FRANKLIN TEMPLETON AND MORGAN STANLEY SHORTLISTED FOR PROPERTY FUND MANAGEMENT; SEE PAGE 6 ANALYSIS
The Centre Ville aparthotel complex hopes to keep its occupancy rate above 90 percent this year, says general manager Yaron Ashkenazi See page 9
ANALYSIS
REAL ESTATE
Plori Capital and Consulting plans to invest in offices after selling its shares on the local stock market, says investment director Gerasimos Vergotis See page 12
Graham Kilbane, the new GM of developer Omilos Group, is focusing on leasing space in Era Shopping Park projects See page 13
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JUNE 1 - 7, 2009 / VOLUME 14, NUMBER 20
HUNG UP
Cable operators expect a grim year, with landline services and re-transmission of TV content both down, prompting price cuts. The internet segment will still be dynamic, but an optimistic forecast suggests overall market stagnation LAURENTIU OBAE
See pages 10-11
BUSINESS REVIEW ROMANIA’S PREMIERE BUSINESS WEEKLY
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NEWS
P&G Romania sees turnover fall 3.74 percent Banks seek commercially bullet-proof CEE in 2008, gambles on Urlati plant projects in energy, KPMG consultants say Consumer goods producer and distributor Procter & Gamble Romania reported a consolidated turnover of EUR 532.53 million for the fiscal year 2008, down 3.8 percent from EUR 553.2 million in 2007. After three years of turnover growth, P&G’s local operations posted a similar value in 2008 to 2006. While three of the firm’s divisions – Procter & Gamble marketing Romania, Procter & Gamble distribution and SC Detergenti – registered positive net profit in 2008, the company’s materials management division suffered a loss of just under EUR 900,000 in the interval, according to the company’s financial report. After making a greenfield investment of USD 50 million in 2008 in a 250,000-sqm plant in Urlati, Prahova county, the company announced at the beginning of 2009 it would commence production in spring of 2010. The USD 50 million investment in the first development stage of the beautycare production line could see 50 percent of production go onto the Romanian market and the rest through-
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out the Balkan region. Following the full completion of investments, the plant will produce more for external markets, according to P&G. Two years after entering the Romanian FMCG market in 1992, the American company acquired a powder plant in Timisoara for which it estimated direct investments of USD 35 million. More than half of the production in Timisoara is exported to eight countries in the Balkans. In the future, P&G plans to expand its production at the Timisoara-based plant as well as at its distribution center in the same city. Total investments estimated by the company exceeded USD 600 million in the last two years. The money went on training programs and educational projects while USD 300 million of the total was spent on advertising and mass media. P&G currently operates on several markets, including detergents (with Ariel and Tide) and personal care products (with brands such as Pantene, Head & Shoulders and Gillette). Magda Purice
Most top executives worldwide say renewable energy projects remain economically viable despite collapsing fossil fuel and commodity prices and the credit crunch, but the view on the US and European markets is different. Péter Kiss, KPMG`s global power & utilities sector leader, says while the EU has set a 20 percent target for the share of renewables in final energy consumption by 2020, the current financial crisis has slowed the progress of such projects. Of the 200 senior energy executives from across the globe surveyed for KPMG’s annual report into M&A in renewable energy, 42 percent identified the US as the country where they were looking to invest, while 24 percent named India. Although some large energy companies in Europe feel stymied not just by finance but also by planning and access to the grid, the US is starting to look more attractive to foreign investors with a stable government stimulus creating the potential for a more profitable deal environment, according to the survey. Of the Romanian energy market, Kiss said that the banks are looking for
commercially bullet-proof projects and renewable investments which are still much more expensive than conventional power generation technologies and therefore can only be viable with significant state support (investment and/or operating subsidies), so they are at a disadvantage. “Taking into account the potential of renewable resources, size of the electricity market, gap to meeting EU targets and the attractiveness of support schemes, some the most attractive targets for wind, biomass and/or hydropower generation and geothermal investments may be in Romania, Poland, the Czech Republic, Croatia, Hungary, Slovenia, and Bulgaria,” said Kiss. Razvan Mihai, partner at KPMG Romania, thinks the local energy market has potential for investors, particularly for renewable sources. “Many installations are 35-40 years old, and need to be replaced, not only to bring them up to date with modern technology but also so that Romania complies with its international obligations related to protection of the environment, ” he said. Magda Purice
BUSINESS REVIEW / June 1 -7, 2009
3Q regional vice-president Atomic Energy of Canada Limited (AECL) What is the current status of works at nuclear units three and four at Cernavoda? EnergoNuclear, the company handling the project, is starting the preproject phase, which might take one and a half years. The main objective of this phase is to establish the exact cost, schedule, licensing requirements of the Romanian and European authorities and also to finalize the technical and economical analysis to see whether the project will be competitive. The current estimated cost is EUR 4 billion, which could be recovered in about 15 years, depending on the financing sources. Has AECL signed a contract with the project company? We do not have a contract yet, not even for the pre-project work. But we are the obvious participant to assist EnergoNuclear with the studies that will lead to this very important decision. We expect to hear from them sometime next month. AECL will be the contractor for the nuclear units 3 and 4 CANDU technology. If the pre-project conclusion is positive, the actual works will start some time towards the end of next year.
BUSINESS REVIEW / June 1 -7, 2009
The elections for the European Parliament on June 7 are quickly approaching – though enthusiasm among the public is muted. The political parties in Romania have picked their candidates, but there are fears that the turnout will be low, especially as the presidential elections due to take place much later, when the mandate of President Traian Basescu expires (he was sworn in as president on December 20, 2004) seem to spark more interest. Turnout at the previous European elections was also low, 29.12 percent. According to an INSOMAR poll this month, the Democrat-Liberal Party (PD-L) and the Social Democrat Party (PSD)-Conservative Party (PC) alliance will each get 30 percent of the vote. Next will come the Hungarian Minority Party (UDMR) with more than 7 percent, Greater Romania Party (PRM) with 6 percent and independent candidate Elena Basescu with 4 percent. Several of the candidates are wellknown figures on the political stage. The PD-L list includes Theodor Stolojan, a former prime minister and current MEP; Monica Macovei, a former justice minister; Traian Ungureanu, a journalist and
Merrill Lynch downgrades Romanian economic forecast to 6.4 percent contraction this year The Romanian economy will contract by 6.4 percent this year, with an estimated drop in GDP of 2.5 percent in 2010, according to an analysis by Merrill Lynch. Previously, the financial management and advisory firm had forecast a drop of 3.4 percent in GDP for this year and 3.2 percent for the next. The correction came after a revision of the fundamental economic trends, as well as after the fiscal adjustments following the agreement between Romania and the International Monetary Fund (IMF). “The sharp contraction in 2009 and 2010 will be caused on one hand by a normalization of economic trends, after the record 7.1 percent growth last year, which was fueled by exceptional factors, and on the other, by the fiscal measures stemming from the IMF agreement,” found the Bank of America-Merrill Lynch report on Central and Eastern Europe emerging economies. The IMF has anticipated an economic contraction of 4.1 percent for this year, with stagnation foreseen for 2010. Corina Saceanu
The elections are expected to see a low turnout
columnist; Dan Preda, a counselor to the president of Romania; and Valentin Bodu, a former lawyer and current MEP. The PSD candidates include Adrian Severin, a former foreign minister and current MEP; Ion Mircea Pascu, former defense minister and current MEP; Daciana-Octavia Sarbu, a lawyer, party activist and current MEP; Corina Cretu, a former journalist and MP and current MEP; and Victor Bostinaru, a former university professor and current MEP. The PNL line-up features Norica Nicolai, an MP and Senate vice-president; and Renate Weber, a lawyer and current MEP. Among the UDMR candi-
dates are Laszlo Tokes, a priest and current independent MEP; Iuliu Winkler, an engineer, economist and current MEP; and Csaba Sogor, a priest and current MEP. Finally, the PRM line-up features an odd couple: nationalist leader Corneliu Vadim Tudor and George Becali, businessman and owner of Steaua football club, whose recent detention dominated the headlines in the mass media. The best-known of the new faces is Monica Macovei, who is number two on the PDL list. A former justice minister between 2004 and 2007, Macovei is highly respected in Brussels for her efforts to combat corruption. At the other pole is Elena Basescu, a fashion model and the daughter of President Traian Basescu, who is running as an independent. She is considered an “eccentric candidate” by the French and German press while the Austrian media dubbed her “the Barbie candidate.” The elections for the European Parliament take place at the same time across all 27 member states of the European Union and, after the MEPs are selected, Romania will have 33 people in the European Parliament. Otilia Haraga
ALL THE WAY FROM AUSTRALIA TO ROMANIA KINGDOM-FASTBUILD TECHNOLOGY “THE WAY OF THE FUTURE FOR ROMANIA“
“The Most Innovative Residential Building Concept to Come Along In Over Half a Century” FastBuild-steel framed homes Kingdom Constructii has recently been appointed as the distributor for the steel frame system technology FastBuild for Bucharest, Romania. With its strong engineered and durable product is renowned among developers as a trusted system for the construction of lightweight steel framed homes and its the way of the future for Romania. It is considered the market leading product in Australia and now Kingdom Constructii will continue in expanding the product into Romania’s housing industry. Kingdom Constructii is focused on designing the best steel framed homes and in creating the most affordable construction method for residential developers. FastBuild has invested heavily in its manufacturing facilities and information technolo-
gy to create and improve its products here in Romania. FastBuild uses customized software for the ongoing development of its products and machinery. Kingdom with its FastBuild system will commence shortly on a new project called Oakland Homes in the new subdivision in Tunari for Southern Cross. The project consist of 95 affordable homes and by using the new Kingdom-FastBuild technology, the developer Southern Cross are able to sell their 100m2, P+1 homes with car space, front and rear gardens starting from 99,990.00euros. Southern Cross a leader in creating affordable homes will also use the building technology on all their other projects in the Tunari area creating the most affordable area to own a home for Romanians. The design of FastBuild’s machinery and associated tooling has progressed over the years and is now capable of producing a world leading high precision product. On site, it only takes a few days to erect a typical structure 100m2 home with just a few people making the Kingdom- FastBuild system one of the most labour effective systems available. The typical Kingdom- FastBuild home is so fast, low cost to build and being a steel product makes the FastBuild home easily insured by insurance companies and funded by banks. More details contact tel: 021 313 90 36 , www.kingdom.ro
ADVERTORIAL
Have you discussed a nuclear unit at a new site with the Romanian authorities? The only discussion we have had with the authorities is regarding the new reactor designs AECL has developed and will build in Canada and Austria. This new technology should not cost more, because one of the objectives of making a new, safe design is to keep it economically competitive. Nuclear power plants are being built because the cost of electricity is cheaper. The new technology is the advanced CANDU reactor (ACR 1000) which is bigger than the one used at Cernavoda. Dana Ciuraru
Elections for EU Parliament expected to draw small crowds
LAURENTIU OBAE
John Saroudis
NEWS
5
NEWS
Franklin Templeton and Morgan Stanley make the shortlist for Property Fund management
Morgan Stanley owns 2.7 percent of BSE shares
The race to manage the Property Fund is nearing an end with two US investment management firms on the final list after submitting technical offers, in the third phase of the selection process. Franklin Templeton and Morgan Stanley will now submit financial offers, and a winner should be chosen this month, said Enache Jiru, head of the selection commission. Several other firms failed to pass the first and second phases. Aviva Investors, ING Investment Management and BlackRock Investment made it to the second phase, while Finag Holding, an Erste company, Julius Baer and
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the Credit Suisse-OTP consortium were eliminated after the first. The two US firms are now fighting for the administration of the fund, a stake of EUR 3 billion of assets under administration. Franklin Templeton manages $500 billion of assets in mutual funds and other investment alternatives, with its stock traded on the New York Stock Exchange and included in the Standard & Poor's 500 Index. The firm is bidding for the Romanian project through its London-headquartered division. The firm does not yet have an office on the local market. Its emerging market division is headed by financial guru Mark Mobius. Morgan Stanley had until recently been present in Romania through its 50 percent share package in HTI Valori Mobiliare brokerage firm, which it eventually resold to its initial owners. The firm owns 2.7 percent of the shares in the BSE. In 2007, Morgan Stanley had more than $570 billion of assets under management. The winner will manage the fund's assets and see to its planned BSE listing. Corina Saceanu
Romanian CEOs call for government involvement and real action, Deloitte study reveals Romanian CEOs have said they have a long-term commitment to the local economy, despite the difficult year brought on by the global economic crisis, but have also underlined the need for more transparency and active involvement from the government, according to the Romanian CEO survey released by Deloitte Romania. “The general perception of the CEOs Deloitte interviewed is that the local economic downturn, although caused by global events, is actually a necessary correction that had to take place,” said Antonis Ioannides, transaction services partner with Deloitte Financial Advisory. “Many businesses have been run inefficiently for many years and now they have the chance to optimize operations. 2009 will definitely not be a growth year, but CEOs are confident in the long-term prospects of their businesses and the local market overall,” he added. The government’s role within the economy was among the main challenges identified by the survey respondents, with CEOs expecting much more involvement, long-term planning
and real action. Infrastructure works, from this perspective, could be a good start, according to Deloitte. Such works – from transport infrastructure to public administration, urban development, waste management, education, health, sport and leisure – have become golden opportunities for Romania in such challenging times, according to the firm. The private sector will witness a healthy and active wave of consolidation, with most respondents looking at the second half of 2009 and beyond. “The M&A market is still on hold, mostly because it needs to first undergo a natural selection and eliminate the weakest players, and also because there is still a significant imbalance between sellers’ and buyers’ price expectations,” said Ioannides. Deloitte Romania reported a EUR 36.26 million turnover for the 2008 calendar year, up some 32 percent against 2007. Audit services brought 40 percent of the revenues, while the rest came from professional consultancy services. Staff
BUSINESS REVIEW / June 1 -7, 2009
NEWS Law firm Lina & Guia aims for 15 percent higher revenues
BUSINESS REVIEW / June 1 -7, 2009
increase in the M&A market, as well as in public procurement. Of the industry areas gaining ground, energy and natural resources are likely to become notable,” Iordache foresees. In dispute resolution, Iordache has seen demand from real estate players for assistance with settlement of disputes relating to construction contracts and commercial leasing, as well a demand for transactional assistance for new construction contracts, where all parties are now more cautious in negotiating conditions and guarantees. The law firm Lina & Guia, which has four partners and 11 lawyers, has seen the economic downturn in Romania generating pressure on fees for legal services, due to the cash flow problems of the market. It is not so much a direct pressure on billing rates but more a focus on cost control and predictability, along with a concern with payment terms. Mihai and Cristian Guia, Cristian Lina and Adrian Iordache are partners in the firm, which was set up in 2007. Corina Saceanu
Romgaz-Sterling collaboration still up in the air
STOCKEXCHANGE
Local law firm Lina & Guia foresees an increase in revenues of 10 to 15 percent this year from EUR 1 million last year, when its main areas of growth were real estate, energy and natural resources as well as mergers and acquisitions. “Judging by the first quarter of this year – which is, even in times of economic boom, a difficult quarter – we expect a 10 to 15 percent increase in revenues,” Adrian Iordache, partner at Lina & Guia, tells Business Review. He expects increased demand in corporate matters and M&A, regulatory, compliance and disputes, with a strengthening of the firm’s focus on industries such as telecom and energy. As for real estate, Iordache says that even the speculative real estate acquisition market could become more dynamic, “provided that the market becomes liquid, even at disastrous initial prices.” The most obvious growth areas this year will be dispute resolution, as well as assistance with regulatory and compliance issues. Employment law is also an area of growing interest. “It is possible that we could see a general
Romgaz is ready to exploit the Black Sea resources alone, says the Ministry of Economy
Romgaz, the state-owned gas producer, is ready to exploit Black Sea resources without Sterling Resources. The statement was made recently by the state secretary in the Ministry of Economy, Tudor Serban. According to him, the legal situation regarding the agreement with Sterling must be clarified.
“Romgaz is ready to enter and exploit the continental plateau in the Black Sea alone. The situation with Sterling must be settled. An inspection is ongoing and there will be a report,” said Serban. Representatives of Sterling Resources said recently they agreed to associate with the gas producer Romgaz, but only if the gas producer were interested. “For the future, if Romgaz is interested we are happy to discuss a partnership, as they are the second biggest gas producer in Romania,” said Stephen Birrell, vice-chairman at Sterling, who added that all the allegations made by the Romanian authorities were false. Sterling Resources was accused of having failed to prove that it had the necessary technical and financial capacities to function. Birrell said that Sterling could not have started oil operations without these capacities, which were checked by the National Agency for Mineral Resources (ANRM). Dana Ciuraru
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CALENDAR / WHO’S NEWS
EVENTS, BUSINESS AND POLITICAL AGENDA
WHO’S
JUNE 1 é 09.00 – The ExP Group organizes the Treasury Risk Workshop – For-
eign Exchange Risk and Hedging seminar in Bucharest. Registration required. é 16.30 – Baby Acorns celebrates three years of existence at its headquarters.
JUNE 2 é 09.00 – The ExP Group organizes the Treasury Risk Workshop – Inter-
est Rate Risk and Hedging in Bucharest. Registration required. é 10.00 – IRIS SA, Apple Authorised Distributor in Romania, organizes an event on the distribution of Apple products at Hotel Radisson SAS, Merope I room.
JUNE 3 é 19.30 – Centre Ville opens Le Bistro restaurant in Victoriei Square.
JUNE 4 é 11.00 – L’Oreal celebrates 100 years at Hotel Residence Cerisiers,
Domenii room. é 14.00 – The humanitarian campaign Overland for a Smile returns for
the fourth time in Romania under the high patronage of the Italian Embassy in Bucharest and the National Union of Italian Entrepreneurs in Romania.
Unirea Medical Center puts EUR 3 million into two centers in Constanta and Ploiesti
COURTESY OF CMU
Unirea Medical Center acquired 50 percent of Avamedica last year
Unirea Medical Center (CMU) has opened two new diagnosis and treatments centers in Constanta and Ploiesti following an investment of EUR 3 million, the company has said. Its plans include the opening of two new clinics in Cluj and Bucharest. The new center in Constanta was opened in partnership with the Constanta-based Avamedica and the greenfield development required an investment of EUR 1.5 8
million, according to the company’s released data. Last year, the firm acquired 50 percent of Avamedica. CMU owns four clinics in Constanta so far. The clinic in Ploiesti, worth EUR 1.3 million, is the second clinic opened by CMU in the city. So far, CMU owns 10 clinics and hospitals in Bucharest and seven clinics in other Romanian cities. Staff
IULIAN TECU, 44, is the new country manager of A&D Pharma’s Elantis division. He has over 14 years of experience in the pharma market, having worked for companies such as Schering Plough Central East AG and Bio Medical Group. He graduated from the Faculty of Medicine and Pharmacy in Bucharest in 1988 and holds a master’s degree in Communications and Public Relations from the National School of Political and Administrative Studies.
NEWS ANDREIA BUNEA has joined OgilvyInteractive as copywriter. She is a graduate of the Psychology Faculty. She has worked for various advertising agencies such as McCann Erickson and Idea Zone. IONUT JUGANARU has joined OgilvyInteractive as art director. He is student at the University of Art in Bucharest. He has worked for various advertising agencies such as McCann Erickson and Idea Zone.
CARMEN STERIAN has joined the Ogilvy Interactive team as client service director. She has 15 years of experience in marketing and advertising in Romanian and multinational companies where she has developed ATL, BTL, PR and new media projects.
HRISTO NIKOLAEV PENCHEV was appointed chief engineer of the JW Marriott hotel. He comes from Atyrau, Kazakhstan, where he was part of the team which opened two Marriott properties – Renaissance Atyrau Hotel and Marriott Executive apartments. Prior to that, he was with Pan Service and with the Panasonic dealer in Bulgaria.
CRISTINA DIMA has been appointed account manager for the implementation of online projects for OgilvyInteractive. She graduated in 2005 from the Sociology and Social Assistance Faculty and obtained a master’s in Strategic Marketing at the Academy of Economic Studies in Bucharest. She has previously worked for McCann Erickson and Mercury360 Communications.
MIRKO PEZZERA was appointed chef at the Cucina Restaurant at JW Marriott. Pezzera has expertise in hotels in the US, Italy, Ireland, Thailand, the Caribbean, Singapore and Costa Crociere Cruise Lines. He holds a diploma from the Scuola Professionale Alberghiero Clusone and has also graduated from a wine tasting course at Luigi Veronelli’s school.
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
US Embassy in Bucharest rents land from Baneasa Investments for new HQ The US Embassy in Bucharest will move into a new building located near Tunari forest in 2011, according to the institution’s officials. The new site will be built on five hectares of land rented for 99 years from Baneasa Investments, controlled by Gabriel Popoviciu.
The construction works will last two years and will be carried out by American International Contractors-Special Projects company which signed the contract in 2008. The construction companies Bog'art and Apolodor are also involved in the project. Staff BUSINESS REVIEW / June 1 -7, 2009
ANALYSIS
COURTESY OF CENTRE VILLE
Yaron Ashkenazi, general manager of the Centre Ville hospitality complex
Centre Ville fights to keep over 90 percent occupancy while industry average declines Despite a reduction in traveling and accommodation budgets, aparthotels seem to be doing better than hotels in terms of occupancy and profitability, but they too have to come up with innovative ways to thrive. Yaron Ashkenazi, general manager of the Centre Ville aparthotel complex, talks to Business Review about the hotel's mid-crisis results. By Corina Saceanu
Yaron Ashkenazi is one of the very few hotel managers who can report higher than average occupancy rates, even for this year, than any other in the hospitality industry. Last year he saw an occupancy rate of 92 percent at Centre Ville and wants to keep it at a similar level this year, compared to an average market occupancy of around 60 percent. How does the unit Ashkenazi runs manage to achieve such high occupancy rates? The first and simplest answer is that Centre Ville is an aparthotel, which rents apartments to foreigners doing business in Romania for the long term, and BUSINESS REVIEW / June 1 -7, 2009
demand is steadier on this segment despite the downturn. “We have long-term contracts; we have clients here who have stayed with us for more than five years. In every developing country the aparthotel is a winning product. If a guest stays more than 15 days in a month in Bucharest, they find it better to take an apartment in an aparthotel,” Ashkenazi, general manager of Centre Ville hospitality complex, tells Business Review. “If the crisis hadn’t started, we would have finished this year with a 97 percent occupancy rate. We start each month with 80 percent occupancy, and the marketing team is working to fill the gap. I hope to finish the year at 91 percent.” One of the aparthotel’s biggest
contracts is with the Romanian Parliament, which pays for its MPs to live there, bringing a big portion of the hotel's revenues. With its 290 aparthotel rooms structured in Centre Ville Elite luxury units and in the Centre Ville Aparthotel hotels, the complex is the biggest of its type in Bucharest and even Europe, says Ashkenazi, who doesn't see any competition on the local market for the product. “There are only 100 units in total in aparthotels in Bucharest,” he says. “Some smaller aparthotels which have been created recently, but an aparthotel needs more than 100 units, and there is none bigger than this,” says Ashkenazi. Moreover, the aparthotel is the most profitable business in the hospitality industry. It doesn't have public areas which come with high costs, so it can be very profitable. “The aparthotel runs on a 60 percent gross operating margin, which is one of the highest in Europe in the hospitality industry. We finished last year with a 60 percent gross operating profit and we are making efforts to stay within 58-59 percent profitability, which is still very high,” the general manager explains. In the region, a good hotel can make a 45 to 47 percent GOP, and aparthotels should do 55 to 60 percent. Centre Ville's aparthotel units should bring its owners, the Israeliowned Bucuresti Turism, a turnover of EUR 8.5 million this year, according to Ashkenazi. A further EUR 1.5 million should come from renting the commercial spaces in the complex, while the Radisson SAS hotel, also part of the complex, is set to bring in EUR 20 million. “In total that’s EUR 30 million, which is not bad given the current market situation,” says Ashkenazi. The aparthotel, which opened six years ago after an investment of EUR 5 million in total, reached break-even point in less than three years, which makes it a profitable recipe on a market with little competition on the segment. Centre Ville's shareholders were initially planning to build a chain of similar units in Romania, but that was before the crisis hit. Plans have changed, at least for the time being. “Two years ago I said we wanted to build a chain of aparthotels, but now we are being very careful. There is demand, in at least one of the big cities. We were also searching for opportunities in developing countries, like Georgia, the Czech Re-
public and Croatia. After we get through the crisis we can look at a chain of aparthotels under the Centre Ville brand in the region,” says Ashkenazi. “Now the market is different. Two years ago I could tell you that another two aparthotels with more than 100 apartments could have survived. Entering the market with a new aparthotel brand now would be too risky.” Yaron Ashkenazi is currently supervising the planning of a new aparthotel to be built within the Casa Radio mixed project, a Plaza Centers development, which will also host a hotel unit, for which the operators have not yet been decided. The hotel is now investing in marketing, sales and publicity, and branding. “If we have low occupancy during a weekend we can close the floors. We are not hiring new people. We are looking at numbers, at food costs – we go to our own suppliers,” says the general manager, listing some of the anti-crisis measures his firm is taking. “We are fighting now like lions, because high occupancy doesn't come easily. The market is much harder nowadays,” adds the businessman. For example, the hotel is selling a romantic weekend in the aparthotel with some services included for 799 lei, or the equivalent of EUR 200, an offer which targets local guests. The Centre Ville complex includes a Le Bistro restaurant, which was recently renovated at a cost of EUR 2 million, and a World Class unit. corina_saceanu@bmg.ro
“Centre Ville opened six years ago to answer demand from expats seeking accommodation in Bucharest. At the time the price per night was EUR 150 and the length of stay was 15 nights per month. Centre Ville offered apartments for an entire month for EUR 2,000, and was subsequently full from the first day. Last year, during the week, we had a 100 percent occupancy, and during the weekend, 9394 percent. Nowadays, mid week it is close to 100 percent occupancy, and during the weekend, about 86-87 percent. Yaron Ashkenazi
”
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ANALYSIS
LAURENTIU OBAE
Crossed wires: telecom firms are slashing prices to hold onto their customers – but will it backfire
Cable industry: internet growth, TV and landline stagnation, at best The outlook for the cable industry this year is not pretty: the sector is expected to stagnate overall. While internet will still be dynamic, the downturn in landline services and the re-transmission of TV content will curb the enthusiasm. In this latter category, users will continue to switch from analogue cable to DTH services. To hang onto their clients, operators are having to cut their prices, keeping profit margins and investment budgets low. By Otilia Haraga
Cable industry statistics in mid 2008 looked like this: for re-transmission services of audio-visual content, there were 543 suppliers, 28 fewer than the end of 2007, mainly due to acquisitions. This shows that the mar10
ket is in a process of consolidation, according to Catalin Marinescu, president of the National Authority for Management and Regulation in Communications of Romania (ANCOM). The authority’s report on the local electronic communications market for January 1-June 30, 2008, found the
number of subscribers to these services on June 30 was 5.58 million, 6.5 percent up on the 5.24 million at the end of 2007. Approximately 2 million of these had signed up for satellite or DTH (direct-to-home) services, a 16.4 percent growth compared to the end of 2007. CATV (cable TV), also called analogue cable, subscribers numbered 3.6 million, only 1.8 percent up on the end of 2007. “On the TV program re-transmission market, competition is extremely fierce. Consequently, profit margins and therefore investment budgets are slim. Loan conditions will not encourage a strategy of rapid investment. As a result, cable operators’ tendency to opt for digital television is moderated by the economic conditions,” says Radu Petric, president of the Cable Communications Association (ACC). “I have no reason to believe that cable television is a market that will increase. There will be, however, a growth in satellite television, as many customers will switch to DTH to the detriment of analogue cable,” telecommunications consultant Nicolae Oaca tells BR. The total number of broadband internet connections at fixed points registered on December 31, 2008, amounted to 2.51 million, a penetration rate of approximately 11.7 percent. Broadband internet connections through cable dropped by 2 percent from 52.8 percent at the end of 2007 to 50.7 percent at the end of 2008. The penetration rate of broadband in Romania (calculated in relation to the number of inhabitants) amounted to 11.7 percent, half the EU average. ANCOM estimates that this sector will continue to grow this year, both fixed and mobile internet. “Internet will be the sector which will grow the most. While last year internet increased by 30 percent, this year it might increase at a slower rate, but still a two-digit one,” says Oaca. He adds that landline telephony might stagnate, “although it is fair to say that it will survive since, in times of crisis, Romanians will go for the cheapest phone. In Europe, the telephony market has decreased, but Romania has one of lowest penetration rates – 23 percent, or one phone for every two houses.” For companies such as Romtelecom, the largest landline operator, landline users have been retained by internet and satellite television (DTH) services. Romtelecom’s most consistent revenues, representing 55 percent
of total revenues at the end of 2008, came from landline use. However, landlines are losing ground to the newer services offered by Romtelecom: broadband, data and satellite television. “Everywhere in the world landline telephony is decreasing. Romtelecom has managed to keep the rate of disconnections (network switch-offs) under control – at the end of the first quarter of 2009 it amounted to only 1.5 percent,” says Cristina Popescu, PR manager at Romtelecom. At the end of Q1 2009, Dolce, the company’s satellite TV service, had 724,000 clients. Romtelecom posted revenues of EUR 869.8 million at the end of 2008. At the end of Q1, 2009, the operator’s revenues were EUR 201.4 million. The segment that has posted the highest growth for UPC Romania was digital TV, and the company intends to invest further in the network. “In practice, television should be seen as a whole because some of the analogue cable clients have chosen to switch to digital services. In the first quarter of this year, the number of analogue TV users was 961,000,” says Raluca Milin, marketing & sales director of UPC Romania. Internet remains a growth engine for the firm, “a segment that we will focus more and more on this year,” adds Milin. UPC Romania has an investment budget of EUR 52 million for 2009. Some EUR 30 million will be put into the network while the rest will be spent on various technological services. The company entered the local market 17 years ago and has rolled out overall investments of EUR 700 million. In 2007, UPC invested USD 45 million and last year spent USD 40 million on modernizing its network and expanding digital television services. UPC Romania’s customer base amounted to 1.26 million users in the first quarter of 2009. “Since last year, we have concentrated largely on digital television services, and we have encouraged customers to switch from analogue to digital,” says Milin. At the end of the first quarter of 2009, the total number of digital TV clients was 147,300, a 34 percent growth since the end of 2008. In Q1 2009, the firm also posted growth for internet, satellite television and telephony. “The number of UPC internet subscribers in the first quarter of 2009 is 245,300 while the number of subscribers for telephony services is 131, 300,” says Milin. BUSINESS REVIEW / June 1 -7, 2009
ANALYSIS HOW
ECONOMIC UNCERTAINTY AFFECTS M&AS
Certain factors can alter economic indicators for the communications sector in Romania, such as the average revenue per user (ARPU), which will probably be affected by the evolution of the currency exchange rate as well as current customers’ reduction in use, says Marinescu. He also predicts that some smaller internet, cable and telephony players might not make it on a market of offers that are more and more advantageous to clients and may be forced to sell some of their shares or merge with other companies. “It is natural for the market to consolidate through M&As, even more so in periods of economic crisis,” says Marinescu. The main risk that companies run in this period is poor cash flow. “Generally, in times of crisis companies’ cash flow is in grave danger, so, if a company has problems with its cash flow, one solution would be to sell it. If there are players that are large enough to be taken over by other firms, yes, this would be a good time for such transactions. It is a time for consolidation, the winners being international companies with deep pockets,” says Oaca. Still, a large firm from abroad that was eyeing the local market for acquisitions would only consider companies that are worth “at least a few tens of millions of EUR,” says Oaca. At this point, the market price of companies has fallen. “The value of a company is calculated using EBITDA by a multiplier. For example, if a company’s EBITDA is EUR 100 million, its market value will be EUR 500 million with a value of 5 as multiplier. Lately, these indicators have dropped, which means that the companies’ value has decreased too, making them attractive takeover targets.” Recently, daily paper Business Standard reported that Turk Telekom would be interested in investing EUR 1 billion in the region, including on the Romanian market. The publication also wrote that OTE Group was in negotiations for the takeover of Telemobil (Zapp), a report which was dismissed by both companies as “rumors.” Commenting on these articles, Oaca says this information is contradictory. “I do not understand why Saudi Oger, majority shareholder in both Telemobil and Turk Telekom, would sell, if he is planning on investing in BUSINESS REVIEW / June 1 -7, 2009
Romania,” he says. “There is no great appetite for buying smaller networks at this time,” says Petric, adding that acquisitions are not advisable now while there is uncertainty over the future of the market. “The climate of competition beyond the dumping limit along with the global evolution of the economy renders any acquisition speculation,” says Petric, who describes the movement of prices on the TV, internet and telephony market as in freefall. “Tariffs have dropped a lot, and I
expect them to start rising, not to continue their fall. Up to now, the strategy has been to undercut the competition. I think we have reached a point where operators will have to adopt other strategies. Otherwise, the next step will be to offer services free of charge. I think aggressive price-cutting has a significant impact on the modernization speed of the networks, the introduction of new TV programs and high-speed internet,” says Petric. During the crisis, operators would
prefer to lower prices and thereby keep their clients rather than losing them, because it is more difficult to get them back later. “So far, Romtelecom and UPC have dropped prices. The only player that has increased prices is RCS&RDS, which might come out of this period slightly affected. Although RCS&RDS denominates its tariffs in RON, the company has so far increased its prices twice, which may be a little confusing for its clients who have hitherto been accustomed to small tariffs,” Oaca adds. I
11
ANALYSIS
LAURENTIU OBAE
Gerasimos Vergotis has moved from soft drinks into funds
Plori keeps the focus on property and stocks Real estate and capital markets are the only two areas of investments in Romania for Plori Capital and Consulting, which manages EUR 7 million worth of assets belonging to 21 foreign business people. GERASIMOS VERGOTIS, the company’s investment director, told Business Review that Plori has recently exited from half its Bucharest Stock Exchange equities and plans to invest in office buildings towards the end of the year. By Dana Ciuraru
Gerasimos Vergotis started his career in 1989 as a financial analyst at PepsiCo’s headquarters, where he continued to work for ten years. His name became linked with Romania after he left PepsiCo and, drawing on his experience, he started Plori Capital and Consulting, an investment vehicle with operations on the local market. The company was established in Romania in April 2005 with the purpose to advise and manage the real estate and capital markets invest12
ments of the close fund’s clients. According to company information, the shareholders of the company are Vergotis and Spring Creek Capital Limited, a Cypriot company in which Vergotis controls the majority of the shares. Looking back at his first investment in Romania, Vergotis remembers his fear. “My first investment here was an apartment. I was petrified, to tell you the truth. The lawyers that were recommended to me by a bank had their office in an apartment building in Unirii. It was not what, traditionally, one would expect. Incomplete documentation
and an incomplete title – I saw them with my very first purchase. It was a learning experience because lots of the issues one has to be careful about I saw with my very first purchase,” Vergotis told Business Review. According to him, Plori’s clients are 21 business people who have made investments in Romania. “In this close fund there are no Romanians, they are mainly Greek investors and one investor each from the US, Mexico and Switzerland. Our total investments in Romania in real estate, at acquisition value, reach around EUR 6 million and another EUR 1 million has been invested in equity on the Bucharest Stock Exchange (BSE),” said Vergotis. Company data show that Plori’s investments in Romania represent 15 percent of the assets managed by the parent company. Four years ago the minimum limit to enter the fund was EUR 100,000, and since then it has been raised to EUR 200,000.
THIS
YEAR, OFFICE BUILDINGS
Romania is the only country in which the firm manages real estate assets. Plori Capital and Consulting’s real estate portfolio includes 38 apartments in two residential complexes and various parcels of residential land totaling 107,000 sqm. The land is situated on national roads 1, 3 and 7. Plori stopped buying land in 2006 because the prices were becoming too high. “We advise our clients to invest in the residential sector for some fundamental reasons. First of all, the housing stock in the metropolitan area of Bucharest is very poor. Secondly, the space per capita for the existing households is very low. There will be a need for new construction and one can only build on land,” said Vergotis. At the moment, the Plori investors expect a 13 percent yield on income properties, a level that might be reached by the end of this year, says Vergotis. According to him, a reasonable price for a studio apartment is between EUR 30,000 and EUR 35,000, for a two-room apartment between EUR 55,000 and EUR 60,000 and for a three-room one about EUR 85,000. Could prices get even lower? Vergotis thinks that prices on the residential sector might drop by another 20 percent, before they start bottoming out. “Currently, some 60 percent of the buyers in the market expect the
prices to drop,” says Vergotis. The Plori investment director says that the main market impediment is the low level of mortgage lending. “Bank representatives say that they are willing to do this but there isn’t anyone out there asking for the money. We know that people are asking but banks are not approving anybody,” said Vergotis. He added that Plori is interested in investing in office buildings, most probably towards the end of this year.
GOOD
RETURNS ON THE
BSE
“We started investing on the BSE in 2004 and we exited those investments at the end of 2006 and the beginning of 2007. After the big correction registered by the market that year, we re-entered on the BSE in October the same year. Those equities we sold at the end of February 2008,” said Vergotis of Plori’s beginnings as a player on the BSE. According to him, Plori stared to buy shares on the stock exchange again towards the end of October last year when the crisis hit and the market was dramatically down. “We bought little by little until the end of February this year. We started selling about two weeks ago and we have significantly reduced our positions on the BSE by 50 percent,” said the businessman. Plori invested a significant sum of money in the Transelectrica IPO. “We sold in about three months at about 100 percent profit,” said Vergotis. “We would more than welcome more quality IPOs like Transelectrica, but, unfortunately, in the current environment, we will have to wait a year or so.” What can be seen is that the company’s portfolio has changed in the last few years. “We are looking at different things now compared with what we were interested in 2004. Then I was interested in the financial sector, meaning BRD, Banca Transilvania and the SIFs. We bought shares in that sector almost exclusively. We also had some positions with some Rasdaq companies such as Compa Sibiu, Iproeb Bistrita and Biofarm,” said Vergotis. Real estate and capital markets will remain the main areas of investment for Plori, as these two domains currently offer attractive prices and a worthwhile risk-reward profile, added the director. dana.ciuraru@bmg.ro BUSINESS REVIEW / June 1 -7, 2009
Estates&Construction
MARKET
JUNE 1 - 7, 2009 / VOLUME 14, NUMBER 20
BUSINESS REVIEW FORUM
Manage your business environment !
New Omilos CEO focuses on finalizing leases for Oradea and Iasi, includes turnover rent agreements
LAURENTIU OBAE
Graham Kilbane, the new general manager of developer Omilos Group
Cypriot-owned developer Omilos Group is focusing on leasing the remainder of its Era Shopping Park retail projects in Iasi and Oradea, while revising its leasing structures to include turnover rents. “Many agreements signed three months ago need to be revisited. Now we are including
a turnover rent provision, along with the fixed rent. It is common in Europe to include turnover rent, which is a benchmark for owners to evaluate the success of a tenant and the shopping mall, and identify the weak areas,” Graham Kilbane, the new general manager of Omilos Group, told Busi-
ness Review. Usually, retailers pay from 6-10 percent of their turnover as rent. Kilbane, who came from Ukraine where he worked for Cushman and Wakefield as chief operating officer, has made leasing in the two Omilos projects his priority. “It is the most challenging thing for developers now, in other countries as well, because retail demand across the region has dropped significantly,” he says. The first phases of Omilos's retail projects in Iasi and Oradea have already been completed, with 90 percent occupancy in Iasi and 85 percent in Oradea. “The last few units are under negotiation and by Q4 of this year Oradea will be 95 percent leased. The second phase of the project in Oradea is 40 percent under heads of terms,” says Kilbane. The second phase of Omilos's retail project in Oradea is currently under construction, with an expected delivery between March and May next year. Its retail project in Iasi, which should reach 150,000 sqm of leasable area when finished, is bigger than the Oradea project, and will require EUR 175 million of investment in total. With the first phase of the project already open, Omilos is on the point of selling some of the land to a sports retailer which would build a big box unit there. “Certain plots there are available for sale, others for rent. The next phases could take two-three years to be finished,” says Kilbane, adding that the developer is redesigning the next phases to suit the new market demand. continued on page 14
ESTATES & CONSTRUCTION MARKET Romania Invest borrows EUR 1.6 million from Bank of Cyprus to pay for 25 apartments
LAURENTIU OBAE
Norwegian investment fund Romania Invest has secured a EUR 1.6 million loan from Bank of Cyprus to pay the 25 apartments it has acquired within the Bucharest residential project My Dream Residence, the company has announced. “We have signed the first contract with Bank of Cyprus for the financing operations for the My Dream Residence project and we are considering further such contracts with the bank,” said Bjorn Hauge, country manager of Ro-
Be Igloo at the Project Expo real estate exhibition From this year, a new real estate exhibition has place at Palatul Copiilor, with the dedicated purpose to help young families buy an apartment. Be Igloo, the sales organization for Romania Invest sustained this project ever since its first edition and now, at the second one, that had place between 29 – 31 May, they came with 800 apartments in seven residential projects from Bucharest and with the smallest prices possible: euro 98 000 for 2 rooms apartment and 64 000 for one room.
The most important thing that really helps the young people to buy their house, is that Be Igloo always finds a financing solutions for their clients and this seemed to be the major advantage for most of the visitors, because all of them were in the same situation: they couldn’t afford to pay the advance that the other banks or developers asked for. For further details about these new solutions you can visit www.beigloo.ro or you can call at +4 0372 744 777/8
International Investments Fund purchases, on adjusted price, any building with business potential in Bucharest: G STORES G OFFICE BUILDING G RESIDENTIAL BUILDING G HOTELS, etc. Phone: 0754 034 289
14
COURTESY OF VITANTIS
Bjron Hauge, country manager with Romania Invest fund
mania Invest. The fund will also come up with a financing scheme for end users of the apartments in its portfolio. Recently, the fund launched Be Igloo, a company which will sell its stock of apartments in Bucharest. Romania Invest plans to continue buying apartments in Romania but also to start up as a developer, according to Hauge. He does not believe that residential prices will continue to drop excessively, and thinks that the market will unblock when customers start buying again. According to Elena Lavric, corporate manager of Bank of Cyprus, the financial institution holds a market share of 0.6 percent of the local lending segment, and plans to increase its credit portfolio by 10 percent by the end of 2009. Bank representatives said their number of non-performing loans was almost zero. Since it started operations in Romania in 2006, the fund’s portfolio has reached 800 apartments in various development stages in seven residential projects in Bucharest. It expects to post a EUR 30 million profit from selling on the apartments, in which it has invested EUR 85 million. I
Vitantis Shopping Center sees 2.3 mln visitors in eight months, re-thinks commercial mix
Vitantis Shopping Center saw 312,000 visitors per month since opening
Real estate fund Equest’s retail park Vitantis Shopping Center could make some changes to the mix of stores in order to include more low pricing units, according to Razvan Gheorghe, general manager with Cushman & Wakefield Romania. The shopping center has attracted almost 2.3 million visitors since its launch in September 2008. The average number of visitors was estimated at 312,000 per month. In the last quarter of 2008, the retail park expanded with a 75-shop commercial gallery, representing the third development stage of the project, estimated at a total investment of EUR 60 million. Vitantis Shopping Center delivers 34,000 sqm of rentable area and comprises the 11,400-sqm shopping gallery, furniture center Mobila Bontas, DIY unit Praktiker, Carrefour hypermarket and household appliances retailer Technomarket.
Equest Investments is the Romanian subsidiary of Equest Capital Limited, which runs Equest Balkan Properties (EBP) investment fund. Last year, investment fund EBP said it planned to focus on developments in Romania, with three retail and logistic projects in the pipeline for the country in the coming period. The fund said it was not planning to make an exit in Romania, but was in the process of selling a significant mature asset it held in another country, in order to finance its pipeline of investments in Romania, according to its representatives. In March, Bank Austria Creditanstalt said EBP had breached the conditions in the loan contract for the commercial center Moldova Mall in Iasi. The loan was taken out by the firm in 2006. According to the investment fund, this was not expected to impact on EBP's other assets or borrowing. Staff
continued from page 13 “Retailers decide early when picking their locations, so they could make decisions 12-18 months in advance. It is not unusual to have a retail project 40-60 percent preleased before the start of construction. But in this market, a lot of retailers need to see the project under construction. Retailers are signing the heads of terms but then taking a longer period to negotiate the lease,” Kilbane explains. Omilos's Era Shopping Park in
Iasi was opened in September last year, when the Carrefour unit, Altex store and shopping galleria were inaugurated. The park also includes a Praktiker store. The project in Oradea was opened in March this year, with a Bricostore, Carrefour, shopping galleria and Media Galaxy unit. The developer, which has secured bank financing for both its projects, expects to invest EUR 300 million in expanding them in the next few years. Corina Saceanu BUSINESS REVIEW / June 1 -7, 2009
ESTATES & CONSTRUCTION MARKET
Ruukki Romania plans to make EUR 10 Arabesque proceeds with projects mln sales from thermal insulation panels on land acquired in 2008
COURTESY OF RUUKKI
The company produces metallic contruction materials
The Romanian subsidiary of Finnish construction materials producer Rautaruukki plans to achieve a market share of 7 percent on the local thermal insulation panel segment, with hopes to make EUR 10 million of sales in 2009.
BUSINESS REVIEW / June 1 -7, 2009
The company, which specializes in the production of metallic construction materials, entered the specific segment of thermal insulation panels last year when it also started production in Romania. This sector makes a EUR 134 million market locally, according to Ruukki’s estimation. Last year, the Finnish company announced its plans to restructure its operations in the CEE region, meaning it would close its Czech-based plant in Ostrava, with relocation of production to the company's other plants in countries such as Hungary, Poland and Romania. The relocation was planned to be completed by the end of Q1 2009. Through this measure, the company plans to improve its operational profit by EUR 3 million from 2009. In Romania, Ruukki opened its first production line in 2007, following an investment of EUR 35 million. Magda Purice
The Pitesti store required a EUR 5 million investment
The local distributor of construction and finishing materials Arabesque, owned by Romanian businessman Cezar Rapotan, has opened a commercial center in Pitesti at a cost of EUR 5 million, its second project this year, the other being the mixed-use center it opened in the Glina area of Bucharest. In the capital,
Arabesque owns two more such centers – one in the Otopeni area, with a EUR 4 million in investment, and one in Militari. The store in Otopeni covers some 30,000 sqm of warehousing space. The two others in Glina and Miliari have a total of 60,000 sqm. The new center in Pitesti delivers a total area of 34,000 sqm, of which 10,000 sqm represents the storage and showroom areas. So far, Arabesque has developed 19 commercial centers and 22 subsidiaries in countries such as Ukraine, Bulgaria, the Republic of Moldova and Serbia. In 2008, the company posted a turnover of EUR 550 million, more than 22 percent up on its 2007 result. From the entire sum, the firm’s external markets generated EUR 110 million. The expansion of commercial stores in 2008 resulted in EUR 50 million of investments being made by the company in Romania and the neighboring countries. Magda Purice
15
RESTAURANT REVIEW
Bucharest beach Poolside Brunch at the Radisson. Booking advisable 021 311 9000 n 1995 the French Village in Herastrau opened as the nation’s first country club. That meant it had a pool, a court, a grass lawn and a fitness center the size of a telephone kiosk. It was an oasis of calm which soon changed into a desert as standards dropped, and after a few good years they went bust! So step forward the Radisson as its replacement after a hiatus of some eight years. They share some facilities with their neighbour, the huge World Class Fitness Center, so if you wish to use the Radisson’s outside pool, tell your waiter and you can use the gym’s changing rooms. I arrived on Sunday for brunch to find the place packed with hundreds of guests. Not all were dining, as the House allows day guests to use the pool for a small fee. Most of them were dropdead gorgeous female poseurs. Irrespective of how wealthy they appeared to be, I suspect they were too mean to pay for a brunch or to use the pool bar as I saw several of them sneaking in their own drinks in their dubiously authentic Prada bags. But I came to eat, so let’s get on with it! It is a new menu which means it is
I
COURTESY OF RADISSON
Life’s a beach: poolside brunch at the Radisson
not the original brunch moved out of doors. As befits an al fresco extravaganza, the meat carvery is based upon a BBQ. But not the open charcoal barbie you have loved to hate every summer of your life. This is a sophisticated smoking engine. Wood and charcoal are burned in a semi-sealed grill, and the food is placed in a chamber whereby smoke passes over the food. This means the meat and fish is massaged in smoke, keeping all of its moisture rather than being burned on an open grill. The effect is dramatically different and it is vastly superior to the traditional ‘old’ method. Another departure from the ‘old’ barbie is that the Rad chefs do not start the fire with petrol-soaked,
packaged firelighters, which always made the meat taste like a gas station attendant’s jock strap.They do it the hard, slow way with a flame. And what meat it was. I gorged on tender Argentinian sirloin steak together with juicy New Zealand lamb. By that point I had had my money’s worth but there was far more to come. I had whole dorada, smoked spare ribs, trout, giant prawns and chicken tandoori. Under the shade of the pool bar there was a chilled seafood section with marinated calamari, lobster cocktail, gravadlax and smoked salmon. Away we go to the antipasti station where there was freshly baked bread, pickles and olives, mushroom salad, eggplants stuffed with sun dried tomato and crème fraiche, terrines and more. By this stage I was far too full to eat any more. So I passed on their Asian stir fried beef together with their Thai green curry, which judging from both appearance, aroma and satisfied customers, I assume were a great success. Desserts were administered by the French pastry chef, Fabrice, whose creations were too numerous to mention. Suffice it to say they change weekly and are miniature works of art.
But all was not perfect in Paradise as their cheese section failed and needed improving. But this tiny defect pales into insignificance when compared to all the fabulous positive points I enjoyed. And I was not alone in my enjoyment. Although the brunch was supposed to close at 4 pm, it was still half full with almost 80 happy brunchers still revelling at 6.30 pm. They simply did not want to leave. I must close by making one last comparison with the now defunct French Village. It was dominated by numbers of obese American parents who smiled benignly as they watched their screaming, running, out of control two legged rodent offspring making life a misery for the guests as they dive bombed each other in the pool. Fortunately, the guests at the Rad are European with kiddies who are both courteous and disciplined and who were happy with their candy floss and imported Italian ice cream. They all behaved themselves, and so did I! Michael Barclay michael.barclay@intereurologistics.ro
Canadian jazz singer DIANA KRALL will perform in Bucharest at the Palace Hall on November 22. The concert is part of a tour for the promotion of her latest album “Quiet Nights,” which has already been released in Romania by record company Universal Music. Krall is well known for her unique voice and manner of interpretation. She was born in Canada to a family of musicians and started taking piano lessons when she was four. She released her first album “Stepping Out” in 1993. Her Top American band LIMP BIZKIT will play Bucharest on June 28 at the Arcul de Triumf stadium as
records have ranked high in the
part of the festival “Rock the City.” Bands such as Queensryche and Saga will also headline the event.
Billboard charts and earned nu-
Limp Bizkit are coming to Romania as part of their “Unicorns and Rainbows” tour, which will take
merous platinum discs, nomina-
them through the Baltic region, Russia, Europe and Japan. The band will also be playing three other
tions and prizes, including two
major festivals: Rock IM Ring in Germany, Summer Sonic Festival in Japan (where they share the
Grammy awards. Tickets for the
stage with Jay-Z) and Werchter Festival in Belgium, where Metallica will also play. “Rock the city” is
concert are on sale at www.myt-
organized by D&D East Entertainment with promoter Marcel Avram. Tickets cost RON 130 until May
icket.ro and from the network of
31 and RON 150 thereafter. They can be purchased from the Diverta and Germanos stores and on-
the Diverta stores for RON 100,
line at www.Eventim.ro, Ticketpoint.ro, Blt.ro and Bilete.ro.
150, 220, 300 and 500.
16
BUSINESS REVIEW / June 1 -7, 2009
STOCKEXCHANGE
AFTERHOURS On the occasion of Children’s Day, celebrated on June 1, Masca Theater will put on three shows for children at Liberty Center. The first play, “The Clowns” directed by Mihai Malaimare, is due to take place on June 1 at 5 pm. It shows children how much generosity and intelligence hides behind a clown’s red nose. The second show, “The Lady with the Little Dog,” will be staged on June 13 at 11 am, when children will see five gentlemen with a pipe, a lady and a little dog walking and playing with them. The last show from the Masca Theater, “Human Foolishness,” based on a story by Romanian author Ion Creanga, will take place on the same day one hour later. In total, 20,000 spectators are expected to attend the shows at Liberty Center.
Romanian Fashion Week postponed until spring 2010 due to crisis
Muuuvi Fest gets fifth run
Get muuuving: the fifth edition of the character driven film festival will take place this summer
The fifth edition of Muuuvi Fest will hit screens on July 31. The festival, which will run until August 3, was started in 2004 by Selyem Andras, festival director, and Aaron Balazs, art director. At that time it was called Muuuvi – International Short Film Festival. Its aim is to find the most original movie character, capable of beating Kenny from South Park or James Bond from Agent 007. In the meantime, Muuuvi Fest is a cinema-substitute for the 60,000 inhabitants of Gheorgheni (the town where it takes place). Since the local cinema, Miorita, closed its doors, the inhabitants have lost touch with movies. Dur-
ing the first four editions of the festival, over 1,000 short films from all over the world have been showcased, and wellknown filmmakers, from the United States to the Congo, have participated. Aside from movie screenings, there will be “parties ‘til dawn,” DJs and different bands and visual artists from London and Tokyo. Muuuvi Fest invites by July 1 short movies competing for the BloodyCow award. These will be judged by an international jury of five members with the trophies made this year by young artist Orosz Annabella. Other prizes are also up for grabs. Otilia Haraga
LAURENTIU OBAE
A passion for fashion – but Romania’s models won’t be sashaying down the catwalk this year
The 13th edition of Romanian Fashion Week has been postponed from 2009 to spring of 2010. “We have decided to make this change because we wish the event to take place only at the standards that we have imposed in past years,” said fashion designer Irina Schrotter, the founder of the event. The organization of a single edition involves a team of 150 specialists and a budget from EUR 200,000-250,000. “With all the economic difficulties during this period, we were glad to see that our traditional partners decided to stick with us. But budget adjustments determined by the world economic crisis have made it nearly impossible to cover all expenses that this event involves,” said Schrotter. The organizers did not enjoy BUSINESS REVIEW / June 1 -7, 2009
support from the mayor of Iasi, Gheorge Nichita, nor from the Ministry of Economy, added the founder. “Even though Romanian Fashion Week is the driving engine of an industry that generates tens of thousands of jobs and an important contribution to Romanian exports, the Ministry of Economy decided it does not deserve support. We got the same answer from the mayor of Iasi,” said Schrotter. Participants in Romanian Fashion Week have included designers Doina Levintza, Agnes Toma, Irina Schrotter, Razvan Ciobanu, Catalin Botezatu, Liza Panait, Wilhemina Arz, Rita Muresan and labels like Jolidon, Dinasty, Uniconf and ER Fashion. Otilia Haraga 17
LAURENTIU OBAE
AFTERHOURS PASARELA 2009, a fashion festival organized by the French Embassy and French Institute in Bucharest, took place between May 27 and 31. This was the second edition of the event established to encourage and support young designers. The topic for this year’s edition was “Marions Nous…” (Let’s Get Married). PASARELA is a fashion competition open to designers aged between 18 and 40, students or graduates, who share a common passion: fashion. The winner of the competition will attend the presentation of the prêt-a-porter collections of designers in Paris. The jury is made up of fashion professionals such as Romanian designer Doina Levintza, president of PASARELA; Philippe Guilet de Saint Mart, artistic director of the festival; Ioana Avram, designer and teacher at the Bucharest Art University; and a member of the French Institute of Fashion.
Fans of British glam rock band PLACEBO can enjoy the band’s latest album while waiting for the concert in Bucharest, which will take place at Romexpo in Bucharest on June 21. "Battle For the Sun” will be on sale in Romania from June 8. It will be distributed locally by MediaPro Music which signed a contract with PIAS (Play it Again Sam), the band’s record label. The new album is Placebo’s sixth. So far, they have sold over 10 million albums and held over 900 concerts. The new disc is about “coming out of the darkness and choosing to live in a new way,” according to Brian Molko, the band’s frontman. The first single off the album, "For What It's Worth,” is already being aired, and is a sample of the more optimistic turn the band’s music has taken.
American alternative rock band Faith NO MORE will be performing in Bucharest on August 15 at the Polivalenta Hall. The gig is being organized by King Size Production and Bring The Noise. It is part of the band’s “Reunion Tour 2009” which marks their return after 11 years of absence from the music scene. Tickets for the concert will go on sale on May 28 in Diverta stores. Faith No More was founded in 1982 in San Francisco, California, and have a musical style that has been labeled alternative rock with influences from heavy metal, progressive rock, hip hop, punk hardcore and jazz. The band’s best-known songs include “Easy," "We Care a Lot," "Epic," "Stripsearch," "Everything's Ruined," "Falling to Pieces," "The Real Thing" and "Last Cup of Sorrow." The group has launched six albums that sold over 10 million copies worldwide. 18
BUSINESS REVIEW / June 1 -7, 2009