manager of Mediapost in France, will be a board member. According to Seitan, Mediapost will bring the necessary investment and expertise to the newly established company, which plans to develop services of relationship marketing for offiline and online direct marketing. The two companies were assisted with the transaction by Irina Anghel law firm for Hit Mail, while Vilau & Mitel provided legal consultancy for Mediapost. Magda Purice BUSINESS REVIEW / March 30 - April 5, 2009
NEWS
Constantinovici, McCann and Associates bets on distressed sales and corporate housekeeping Law firm Constantinovici, McCann and Associates expects to see a drop in its revenues from real estate projects, from 90 percent of its total revenues last year, to around 60 percent, but still hopes to achieve profit this year. “Last year we worked on due diligence and acquisitions, which are more expensive services than those needed in the construction phases. January wasn't really a good month, but February and March were, so I am looking at an increase in profit for this year, because there has been an increase in demand in insolvency and corporate advice,” Theodor McCann, partner with the firm, told Business Review. The company expects to post EUR 450,000 in profit this year and a turnover of EUR 900,000, which will be more than twice the turnover posted in 2008. This year's profit will be fueled by legal advice on distressed real estate sales and by corporate housekeeping services. At the moment, the firm handles 70 percent of its projects in real estate, with the rest coming from corporate housekeeping services, corporate deals, social security issues and insolvency cases. Since the beginning of the year, the firm
has only seen new clients on the corporate and social security segments. “We have preliminary due diligence projects for clients looking at distressed assets, and we will probably see the real estate side growing solely on distressed assets, on purchasing and turning around real estate business,” says McCann. He expects distressed sales to become a secondary market for real estate. The firm has several opportunistic real estate investment funds looking at Romanian projects, with available funding from EUR 100 to 400 million, both for Romania alone and the Eastern European region. Constantinovici, McCann and Associates employs six lawyers, and wants to add two more to the firm, with plans to build an in-house insolvency practice. It is not looking at changing its fees this year. “Increasing the fees would be suicidal now, although many law firms have done this to keep their profits at the same level on less activity. Nowadays, lawyers cost even less considering how the market looks, because there is less need for large law firms now,” the partner explains. Corina Saceanu
Metro Group reports record sales of EUR 68 billion German retail group Metro, present locally with a cash & carry division, posted a turnover of EUR 1.49 billion in 2008, 6 percent down on 2007, which it blamed on the exchange rate. Group CEO Echkard Cordes says there is no guarantee of rising sales in 2009 due to uncertainty over the rate. Metro reported sales of EUR 68 billion and an EBIT of 2.2 billion, up 5.8 percent and 7.1 percent y/y. The results included sales of EUR 26.7 billion in Germany and EUR
41.3 billion internationally, according to the firm. Eastern Europe contributed EUR 18.1 billion to the group’s overall sales results, and Asia/Africa EUR 2.2 billion. The group intends to expand by 20 Metro Cash & Carry units and 10 Real hypermarkets in Eastern Europe, besides opening 50 end-user Media Markt and Saturn household centers in 2009. In Romania, it is planning four more Real hypermarkets units at a cost of EUR 75 million. ■
AmCham Romania calls for measures to support the business environment
BUSINESS REVIEW / March 30 - April 5, 2009
lower tax will encourage investments and discourage skilled labor emigration. As shown in a recently-released OECD study, unfortunately Romania ranks top in the EU for ‘unofficial’ labor payment,” said AmCham. The group also recommends reintroducing the VAT simplification measures previously stipulated by the Fiscal Code. “The VAT reverse charge mechanism should be applied, as VAT pre-financing is a real burden for investors,” say AmCham representatives. Staff
Friday, 20 march, in Pat club, VIP, Romanian and foreign businessmen were gathered together by Diana Metiu International under a noble cause: to promote talented young Romanian artists. The event, organized like a fashionable party under all highlife rules, mixed in a nonconformist manner, entertainment with promoting talented artists and also with rendezvous of one of the most important personalities of the moment. Eggo Fashion Party was the first event from a long series which are going to be organized this year and which will culminate with a catalogue promoting young artists and real talents in various fields like photography, fashion design, music and hair style. The evening host, Gianina Corondan, opened the artistic marathon which in-
cluded Bogdan Dinca’s photo exposition, Denis Predescu’s fashion show on a live bongo drums soundtrack of the Drum Up band, Bling Bling salon’s hair styling and make-up show and Alin Pascal’s recital who launched his officially his first video “Lumea in Picioare”. Famous stars like the photographer Dinu Lazar, the movie producer Ioan Carmazan, the instrumentalist Vali Craciunescu and the music critic Dana Dorian guaranteed for this young artists, presenting them to the public. Within the important names of the evening remarked Mircea Radu, Aniela Petreanu (Divertis), Roxana Iliescu (B1TV), Diana Gherghita (Money Channel), Catalin and Cristina Soloc (TVR2), George Angelescu Monteoro. The guest delighted with traditional Japanese food from the Maiko restaurant and with Tohani wine. Main sponsor of the event was the new founded company Be Igloo, the sales organization of the Norwegian investment found Romania Invest. Nimrod Zvik, sales manager at Be Igloo declared: “I came in Romania for long term projects and there for, we are integrating in the life of the Romanian people. Although there is no connection between real estate and fashion shows, we decided to sustain young talented Romanians because they deserve a chance without depending on their financial situation.
ADVERTORIAL
The American Chamber of Commerce in Romania (AmCham Romania) has submitted to the Ministry of Public Finance a set of measures to support the business environment, as suggested by members of its working groups. Members call for capping, simplifying and consolidating social security contributions, since their uncapping has led to a huge burden on investors who wish to attract skilled personnel and pay adequate salaries. “Capping all social contributions will diminish labor payments on the black or grey market as
Norwegian real estate sustains Romanian arts
5
NEWS
Revenue growth for Cosmote, slight fall for Romtelecom
MINISTRY OF FINANCE AND AVAS QUARREL OVER CEC MANAGEMENT RESHUFFLE é The Ministry of Finance does not plan to reshuffle CEC Bank's management, said representatives in response to a statement by the head of the Authority for the Recovery of State Assets (AVAS), Mircea Ursache, who said the state-owned bank would change its management in April. The bank is now headed by Radu Gratian Ghetea, while the AVAS head mentioned Enache Jiru, who had previously been at the helm of CEC, as a possible replacement for Ghetea. The Romanian Central Bank (BNR) also emphasized that there was no need for CEC to change its management.
Financial results released by Greek group OTE showed that Cosmote Romania posted EUR 311 million in revenues for 2008 and a positive EBITDA of EUR 22.5 million, in line with the previous year’s prediction. Its EBITDA in 2007 was minus EUR 39.2 million. Cosmote Romania ended 2008 with 5.89 million customers, up 3.6 million from end-2007. In 2008, it attracted over 470,000 new postpay subscribers, making a total of 1.1 million. In the prepay segment, the number of users also increased by over 1.89 million to 4.78 million. The firm’s ARPU is only EUR 5.3. “A market share of 23 percent with a base of almost 5.9 million customers – up by 63 percent compared to 2007 – confirms Cosmote for the second year in a row as the most dynamic mobile network in Romania,” said CEO Stefanos Theocharopoulos. In 2008, local mobile penetration reached about 130 percent. Among the main targets for this year, Theocharopoulos mentioned a focus on expanding the customer base and
TAROM CUTS PRICES TO UP PASSENGER NUMBERS é Romanian airline Tarom has recently aligned some of its prices with those of low-cost operators for both domestic and international routes. Tarom, which posted a EUR 20 million loss last year and saw its number of passengers dropping in the last quarter of the year, has introduced EUR 50 tickets for return trips for international destinations and EUR 24 tickets for local destinations. The operator is trying to attract more passengers with this new marketing policy, although the number of low-cost tickets on offer varies depending on the destination and time of booking.
6
Stefanos Theocharopoulos. CEO of Cosmote
innovation in prepaid, postpaid and corporate segments of activity. The other company controlled by OTE in Romania, Romtelecom, the largest landline operator on the market, posted overall revenues of EUR 869.8 million for 2008, a 0.2 percent decrease from the previous year. Its EBITDA also fell slightly from EUR 300.6 million in 2007 to EUR 291.6 million in 2008.
Michelin’s Zalau tire making plant resumes activity
The company halted production in December
The Silvania tire plant in the Romanian town Zalau, owned by Michelin, the world’s second-largest tire producer, will restart activity at the beginning of April. Recently, the company shut down its activity for 18 days to adjust orders to market demand. The other two plants controlled by Michelin, Romsteel Cord in Zalau and Victoria Floresti, have stop working at weekends. According to Alina Ghica, marketing director with Michelin Romania, the company’s employees have either taken leaves of absence or attended training sessions. On January 6, Michelin resumed activity at its three plants in Romania, after closing the gates on December 12, be-
“After taking out the costs of the program for increasing efficiency (which also included a personnel cut from 12,512 at end-December 2007 to 10,344 at end December 2008), the final EBITDA amounted to EUR 253.6 million,” said company officials. Romtelecom had 2.97 million landlines at end-2008, down 1.9 percent from the previous year. However, it had 650,000 Clicknet customers, a rise of 81 percent compared to 2007. The number of Dolce satellite TV customers amounted to 643,000, a 65 percent increase compared to 2007. “The results we had in 2008 both from the point of view of enhancing Romtelecom’s position on a very competitive market and also increasing operational efficiency represent a solid base for facing the challenges of 2009 in the new economic context in Romania,” said Yorgos Ioannidis, general manager of Romtelecom. Otilia Haraga
Oltchim aims to reach revenues of EUR 1 billion by 2013
LAURENTIU OBAE
RTC HOLDING TO INVEST IN NEW COMPANY é RTC Holding, controlled by businessman Octavian Radu, has enlarged its company portfolio with a new entry, Q-Power, a company registered in Netherlands and producing and distributing thermalinsulating tubes, as application for energy-efficiency solutions. According to Radu, the idea came after he talked to Romanian researchers. QPower plans to distribute its solutions in Romania and other European countries, through local partners or its own sales offices. In February, RTC Holding’s owner announced plans to invest in increasing the group's efficiency rather than its retail network, and is even considering closing some of its worst performing Diverta stores.
COURTESY OF COSMOTE
BRIEFS
cause of the drop in global demand caused by the economic downturn. As for the tire market, Michelin Romania officials said that the dynamics of tire replacements increased last year by as much as 10 percent versus 2007, to 2.2 million units, but dropped during the first two months of this year. Before the crisis started, the plant in Silvania Zalau produced 600,000 tires annually and had 1,300 employees, while Romsteel Cord employs 300 people. Michelin entered the local market eight years ago. The company has 129,000 employees and operates 71 units in 19 countries. Staff
State-owned chemical producer Oltchim Ramnicu-Valcea (OLT) estimates that the company’s turnover will hike by 85 percent from last year’s result, up to EUR 975 million by 2013, the first year when the revamped equipment will work at full capacity. The company’s estimates contradict claims by the minority shareholder of Oltchim, the German group PCC SE, who warned earlier this month that Oltchim is running the risk of bankruptcy due to huge losses of around EUR 1 billion. Oltchim claims it cut last year’s debts from EUR 491 million to EUR 434 million and these could be slashed further to EUR 300 million, if the European Commission approves the conversion to shares of the company’s debt to the Authority for the Recovery of State Assets (AVAS). The majority stake in Oltchim is owned by the Economy Ministry with 53.26 percent of shares, and the German group PCC SE which controls a 12.89 percent share package. Staff BUSINESS REVIEW / March 30 - April 5, 2009
CALENDAR / WHO’S NEWS
EVENTS, BUSINESS AND POLITICAL AGENDA MARCH 30
é 20.00 – Soirees de la Mode showcasing the 2009-2010 fall/winter col-
lections take place at Athenee Palace Hilton Hotel.
MARCH 31
é 09.30 – MGT Educational and EASY SOFTWARE AG organize con-
ference “Easy – Solutions for the Administration of Documents” at Phoenicia Grand Hotel, Saidon room.
APRIL 1
é 13.00 – Departure for the inauguration of OBI Pitesti will take place
from Free Press Square. é 18.00 – Land Development Proiect SRL organizes press conference for the inauguration of Militari Shopping Center at Caffe Pascucci. é 19.00 – Inauguration of Decathlon Sports Megastore at Militari Shopping Center.
APRIL 2
é 12.00 – The Bilateral Chamber of Commerce and Industry Romania-
Cyprus holds a meeting at the headquarters of the Romanian Chamber of Commerce and Industry, Dacia room.
APRIL 6
é Romanian Chamber of Commerce and Industry organizes Romanian-
Jordanian Forum at its headquarters.
APRIL 7
é 18.30 – CEU Business School organizes open master class on “The
Global Economic Crisis: Can Central and East European Managers Cope?” at JW Marriott Bucharest Grand Hotel in Galati conference room. The master class will be led by Prof Yusaf Akbar.
APRIL 8
é Microsoft organizes online seminar “getVIRTUALnow”.
APRIL 9-11
é Eurofinantari, consultancy company in development of projects for Eu-
ropean Financing, organizes workshop for “Drafting projects regarding HR development through POS DRU financing”.
Transelectrica lowers last year’s dividend value
STOCKEXCHANGE
Transelectrica is listed on the BSE
Romanian electricity transporter Transelectrica has announced through the Bucharest Stock Exchange (BSE) BUSINESS REVIEW / March 30 - April 5, 2009
that it plans to pay a gross dividend of RON 0.30 per share from 52 percent of last year’s profit. According to company information, this figure is 17 percent less than that granted in 2008 and almost five time lower than the amount paid in 2007. The firm revised upwards by 6.6 percent the net profit recorded last year to EUR 11.4 million. The company reported a 26.3 percent hike in turnover last year, to EUR 793 million. Transelectrica is majority owned by the Finance Ministry, with a 73.69 percent stake. The Property Fund, created to compensate people whose properties were illegally taken by the communist regime, owns 13.5 percent of shares. The company’s market value stands at about EUR 209 million. Staff
WHO’S PHIL JONES was appointed GM of Aviva Pensii. Previously, he was Deputy CEO of Aviva Asigurari de Viata. Jones has 15 years of experience in the financial domain. In 1990 he became financial manager of GI where he spent eight years. Over the next 10 years he worked in financial consultancy. He started collaborating with Aviva in 2001, as interim financial director and chief investment officer of Aviva India. In August 2007, he joined Aviva Romania as financial consultant, but soon became interim financial manager. GEORGE CRISTEA is the new rooms division manager at Howard Johnson Grand Plaza Hotel. He started as a receptionist in 2004 and worked his way up through several positions in the hotel. Cristea holds a master’s degree in Business Administration in Tourism and Hospitality Industry from ASE, Bucharest, a Rooms Division Manager Certificate from the AH&LA, USA and a postgraduate diploma in Hospitality Management from the Ecole Hoteliere de Lausanne & the Royal Institute of Hospitality Management. GRANT MCKENZIE was appointed vicepresident of marketing for Romania in Ursus Breweries. He has spent 12 years in marketing, and was previously marketing & trade marketing director for SABMiller Canarias. McKenzie joined SABMiller în 2005 in Budapest as marketing manager for Europe. He started his career in 1997 at Mars Inc. in the United Kingdom. He has a Marketing & Law diploma from Strathclyde University in Glasgow and has accumulated experience to become Chartered Marketer within the Chartered Institute of Marketing in the United Kingdom. MARTIN DRANE was recently appointed general manager of Cadbury Romania. He has spent the last 25 years working in various management positions for Cadbury. Before coming
NEWS to Romania, he was the general manager of the Belgian branch of the company, and prior to that, general manager of Monkhill, the largest producer of sweets in Great Britain, which is also owned by Cadbury. KEITH HULLEY was appointed interim chief executive officer of Gabriel Resources Ltd after Alan R. Hill announced he would leave the position of president and CEO. Hulley will ensure continuity between the former CEO and his successor. He has three years’ experience as member of the management board of the company and president of the technical commission. He coordinated the evaluation, design, construction and inauguration process of the silver mine in San Cristobal, Bolivia. NICOLAE CONSTANTIN was appointed group creative director at Lowe & Partners. He has worked in advertising for over 12 years. He started his career in copywriting in 1995 and since 2006 he has been creation director in an agency. He has coordinated communication campaigns for clients such as Dero (Unilever), Sunsilk, Aviva, SIAB, Dr. Oetker, Dona pharma, Hellmann’s, Mitsubishi, Panasonic and Renault Technologie Romania. He graduated from the Academy of Theater and Film, the Audio- visual Communication section, in 2001. CATALIN TIHON was appointed sales director of ING Lease Romania IFN SA. He has seven years of experience in leasing. He was previously real estate sales manager within the same ING division. He has undertaken management studies at the Academy of Economic Studies in Bucharest. Before joining ING, he worked in managerial positions within international leasing companies for which he developed the operational and commercial development.
Business Review welcomes information for Who’s News from readers. Feel free to contact us on 206 0680 (10 lines), by fax at 335 3474 or e-mail: otilia.haraga@bmg.ro
7
ANALYSIS By Corina Saceanu
LAURENTIU OBAE
The fund has already announced the social and fiscal measures the government needs to take
Romania prepares to dance to IMF tune for emergency loan The International Monetary Fund (IMF) is planning to lend Romania EUR 12.95 billion to balance the effects of the sharp drop in capital inflows, with additional funding reaching EUR 20 billion in total from several financial institutions. The yet to be signed stand-by agreement comes with strings attached: the social and fiscal measures the Romanian government needs to take. 8
Romania is on its way to receiving a EUR 20 billion cushion loan from a consortium made up of the International Monetary Fund, European Union, World Bank and European Bank for Reconstruction. But, as with any IMF stand-by agreement, the money comes with several conditions. Revising the pension system and public sector pay will be one of them, along with reform of the inspection system for certain public enterprises, which will keep the government busy for the next two years. Low inflation, within the Romanian Central Bank target of 3.5 percent, for this year and the next is also crucial, said IMF representatives. Measures to keep the local banking system well capitalized and strengthen it, plus key support for foreign banks in Romania are also on the to do list. “We will meet with Austrian banks present in Romania to seek their voluntary commitment to keeping their exposure to Romania and not taking money out of the country,” said Jeffrey Franks, the head of the IMF mission which was in Romania for two weeks to discuss the loan agreement. “The core measures under the program are designed to strengthen fiscal policy further to reduce the government’s financing needs and improve long-term fiscal sustainability, thus preparing Romania for eventual entry into the Eurozone,” said Dominique Strauss-Kahn, managing director with the IMF. “The program aims to maintain adequate capitalization of banks and liquidity in domestic financial markets; bring inflation within the central bank’s target and maintain it there; and secure adequate external financing and improving confidence. It contains explicit provisions to increase allocations for social programs, as well as protection under the reforms for the most vulnerable pensioners and public sector employees at the lower end of the wage scale,” he added. The financing package put together for Romania will sustain the balance of payments and could help boost lending through the decrease of minimum mandatory reserves set by banks with the BNR. But the EBRD package will mostly go to the private sector and will not help adjust the balance of payments, which has been affected by imports exceeding exports. “Times will be tough for Romania in the next two years. With or without the IMF agreement, 2009 will be a very difficult year for Romania. 2010 will also be difficult, although perhaps less so
than 2009. But I am optimistic. I trust the EUR 20 billion financial aid for Romania will stand a better chance,” said the IMF representative in Romania. The first disbursement of the funding from the IMF, which will give Romania EUR 12.95 billion under a twoyear stand-by agreement, will most likely come in May, after the IMF board approves what is now a staff agreement. Romania would be able to draw on about $6.75 billion immediately after IMF board approval. The money from the European Council, which has pledged EUR 5 billion for Romania, will probably be available for a first withdrawal in July, after the go-ahead from the European Commission and European Council. The World Bank's EUR 1 billion loan has yet to be discussed in detail with the government, according to Catalin Pauna, chief economist with the World Bank in Romania. The country’s budget deficit is also under scrutiny. It should stay below 3 percent of the GDP in the next two years, below the estimation of 5.1 percent calculated under ESA standards for 2009, slightly under the 5.3 percent of last year. The IMF money will be lent at an interest rate of 3.5 per year, and must be repaid gradually by 2015. The EC finance will bear the interest rate determined by the market on which it is raised, amounting to the EURIBOR rate plus a few basis points, according to the European Commission representative in the joint mission, Filip Keereman, head of the EC unit for the Czech Republic, Poland, Romania and Slovakia. This is the fourth stand-by agreement Romania has signed with the IMF and the biggest sum the country has got from the fund, after deals signed in 1999, 2001 and 2004. The last agreement expired in July 2006 but Romania has not used any of the money pledged by the IMF at that time. The previous IMF loans, which come in Special Drawing Rights, the fund's unit of account, were of 400 million and 300 million SDRs. Romania used 139 million SDR of the first and the full amount of the second. The stringent policies agreed by the Romanian authorities and the IMF justify the exceptional level of access to IMF resources, the equivalent to around 1,127 percent of Romania’s quota, according to the fund. The IMF has so far committed around $50 billion in lending to several economies affected by the deepening global economic crisis, including Belarus, Hungary, Iceland, Latvia, Pakistan, Serbia, and Ukraine. corina_saceanu@bmg.ro BUSINESS REVIEW / March 30 - April 5, 2009
ANALYSIS
COURTESY OF VODAFONE
The local handset market posted EUR 362 million sales last year
Recession not yet ringing a warning bell for posh cellphones Telecom operators are keeping their fingers crossed that the customers who are already hooked on premium and high-end handsets will not ditch them. The most popular handsets last year included the iPhone 3G, HTC Diamond, BlackBerry Storm, Samsung Omnia, Nokia N95 8Gb and Nokia N96. While the mobile handset market is expected to decline, both globally and locally, players say this particular segment will not be affected by the recession. By Otilia Haraga
Last year, the local market of mobile handsets posted sales of EUR 362 million, according to a GfK Temax report, and they were already in decline. The study found a drop of 4.5 percent in cell phone sales figures, mainly because prices fell worldwide. Paradoxically, the most substantial sales locally were registered in the fourth quarter of 2008 when the crisis on the international markets was already looming. “Comparing the value of the BUSINESS REVIEW / March 30 - April 5, 2009
fourth quarter of 2008 with the same period of 2007, the telecom sector remained relatively stable with a slight drop of 0.6 percent,” found the study. The report adds that although the sales of smartphones have strongly increased – this being a sector with a strong development pace in Romania – “the annual rate of value increase for the entire sector has remained negative, especially because prices have decreased both for mobile handsets and for smartphones and the RON has depreciated in comparison with the reference currency (EUR).”
“The market of high-end handsets is certainly a niche one, with a limited percentage of the total. The high-end segment typically means handsets starting from EUR 300, and is typified by models launched by Nokia, Samsung, HTC and Sony Ericsson,” Roxana Cocorel, sales development & support department manager at Cosmote Romania, tells Business Review. She says the percentage of high-end handsets sold in relation to total cell phone sales has remained constant, which means “the Romanian market has reached maturity and is comparable to other markets in the region.” Players do not expect the users of such posh phones to start downgrading. “We do not believe that the customers who are accustomed to using highly efficient handsets will go for an inferior model, but will continue to buy those models that significantly facilitate their daily activities and allow them to keep in touch with what is happening at the office and communicate more easily through the applications provided by the handset,” Mihnea Serbu, senior product manager at Orange Romania, tells Business Review. Telecom operators generally collaborate with producers of mobile handsets in order to obtain the best quality-price ratio for the handsets they sell to the consumer. Prices are influenced by various factors, including the strategy of the producer, the commercial relationship with the operator and the geographical positioning of the country in relation to the logistic centers of the producer. The final price of a handset also depends on how far the operator is prepared to subsidize the phone, thereby passing on a discount to the user, says Serbu. The sales of premium and smartphone handsets represent a sizeable slice of the total sales of Orange Romania. In 2008 there was significant growth on a wave of special offers and promotional campaigns. “For instance, Orange Romania sales of smartphones increased by 20 percent in 2008 compared to 2007, and we believe that future models, capable of combining e-mail access and internet services with multimedia functions, will continue to be extremely attractive to clients,” adds Serbu. Equally, Vodafone Romania doubts sales on the high-end segment will be hit by the downturn. “In 2009, we expect an increase in
the high-end handset segment of approximately 5-10 percent, despite a slight drop forecast in the total number of mobile handsets sold in Romania,” Andrei Oltei, manager of handsets at Vodafone Romania, tells BR. He attributes this prediction of growth to the falling prices of handsets, as well as the diversity of models on sale and increasing demand for the services that users can access on this type of phone. This includes functions such as mobile e-mail, internet, music and similar. Over 80 percent of the exclusive handset models sold by Vodafone Romania were acquired by customers through the network of Vodafone’s own stores. Special offers are employed to make the phones available to a larger slice of the interested public. “We believe that these offers have made models in the high-end range accessible to more categories of customer and contributed to an increase in sales on this segment,” says Oltei. This year, Orange Romania has introduced in its portfolio of products the BlackBerry Bold 9000 and BlackBerry Curve 8900, Nokia 5800 XpressMusic and Sony Ericsson Xperia X1. To date, the best sold models introduced last year include the Nokia (with models from the E series), HTC and RIM (the BlackBerry range) as well as the Apple iPhone 3G, which is popular for its browsing and multimedia capabilities. Meanwhile, at Vodafone Romania, the best sellers include the HTC Diamond, BlackBerry Storm – an exclusive Vodafone model – Samsung Omnia and Nokia N96. Cosmote Romania customers bought up the Nokia N95 8Gb, Samsung I900 Omnia maps and HTC Diamond. So far this year, the most popular models have been the Samsung M8800 and Sony Ericsson X1, says Cocorel. What business customers most look for in a high-end phone is a touch screen combined with full QWERTY keyboard, mobile connectivity at high HSDPA speeds for better access to e-mail and internet, GPS, HSUPA, Wi-Fi and access to their company’s business applications. Users in the consumer segment go for facilities such as a generous display with a very good resolution, special multimedia capabilities (HD), good camera, rapid access to music and video services and a high data storage capacity. ■ 9
ANALYSIS
After growth joyride, turnaround management brought on board for bumpy ride ahead The time has come for Romanian companies to look at what went wrong in the past and start turning their future around. Local firms have begun to reshuffle management, replacing people in key positions. Local managers have the opportunity to learn from their own mistakes and from the mistakes of the West, and this may change the way companies do business, creating a pool of homegrown leaders. By Corina Saceanu
10
HISTORY TO APPORTION BLAME, PRESENT TO FIND THE SOLUTION But who is to blame for the companies that have failed during this turbulence? Is it the market itself? It is the Romanian management, which has never seen such a crisis before, or the foreign management, which may have seen its share of bad times and could have turned the local subsidiaries around before it was too late? “It is not the first time multinational companies have seen something like this. They have the advantage of having dealt with regional and local crises over time, giving them the expertise which is more than required in dealing with the global crisis,” Dragos Dinu, partner with Link Resource consultancy firm, tells BR. Dinu, who was with A&D Pharma
for 13 years, left his CEO position with the company last year and went on to become a partner in a firm which offers consultancy on the pharma market. “Who’s to blame for this situation? It is difficult to say considering the worldwide crisis on the financial markets. One could easily be tempted to speculate that human nature is to blame. But I strongly believe that it is counterproductive to even think that way as this goes hand in hand with the conclusion that ‘if it’s somebody else’s fault, somebody else should fix it’,” says Stefan Bucataru, director and owner of Veldtster Management & Consulting. A sense of shared responsibility and a diligent and responsible focus on working things out is much more appropriate for all players within the business community, says Bucataru, who left the helm of Global Finance Romania at the end of last year after four years with the fund. If one were to point fingers at those who made mistakes, understanding the strategy and decision-making policy of each individual firm would be essential. “If the local management is merely implementing the strategy which was decided at a regional level or in HQ, which is often the case, then it is different than if a local head is not complying with corporate policies,” says Ulrik Rasmussen,
Management reshuffles this year – the new faces é A&D Pharma – temporary CEO
Robert Popescu, CFO Dimitris Sophocleous é Adesgo – CEO Goer Meir é Cadbury Romania – CEO Martin Drane é Danone – CEO Stephane Batoux, HR manager Oana Farcasanu, marketing manager Kiril Hadzhidinev é Euroweb Romania – commercial manager Catalin Scarlat, technical director Gabriel Ionita é Global Finance – investment director Stelian Dragan é GsK – CEO Patrick Desbiens é Heineken Romania – CEO Jan Derck van Karnebeek é LG Electronics Romania – general manager Roh Pan Ock é Romtelecom – strategy director Ovidiu Ghiman é Somaco – CEO Gabriel Colobatiu é Tiriac Holding – CEO Petru Vaduva é UPC Romania – sales manager Razvan Agrosoaie
SOURCE: BUSINESS REVIEW
It takes a crisis to succeed, say turnaround managers, those people every shareholder thinks of when their companies suffer. Nothing gets more attention than running out of cash, but how leaders respond to this makes all the difference. A classic turnaround starts with a management reshuffle, several of which have been seen in Romania since last October, when local companies started to feel the need for new vision to see through the clouds. The need for turnaround management and the effects of the crisis on companies provide valuable lessons for current and aspiring managers, and will change the way companies do business. “The current crisis has an important moral dimension and now we have to learn its lessons. I think that leadership itself is in crisis, the way we do business will change and the focus will shift from making profit at all costs to making profit and doing the right things. The interesting thing is that most companies were taken by surprise, despite some very visible ‘early warnings’,” Silviu Hotaran, training leader and general manager of GKTI Semper Human, tells Business
Review. Hotaran, who had steered Microsoft Romania through both good and bad times from 1996 until last year, when he went on to set up his own consultancy firm, says the management culture in Romania needs to change. “The individualism, plus lack of trust and personal responsibility are already barriers for growth, with or without a crisis. The ‘one man show’ syndrome prevents companies from scaling up and to reach the next level,” he goes on.
BUSINESS REVIEW / March 30 - April 5, 2009
ANALYSIS
LAURENTIU OBAE
LAURENTIU OBAE
COURTESY OF DRAGOS DINU
Dragos Dinu, partner with Link Resource
Silviu Hotaran, GM at GKTI Semper Human
Ulrik Rasmussen, partner Pedersen & Partners
partner with Pedersen & Partners executive search firm. Looking for and finding those responsible is for the economic history, not for the present, says Dragos Dinu. “The present needs solutions and mobilization, not people to blame. They will pay with their jobs, losing shareholders' trust and their reputations,” says Dinu.
is a must. “I am still running into people talking about aggressive growth scenarios, new investments and looking for growth financing. Do not get me wrong, there are companies and industries who experience growth during periods of crisis. However for the vast majority it is a time for managing cash, cutting costs and focusing on core business,” Stefan Bucataru explains. What we’re seeing now is a return of companies in the worst affected sectors, like the car industry or real estate, to optimizations and efficient solutions to allow an increase in the number of clients who can afford their products even without generous financing, explains Dragos Dinu. But making a mathematic, quantitative restructuring, simplified to slashing staff and cutting salaries, to save the company’s profit is wrong, Dinu thinks. “The attention needs to be re-focused on key employees on all levels, to key customers and to shareholders at the same time,” he goes on. And it seems the market can provide the necessary professionals to make these changes. “I see a lot of great professionals on the local market with immense potential and who could quickly adapt to the present environment, where they will be forced to fight to maintain their market positions rather than increase market share, which was the case
before,” says Ulrik Rasmussen. But where many executives are falling short is on the organizational development level – building is easy, while maintaining and improving is the difficult part, and not from a business viewpoint, he believes. “Cost benefit analysis, risk assessment and cash flow management are key today,” Rasmussen goes on. “I foresee an increase in expatriates with proven CEE management experience returning to Romania in key roles,” the Pedersen & Partners representative says.
COMPANIES LOOK FOR TURNAROUND MANAGERS It doesn't matter so much whose fault it was as long as companies manage to change and keep up with markets. “Many companies are changing and refocusing their strategies, which includes making their management teams leaner and more efficient. They are looking for people with track records of leading successful turnarounds and start-ups who have achieved measurable results, people with diversified skills who are able to manage change,” Rasmussen adds. The key positions are head of operations and top finance jobs. Silviu Hotaran sees a clear lack of talent in leadership today, so he thinks the focus should be on developing local managers and leaders. “Actually, bearing in mind the global situation, this is an interesting opportunity for Romania,” he says. First of all, accepting the new reality
BUSINESS REVIEW / March 30 - April 5, 2009
NEW MANAGERS EITHER LEARN THE HARD WAY OR ADMINISTER THE RIGHT MEDICINE It has been easy to do business and to be a manager during the past few years due to the huge boom, commentators agree. “In particular, Romania has benefited from several years of significant growth, which generated rather carefree entrepreneurial behavior within the business community, summed up by the phrase ‘anything goes’. That, plus the relatively easy access to bank credit has resulted in a prevalence of over-leverage within a large number of players with fragile business fundamentals,” says Stefan Bucataru. After a joyride on the growth curve, managers need to face the bumpy ride
down and find their way up again. “Besides dedicating more time to developing their management skills, many managers need to learn the basics of running a competitive business with tight budgets while applying management performance tools and analysis,” says Ulrik Rasmussen. A CEO should be a leader and a model and we can see this kind of person everywhere. “Let's not forget that Wall Street is full of Harvard and Yale graduates from all over the world, and this hasn't kept them from making the ‘legal’ mistakes, as the US president Barack Obama said recently,” says Dragos Dinu. The recruitment pool is certainly bigger aboard, and expertise and tradition have their part to play, but this doesn't mean there aren't enough candidates of value in Romania, he goes on. “It's a matter of attitude and of shareholder trust to have them promoted,” says Dinu. Even big companies can be poor examples, because of their short-term thinking, trying to concentrate on surviving, preserving profits at the huge cost of giving up on relevant resources and long-term opportunities, believes Silviu Hotaran. “Repositioning, redefining objectives, for example market share vs. profit, looking at the effects of the crisis on the competition, even asking questions – the right questions at the right time can be part of innovative solutions, such as Where do we want to be when the crisis ends? How can we differentiate from others? – can be possible outcomes of positive visions built on right attitudes,” says Hotaran. “The crisis is affecting everyone and, one way or another, everyone is looking for solutions. It is not a solution for anyone for companies to start folding. It may sound like a cliche, but the expression ‘together we can make it’ has never been more relevant than today,” Bucataru concludes. ■
11
ANALYSIS confirm that in the first three months of this year fuel sales have been lower than before. “On the local oil retail market, the beginning of this year brought a decrease in demand. The current economic climate and the substantial cut in companies’ activity have led to lower revenues and to a decrease in customers’ purchasing power. Moreover, from what we have observed, individuals now tend to limit their outlay at the filling station to a certain amount of money,” Zsolt Szalay, country chairman of MOL Romania, told Business Review. The firm owns a total of 133 filling stations in the country.
OUT
LAURENTIU OBAE
Foot off the gas: the financial crisis is making its effects felt on oil companies’ margins
Low pressure for oil companies’ pumps Major oil companies with operations on the local market have announced a substantial decline in fuel consumption in Q1, and predict that the downward trend will continue. Market players attribute the slump to falls in activity in the car industry, transportation, metallurgy and construction. Oil firm representatives tell Business Review that they will try to compensate for the decline in demand by developing the non-oil side of their business. By Dana Ciuraru
In November last year, OMV Romania’s general manager Rainer Schlang predicted that fuel sales on the local market would go up by between 3 and 5 percent this year, from the 10 percent hike last year. “Romania will not suffer an economic recession, but the market’s 12
growth rhythm will be lower than estimated,” said Schlang. According to him, the financial crisis will affect fuel consumption in several sectors. The OMV’s GM forecast is an optimistic one compared with the actual level of fuel consumption in the first three months of this year, but offers a fair assessment of the reasons for the fall in consumption. Market players
OF GAS
“Regarding Petrom sales for this entire year, we estimate a 15 to 20 percent cut in demand for the commercial sector, and a stagnation or even a 15 percent decrease on the retail side,” Mariana Gheorghe, Petrom CEO, told Business Review. Its market share on the retail side was 36 percent at the end of last year. The firm owns 448 filling stations, while Petrom Group operates 819 units: 550 in Romania and another 269 in the region. The MOL Romania country chairman also predicts that the local fuel retail segment will continue to slump as a result of falling activity across several sectors. “B2B fuel sales in the first months of this year were influenced by the activity cutback in the automotive industry, construction and metallurgy. For instance, car sales were down 60 percent in the first two months of this year, compared with the same period of 2008. Construction and metallurgy have also registered constant decreases because of difficult access to funds or lack of liquidities,” said Szalay. Dan Ionescu, operational manager at Rompetrol Group, added, “From the analysis conducted by the company, car fleets have decreased by 50 percent, which is one of the main reasons for the market decline.” Rompetrol Downstream operates 450 filling stations and seven fuel deposits in Romania. Overall, throughout the country last year, the firm sold more than 1.4 million tons of fuel, a growth of about 10 percent compared to 2007. But it’s not all doom and gloom. For Petrom, this winter’s gas crisis
was a breath of fresh air on the commercial sales side. “On the commercial segment, crude oil sales increased by 20 percent, as a result of the gas crisis and of diverting thermo power plants’ consumption towards crude oil. For other products our sales decreased by 10 percent compared with Q4 2008, as a result of low consumption in the transportation and industry areas,” said the Petrom CEO.
NON-OIL ES
SALES OFFSET LOSS-
Lukoil Romania plans to double its non-oil sales as fuel consumption falls. “We intend to double our income on the non-oil segment and increase the share of profit from services,” said Constantin Tampiza, Lukoil Romania’s GM. He believes that the potential business growth on the services segment is very high. Unlike markets in Western Europe, where non-oil sales contribute 50 to 70 percent of total income, in Romania the average is about seven times lower. According to him, for Lukoil Romania the proportion is about 5 percent. He estimated that, in Q1, average fuel sales per station decreased by 12 to 15 percent. Currently, 15 percent of all MOL Romania receipts represent non-oil sales. “Our priority has always been to make the current filling station network more efficient, and optimize the corporate and individual services portfolio. As a result of this strategy we have completed a large analysis of our activity and we have decided not to close any MOL filling stations. Furthermore, the development plan of our retail network will be implemented as of this year in accordance with feasibility,” said the MOL Romania country chairman. For Petrom, the investments on the marketing side will focus on optimizing the operations and increasing their efficiency, as well as the construction of new fuel storage space. “Last year, sales on the nonoil segment rose by 45 percent from the previous year, to EUR 86 million, due to the portfolio and acquisition process optimization,” said Gheorghe. It is clear that the current economic climate is leaving its mark on the fuel retail market, and players must also wait to see how the exchange rate fluctuates, as this is another important factor for oil companies’ bottom line. dana.ciuraru@bmg.ro BUSINESS REVIEW / March 30 - April 5, 2009
ANALYSIS
COURTESY OF RUUKI
Building market share: construction firms are restructuring to weather the financial storm
Construction material producers chase bigger piece of shrinking pie While the overall construction market is tipped to continue to shrink until financing becomes available again, building material producers are not resting on their laurels, but have started to look for a larger market share and product portfolio through partnerships, mergers and business restructuring. Although large acquisitions are unlikely this year, the bigger players plan to consume some of the smaller ones’ share. By Magda Purice
PRODUCERS
COUPLE UP TO CONSOLIDATE MARKET SHARE
Mapei group, the international construction materials producer active locally through its subsidiary Mapei RomaBUSINESS REVIEW / March 30 - April 5, 2009
nia, recently announced it had acquired the Italian company Polyglass. Vasile Brad, general manager of Mapei Romania, thinks that the move will help the company enlarge its product portfolio and develop internationally, in the hope of attaining a global turnover of EUR 2 billion by 2010.
It’s not the only firm making such moves. Last week, Swedish Investment fund Oresa Ventures announced it would relaunch the Somaco brand, by merging the construction materials producer’s three plants into a sole company by August. Oresa acquired the plants last year through subsidiary Sonriso Investments at a cost of EUR 32.5 million. The three generated a turnover of EUR 20 million, according to the fund’s representative in Romania. For the next four years, the fund plans to put EUR 8 to 10 million into Somaco, to help the firm triple its turnover. Cornel Marian, the fund’s GM in Romania, said, “After an estimated decrease of about 10- 20 percent this year, we expect the market to recover within two to three years. This will definitely be a difficult year but we hope investments in commercial spaces, industrial, residential and especially infrastructure will allow interesting growth in this sector.” An optimistic focus on infrastructure was also voiced by Holcim Romania's GM, Markus Wirth. He recently told Business Review that he hoped infrastructure projects would deliver contracts for the company: “It is not that I'm relying on infrastructure contracts for this year, but the country greatly needs these projects and there are European and structural funds available for such projects,” said Wirth. The Romanian Contractors Association (ARACO) estimates a drop of 10 percent for the local construction market, its president Laurentiu Plosceanu said recently. “Companies are now talking about survival this year,” he added. Construction firms began to feel the pinch in H2 2008, when the financial shortage started to hit the whole market and payments were delayed. H2 2008 also saw investors delaying and canceling projects on the local real estate market. In this context, the construction market, estimated by ARACO at EUR 14 billion, was 6 percent smaller than in 2007. But some players remain bullish. Ruukki Romania, a provider of construction materials on the local market, is planning a growth of up to 30 percent against the current market downturn. The optimistic expectations follow its strategy of entering on two new markets, one of which is thermo-insulating panels, a market estimated at EUR 136 million, according to company representatives, of which Ruukki is aiming for 7 percent. Through its division Ruukki Metals, the firms also plans to gain a market share of 10 percent from an overall metallic structures segment of EUR 200 million. “Local acquisitions are not likely this year and it is more important to gain
market share from the small competitors on such fragmented markets as the roof segment,” Madalina Dumitru, country marketing manager Ruukki Romania and Bulgaria, told Business Review. Ruukki is involved in ongoing projects including Oradea-based Era Shopping Center 1 and 2, Tiago Mall and the Olimpic Pool. It has also worked on logistic center Pepsi Bucharest and the Arcadia Mall.
LEASING
COMPANIES SWITCH FOCUS TO SAFER SEGMENTS THAN CONSTRUCTION
Impuls Leasing Romania, part of the Swiss holding Impuls Leasing International and controlled by Raiffeisen Landesbank Oberosterreich AG, recently announced its plans to achieve a turnover of EUR 200 million in 2009, similar to this year’s figure. With the value and number of contracts signed for construction equipment leasing in 2009 set to plunge, the company's strategy is to focus on more dynamic segments such as medical and agriculture. According to the firm, lack of activity on the construction market is hitting equipment leasing operations. In 2009, Impuls Leasing plans to develop the nine units it announced last year it would open. The firm intends reach EUR 200 million of financed assets, down from previous estimates of EUR 270 million. The EUR 70 million shortfall reflects real estate leasing, according to the company, which is hoping the property market will rebound in H2 2009. As leasing companies switch focus, equipment leasing operations (including for construction) are also expected to change. According to the yearly report from the Association of Financial Companies in Romania (ALB Romania), at the end of 2008, financing for equipment represented EUR 1.08 billion of a total of EUR 4.81 billion of leasing financing all year. Construction equipment made up half of this sum. Medical machinery, by comparison, barely reaches 3 percent, but the segment is expected to grow this year. Equipment leasing almost tripled in 2008 versus 2007, representing 42 percent of total leasing on the market last year, compared with a slice of 16 percent gained in 2007. “From a construction market valued at EUR 10.2 billion in 2008, construction materials represented a wedge of EUR 4.5 billion. Cement makes up EUR 800 million, bricks EUR 250 million, while the roofing segment was estimated at EUR 200 million in 2008,” said Claudiu Georgescu, president of the Association of Building Materials in Romania (APMCR). ■ 13
INTERVIEW What costs are we talking about? Over the last four or five years everybody was beating the growth drum, and banks were opening branches as if they were going out of fashion, hiring people at a very high cost and paying high rents. Now times have changed. In the current environment, I don’t expect revenues to grow dramatically. Banks will have to analyze how efficient their entire operation is, and ask themselves if they are using their people efficiently. Our strategy has been different. We have not opened hundreds of branches like other banks and our costs are down 15-20 percent year on year, because we have less economic activity and a lower sales volume.
COURTESY OF RBS BANK
RBS exits lower income segment The current economic climate has changed the Royal Bank of Scotland’s (RBS) strategy for the local market. HARIS HANIF, managing director and country head of retail with the bank, told Business Review that the lender had exited certain segments, which were judged to be at risk of unemployment, in Q4 of last year. Hanif says the bank will focus on developing private banking and credit card services this year. By Dana Ciuraru
How solid do you judge the Romanian banking system to be? It is clear that economic activity is slowing down, and therefore the banking sector is also being affected. I don’t think that there would be any dramatic fears that something will happen to the banking sector in Romania and banks will go bank14
rupt. It will be a difficult year for banks, I’m not denying that. They will really have to look at costs, efficiency and what they can do to be more productive. RBS is very well financed in Romania and we will not seek financial support from any international financial institution. We have a very limited dependency on the group, about 10 percent.
How is the current exchange rate affecting your business? Of every EUR 100 in deposits, 75 percent represents a loan, and we have some 130,000 customers in the retail division. Over 50 percent of customer borrowing is in EUR and the RON/EUR exchange rate therefore plays a significant role. It is critical because, if you look at the entire market, I think that over 50 percent of total loans are in foreign currencies. The IMF loan is a good signal to the market and I believe it will really help. My view is that it will create stability. If we look at the performance of the RON, it has moved between RON 4 and 4.3 per EUR for the last couple of months. My view is that it will stay in that range. I do not expect a significant depreciation of the RON. What changes has RBS made as a result of the current economic climate? Somewhere in September, October last year, we upgraded our credit criteria and as a result we exited some segments of the market where we thought borrowers could suffer higher unemployment or would not be able to pay back the loans, for example the lower income segment. The loan market has slowed down tremendously over the last year and our volumes have too. If you look at the market, in January and February, there was negative growth, which defines very well the significant slow down in market activity, especially on the loans side. For RBS, in these two months, the fluctuation was not dramatic.
We have become more conservative in our approach due to the current economic climate. As a bank we will never invest in real estate, except mortgages. For this segment, in February this year we registered almost the same volume as in the same month of 2008. What are RBS’s advantages as the bank looks for a buyer? We are trying to find the best parent for RBS Romania, who will be willing to invest, further grow the business and take a long-term view in Romania. We haven’t done the pricing. But meanwhile we continue to consolidate our business. There are still some segments, where we are doing extremely well, like credit cards. We are selling 25 percent more credit cards this year than the previous year, between 3,500 and 4,000 per month. We will launch various types of investment products, a new deposit product soon, internet banking and a transaction call center. Next month we will open another branch in Cluj. So far we have opened a branch in Bucharest last month and we also manage two preferential banking units, one in Bucharest and the other in Constanta. Selectively, if we find the right location at the right price, we will open more branches. What targets does RBS have for this year? We will take a very cautious approach. We will continue to grow on the credit cards segment and our services in the area of private banking, for which we reported total assets of EUR 2.3 billion last year. We currently have three preffered-banking units and we are hiring more people, to add to the current 1,700 employees. We are introducing new products and new training programs. To sum up, we will continue to push on private banking and credit cards. We will also push for deposits, but not at the interest rates currently available on the market. We will never pay a 20 percent interest rate. I believe that price is an issue in the absence of value. We will pay what we believe is the right price, currently 5 percent interest for EUR deposits and 14 percent for RON. With these rates, we have upped our deposits from individuals by 9 percent. On home equity and personal loans we will be selective and conservative in our approach. dana.ciuraru@bmg.ro BUSINESS REVIEW / March 30 - April 5, 2009
Estates&Construction
MARKET
MARCH 30 - APRIL 5, 2009 / VOLUME 14, NUMBER 11
BUSINESS REVIEW FORUM
Manage your business environment !
Oresa Ventures brings new management to Somaco and plans new acquisitions
COURTESY OF SOMACO
Lto R: wCornel Marian, managing director with Oresa Ventures and Bengt Jansson, head of the board with Somaco
Investment fund Oresa Ventures has installed new management at construction material producer Somaco and is planning to acquire other production units on the market to add to the three Somaco factories it bought last year for EUR 32.5 million. It intends to up the firm’s turnover from EUR 20 million expected this year, a similar level to last year, to EUR 60 million by 2014. The expected results only include organic growth and come despite the bleak market outlook. “It may take longer than initially estimated, but we will still get there,” said Cornel Marian, MD with Oresa Ventures in Romania. The fund, which is not yet in negotiations for another acquisition, but which expects to start working on new deals in the next two to four months, says Somaco will make a profit this year, despite a pro-
jected 20 percent fall in the construction material market. Representatives say Somaco's sales fell by around five percent in the first months of this year, but a comparison to last year would be biased by the production increase in the firm's factories. Oresa Ventures, which raised Somaco’s production capacity by around 30 percent, wants to further invest EUR 10 million. The fund has installed new management at Somaco Grup Prefabricate, which covers the factories’ production. Gabriel Colobatiu, previously with ASA Turda, will be the new CEO, with Eugen Pitic, coming from Xella Romania, as commercial director. Sorin Miron, formerly CFO of Michelin Romania, becomes the new CFO, and Remus Benea from la Fantana operations director. The new head of the board, Bengt Jansson, joins from Finnish
Consolis, one of the largest producers of prefab materials, where he was CEO. Somaco Grup Prefabricate produces BCA and concrete prefabs, ready-mix concrete and aggregates. It runs three factories in Adjud, Buzau and Roman, with a sales focus on central and eastern Romania. Oresa Ventures, the Swedish investment company, brought the factories last year from local firm Somaco, which in the meantime changed its name to SMC Prefabricate pentru Constructii, a Rasdaq-listed company. The fund has so far invested EUR 150 million in CEE firms. In Romania, it fully controls Fabryo; Kiwi Finance, where it has an 80 percent stake; Trinity, with 60 percent; La Fantana, with an 80 percent package; and Flamingo, with a minority package of 6 percent. Corina Saceanu
ESTATES & CONSTRUCTION MARKET
Immoeast cancels 53 European projects, over half in Romania
LAURENTIU OBAE
Austrian investment fund Immoeast is planning to cancel a total of 53 projects in Europe, of which half were to have been built in Romania, according to the fund’s financial and investment report for the three quarters ending on January 31, 2009. So far, the fund has 73 remaining properties in Romania, representing a book value of just under a EUR 1 billion and almost 2 million sqm of lettable space, equaling 45 percent of Immoeast’s overall GLA in Europe. The Romanianbased properties’ value represents 23.8 percent of the fund’s overall EUR 4.05 billion portfolio in Europe. The decision to cancel the 53 projects came “in the scope of measures for the consolidation and strengthening of liquidity which began in autumn of 2008. As a result, the capital requirement (equity and loans) for the future has been drastically reduced. Open investment costs have been reduced by a total of EUR 3.15 billion, EUR 2.43 billion of which is accounted for by
S-Park office project is one of Immoeast’s properties in Romania
Immoeast, the remainder by partners for specific development projects,” stated the report. Fund representatives said the cancellations would incur EUR 34.7 million in costs, 11 percent of the planned investment volume for the projects concerned. Depending on the current planning status, another 16 projects with a project volume of
EUR 1.15 billion will be cancelled or sold off from the remainder of Immoeast’s development portfolio. Ongoing negotiations concerning the cancellation procedures are currently underway, according to Immoeast. Recently, the fund sold its share package for their joint projects in the region to the Austrian real estate de-
veloper S+B Gruppe. Overall, the fund stated revenues of EUR 86.1 million in Q3 of 2008/2009, 13.8 percent up on the previous fiscal year, while cumulative revenues in the first three quarters rose by 19.3 percent to EUR 252.7 million. The report also states a significant increase in earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter year on year, while a 2.6 percent decline from EUR 91 million to EUR 88.7 million was observed in accumulated figures. The development of the financial result was especially negative, showing a negative EUR 559.1 million and accumulated EUR 870.9 in the third quarter. The most significant factors putting a strain on the result were the devaluations in financial investments and associated companies as well as the effects of the exchange rate, which at a negative EUR 920.8 million impacted the financial result of the first three quarters, according to the report. Magda Purice
Atrium’s local properties lose 22 Conarg to deliver Rasarit de Soare percent of initial EUR 70.6 million in September
Atrium European Real Estate, which develops commercial center projects in Romania, such as the soon to be opened Bucharest-based Militari Shopping Center, posted a 22 percent drop in its local property re-evaluation, from EUR 70.6 million in 2007 to EUR 45.2 million in 2008. The approximate EUR 25 million decline in value was made pub16
COURTESY OF CONARG
COURTESY OF ATRIUM
New stores will open in the retail park this week
lic in the firm’s annual financial report. Atrium European Real Estate has scheduled the opening of the commercial gallery of its Bucharestbased retail park Militari Shopping Center for April. The site has a GLA of 16,000 sqm and a market value of EUR 23.2 million, with a yield of 8.77 percent. By the time of completion, the entire park will deliver 51,400 sqm of rentable area which will host 61 shops and anchors. The company owns land plots in Arad and Constanta where it plans to build similar shopping centers as the one in Bucharest, the firm’s first project in Romania. The commercial gallery of Militari Shopping Center will open this week, adding brands such as Media Galaxy, C&A, Decathlon, Hervis, New Yorker and Deichmann to aleady existing ones linke Praktiker. Staff
The developer had previously said it would deliver the project in 2010
Pitesti-based real estate developer Conarg Real Estate is sticking to its announced delivery plans for the company’s east Bucharest-based project Rasarit de Soare, for the third quarter of 2009, even though the company said it may not be finished until June 2010. According to Conarg Real Estate’s general manager Romeo Cazanescu, the project’s real estate agent CBRE Eurisko has signed sales contracts for 60 percent of the
total project. Rasarit de Soare, a EUR 60 million investment, is being built in eastern Bucharest, in the Titan area, on 18,221 sqm. It consists of seven blocks of 988 flats – studios and apartments of two to four rooms – along with 1,224 parking spaces. Last year, the developer estimated that the project would be delivered onto the market at the end of 2009, when it is estimated to reach a market value of EUR 75 million. Magda Purice BUSINESS REVIEW / March 30 - April 5, 2009
BR AWARDS
LAURENTIU OBAE
Business Review publisher Bill Avery and an audience of 200 high-ranking members of the Bucharest business community congratulated the award nominees on their successes in what was an unprecedentedly bearish year on the market
Business Review honors the fittest survivors in challenging times Business Review rewarded the business champions of 2008 last week, in a gala event which gathered 200 top managers and business people at the JW Marriott hotel. By Corina Saceanu In a challenging market environment, Business Review last week honored the players who had succeeded against the prevailing tide at its Investment Awards Gala. The ju18
ry chose nine winners from 32 nominees across ten categories: deal of the year, M&A, financial adviser of the year, law firm of the year, real estate deal of the year, sustainable business practices, best renewable energy project, businesswoman of
the year, businessman of the year and growth strategy. The jury decided that no award was to be given in the last category, given the current market circumstances which call for downsizing rather than growth.
Raiffeisen Bank received the deal of the year prize for its takeover of HVB Banca pentru Locuinte (Housing Bank), one of the few deals in the banking system last year. Steven van Groningen, president of Raiffeisen Bank Romania, accepted the award, and also went home with another trophy after being voted businessman of the year too. Mariana Gheorghe, the CEO of Petrom, was named businesswoman of the year, an award which honored her leadership of the Austrianowned company, which has invested EUR 3.41 billion in Romania so far. French insurance company Groupama received the M&A award, having been chosen from a five-nominee list. Capital Partners was named financial adviser of the year, having pipped KBC Securities, which was also nominated in this category, to the prize. For the second year in a row, Tuca Zbarcea si Asociatii, the biggest law firm in Romania turnover wise, according to the latest data, claimed the law firm of the year award. This year it was in competition with three other law firms. Ioana Momiceanu of BNP Paribas Real Estate took the real estate deal of the year prize on behalf of her team, the company having been recognized for its takeover of local Atisreal Romania. Sopolec Business Advisory Services received the sustainable business practices award, while Continental Wind Partners was given the best renewable energy project prize for its EUR 1.1 billion Fantanele project. This year's Business Review Annual Investment Awards jury was made up of Anca Harasim, executive director with AmCham Romania; Benoit Blarel, country manager at the European Bank for Reconstruction and Development; Dan Pascariu, president of the board of UniCredit Tiriac bank; Horia Manda, senior vice-president & chief investment officer of the RomanianAmerican Enterprise Fund RAEF; Andrei Caramitru, general manager with McKinsey & Company; and Jonathan Youens, managing director of Creative Global Property. The Business Review Annual Investment Awards were held by Business Media Group, the publisher of this magazine. The event was sponsored by XTrade Brokers. â– BUSINESS REVIEW / March 30 - April 5, 2009
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ALL PHOTO BY LAURENTIU OBAE
■ 1. TV presenter Lucian Mandruta introduces Mariana Gheorghe, CEO of Petrom and winner of the business woman of the year award ■ 2. Friedrich Niemann, GM of the Bucharest Hilton and nominee in the businessman of the year category, together with jury member Anca Harasim and Raiffeisen Bank president Steven van Groningen, winner of the businessman of the year award. ■ 3. Mariana Gheorghe with Friedrich Niemann and Steven van Groningen ■ 4. Lawyer Gabriel Biris and Radu Lucianu of CBRE Eurisko ■ 5. Ioana Momiceanu of BNP Paribas Real Estate ■ 6. Todd Shollenbarger, managing partner with the Bucharest office of White & Case, and Bryan Jardine, managing partner of Wolf Theiss ■ 7. Gabriel Zbarcea, managing partner of Tuca, Zbarcea & Asociatii ■ 8. Florentin Tuca, managing partner with Tuca, Zbarcea & Asociatii, and Angela Rosca, partner of Taxhouse ■ 9. Steven Borncamp, managing director of Sopolec ■ 10. Laurent Thuillier of Groupama ■ 11. Radu Florescu of Saatchi & Saatchi Romania with Jean Pierre Vigroux of Mazars Romania ■ 12. Angela Rosca and Valeriu Binig of RAEF ■ 13. Leslie Hawke and Radu Florescu ■ 14. The winners of the BR Awards pose for the traditional group picture ■ 15. Victor Safta of X-Trade ■ 16. Lucian Mandruta hosted the event ■ 17. Anca Harasim and Jonathan Youens ■ 18. Radu Popoiu of Continental Wind Partners
BUSINESS REVIEW / March 30 - April 5, 2009
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RESTAURANT REVIEW
… But is it Chinese? CHINESE GARDEN, PIPERA TUNARI, NR 2. TEL here are four gastronomic regions in China, each with its own distinctive cuisine. They are: Cantonese, Huaiyang, Szechuan and Peking. One thousand million Chinese know this, but this tiny country of Romania knows better than all those folk. Because here in this gastronomic desert there is another region, Romanian Chinese! And to describe that style of bullshit cuisine – it is simply vile. Romania continues to get away with gastronomic fraud with virtually every ethnically themed restaurant in the land. You can forget about savouring international cuisine in almost every restaurant. Nothing is worse than the Romanian versions of Asian cuisine. If you want to see the most revolting, hideous aberration of Chinese or Asian food, visit the dreadful Dragon House in Amzeii. Why not go there? Lots of people do, who know nothing about Chinese cuisine. So you can well imagine I approached the Chinese Garden somewhat cautiously. It is easy enough to find, next door to Mega Image in the Pipera neighbourhood, where silly folk pay a fortune to live in prisonlike compounds and then risk having a heart attack out of frustration whilst waiting for one hour in a morning traffic jam to cover ten kilometers. The décor is ordinary middlemarket Romanian. This is not a bad thing, because the alternative could have been red dragons, and red paper lanterns, and red wallpaper, and red tables and chairs. In an ethnic restaurant, the food should do the talking, not the imitation décor. So far, the House has got it right, although our charming Romanian waiter did look absurd wearing a blue and gold Chinese disco jacket! A vast menu arrived, far too large for me to cover here. However, my heart sank when I noticed it was segmented into sections headed ‘pork’, ‘fish’, ‘beef’, and ‘chicken’. For that is precisely how Romanian restaurants list their offerings. I feared we were gong to get yet another phoney meal. But I was wrong!
021 269 1446
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LAURENTIU OBAE
I was pleased to see they offered ‘Huo Guo,’ which is a base of spicy or mild soup, into which you add your choice of either mutton, beef, prawn, fish or squid. That was authentically Chinese, but the high price was authentically Bucharest. They had overpriced side dishes such as spinach, mushrooms and cabbage for between RON 12-18. They even had the ludicrously misnamed ‘seaweed’ at RON 16. Seaweed it is not, rather it is simply deep fried, shredded Savoy cabbage. I smiled at the very nerve of the House to charge RON 16 for a side of coriander leaves. So we ordered the tourist staple of ‘sweet and sour pork’ which was perfect. It should be. It is, after all, the simplest Chinese dish to prepare. Portions were generously large, so we ended taking most of our food home with us. However, prior to
that we had a selection of three different steamed pork dumplings. They were OK rather than memorable, and I would have liked to have seen them brought to the table in a bamboo steamer. But no! Our calamari in a chicken broth soup was excellent, so too was our
Michael Barclay mab.media@dnt.ro
LAURENTIU OBAE
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Far East eats: this place is a cut above many local rivals, where the cuisine resembles a China crisis
sliced and stir fried duck. But like so many Chinese chophouses, they made the mistake of patronising the clientele by assuming they know nothing about Chinese food, so the menu has the absolute minimum of description. So you are on a ‘need to know’ intel basis with meaningless descriptions such as ‘curry sauce’ food with ‘tomato’ or with ‘pepper’ or with garlic’… and so on. Overall, we enjoyed our food immensely. As to its authenticity, please bear in mind that Peking is a cold region with lots of preserved and dried foods, no rice but dumplings together with Western influenced dishes. Cantonese is South China near Hong Kong with fish dishes predominating, loaded with soy and hoi sin sauces. Szechuan is west China with inland dishes (no fish whatsoever) such as pork and poultry spiced up with their local red-hot chillies. Huaiyang is east coast China with noodles rather than rice with fruit and vegetables dominating the menus. So where does this House fit in the regional authenticity area? It does not! It offers a mixture of foods that will suit the local Romanian tastes, rather than giving them the real regional stuff. However, that said, I consider it to be the best Chinese chophouse in town. But let’s face it – they have no real competition.
Chin-easy does it: simple dishes for local diners are the order of the day at Chinese Garden BUSINESS REVIEW / March 30 - April 5, 2009
FILM REVIEW
FILMREVIEW: The Wrestler
Wrestling with his conscience: Mickey Rourke
Sporting has-been, fallen on hard times, returns to the ring for one last shot at glory. It could be many movies, including about half a dozen Rockys. But The Wrestler is elevated above the rather conventional sports film genre, largely by dint of an exceptional, Oscar-nominated performance from Mickey Rourke as the eponymous fighter. The story is delivered through nofrills, pared down filmmaking, which often has the feel of documentary. An opening montage of newspaper cuttings, match tickets and radio voiceovers conveys the heady heights that Randy the Ram’s (Rourke) career reached back in the 1980s. It’s all a long way from his current condition –
BUSINESS REVIEW / March 30 - April 5, 2009
living in a trailer park, estranged from his family, and eking out a living through a combination of the amateur wrestling circuit and packing boxes at the local supermarket. Despite the good-natured banter between the wrestlers (many of whom are played by genuine practitioners), Randy’s only real friend is Cassidy (Marisa Tomei), a dancer from a local strip club. The similarities between their lives are obvious. Both earn their living in ways that are essentially fake – Randy’s fights are choreographed by the combatants, and the desire Cassidy affects to show for her loserish redneck punters is equally phoney. Both are struggling on in bodies that are too old for their trade. Both have identity issues symbolised by their use of stage names – Cassidy is really Pam, who sees herself as a mom, not a stripper, while Randy is trying to escape his humdrum life as Robin Ramzinski. Further, reallife parallels can be drawn with Rourke himself, whose own career was in the doldrums before the success of this picture restored his luster. The film doesn’t shy away from re-
vealing the bleakness of Randy’s New Jersey world, the humiliation of the washed-up star getting locked out of his trailer for rent defaults, and begging his smart alec boss for extra hours. Nor does it gloss over the brutality of his sport. If you don’t wince during Randy’s second fight, a hardcore wrestling bout featuring all manner of grisly makeshift weapons, you’re not human. Despite – or most probably because of – the barrage of drugs he’s taking to keep his aging torso in shape, Randy’s doctor advises him to retire. But will patching up his relationship with his daughter (Evan Rachel Wood) and pursuing romance with Cassidy be enough to sustain him, without the thrill of the ring and roar of the crowd? It’s a clichéd premise, and much of The Wrestler is predictable, sports film fare. But the movie is ennobled by its humanity. Touching scenes of the general dressing room camaraderie, when Randy encourages a younger wrestler in the manner of a friendly uncle, and jokes around with the trailer park kids, are moving without being overblown. Most viewers will be able to sympa-
thize with the feelings of disappointment and humiliation when Randy and his fellow pros while away the time at a poorly attended autograph session. “You look just like him – only older,” says a fan who recognizes a mortified Randy working at the supermarket. Ouch. The daughter and romance subplots occasionally strike a false note. But that does not detract from what is an eloquent, funny, sad and tender film. The heart of it is Rourke’s powerhouse of a performance, which would surely have earned him this year’s Best Actor Oscar, were it not for Sean Penn’s eyecatching turn as gay politician Harvey Milk. Rourke’s physicality – at times he is like a wounded lion – and humanity make the character utterly convincing and never ridiculous. Debbie Stowe Director: Darren Aronofsky Starring: Mickey Rourke, Marisa Tomei, Evan Rachel Wood On at: : Hollywood Multiplex, The Light
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EVENTS
NGO calls for special center Romania officially joins Earth Hour for the first time for gifted children
IRSCA Gifted Education, a nongovernmental organization that advocates and supports the development of talented people in all domains in Romania, is calling for the setting up of the first Gifted Education center, kinder-
Serbian works go on show at the National Museum of Art
Local company Eltrix, producer of signs, indoor and outdoor visual materials, has launched ArhitechSIGN, an urban signs competition which will take place in March and April. This year's theme is space and light. The competition has the Architecture and Urbanism University, the Bucharest City Hall and the Sector 1 City Hall, as well as Igloo Media as partners. Winners will receive EUR 2,500 in total prize money, and the winning projects will be on display at the Annual Architecture exhibition in May. More details about the competition can be found at www.arhitechsign.ro. 22
tributions from Serbian artists who created some of their art in the Banat region of Romania, such as Konstantin Danil and Nikola Aleksi. The majority of the pieces in the exhibition are part of the Collection of Paintings of the 20th Century. Many depict artists who have contributed to shaping the universal artistic language by constantly getting involved in important contemporary European artistic movements such as expressionism, cubism, secession and symbolism. The National Museum in Belgrade is the most important museum in Serbia. Its collections encompass 400,000 works of art, archeology and numismatic pieces. Otilia Haraga
The initiative calls attention to climate change
Romania officially joined the Earth Hour campaign for the first time on Saturday, March 28, when individuals, corporations and institutions were urged to turn off their lights for one hour in order to mark their concern about climate change and environmental protection. “The business community has an
incredible ability and responsibility to engage employees, customers and suppliers to create a sustainable future for our planet, and we therefore welcome the involvement of major international businesses such as Hilton in Earth Hour,” said Andy Ridley, global director of Earth Hour, for the WWF. Earth Hour was organized for the first time in Sydney, Australia, when 2.2 million people and companies switched off their lights for an hour. A year later, the event went global, involving 50 million people from 35 countries. In total, 931 cities in the world have entered the program, seven of which are in Romania: Bucharest, Timisoara, Iasi, Brasov, Botosani, Cluj-Napoca and Tulcea. In Bucharest, lights were going to be switched off at the Parliament Palace, Romanian Opera House, Romanian Athenaeum, National Art Museum and the National Military Center. Otilia Haraga
The names of ten subway stations that have no real connection with their actual locations will be changed by Metrorex. The transportation company announced it was inviting proposals for new names from the citizens of Bucharest for a period of ten days. The ten subway stations to be re-named are Semanatoarea, Armata Poporului, Industriilor, Timpuri Noi, Aparatorii Patriei, IMGB, Depoul IMGB, Laromet, Linia de Centura and Policolor.
Industrial-techno-rock band Motor is the second band confirmed as an opening act for the Depeche Mode concert, joining Ladytron. Motor was selected by band member Andy Fletcher and will open several European dates, including Bucharest. Depeche Mode will be performing in Romania on May 16 in Izvor Park. Motor, made up of Bryan Black and Olivier "Mr. No" Grasset, rose to fame after their first two studio albums Klunk and Unhuman, and have performed in well-known festivals such as Sziget and Werchter. Tickets for the concert are on sale in the Diverta chain of stores and on the site www.myticket.ro for 360 RON (the VIP category), RON 120 (sector B) and RON 100 (sector C).
LAURENTIU OBAE
The National Museum of Art is hosting for the first time the exhibition A Century of Serbian Painting, 18501950, Masterpieces from the National Museum of Belgrade. The display opened last week. This is the first time when the selection of 150 paintings and graphic works by the most important Serbian artists has been presented outside its country of origin. The exhibition will run until June 14. The 50 pieces, which represent the evolution of Serbian art, mark artistic European events that took place between 1850 and 1950. Among the attractions are works by the first celebrated woman painter in Serbia, Katarina Ivanovic, plus con-
STOCKEXCHANGE
STOCKEXCHANGE
The campaign needs 150,000 people to donate 2 percent of their annual taxes
garten and after- school club, dedicated to gifted children. “Romania today is one of the few countries in the EU which is massively exporting brains without having any center for supporting and developing the intelligence of young people,” said representatives of the NGO. The center should represent the most modern education institution, and should be a point of reference in education, with the best curricula, the most talented teachers and the best internationally validated teaching methods. IRSCA Gifted Education in partnership with EDUGATE has started a national campaign entitled “Put a brick!” which is intended to facilitate the creation of this center. It requires about 150,000 people to redirect 2 percent of the annual taxes they pay to the state toward this project. Otilia Haraga
Campaign raises awareness of diagnosis of autistic children The Romanian Angel Appeal and Fundatia pentru Dezvoltarea Societatii Civile (FDCS – the Foundation for the Development of Civil Society), together with Vodafone Romania have begun a campaign to inform 10,000 Romanian doctors about autism in children and teach them how to identify the first signs of the disorder. Screening materials will be sent to family doctors in 33 Romanian counties in March and April, as part of the campaign “Together we can fight autism!” The materials were translated with help from the US Help Autism Now Society. Staff BUSINESS REVIEW / March 30 - April 5, 2009