POSITIVE OUTLOOK FOR REAL ESTATE MARKET IN 2022
June, 2022 / Volume 26, Issue 5
www.business-review.eu
6
SUSTAINABLE CITIES PAVING THE WAY TO A SMART(ER) FUTURE
12
AUDIO ARCHITECTURE CHANGING SPACES AND LIVES
28
THE ROAD TO RECOVERY STARTS WITH A NEW MINDSET
32
HAGAG DEVELOPMENT EUROPE: THE PHILOSOPHY OF PERFECTION IN BUSINESS
www.business-review.eu Business Review | June 2022
EDITORIAL 3
• Editorial •
REAL ESTATE
Anda Sebesi • Editor-in-Chief •
6 Positive outlook for real estate market in 2022
COVER STORY
Confidence paves the way to success
M
ajor international issues related to the Ukraine crisis,
8 A business based on the philosophy of perfection
MAIN STORY
high inflation, growing interest rates, and a slowdown of leading economies are all rattling the startup funding
market, meaning that entrepreneurs might have a harder time securing the necessary funds in the coming year. Faster routes to profitability are set to become a hot topic among startup found-
12 Sustainable cities paving the way to a smart(er) future
ers and investors as sky-high valuations begin to lose steam. But what Silvia Floares, co-founder at Mezanin Market, Roditor Food Market, and Weekend Sessions, pointed out at the 5th edition of
ENTREPRENEURSHIP
Business Review’s Rising Cities. Smart Future event was that uncertainty, insecurity, and financial fluctuations are very common issues faced by Romanian companies and local independent cultural operators. Regardless of the difficulties they may face, they continue to have a positive sentiment regarding their businesses. There are many sectors in Romania that are currently transforming challenges into business opportunities and generating growth. Real estate is one such sector, and this is why we’ve
20 Startup valuations and investments see rebalancing amid economic turmoil
CITY
decided to dedicate the cover story of this issue to a business based on the philosophy of perfection: real estate investor and developer Hagag Development Europe. Since its entry on the local market back in 2017, it has been working to reshape the local urban landscape. The company’s business vision is based on the philosophy of perfection, and it pays little attention to passing trends. Hagag’s strategy is built around timeless properties that transcend trends and create excellent value that doesn’t sway away. And this seems to be a winning approach for both the company and the local communities it transforms through its projects.
35 Ioana Ciocan: “New generations of art collectors are emerging in Romania”
37 Romania’s presence at Venice Biennale
38 Cultural calendar
EDITOR-IN-CHIEF: Anda Sebesi JOURNALISTS: Aurel Constantin, Mihai Cristea, Deniza Cristian, Romanita Oprea, Oana Vasiliu CONTRIBUTORS: Ovidiu Posirca, Claudiu Vrinceanu COPY EDITOR: Anca Alexe PHOTO EDITOR: Mihai Constantineanu PHOTOS: Dreamstime ART DIRECTOR: Raluca Dumitru PUBLISHER: Bloc-Notes Media Network ADDRESS: 82-98 Calea Grivitei, 1st floor, Hotspot Workhub, District 1, Bucharest, Romania SALES MANAGERS: Radu Fireteanu, Alexandra Rosca MARKETING & SALES MANAGER: Luiza Luca PRODUCTION: Dan Mitroi DISTRIBUTION: Eugen Musat EXECUTIVE DIRECTOR: George Moise GENERAL MANAGER: Catalin Alistari USA MANAGER: Oana Molodoi FOUNDING EDITOR: Bill Avery EMAILS: editorial@business-review.eu, sales@business-review.eu, events@business-review.eu SUBSCRIPTIONS on Manpres Distribution Business Review is a member of Fwei
Publicație auditată pe perioada Apr 2015 - Mar 2016
ISSN NO. 1453-729X
www.business-review.eu Business Review | June 2022
4 NEWS
WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at mihai.cristea@business-review.eu
More than half of Romanians prefer digital payments By Deniza Cristian device. When asked a similar question about their last online purchase, only 14 percent of respondents said they had paid cash on delivery. “Visa supports the payment ecosystem
Angeliki Karava has been appointed by SofMedica Group as General Manager for the ISLE Academy across all locations where the organisation has an established presence: Romania, Greece, Hungary, Bulgaria, and Cyprus. Karava is a microbiologist with extensive experience in the healthcare sector at the global level, having started out as a supervisor in research and diagnostics laboratories, then moved on to senior commercial positions in multinational medical devices & pharmaceutical companies.
in the CEE region, including Romania, which results in the number of terminals accepting card payments increasing and consumer daily payment
51 percent of Romanian consumers tend to use a card for payment
page 5
payment products and solutions are introduced on the Ro-
Results of the latest interna-
use a card for payment. The top
manian market in partnership
tional study “Attitudes towards
reason for choosing cash is when
with our partner banks, acquir-
payment methods,” commis-
digital payments are unavailable
ers, and other financial institu-
sioned by eService and other
at a given store or service point—
tions,” said Elena Ungureanu,
EVO Group entities, show that
that’s the view of one third of
Country Manager at Visa in
almost 6 out of 10 Romanians
the respondents who often pay
Romania. The study also finds
like to pay digitally citing ease
with cash. It is worth noting that
that stores that offer digital
of use and convenience. Visa
digital payments dominate as
payment methods are clearly
was a partner of the study in
the preferred payment method
perceived in a positive way by
the Central Eastern European
for online shopping among
Romanian consumers: as many
region.
Romanians. Half of the respon-
as 77 percent of respondents
dents paid for their last in-store
believe they are modern and 72
while shopping, 51 percent of
purchase with a card or using a
percent of them think they are
Romanian consumers tend to
phone, smartwatch or another
customer-centric.
The study shows that
Adam Nykles has been named Chief Data Officer for Publicis Le Pont. The appointment is an expansion of Adam’s existing remit as Chief Data Officer of KINDRED, a part of Publicis Groupe Czech Republic. Adam has 12 years of experience in the digital marketing industry from various fields of media, programmatic, AdTech and MarTech platforms, data, and digital transformation. Over the past three years, Adam has been leading the Groupe’s Data and Technology Practice Center of Excellence out of Prague.
experience improving as new
Alpha Bank Romania supports Romania’s entrepreneurial environment By Deniza Cristian Alpha Bank Romania has joined
support construction—includ-
four new governmental pro-
ing green projects—, stimulate
grammes whose main priorities
productivity and competitive-
are to boost local production,
ness in the agricultural field, and
Alpha Bank grants financing for entrepreneurs through new programmes
www.business-review.eu Business Review | June 2022
NEWS 5
EBRD becomes first international financial institution to open office in Cluj-Napoca By Aurel Constantin Martin Sander is the new General Manager of Ford Model e and Chair of Ford-Werke GmbH. He will lead the delivery of breakthrough electric vehicles, as well as the development of software and connected vehicle technologies and services. Sander will be located in Cologne, the headquarters of Ford’s European Model e business unit.
The European Bank for Reconstruction and Development (EBRD) is expanding its presence in Romania by opening a new office in Cluj-Napoca, the country’s second-largest city. The EBRD is the first international financial institution to open a regional office there, recognising the significant potential of its location. Situated in the heart of
The Cluj-Napoca office will support local SMEs with expert advice, training, and access to finance
historical Transylvania, ClujNapoca is a gateway to three
EBRD’s Advice for Small Busi-
businesses in Transylvania,”
strategic regions of Romania:
nesses (ASB) programme, funded
says Charlotte Ruhe, EBRD
the north-west (where it is
in Romania by the European
Managing Director for Central
located), the centre, and the
Union and the EBRD’s Small
and South Eastern Europe.
west. The city has demon-
Business Impact Fund, the Bank
strated its ability to promote
has already provided advisory
focuses on financing sustain-
high-tech business sectors and
support to more than 900 Roma-
able infrastructure, boosting
is known for its strong informa-
nian SMEs, including regional
private-sector productivity by
tion technology (IT) industry
business leaders such as Arobs,
helping private companies ex-
and excellent academic sector.
Ciserom, and Unilact.
pand and improve their work-
The Cluj-Napoca office will
“We have supported hundreds
In Romania, the EBRD
force skills, and developing
mainly support local small
of companies across the coun-
the financial sector and capital
and medium-sized enter-
try through direct and indirect
markets. To date, the Bank has
prises (SMEs) in the region with
investment, as well as through
invested almost EUR 9.7 bil-
expert advice, training, and
advisory projects, and we now
lion in the country’s economy,
access to finance. Through the
want to increase our support for
through 488 projects.
support projects with innovative
SME Division of Alpha Bank
and digital components: IMM
Romania.
Prod, Garant Construct, Rural Invest and Innovation. “We understand the challeng-
Mircea Varga has been appointed as Chairman of the Board of Directors at TEILOR Holding. Varga is an executive with over 26 years of professional experience in multinationals and local companies from various industries, such as PwC Romania and Tiriac Group. He has proven expertise in M&A and capital raising, organisational transformation, organisational change, and crisis management.
The new governmental programmes are designed to help companies access investment
es faced by entrepreneurs who
and/or working capital credits,
are developing businesses and
supported by state guarantees
creating jobs, and we are pre-
of up to 90 percent of the value
pared to support their projects,
of the requested financing,
inter alia, by granting financing
issued by the National Credit
through these new programmes
Guarantee Fund for Small
designed to improve the com-
and Medium Enterprises
petitiveness and resilience of
(NCGFSME), the Rural Credit
the local entrepreneurial
Guarantee Fund (RCGF), and the
environment,” stated Dragos
Romanian Counter-Guarantee
Draghici, Manager within the
Fund (RCF).
Aleksej Koscejev has been appointed as Head of Growth for CEE at Revolut. He will be based in the Berlin office, and responsible for building the business in Romania, Poland, Hungary, Czechia, Slovakia, Lithuania, Latvia, Estonia, Croatia, and Bulgaria. With his expertise, he will scale Revolut’s marketing strategies to the mass market across the CEE region.
www.business-review.eu Business Review | June 2022
6 REAL ESTATE
Positive outlook for real estate market in 2022 Romania’s property investment volume in the first quarter of 2022 is estimated at EUR 68.5 million, a value that’s 7 percent lower than the one recorded in the same period of 2021. Analysts expect investments to reach EUR 1 billion in 2022, 11 percent above last year’s total figure, though it is difficult to make accurate predictions in this period marked by uncertainty. By Aurel Constantin ter to 14.3 percent, also due to a significant volume of new offices being delivered during the period. Although most companies have started bringing their employees back to the office, the accommodation process is usually progressive: not all employees are required to work from the office every day of the working week, and to a certain extent, the hybrid practice of combining office and home work continues. The first quarter of the year saw a high level of new deliveries, totalling 73,500 sqm, compared to only 29,500 sqm in Q1 2021. The largest project delivered during Q1 was Sema Office London & Oslo, with a total of AFI Lakeview
O
approximately 31,500 sqm GLA, developed by River Development in the Centre-West submarket. Two projects of roughly 21,000 sqm
ffices accounted for almost 80
Unexpired Lease Term) significantly longer
each were also delivered in Q1. The first one
percent of total investment volumes
than the market average can achieve yields
was phase 1 of @Expo, developed by Atenor
during the first three months, while
below those quoted as prime, with quality
in the North-West (Expozitiei) submarket, fol-
retail accounted for the rest. The largest in-
and ESG compliance (Environment, Social,
lowed by Tandem, delivered by Forte Partners
vestment deal closed in Q1 2022 was the sale
Governance) playing a major role in future
in the Centre submarket.
of the Record office scheme in Cluj-Napoca
transactions.
Another 83,000 sqm are due to be added to the market before the end of 2022, bringing
for a reported EUR 35 million. Speedwell sold the project to AYA Properties Fund from Bel-
OFFICE MARKET
total deliveries for the year to 156,500 sqm.
gium. The second-largest deal in Q1 was the
Demand for offices is improving as the total
This would represent a 36 percent decline
sale of Vitantis Shopping Center in Bucharest,
gross transaction volume in Bucharest during
compared to 2021. The Centre-West submar-
with approximately 36,000 square metres
Q1 2022 reached 69,500 sqm, 17.5 percent
ket will attract almost 60 percent of all deliv-
GLA. Revetas Capital sold the property to
below the previous quarter, but 36 percent
eries expected for the year—over 90,000 sqm.
Praktiker Real Estate, according to a report by
over Q1 2021. On the other hand, net take-up
The largest project expected to be completed
JLL Romania.
increased by 30 percent compared to the pre-
by the end of 2022 is the second phase of One
vious quarter, to 45,600 sqm and more than
Cotroceni Park, developed by One United
doubled when compared to Q1 2021.
Properties, adding around 34,500 sqm to the
Q1 2022 marked a decrease in prime industrial yields, from 7.75 percent in the previous quarter to 7.5 percent. After consecutive
New leases had the largest share in total
Centre-West submarket. The second building
contractions in the previous two quarters,
transaction volumes in Q1 2022, with approxi-
in AFI Tech Park, developed by AFI Europe,
prime office yields remained flat during Q1
mately 60 percent of the total, followed by
will increase the stock of the same submarket
2022, at 6.75 percent. Prime retail yields were
renewals and renegotiations, with 21 percent.
by 24,500 sqm. The vacancy rate is likely to
also stable during the period, at 7.25 percent.
The vacancy rate slightly increased during Q1
drop in 2022 due to the lower number of new
Prime assets with WAULT (Weighted Average
2022, from 13.7 percent in the previous quar-
deliveries over the next three quarters.
www.business-review.eu Business Review | June 2022 May 2016
COVER REALSTORY ESTATE14 7
RETAIL MARKET Following the decline in intensity of the covid-19 pandemic in Romania in the first quarter of 2022, the state of alert was lifted on March 9th, together with all remaining pandemicrelated restrictions. This was encouraging news for the retail market, and it is likely to be reflected in second quarter figures. Retail sales increased by 5 percent year-on-year in March 2022. After strong retail deliveries in the last quarter of 2022, only 16,500 sqm GLA were introduced in Q1 2022, only slightly more than a quarter of the deliveries of the previous quarter. By comparison, there no openings were recorded in Q1 2021. The only major retail project to be launched in Q1 2022 was Colosseum Mall, the 16,500 sqm shopping One United Properties, office building
centre added to the existing Colosseum Retail Park in the north-west area of Bucharest. Following a relatively low volume of new
followed by Ploiesti, with a 31 percent share
stock would reach 6.36 million sqm by the
deliveries in 2021, supply is estimated to
(87,600 sqm) and Arad, with 10.2 percent
end of the year.
increase by 73 percent in 2022, up to a total of
(29,000 sqm).
184,100 sqm GLA, mostly through retail parks
Deliveries of industrial and logistics spaces
RESIDENTIAL MARKET
in medium and smaller cities. After the open-
totalled approximately 155,400 sqm across
The number of transactions with new units
ing of Colosseum Mall in Q1, only 13,000 sqm
Romania in the first quarter, 36 percent less
in Q1 2022 stood at around 7,760 units for Bu-
are expected for delivery in Bucharest until
than in the previous quarter but five times
charest and 1,680 units for Ilfov; 60 percent of
the end of 2022, in two retail parks adjacent to
more than in Q1 2021. Almost 81,000 sqm
the Bucharest transactions officially regis-
residential developments: Greenfield Plaza,
were delivered in the Bucharest region, repre-
tered by the National Agency for Cadastre and
developed by Impact Developer & Contractor
senting nearly 50 percent of all completions.
Land Registration were for new units, while
in Baneasa, and Lemon Park, developed
new sales represented 90 percent of the
by Synergy Construct in the Damaroaia
total transactions in Ilfov. This represents
neighbourhood.
a 13 percent decline from the previous
In regional cities, the pipeline for
quarter, a predictable evolution based
2022 is mainly represented by small and
on seasonality. Despite the social and
medium-sized retail parks. One notable
economic impact of the Russia-Ukraine
exception is Alba Iulia Mall, with 28,900
conflict, the new housing sales market
sqm GLA, which will be delivered by
performed much better than expected
Prime Kapital and MAS Real Estate.
in Q1, especially in March. Overall, the first quarter saw a 15.3 percent increase
INDUSTRIAL MARKET
compared to Q1 2021 and a spectacular
The Romanian industrial market had
increase of 54 percent compared to Q1
a good start in 2022, with total demand
Another 25,000 sqm were delivered in Deva
reaching 284,300 sqm. However, this was 41
and 19,000 sqm in Constanta. At the end
percent below the previous quarter, which
of Q1 2022, the modern rentable industrial
as a result of the record level of deliveries in
had hit a record level, but 9 percent over Q1
stock in Romania totalled approximately 5.8
2021, with transactions being negotiated and
2021. Net take-up accounted for 85 percent of
million sqm. Encouraged by strong take-up
secured in 2021 and concluded through final
total take-up in Q1 or approximately 242,600
in 2021 and early 2022, developers plan to
sale-purchase agreements in Q1 2022. For the
sqm. This is 27 percent below the previous
deliver another 530,000 sqm of industrial and
short and medium-term, analysts foresee that
quarter and 47 percent above Q1 2021. Bu-
logistics spaces by the end of this year. This
demand for new homes will be significantly
charest accounted for 42 percent of the gross
would bring total completions for 2022 to
impacted by the continuous increase of the
demand for industrial and logistics spaces in
685,500 sqm, 30 percent over those recorded
key interest rate combined with high inflation
the country in Q1, with around 120,000 sqm,
in 2021. If everything goes to plan, the total
rates.
2020. This positive evolution is seen by analysts
8 COVER STORY
www.business-review.eu Business Review | June 2022
A BUSINESS BASED ON THE PHILOSOPHY OF PERFECTION
www.business-review.eu Business Review | June 2022
COVER STORY 9
Since its entry on the local market, back in 2017, real estate investor and developer Hagag Development Europe has been working to reshape the local urban landscape. Within less than five years, the company has become one of the most prominent real estate players in Romania and the SEE region, by staying true to its three main principles: design, culture, and service. The company’s business vision is based on the philosophy of perfection, and it pays little attention to passing trends. Hagag Development Europe’s strategy is built around timeless properties that transcend trends and create excellent value that doesn’t sway away. Yitzhak Hagag, co-founder of Hagag Development Europe, sat down with Business Review and talked about the company’s approach on the local market and its plans for the future, both in Romania and abroad. By Anda Sebesi What is the story of Hagag Development Europe and how has the company developed since its entry on the Romanian market back in 2017?
139, finalising construction works on H Tudor Arghezi 21, and con-
Hagag Development Europe is an experienced real estate investor-
old buildings with patrimonial value, and introducing to the market
developer, operating in Europe and being publicly traded on the Tel-
upper-premium projects such are H Eliade 9 and H Primaverii 1 are
tinuing our investments in key areas, exploring, shaping, growing the niche segment of urban renewal through the reconversion of
Aviv Stock Exchange (TASE).
all among our top achieve-
Our group of companies is
ments. I also think it is relevant
involved in the purchase,
to mention that over the past
development, renovation, and
six months alone, as a result
management of several assets
of our latest acquisitions, the
located in both privileged and
market value of our portfolio,
emerging locations across Bu-
as completed, has gone up by
charest and other major cities
more than 50 percent, from
in Romania. Since 2017, when
EUR 200 million to over EUR
we opened our local office, we
300 million. Likewise, this Au-
have been tirelessly working on
gust we will be celebrating our
reshaping the urban landscape.
first year as a publicly traded
Our land and property portfolio
company on the Tel Aviv Stock
has been growing every year,
Exchange.
and we are currently managing over 250,000 square metres
estate players in Romania and the SEE region, and that it is directly
What can you tell us about your company’s positioning on the Romanian real estate market through the projects it develops and how is Hagag Development Europe different from other real estate developers?
responsible for the development of some of Bucharest’s most el-
Modesty aside, what we are doing is truly unique. Our iconic projects
evated residences and office buildings.
have raised the benchmarks and they continue to set the standards
GBA of residential, office, commercial and, more recently, hospitality projects. I am delighted to say that within less than five years, our company has managed to become one of the most prominent real
in terms of premium real estate development and luxury living as
What are the company’s biggest achievements in Romania?
our portfolio expands in Bucharest and secondary markets across
First of all, Romania is an emerging market, and as all other emerg-
the nation. Our vision for the local market and our investment strat-
ing markets, it is highly prone to risk. And yes, Bucharest has
egy are the main differentiators. Moreover, regardless of the purpose
enormous potential, secondary markets are on the rise, and the real
of each of our projects, we pay close attention to three core criteria:
estate sector as a whole has become more mature; still, the tense
design, culture, and service. I am talking about a holistic approach
social-economic-political climate, the covid-19 pandemic, and the
designed to offer an exclusive experience to residents and tenants
recent Russian-Ukrainian conflict have been pushing everybody’s
alike—whether it’s for living or working, in a refurbished building or
limits. In this context, I believe that being here for five years now,
a new development, downtown or in north Bucharest. When you
with a firm intention to stay and ambitious plans for the future, hav-
walk into an H property, you should feel like you’ve walked into a 7*
ing delivered unique projects such as H Victoriei 109 and H Victoriei
hotel. That’s because we are inspired by imagining how people are
www.business-review.eu Business Review | June 2022
10 COVER STORY
going to respond to—and interact with—what we are building, and
in 1835, and it’s as revolutionary now, in 2022—even though it’s on
how our projects are going to create memorable moments and spe-
the verge of collapse nowadays. What’s more, iconic properties in
cial communities. Even at H Pipera Lake, our large-scale affordable
prime locations do not devalue over time. No matter the market
luxury development, we are working on integrating several elements
fluctuations, there will always be strong demand for high quality
such as concierge services or property and facility management,
and unique architecture. In good market conditions, you get a good
which are usually only available for premium projects.
return of investment for such products. On the other hand, if the market is temporarily shaking, you have great downside protection.
How would you describe Hagag Development Europe’s vision and how does it get translated into the projects the company develops in Romania?
What are the most recent business updates for your operations in Romania?
Our vision is based on the philosophy of perfection. Perfection is
We started 2022 on the same positive note in which we ended 2021,
what elevates and distinguishes each of our developments, as do
and lately we have been very busy ”shopping,” consolidating our
the sites and locations we choose. We don’t care much about trends;
presence in the region, and expanding our local team. In Q1, for ex-
they’re just not part of our vision and who we are as a company. We tend to focus on timeless properties that transcend trends and create excellent value that doesn’t sway away. Trends come and go; our properties and the business we are building are here to stay. As we see it, real estate is not a short-term game. At least not the real estate that we invest in. We have a very well-articulated strategy and we only buy prime assets in key locations. And what I really like about what we are doing is the fact that we have the opportunity to purchase super prime real estate, add our personal touch, and make it great. We strongly believe that true luxury is a matter of choice, and our unique value proposition offers clients something beyond tangible things. This includes the views, the building’s personality, the historical
ample, we completed two new transactions: we purchased an old of-
influence, the unrivalled amenities, and so on. Most of the time, es-
fice maze on 5-7 Vasile Lascar Street, and a plot of land of over 1,300
pecially in Romania, “luxury” gets mistaken for “expensive,” but it is
sqm located at 1 Primaverii boulevard. Also in terms of business
actually about the experience. It’s not about adding more marble or
updates, we have recently launched our second upper-premium
bronze or more square feet or the best fixtures. Sure, all of that mat-
residential boutique, H Primaverii 1, which—judging by the number
ters and definitely helps. But what “luxury” means is being cared
of inquiries we have received from both clients and media since
for and taken care of—being able to clear your head, to be inspired,
the news about us purchasing the land got out — I actually believe
to inspire others, and to be your best self. This is what we want to
was the most highly anticipated announcement on the residential
express throughout our projects.
market so far. In terms of leasing and sales, we are also pleased to post out-
What is the reason behind your decision to invest in the central areas of Bucharest?
standing results for the first half of the year. Our office building H
Coming back to what I was previously saying, our decision of direct-
139 is sold out, phase I of H Pipera Lake (435 units) is also sold out
ing a significant part of our investments towards central areas is
and completed, and we have recently started pre-sales for phase II,
linked to our long-term vision for Romania and to the uniqueness
where almost 200 units were reserved in just two months of project
of our brand. The city centre has been neglected by investors and
marketing. H Eliade 9 remains, too, a prestigious undertaking for us.
developers for almost two decades, and it would be a pity not to
Almost half of the units available for sale have been contracted.
Victoriei 109 is fully leased, the residential boutique H Victoriei
explore its beauty and potential. The properties we own in downtown Bucharest are some of the most beautiful buildings in the city. Palatul Stirbei, for example, was revolutionary when it was built
What are Hagag Development Europe’s plans for the local market?
www.business-review.eu Business Review | June 2022
To sum up what could be a very long phrase, I believe the proper
COVER STORY 11 Moreover, the fact that Romania has the oldest stock of resi-
word to use in this case is “expansion.” We are simultaneously work-
dential units in Europe further underlines the country’s growth
ing on planning, designing, launching, and marketing new projects,
potential. But the real problem here is urbanisation, and I think that
all while looking into several other properties and plots of land that
the natural outcome in this context is for the residential segment to
have caught our interest. Aside from Romania, we are also looking
continue to develop. Even when it comes to mass-market projects,
into opportunities abroad, in more than one European metropolises.
clients are becoming increasingly demanding. They have higher
And yes, in the long run, our intention is to expand across both
expectations and their preferences and behaviours are and will be
Romania and other countries in Europe.
reflected in what the offer will look like 10 years from now. As an innovative player, when we designed our mass-market project H
How do you think the Romanian real estate sector will evolve in the coming years?
Pipera Lake, we took into consideration the long-term evolution of this particular segment, so we are already working on a product that
We are very optimistic about
will meet the future clients’
the future of this market.
needs.
Romania has shown a lot of resilience throughout the
when it came to the residential
More than once over the years, both publicly and unofficially, Hagag Development Europe has promoted art and culture and supported local artists. How do you see the intersection of art and real estate?
sector. The office segment has
In our view, real estate devel-
started moving again and, with
opment is by default a form
the recent entries of new inter-
of art. When building for the
national players, retail is also
future, we are creating some-
slowly making a recovery. As
thing aesthetically beautiful
far as we are concerned, Hagag
that adds value to the city’s
Development Europe remains
skyline while reviving the ur-
open to all opportunities. The
ban landscape as a whole. Our
current market environment is
buildings on Calea Victoriei
not deterring us from buying
are great examples. And since
real estate. We have the experi-
we own these superb proper-
ence, the know-how, and the
ties in such iconic locations
financial capacity to look past
that make them great places
the temporary fluctuations of
to bring art to the public, we
the market and comprehend
are very proud that the ground
pandemic, and even now in the unfortunate context of the Ukraine invasion. Over the past couple of years, the market has performed much better than expected, especially
the bigger picture, as depicted in a time projection of 10 to 30 years.
floor of our office building H Victoriei 109 hosts a space dedicated to contemporary art, The H Gallery, an eclectic space that’s perfectly
What do you expect the residential segment in Romania to look like ten years from now?
framed inside the natural contrast between the building’s impres-
Let’s just say that if the past few years have taught us anything, it
newest tenant is truly unique, as the main purpose of the gallery
was that time is the biggest luxury one can have. I personally believe
is to develop a less explored direction of the Romanian art scene,
that luxury living is shifting towards this narrative and that buyers
through collaborations with local and international galleries. Thus,
will continue to look for easily accessible homes that cater to this
the H Gallery will act as an intermediary in organising exhibitions
lifestyle. Even now, buyers are looking for homes that complement
and events. Its aim is to both shape the way the public interacts with
their lifestyle. And if you think that hotel brands are the best at doing
contemporary art and familiarise people with the various meth-
that, think again, because as a developer and manager of real estate
ods by which art is created, interpreted, and collected in a recent
assets, Hagag Development Europe has already started to move in
context. Accommodating a tenant like The H Gallery and supporting
this direction. H Victoriei 139, H Eliade 9, and H Primaverii 1 are all
its growth and development is just the beginning of our endeavour
about iconic locations that are remarkably connected to the core of
to create that perfect synergy between art and real estate. Just think
the city, premium services, fine amenities, and unique experiences.
about it: isn’t it fabulous to admire art while enjoying a glass of
We can call it upscale living if you like.
champagne in a magical setting?
sive architecture and the vibe of the emblematic Calea Victoriei. Our
www.business-review.eu Business Review | June 2022
12 MAIN STORY
Sustainable cities paving the way to a smart(er) future
The curtains dropped on Business Review’s Rising Cities. Smart Future 2022 after more than four hours of lively debate between top business leaders, local officials, the heads of the European Investment Bank and European Commission representations in Romania, and members of the civil society. The main conclusion was that without a clear strategy for making our communities more sustainable, it will be difficult for our society to keep up with European peers. By Anda Sebesi, Aurel Constantin, Mihai Cristea
www.business-review.eu Business Review | June 2022
MAIN STORY 13
CHALLENGES AND OPPORTUNITIES FOR A SUSTAINABLE CITY The global trend is moving towards smart cities with efficient and environmentally-friendly buildings and cars. In the first panel of the conference, the discussions were centred on how a traditional city could be transformed into a smart one, by integrating the new environment, social, and governance (ESG) rules. These rules help us build clean cities, with clean and efficient consumption patterns. In fact, ESG rules are rapidly becoming the norm for any construction project. As pointed out by Antoniu Panait, Managing Director at Vastint Romania, the ESG concept appeared relatively recently, but it is already being embraced, and big banks are using ESG evalua-
Victor Iancu, Associate Partner at KPMG Romania “For a year, I have been part of a project funded by the European Commission that guides cities in Romania towards becoming smarter. And what I have learned from dozens of cities in Europe is that they have a long-term strategy, which isn’t just a document written by the mayor's office, but a vision that transcends electoral cycles.”
tions to condition investments and access to financing. In practice, it only took a few months for ESG to be adopted by Romanian companies, just like it usually happens when various new technologies appear. Lucian Enaru, Country General Manager at Schneider Electric, pointed out that unlike 20 years ago, when Romania was at the beginning of the road in terms of technology, all of today’s global innovations also reach our country right away. But developing a smart city means more than adopting new technologies; first and foremost, it requires a medium and longterm strategy, involving all stakeholders. Claudiu Bisnel, Managing
Antoniu Panait, Managing Director at Vastint Romania “Smart cities are already green, as smart can’t be separated from ESG. A few months ago, ESG seemed like a distant thing, but it’s already here and we will depend on it more and more for financing and lending. Large banks are already conditioning their investments on ESG valuations. And smart cities will need big investments and tailormade projects.”
Partner at Brisk Group, explained that public authorities cannot be expected to create such plans on their own. They need support from the civil society and the business environment. It is well-known that authorities rarely manage to create long-term strategies that transcend electoral clichés, but according to Victor Iancu, Associate Partner at KPMG Romania, the pandemic has shown us that we can mobilise to adopt new plans quickly, especially since we have examples of cities in Europe from which we can learn. In fact, as pointed out by Razvan Parvulescu, Business Development Coordinator at BTD Construct & Ambient, although there is a gap between Romania and Western states, it is a gap that we are recovering quickly.
UNLEASHING THE FULL POTENTIAL OF A SMART CITY A highly anticipated section of the Rising Cities. Smart Future conference was the second panel, titled “Unleashing the full potential of Smart Cities,” where top business professionals from major industries—such as Marius Motofei (Business Operations & Public Sector Director at Vodafone Romania), Adrian Huma (Sector Head for Automotive, Transportation, and Logistics at ING Romania), and Michele Giove (Senior Manager for Government and Public Sector at EY Romania)—sat face to face with Lara Tassan Zanin, Head of the European Investment Bank’s Bucharest office, and two of the most high-profile local public officials of the moment, Brasov Mayor Allen Coliban and Bucharest Sector 1 Mayor Clotilde Armand. Panel moderator Dan Borbely, Partner at Tuca Zbarcea & Asociatii, started off with a short introduction: “The way I see this panel is that we have all interested parts on stage: the targets, the money, the private sector, and the consultants—so we have all the ingredients for a meaningful discussion and I’m sure we’ll draw some interesting conclusions about what can we do to unleash the full potential of our cities.” One of the key components of the smart city concept, as seen by the European Union, is the smart environment,
Razvan Parvulescu, Business Development Coordinator at BTD Construct & Ambient “Where there’s been communication between the authorities, civil society, and the business community, these smart city plans have been successful and effective. It is clear that these projects are long-term and they must also take sustainability into account, which is going to happen as we build over the coming decades. There is a gap between Romania and Western states, but it is a gap that we are recovering quickly.” Claudiu Bisnel, Managing Partner at Brisk Group “Urban development requires a long-term strategy, and to achieve this strategy you need to integrate all the stakeholders. We need integrated thinking that brings all the visions together and puts them in order for a long-term plan. Authorities can’t do this alone; they need support from the civil society and the business environment.” Lucian Enaru, Country General Manager at Schneider Electric “We’re having a hard time transitioning to smart cities because we lack a long-term strategy. But the pandemic has shown us that we can quickly adopt technologies and develop new projects when we are forced by the general context. Romanian society easily accepts new technology trends, and we have an appetite for new technologies.”
www.business-review.eu Business Review | June 2022
14 MAIN STORY
Lara Tassan Zanin, Head of the EIB Group Office in Romania “Municipalities must be key drivers of Romania’s green transition. It’s good to have green projects and vision at the central government level, but those who can make a real difference are the mayors, by promoting smart cities and factoring sustainability into their projects.”
Michele Giove, Senior Manager for Government and Public Sector at EY Romania “We have been working to support local and national authorities in designing their policies and decisions and to improve the manner in which they deliver services. What we have seen through working with different cities around the world is that technology is not the driver of smart city transformation. The real drivers are the citizens and the needs of the community.”
Allen Coliban, Mayor of Brasov “The smart city concept is not new. What is new is that the discussion is no longer just about technology. It is about integration, sustainability, energy-efficiency, and many other aspects. The new approach for smart mobility is not car-centred, but humancentred. Brasov is the city with the largest fleet of green buses.
Ioana Ciocan, general manager at Art Safari “In 2015 we started with just 3 kids in the Art Safari project; this year we’ve included 10,000 of them. We also offered this opportunity to 3,500 disadvantaged kids last year and I think that we managed to generate a real change in these communities. This concept could be applied across several districts in Bucharest.”
Clotilde Armand, Mayor of Bucharest’s Sector 1 “Everything we are doing is centred around the green concept, and green energy means investments. When I became mayor, the first complaints that I heard were about heating. The Sector 1 heating network is not sufficient to cover the demand. What I did was to propose and carry out studies for solar heating and heat pumps fuelled by photovoltaic panels.”
Silvia Floares, Co-founder at Mezanin Market, Roditor Food Market, and Weekend Sessions “All three of our projects allow us to promote an important selection of local entrepreneurial startups and artists. Citizens of Bucharest need a chance to fall in love with places in Bucharest they may not like or don’t recognise the value of. If we imprint emotions onto some places, we will connect Bucharest with its citizens. This is the only way to make Bucharest a better place.”
Marius Motofei, Business Operations & Public Sector Director at Vodafone Romania “A smart city is a city where people are happy, where they want to raise a child, care about their elders, have fun and entertainment options, and of course, pay taxes. Transportation is one of the biggest sources of pollution, noise, and stress in our cities. Using data to make smart decisions is very important for transportation, and nobody knows this better than a telecom company.”
Andrei Bortun, CEO at The Institute “There are about 15,000 schools in Romania. If we placed separate waste collection bins across one of the largest infrastructures in Romania, we could settle an entire process. If we brought together a group of citizens who are involved in their communities and willing to vote for likeminded leaders, and perhaps one day become leaders themselves, we’ll have a better future.
Adrian Huma, Sector Head for Automotive, Transportation, and Logistics at ING Romania “We can help the private sector by offering guarantees to participate in public projects, because municipalities require these types of guarantees. Another way we can help in smart city transformation is through financing, because even though there are lots of grants available, they don’t always cover the entire cost of a project.”
Cristian Danciu, co-founder at Charger.ro “It’s becoming more and more apparent that the urban population of Bucharest feels a real need for crucial change while looking for new adventures in their neighbourhood. It is fascinating to see how their perspectives improve, even though the urban environment and the design of the city remain unchanged in many ways, including in terms of architecture, investments, and infrastructure.”
www.business-review.eu Business Review | June 2022
MAIN STORY 15
and cities will have a key role in the green transition proposed by the EU. As the EU’s climate bank, the EIB aims for 50 percent of the projects it manages throughout Europe to be climate-friendly by 2025, while the other 50 percent will have to be carbon neutral, explained the EIB’s Lara Tassan Zanin.
OPINION: Ramona Chiriac, Head of the European Commission’s Representation in Romania
“Municipalities must be key drivers of Romania’s green transition. It’s good to have green projects and vision at the central government level, but those who can make a real difference are the mayors, and I was happy to see two of them taking part in this conference!” the Head of the European Investment Bank’s Bucharest office said.
LIVING SUSTAINABLY The last part of the event was dedicated to the actions of the most passionate “City Changers” aiming for a more beautiful and sustainable urban life. All panel participants highlighted the importance of creating a community around Bucharest to act as a driving force for the further development of the Romanian capital. “While at the beginning of our activity we would focus on projects dedicated to a specific industry or sector, in the past 10 years we’ve shifted towards collaborative projects which have tried to generate community involvement. Today, we are trying to approach each of our individual events as tools for a greater, common good and with a long-term social value,” says Andrei Bortun, CEO at The Institute. He adds that the lack of financial resources, partnerships, and know-how in the local civil society have led to many organisations and specialists in the field becoming more resilient. “It is fascinating how Romania and its society continue to develop regardless the difficulties they face. I think we could think of it as some kind of a European vocation for a part of our society who are dedicated to making this country develop in many directions,” Bortun said. However, he also warned that there was just a “transactional” relation between Bucharest as a city and its citizens, likely due to the fact that around half of them are first-generation inhabitants. Education plays a crucial role in training young generations to live in a healthy and sustainable community, fostering talents who can collaborate towards better urban living. But education is equally necessary for both young generations and older adults. “Sustainability has many layers, from concept, vision, and strategy to the tools and technical solutions that can be used to implement it on various business lines: transportation, food, energy, and utilities,” says Cristian Danciu, co-founder at Charger. ro. In turn, Ioana Ciocan, general manager at Art Safari, had a similar opinion about the importance of education among young generations. She added that in the very beginning of the Art Safari project, back in 2014, she decided to develop an educational project for kids who wanted to visit a museum or go to a concert. “This was possible by making arts understandable for them. In 2015 we started with just 3 kids; this year we’ve included 10,000 of them in the Art Safari project.”
We are in a very difficult post-pandemic and geopolitical context, which forces us to reflect upon our European identity, the future of our continent, and our values. The future of our planet has been an issue of major concern for some time now. The Green Deal is the EU’s answer to the climate and environmental challenges that represent the defining responsibility of our generation. It is a new strategy for development aiming to transform the EU into an equitable and prosperous society, with a modern, competitive, and efficient economy. It is about a Europe with net zero greenhouse gas emissions by 2050 and about a focus on the environment and healthy citizens. Through the new European Bauhaus, we intend to make the Green Deal tangible and add a cultural dimension to the economic and technological change. This is crucial if we want Europe to become the first climate neutral continent by 2050. The EU is the first region in the world to have put its environmental and renewable energy targets into law. We are a global leader the transition towards a clean, sustainable, and circular economy. A third of the EUR 1.9 budget will be spent on environmental policies across all our financing programmes. The new European Bauhaus has three building blocks at its core: sustainability, design, and inclusion. We want to protect the future of our planet, including its energy security, which is increasingly relevant in the new geopolitical context that forces us to make the shift towards renewables. When it comes to design, we’re talking about a vision inspired by art and culture that goes beyond functionality. Finally, inclusion means focus on community, dialogue between cultures, academic discipline, and access to welfare for all communities, including vulnerable ones. In conclusion, the new European Bauhaus is a community and society that has citizens at its core. At the global level, buildings are responsible for more than 40 percent of energy consumption and one third of the carbon emissions. Over half of the waste is generated by construction and demolition. Therefore, it is clear that to achieve our goal of becoming climate neutral by 2050, we need to change the way in which we build, renew, live, and consume. The Green Deal comes with a clear concept and roadmap for the new European Bauhaus, with four key priorities: reconnecting with nature, regaining the feeling of affiliation, prioritising vulnerable places and individuals, and reorienting towards the circular economy concept. The new European Bauhaus contributes to the creation of a new framework for smart city design, with the aim of transforming the urban environment, reducing pollution, and bringing long-term social value.
www.business-review.eu Business Review | June 2022
16 FDI
Regional economies are contracting. How will Romania hit FDI objectives? High inflation and the effect of the war in Ukraine will drain growth later this year in the entire region, Romania included, despite GDP growth of 6.5 percent per year in the first quarter. These effects will also be visible in the foreign direct investment (FDI) segment, particularly in greenfield investment. Romania is now facing a problematic economic context
A
By Claudiu Vrinceanu
fter solid economic development in
when it comes to attracting FDI, and sharp
tion must have an essential role in site
2021 (5.9 percent), this year's growth
investors will continue to pursue prospects
selection, incentives, data collection,
rate will be much slower, at around
in emerging markets, the Romanian economy
bureaucratic certification, and company
2.6 percent, according to a forecast by the
could better position itself among others
establishment procedures.
European Commission. The causes listed by
competing for capital by focusing on the fol-
the European institution are high inflation,
lowing pillars:
ing corruption and indecision around
which is eroding revenues, and the war in
•
The stability and predictability of the
regulations. Investors and companies
Ukraine, which is influencing economic
tax system. It must be a priority for the
need more clarity on the rules to be able
sentiment, supply chains, and investment.
authorities to maintain an attractive
to invest confidently. With a score of 45
By 2023, the Commission expects a slight ac-
business environment. According to the
out of 100, Romania remained one of the
celeration in economic growth to 3.6 percent,
Foreign Investors Council, only under
worst-performing countries in the EU in
amid a long-awaited decline in inflation. The
such conditions will the private sector
the 2021 Corruption Perceptions Index
war is worsening the existing investment
be motivated to continue investing in
difficulties.
our country and provide jobs for its citi-
•
Improving transparency, but also reduc-
released by Transparency International. •
Defining a new competitive advantage
zens. Any change in the fiscal framework
for the economy in terms of foreign
from an economic point of view, foreign
without proper impact assessments and
investment, by focusing on industries
investments will be carefully judged and
dialogues with the business community
where Romania may be more attractive
correlated with any chance of risk. A UNC-
could compromise the potential for
than countries in the region with which
TAD review of the Ukraine war's impact on
economic development, which is mainly
it is directly competing (Poland, Hun-
trade and development confirms a rapidly
based on attracting foreign direct invest-
gary, Bulgaria, Serbia).
As Romania enters an unforeseen area
ment.
worsening outlook for the world economy,
Providing information on investment opportunities, contact information
izer prices. The report also shows increased
tive measures dedicated to attracting
for regional and local authorities, and
financial volatility, sustainable development
foreign investment, and making this a
information on investment procedures,
divestment, complex global supply chain
priority for the coming period.
company registration, and legislation.
Developing the long-awaited govern-
This approach should generate contacts
reconfigurations, and mounting trade costs.
•
•
Satisfying the need for proactive legisla-
underpinned by rising food, fuel, and fertil-
•
mental investment promotion agency.
with potential clients and provide infor-
challenging, and Romania is now facing a
The new body should be the first entity
mation for potential investors through
problematic economic context due to high
investors interact with and serve as an
simple activities such as liaisons with
energy prices, inflation, and geopolitical in-
intermediary between foreign investors
foreign embassies and business associa-
stability. While Europe remains competitive
and the government. Ideally, the institu-
tions.
Luring foreign investors has always been
www.business-review.eu Business Review | June 2022 May 2016
COVER ECONOMY STORY 17 14
Romanian entrepreneurs building advisory boards even as recession looms Romanian entrepreneurs are starting to develop their advisory boards even in these times of economic uncertainty. Their motives are related to the opportunities they’re seeing over the short and medium-term: raising financing, starting internationalisation ventures, expanding their business networks, and even preparing for exits. By Claudiu Vrinceanu they have encountered personal barriers in the internationalisation process. When asked about specific barriers, Romanian exporters point to the lack of connections, knowledge, and information about target markets. The need for internationalisation is high in the Romanian business environment: the list of the 100 largest exporters in 2021 only includes four companies owned by local entrepreneurs: Chimcomplex, Aramis Invest, Romcab, and Cerealcom. For Romanian firms seeking to expand Romanian tech companies have managed to raise investments of millions of euros
their global footprint, a formal advisory committee delivers access to advisors with in-
RAISING INVESTMENT
EXIT STRATEGIES
ternational expertise and market knowledge
A board of advisors is a group of business
Many shareholders of mature Romanian
as well as connections to support their ambi-
professionals that delivers advice on how
companies are now thinking more carefully
tions and strategy execution. The support
company owners can better manage their
about a final exit for two strategic reasons:
and knowledge sharing can take many shapes
operations and growth. One of the roles of an
on the one hand, they anticipate possible
depending on the business’s particular needs,
advisory board is to help raise capital. While
falls that will influence the company's valu-
product or service coverage, and the market
they are not involved in the daily fundrais-
ation. On the other, founders believe that
they are entering.
ing process, advisory board members can
consolidating companies is more efficient in
open doors to key potential investors. In the
times of economic change. They prefer using
EXPANDING BUSINESS NETWORKS
growth phase, the need to finance companies
an advisory board to help manage an exit
Growing investment and access to specific
remains high, and access to money is more
transition. Whether they expect an exit in the
new markets and resources that involve
difficult when a recession is imminent.
next year or not for years to come, having an
slightly lower costs are directions that Roma-
advisory committee to focus on this specific
nian managers are exploring in the context
ty, Romanian tech companies have managed
topic can yield results. The context is still
of the current crisis, according to a Confidex
to raise investments of millions of euros.
suitable for transactions: the Romanian merg-
study. Therefore, expanding business net-
ers and acquisitions (M&A) market has shown
works to attract new customers and partners
by Druid (EUR 14.3 million) and Bunnyshell
resilience despite complex geopolitical and
has become a priority for Romanian entre-
(EUR 3.8 million) represent 60 percent of the
macroeconomic challenges. According to con-
preneurs and managers. A well-connected
total investments obtained by startups in
sulting firm EY, the M&A market recorded 48
board expands an organisation’s contacts and
2022.
transactions in the first three months of 2022,
can help build or grow its reach on relevant
up 17 percent. Despite the higher volume of
markets. Additionally, board members can
tech projects that have attracted investments
transactions, the estimated value of local
utilise their connections to help with funding,
in 2022 so far include: Machinations (EUR 3.3
M&A is USD 1.8 billion, compared to USD 2.1
establish strategic partners, connect with
million), Ogre AI (EUR 2 million), Adservio
billion in Q1 2021.
vendors, and join other industry specialists.
Despite the period of economic uncertain-
The two largest financing rounds attracted
In order of investment value, Romanian
(EUR 2 million) Archbee (EUR 1.9 million),
In this context, firms are looking to create
Tokinomo (EUR 1.6 million), and Stailer (EUR
SCALING ABROAD
strong advisory boards that can also help
1 million).
Two out of three entrepreneurs believe that
expand these business networks.
www.business-review.eu Business Review | June 2022
18 TAX
Tax, Law & Lobby 2022: Digital transformation making slow progress in public institutions The 19th edition of Business Review’s conference dedicated to Tax, Law & Lobby topics touched upon the legal and fiscal issues of recent years and highlighted the urgently needed digitalization of our country’s entire public system. The pandemic, the economic and social crisis, and the war in Ukraine have forced us to make major changes to our tax system and embrace the digital economy. We should see a package of fiscal measures to combat inflation in Romania
R
By Aurel Constantin
omania’s tax system has had a
tax amnesty that companies can still benefit
regarding possible changes in the coming
significant evolution over the past
from. A positive change that was among the
period. “The expectation has to do with
few years. July 1 will be an important
results of pandemic measures is the easier
certain VAT rates being lowered, but it will
date because it is the deadline for our country
and faster repayment of VAT, as well as the
be a political decision. Everyone's concerned
to implement the latest updates coming
procedure to reschedule debts to the Fiscal
with the decline in purchasing power, and
from the European Commission. “The most
Authority (ANAF),” said Bianca Vlad, Tax
we should see a package of fiscal measures to
important changes were those enacted at
Partner at Mazars.
combat inflation, which is now reaching very
the beginning of the pandemic, such as the
As for the VAT system, speakers agreed
high levels,” said Theodor Artenie, Head of
that not much had happened over the last
Tax Practice at Noerr. The main issue is the
few years, but they had high expectations
fact that incomes have not increased, while spending has seen a sharp rise. Everyone
”ROMANIA’S TAX SYSTEM HAS HAD A SIGNIFICANT EVOLUTION OVER THE PAST FEW YEARS. JULY 1 WILL BE AN IMPORTANT DATE BECAUSE IT IS THE DEADLINE FOR OUR COUNTRY TO IMPLEMENT THE LATEST UPDATES COMING FROM THE EUROPEAN COMMISSION,” INGA TIGAI, ASSOCIATE PARTNER, HEAD OF TAX AND
”IF EVERY EMPLOYEE OF A LARGE COMPANY TAKES 2 OR 3 PENCILS HOME, THE TOTAL LOSSES REACH A VERY HIGH LEVEL, EVEN IF THE GAIN IS VERY SMALL AT THE INDIVIDUAL LEVEL. THE SAME HAPPENS WITH TAX EVASION,” THEODOR ARTENIE,
”THE FISCAL PARADIGM HAS CHANGED AS A RESULT OF THE 2008-2010 CRISIS, WHEN THAT PACKAGE OF EROSION OF REPORTING AND FISCAL OPTIMISATION BASE APPEARED,” BIANCA VLAD,
LEGAL TECHNOLOGY AT KPMG ROMANIA
HEAD OF TAX PRACTICE AT NOERR
TAX PARTNER AT MAZARS
www.business-review.eu Business Review | June 2022 May 2016
COVER STORY TAX 19 14
”THE DIGITALIZATION PROCESS IS NOT RECENT; IT STARTED MANY YEARS AGO. AN EXAMPLE IS THE ELECTRONIC PUBLIC PROCUREMENT SYSTEM, SEAP, WHICH EVERYONE IS FAMILIAR WITH, AND WHICH APPEARED 20 YEARS AGO, IN 2002,” ROXANA POPESCU, DIRECTOR OF
”THE HIGH VOLUME OF REGULATIONS RESULTS IN A LOW-QUALITY PUBLIC POLICYMAKING PROCESS AND CAUSES BOTH INSTITUTIONS AND BUSINESS REPRESENTATIVES TO BE PERMANENTLY FOCUSED ON SOLVING URGENT LEGAL MATTERS,”
APPLICATION SUPPORT AT AUTHORITY FOR
OCTAVIAN RUSU, PUBLIC POLICY EXPERT
THE DIGITALIZATION OF ROMANIA
& FOUNDER AT ISSUE MONITORING
is trying to solve this problem by reducing
functioning 90 percent of the time. Another
spending, as it’s the only immediate way to
important system has been Ghiseul.ro, al-
fight inflation.
lowing users to pay their taxes online, which
“If we’re talking about tax fraud, it is very
”IN THE INSOLVENCY PROCESS OF CITY INSURANCE, WHICH CITR IS CARRYING OUT, WE SAVED RON 700,000 JUST BY USING EMAIL INSTEAD OF THE CLASSIC MAIL TO NOTIFY CREDITORS,” ALINA POPA, HEAD OF LEGAL AT CITR
exceeded one million users this year, partly
difficult to stop when it becomes generalised.
as a result of the pandemic,” said Roxana
For example, if every employee of a large
Popescu, Director of Application Support at
company takes 2 or 3 pencils home, the total
the Authority for the Digitalization of Roma-
losses reach a very high level, even if the gain
nia. Unfortunately, there is an inertia among
is very small at the individual level. But it’s
state institutions in terms of digitalization.
easier not to fight the phenomenon, because
Many town halls purchase their own online
it is too expensive to watch each employee to
tax collection systems instead of connect-
”PUBLIC INSTITUTIONS SHOULD FOLLOW THE LAW AND MAKE THE DATA AVAILABLE TO THE PUBLIC, BUT UNFORTUNATELY EVERY INSTITUTION APPLIES THE LAW BASED ON ITS OWN INTERPRETATION,” ADRIAN MANTOIU,
prevent them from taking a couple of pencils.
ing to Ghiseul.ro, which is free of charge and
The same happens with tax evasion,” The-
much simpler to implement.
MANAGING DIRECTOR AT WOLTERS
odor Artenie also argued. But the way companies operate has also
“Public institutions should follow the law
KLUWER ROMANIA
and make the data available to the public, but
gone through changes in recent years. “The
unfortunately every institution applies the
fiscal paradigm has changed as a result of
law based on its own interpretation. Just like
processes as possible, including the auction
the 2008-2010 crisis. Recently, the European
people, institutions too must have access to
part, which can be carried out online.”
Commission issued a fiscal package with new
digital education in order to gain the degree
measures around intra-community transac-
of confidence required to use digital systems,
new regulation (law, ordinance, decision or
tions and cross-border invoicing, which will
and that takes time,” says Adrian Mantoiu,
order) is adopted in Romania every 3 hours,
be implemented in all EU countries,” Bianca
Managing Director at Wolters Kluwer Roma-
coming to a total of approximately 4,500
Vlad noted.
nia.
regulatory acts every year. The high volume
Unfortunately, the problem is that a
An example of successful digitalization
of regulations results in a low-quality public
DIGITALIZING BUREAUCRACY
in the private sector was provided by Alina
policymaking process and causes both insti-
Digitalization doesn’t just mean scanning
Popa, Head of Legal at CITR, who showed
tutions and business representatives to be
some documents and putting them into a
how the insolvency process was broken into
permanently focused on solving urgent legal
digital file; it must bring added value for both
pieces in order to automate and digitalize
matters. “At Issue Monitoring, we save time
companies and individuals. “The digitaliza-
what was possible. “In the insolvency process
for our clients and send them real-time alerts
tion process is not recent; it started many
of City Insurance, which CITR is carrying out,
when initiatives go through these stages. In
years ago. An example is the Electronic Public
we saved RON 700,000 just by using email
2021, we sent 6.5 alerts every hour (13,530
Procurement System, SEAP, which everyone
instead of the classic mail. Of course, that was
alerts in total) and we followed 1,737 regula-
is familiar with, and which appeared 20 years
only possible where we had the data, i.e., the
tory acts from over 20 sectors,” said Octavian
ago, in 2002. It was very difficult to manage in
email addresses of creditors who had to be
Rusu, Public Policy Expert & Founder at Issue
the beginning, but we’ve been able to keep it
notified. We’re trying to digitalize as many
Monitoring.
20 ENTREPRENEURSHIP
www.business-review.eu Business Review | June 2022
Startup valuations and investments see rebalancing amid economic turmoil Major international issues related to the Ukraine crisis, high inflation, growing interest rates, and a slowdown of major economies are all rattling the startup funding market, meaning that entrepreneurs might have a harder time securing necessary funds in the coming year. Faster routes to profitability are set to become a hot topic among startup founders and investors as sky-rocket valuations begin to lose steam. By Ovidiu Posirca
If an entrepreneur is currently in the final stages of raising capital, the best move right now would be to speed up the talks and close a transaction
www.business-review.eu Business Review | June 2022 May 2016
G
lobally, venture financing was down
ENTREPRENEURSHIP COVER STORY 14 21
The median post-money valuation for
ing down from the international stock
2.9 percent to USD 148.8 billion in
companies heading into a liquidity transac-
exchanges towards Series B and A, generated
the first quarter compared to the
tion declined slightly from USD 1.04 billion
by an expected deep recession. On the other
in Q1 of 2021 to USD 963 million in 2022.
hand, there is still an abundance of capital,
same period of last year, according to a report by professional services firm KPMG. Across
Late-stage startup valuation took a
Europe, funding actually rose by 10 percent
significant hit this year, as did the entire
to USD 31.7 billion in Q1 versus the same
tech sector on public markets, adds Cristian
period of 2021.
Munteanu, managing partner of Early Game
On this background, the outlook for startup valuations is unpredictable, with
Ventures (EGV). He tells BR that “the shock wave will
some market commentators saying that we
probably propagate upstream, and startups
are entering correction territory.
in the early stage will also see a decrease in
Startup valuations are mainly affected by public market corrections, as company peer
valuation, albeit less punishing.” Market research shows that the high
especially for early-stage startups with more flexibility and adaptability. Bogdan tells BR
groups are usually selected from publicly
inflation environment will have a downward
that we are soon going to find out which of
listed companies, and we have seen major
impact on private equity valuations.
the two trends will be the stronger one.
corrections on these stocks lately, suggests
PE valuations have continued to
Marius Ghenea, managing partner at private
increase over the past decade,
equity and venture capital fund Catalyst
due in part to low inflation
Romania. For instance, shares of communi-
and the zero-interest-
cations company Zoom fell 38.9 percent in
rate environment,
the past six months, while streaming giant
but this trend has
Netflix has seen its shares dropping by 66
reversed and will be
should have realistic
percent.
reflected by the data
expectations, fund
in the coming quar-
managers suggest.
“In my opinion, inflationary issues and the war in Ukraine are secondary factors—
ters, according to a
that indeed could slightly influence valua-
report by PitchBook.
tions—but they are not the most important ones,” Ghenea tells BR. Data from Carta, a company that manages
Alexandru Bogdan, CEO & GP at startup investment fund ROCA X,
WHAT CAN REPLACE ENTHUSIASTIC VALUATIONS Founders looking for financing in the current environment
“Recently, on our early-stage market, I have seen multiple inflated valuations for barely MVP-level startups
equity programmes, shows that compared
says that Central and East-
to the first quarter of last year, Q1 2022 saw
ern Europe will see a battle between
similar valuations among companies seeking
two trends. On the one hand, there is the
accept unrealistic valuations anywhere,” says
liquidity.
downward pressure on valuations cascad-
the CEO of ROCA X. This means that found-
with no revenues, and investors will certainly no longer be willing to
www.business-review.eu Business Review | June 2022
22 ENTREPRENEURSHIP
So far this year, the biggest single financ-
ers must keep a sharp focus on efficiency and
inflation. On the bank lending side, this will
not lose sight of the profitability target going
mean that costs will go up for borrowers;
ing round—worth USD 15 million—was closed
forward.
for startups, this could translate into greater
by DRUID, a local startup developing virtual
scrutiny from the financiers’ side.
assistants that can be used by companies of
Munteanu of EGV adds that unrealistic optimism and high valuations that are not supported by traction will meet resistance from investors or get ignored altogether. If an entrepreneur is currently in the final stages of raising capital, the best move right now would be to speed up the talks and close a transaction. Ghenea of Catalyst Romania points out that founders that have yet to start negotiations for a funding round need to make an internal cash runway analysis. “Many such companies should actually consider preserving existing cash and, if possible, reach breakeven and a positive cashflow situation by optimising costs,” he explains. Nevertheless, certain industries such as IT, renewable energy, and agriculture remain attractive in the eyes of investors despite the many challenges. Estimating the value of a company is already a very complex process, but in short, it represents the present value of its future free cashflows. However, many investors often rely on valuation multiples as a proxy for determining what a company is worth. “When you have that much volatility on
“For the very short term, as the end of the
various sizes. Several smaller rounds of up to
year is just around the corner, I do believe
USD 1 million were also signed in the first half
we will see a slowdown even as new play-
of 2022.
public markets, you don't know what the
ers come to the scene, but in the medium
price [of a company] will be a week from
and long run I am very confident that the
director at professional services firm Deloitte
to around 2 percent of GDP. In the meantime,
Romanian ecosystem will keep on growing
Romania, points out that the inflationary
the key interest rate was hiked to 3.75 percent
and hopefully replicating the trajectory that
environment leads to an increase in financing
and central bank officials have signalled that
the Israelian ecosystem has had over the past
costs for all companies, regardless of size.
it could be lifted further in a bid to lower
10-15 years,” said the CEO of ROCA X.
Marius Vasilescu, financial advisory
now. It is difficult to figure out,” said Tomasz Tunguz, managing director at Redpoint Ventures, as cited in a PitchBook piece. With the stocks of some of the biggest US-based public companies already falling by 60 percent, startup valuations could follow the same pattern.
TESTING THE RESILIENCE OF ROMANIA’S STARTUP INDUSTRY The local startup sector is facing a series of challenges which are similar to those in other European markets, and funding is expected to slow down in the second half of this year. The inflation rate is estimated to reach 12.5 percent by the end of 2022, while the economic growth forecast was recently cut down
“These rising costs mainly affect startups,
www.business-review.eu Business Review | June 2022 May 2016
ENTREPRENEURSHIP COVER STORY 14 23
A new survey conducted among 34 VC
due to their low level of maturity, but it is
million each. In Q2, the investment mar-
still too early to estimate what the impact
ket was set to slow due to the Ukraine war
will be on the entire ecosystem. Stagnation
combined with rising inflation and interest
investor Anthemis Group, shows that invest-
is the word that could describe the outlook
rates, said KPMG experts in a report. Fintech,
ments in European startups have continued,
for the startup funding environment until the
healthtech, and alternative energy are the
but that they’ve been more selective.
end of the year,” Vasilescu tells BR.
industries set to generate new funding deals
funds by Yann Ranchere, partner at fintech
Investors were asked whether valuations
Meanwhile, EU funds could help the local startup industry maintain its development momentum despite the cost pressure on other funding sources. Ghenea of Catalyst Romania says that the Recovery and Resilience Plan for Romania (PNRR) has already allocated significant amounts for financial instruments, to be managed by the European Investment Fund (EIF) and committed to the creation of other funds. Additionally, Regional Development Agencies are also launching similar programmes across the country, which will increase the availability of funds for startups. “However, the availability of funds does not automatically mean that all these funds will be substantially invested, as investment decisions will largely depend on the market situation and investors’ confidence,” Ghenea notes. Talking about market sentiment, the EGV managing partner adds that investors will
across Europe as we move into the second
were higher than last year, stable versus last
be more prudent as the economy takes a
part of this year. The clean energy sector is
year or lower versus last year. All respon-
downturn.
of particular interest as the European Union
dents said that valuations were lower than
has published a plan to limit imports of fossil
last year at Series B+, and more than three
fuels from Russia.
quarters said the same of Series A, according
“There is still enough money on the market for promising startups. The not-sogood and the really bad ones will have problems raising, but this can simply be considered to be a return to normality,” Munteanu argues.
MASSIVE FUNDING ROUNDS IN EARLY 2022 Despite the Ukrainian conflict, VC investments in Europe proved robust in Q1, led by the USD 1 billion funding round closed by Checkout.com in the UK. Estonian mobility startup Bolt got USD 710 million, while Finnish
The KPMG report also points out that the
to the survey results published by Sifted.eu.
supply chain automation and optimisation
mix of geopolitical uncertainty and climate
However, valuations have not fallen as much
platform Relex raised USD 566 million. Five
change pressures could spur additional in-
at the earlier stages as these companies still
more startups in France, Turkey, and Italy
vestment in climatetech as well as in startups
have a long way to go before investors can
secured new rounds of more than USD 500
focused on energy and carbon management.
make an exit.
www.business-review.eu Business Review | June 2022
24 PHARMA
Striving to improve quality of life in Romania R&D and innovation are Servier Pharma’s main pillars of operational development, both in Romania and worldwide. BR sat down with Michel Eschenbrenner, the General Manager of Servier Pharma Romania, who talked about the company’s achievements since it entered the local market and its plans for the future. By Anda Sebesi is the Group’s ambition to become a leader in oncology, too. Besides our active involvement in local medical education and our multitude of partnerships, Servier is a true supporter of phase IV studies. In the last two years, two epidemiological studies—a national and an international one—have been carried out in Chronic Venous Disease, with the participation of more than 150 family doctors, dermatologists, and surgeons. These are valuable studies highlighting the impact of the pandemic on the management of patients with chronic venous disease. Last but not least, I would like to mention Servier’s ambitious local approach in terms of social responsibility. We have been collaborating with over 25 associations and founda-
What have 30 years of Servier Pharma Romania operations meant for local healthcare services? Since we entered the Romanian market three
medical education, as well as awareness and
tions since 2018 to provide access to educa-
prevention programmes, diagnostics cam-
tion and medical services for disadvantaged
paigns, and scientific events.
groups, to prevent and reduce early school
So here we are today, 30 years later, and
leaving, train medical and teaching staff, pro-
decades ago, we’ve placed all our expertise
we have over 300 active partnerships on the
vide psychological support for patients and
and R&D experience in the service of local
Romanian market with different societies,
healthcare professionals, and so much more.
patients, in order to better meet their needs
scientific and medical associations, patient
and find new treatments. Along the way,
associations, NGOs, medical colleges, federa-
we’ve built long-term partnerships that have
tions, medical universities and institutions,
helped us properly understand and adapt to
hospitals and clinics.
the Romanian medical context, but we’ve also given back because we believe in the
How does Servier Pharma Romania contribute to progress on the Romanian medical market? We constantly launch our innovative products in Romania. In recent years, Servier
power of togetherness and we are aware of
What have been Servier Pharma Romania’s top achievements during this period?
how important strong collaboration is for the
We treat around 2 million patients every
in hard-to-treat cancers with more than 50
entire ecosystem.
month in Romania using Servier medicines,
percent of research and development dedi-
We’ve brought innovative practices to the
has significantly accelerated its investment
which means 12 percent of the adult popula-
cated to deliver significant advances in areas
market, from which medical services benefit
tion here. We hold the 3rd position in
of high unmet need that may truly move the
on daily basis. Our unique business model—
counting units and the 6th place in terms
needle for our patients. For more than 3 years
we are a pharmaceutical company governed
of value of the market share.
now, we have made oncological treatments
by a non-profit Foundation (Fondation
We provide support in areas such as
available in Romania for colorectal, gastric,
Internationale de Recherche Servier – FIRS)—
cardiology, where we are market leaders,
and pancreatic cancers, as well as for acute
gives collaborators the confidence that we
type II diabetes—where we rank second in the
lymphoblastic leukemia. We go beyond the
are a sustainable and stable organisation that
number of patients treated and treat about 20
innovation brought by our products; by
can pursue therapeutic progress to serve our
percent of patients registered by the National
working with the medical community in
patients’ needs. We’ve continued investing in
Institute of Public Health Statistics—as well
Romania, we explore new programmes to
R&D and supporting both online and offline
as psychiatry and, lately, oncology. In fact, it
support patients.
www.business-review.eu Business Review | June 2022
COVER BUSINESS STORY 25 14
Combining traditional and virtual work to fuel business performance Petronius Secareanu, General Manager at Canon Romania and Bulgaria, sat down with Business Review to talk about how the company helps its corporate clients become more productive and collaborate more efficiently, in a secure manner, in the hybrid work environment. By Anda Sebesi According to Gartner, 82 percent
Mobile hub (locations outside of the office
of company leaders intend to
and the home, e.g., working from a café or a
continue allowing remote work-
hotel), and In-house print hub (a print room
ing as employees return to the
located within the organisation). Canon
workplace, while IDC expects
experts guided visitors through each hub
that 80 percent of enterprises
corresponding to real-life hybrid working sce-
will adopt mechanisms to shift
narios in different business departments like
to cloud-centric infrastructure
HR, Accounting, Finance, and print rooms
and applications, at a pace that
and presented the best solutions for manag-
is twice quicker than before the
ing documents and information to work more
pandemic, while Quocirca states
efficiently, safely, and collaboratively.
that 96 percent of organisations expect an increase in demand for collaboration services.
What are Canon’s main business directions on the Romanian market?
We support organisations in
Our focus on innovation increases productiv-
optimising their business pro-
ity and quality for our customers while our
cesses, combining the tradi-
expertise is driving technological advances
tional and the virtual to form a
across a range of industries that rely heavily
Hybrid work has become the new normal for many companies. What kind of solutions does Canon offer in this segment and what are their main benefits for users and companies?
hybrid workspace where paper and digital
on visual data. We are the only company in
documents coexist and are part of a new,
the world to have ranked in the top five for 36
harmonised way of working. Our leading and
years running, according to the latest ranking
integrated ecosystem of hardware, software,
of preliminary patent results issued by IFI
and services is designed to support compa-
CLAIMS Patent Services, based on informa-
Our comprehensive portfolio of solutions and
nies in their transformation journey, regard-
tion issued by the United States Patent and
services for managing documents and infor-
less of where their employees are working
Trademark Office. Keypoint Intelligence, the
mation is designed to streamline working
from. Whatever the situation and business
world’s leading independent provider of test-
processes in any organisation, while facilitat-
landscape, we combine Managed Print Ser-
ing services and analytical information to the
ing employee collaboration regardless of the
vices and Workspace Collaboration solutions
document imaging industry, awarded Canon
place of work. Canon's expertise and experi-
to help companies gain transparency and
with three coveted recognitions at Buyers Lab
ence guide businesses through their swift
control over the entire document lifecycle
(BLI) 2022: the “A3 Line of the Year Award”
digital transformation and enable them to
and build a bespoke approach to support their
and the “Most reliable A3 Brand” for the
easily extend their working experience from
digitalization journey.
exceptional performance and reliability of the hardware technologies used in Canon A3
the office to the hybrid workspace through
multifunctional printers; and for the fourth
cost-effective and efficient and providing
What can you tell us about Canon’s integrated experience titled The Road Show and its added value for customers?
high levels of data security and compliance.
The Canon CEE Hybrid Working Roadshow
enables businesses to track and control print,
featured a converted truck with a modern
scan, copy, and fax activity across their entire
business environment divided into 4 differ-
environment, even if it spans across several
ent hubs: Office & Co-working hub (satellite
locations, won the “Outstanding Cloud Man-
offices or subsidiaries/branches), Home hub,
agement Solution” award.
automated business processes and document management solutions, making it all more
How does Canon help companies become more productive in the context of hybrid work?
year in a row, uniFLOW Online, our secure cloud-based printing software solution that
www.business-review.eu Business Review | June 2022
26 BUSINESS
BAT aims to create a better tomorrow With a 25-year presence on the Romanian market, BAT is one of the major international investors operating in the country. Fred Monteiro, Central European South Area Director at BAT, tells Business Review about the company’s development over the years, its positive impact on the local economy, and its involvement in local communities. By Anda Sebesi
BAT is the largest taxpayer in Romania and a strategic foreign investor. What is the company’s footprint and where is Romania on BAT’s investment map?
We are also proud to be the leader of the
ments here. Romania was the first country
local tobacco market with a market share
in the European Union to produce tobacco
of over 50 percent, as well as the biggest
consumables for glo, our innovative reduced
contributor to Romania’s state budget for two
risk product that heats tobacco, and our
BAT has been in Romania for 25 years now,
years in a row. In 2021, BAT had a total state
total investments in our Ploiesti factory have
since 1997, when production started at our
budget contribution of RON 11 billion (EUR
exceeded EUR 500 million.
factory in Ploiesti, and it has been one of the
2.2 billion) in taxes and excises, an increase
biggest international investors in Romania, a
of over 10 percent versus 2020. BAT also
partner of state authorities in combating
strategic employer, and a long-term partner
contributes positively to Romania’s trade
illicit trade, a severe phenomenon with seri-
of the Romanian economy. We are a strong
balance, as a leading producer and exporter
ous economic and social implications. Every
organisation, with major accomplishments
of agricultural products through its Ploiesti
year, we run national information campaigns
and a significant footprint on the local
factory, the group’s second largest factory in
through our Stop Contrabanda platform, and
market: EUR 125 billion in direct, indirect,
Europe: over 60 percent of the volumes pro-
we support Romanian authorities in their
and induced contribution to the Romanian
duced locally are exported to tens of other
efforts to reduce the smuggling volume. In Q1
economy and EUR 24 billion paid directly to
countries across the world.
2022, the cigarette black market in Romania
the state budget, mostly as excises and other
Romania is an important market for BAT,
In the past 25 years, BAT has been a strong
remained below 8 percent.
taxes, but also as salaries and other local
and we are committed to continuing the
BAT has also had a strong impact on the
expenses* over 25 years.
development of our business and invest-
local workforce, both directly, through em-
www.business-review.eu Business Review | June 2022
BUSINESS 27
ployees in BAT units, and indirectly, through
most of the measured biomarkers, the reduc-
over 11,000 devices have been collected for
our distribution and supply chain. BAT’s
tions seen in people using glo were similar to
recycling. Another recent initiative consists
three economic entities employ over 3,000
those in participants who stopped smoking
of five solar trees installed in Bucharest to
people in Romania, and another 30,000 jobs
completely.
provide green energy which is used to charge
are created through the company’s supply
BAT’s ambition is to have 50 million
electronic devices in both wireless and USB
and distribution chain. We invest in our
consumers of its non-combustible products
format while raising awareness on alternative
employees’ professional development and
by 2030 and to generate GBP 5 billion of
sources of energy and inviting the communi-
provide continuous training sessions, and we
New Categories revenue by 2025. The BAT of
ty to enjoy a relaxing moment and free Wi-Fi.
are happy that our efforts have results. We
tomorrow is a high-growth consumer goods
are proud to say that about 50 percent of our
company: global, consumer-centric, multi-
Romanian culture and art communities and
local colleagues have been with the company
category, with sustainability at its core.
we invest over EUR 1 million annually in supporting cultural events and some of the
for at least 10 years.
The tobacco industry is changing globally, and BAT has a strong commitment for A Better TomorrowTM. What is the company’s vision for the near and mid-term future?
We are also strong supporters of the
In recent years, ESG has become a strategic pillar in companies across sectors. What is BAT`s vision on sustainability and community impact?
biggest festivals in Romania, such as Electric
In 2020 BAT has defined its sustainability
mercial partners, namely preventing minors’
Castle and SummerWell. Furthermore, a responsible commercial behaviour in both our teams and our com-
agenda under the promising umbrella of de-
access to nicotine products, is also an im-
Innovation and tech are transforming all in-
livering A Better TomorrowTM, an ambitious
portant pillar of our sustainable business in
dustries, products, and consumer behaviours
objective across all business lines. Sustain-
Romania. BAT is constantly investing in edu-
ability is at the heart of our strategy
cational campaigns regarding the legal provi-
worldwide, and the tobacco sector is no exception. Our industry is transforming, and BAT’s business strategy is all about sustainability and building A Better Tomorrow
TM
for all
stakeholders, which includes reducing
and it is delivering consistent growth, encouraging more consumers to transition to reduced risk products** and reducing the health impact of As part of our environment pillar,
of its business by
we continue to grow
ers reduced risk alternatives** such as glo. BAT invests almost GBP 350 million a
have access to nicotine products. And we are happy that the National Consumer Protection Authority joined our campaign in 2019, underlining the importance of responsible commercial practices.
our business.
the health impact offering adult consum-
sions and the reasons why minors should not
our internal efforts to reduce waste and operate responsibly across the value chain. We focus constantly
BAT is a strategic partner of the Romanian economy. How could a sustainable fiscal framework be created in Romania in the coming period and what types of measures would consolidate the local economy? We are committed to continuing our invest-
year in the research and development of its
on bringing our consumers along our
ment and building A Better TomorrowTM in
New Category products, and we now have a
sustainability journey and we undertake
Romania. As Romania’s largest contributor
broad portfolio of non-combustible nicotine
regular campaigns to inform them about the
to the state budget and one of the largest
products which includes tobacco heating
importance of simple gestures we can all do
international investors on the local market,
products, vapor products, and modern oral
to protect the environment and our com-
we consider stability and predictability to
nicotine pouches.
munities. In 2019, we launched the Choose
be the most important prerequisites for
responsibly for a Clean City campaign—the
economic consolidation. In our view, a stable
most innovative tobacco heating product.
first national campaign that included street
economic environment and a balanced and
Over the years, BAT has conducted more
bins for cigarette stub collection to be used in
fair fiscal framework for all nicotine products
than 300 studies on glo, including some
energy recovery. This year, we marked June
are essential in driving predictability for solid
to help assess the reduced risk of using
5th—World Environment Day—with an aware-
business development in Romania.
glo compared to smoking. BAT’s scientists
ness campaign in Bucharest showcasing cit-
also conducted the first controlled study in
ies as our second homes and the importance
the UK, spanning one year, and the results
of treating them as such in terms of waste
showed significant reduction in indicators
management, for the common good.
In 2018, we launched glo in Romania, our
of potential harm over 6 months for smokers
In 2021, we started the selective collec-
* SOCIO-ECONOMIC FOOTPRINT ANALYSIS for BAT ROMANIA, Civitta, 2021 **Based on the weight of evidence and assuming a complete switch from cigarette
switching to exclusive use of glo compared
tion campaign for the previous versions of
smoking. These products are not risk free and
with continuing to smoke cigarettes. For
glo, our tobacco heating device, and so far
are addictive.
www.business-review.eu Business Review | June 2022
28 TECHNOLOGY
Audio architecture changing spaces and lives As offices reopen, businesses are leveraging the power of audio to design a more compelling employee experience, according to Marie Stafford of Wunderman Thompson. Arizona-based company Spatial has created a flexible, scalable technology platform that powers immersive three-dimensional virtual sound experiences for realworld spaces, which are a lot less expensive than traditional solutions. By Romanita Oprea music and biophilic sound, three soundscapes aim to create the ideal environment for different work modes. A welcome ambience for lobbies and reception spaces creates a sense of warmth and interconnectedness; a focus ambience reduces distraction and inspires relaxation; and an energising ambience for high-traffic or communal areas encourages optimism and motivation. Sound has long been an afterthought in workplace design, yet according to research from Made Music, there is an 86 percent correlation between one’s reaction to sound and a subconscious desire to return to that space. Biophilic sound design has also been Spatial’s Holodeck experience showcased the power of sound to reshape our sense of place and inspire feelings of comfort, belonging, and safety
A
shown to improve employee engagement and productivity and could prove a surprising ally in delivering on employee wellness,
t the SXSW festival in Austin, Spa-
He compared what they do to “what great
which continues to push up the agenda. In
tial’s Holodeck experience showcased
thematic designers did 30, 40 years ago when
their cases the tracks have a natural connec-
the power of sound to reshape our
they built whole theme parks in three to four
tion, with each of the ambiences having been
years
inspired by nature’s four main elements of air,
sense of place and inspire feelings of comfort, belonging, and safety. A live demonstration
“The idea of a cumulative effect is deep
earth, water, and fire.
exposed visitors to the harsh sounds of a busy
in the philosophy of Meow Wolf's growth,
shopping mall, a hospital waiting room or
much as each of their installations is part of
the full lifecycle of work and rethinking the
a chaotic cityscape, then sonically whisked
a greater whole. Each table-sized container
purpose of the modern campus with their
them to an idyllic tropical beach with lapping
at the SXSW installation was unique but syn-
employees, immersive work design is coming
waves, a rainstorm in a lush forest or the
chronistic, like each room at Santa Fe’s House
to the forefront,” Michael Plitkins, cofounder
gentle burbling of an underwater lagoon. The
of Eternal Return reflects the individual artist
of Spatial, told Wunderman Thompson Intel-
technology has compelling applications for
or subset of the collective, and how Santa Fe
ligence. “We look forward to connecting with
the employee experience. Its presence contin-
interlinks with their other sites in Denver, Las
brands interested in enhancing the employee
ued during the most recent SXSW with some
Vegas, and whatever lurks behind that count-
experience throughout the day. Hybrid
site-specific work that melded Meow Wolf's
down clock. Sandra Wang, senior creative
work models inherently consider the unique
unique pop experimentalism with software
director for Meow Wolf said. “We have this a
strength of each workplace to maximise cre-
firm Spatial's auditory architecture.
“As leading companies are rearchitecting
macro-story that's happening with this show
ativity, teamwork, and performance and our
The evolution of the collaboration was
fits with the narratives that our happening
soundscapes deliver enhanced environments
organic, said Spatial CEO Calin Pacurariu, and
with our other exhibits. One seeps into the
in an easily scalable and customisable manner
it started off as a way for the company to get
other,” wrote the Austin Chronicle.
on the real-time interactive Spatial platform.”
feedback on its software. Spatial had been
In 2021, Spatial announced the launch
Spatial has also recently been working with
planning a SXSW activation even before the
of its first Future of Work Soundscapes, in
the California Institute of Arts (CalArts) and
2020 cancellation, and with the return of the
collaboration with sonic branding company
Roger Holzberg, founder of Reimagine Well, a
in-person festival, they looked to Meow Wolf.
Made Music Studio. Comprising a blend of
company that delivers immersive patient ex-
www.business-review.eu Business Review | June 2022 May 2016
COVER TECHNOLOGY STORY 29 14
periences through screens and virtual reality
is helping the blind better navigate their
gear. Both Holzberg and Shannon Scrofano,
way through the day using the head tracking
tecture builds an imagery of sound that can
a professor at CalArts, teach a course at the
features and Bose bone-conducting audio
also be seen and felt, presenting it across
school called Healthcare by Design. In the
glasses.
a 25-metre-long digital screen filled with
spring of 2021, the class partnered with Henry
According to Sound of Life, Audio Archi-
undulating abstract shapes. 21_21 Design Sight
Mayo Newhall Hospital to deliver immersive
IN ART
isn’t just any other “design museum” either.
experiences at their Santa Clarita Valley facil-
21_21 DESIGN SIGHT held the “Audio Archi-
Created by two industry heavyweights—archi-
ity.
tecture” exhibition in the summer of 2018,
tect Tadao Ando and fashion designer Issey
welcoming Yugo Nakamura as its director,
Miyake—it is, according to Ando, “not only a
soundscape is scalable once you fine-tune
whose unique forms of expression are highly
museum that shows exhibits, but also a place
your workforce's preferences. A welcome am-
regarded in web design, interface design,
for researching the potentiality of design as
bience might incorporate wind-related sound
and film. Within the music familiar to our
an element that enriches our daily life, a place
along with synthesiser pads/arpeggios, which
everyday life is a combination of elements:
that fosters the public’s interest in design by
may be geared toward lobbies as they can
layers of tone, sonic range, and rhythm form
arousing in them different sights and perspec-
Furthermore, according to Inc.com, the
spark warmth and feelings of connection.
tives on how we can view the world and
A more focus-oriented ambience, rather,
its objects.”
may be heavy with acoustic instruments,
“When Audio Architecture opened in
while also tying in the sounds of running
Japan for the first time in 2018, audiences
water, wind, and bird song, and human-
were mesmerised by the fresh perspec-
generated sounds. The focus ambience
tive integrating sound, video, and space.
may boost productivity as it is built for
For a seamlessly inclusive experience,
use in quieter working spaces.
details such as the sequence and length
At the same time, according to Forbes,
of each artwork were also carefully
other emerging research is providing
thought out. This year, 21_21 Design Sight
evidence that spatial audio applications
is set to take the exhibit beyond Japan.
can be effective for short-term stress
Teaming up with exhibition experts
reduction and even have the potential to
INCEPTION, Audio Architecture will
supplement clinical music interventions.
be showcased in Taipei’s Huashan 1914
Spatial audio is one solution to help fill
Cultural and Creative Park, a creative hub
in those missing gaps in the 2D digital
rebuilt from an abandoned sake factory.
reproduction of music or voice that
On top of its original vision, ‘to see the
leave our brains a bit less satisfied, if not
world with design,’ the exhibition aims to
stressed, tired, and confused.
allow visitors to ‘visualise sound,’ creat-
Addressing issues of low-resolution audio
a densely designed structure—architecture.
ing a fun connection of listening to music
and spatial disorientation in video conferenc-
There are few opportunities, however, to be
with your eyes,” Sound of Life wrote in 2020.
ing, Immersitech CEO Jim Poore says, “Spatial
conscious of this particular structure.
audio gives users the proximity orientation
Musician Keigo Oyamada (Cornelius)
As Masakazu Kitayama says, “music cannot be perceived with the eyes; it can only be
where your brain kind of knows that you
has written new music with a focus on its
heard with the ears. It is something special
hear it from the right, left, or centre. It’s
structure exclusively for this exhibition; it is
and different, isolated from visual orientation
such a simple thing, but when everything is
interpreted from the varying perspectives of
and space.”
monotonous, your brain has to deconstruct
spirited creators into disparate video works.
the different streams coming in from all the
Participating in this exhibition are nine
ate the ordinary things in life from a design
different people. That makes your brain work
creators who challenge new modes of expres-
perspective. Music was one of the elements
considerably harder and that’s one of the
sion with original sensibilities, by travers-
Masakazu Kitayama appreciated, but it was
main reasons why you see a lot of the stuff on
ing fields of film, animation, dance, graphic
rare to set the core of an entire exhibition
Zoom fatigue.”
design, illustration, programming, and media
around the concept of sound or music, let
design. Exhibition graphics are designed by
alone associate it with architecture. For him,
ing spatial audio technology to airline flight
Masakazu Kitayama (Help!). Moreover, the
it became necessary for the audience to walk
control systems to help pilots better manage
exhibition tries to construct a type of “audio
into a space built on the basis of sound, then
the multiple audio-based navigation signals
architecture” by repeating the music paired to
be immersed in an environment that allowed
they have to monitor simultaneously, so they
various films over and over, in the space dy-
them to acknowledge its transformation,
can reduce stress and stay more alert and
namically designed by Masamichi Katayama
visualised on-screen via a beautiful cross-
focused during takeoff and landing. HEAR360
(Wonderwall).
media collision.
The engineering team at VisiSonics is add-
His intention is simple: to learn to appreci-
www.business-review.eu Business Review | June 2022
30 ADVERTISING
Powerful Romanian-made regional and global ad campaigns Ready-to-drink cold tea brand FUZETEA, part of the Coca-Cola Company portfolio, has launched its first-ever global brand campaign across 87 countries, with the big idea behind it coming from McCann Bucharest. The campaign required the effort of multiple teams—in Bucharest, New York, Buenos Aires—and production was carried out on three continents, under the Romanian team’s coordination. By Romanita Oprea TV spot, online and social media promotion, OOH, and collaborations with influencers. “We are made of a mixture of contrasts, and the perfect fusion of contrasts makes the FUSET unique. This product is special not because of a single ingredient, but because of the extraordinary fusion between tea, fruits, and herbs, which is meant to arouse the senses in moments of active relaxation. We are happy to offer ‘Made of Fusion’ to the modern explorers’ community in Romania,” said Iuliana Nedelcu, marketing director at Coca-Cola Romania. The “Made of Fusion” creative platform was developed and launched by several agencies within the Interpublic Group, including TPS Engage launched in May the global campaign for Gap Yeezy Engineered by Balenciaga
T
McCann Bucharest, as lead agency, together with MRM Bucharest as lead digital agency. The McCann creative team collaborated with
he shoot for the “Made of Fusion”
enjoy relaxing moments while staying active
the Coca-Cola team along with Egyptian di-
campaign took place in Italy and Uru-
and full of energy.
rector Ali Ali and international photographer
guay, with a team of two directors and
“We want to celebrate human nature in all
Ignacio Ricci. The campaign is produced by
two photographers from Egypt, the Nether-
its complexity, as reflected by our product’s
an international team of professionals from
lands, Argentina, and the UK.
diversity and fusion of ingredients. FUZETEA
around the world.
The campaign was developed around
is composed of elements as contrasting as the
“We wanted to give the FUZETEA brand a
the concept of fusion and started from the
people who drink it and the world in which
role in culture, a voice, and a point of view;
idea that all the things that are special in the
they live. What makes FUZETEA special
to bring people a revelation about how they
world—including people—are the result of a
are its three unique ingredientssaid George
can relate to the world, to what is happening
fusion of contrasts. “Made of Fusion” is an
Wheen, senior director of brand strategy tea.
to them, and to what surrounds them. We
end-to-end global brand creative platform
Over the next 3-5 years, the “Made of Fu-
humans are a fusion of contrasting experi-
based on a general truth: all life experiences,
sion” platform will launch several campaigns
ences—both good and bad, barriers and ambi-
even the most exciting ones, are, in fact, a
that will take consumers on a journey of
tions to overcome them, achievements and
fusion of dreams, fears, and adventures. The
exploration. In the second and third years of
failures, things we dream of, and things we
fusion of emotions reflects the very essence
the campaign, the platform will continue to
fear. They all merge and make us unique, bet-
of the product, a contrasting trio of soft tea,
develop new ways of interacting with “mod-
ter. By revealing that we are ‘Made of Fusion,’
cheerful fruits, and herbs. The platform
ern explorer” communities.
we wanted to inspire people to have a more
highlights the fusion of contrasts, with an emphasis on active relaxation, and invites us to
In Romania, the platform's communication campaign started and included a dedicated
optimistic attitude towards everything that happens in their lives,” added Catalin Dobre,
www.business-review.eu Business Review | June 2022 May 2016
chief creative officer at McCann Worldgroup.
COVER ADVERTISING STORY 31 14
countries! It was the other way around from
sumer insight, that they decided to develop
the Coca-Cola bracelet festival, where the
the campaign in 3 other countries, which
nescu, regional business director at McCann
idea came up here and then a whole world
gave us even more confidence in approach-
Worldgroup, FUZETEA is a brand that is very
took it over. This time, we had the chance to
ing future briefs. We ended up using Teams
close to the hearts of McCann’s Bucharest
make it global from the get-go,” said Lia Bira,
and WhatsApp to coordinate a photoshoot in
team. It’s young (3 years old, but already a
group creative director at McCann Bucharest,
Italy, which featured authentic home-cooked
global brand), energetic, and it has a very
for IQads.
meals that looked like the ones we all eat at
Moreover, according to Cristian Cali-
Another example of global success com-
home, which we might not post on Instagram
ing from a Romanian agency is TPS Engage,
but still remember for the perfect feeling they
which in May launched the campaign for Gap
create, precisely because they are authentic,”
ally in the past, when the global repositioning
Yeezy Engineered by Balenciaga, the new
said Mihaela Bourceanu, customer service &
pitch brief came in, we knew that it was our
collection from Kanye West (Ye), via digital
shot to help FUZETEA become the challenger
screens in 8 countries and 11 cities, including
brand we already knew it was. But this was
Bucharest. Since 2021, TPS Engage has been
not an easy brief; our client partners were
working with well-known artists and brands
looking for a long-term platform that would
like Snoop Dogg, Kanye West, Chance the
be both timely and timeless. To get this
Rapper, Duolingo, TikTok, GoDaddy, Morning
done, there was a huge IPG display of force
Brew, Picsart, India Times, Universal Music,
(agencies from within the group and around
HBO, and thousands of startups that are using
the world, each uniquely qualified to bring
marketing on digital screens in an innovative
specialised contributions to the work) and the
manner.
unique proposition in the Global RTD category. “Having pitched both locally and region-
weeks from briefing to presentation were the
“Ye’s campaigns are a unique combina-
most intense (but also super gratifying) four
tion of minimalist and spectacular. We are
weeks of my life,” Calinescu said.
happy to mark the second collaboration
The insight and the Big IDEA are both
with the group behind the collection. The
broad, but also very specific, and they can be
entertainment and fashion sectors have truly
effectively leveraged on markets where the
embraced programmatic DOOH advantages,
brand is in its infancy and where product cre-
especially the benefits of our platform when
dentials need to be put front and centre, but
it comes to implementation speed and budget
also on markets where the brand has reached
optimisation,” said Diana Sumanaru, global
maturity and needs to differentiate itself
marketing manager at TPS Engage.
with a clear philosophy and tackle a purpose proposition.
Among the most well-known initiatives from TPS Engage was the viral GameStop
strategy director at Mercury360. For the cli-
screen from February 2021, which at the
ent’s part, Daniela Pontecorvo, chief growth
without the right team and the right client
moment is the most popular post in Reddit
officer at Costa d'Oro Italy, said: “We found a
partner. I am grateful for all of it. We had
history. Founded in Romania in 2018, the
strategic partner in Romania who knew how
people on both sides pushing boundaries
company is now present in over 42 countries,
to connect the world of the brand and the
and never settling. Getting a chance to work
with its main offices in Bucharest, New York,
consumer in a natural way, looking beyond a
with and learn from so many amazing and
Dubai, and Seoul.
specific need for communication, namely the
“All of this would not have been possible
super talented people for more than 9 months
At the end of last year, authentic Italian
launch of a new product image. Costa d’Oro
to deliver the global was so enriching and I
olive oil brand Costa d’Oro aimed to inspire
is a story about authenticity that was born on
would do that all over again. It’s only when
consumers to enjoy life in a genuine way,
the sunny hills in the heart of Italy and it is
the skillset matches the passion and the
through an integrated campaign signed by
being passed on to future generations, with
determination that amazing things happen,”
Mercury360 and adapted in Bulgaria, the
passion and skill, just as it was inherited. In
Calinescu added.
Czech Republic, and Poland.
an increasingly superficial world, the authen-
“It's a great feeling when you're working
“We won the pitch in 2020, the year
tic taste of our product aims to whet the ap-
on something that needs to feel global and
in which many brands acknowledged the
petite for an authentic lifestyle, which makes
very personal at the same time. And it's great
importance of courage in communication.
you feel that you are tasting life to the fullest,
to lead teams from all over the world from
We presented the client with a long-term
through all of your actions—from the genuine
here, in Bucharest, a small town in a small
strategic approach, which went beyond the
taste of the ingredients you use in the kitchen
country. I’ve had some experience on Coke,
specific campaign brief for the local mar-
to the point where you enjoy the meal and the
Fanta, and Sprite regionally, but it's a dif-
ket. The client resonated so well with our
things you choose to post on social media out
ferent feeling when you see your work in 87
proposal, which was built on strong con-
of the whole experience.”
www.business-review.eu Business Review | June 2022
32 BUSINESS
The road to recovery starts with a new mindset To find out more about the European Directive for restructuring, which must be implemented by all 27 EU member states by July 2022 Business Review talked to CITR CEO Paul Dieter Cirlanaru and Head of Legal Alina Popa in an exclusive interview. By Mihai Cristea progress. Just like in medicine, we can all agree that prevention is better than treatment. That is the kind of mentality that we are looking to develop in business, too.
How will the restructuring legislation work? A.P.: We invite the parties—the company and its creditors—to a negotiation. After they reach an agreement with the support of an insolvency practitioner, they go to the syndic judge, who has a minimum involvement in the process as a guarantor of legality and integrity. The judge verifies whether the
What is the current status of the Directive?
the International Monetary Fund, Romania
company is in difficulty, if the creditors’ vote
has been among the fastest-growing econo-
is carried out properly, if creditors are cor-
Paul-Dieter Cirlanaru: CITR was selected by
mies in Europe in recent years. Romanian
rectly treated, and if the proposed restruc-
the European Commission as the Consultant
insolvency legislation has improved signifi-
turing measures are viable. Then, the plan
of the Romanian Justice Ministry. The core
cantly under the strict observation of the
created by the insolvency practitioner must
team of experts that drafted the law included
World Bank group on Insolvency. What our
be implemented by the company, under the
seven professionals: syndic judges, academic
legal framework lacks are functional pre-in-
practitioner’s supervision.
professors, and insolvency practitioners. We
solvency proceedings, and that was our focus
P.-D. C.: We encourage entrepreneurs to be
carried out consultations with stakeholders
for the new proposed law. It will be a turning
open to the new prevention and restructuring
involved in the restructuring and insol-
point for companies and for our economy.
mechanisms because, at the end of the day, they bring a competitive advantage, help-
vency market, namely banks, businesses,
ing them to get out of difficulty but also to
notaries, bailiffs). We had studied various
How come judicial reorganisation in Romania has such a low success rate of 2-3 percent?
legislative frameworks on pre-insolvency
P.-D. C.: A World Bank report shows that most
tioned, it is still hard to identify the under-
and insolvency in the EU to identify better
of the SMEs that open an insolvency proce-
lying condition is. Even though we benefit
solutions to build both debtors and creditors’
dure are more likely to end up in bankruptcy
from the advantages of an emerging market
trust in pre-insolvency procedures. We un-
than undergo a successful judicial reorganisa-
and the solutions of modern legislation, we
derstood that restructuring involves strategic
tion. Why? Because entrepreneurs are facing
still need to understand what could moti-
compromise and a new mindset, consensus
the stigma of failure and tend to access the
vate somebody to access these tools. In my
and negotiation, but also the development
legal procedure very late. They often try to
opinion, we also need to look at the mindset
of an entrepreneurial profile to understand
solve the problem by themselves, they lack
of today’s entrepreneurs and at existing at-
what the client is going through. After public
the culture of partnership, of being stronger
titudes towards restructuring solutions. If we
debates across ministries and government,
together than separately, of asking for help
don’t learn that failure should be accepted
the law has now reached Parliament, and we
while is not too late. This is a change we want
and sometimes even encouraged in order to
are expecting it to be adopted by the end of
to bring into Romania’s entrepreneurial cul-
accelerate progress in our capitalist culture,
this month.
ture. We have modern legislation, but it’s in
we will remain unable to raise the level of ex-
vain if it is not applied. We need to leave the
pertise and practical solutions leading to real
How does Romania compare to other countries in terms of legislation?
stigma and fear of failure behind. And it is not
life success stories. Let’s turn distress into a
going to be easy, because our early education
chapter of a company‘s history rather than
Alina Popa: According to official data from
didn’t teach us that failing is a part of
see it as its inevitable demise.
authorities, syndic judges, and professionals (insolvency practitioners, lawyers, valuators,
improve business performance. Considering everything that we’ve men-
www.business-review.eu Business Review | June 2022
COVER FOODTECH STORY 33 14
Key players in Romanian foodtech and lessons from other countries Romania is far from being a rising star in foodtech innovation, but experience sharing between startups and corporations and the emergence of specialised investors could change this situation. The development of platforms that have finally joined strategic investors’ portfolios is the only notable recent gain in the foodtech sector. By Claudiu Vrinceanu aims to attract a new seed financing of EUR 750,000 to accelerate its development plans and technology investments. The growth pattern is clear in terms of success stories: launch, grow, and exit to a strategic investor. Bringo, Gloria Food, and EuCeMananc are three examples of tech startups that have grown and eventually reached the portfolio of large retail or technology companies.
INVESTORS There are no specialised foodtech funds in Romanian hospitality entrepreneurs usually follow a vocational path
Romania; the largest transactions have been made by strategic investors. Globally, invest-
KEY INSIGHTS
retail, as well as a third cohort devoted to the
ment funds allocated more than USD 39.3
Foodtech is an ecosystem of startups and
concept of business as a service. According
billion to foodtech companies across 1,358
entrepreneurs working to innovate in the
to the F&B Business Accelerator, Romanian
deals in 2021, according to a PitchBook report.
following fields: supply chain, food research
hospitality entrepreneurs usually follow a
The funding accelerated because of the in-
and services, delivery, and consumer tech.
vocational path, and they have the desire to
creased e-commerce and food delivery trends
Good business ideas have included subscrip-
improve their entrepreneurial training and
amid the COVID-19 pandemic, environmental
tions to food and beverage services, access to
provide quality services to their custom-
concerns, and the drive toward automation to
cooking ingredients, and startups develop-
ers. However, periods of change such as the
reduce labour costs. For example, Romanian
ing new digital platforms for entrepreneurs.
pandemic and economic crisis can change the
startup Bonapp has announced a seed invest-
Subscriptions for ingredient providers are
modus operandi of companies in the hospital-
ment of EUR 800,000 from a group of inves-
based on users’ growing desire to cook at
ity industry. Change can also be observed
tors led by Up (formerly Chèque-Déjeuner).
home, but with ingredients that have already
among the new generations of entrepreneurs,
The other investors are Romanian VCs RocaX
been weighed and cut for their chosen recipe.
who tend to build businesses with high scal-
and Early Game Ventures and Hungary-based
Food and beverage subscription services rely
ability potential from the very beginning.
Impact Ventures. What can we learn from other countries?
on the fact that users lack the time to order
TECH STARTUPS
Romanian foodtech startups are still primar-
Seven of the most active and experienced
ily relying on their founders' resources. If we
TOP PLAYERS
Romanian foodtech startups and scaleups are
look at Poland, we can see the involvement
One of the few initiatives focused on the
LifeBox, Comarket, Manna Foods, Clever Eat,
of corporations in the foodtech ecosystem.
foodtech sector in Romania, the F&B Business
Bonapp, Yummydiet, and Peelhy. LifeBox,
Carrefour has financed four Polish startups
Accelerator, is a programme developed on 3
the healthy food delivery startup, started its
in this sector to help them invest in product
verticals: Products, Services, and IT prod-
international journey last year by launch-
development, marketing, sales, and attracting
ucts for the F&B industry. The first cohort
ing its service in Hungary under the brand
investors. Even though most foodtech uni-
targets entrepreneurs who create products
FrissBox. Meanwhile, the Comarket platform,
corns are still consumer-oriented, specialists
for the F&B sector. There is also a programme
a SaaS for centralised procurement and a
are noting a shift to B2B business models, a
dedicated to IT products for hospitality and
B2B marketplace for the hospitality industry,
trend that should also be adopted in Romania.
food products.
www.business-review.eu Business Review | June 2022
34 INTERVIEW
Dentons hopeful for a bright future on the Romanian market This year, Dentons is celebrating a quarter century of delivering legal advice to clients in Romania and the region. Perry V. Zizzi, Managing Partner of Dentons Romania, sat down with BR to discuss how the practice of law has changed and the long-term outlook of the Romanian market. By Anda Sebesi are accessible from
anticipated IPO of Hidroelectrica, a transac-
anywhere, day or
tion expected to be the largest Romanian IPO
night. We deploy
in history.
software that uses AI to review large volumes of documents. This saves the client
Dentons has been present in Romania for 25 years, and you have been working here for almost 20. What changes have you seen on the market during this time?
money and time and improves accuracy.
Since taking over as Managing Partner in Romania, you’ve done a lot to shake up the office. What changes have you made so far, and what comes next? Our legal team has grown by nearly 70 per-
What have been the most memorable deals you’ve worked on? What are you most proud of?
cent, and we recently occupied a second floor
being primarily state-centred to having a
So far this year, our Bucharest office
including two women, one of whom leads the
dynamic private sector. 25 years ago, the
attorneys have advised on matters worth
Banking and Finance practice and the other
focus was on privatisations and public infra-
well over EUR 18 billion, all of which are
who leads the Capital Markets practice. In
structure; today, we advise clients on a wide
landmark transactions in their respective
terms of revenues, we were one of the fastest
of range of areas. The investor base has also
sectors. Among these was a USD 15 billion
growing European offices in our Firm from
shifted from primarily eastern Mediterranean
data centre acquisition and financing, which
2020 to 2021.
to a mix that includes investors from Western
was managed by me and my team in Romania
Europe, North America, East Asia, India, and
and involved over 150 Dentons attorneys in
consolidate our market leading positions in
the Middle East. Romania’s accession in the
Europe, North America, South America, and
Corporate, M&A, and Real Estate. We are also
first decade of the 2000s to both the Euro-
Asia. Another very high profile matter this
actively recruiting to create Tax and White
pean Union and NATO paved the way for a
year was Romgaz’s USD 1 billion acquisition
Collar practices.
more diverse group of investors in a wider
of ExxonMobil’s offshore assets, as well as the
range of sectors. All these developments have
financing for it. At the beginning of this year,
shaped and consolidated both the Romanian
we assisted a consortium of four domestic
business culture and the practice of law.
and international banks on a EUR 125 million
Looking five years into the future, what do you see for the Romanian market, and what do you see for Dentons?
green loan facility for six commercial real
As I stated four years ago when I was appoint-
we work. Take due diligence for example.
estate assets developed by Prime Kapital, in
ed Managing Partner of Dentons in Romania,
A quarter century ago, we used to send an
what’s looking to be one of the most signifi-
we are committed to this market and are
army of lawyers to out-of-the-way places to
cant green real estate transactions of the year
here to stay. After a quarter century, we are
read dust-covered documents, take notes,
2022. Other landmark transactions include
larger, stronger, and better positioned than
then summarise findings in a report, often
the RON 555 million private placement of the
ever before. Interestingly, I believe the same
without the ability to check the documents
Bucharest municipal bond issue and the EUR
can be said about the Romanian market. I am
again. Fast-forward to the present: we
153 million bridge to bond structure for Elec-
hopeful for continued growth and achieve-
almost always have virtual data rooms that
trica. We are currently advising on the highly
ment over the next five years.
The Romanian market has evolved from
Technology has also transformed the way
of the modern office building that we moved into in 2019. We have hired four new partners,
In terms of future plans, we continue to
www.business-review.eu Business Review | June 2022
ARTS 35
Ioana Ciocan: “New generations of art collectors are emerging in Romania” For the 9th edition of Art Safari, the biggest art event in Romania, Business Review talked to Ioana Ciocan, the event’s general manager, about the current trends and challenges on the local and international art scene. By Oana Vasiliu will be the fact that Art Safari will return in the fall, in the same place, with a resounding anniversary edition. We have long wanted to present Art Safari in a large format, especially since the effort we make to organise it is very significant, and this unique event deserves to last longer. In addition, Art Safari is also funded by the Culture Ministry this year, in an extraordinary recognition of the event’s leadership in the field of cultural projects and its potential to place Romania on the European art and culture map. (…) Moreover, this edition will showcase art worth over EUR 14 million, including works by Picasso and Dali, featured for the first time at Art Safari.
How would you describe the DNA of Art Safari?
masters—Aman, Luchian—and also acquiring
Even though the space where Art Safari will
super contemporary Romanian art, such as
take place will be the same as last year, the ar-
Boldness is key. Art Safari has been a daring
that of Irina Dragomir, who will have her own
chitectural concept of this edition, signed by
project from the very beginning. It takes time,
exhibition at Art Safari – 9th edition.
architect Ioana Corbu, will certainly surprise visitors, offering an exciting show at modern
hard work, but also courage to become the
standards. For the first time, the exhibition
in Romania. (…) The success of that 2015
What advantages does Art Safari bring to the Romanian art scene?
edition—20,000 visitors—gave us courage to
We are a leading brand in the field of art and
that will highlight every artwork in Art Safari,
organise the next editions and the chance to
culture, we have the power to reach wide
while the pavilion dedicated to the Picasso-
massively evolve, and here we are in 2022,
audiences, to shape behaviours, to bring art
Dali duo will be accompanied by music. (…)
ready for two editions in a brand new format:
in people’ lives in an unprecedented way, and
6 months of art in the heart of Bucharest.
convince them that art and culture represent
exhibited art has increased, because we are
important parts of our national identity in a
no longer talking about an insurance period
European and global context. We are a one-
of 10 days, but 6 months. And our border with
of-a-kind project in Romania, with a great
Ukraine does not help our insurance rates at
potential to place Bucharest and the entire
all, because now we’ve had to introduce a war
country on the European cultural map, not
clause into the policy. This was in addition to
just on a regional level.
the terrorism clause, which has been in place
largest and the most appreciated art event
Let’s talk about changes on the art market and the continuing art boom since the beginning of Art Safari. How does today’s market work? Can you point to specific trends?
space will also benefit from a lighting system
The value of our insurance policy for the
for several years. Our international partners
Romania has a relevant position in CEE and will have much to say in contemporary art,
What makes Art Safari so special this year?
have been quite concerned about this proxim-
and in recent years Art Safari has contributed
It will be the first time when Art Safari, a cul-
ity to Ukraine, but we are very happy that
to shaping tastes and educating the public,
tural project funded by the Culture Ministry,
there was no question of cancelling the event
including collectors. New generations of
will last 3 months, and the second year in a
or postponing it, because we are prepared to
collectors have begun to emerge over the
row when it will take place in the gorgeous
protect the artwork like every big museum
past few years, resuming the tradition of art
Dacia-Romania Palace, in the old city centre,
does. And people need art; it gives them
investment that had faded away during the
the future headquarters of Pinacoteca Bucur-
hope.
communist period. This new class of young
esti, on 18-20 Lipscani, through a partnership
collectors is discovering the great Romanian
with the Bucharest Museum. Another first
Art Safari will continue until August 7, 2022.
www.business-review.eu Business Review | June 2022
www.business-review.eu
36 FILM Business Review | May 2016
COVER STORY 14
Mihai Chirilov (TIFF): “The festival has established itself as a connective and vibrant experience” The Transylvania International Film Festival (TIFF) will return in full force between June 17-26, to the way it used to be before the pandemic. Business Review talked to Mihai Chirilov, TIFF’s artistic director, about cinema after the coronavirus. By Oana Vasiliu What will be the size of the lineup at this edition? Will it be smaller than usual?
Square in Cluj, expecting to gather a couple
Castle in Bontida, marking the centenary
of thousands of viewers. So does “Met-
of this classic silent horror by F.W. Murnau,
It’s going to be just like in the good old times,
ronom,” the Romanian debut feature that
complete with a new score written for a
with almost as many movies and events as we
brought Alexandru Belc the directing prize
huge orchestra by the uber-talented Simona
used to have before the pandemic. As most
in the Un Certain Regard sidebar. Icelandic
Strungaru. I wouldn’t mind the nostalgia trip
people know, TIFF was successfully carried
writer-director Hlynur Pálmason returns to
provoked by the tribute screening of Buena
out as an in-person event even during the
TIFF after having been awarded here for his
Vista Social Club, the cult doc directed in the
pandemic, by sacrificing its usual size due to
two previous films “Winter Brothers” and “A
late ‘90s by Wim Wenders—especially since
an absence of indoor locations (in 2020) and
White, White Day,” with “Godland,” equally
one of the band’s last standing men Eliades
proper screening conditions (in 2021). Right
shown in the Un Certain Regard section.
Ochoa will be performing live in Cluj on the
now, there is no reason to hold back. (…)
The newest work by one of the Transylvania
occasion. Three other documentaries are not
There will be slightly fewer films than there
Trophy winners premiered in Cannes and
to be missed: “The Orchestra with the Broken
were in 2019, but all in all the 2022 edition
will get the coveted Surprise Film slot in Cluj
Instruments” (d. Yuval Hameiri), a highly
qualifies as a normal one—whatever “normal”
(watch out for upcoming news!). Elsewhere,
successful experiment that ended with an im-
might mean nowadays. The last twenty years
we are happy to host the Romanian premieres
pressive and cohesive performance of Israeli
have established the festival as an extremely
of: “Alcarras” (the Berlinale’s Golden Bear, d.
and Palestinian musicians using damaged
connective and vibrant experience, and these
Carla Simon); “The Good Boss,” the top win-
instruments; “The Balcony Movie” (d. Pawel
were precisely the values that were the most
ner at this year’s Spanish Oscars (d. Fernando
Lozinski), the simplest yet most clever idea
affected and endangered by the pandemic.
Leon de Aranoa, with Javier Bardem in the
for a film ever; and “The Round Number”
We want people back, congregating and
main role); the newest works by TIFF regulars
(d. David Fisher), with an edgy and fearless
communicating, getting together through
Peter Strickland (the outlandish “Flux Gour-
investigation of a tabu matter which is very
art. That’s why we are going to emphasise
met”), Ulrich Seidl (the provocative “Rimini”)
likely to stir controversy.
TIFF’s social dimension and the need for
and Chilean Matias Bize (the intimate and
cerebral dialogue by introducing a music
devastating “Private Messages”).
sidebar called Soundsquare, located in the
Last but not least, and possibly the
You’ll be much safer booking your ticket for one of the salivating Film Food events (matching a themed film screening with a
nicely refurbished inner courtyard of the Arts
greatest catch of them all, is the Krzysztof
sophisticated dinner prepared by a celebrity
Museum and dedicated to emerging bands,
Kieślowski retrospective, with most films
chef; they usually sell out quickly, so move
and by adding daily talks about certain films
shown in brand new restored prints, includ-
fast) or watching the newest—and shock-
debated by key public figures. (…)
ing the “Three Colors - Blue, White, Red” tril-
free—film directed by enfant terrible Gaspar
ogy, complete with a rare photo and multime-
Noe, “Vortex.” Gerard Depardieu as “Mai-
dia exhibition as part of the big Polish Focus
gret” is a treat, and so is the extended final
put together at this edition.
car chase in the action-packed Korean film
Which movies do you consider to be the greatest catches of the year?
“Escape from Mogadishu.” And if you want
Every film that has just been screened at
some roaring fun, take a chance with either
is a great catch. “Final Cut!” directed by Oscar
What should people make sure they don’t miss this year at TIFF?
winner Michel Hazanavicius opened the
First of all, the special screening of “Nos-
comedic romps or “Cop Secret”, a buddy-
French festival and now lands in the Unirii
feratu” in the spooky setting of the Banffy
movie parody with gay cops.
Cannes and reaches TIFF in such a short time
“The Unemployment Club” and its irreverent
www.business-review.eu Business Review | June 2022
ARTS 37
Romania’s presence at Venice Biennale Besides the Romanian pavilion at the Venice Biennale, represented this edition by director Adina Pintilie with her multichannel installation that emerges from her ongoing research on the politics and poetics of intimacy and the body, visitors can meet New York-based artist Andra Ursuta, choreographer Alexandra Pirici or Eugen Raportoru and his installation exploring the Roma domestic space. By Oana Vasiliu
T
Andra Ursuta
Alexandra Pirici
he Venice Biennale returned this year
eral outlets as a top item to see at the event.
multifaceted and kaleidoscopic time capsule
with “The Milk of Dreams” theme,
In the Giardini, after the grand entrance and
which is grounded in an understanding of
curated by Cecilia Alemani, which
the colossal work of German artist Katharina
the significance of the narratives that such
includes 213 artists from 58 countries; 180 of
Fritsch, Romanian artist Andra Ursuta returns
objects embody, as well as their capacity to
them are participating in the International
to the Biennale to seduce the audience with a
inform and reflect Roma culture.
Exhibition for the first time. Of the 1,433
series of sculptures. This time, her sculptures
works and objects on display, 80 new projects
recall both American science fiction action
are conceived specifically for the Biennale
horror films, including “Preda-
Arte.
tor” and the “Alien” franchise,
When visiting the exhibitions, attendees
but ultimately they emphasise
will discover a world where everyone can
the vulnerability of the human
change, be transformed, become some-
form and the complexity of
thing or someone else, as the curator states.
desire. Moving forward in the
The “The Milk of Dreams” exhibition takes
Giardini’s main exhibition space,
Leonora Carrington’s otherworldly creatures,
you’ll meet with Alexandra Pirici,
along with other figures of transformation, as
Romanian artist and choreogra-
companions on an imaginary journey through
pher, who will likely capture your
the metamorphoses of bodies and definitions
attention through her live perfor-
of the human. In Romania’s pavilion at the
mance, Encyclopedia of Relations
Biennale, Adina Pintilie imagines a space of
(2022). She assembles groups
togetherness, beyond borders and binaries,
of actors and performers into
exploring the central role of intimacy in the
formations that she describes as
everyday. Nurtured by long-term collabora-
live sculptures, which act, move,
tion with the protagonists, the Romanian Pa-
shift, and sing. A collateral event
vilion is transformed into a contemporary ca-
is taking place at Istituto Veneto
thedral that celebrates connections between
di Scienze, Lettere ed Arti, where
bodies beyond any preconceptions. The video
Eugen Raportoru presents his
installation was highly acclaimed by interna-
magic-carpet post-Soviet Romani
tional media, having been mentioned by sev-
seraglio. The artist has created a
The Venice Biennale continues until November 27, 2022.
www.business-review.eu Business Review | June 2022
38 CITY
Cultural calendar
By Oana Vasiliu
For this edition of the festival, a
Theon Cross, Ilhan Ersahin’s Is-
total of 575 theatre, contempo-
tanbul Session, Lucy Woodward,
rary circus, and dance perfor-
Radu Valcu Quintet, Muntet, and
mances are scheduled in Sibiu,
TajNic Trio. Attendance is free of
in central Romania. More than
charge.
3,300 participants are expected at the event, and a total of 30,000 tickets are available for 116 on-
Pet Shop Boys concert July 4, Arenele Romane
site performances. If you don’t get your ticket, don’t worry: the festival’s programme also includes 170 open-air performances.
alt-J concert June 22, Arenele Romane
year with a show promoting the “Blackest Blue,” which was com-
Postmodern Jukebox concert June 28, Arenele Romane
The Pet Shop Boys will return
posed during the pandemic and
The Postmodern Jukebox pop-
to Bucharest after 14 years, in
released in the spring of 2021.
jazz phenomenon continues
their “Greatest Hits Live” world
The album explores the types of
its world concert tour, which
tour. The band is one of the most
experimental sounds that we’ve
began in 2021, titled “The Grand
successful duos in the UK’s music
been accustomed to hearing
Reopening Tour.” They are entic-
history, with over 22 singles in
from the London over the course
ing audiences with a sensational
the UK Top 10. Tickets now on
Indie rock band alt-J, originally
of their career of almost three
party in the style of the ‘20s,
sale.
from Leeds, UK, has been ac-
decades, continuing the musi-
with a live performance from the
tive on the music scene since
cal journey that has established
Great Gatsby times. Tickets still
2007. alt-J includes Joe New-
them as pioneers of the British
available.
man, Gus Unger-Hamilton, and
music scene and made them
Thom Green. They returned in
known in all corners of the world,
2022 with their new album, The
with millions of albums sold.
Dream. alt-J are one of the most
Tickets available.
tenth Morcheeba studio album,
Placebo concert July 13, Romexpo
JazzX Festival July 1-3, Timisoara
successful British bands of the millennium. Tickets are still on sale.
Morcheeba concert June 24, Arenele Romane
Sibiu International Theatre Festival June 24 – July 3, several locations in Sibiu
Beloved band Placebo, one of the most popular musical groups in the UK, is coming back to Bucharest. It was founded in 1994 by soloist and guitarist Brian Molko JAZZx is going to be a mix of
and bassist Stefan Olsdal, both
jazz, contemporary instrumental
of whom continue to play with
music, and emerging projects
the band. The band has released
that go beyond the boundaries of
seven studio albums so far, all of
musical genres. So far, the festi-
which have reached the TOP 20
val has announced Stanley Clarke
in the UK and have sold over 11
Skye Edwards and Ross God-
N 4EVER, Hiromi - The Piano
million units worldwide. Tickets
frey will return to Romania this
Quintet, Ashley Henry Trio,
are available.
