CONSULTANCY COMPANIES ARE CONFIDENT 2009 WILL PROVE A GOOD YEAR; SEE FEATURE ON PAGES 12-15 NEWS
Investment fund Black Sea Global Properties Limited, owned by Dinu Patriciu, has acquired another real estate fund listed on the LSE See page 4
INTERVIEW
Serban Radu, GM of Carturesti bookstores, says the company plans to expand with a new outlet in Bucharest and upgrade the existing locations See page 9
ANALYSIS
Despite repreated price cuts, car sales have been in free fall since the start of the year, and dealers expansion plans are being scaled back See pages 10-11
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BUSINESS REVIEW ROMANIA’S PREMIERE BUSINESS WEEKLY
JUNE 15 - 21, 2009 / VOLUME 14, NUMBER 22
STEPPING OUT
Italian footwear producer Geox has recently sold its Romanian factory in Timisoara to VT Manufacturing, following the company’s reorganization strategy See page 4
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NEWS
BRIEFS DEBTORS ASK INSOLVENCY FOR ARCOM é Construction company Arcom, owned by 71.6 percent by controversial businessman Gigi Becali, faces insolvency requests filed by several suppliers. According to them, the firm is late paying the afferent debts. On the other hand, representatives of Arcom say that they have to cash in some EUR 10.5 million from their beneficiaries, while the company’s debts reach only EUR 3 million. According to Arcom, half of this debt is represented by the precontracts signed by individuals which are not willing to pay for their apartments in the current economic situation. FRANKLIN TEMPLETON TO MANAGE PROPRIETATEA FUND é Franklin Templeton Investment Management Ltd won the assets management of Fondul Propietatea, with the lowest priced offer among the other tenders. Franklin Templeton Investment Management Ltd will activate the management operations after the decision will be approved by the board of Proprietatea fund, according to officials. Morgan Stanley Investment Management Ltd has been its competitor for wining the assets management and filed its offer along with other 8 candidates. BOSTINA SI ASOCIATII LAUNCHES INSOLVENCY COMPANY é Law firm Bostina si Asociatii entered the insolvency operations market by launching the company Bostina si Asociatii Insolvency SPRL. According to the partners with the law firm, the new company will focus on the commercial insolvency cases and crisis situations among companies. The new firm’s services will be backed up with consultancy provided by the others divisions of the law firm, as Bostina Accounting & Fiscal Consulting and Bostina & Associates Financial Consulting. In 2008, the law firm posted a turnover worth EUR 16.67 million, with over 130 lawyers and partners. The law firm has offices in Bucharest and 13 other Romanian cities, while abroad, it runs subsidiaries at Vienna, Fribourg and Nicosia. 4
Geox sells Timisoara factory on production reorganization strategy
Geox has five franchise stores in Romania
Italian footwear producer Geox has recently sold its factory in Timisoara to VT Manufacturing, as a result of Geox production reorganisation strategy, Geox representatives have told Business Review. “Our shoe production realized in Timisoara in 2008 was the 5 percent of the total amount, while the 95 percent
was realized in outsourcing thanks to partners based in Far East and South America,” according to Geox. All the activities related to the design, the research and the development of the materials are carried out at the Geox headquarters in Montebelluna, Italy. “Looking at the Eastern European
area, Romania is one of the countries more affected by the crises. Taking into consideration all these different situations, Geox is confident that 2009 global sales will be in line with the 2008 sales,” Geox representatives went on. The firm has five stores in franchising in Romania and is planning to open a new one in 2009. According to previous reports, Geox' investment in the Timisoara factory was mid last year close to $70 million. Geox posted EUR 384 million in sales in the first quarter of this year, up 5 percent on the similar period of the last. Footwear sales made 91 percent of the amount, with the rest being covered by apparel. Its sales in Europe made 48 percent of total sales, slightly below the first quarter of last year. Geox sells its products in both franchising units under its brand and directly operated stores, as well as multi-brand stores. Geox had 953 stores at the end of March this year, out of which 220 directly operated. In April, the firm opened 29 new stores. Corina Saceanu
PSD+PC pip PD-L to claim most mandates in European Parliamentary elections The alliance between the Social Democrat Party (PSD) and the Conservative Party (PC) is arguably the winner of the elections for the European Parliament (EP) that took place on June 7 in Romania, having claimed 11 mandates as a result of receiving 31.07 percent of the votes cast (1,504,218). It was closely followed by the Democrat-Liberal Party (PD-L) which won 10 mandates with 29.71 percent of the ballot (1,438,000 votes). In fact, the two political formations are tied, as Elena Basescu, who ran as an independent candidate and won a seat in the EP with 4.22 percent of the votes cast (204,280), has decided to re-join the PD-L. The two frontrunners were followed by the National Liberal Party (PNL) which won five mandates with 14.52 percent of the votes (702,974). The fourth party that will send representatives to the EP is the Hungarian Minority Party (UDMR)
Elena Basescu, daughter of president Traian Basescu, is one of the new European MPs
with three mandates and 8.92 percent of the votes (431,739). The last party on the list is the Greater Romania Party (PRM) which obtained three mandates with 8.65 percent of the ballot (419,094 votes). Turnout was low. The total num-
ber of citizens who cast their vote was 5,035,297, or 27.6 percent of the electorate. The list of people that will represent Romania in the European Parliament includes more traditional candidates such as the former minister of justice Monica Macovei (PDL), who enjoys a very good reputation in Brussels, former PM Theodor Stolojan (PD-L), on his second mandate in the EP, journalist Traian Ungureanu (PD-L), former minister Adrian Severin (PSD+PC), on his second mandate, Ioan Mircea Pascu (PSD+PC), second mandate, Norica Nicolai (PNL vice-president) and Renate Weber (PNL), second mandate. More “eccentric” figures in the line-up include Elena Basescu, the daughter of President Traian Basescu, nationalist leader Corneliu Vadim Tudor and controversial businessman George Becali, owner of Steaua soccer club. Otilia Haraga BUSINESS REVIEW / June 15 - 21, 2009
NEWS
Dinu Patriciu continues real estate shopping in Western Europe with two more funds
Businessman Dinu Patriciu
Investment fund Black Sea Global Properties Limited (“BSGP”), owned by Romanian businessman Dinu Patriciu, has went on to acquiring another London Stock Exchange listed real estate investment fund and placing an offer for the second, after taking over investment fund Fabian at the beginning of the year. BSGP has subscribed for 30 percent in Deutsche Land's share capital increase, an investment fund with properties in Germany. In total, the fund has raised EUR 16.4 million from the share issuance, which puts Dinu Patriciu's fund investment in the fund at some EUR 5 million. “We are pleased to become Deutsche Land's largest shareholder. Subject to shareholder approval, we will invest an additional 20 million pounds in Deutsche Land in order to strengthen the company's balance sheet further,” said Obie Moore, BSGP's proposed representative in the Deutsche Land's board. Black Sea Global Properties has also placed a cash offer for Rutley European Property investment fund, at 6 pence in cash for each Rutley share. The offer values “the existing issued redeemable preference share capital of Rutley at approximately GBP12.5 million and at an enterprise value of approximately 446 million pounds, including net debt of approximately 434
million pounds as at the end of 2008,” according to the offer. The offer represents a premium of approximately 107 percent to the closing price of 2.9p per Rutley Share on 27 March 2009. BSGP originally approached the board of Rutley in March 2009 with a proposal to recapitalize Rutley and in April BSGP announced that it had acquired 150,000 Rutley shares at 4.25p and was considering making an offer for the fund. “We are launching this Offer at a time of ongoing uncertainty in European real estate markets. Our offer is designed to accommodate those shareholders who are seeking a cash exit as well as those who wish to remain invested. Assuming we achieve control of Rutley via the offer, we intend to stabilize the company's financial position and take other measures to improve the company's performance,” said Dinu Patriciu. Rutley has properties in Belgium, Germany, Netherlands, Poland and Sweden. Deutsche Land is a property investment company that concentrates on German real estate with a focus on commercial assets. The fund owns a portfolio of office, retail and hotels in Germany, valued at EUR 593 million mid last year, down 3 percent on the value at the end of 2007. Dinu Patriciu's real estate investment fund bought at the beginning of the year investment fund Fabian, with properties in Romania. The offer valued the fund at EUR 50.8 million. Following the takeover, BSGP delisted Fabian from the AIM market of the London Stock Exchange. Dinu Patriciu's recent investments in real estate properties both in Romania and abroad are among the biggest such deals on the real estate market, which has seen little activity last year and since the beginning of this year. Corina Saceanu
Mobexpert cancels EUR 15 million credit lines this year
Mobexpert owner Dan Sucu
Mobexpert is operating advance payments to all the current financing lines contracted by the company so far. “I can estimate that, since the beginning of 2009, we dropped credit lines exceeding EUR 15 million Further, we plan to sustain our activity using our own funds. We think that the financings costs are not realistic at the moment and they can not be supported from furniture
and accessories retail operations,” Dan Sucu told Business Review. The businessman expects the furniture market to recover sometimes in 2011 or 2012 and, only at that moment, the company could establish annual financial targets. Last year, Mobexpert reported a turnover of EUR 69 million, covering the business activities of the 10 retail companies of the group, 8 furniture plants, 6 import companies and 3 services business units. Since is establishment in Romanian in 1993, Mobexpert invested over EUR 100 million in chain expansion, real estate activities, production and logistic. Also last year, Mobexpert attained 79 percent from the overall sales from house furniture and accessories, while 21 percent from the sales represented the corporate segment. For this year, Dan Sucu estimates a slightly decrease on the corporate, compared with the home&deco segment. Magda Purice
Pullman Hotel bets on casino A new casino, Olympic Casino Bora Bora, has opened in Bucharest at the recently re- branded Pullman Hotel (formerly Sofitel). The casino was opened by the Estonian company Olympic Entertainment Group which has invested approximately EUR 6.4 million in it, according to media reports. This is the group’s largest casino on the local market. It covers two floors and an area of approximately 14,000 sqm. The venue includes a restaurant, 72 slot BUSINESS REVIEW / June 15 - 21, 2009
machines, three electronic roulette machines and 17 tables. Olympic Entertainment Group is present in Romania through six casinos, five of them in Bucharest and one in Pitesti, staffed by 224 employees. The six are coordinated in Romania by the company’s subsidiary, Olympic Casino Bucharest. The group entered on the Romanian market after taking over three casinos from Empire International Game World in 2007. Otilia Haraga 5
NEWS
BRIEFS TERRA NOVA CONSTRUCT SELLS RESIDENTIAL COMPLEX IN POPESTI LEORDENI WITH EUR 9.6 MILLION é Romanian company Terra Nova Construct plans to sell a residential complex located in Popesti Leordeni which has been started 6 months ago, with EUR 9.6 million, including VAT, the company announced. The complex called TerraNova Residence delivers a built area of 16,000 sqm and comprises 240 residences. The company is controlled with 87 percent shares by Romanian businessman Marian Bucur. OTP ASSET MANAGEMENT TO LAUNCH CLOSED-END INVESTMENT FUND é Asset management company OTP Asset Management plans to launch a new closed-end investment fund with guaranteed capital, the company stated. The bank plans to launch several new products in order to differentiate from other competitors. OTP Asset Management currently manages 3 open-end investment funds: shares- type OTP Avantis, diverse operations OTP Balansis and monetary-type OTP Comodis. CAPGEMINI OPENS OUTSOURCING SERVICES CENTER AT IASI é Technology and outsourcing services provider Capgemini plans to open an outsourcing center in Iasi. The center will be designed after the business structure of the centers in Poland, Katowice and Krakow. In 2008, Capgemini reported overall turnover of EUR 8.7 billion. The European region contributed with EUR 592 million to the group’s worldwide results. Last year, the Romanian subsidiary of Capgemini reported a EUR 30 million turnover. ALSTOM TRANSPORT PLANS EUR 45 MLN TURNOVER é Alstom Transport estimates to reach a EUR 45 million turnover locally this year and plans to focus on the transport segments of trams and railway installations. Alstom Transport holds a portfolio of contracts signed with Metrorex, and the Romanian railway company (CFR). The contract signed with Metrorex is worth EUR 20 million and consists in maintenance services to be delivered until 2014. 6
Mega Image assigns EUR 17 mln for chain expansion in 2009 Retailer Mega Image, part of Belgian group Delhaize announced it increased its share capital with EUR 17 million in April 2009, in order to finance the expansion of the supermarket chain in 2009. “The share capital increase will be used for speeding up Mega Image’s expansion with 8 new units in 2009,” said Raluca Pavel, marketing manager of Mega Image. Since the beginning of this year, Mega Image opened a supermarket in Constanta, representing actually a relocation of the former unit located in Stefan cel Mare to a space rented within Tomis Mall. In March 2009, Delhaize signed an agreement of purchasing 4 supermarkets in Romania through the subsidiary Mega Image, according to the group. A statement reads that the company has entered into an agreement to acquire four
Mega Image has 40 stores in Romania
stores operated under the banner Prodas Holding Supermarket in Bucharest, through its fully-owned subsidiary Mega Image. For 2008, it is estimated
that the revenues of the four acquired stores amounted to more than EUR 12 million. The four stores, which have a size of 400 to 750 square meters, will be converted to Mega Image supermarkets. The acquisition of the four Prodas Holding Supermarket stores is subject to the customary conditions, including the approval by the Romanian antitrust authorities. The transaction is expected to close in the third quarter of 2009. At the end of 2008, Mega Image's network consisted of 40 stores, 37 in Bucharest, 2 in Constanta and 1 in Ploiesti. The number of employees at the end of 2008 was approximately 2000 people. Delhaize Group acquired a 51 percent stake in Mega Image in 2000 and four years later, it fully acquired the chain. Magda Purice
Spar to spar with Flanco in court over unpaid debt Retailer Spar has started legal procedures at the Bucharest Court of Justice calling for the insolvency of IT&C retailer Flanco, part of the Flamingo International Group, over an unpaid debt of RON 150,000 (less than EUR 36,000) representing unpaid rent. The file was lodged by Spar on June 4 with the first hearing scheduled for September 1. Representatives of Flamingo International issued an official statement expressing their surprise over the actions of Spar Romania, in part owing to the size of the debt. “We were surprised to see there is such a request from Spar, especially since no prior communication had taken place with us. The debt that Flanco has to pay to Spar is a small and recent one, and the issue will most likely be solved without court intervention,” said Jiri Rizek, CEO of Flamingo International. “Their way of acting is undoubtedly questionable, especially in the current market conditions, which will compromise our commercial relations with this
Spar is calling for the insovency of Flanco over unpaid EUR 36,000 debt
partner,” goes the official statement. The Flamingo CEO added that the current international context, in which the economic crisis has made its presence felt in all business areas, should “tighten the partnerships between companies, based on a winning long-term approach for all the parties involved.” “We are convinced that the current eco-
nomic situation will generate an alignment of commercial practices to international standards so that minor litigation can be resolved through direct communication,” said Rizek. Spar entered the Romanian market in 2006 and currently has 21 units. Flamingo International, the second largest retailer of electronic products, home appliances and IT&C on the market, posted sales of approximately EUR 23.8 million (RON 100 million) in the first quarter of 2009, 34 percent down on the same period of the previous year. But its evolution was still above that of the market which dropped overall by 40 percent. The company says it will end the year with a positive EBITDA due to reorganization in the structure of operational costs. The company ended Q1 2009 with a negative EBITDA of approximately EUR 3.2 million (RON 13.6 million) compared to only EUR 0.14 million (RON 0.6 million) during the same period of last year. Otilia Haraga
Frigotehnica plans expansions and investments in 2009 Romanian refrigeration equipment installation firm Frigotehnica plans to enter the Ukrainian and Serbian market, after the company already set up a subsidiary in Bulgaria, for which it expects a turnover worth EUR 4 million this year, the company said. The company invested so far EUR 700,000 in developing regional centers and estimates a total amount of
EUR 1 million for its expansion plans. Frigotehnica is a group of divisions comprising Clima Industrial, Frigosystem, Tehnoelectric and Frigo Leasing. At the end of 2008, 75 percent from the company’s shares have been acquired by the Balkan Accession Fund (BAF), a EUR 110 million private equity regional fund, following a transaction worth EUR 25 million.
The rest of 25 percent from Frigotehnica is owned by Romanian investor and the company’s general manager, Nicolae Bara. The company was established in 1949 and, according to its estimations, within the overall refrigeration system market, it holds 75 percent on the commercial segment and 20 percent on the industrial segment. Magda Purice BUSINESS REVIEW / June 15 - 21, 2009
NEWS
EUR 98.5 million non-refundable funds granted in the Romanian-Norway cooperation program
Videanu announces the constitution of the energy giants
Economy Minister Adriean Videanu The main projects to be financed through the EEA mechanism are in environment, energy, and health
Some 70 projects in Romania benefit from EUR 98.5 million in nonrefundable funds, allocated through the EEA Financial Mechanism (the EEA Grants) and The Norwegian Cooperation Program (Norway Grants). About EUR 98.5 million are granted for projects in priority sectors such as environment, energy, health, sustainable production, human resources development and cultural heritage. The evaluation process ended in April and 30 bilateral projects were approved under the Norwegian Cooperation Program with Romania. Since the official launch of the program in November 2007, as many as 182 applications were received, consisting of 13 travel support applications, 98 seed money applications and 71 individual projects. The total value of project proposals was three times the total grant available under the program. “Now that the project selection phase is over, we are looking forward to the implementation stage,” said Anne
Lise Rognlidalen, commercial counselor for the Norwegian co-operation program at the Royal Norwegian Embassy in Bucharest. The deadline for project implementation expires end of April, 2011. Through the EEA Financial Mechanism, 40 individual projects were approved for a financial non-refundable assistance of EUR 50.5 million, from which 47.5 are Norwegian contribution. The 40 projects approved are as following: 10 projects in the environment sector, 6 projects in the cultural heritage sector, 13 in human resources and administrative capabilities development and 11 projects in health and childcare. The European Economic Area (EEA) Enlargement Agreement was signed by Romania in July 2007. Through the EEA Agreement, three countries non-members of the European Union, Norway, Island and Liechtenstein take part in the Common European market. Dana Ciuraru
Marius Ghenea opens online fashion mall Businessman Marius Ghenea, owner of several online retail stores, has announced he has invested EUR 200,000 in an online fashion mall, the first in Romania. The mall offers clothing, footwear and accessories by famous designers. Fashion Up joins the portfolio of sites that Ghenea owns, which include PCfun.ro, ElectroFun.ro,TOYfun.ro, ShopIT.ro, FlorideLux.ro and BrazideCraciun.ro. “Through www.fashionup.ro, we are entering an area of online commerce that is just starting out in Romania, so we intend to develop this market and prove there are no more taboos regarding the products and services that can be offered online. Using the experience and synergies from the other online stores BUSINESS REVIEW / June 15 - 21, 2009
in which I have invested, I believe we will be able to grow very rapidly in the preferences of online shoppers in Romania,” said Ghenea, president of Online Fashion Group. The store sells more than 1,000 products from a portfolio of over 50 brands of clothing, footwear and accessories. Items are delivered to customers three days after the order is placed. The main brands whose products are sold through www.fashionup.ro are Adidas, Baldinini, Bata, Dada, D&G, Diadora, Formentini, Gabor, Geox, Goliath, Jolidon, Kruebeck, Lacoste, Le Coq Sportif, Levi's, Olsen, Otter, RayBan, Reebok, Versace, Vogue Eyewear and Zodiaco. Otilia Haraga
The two national energy companies to be established this year will be listed on the Bucharest Stock Exchange, said Adriean Videanu, the Economy Minister. According to him, Electrica will be divided in two parts and Romgaz will takeover from Termoelectrica the unit from Iernut. The three energy complexes in Turceni, Rovinari and Craiova, the nuclear reactors 1 and 2 at Cernavoda, SNLO, half of Electrica and two hydroelectric plants of Hidroelectrica in Valcea and Slatina will be part of the first company. The second company will include ELCEN Bucuresti, the thermo
power plants Deva and Paroseni, CNH, the other half of Electrica, Portile de Fier and the hydro power plants Caransebes, Hateg, Arges, Cluj, Bistrita, Sibiu, Sebes, Buzau and Targu Jiu. Romgaz, through the thermo power unit from Iernut, will also be included in the second energy unit. According to the minister, the two companies will have almost the same market shares. Thus, the first company will have a market share of 48 percent, while the second one some 44 percent. According to him, these percentages are expected to decline in 2017, when the nuclear reactors 3 and 4 will be fully operational. The two energy companies will have energy production costs of some EUR 45 per MWh, lower than the current cost of EUR 48 per MWh. Currently, the cheapest producer of energy in Romania is Hidroelectrica (EUR 26 per MWh). Videanu also announced that the Ministry plans to list these two companies on the Bucharest Stock Exchange. Dana Ciuraru
BUSINESS REPORTER Requirements: • At least one year of relevant experience in journalism (news reporting and editorial features) • Journalism or business degree, good knowledge of the business/economic environment • Strong English-language skills (speaking and writing) • Strong ability to analyse and communicate • Personal integrity • Good PC use Job description: • Prepares editorial coverage of foreign investments, covers events and press conferences, conducts interviews. Please send your CV together with a letter of intent to simonafodor@bmg.ro. 7
ANALYSIS By Dana Ciuraru
Rocky road: new car sales are down, with even price reductions failing to halt the slide
Price cuts fail to put brake on car sales slump Sales of the major car firms on the local market have been in free fall since the beginning of the year, company figures show, and even lower prices have failed to temper the slide. Expansion plans have been postponed or scaled back, with Porsche Romania for example finishing its Bentley showroom six months later than scheduled. And the market shows no signs of improvement, which car company officials blame on the difficult access to financing and fiscal barriers. 10
Local carmakers never dreamed that sales would fall so hard as a result of the economic crisis. Sales have been sliding since the beginning of the year, with little sign of improvement. “In the first four months of this year, Porsche Romania’s new car sales have followed the general market trend. We have registered 50 percent lower sales compared to the same period of last year,” Brent Valmar, Porsche Romania GM, told Business Review. The firm imports the Porsche, Audi, Seat, Skoda and Volkswagen car brands. Nor has Mercedes-Benz Romania, importer of Mercedes-Benz, Smart, Maybach, Chrysler, Jeep and Dodge, enjoyed good results. According to company information, car deliveries have dropped by 60 percent in the first five months of this year, compared to the same period in 2008. The most significant fall, 72 percent, was recorded by Mercedes-Benz commercial vehicles while Jeep posted a sales decrease of 58 percent over the same period. It’s the same story at BMW’s local importer. “In the first months of this year new car sales have registered a drop in line with the market performance,” Michael Schmidt, Automobile Bavaria Group president, told BR. But the same fate has not befallen the second hand segment. Schmidt said that the BMW used cars segment had registered a “very good performance” since the beginning of 2009. Even the long awaited car replacement program hasn’t boosted sales greatly on the Romanian market, compared with Germany, for instance. “Mazda participated in the first stage of the program, through its dealers in the country, but the sales generated during this program weren’t significant for our company,” Dragos Grapinoiu, marketing manager of Mazda, told BR. The Porsche Romania GM echoed the fact that the car replacement program hadn’t enjoyed the same success as last year.
CAR
PRICES DRIVEN TO ROCK BOTTOM
“Car prices will never be as cheap as in recent months. The discounts offered this year were due to BUSINESS REVIEW / June 15 - 21, 2009
ANALYSIS the dramatic decline in sales, the current market conditions and the wrong car stock, which was calculated at last year’s sale volumes,” said Valmar. He added that different carmakers and importers have responded d i ff e r e n t l y, depending on their strength and brand image, the financial muscle of their distribution network and their capacity to compete on the long run, even if sales head south in the short term. Not everyone agrees that lowering prices is a wise strategy. “Most car firms have made irrational price reductions in the attempt to shift stock,” said Valmar. One company which has cut prices is Mazda. “Mazda launched a campaign with special prices for the cars in stock, with reductions varying between EUR 2,500 and EUR 3,000, depending on the model,” said Grapinoiu. But not everyone has followed suit. The Automobile Bavaria president said, “BMW prices have been kept at the same level, because the value of a premium model isn’t determined by market conditions, but by the technologies used to make the car.” However, the used cars sold by his company are going for less, because of the current economic climate.
EXPANSION
said Schmidt. Mercedes-Benz Romania officials told BR that since the beginning of the year seven “working points” – smaller than the usual showrooms – which can provide sales and after-sales services, have been opened, and they estimate that another five or six units will be opened by the end of the year.
MARKET
GOES INTO REVERSE
“The car market will be very subdued compared to last year,” predicted Valmar.
He added: “We estimate a 50 percent decrease. Some factors to improve the situation in this field would be extending the car replacement program to leasing, restarting bank lending and eliminating tax barriers whose implementation has caused many negative effects.” According to Mazda estimates, the imported car market will reach 115,000 units sold this year. The Automobile Bavaria Group president subscribes to the general consensus on this year’s market. “The main problems are access to
finance and its restrictive conditions, and the unwillingness of those who have money and want a car to invest.” The car market has certainly gone into reverse this year, from a prosperous one to a poorer one. Experts say further industry consolidation is likely, not via the acquisition of smaller dealers by larger ones, but through dealers waiting for the collapse of their competitors to pick up their assets and brands at bargain basement prices. dana.ciuraru@bmg.ro
STALLS
With sales so poor and companies all keeping a beady eye on expenses, expansion plans are grinding to a halt. Porsche Romania told Business Review that certain ongoing projects would be delayed. “Those investments which are now in the project phase involving Porsche Romania or our dealer network will be delayed by one, even one and a half years. The investment in the new Bentley showroom will be also put back by six months,” said Valmar. This year, Mazda has increased its network by one unit, placed in Arad, bringing the total number of Mazda partners across Romania to 13, with 16 selling points. Meanwhile, Automobile Bavaria Group has inaugurated a new showroom, but has also focused on motorcycles sales. “In May, our company opened a new showroom at one of our dealers in Sibiu, which required a EUR 3 million investment. Also in Sibiu, the first showroom dedicated exclusively to BMW motorcycles will be inaugurated by the end of the year,” BUSINESS REVIEW / June 15 - 21, 2009
11
CONSULTANCY COMPANIES By Otilia Haraga
Most consultancy companies were confident this will be a year in which they wil register consistent growth in spite of the financial crisis, report shows.
Consultancy companies confident 2009 will be a good year On the local management consultancy market, which has a value of approximately EUR 4 million and around 1,000 players of various sizes, consultants’ fees are three-four times lower than those of their counterparts working in Western European countries. The Romanian market is on the same footing with other countries in the region but not nearly mature enough to reach the level of the West. Still, most consultancy firms are confident this year will be one of solid growth. 12
A report drawn up by the European Federation of Management Consultancies Associations (FEACO) estimates that the value of the consultancy market in Romania reached over EUR 400 million last year. “We estimate that in 2009 the market will post similar values as in 2008,” Robert Maxim, managing partner at Ensight Management Consulting, tells Business Review, adding that in 2009 there will definitely no longer be the same spectacular growth seen in recent years because the current economic context does not allow it. There are two kinds of consultancy companies: local firms with Romanian capital that count on local know-how and do not have international experience and international companies that have the advantage that they can import international know- how, methodology and methods that are already standard and used internationally. “In Romania there are large companies that perform auditing and have a department of management consultancy, others which are specialized in IT c o n s u ltancy, and the third category, that we are part of, is that of companies specialized exclusively in management consultancy,” Aura Cadis, consultant in Horvath& Partners, tells Business Review. The company posted in 2008 a turnover of approximately EUR 4 million and estimations for 2009 are that the business will be up to EUR 4.5 million. Most of its clients are companies with foreign capital such as OMV, Petrom or Daimler, but 20 percent of its clients are local firms. “Our smallest client has a turnover of EUR 5 million. Most of them however run on a market between of EUR 30 million- EUR 200 million (excepting large international corporations),” says Cadis. Currently, Horvath& Partners has 10 Romanian consultants and works with over 25 consultants from the German space who come to Romania to work on specific projects. “We want to employ other 2-3 Romanian consultants with specific expertise in certain industries this year,” she says. At the moment there are approximately 1,000 management consultancy firms on the local market. The BUSINESS REVIEW / June 15 - 21, 2009
CONSULTANCY COMPANIES majority of these have just one or two consultants and generate turnovers of less than EUR 200,000, according to data from the Romanian Management Consultancies Association (AMCOR). Still, a “leading squad” is in the making, made up of approximately 20 companies that work with over 10 full-time consultants and post annual turnovers above EUR 1 million per year. This “squad” is followed by around 50-70 companies that post between EUR 200,000 and EUR 1 million, Mihai Svasta, president of AMCOR, tells
the market. Western European states have much more mature and profitable consultancy markets. Some 75 percent of the total volume of consultancy services invoiced on the European market come from Germany, France, England and Spain. “This figure is the natural consequence of the existence of more mature consolidated markets, the profession of management consultant being wellpaid and sometimes regulated,” says Svasta. Maxim explains that while it is
Mihai Svasta, president of AMCOR.
Business Review. The FEACO study on the European market places the local consultancy scene on a par with markets in the Czech Republic, Hungary and Bulgaria. This raking takes into consideration quantitative factors (such as the volume of consultancy services in relation to the gross domestic product [GDP], the dimensions of the consultancy market, its annual growth rates and the fees charged) as well as qualitative factors such as the novelty of the management profession and the “atomic” structure of
BUSINESS REVIEW / June 15 - 21, 2009
true that there has been very rapid development over the last few years both from the point of view of the value of the market and the number of companies and consultants, Romania is not there yet. “I am convinced that the current economic context will contribute to the growing maturity of the market in management consultancy even though at times this will be a forced process,” he says. “The first months of this year have brought some limitations to the budgets allocated by most clients to
consultancy, for reasons that had to do with caution rather than as a result of real modifications to businesses,” adds Svasta. Most managers have not cut budgets for consultancy entirely, but rather preferred to opt for services that serve the current business needs of the company. Generally, each industry solicits help in the areas where it has been affected worst, says Maxim. “While a year ago consultancy was regarded as a luxury or as a service for companies that were oriented towards innovation and development, now it is instead becoming a solution for ‘getting out of trouble’ for companies in dire straits,” explains Maxim. Currently, the firm’s team comprises 60 employees, 6 of whom are foreign specialists. The consultants used by Ensight are specialized in strategy, operations, financial domain, human resources and technology. On a yearly basis, the company runs approximately 40-50 projects of various sizes and complexity. The study “The Consultancy Market in Romania between 2008 and 2009,” put together by AMCOR based on market research carried out
at the end of last year, flagged up some of the challenges that players in this domain are up against. Since the most important asset of a consultancy company is its human resources, companies that were questioned identified as their main challenges the recruitment of specialized personnel (around 43 percent of the companies that were questioned) and staff retention (around 30 percent.) “It is necessary to improve the system of recruitment, formation and integration of new consultants,” says Svasta. Robert Maxim, managing partner in Ensight Management `Consulting
Another challenge relates to the promotion of consultancy services. “Romanian companies need to define a marketing strategy or revise their current strategies,” she adds. Romanian companies have diff iculties in controlling activities, process optimization, the transparency of revenues and costs, the management of the portfolio of clients and products they offer and price strategies, according to Cadis. This same study shows that 42 percent of the companies questioned
13
CONSULTANCY COMPANIES
IIndustries that were affected by the crisis, such as banking, car industry and insurances create demand for consultancy services.
perceived 2009 as a year in which turnover would increase by more than 15 percent. Some 32 percent of the companies believed that there would be indeed growth, but not higher than 15 percent. Last but not least, 21 percent of the firms sur-
14
veyed believed that this year the market would stagnate. The demand for consultancy offers is much greater than in previous years (80 percent greater) precisely because “this is an auspicious moment for changes, restructuring and
rapid short- term solutions, which most of the time cannot be implemented without outside assistance,” says Cadis. Industries that have bore the brunt of the crisis such as banking industry, insurances, car industry and constructions, are also those that have most initiatives for the optimization of their internal performance. “Companies that are used to working with management consultancy firms are focusing on projects with a positive impact on the EBIT and cash-flow on the short and medium term (such as the reduction of working capital, process efficiency, transparence of the costs and profitability at the level of services and products). These are the services in the cost controlling area that most emphasis is laid upon in periods of crisis,” explains Cadis. Out of the most confident consultancy players, most believed that the public sector, infrastructure, light industry, transport and tourism would be the most lucrative sectors. These also provided a revenue boom last year. “Generally, a company that has foreign capital will be more willing
to resort to consultancy services. There is still a shortfall in the mentalities of Romanian managers,” says Svasta. But Maxim finds that the ratio of foreign to Romanian companies in the make-up of Ensight Management’s clients is about even. “In recent years, Romanian managers have started to understand the importance and role of consultancy services,” he says. Even though these are tough times, companies that offer quality consultancy services should have nothing to fear: clients might come from different domains, because many sectors are affected but, in total, the volume of demand for consultancy services will stand up. “We believe that projects of the ‘nice to have’ type will disappear from the market. The ‘must be done’ projects will continue, even if budgets are negotiated more attentively. We also believe that the start of the process of absorption of structural funds will be a stimulus for companies that have developed their businesses in this sector,” says Svasta. In order to face sharper competition, consultancy companies will
BUSINESS REVIEW / June 15 - 21, 2009
CONSULTANCY COMPANIES with expansion and development, now the targeted domains are those that can counteract the crisis: cost reduction, treasury management, restructuring and transformation of the business, mergers and acquisitions,” says Maxim.
LOCAL
CONSULTANTS CHEAPER THAN THOSE IN WESTERN EUROPEAN
Consultancy firms say the key to the good running of companies is to improve their efficiency and cost management, among other things.
have to focus on offering customized solutions for each business and industry,” she explains. The major change that the crisis has brought to such firms’ activity is
BUSINESS REVIEW / June 15 - 21, 2009
reflected in the portfolio of services offered to clients, which mirror current economic demands. “While before companies asked for consultants’ help with issues that had to do
An AMCOR study has found that fees earned by consultants in Romania vary from EUR 100-300 per day for a junior consultant and EUR 300-800 for a senior one. “The flexibility in the level of the fee is determined by a series of factors such as the geographical area, the dimension and reputation of the consultancy company on the market and the seniority of the consultant,” outlines Svasta. Maxim suggests that before comparing the salaries of Romanian and Western European consultants, it is necessary to take a look at the cost of the consultancy services in Romania versus Western Europe, since there is a close connection between the two. The FEACO report found that
the average daily fee of consultants working on the top three European markets – Germany, Great Britain and France, which together have a market share of 65 percent – is approximately EUR 1,600/day for a consultant. “In Eastern European states whose professional management consultancy associations are members of FEACO – namely Bulgaria, the Czech Republic, Poland, Slovenia and Greece – the average fee for consultancy services has not changed much over the last two years. Greece reported that the average fee for consultancy surpasses EUR 400 per day per consultant.” The same report found that the fees of Romanian consultants are three-four times lower than those of their Western European counterparts, “even though we are talking about projects with a similar degree of difficulty and consultants with comparable preparation and experience. This is one of the aspects where the Romanian management consultancy market needs to mature: the correct evaluation of consultancy services and the adjustment of the fees,” says Maxim. ■
15
CONSULTANCY COMPANIES ACTIVE IN ROMANIA
Companies are listed in alphabetical order. The information in the list was provided by companies. Only those companies answering our questionnaire were included. Š2009 Business Review. The list may not be reprinted or reproduced in whole or in part without permission from the publishers. Corrections or additions to the list should be send to research@bmg.ro 16
BUSINESS REVIEW / June 15 - 21, 2009
Estates&Construction
MARKET
JUNE 15 - 21, 2009 / VOLUME 14, NUMBER 22
BUSINESS REVIEW FORUM
Manage your business environment !
Tiriac Imobiliare focuses on Residenz and Stejarii as it keeps other projects on hold
The Residenz project will have a total of 489 apartments
Developer Tiriac Imobiliare, part of Tiriac Holdings, the group controlled by Romanian businessman Ion Tiriac, has announced it has so far sold 150 apartments of the 350 completed units within its Chitila-located Residenz project. The figure represents half of the first two construction phases of the residential complex, which was started in 2006. The developer recently started to market almost 100 new apartments, in the project’s third development phase. By the time of completion of the fourth stage, Residenz will have a total of 489 apartments. The last development stage will deliver 130 flats but no completion date has yet been determined. While in 2007, when the local real estate market was still booming, the developer managed to sell up to 15
homes a month, but since the beginning of 2009 the figure is more like three or four. “We have noticed an improvement in sales in the last few months. From the 150 sold apartments, 65 percent of them were paid for in cash, while the rest were acquired using bank loans,” said Jurgen Reich, country manager of LBBW Immobilien, the German developer that joint ventured with Tiriac Imobiliare for the Residenz project. Like so many developing companies that have launched various financing schemes in order to sell their projects in tough financial times, Residenz’s developers offer, among other things, the “rent to buy” financing facility. The scheme involves a tenant paying rent for three years after which he or she can buy the apartment, with
the total rent paid being deductible from the overall apartment price. Rent has been estimated at EUR 6 per sqm. Prices at Residenz start from EUR 87,000 for a two-room flat and could reach EUR 270,000 for a four-room apartment, not including VAT. A ccording to representatives, the most popular homes are the two- and threeroom categories. The acquisition package includes a terrace, parking space, and, depending on the apartment location, a courtyard, on top of the project’s all-inclusive facilities such as the private kindergarten, Plus discount market, food market, banks, pizza place, pastry shop, an artificial lake and playgrounds. Residenz, which has a current estimated market value of EUR 70 million, is funded by UniCredit Tiriac Bank, while Herberger has been appointed project constructor. Project management is being carried out by ALBA Project Management, the architects are Artre Studio and Nething Generalplaner while the exclusive agent is CB Richard Ellis Eurisko. According to Bjarne Virenfeldt, CEO of Tiriac Imobiliare Group, the company is only focusing on its two ongoing projects, the German district Residenz and Stejari compound’s first two development stages. “Besides these two projects, we don’t plan to start anything else just yet and we are waiting to see how the market will fare,” said Virenfeldt. According to him, the first development stages at Stejarii are set for completion between 2009 and 2010. Magda Purice
ESTATES & CONSTRUCTION MARKET Prologis signs 8,400 sqm lease contract with Geodis Calberson in ProLogis Park Bucharest A1
Geodis rented 8,400 sqm
Global distribution facilities firm Prologis has announced it recently leased a space of 8,400 sqm within ProLogis Park Bucharest A1 to to Geodis, a third party logistics and international transport provider and subsidiary of French railway national company (SNCF). “It is not atypical to see a flight to quality as economic conditions soften, and this dynamic is increasing in Central and Eastern Europe,” said Ben Bannatyne, managing director of ProLogis. According to Pierre Kosc, general manager of Geodis Calberson in Romania, this is the third leasing contract
Construction works at the Bucharest projects are set to start this fall
signed between the two companies. ProLogis Bucharest A1 consists of four buildings totaling 108,600 sqm of industrial space, of which 28,000 sqm is A-rated. In addition to Geodis, other customers at the park include A u g sburg International Impex, cargo-partner, Centrum Logistics, Flamingo Romania, Gefco, Kuehne+Nagel and Omega Transport & Logistics. By the time of completion, ProLogis Park Bucharest A1, which is the company's first project in Romania, will deliver 12 buildings totaling approximately 300,000 sqm of distribution space at full build-out. Magda Purice
You can go to the seaside 6 km from Bucharest! From Thursday, June 11 2009, Water Park Otopeni is opened until the end of the summer. The opening was organized, like every year, by Diana Metiu International PR&Advertising agency and this time the theme was “Sunshine to Ibiza”. For the first day, the registered 2000 persons and all of them enjoyed fashion shows and concerts sustained by Anamaria Ferentz and Claudia (ex-Sexxy). For this year, Water Park invested EUR150 000 into a gaming room and a new Twister water slide for strong sensations and they are expecting their visitors with many surprises. Water Park is situated in Otopeni, near Confort Rin hotel 18
Spanish HL1 to start work on two Bucharest residential compounds in fall
and it is not only the biggest water park from Romania, but it is the only one in Bucharest area. It has 40 000 sqm, 4000 chaise lounge, 9 pools and 26 water slides and that is why it can receive about 4000 persons/day. It has a children area, a bar & restaurants one, music & dance space and, of course, the first and most important thing: slides for everybody! The clients from Water Park will have, unlimited and for free, umbrellas, chaises and all the comfort for the entire summer, from Monday to Friday between 10.00 o’clock and 20.00 and durin week-ends between 09.00 si 20.00.
Spanish developer HL1, locally represented by Area 10 Eastern World, plans to start construction of residential compounds on Timisoara Boulevard and in the Mogosoaia area of Bucharest in fall of 2009, the company has announced. Currently, it is in talks to find a construction company for the two projects. The development on Timisoara Boulevard consists of an office tower block and residential complex, which the firm plans to sell in the near future. The Mogosoaia project will cover 21 ha. Shares in Area 10 Eastern World are equally owned by Area 10 New World and HL1. It is currently de-
veloping a residential complex in the Delea Veche area of Bucharest, comprising 197 apartments priced at some EUR 95,000 for around 102 sqm and parking per unit, according to the firm. The complex will be built on a 5,900-sqm plot and is set for completion in June 2011, when it will also deliver 1,500 sqm of class A offices, according to the project draft. In Romania, the Spanish Area 10 company plans to sell a residential compound in the Lacu Morii area of Bucharest. Other Bucharest-based projects developed by the company are located in the Lacul Grivita area, consisting of 100 apartments built on a 10,000-sqm plot, and Piscul Mosoului in district 1 in Bucharest, where the company plans to build 250 apartments on a 20,000-sqm plot. In 2008, the developer borrowed EUR 24 million from the Romanian subsidiary of Caja de Ahorros y Pensiones de Barcelona bank. The loan was backed up with the 6,000sqm land plot in Delea Veche. Magda Purice
Rehau tips business to go down the tubes by 35 percent this year
Rehau’s turnover is taking a plunge, along with the entire construction market
Industrial and construction equipment producer Rehau Polymer Romania, part of German group Rehau, predicts its turnover to decrease by 35 percent in 2009, from the EUR 70 million attained in 2008, the company has announced. That figure was 17 percent up on the previous year. “For this year, we estimate a fall of 25 to 30 percent below last year’s results,” said Emil Pop, general manager of Rehau Polymer Romania. Ac-
cording to him, the construction market in Romania is likely to rebound in the near future, the first signs of which became visible in May. For this period though, the company’s general manager said that the local construction market had registered a drop of 30 percent. However, he added that the specific market of tubes used in construction should record a slight increase over the overall value of EUR 60 million posted in 2008. Since the beginning of 2009, the company has invested some EUR 3 million in opening a logistic center, a sum which also includes the value of the land. Last year, the company said it was looking for a partnership with a German company to develop a biomass station in Romania, in order to produce electric and thermo energy. As for its investment plans for 2008, Rehau intended to spend EUR 20 million on expanding the company's plant in Sibiu. Magda Purice BUSINESS REVIEW / June 15 - 21, 2009
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■ 1.l to r: Peter de Ruiter, partner of tax and legal services at PwC, H.E. Jaap Ambassador of Royal Netherlands Embassy ■ 2. Peter de Ruiter, partner of tax and legal services at PwC and also representing the Netherlands Romanian Chamber of Commerce ■ 3. Pieter Wessel, partner specializing in VAT at Deloitte Balkans ■ 4. H.E.Jaap Werner Ambassador of Royal Netherlands Embassy ■ 5. H.E.Jaap Werner Ambassador of Royal Netherlands Embassy , Peter de Ruiter, partner of tax and legal services at PwC and also representing the Netherlands Romanian Chamber of Commerce, Bill Avery, publisher Business Review ■ 6. H.E.Jaap Werner Ambassador of Royal Netherlands Embassy ■ 7. l to r panel : Pieter Wessel, Deloitte Balkans’s partner on tax partner specializing in VAT, Bill Avery publisher Business Review, H.E.Jaap Ambassador of Royal Netherlands Embassy, Peter de Ruiter, partner of tax and legal services at PwC, Edwin Warmerdam, CFO Avrig 35 ■ 8. l to r: Marjolijn van Deelen, head of Economic Department of Royal Netherlands Embassy, Pieter Wessel, Deloitte Balkans’s partner specializing in VAT, Edwin Warmerdam, CFO Avrig 35 ■ 9. Dutch Business Forum’s panel speakers and representatives of Dutch business community in Romania ■ 10. Edwin Warmerdam, CFO Avrig 35 20
Dutch keep cool in dealing with crisis The Dutch Business Forum organized by Business Review last week brough together top-level executives, institutional and private investors. A panel including H.E. Jaap Werner, the Ambassador of Royal Netherlands Embassy and Peter de Ruiter, partner of tax and legal services at PwC and also representing the Netherlands Romanian Chamber of Commerce, stated the challenges ahead for the Dutch business community in Romania. The event’s hot topics referred to the recently restructured fiscal code, the problem of VAT refunding in Romania, the fractured link between suppliers and developers in the real estate industry, and the lack of good professional local project managers in Romania. Jaap Werner said that since 2007 the approach in choosing business partners has changed and Dutch companies operating in Romania focus on the priority sectors as infrastructure, logistic, structural funds and industrial due to availability of EU funds in these sectors. VAT refunds were also a hot issue on the discussion panel, with Pieter Wessel, Deloitte Balkans’s partner on tax partner specializing in VAT, referring to “a big unwillingness” from the part of authorities involved to solve this problem in Romania. “The new fiscal code seems to surprisingly have a more pro-crisis structure,” Pieter Wessel stated. The problem of delays in recovering VAT has been highlighted by Avrig 35’s CFO Edwin Warmerdam. The representative described the Romanian economy as flexible, estimating that, 2009’s autumn will bring a “fresh start”. Avrig 35 is working on several residential, office and retail projects in Romania, of which 3 project are under construction and few others are on the planning stage. As Edwin Warmerdam stated, “the company is still building at this stage, within a very difficult business climate. The banks are not lending yet, but they are softening their approach on this matter.” ■ BUSINESS REVIEW / June 15 - 21, 2009
EVENTS
Cars are banned as pedestrians re-claim the street
Street Delivery will fight for the rights of pedestrians to walk on the city streets.
The fourth Street Delivery, an urban architecture and arts event, will take place between June 12 and 14, during which time cars will be banned and pedestrians will have freedom of movement on Arthur Verona Street. Under the Regional Urbanism Plan, the street is to become a cultural route for pedestrians, linking Icoanei Garden to Cismigiu Garden. The plan stipulates the enlargement of sidewalks – traditionally the domain of pedestrians not cars, as is the case in Bucharest – and the creation of a walking space for people and underground parking, among other things.
During Street Delivery, art will descend on the street with cultural events taking place that aim to draw attention to the fact that the city is the joint responsibility of those who live in it. Furthermore, the event calls for the restoration of 25 historic buildings along this route, which include the Central School, Anglican Church, Dimitrie Sturdza house, Ion Mincu house and Hotel Ambassador. “Sibiu is a city that has undergone extraordinary development precisely because it turned to culture. Bucharest seems to bet less on culture. We are the victims of this situation because our habitat is being destroyed. I am now fighting with the despair of an animal whose habitat is being destroyed,” said culture minister Alexandru Paleologu, who attended the event launch. In Bucharest there is currently 2 sqm of green space per inhabitant, while the average under European standards should be 12 sqm. There is also a huge number of cars and few parking spaces available (16 cars per parking space), as a result of which many drivers park their cars on the sidewalk, forcing pedestrians dangerously onto the road. Otilia Haraga
New York skyscraper photos go on show
New York sky- scrapers are presented from various perspectives in Lazia’s exhibition.
Karousel art gallery has opened the photography exhibition “Higher Ground,” by Cornel Lazia. The pictures on display can be seen until June 17 at The Place Concept Store. “Higher Ground” is a selection of
24 photos of New York skyscrapers from multiple perspectives, from the ground up to the clouds. The pictures were taken during the three trips the photographers made to New York and offer a personal perspective of the classic symbols of the American city. Lazia is one of the most prominent contemporary photographers, celebrated for his spontaneous style and the way he uses light. Many of his fashion photos have appeared in glossy magazines such as Elle, Tabu, Cosmopolitan, The One and Beau Monde. He has also taken photos of some of the top Romanian bands and artists such as Paparude, DJ Vasile and Omul cu Sobolani. The works in the exhibition are for sale for between EUR 120 and 500. Otilia Haraga
National Forum of Children and Young People call for end to violence against the youth The National Forum of Children and Young People, which took place between June 6 and 9 in Bucharest, gathered teenagers from Bucharest and 13 counties, who called for the prevention and eradication of violence against children in families, at school, in the community and on the internet. The event was organized by the Save the Children non-governmental organization The participants in this forum, aged 13-18, were split into six working groups moderated by experienced volunteers from Save the
Children. The projects drawn up during this year’s event were on the topics of the workings of the Children’s Council, the necessity of the institution The Child’s Lawyer, enforcing parent-child-teacher relations, reporting online abuse and teacher training. Participants turned their proposals into projects that will be brought by the representatives of each working group before the authorities during a final debate session so they can be implemented. Otilia Haraga
TV getting more violent, study finds
Companies with functional computers or computer components they no longer need can donate them to poor children as part of the program “Each Child in School” from the non-governmental organization Ovidiu Rom. The NGO has teamed up with IT company Blackbox and the MaiMultVerde Association, collecting computers and IT parts which are then re-conditioned and donated to poor children who can in this way learn how to use a computer and get internet access. Companies that wish to donate their old computers can contact Blackbox which will take the equipment and repair it before it reaches its final owners. Through its educational programs, Ovidiu Rom identifies the children who need a computer and assists the Blackbox team in delivering the items. MaiMult Verde is promoting the campaign among its partners and beneficiaries. BUSINESS REVIEW / June 15 - 21, 2009
Violence on Romanian TV channels has risen, according to the study “The Representations of Televised Violence and Child Protection.” The report was released by UNICEF Romania in partnership with the National Audiovisual Council (CNA) and Center for Media Studies and New Communication Technologies at the University of Bucharest. Its aim is to warn of the impact violence has on children and emphasize the responsibility of the school, family, and mass media in protecting them from it. The number of acts of violence broadcast in one hour (excluding advertising and promos) ranges from 9 on TVR 1 to 23.4 on PRO TV. Cartoon channels are even worse offenders, with 20 on Minimax and 37 on Jetix. Verbal abuse makes up 44 percent of violent acts presented, and physical violence
33.6 percent. In a quarter of cases, the violence takes place in the home or domestic sphere. The consequences of the criminal acts on the victim are not shown in almost 44 percent of the cases while their consequences for the criminal are not depicted 66 percent of the time. “Too much television creates immunity and indifference to the horrors of violence. By watching TV characters killing and hurting too much, children lose their capacity to discern between violence in real life and simulated violence on the screen. Through such shows, they can be deceived into thinking violence is the way to solve problems, imitating what they see on TV,” said Edmond McLoughney, UNICEF representative in Romania. Otilia Haraga 21
EVENTS The fundraising campaign for the 35 social projects that United Way is aiming to support this year is underway. The NGO plans to raise over EUR 600,000 for projects in Bucharest, Cluj and Timisoara, which involves a concerted effort from a large number of companies, employees and volunteers. The proceeds collected this year will be used to help children who run the risk of being abandoned by their family or dropping out of school, homeless people, HIV/AIDS sufferers, the terminally ill, elderly and people who need home care. So far, United Way counts on the support of 43 partner companies. The largest paintball venue in Bucharest has been opened by CityPaintball, five minutes away from Free Press Square. The site has a surface area of over 10,000 sqm and comprises three paintball courses where up to 500 people can play every day. It also includes a terrace with video projections that can accommodate 100 people and 70 parking spaces. The location is also equipped to function at night. As the economic crisis has prompted companies to reduce budgets for corporate, entertainment and team building events, the owners decided to open this location which, they say, could help companies save on travel and accommodation expenses. “We put at the companies’ disposal the same services offered in a typical team building exercise but at much lower cost, since the location is very accessible,” said Mihai Voiculescu, managing partner of CityPaintball.
Water Park, the largest water park in Romania, has reopened. The venue is located 6 km from Bucharest near the hotel compound Confort RIN Otopeni. It welcomes between 150,000 and 250,000 visitors per season, both tourists and locals. The compound has a capacity of 4,000, and is a popular destination for many families. Once inside, visitors can use the chaise longues, of which there are approximately 4,000, free of charge as well as the sun umbrellas, with no time limit imposed. The park has nine pools, 26 slides, fast food, bars and terraces. There is parking space for over 2,500 cars. 22
BUSINESS REVIEW / June 15 - 21, 2009
CALENDAR / WHO’S NEWS
EVENTS, BUSINESS AND POLITICAL AGENDA
WHO’S
JUNE 17
é 10.30- Cinema City network organizes press conference at La Gondola
ALEXANDRU REFF, 33, a Legal Services Partner of Deloitte Romania, was appointed the Partner in Charge of the Deloitte Balkans Tax & Legal practice. Reff joined Deloitte in 1998, straight after finishing his law degree at the University of Bucharest. His mixed background (tax and legal) and international experience (including a one-year secondment to Deloitte Paris) helped him play a leading role in multi-disciplinary and cross-border projects.
restaurant. *10.30- Intel organizes event that marks the end of competition “Oldest Notebook” at Hard Rock Cafe é 11.30- IBM Romania organizes press conference "Building A Smarter Planet –The Next Leadership Agenda" at ''Taverneria La Gigi'' (11 Uruguay St.)
JUNE 18 é 09:30 The ExP Group organizes the Acquiring Basic Financial Fluency
seminar in Bucharest. Registration required.
JUNE 19 é 09:30 The ExP Group organizes Analyzing Financial Statements semi-
ANDREI BURZ-PINZARU, 37, former Senior Manager of Reff & Associates, was appointed Equity Partner of Deloitte Central Europe. He has been working for Deloitte for over seven years, generating a significant contribution to the Firm’s performance in banking, M&A and capital markets. While a Senior Manager with Reff & Associates, he was also appointed leader of Deloitte’s team for banking and finance law, and head of the Deloitte Tax & Legal Financial Services Industry Group in Romania. He previously worked in Ernst & Young and its affiliated law firm for 2 years and for other 3 years in a securities firm.
nar in Bucharest. Registration required.
JUNE 23 é 09:30- The ExP Group organizes Business Valuation Essentials seminar
in Bucharest. Registration required.
JUNE 26 é 09:30- The ExP Group organizes Strategic Performance Measures for
Survival and Growth seminar in Bucharest. Registration required.
CATALINA MIRCEA is the new Senior Partner of Mircea & Partners Law Firm, replacing Valentin Mircea, who remains Honorary Founding
NEWS Partner. Mircea has an extensive experience in corporate law, labor law and financial matters. Before joining Mircea and Partners in 2008, she held the position of Legal and Corporate Affairs Manager of Agroalim Group of Companies.
EUGENIA FLORIAN – HAIDA has been promoted as Partner of Mircea and Partners Law Firm and in this position she will coordinate the Labor Law Department of the firm. Mrs. Eugenia Florian – Haida has more than 12 of experience in labour law. ROMANITA OPREA joined Millenium Communications as PR Manager. She is the new member of the Project Division of Millenium Communications and her mission will be to coordinate the Internetics festival. Previously, she was a journalist for various print and online publications such as www.strategic.ro, Campaign, IQads, Marca Inregistrata, Biz, AdMaker and Media Week. GIANINA TUDOSE was appointed Project Manager KFC, being in charge with developing new projects of the American brand in Romania. She joined the KFC team in 1999 and shortly became restaurant manager of KFC Tomis, the first KFC restaurant opened in Constanta. In 2007 she was promoted as Area Manager for Moldova and Dobrogea.
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
Sandero Stepway gets local launch
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Automobile Dacia is launching the new model Sandero Stepway on the local market this week. Sandero Stepway is the European version of the Stepway model which has been selling under the Renault brand in Brazil since last year. Stepway is not the Dacia SUV model that will be launched next year. The new car, which was fist presented at the Barcelona Auto Show on May 7, is built at the Dacia factory in Mioveni. ■ BUSINESS REVIEW / June 15 - 21, 2009
INTERVIEW amounted to EUR 70,000 but it does not stop here, we intend to develop many other functionalities, to continually improve the offer of cultural prodHow many new titles do you intro - ucts (books, music and films) available duce year on year? online. The portfolio of Romanian and forAt this point we sell online around eign titles exceeds 30,000 active titles, 200,000 titles but we aim to reach of which approximately a quarter are 600,000 in a year. The turnover for the novelties. English books cover all cat- online segment in the first year of acegories, just as Romanian titles, and tivity is estimated to reach EUR surpass 10,000 active titles. They range 200,000. from fiction to business titles. Currently we have a market share How do you see the book market of approximately 5 percent for books in Romania and how varies is the of edited in Romania (working with 300 fer? Recent official statistics on the valpublishing houses in the country) and probably 20 percent market share for ue of the book market do not exist yet, but there are talks about a value of import books. EUR 60- 70 million. The offer is varied What are your development plans and over past years nearly all important for Carturesti this year? domains and niches have been exThe total value of investments we plored, but of course there are unexwill make in 2009 will amount to over plored niches still. The impact of the EUR 600,000. So far, we have final- crisis is probably visible in all doized the investment in the gallery mains. A small drop in the purchase opened in April within the Romanian basket could also be noticed at CarCultural Institute in New York. For turesti. coffee lovers, we will open with this On the other hand, many publishyear’s edition of Street delivery the un- ing houses have started discount proderground coffee shop at Carturesti on motions and campaigns that have a space of approximately 250 square sparked public interest in last weeks. meters that will host exhibitions and Once the situation stabilizes, the market will grow more, for instance becultural events. Next comes the Verona garden- ter- cause we are shifting, as an economy, race in the book store’s yard on towards services, greater added value, Magheru Blvd., an extremely interest- which means greater need for specialing project that will complement with ization and training. the bookstore really well (in fact we worked with the same team of archiIn what way is the price of the tects- Mr. Serban Sturdza and his col- books settled between book stores and leagues). The Verona garden will be publishing houses? opened in June. In Romania, as in many European With this project, Verona 15, that countries, the price of the books is set has developed in several stages, Car- by publishing houses, so the book turesti has managed to save from dem- should be sold at the same price everyolition one of the most beautiful hous- where. The price is set according to the es in old Bucharest. This is the house paid copyright and translations, the ciron 15 Pictor Verona St. where Car- culation, the time in which the book is turesti expanded last year. It was a very estimated to sell, the quality of the padifficult and ambitious activity that we per/cover, the thickness of the book managed to carry through with great fi- and so on. nancial effort. This has been the most Bookstores benefit from discount substantial investment Carturesti made from the price listed but this is negotiso far, exceeding EUR 5 million. We ated according to the sale potential contracted a bank loan for this. they have, how old they are on the Another very interesting project market, payment conditions. we will end by August is the French On the Romanian market there are bookstore Carturesti will open within exceptions as some book stores practhe French Institute in Bucharest at the tice prices that exceed with 15 percent invitation of the French embassy and the price recommended by publishing the Institute’s management. Last but houses, but in Carturesti we practice not least, we intend to expand with two only the prices and discounts set by bookstores located in other cities. these or by importers. We are nevertheless faced with a misconception of the What investment went into the on - clients who believe that if our book line bookstore you opened recently? stores look better, then the price of So far the total investment has books would be higher. ■
Some of the titles are aided by unique cinema productions, such as The Reader by Bernhard Schlink.
Carturesti bookstore in massive expansion mode When thinking about buying a book, one of the names that immediately spring to mind in Romania is Carturesti, one of the posh and preferred destinations of bookworms but also lovers of music, tea and decorative objects. The owners of this chain of book stores have great plans this year, some of which they have already put into practice, even if it meant at some point fighting against big real estate sharks. SERBAN RADU, general manager, talks to BR about some of the keys to its success. By Otilia Haraga
probably supported by the fact that we have the largest offer of books in English in Romania, with over 10,000 titles What type of books were best- sell - in stock. Of the total number of books on the ers this year in Carturesti? If we are talking about books by shelves of Carturesti novelties and recRomanian authors, the best-sold titles ommendations, 30-35 percent are local in the Carturesti bookstores in the first titles, which does not reflect necessari3 months of this year were “About the ly the public’s appetence for these Beautiful Man,” and “Who We Are,” products but our effort to promote Roboth by Dan Puric, “The Confessions manian authors. Other explanations would be the of a Coffee Lover,” by Ghe. Florescu and “Deadly Stories” by Mihai Gai- promotion efforts made by publishing nusa. houses and book stores both in the meThe best-sold foreign titles are The dia and through successful launch Reader by Bernhard Schlink, Black events such as the launch of “The Swan, by Nassim Nicholas Taleb and Golden Age for Children” by Stefan The Shock Doctrine by Naomi Klein. Constantinescu and “The Book of The sales of hundreds of copies are Restlessness” by Fernando Pessoa. BUSINESS REVIEW / June 15 - 21, 2009
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