BR 10/2016

Investors still reluctant to splurge on local properties

WHERE ROMANIA TALKS BUSINESS November, 2016 / Volume 20, Issue 10

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8

Romania AIMS to attract FDI TO poorer areas with NEW bill

36

Seasonality wanes on marcomm market this year

40

VIENNA DEVELOPING THE SMART CITIES CONCEPT IN ASPERN

42

Getting competitive Photo: Mihai Constantineanu

www.business-review.eu Business Review | November 2016

EDITORIAL 3 REAL ESTATE

• Editorial •

Anda Sebesi • Editor-in-Chief •

6 Retail and residential next to ride the ‘green wave’

8 Investors still reluctant to splurge on local properties

9 High-class homes pick up steam

COVER STORY

Better late than never For the first time since it shook off the yoke of communism back in 1989, and approaching its celebration of ten years since European Union accession, Romania has finally managed to come up with a draft country strategy. The paper, called Competitive Romania, was drawn up by the current technocrat government, led by PM Dacian Ciolos, with the support of the National Bank of Romania (BNR) and the Romanian Academy. The strategy encompasses 41 economic goals that call for 90 measures to be achieved and a total estimated budget for 2016-2020 of EUR 16.9 billion (about 10.5 percent of GDP) for implementation.

The Ciolos cabinet’s endeavor to devise a strategy to help Romania become competitive on the medium and long term is unique from at least two perspectives. First, the current government’s

10 Competitive Romania 16 Romania’s FDI outlook: high-tech industries and competitive costs for workforce

22

Romania’s future investment in IT to be boosted by IoT trends

28 Romania vying for fresh R&D investments with IT talent pool and lower taxes

COUNTRY FOCUS 34 Local firms set to learn from Polish regional business expansion model

36 Pole position: local Polish investment gains prominence

constant efforts to prioritize projects. This is a significant step forward, as the various priorities that Romanian ministers have set would cost a total of about 300 percent of GDP to implement, or nine annual budgets. Such a huge sum suggests that there are actually no priorities at all; it is just a wish list, say pundits. Second, all the objectives and measures outlined in this strategy have an estimated budget for their implementation.

There is still room for improvement in the strategy, but at least we have a draft. Better late than never. All we can do now is hope that the next government will consider it a starting point and a reference for making Romania (more) competitive.

CITY 46 Thirst for opportunities: alcohol brands drink in the culture

50 The long journey of raising funds for art

52 HBO Romania’s The Silent Valley to shake up local and regional audiences

54 Bringing up baby in Bucharest

FOUNDING EDITOR: Bill Avery, Editor-in-Chief: Anda Sebesi, DEPUTY Editor-in-Chief: Simona Bazavan Journalists: Georgeta Gheorghe, Otilia Haraga, Romanita Oprea, Ovidiu Posirca, Oana Vasiliu, HEAD COPY EDITOR: Debbie Stowe Copy Editor: Eugenia Pupeza, Photo editor: Mihai Constantineanu, ART DIRECTOR: Raluca Piscu publisher: Bloc Notes Media, Address: No. 10 Italiana St., 2nd floor, ap. 3, Bucharest, Romania­­­­, Landline: Office: 031.040.09.31 Executive Director: George Moise, business development director: Oana Molodoi, Sales DIRECTOR: Ana-Maria Nedelcu Sales CONSULTANT: Valeria Cornean, EVENTS DIRECTOR: Oana Albu, Marketing: Adina Cretu, Marius Andronic, Patricia Neamtu Production: Dan Mitroi, Distri­­bution: Eugen Musat EMails: editorial@business-review.ro, sales@business-review.ro, events@business-review.ro­

ISSN NO. 1453-729X

www.business-review.eu Business Review | November 2016

4 NEWS

WHO’S NEWS BR welcomes information for Who’s News.

Submissions may be edited fo­­­r length and clarity.

Get in touch at simona.bazavan@business-review.ro

Carmen Adamescu has been promoted to partner in the business assistance department at EY Romania.

She has more than 18 years of professional experience in the IT industry and has been part of the EY team since 2012. Prior to that, Adamescu worked for IBM for 13 years. She graduated from the Physics Faculty with a major in nuclear physics and got an MBA from the Open University in the UK. Nihat Bayız is the new general manager of Romanian home appliance company Arctic. He took over the helm from Hasan Ali Yardimci, who was promoted to president of Beko USA Inc, a position at Arcelik Group, the parent company of Arctic.

Bayız has been part of the Arcelik Group for 22 years, assuming leadership positions in R&D, product and factory management. Prior to his current role, he had acted as the head of product management for Arcelik Group since 2012.

Ana Dumitrache has been appointed cocountry head of real estate developer CTP Romania. She will coordinate operations with CTP CEO, Remon L Vos. Dumitrache has extensive experience in real estate and finance, having been active in the banking sector. As co-country head, she will be responsible for funding, finance & accounting, and focusing on business development in particular. page 5

Investment: Two new nuclear reactors at Cernavoda cost EUR 6.5 billion

Iohannis hopes negotiations with Chinese over nuclear investment will be concluded next year

By Ovidiu Posirca The Romanian president, Klaus

ment by the Romanian state.

development of units 3 and 4

Iohannis, says that nego-

State-owned Nuclearelectrica,

just as a way to produce more

tiations with China General

the operator of Romania’s exist-

electricity, because it allows

Nuclear Power Corporation

ing two nuclear reactors, inked a

us to close units that pollute

(CGN) over the construction

memorandum of understanding

too much or are inefficient and

of two new nuclear reactors in

with the Chinese for the new

worn out,” said Iohannis during

Cernavoda could be finished

investment last November and

a visit to Cernavoda.

next year.

negotiations have been carried

The development of the two nuclear reactors is already considered a strategic invest-

Bucharest’s modern office stock to reach 2.6 million sqm by 2019

By Simona Bazavan

According to market esti-

out since then with a series of

mates, the construction of the

extensions to the deadline.

two reactors requires an invest-

“We should not imagine the

delivered by 2019, according to data from real estate services firm Colliers International. This will take the capital’s total stock of modern office space, meaning projects rated between B+ and AA+, to 2.6 million sqm.

“This volume will be part of projects that have been announced so far and which are presently scheduled for completion in 2018 and 2019. However, given how the market and their

About 600,000 sqm of office

leasing will evolve, this timeline

space is currently in the pipe-

could be extended to 2020 or

line in Bucharest, planned to be

2021,” said George Didoiu, associ-

ment of at least EUR 6 billion.

www.business-review.eu Business Review | November 2016

NEWS 5

Chamber of Deputies adopts draft law on CHF loan conversion

Cristina Hanganu has been appointed communication & CSR director of Lidl Romania, a newly created position within the company.

She has over 20 years of experience in the communication field, having worked both for multinational and local companies that include Connex (currently Vodafone), Michelin, Media Pro, Intact Media Group and various communication agencies.

By Georgeta Gheorghe The plenum of the Chamber of Deputies has adopted a draft law on CHF loan conversion, which eliminates the CHF 250,000 threshold. The bill was passed with 248 votes in favor.

According to the draft law, loans in Swiss francs are converted into RON at the

The Chamber of Deputies passed the draft law on October 18

exchange rate valid on the day the contract was signed, with the conversion being made

the parties resort to the courts.

by the committee there is only

He added that another

one eligibility criterion, namely

the credit converted into RON

amendment specifies that “at

that the provisions of the pres-

will be negotiated with the

the request of clients, banks that

ent law only benefit clients.

client, taking into account the

converted loans to Swiss francs

Paragraph 2, regarding the CHF

principle of good faith and

can go back to the CHF loan and

250,000 threshold, was elimi-

professional requirements,

make the conversion as per the

nated,” said Nica.

so that payment obligations

provisions of the present law.”

cannot be more burdensome

Nica added that the com-

(PSD) MP Ana Birchall, who

for the client, said Ciprian Nica,

mittee took into account the

proposed the draft law, said

vice-president of the Legal

fact that some borrowers had

the vote was a “compensatory

Committee of the Chamber of

negotiated with the banks the

gesture” and an opportunity

Deputies. According to Nica,

conversion of credits. “According

for MPs to end a social crisis

only in exceptional cases will

to another amendment adopted

started in Romania in 2015.

by addendum. The costs of

ate director of the office agency

slowly blur in tandem with a

with the consultancy.

growing preference for mixed-

The Barbu Vacarescu-Flore-

use developments, according to

asca area of Bucharest will see

Colliers International representa-

its position as one of the main

tives.

office poles in the capital further

Social Democratic Party

Elisabeta Moraru is the new head of Google Romania. She is replacing Dan Bulucea, who was promoted earlier this year by the company to business manager for the Asia-Pacific region. Moraru joined Google in April 2012 as industry head. Prior to that she worked for Xerox (February 2011 to March 2012) and Microsoft (2007 to 2011). Moraru also has a background in the public sector where she worked for the Ministry of Administration and Internal Affairs for three years until 2007. Between 2005 and 2009 she was lecture assistant at the Journalism Faculty in Bucharest.

Some 360,000 sqm of office

consolidate as its stock is set to

space is planned for delivery in

reach some half a million sqm of

Bucharest this year alone, ac-

office space. In the meantime,

cording to company representa-

other parts of the city, such as the

tives. The following year another

center-west, have been attracting

210,000 sqm should be added to

a growing number of new office

the market, out of which 120,000

developments. Beyond next year,

sqm will be in center-west

though, the line between areas of

Bucharest, 49,000 sqm in Barbu

the city that have a clear office,

Vacarescu-Floreasca and 40,000

residential or retail profile could

sqm in Dimitrie Pompeiu.

Rene Schob has joined KPMG as partner in taxation services. He has more than 17 years of professional experience, out of which nine were spent as managing partner of other international consultancy firms in Romania.

Schob joins KPMG after serving as country managing partner of audit and tax advisory firm Mazars for the past two years.

www.business-review.eu Business Review | November 2016

68 INTERVIEW REAL ESTATE

Retail and residential next to ride the ‘green wave’ Razvan Nica, managing director of BuildGreen, a company that offers developers and property owners consultancy for securing green building certifications such as BREEAM and LEED, tells BR about how demand for such certifications is on the rise and how residential will soon follow suit.

By Simona Bazavan

ABOUT Razvan Nica, managing director, BuildGreen Razvan Nica founded BuildGreen, the first company in Romania to offer sustainable building and certification consultancy services, in 2010. Prior to that, he coordinated the first BREEAM certification ever obtained by an office building in Romania (Euro Tower by Cascade Group). He has over ten years of experience in real estate and more than 60 projects certified to date..

Has interest in securing sustainable building certifications for real estate projects gone up among local developers and property owners?

Methodology) and LEED (Leadership in Energy and Environmental Design), which do local developers tend to prefer?

in 2013 made its certification criteria stricter

I think that overall there is a larger number

the past few years. The first LEED certifica-

The simple answer to that is yes. They do

of BREEAM-certified buildings. The first one

tion for new buildings in Bucharest was

place a greater importance on securing such

was in 2010 and by 2014 another six or seven

Skanska’s Green Court.

certifications. Interest started in 2008 and

projects had joined in. BREEAM’s upgrade

which in turn made some developers turn to LEED which has grown at a faster rate over

Developers are always looking to optimize

2009 and in 2010 it finally took shape. At first

their costs and this is why most opt for one

it was a novelty for the local market. The first

certification or the other based on costs and

developers were pioneers and they tried to

the difficulty of attaining it. Some develop-

introduce these certifications for market-

ers I have worked with have initially asked

ing reasons as they offered them a means to

me for an analysis of the two systems and

differentiate on an increasingly competitive

the impact each will have on the project and

office market.

the overall budget in order to take a decision.

As time went by, developers also saw that

There are also situations when a project is

the conditions they needed to meet in order

better suited to one certification system or

to secure such certification also helped with

the other. It depends on location, technical

the project management and quality control

requirements and other aspects.

of their properties. That is why over the past few years we have seen developers put in place a clear policy around green certification, such as Skanska, Portland Trust, Globalworth and more recently NEPI as well. Finally, such certifications act like a quality checklist for a building because the criteria one needs

Fewer developers are dedicated to either BREEAM or LEED and stick to their choice regardless of the fact that, for example, BREEAM was upgraded earlier this year or that a new version of LEED comes into force at the end of November.

Demand for both certifications is growing but I expect the share to remain at about 60-70 versus 3040 in favor of BREEAM.

to meet are very clear and objective. I would say that all of the class A office stock delivered this year in Bucharest is certified.

When it comes to choosing between BREEAM (Building Research Establishment Environmental Assessment

How much do the developers or owners of an office project in Bucharest allocate on average to secure a green certification?

There are variations from one project to another. It all depends on the moment

www.business-review.eu Business Review | November 2016

REAL INTERVIEW ESTATE 79

the developer decided to start the certification process as well as the project’s initial plans. In some cases the project is so good that one doesn’t need to intervene too much in order to secure a certain rating.

The desired rating is also important – “silver”, “gold” or “platinum” for LEED or “good”, “very good” or “excellent” for BREEAM. One thing is for sure, I can’t agree with the suggestion that certification costs 10-20 percent of a project’s construction budget. Under no circumstance. I would say it represents no more than 5 percent of the construction budget of a class A office project in Bucharest.

Is demand for green certification also growing among retail projects?

Yes, demand is growing and after office, I believe, retail and industrial are coming behind and residential will follow. Presently there is only one retail project certified as a new building and that is Coresi Shopping Resort Brasov. For several projects curof being certified interested in

existing buildings there are rently in the process and owners are securing such

certifications.

Their main the same as

motivation is that of office

developers – re-

ducing mainte-

nance costs and

optimizing facility

management costs. the fact that they align

And there is also themselves to this grow-

ing trend. It is a corporate policy for many. For example Iulius Mall is LEED certified for “existing buildings” and we also certified two of NEPI’s projects about one year ago. We are currently managing the certification of 16 shopping centers in Bucharest and secondary cities.

Do you expect the trend to expand to residential projects as well?

We know that there is already a BREEAM-certified residential project in Cluj-Napoca. This is not a coincidence as in Cluj-Napoca there is a subsidies system in place for this. Over the next two years we will have at least one certified residential project in Bucharest as well, regardless of any subsidies.

There is a delay in Bucharest because as far as developers are concerned there hasn’t been demand for green certified housing so far. Buyers simply haven’t been demanding this and so for developers there was no reason to take on this cost. Nevertheless, I am convinced that Bucharest will soon follow suit. I think this will be a natural evolution for residential projects that target clients with above average incomes. These are people that work in certified office buildings and they see the benefits and understand the relevance of such certification.

How many projects are you working on at present and what was your turnover last year?

We are working on around 30-40 projects in various stages at present.

consultancy or assist the general contractor. About half of this year’s

Such projects take about two years to complete. So far this year we

contracts involve the certification of new projects. Our turnover last

have signed 19 new contracts, about double last year’s figure. There

year was around EUR 250,000 and this year I hope we will go beyond

are projects where we do certification and others where we only offer

that.

www.business-review.eu Business Review | November 2016

8 REAL ESTATE

Investors still reluctant to splurge on local properties Country risk, high financing costs and the lack of prime assets available for sale will most likely see this year’s volume of investments in the acquisition of real estate assets fall short of 2016’s level, says Silviana Badea, the national director and head of capital markets with JLL Romania.

This would suggest that they are more likely opportunistic and looking for value-added assets that enable an immediate and easy gain rather than a long-term approach,” she explained.

One major reason for this is Romania’s perceived country risk, which is also reflected in high financing costs on the local market, she believes. Financing conditions have improved about seven local banks now open to granting

posting double-digit increases and the key in-

loans of between EUR 10 million and EUR 50

terest rate is at an all-time low. However, this

million at margins of about 2.8-3 percent for

has not yet brought about higher investments

prime properties. However, Romania contin-

in the acquisition of commercial properties

ues to lag well behind markets such as Poland

on the local market, said Badea. The overall

or the Czech Republic where financing condi-

investment volume amounted to EUR 400

tions allow investors more attractive yields,

million in the first nine months of 2019, up

pointed out Badea.

by a meager 6 percent y-o-y. Moreover, the

Another reason is the lack of prime assets

overall volume is expected to be in the range

available for sale on the local market. Should

of EUR 600 million – EUR 700 million by year-

there be a prime shopping mall with a proven

end, similar to 2016’s level, whereas around

track record up for sale in Bucharest, there

EUR 1 billion would be closer to the market’s

would be seven to ten investors interested in

potential, said Badea.

buying it, she said. However, such projects

“For us, this is something of a puzzle if we

E

target internal yield rates of 13-15 percent.

significantly over the past year and a half with

By Simona Bazavan

Silviana Badea, JLL Romania

long negotiations, cautious investors that still

are not up for sale at present, she noted. After

look at a market such as Hungary with which

the buzz of recent years on the industrial

we can compare ourselves,” she pointed out.

market there is nothing left to buy except

Yields are about 200-250 basis points higher

perhaps entire portfolios, and as far as office

in Romania than in Poland or the Czech

projects are concerned, investors’ interest is

Republic but only 50 basis points above Hun-

dampened by fears of oversupply given the

gary, she said. While economic indicators put

large number of projects in the pipeline.

Romania in a better light than its neighbor,

The bottom line is that investors are will-

conomic data make a strong case for

Hungary fares better in terms of investments,

ing to consider the local property market,

Romania to be on the radar of inves-

she noted.

a fact proven by the entry of several new

tors looking to acquire real estate

Over five negotiations are underway

players over the past couple of years, stressed

assets in Central and Eastern Europe this

involving assets worth over EUR 40 million

JLL’s head. “However, they pay great atten-

year. The 5 percent economic growth posted

each, which could be closed by yearend and

tion to the way they choose their projects

in the first semester was the highest in the

thus boost the market’s dynamic, she sug-

and unlike 2007 when they bought anything

EU, industries like IT&C and retail have been

gested. “On the other hand, we have seen

at any price, they are now very careful about the sustainability of rents on the long run and competition,” said Badea. As for the fact that Romania doesn’t garner the same interest as other countries in the region, this is not necessarily a bad thing. “What is happening now in Poland or the Czech Republic, where yields have reached 5 percent in secondary cities, cannot be sustainable on the long run and once investors see that this appetite is a bit too enthusiastic, they will turn their attention to us and we will reach the EUR 1 billion we are targeting,” she concluded.

www.business-review.eu Business Review | November 2016

REAL ESTATE 9

High-class homes pick up steam A new residential project is being kick started north of Bucharest some ten years after its owners first bought the land, and is intended to ride the wave of Bucharest’s growing segment of premium housing.

By Simona Bazavan

can build their own houses as long as these respect the developers’ master plan. Another option is to choose from some of the houses already built on the site. Huf Haus, a German manufacturer of high-end prefabricated timber and glass houses, has opened two show houses in the project which are also available for sale for EUR 1.25 million and EUR 3 million, respectively. Next year the developer wants to build another four houses which will be designed by local architects and which will be available for sale for price tags of between EUR 250,000 and EUR 450,000.

Dumbrava Vlasiei should feature another four development phases which will add blocks of flats and retail areas to the gated community, say company representatives.

Starting the next phase depends on how sales evolve, said company representatives.

Fresh momentum for the premium market Demand for premium housing has been rising in recent years to the point where sales now represent about 5 percent of the entire residential segment, indicate data from consultancy Regatta Real Estate. Buyers are made up of both those looking for a home as well as a growing number of investors for whom buying premium properties is a lucraHigh hopes: first two local Huf houses are on sale for EUR 1.25 mln and EUR 3 mln, respectively

tive alternative to keeping their money in a bank, argue consultants. Regardless of their

the local real estate market, yet it has

L

of land surrounded by forest in

recently announced ambitious plans

Dumbrava Vlasiei, near Balo-

for the years to come. The company is owned

testi, but actual works on

by Rey Muraru and Lorna and Colin Jackson,

the project started last

all new names in the local real estate industry

year. So far the devel-

but who have been working in the field across

oper has invested

the Channel. Romanian Muraru met his

EUR 40 million,

partners and worked with them on several

which went on

residential projects in the UK. Dumbrava

buying the land and

demand for premium

Vlasiei, the scheme they have kick started on

infrastructure and

housing over the

the local market, is their first project outside

landscaping works

past couple of years

the UK.

for the first develop-

oreco Investments is a new entry on

“We’ve seen more opportunities for development in Eastern Europe and particularly in

profile, buyers are showing a growing interest In 2006 the three bought 90 hectares

ment phase.

The company has now

in the off-plan acquisition of such properties, which come at a hefty price. About 30 percent of the premium properties up for sale in Bucharest have price tags of over EUR 1 million, according to Regatta Real Estate.

The growing

has thereby put fresh momentum behind new developments. Some 550

Romania. When we first came we felt that we

set an ambitious target: it wants

had the necessary experience to put together

to sell the first 140 plots of land – meaning

scheduled for delivery in Bucharest in 2016

a project which is competitively attractive

about 20 hectares – over the next three years.

and 2017, more than double the volume of the

in terms of what is happening in Bucharest,”

Buyers must be willing to pay approximately

previous two years, according to data from

said Lorna Jackson.

EUR 150/sqm for the land plots where they

real estate services firm DTZ Echinox.

new premium apartments are

10 COVER STORY

Photo: Mihai Constantineanu

Competitive Romania

www.business-review.eu Business Review | November 2016

www.business-review.eu Business Review | November May 2016 2016

COVER STORY 11 14

Approaching the tenth anniversary of its accession to the European Union, Romania finally has its first country strategy for the coming years. The document, drawn up by the current government, aims to make the country a competitive spot on investors’ map. Ranked 53rd worldwide from a competitiveness perspective, it’s clear that Romania needs to rev up all of its engines to become an added-value player on the international scene.

By Anda Sebesi

A

fter a long period of transition when it faced many ups and downs, Romania is now a stable economy that has a real chance of becoming a competitive player on the European

Union scene. With economic growth of 1.5 percent in the second quarter of 2016 compared with the previous three months, Romania posted the biggest economic expansion among the 28 EU members, according to Eurostat, the statistical office of the EU. In addition, the local economy registered the highest economic growth in the bloc (5.9 percent) in the second quarter of 2016, compared with the same period of 2015, followed by Slovakia (3.7 percent) and Spain (3.2 percent). “The reported 2016 growth, the largest in the region, is also due to tax breaks and salary increases in the public sector which are considered ‘economic steroids’ by some economic analysts covering the region, leading to unsustainable growth,” says Serban Toader, senior partner at KPMG Romania.

In such a context, Romania needs to capitalize on its recent positive economic developments in order to lay the foundations for its sustainable and long-term economic growth. As a result, earlier this year the technocratic government led by the prime minister, Dacian Ciolos, launched a country project called “Competitive Romania”.

Consisting of measures to reduce the economic gaps between Romania and its European peers, the project aims to define a clear strategy so that the level of local GDP per capita can converge towards that of more developed European countries. Hence, an optimum use of capital, labor force and productivity is the only way the local economy can be encouraged to grow in a sustainable manner at 3 to 5 percent a year, the document says.

The project was developed with representatives of the presidential administration, the Romanian government, the National Bank of Romania (BNR) and the Romanian Academy. As the Romanian president, Klaus Iohannis, stated at its launch, the new strategy for Romania is designed with the current European context as a model.

“Now is the time to focus on what’s next, both worldwide and in Romania, and I have already said that there is a need for a new post-accession country project. It has not been developed, in 2007

www.business-review.eu Business Review | November 2016

12 COVER STORY

or later. We are now preparing to celebrate ten years since Romania

by introducing unprecedented solutions. Solutions exist and there

joined the European Union and only now are we starting to think of

are premises for them to be developed. We need to work to acceler-

creating a post-accession strategy,” said Iohannis at that time.

ate their implementation,” adds the representative of D&B David and Baias.

How competitive is Romania…

In her opinion, one of the key elements in taking steps towards

According to the World Economic Forum Competitiveness Report,

innovation and increased competitiveness is investment in new

Romania has posted a significant improvement in the perception of

technologies meant to improve, make more transparent and shorten

its competitiveness at international level in the past decade. While

administrative processes, including inter-institutional ones. “The

in 2006-2007 the study ranked Romania 68th out of 125 analyzed

main factor that allows other countries to make better usage of

economies, its most recent edition places Romania 53th out of 140.

structural funds is the ease with which market players have access,

Regionally, the report

control and participate

puts Romania behind

in the projects financed

the Czech Republic (31st)

throughout such funds,”

and Poland (41st), but

adds Constantin.

ahead of Bulgaria (54th),

As Toader of KPMG

Hungary (63rd) and Slova-

highlights, Romania

kia (67th). “Over the last

continues to benefit from

ten years, Romania has

a good macroeconomic

had ups and downs with

environment, a respect-

respect to its competitive

able market size, as well

profile, especially com-

as a pretty efficient labor

pared to other economi-

market, although relative

cally-advanced EU coun-

productivity still has to be

tries. If we look at various

improved. “Unfortunately,

statistics, today Romania

we continue to lag behind

is still behind the peak

in strategic areas such as

of the last ten years, but

infrastructure, especially

these variations are not

roads and railways, quality

uncommon among the

of healthcare and innova-

group of countries in the

tion, where we need to

CEE region,” adds Toader

invest heavily in the com-

of KPMG.

ing years,” adds the senior

According to Miriam Constantin, senior associate lawyer at D&B David and Baias, the

partner.

Romania’s competitiveness was based on different factors after

coordinator of the public sector services team within PwC Romania,

the ‘90s. Despite the fact that before its accession to the EU Roma-

all the competitiveness reports conducted in recent years underline

nia was competitive both in terms of its low-cost labor force and

that the lack of administrative capacity in public institutions, the

low-priced assets, it was not enough for foreign investors. Romania

inefficient management of infrastructure projects, medical and

had a lower productivity than other EU members and offered an un-

educational systems and the instability of the fiscal and public acquisition regulations, are obstacles for Romania on its way towards greater competitiveness.

“All of these areas are in connection with an existing and functional system that calls for improvements rather than radical changes,” says Constantin. She warns that, although the institution-

friendly economic and business environment, governed by frequent legal changes, corruption and a laborious fiscal system.

With EU accession, both foreign investments and access to

al framework can serve a wide range of needs, some competencies

European funds and programs for integration made Romania a com-

are still overlapping and there is a lack of clear lines between duties

petitive market at European level. It offered both a low-cost labor

to eliminate conflict of interest. In addition, public sector special-

force and capital and higher economic growth than its EU peers.

ists are still under-professionalized while resources are allotted

“In the past few years, these competitive advantages, which all the

improperly. “We have evolved towards refined needs that require

countries that joined the EU had in their time, have started to erode.

improvement of the existing institutional tools and not necessarily

This is also the case for Romania, which is no longer as interesting

www.business-review.eu Business Review | November May 2016 2016

COVER STORY 13 14

as the new countries within the EU borders are now,” says Dragos

players in Romania that bring added value for the local economy,

Cabat, managing partner at RisCo Business Intelligence. He warns

with IT being the spearhead.

that, at least for now, Romania’s steeper economic growth than its

Romania has the sixth highest number of certified IT specialists

EU peers is its only element of competitiveness. “This offers the

per capita in the world, thanks mainly to the local multilingual edu-

illusion rather than the confidence that some potential earnings will

cational system, which focuses on technical skills. “Romania has all

be transferred into investments and education. Problems in access-

the premises to be a center of excellence in IT as we have IT&C spe-

ing European funds and the massive emigration of the labor force,

cialists that are recognized and hunted on the international market,”

including highly-qualified workers, reduce Romania’s competitive-

says Constantin of D&B David and Baias. At present, the five main

ness further,” says Cabat.

Romanian university centers generate about 5,000 specialists each year. “For the foreign companies that are active in the IT sector,

… and how profitable are its companies?

Romania delivers polyglot

Banca Transilvania, Coca-

percent of IT specialists

Cola, HBC Romania, Auto-

speaking English flu-

mobile Dacia, Mega Image,

ently. We can see similar

Transavia, Michelin Roma-

percentages with other

nia. What do these names

international languages,”

have in common? They are

adds Constantin. She adds

all among the 100 most

that the conditions on the

profitable private compa-

local market for building

nies in Romania, ranked

national businesses in

by their net profit in 2015,

IT&C are currently good.

based on data provided by

“It also seems that we

the National Trade Register

are quite attractive to the

Office (ONRC).

largest IT&C companies

The cumulated turn-

professionals with 80

worldwide,” she says.

over posted by the top ten

Meanwhile, Victor

players in the 2015 ranking

Iancu, senior manager at

is RON 60.03 billion (EUR

KPMG Romania, high-

13.5 billion)* while their

lights the importance of

profits reached RON 7.08

the IT&C sector to the lo-

billion (EUR 1.59 billion)

cal economy, saying that

and their number of em-

Romania comes across as

ployees about 60,000. In addition, the combined profits registered

an excellent destination for IT&C-intensive businesses. Recent years

by the top 100 companies, which employed in total over 174,000

have brought an increase in SSCs being established in Romania by

people in 2015, was RON 14.46 billion. Banking, retail and automo-

major international companies. “Both these examples have a com-

tive are the industries with the most representatives in the Top 100,

mon plus-factor, human resources. We still produce a valuable and

while FMCG, construction, pharmaceuticals and IT are among the

skilled work force and this is one aspect we need to preserve and

industries that have fewer players on the list. Half of the names in the Top 100 are located in Bucharest, while Cluj, Arges, Timis, Arad, Alba, Ilfov, Brasov, Constanta, Caras-Severin, Tulcea,

develop further. This should be considered in a context where de-

Mures, Bacau, Satu Mare, Prahova, Galati, Harghita, Braila, Dambo-

mographic statistics are showing an alarming decrease,” says Iancu.

vita, Salaj and Dolj also host Top 50 firms.

Automotive is another sector where Romania can make its footprint visible and generate added value. Because of the massive

IT rules added-value

investments made in the past decade, the car parts industry has

Despite all of its economic developments, the extent to which

managed to exceed to some extent its status as a low-cost workforce

Romania can be considered an economy that generates a high added

supplier to become a creative and added-value player, especially in

value remains one of the hottest issues for the local business envi-

the production of car engines, research and design. “These sectors

ronment. As pundits say, service providers continue to be the main

generate significant turnovers so they can be considered success-

www.business-review.eu Business Review | November 2016

14 COVER STORY

ful,” says Cabat. He adds that there are also

ernmental level. If I were to choose one word

other fields, like research – in biotechnology

to describe what we need to do to improve

and engineering – which, despite their added

Romania’s perception, that would be ‘stability’

value, generate turnovers which are too small.

– economic, social, political,” concludes Iancu of KPMG.

Production remains Romania’s Achilles’s heel

Is Romania a talent pool?

Except for the car parts industry, where Ro-

Without any doubt, Romania represents a

mania combines the advantages of a low-cost

talent pool, pundits say, while warning that it

workforce with facilities for foreign invest-

is not the only country that can play a role of a

ments, the economy unfortunately remains a

talent provider for both the local and inter-

supplier of low-processed industrial products

national market. “It is not just Romania that

and a player in industries of volume or with a

exports talent abroad. There is also Bulgaria,

low added-value. “Through its geographical

Poland, Hungary and other Eastern European

position, Romania can be a bridge between

countries. The total volume of so called ‘talent

the EU, Russia, Middle East and China. But, to be so, there is a need

exports’ is higher as Romania has a considerably larger population

for adequate infrastructure that our country doesn’t have now and

than its neighbors,” says Andrei Ion, manager of CEB/SHL Romania

there are no signs of improvements in the next period. In such a

talent management company.

context, Romania has lost ground as an attractive target for foreign

In his opinion, a lack of career and development opportunities

investments to Poland, the Czech Republic, Bulgaria and other

and low compensation are the main reasons why Romanians leave

countries outside the EU,” says Cabat of RisCo. In his opinion, at

their workplace. “There is no best ratio between the capacities of

present Romania is more attractive to Asian investors that want ac-

the talent fund and the opportunities that the business environ-

cess to the common market, warning that in this case Romania may

ment offers. Hence, a significant part of the workforce will migrate

face fierce competition from the more developed EU countries that

towards more attractive business environments from the career

intend to attract foreign investors from the same geographical area.

development and earnings perspective,” says Ion. He adds that the Romanian workforce lacks business, innovation and leadership

How do foreign investors see Romania?

skills. “In order to become attractive and retain our talents, it is

As Toader of KPMG says, Romania is a better place to do business

important for Romania to change from a country rich in specialists

than many others, but there are recurrent, objective demands

into one that cultivates talent in business administration, leadership

coming from foreign investors, such as the need for more physical

and innovation,” concludes Ion.

infrastructure, especially highways to link various parts of the country and also allow easier acces to our western EU neighbours. Other important aspects that seem to impact foriegn investors’ perception are the predictabilitaty of fiscal and monetary policies, as well as the efficiency of public funds management and spending.

“Romania is perceived as one of the most stable European emerging markets, both from the economic and geopolitical perspective. It is a point of stability in an extremely volatile region, only if we think of events in Ukraine, Turkey and the recent political and economic developments in Hungary and Poland,” says Constantin of D&B David

From the investors’ perspective, Sorina Bradea, co-founder and

and Baias. But, she believes that Romania definitely needs a coher-

managing partner at Thomas International Romania, says the fact

ent and strong branding campaign, meant to position it as a safe

that Romania has people that are curious, ambitious, eager to learn

and attractive destination for investments, as a country with higher

and willing to demonstrate it, is an advantage. But she warns that

economic growth than the European average, and as a production

there are some disadvantages too. “In some areas like Banat, Cri-

center with high added value in sectors with advanced technology,

sana and part of Transylvania, a qualified workforce is not available

like IT and automotive.

in terms of number of specialists. In addition, people are migrat-

“While there are certainly mixed feelings about Romania’s at-

ing from small towns to larger ones so foreign companies in small

tractiveness as a business destination, I believe we are more and

towns face difficulties in finding specialists or local coordinators,”

more present on foreign investors’ agenda. Things are definitely

adds Bradea.

moving forward in this area; however, we need to capitalize on this momentum and plan future actions strategically, especially at a gov-

* sums are calculated at an annual average exchange rate of EUR 1 per RON 4.44 (2015), source: BNR

www.business-review.eu Business Review | November May 2016 2016

COVER STORY 15 14

OPINION Andrei Ion, manager of CEB/SHL Romania talent management company

The four myths of Romanian talent “Romanians are smart!”

ranked 45th out of 65 in the latest PISA evaluation,

Genes play a significant role in forming individual

being outperformed by other states in the region such

intelligence. The genetic differences between Roma-

as Turkey, Greece, Slovakia and Poland.

nia and other countries in the region are practically none. On the contrary, Romanians perform worse

“Romanians are innovative”

at general intelligence tests than other nationali-

Combining information about individual skills in

ties like the Americans or British. There is no solid

innovation with data about social and economic con-

evidence to conclude that we have higher cognitive

ditions that facilitate innovation, the Talent Report

skills than other countries.

Study (CEB 2012) grouped countries in four clusters, depending on the context of innovation and the avail-

“The availability of intelligence”

ability of talent for innovation. Romania is part of the

Romania is not different from the perspective of per-

fourth cluster (an unfavorable context for innovation

sonal structures relevant to achieving performance

and low availability for innovation) alongside Greece,

in different professional contexts. The student “Olympics” argument

Egypt, India, Poland and Brazil. The study ranked different states based

is worse than useless (10 or 100 student Olympics don’t mean a “talent

on the number of certifications obtained by their active population.

fund”). Performance at the Olympiad does not depend on intelligence

Romania was ranked eighth for IT skills, being outperformed by other

only. Intelligence is just a condition.

states in the region like the Czech Republic (first), Poland (second) and Russia (fourth). Romania failed to rank among the states that supply

“Romanians have general culture” or “the Romanian education sys-

talents in business administration (Poland was fourth) or essential busi-

tem is high performing”

ness skills (Czech Republic came eighth). Despite the available talent in

High performing students are the result of a high performing educa-

Romania, excluding the IT industry, it is not competitive compared with

tion system. The OECD conducts ongoing tests on an impressive

other EMEA countries. Romania, Poland and Slovakia are the only three

number of students across over 60 countries with the help of PISA

EMEA countries that posted a drop of 35 percent in the talent pool (ac-

(Programme for International Student Assessment). Romania was

cording to the CEB, Global Talent Monitor, Q2, 2016).

www.business-review.eu Business Review | November 2016

16 COVER STORY

Romania’s FDI outlook: high-tech industries and competitive costs for workforce The authorities have been trying in the past few months to change the perception that Romania is a low-tech country attracting foreign investors that are looking for a cheap labor force. With foreign direct investments this year set to exceed the EUR 3 billion registered last year, the government has been talking extensively about turning Romania into a destination for complex investments, be it in the automotive or aerospace industries.

A

By Ovidiu Posirca

s the

targeting both

departing

companies making

head of

greenfield invest-

InvestRomania,

ments, as well as

Manuel Costescu,

smaller firms plan-

put it, “Today,

ning to increase

companies are

their headcount.

not looking at

According to

Romania as a

InvestRomania

country that can

data, EUR 1 in state

offer cheap labor,

aid had a multipli-

but are heading

cation effect of 3.5

towards a highly-

in the 2007-2014

qualified work-

period.

force, at competitive prices.”

opening of a EUR

Romania looking to simplify communication with investors through two agencies

52 million plant

The authorities are

by commercial

looking to make it

aircraft producer

easier for foreign

Airbus Helicopter

companies or indi-

near Brasov. The

viduals pondering

fresh investment

an investment in

completed this au-

Romania to make a

tumn, had a state

decision.

aid component.

In the near future,

Foreign investments made in the past few months include the

Then, there is car

the government

parts manufacturer Faurecia, which opened a EUR 12 million plant

plans to launch BusinessRomania, an agency for the promotion of

for automotive seat covers in central Romania in September.

foreign investment and trade.

The document recently put out by the government on making

“In addition, it is planned that all requests from foreign investors

Romania competitive states some of the driving principles for en-

and Romanian exporters will be redirected by government authori-

hancing direct investments in the country. This includes a reduction

ties towards InvestRomania and TradeRomania for a common and

in the waiting period for getting various permits and a more efficient

coordinated approach and to create an inventory of projects so as to

procedure for securing state aid.

establish an integrated approach at national level,” Costescu told BR.

Romania is continuing its state aid program for new investors,

The government is also to looking to open local InvestRomania of-

www.business-review.eu Business Review | November May 2016 2016

fices so that more foreign investment can be channeled into areas

COVER STORY 17 14 whether the tax incentives apply to their activity,” Pascu told BR.

that have been ignored by companies for over two decades, such as the north-eastern and south-eastern parts of the country.

Recent developments in streamlined legislation and controversial bills

How can Romania attract more R&D investment?

The modernization of the pub-

Although in recent years, some

line with EU standards and the

of the most visible investments

creation of regulation for vo-

have been in the automotive

cational education have been

industry, especially in the case

among the measures rolled out

of car parts makers working

in recent months in order to

for the Dacia and Ford brands,

improve the business environ-

as well as for other companies

ment in Romania, both for

outside the country, Romania

local and foreign companies.

lic procurement legislation in

The government has also

has been able to convince

approved a new bill that aims

some investors to develop complex research & development facilities.

Car parts maker Continental has an R&D center in Romania, while Renault has in Romania its second largest research facility outside

to incentivize the unemployed to find a job in another part of the country. This would help companies that have manufacturing units in western Romania, in towns where the unemployment rate is so

France, Renault Technologie

low that there simply aren’t

Romania (RTR), which accom-

enough workers. Although, in

modates a large array of facili-

theory, it sounds great to bring

ties from product design to the

people from areas that don’t

actual testing ground for new

offer enough job prospects

car models.

to areas with thriving economic activities, the media

“We believe Romania will continue to attract inves-

has reported on cases in which

tors because of the positive

people preferred to stay at home on a lower income than

macroeconomic indicators and prospects for improvement, which are becoming more and more attractive compared to other markets in the region,” Miruna Suciu,

move to another county, away from their family.

The risk of legislation changing overnight has not disappeared

managing partner at law firm

completely from the local

Suciu Popa, told BR. According

market, and investors re-

to EU statistics office Eurostat,

main cautious. For instance,

Romania posted the biggest

the renewable sector, which

economic growth rate in the

attracted billions of euros in

bloc, a 6 percent hike in GDP, in

fresh investments, has been in

the second quarter.

the red for the past two years after the government changed

Monica Pascu, tax manager

the incentives scheme in 2013.

at professional services firm

This year, the banking industry

KPMG, said that taxpayers prefer state aid when planning an investment because it presents fewer

issued warnings regarding the outlook for home lending in Romania,

challenges, which also applies to R&D ventures.

after the approval of the debt discharge law in May. This piece of

“One of the main difficulties in applying the existing tax incentives related to R&D is the lack of clarity as to how R&D activities

legislation, which was heavily criticized by banks, allows mortgage holders to return their homes to the banks and thereby be free of all

are defined. To solve this, the Ministry of

debt. Although only around 4,000 people

Education should set up the R&D Experts

have made such requests to banks up to

Registry as soon as possible. Companies,

now, the lenders are seeking to overturn

employees and the tax authorities would

the law at the Constitutional Court, and

then be able to consult the registered

a verdict was expected in late October.

experts, in order to assess whether certain

Bankers claim it is not fair that the bill also

R&D projects qualify as applied research

applies to existing contracts and not only

and technological development and, hence,

new ones.

www.business-review.eu Business Review | November 2016

18 COVER STORY

Transition to a green economy holds many opportunities The transition from a “brown economy” to a green one entails a complete rethink of the economic model to one that generates growth and prosperity without exhausting the natural systems that sustain us. As with every challenge, the key to achieving sustainable growth is to unlock and seize the opportunities that open up during transition.

By Georgeta Gheorghe Overhaul of energy sector is critical for greening the economy

2015-2050 stands at EUR 115 million (0.002

The implementation of mitigation mea-

efits, the total discounted net cost stands at

sures and solid investments in the energy

a negative EUR 86 million.

percent of GDP). Considering all the ben-

sector are crucial in moving towards a greener economy. In Romania, the decoupling of economic growth and energy

Water management can cut demandsupply gap, counter climate change

consumption, started in the 1990s, is

Standing at 2,000 cubic meters per capita

advancing, along with the development of

per year, water availability in Romania is

less energy intensive-sectors and a decline

currently less than half the European aver-

in heavy industries. Still, Romania’s energy

age of 4,500 m3. However, demand for wa-

intensity remains one of the highest in the

ter is increasing, in the agriculture, industry

EU, releasing 58 percent of the country’s

and hydropower sectors, but less when it

GHG emissions. At present, a World Bank study shows, 46 percent

comes to household consumption. Due to its vulnerability to climate

of primary energy and 40 percent of electricity is generated by coal

change, water management programs are necessary to ensure the

and oil. Moreover, future growth is expected to trigger an increase in

sector’s ability to meet demand.

energy demand, pushing GHG emissions up.

Renewable’s share in primary energy, up from under 1.8 percent

Unless adaptation measures are implemented in the water sector, the WB says, agriculture will be seriously affected by climate change,

in 1990 to 13 percent in 2012, continues to grow. However, wind

with some crops set to record up to 35 percent yield drops. The irri-

power players warn, due to lack of support for investors, their in-

gation sector holds the biggest investment potential, followed by fer-

dustry’s net loss grew last year

tilizer application optimization

by RON 1.9 billion. Total losses

and increasing crop variety.

in 2014 and 2015 amounted to

The WB estimates investments

RON 4 billion, said the Roma-

costs at between EUR 1.8 billion

nian Wind Energy Association

(0.05 percent of GDP) and EUR

(RWEA).

11.0 billion (0.32 percent), with revenues exceeding investment

Better land management could save cash Romania’s forests can play a major role in climate change mitigation.

in all scenarios.

The country still has Europe’s largest remaining tract of virgin and

Improving waste management, transport and building greener buildings

naturally-regenerated forests, which sequester carbon and can help

According to the WB, out of the three sectors above, urban transport

counter the effect of GHG emissions. According to the WB study, the

represents the second-largest source of GHG emissions in Romania,

land use, land use change and forestry sector removed each year

while buildings account for the biggest share of energy consump-

around 27 percent of emissions produced by other sectors between

tion. In particular, heating represents 57 percent of total energy use.

2000 and 2011. However, deforestation has reduced Romania’s for-

Municipal solid waste disposal accounts for around 2 percent of Ro-

est cover to 29 percent, compared to the EU average of 40 percent,

mania’s overall emission portfolio. Should the region Bucharest-Ilfov

a 2014 study found. Climate change is already causing drying, an

meet relevant EU targets on recycling and diversion of biodegradable

increase in biological risks and slowing forest growth.

waste, emissions will fall by 80 percent. Moreover, an implementa-

According to WB estimates, the costs of afforestation and sustainable management of protection and production forests over

tion of a low-carbon development strategy in the region could cut local GHG emissions by 37 percent by 2050.

www.business-review.eu Business Review | November 2016

20 COVER STORY

Supermarkets become mediators in local organic agriculture sector Despite accelerating growth in recent years, the Romanian market of certified organic fruit and vegetables is still emerging, shaped by a range of factors.

R

By Georgeta Gheorghe

omania exports most

vegetables market is very young,”

products grown by its

Andreea Mihai, Carrefour market-

organic agriculture sec-

ing and communication director,

tor abroad, as raw materials. The

told BR. “For Romanian custom-

domestic market, meanwhile, is

ers, organic fruit and vegetables

largely unstructured, shaped by

are still an area of exploration. But

irregular supply and demand that

they are more and more interested

cannot easily be quantified. The

in local organic products.”

relationship between the two is

According to the 2015 Retailer

regulated by supermarkets, which

Scorecard, a survey conducted

have taken on the role of media-

every year by WWF Romania, only

tor and are becoming a significant

three local supermarkets were

factor on the market. Neverthe-

selling Romanian organic fruit and

less, Romania’s organic agriculture

vegetables. Recently, Lidl repre-

sector has tremendous potential

sentatives told BR the chain had

for growth.

established partnerships with over

After Romania joined the EU, its

100 Romanian providers, while in

organic agriculture sector experienced a period of sustained expansion, which has picked up in the past few years. Between 2010 and 2014 alone, the surface used for

the near future, local products will reach Mega Image stores, company representatives announced.

However, the supply of Romanian organic fruit and vegetables

organic agriculture increased by 60 percent, from 182,000 to around

is not a steady one. “The percentage is variable and highly influ-

290,000 hectares. Concurrently, the number of operators in the

enced by seasons,” Mihai noted. In addition, collaboration between

organic agriculture sector rose, from 3,155 in 2010 to 26,736 operators

producers and retailers is still in the nascent stages. “It is too early to

involved in the production,

have a mapping of the regions

processing and sale of eco-

where the producers are com-

logical products in 2012. Out

ing from,” she added. In addi-

of them, 26,390 are producers.

tion, there is a lot of room for

In particular, the number of

improvement when it comes to

agents involved in processing

the range of products available.

increased from 48 in 2007 to 120 in 2014. Nevertheless, the share of

“Unfortunately for organic products not many are certified,” Mega

local land cultivated with organic grains, vegetables and vine is still

Image representatives told BR.

insignificant, standing at less than 1 percent of the total land used for agriculture.

According to the Ministry of Agriculture and Rural Development

To this, retailers respond by sourcing their products from other EU countries, such as Greece, Spain, Italy and the Netherlands. On the long term, they plan to develop partnerships with producers

(MDRAP), 80 percent of Romania’s organic products are exported to

and position themselves as a mediating factor on the market. For

countries like Germany, Austria, Italy and the Netherlands, the main

this purpose, Lidl has developed a program with the University of

suppliers of processed organic foods in the EU. At the same time, Ro-

Agronomic Sciences and Veterinary Medicine of Bucharest. “Within

mania imports a significant share of organic fruit and vegetables to

the program, we offer our business expertise to local farmers so that

supply the local market. Overall, in 2011 Romania imported organic

they can further improve their businesses,” Lidl representatives said.

products to the tune of EUR 75 million.

On the back of an increase in interest in organic food, and in

“Our suppliers are planning their crops in accordance with our estimates, and we try to diversify production every year,” Mega Im-

Romanian organic products, supermarkets have taken on the double

age representatives told BR. “We are currently in talks with produc-

task of building relationships with local producers and boosting

ers that are willing to convert their fields,” said Mihai, “[so that] after

awareness for the sector. “The Romanian certified organic fruit and

three years we will be able to replace imported products.”

www.business-review.eu Business Review | November 2016

22 COVER STORY

Romania’s future investment in IT to be boosted by IoT trends With the local software and IT services market set to register double-digit growth rates in the coming years, from the current level of EUR 3.6 billon, multinational and local firms expect new demand stemming from the Internet of Things trend, meaning that our electronic devices will reach an unprecedented level of inter-connection for which new software solutions will be needed.

C

By Ovidiu Posirca

lose to

the country’s

90,000

GDP in 2015 and

people

this figure is set

were employed

to increase in the

in the market

future, accord-

last year and the

ing to industry

constantly grow-

estimates.

ing demand for IT

“What we

services has also

should not forget

pushed up the

is that this sector,

wage expectations

with its significant

of senior profes-

growth, is mainly

sionals, who have

based on software

become some sort

development

of “stars” on the

teams working on

local labor market.

foreign products.

Companies in Ro-

Intellectual prop-

mania are paying

erty, the effective

their most senior staff to the tune of several thousand euros each

product, is usually not registered in Romania, so it will not generate

month and these specialists are constantly receiving offers from

a benefit for us. We will stay in the country with reduced taxes on

other players on the market.

wages, while the costs of IT specialists will go up, sometimes mak-

IT remains one of the few industries for which the government

ing the acquisition of such services prohibitive for local companies.

has

I think

been

that it is

praised,

vital to

due to

stimu-

its deci-

late

sion to

entre-

exempt

preneur-

IT pro-

ship,

fession-

the

als from

devel-

paying

opment

16

but

percent

also the

income

acquisi-

tax. Au-

tion of

thorities

soft-

consider the technology sector one of the country’s strategic growth

ware products for the local and foreign market,” Alexandru Lapu-

avenues in the coming years. IT generated around 5.6 percent of

san, CEO and co-founder of Romanian IT company Zitec, told BR.

www.business-review.eu Business Review | November May 2016 2016

The export of software and IT services is set to reach EUR 2.5

COVER STORY 23 14 constant development of team members can make the difference

billion this year, which is more than double the value registered four

between two employers, even at the expense of the salary or other

years ago, according to a report commissioned by the Employers’

material advantages,” said Lapusan of Zitec.

Association of the Software and Services Industry (ANIS).

“We need both more and better qualified

The future of IoT in Romania

people to maintain current growth rates

Although the development of projects under the

for the tech industry in Romania,” Valerica

smart cities and IoT concepts is still in the early

Dragomir, executive director of ANIS, told

stages in Romania, we will see more demand from

BR. However, Valentin Metzger, CEE deliv-

companies doing such projects in the coming years,

ery director at IT company Endava, thinks

which will also mean more business for IT firms.

that the tax exemption for IT profession-

“I am convinced that in the next five years,

als should be maintained because it will

everything related to the offline application of tech-

encourage investments in the country.

nology for the use of communities will gain ground,

“In addition, we would like to see an

client companies will align themselves to the IoT

upgrade and simplification of this law

trend and the suppliers of IT services will introduce

so that the application base is extended

services and innovative projects in their portfolios,”

to an increased number of roles in the IT

said Lapusan of Zitec.

domain,” Metzger told BR.

Pelinescu of Luxoft Romania added that IoT “has become imperative when it comes to delivering the

IT firms looking to offer clear career prospects for fresh graduates Aside from the constant competition on

integrated, easy to use and sustainable products and services demanded by clients worldwide.”

Companies will also need in the future to analyze

the market for skilled developers, the IT

and extract value from the data in the IoT, machine

sector is aiming to recruit some of the best

learning/artificial intelligence fields, added Metzger

graduates by offering tailored training

of Endava.

programs and a smooth transition from university to company life.

“Young Romanian IT professionals lack

Which city will become the next IT center?

Bucharest and Cluj-Napoca are currently the two

a clear sense of what their career path

cities with the most profitable companies develop-

should be like. This is because they are not

ing software, but more investors are deciding to

familiar with what it means to work inside

expand their operations in other locations such as

a company and they don’t know how to

Iasi and Brasov, for instance.

deal with complex projects. Fortunately,

Of course, the large cities will continue to attract

they are very talented and easily adaptable.

companies because they find it easier to recruit

Also, we can be really proud of having one

graduates from the university centers here. For

of the best software engineering schools in

instance, e-commerce giant Amazon said in October

the region, which each year gives us new

it was planning to hire 400 new people for its de-

generations of young professionals eager to learn more,” Bogdan

velopment and technology center in Iasi, where it already has 600

Pelinescu, managing director at IT company Luxoft Romania, told

workers. Elsewhere, German carmaker Porsche chose Cluj-Napoca

BR.

over Bucharest for the development of an engineering center, citing

Metzger of Endava added that some of the challenges faced by

the presence of two universities, the lively start-up scene and the

large companies when hiring fresh graduates are related to the

dynamic IT and auto market, according to a recent interview Marius

identification of the right specialization and ownership of their own

Mihailovici, location manager of the local subsidiary, gave to BR.

actions.

Executives in the local business and process outsourcing industry,

All the IT companies that BR talked to said they had specialized

which currently employs some 100,000 people, are also analyzing

training programs, which are

new smaller towns where they

becoming some sort of internal

could they expand their op-

schools, in which employees

erations. Galati, Targu Mures

are kept up to date with the lat-

and Craiova are some of the

est tech trends and can receive

cities which in recent years

training for new certifications.

have attracted new invest-

“Most of the time, a package of benefits that focuses on the

ments, both in the IT and BPO sectors.

www.business-review.eu Business Review | November 2016

24 INTERVIEW

How Romania became a Technology Powerhouse Outsanding talent pool, the digital infrastructure and services offered combined with experience make a Romanian company attractive for investors. Plus, economic context and industry’s strengths line up to create opportunities for Romania’s technology output.

By Anda Sebesi In which technologies are investors from Romania most interested?

even more attractive because of its high

We’re currently living a dramatic develop-

current time, with real possibilities to reach

ment in both technology itself and the way

10 percent this decade), which means it will

it influences the business world around

benefit from the interest of all stakeholders

it. What we are witnessing is the rise of

as a strategic development area.

contribution to the GDP (6 percent at the

disruptive new paradigms, bringing a wave of change that will sweep the economic land-

ABOUT BOGDAN PADIU, CEO TEAMNET GROUP Bogdan Padiu is CEO of Teamnet Group, one of the leading system integrators in Central and Eastern Europe, with offices in seven countries. Padiu started programming out of passion, in 1994, amassing relevant experience and developing his expertise. In 2001, he decided to start his own business in the IT field, founding what is today known as Teamnet Group. With an EMBA from Wirtschafts University of Vienna, his career encompasses 20 years of experience in business development, business strategy, project management, enterprise software and cloud technology.

the current growth for the IT industry and make Romanian companies increasingly attractive.

scape. So, currently, companies from various

What are the main advantages of a local company in the eyes of investors?

industries are scrambling to catch that

I believe three big factors intersect to create

from an outstanding talent pool, created by

wave, especially if it is outside their main area of activity. We’re seeing a lot of interest in Romanian technology expertise, whether it is in a support role or directly as IP development assets in these areas, like Internet of Things, Immersive Interaction, Symbiosis with Artificial Intelligence or Cyber Physical Security.

In your opinion, what are the main issues that an investor looks at when deciding to invest in a Romanian company?

The decision to invest is certainly one that depends on many variables and so one should take into account many factors – not all of them related directly to the company itself. The overall state of the economy, for example, is an important one. Right now Romania is a very attractive destination from this point of view, having one of biggest growth rates for 2015 and being expected to maintain that very positive trend for the coming years. I’m referring to tax reductions, and the existing and coming reduction to VAT, for example. Geopolitically, Romania has been a remarkably stable country throughout the last decades, even when facing the volatile situation in the region.

If we were to go deeper, the IT sector is

The first one is talent – Romania benefits

www.business-review.eu Business Review | November 2016

INTERVIEW 25

a combination of specialized education and

veloped in order to expand Teamnet Group

product and product creator that happens in

work opportunities. The 100,000 people the

at regional level.

some of the more exotic locations developing global IT technologies. A Romanian

industry employs give it first place in Europe

product developed for the Romanian market

specialists. There is a good collaboration be-

How big is Romania’s potential in the technology sector now?

tween institutions and private organizations.

I feel that we are still undervalued as an

transition to export much easier and more

For example, Teamnet has several partner-

industry – so there is tremendous growth

seamless.

ships with technical universities in Romania,

potential for investments. But what’s even

aimed at developing educational programs

more exciting is the increase in Romanian

that create relevant and modern expertise for

entrepreneurship: original IP that is created

How competitive is Romania in the technology industry now?

students.

and developed right here, and that can be

As one of the fastest growing economies in

exported.

the EU and with a strong IT industry that has

when it comes to the number of IT certified

The second factor is the digital infrastructure and services offered, which are some of

Teamnet is one of the proponents of origi-

can have global appeal as well, making the

enjoyed continuous growth for years, I think

the best in Europe from a business stand-

nal Romanian IP – we’ve innovated in many

Romania is uniquely positioned to become

point. Romania has a real chance to build on

of our areas of activity and our products are

one of Europe’s IT powerhouses in the near

that and exploit the increased adoption of

now deployed throughout the region, as we

future. As one of the leading technology

current technologies like Internet of Things,

have offices in seven countries and plan to

companies in the country and the region, Te-

for example, which relies greatly on con-

expand further. Our emergency response

amnet will build on this trend, by investing

nectivity. At the same time, investors look at

integrated systems and our unmanned flying

significantly in new products and services.

how a new technology meets current needs,

vehicles have found great interest abroad.

Innovation is at our core and our entire range

for instance the cadastre topic. Through our

And I think that’s where Romania’s potential

of solutions confirms this, bridging that gap

solutions, we facilitate the modernization of

lies – in becoming a technology

between business and technology.

land management systems by integrating solutions that can collect and process

How did Teamnet influence Romania’s development from a technological perspective?

a high volume of data. Also, at Teamnet, we promote their interfacing with mobile devices and

Teamnet is a pioneer in the in-

with UAVs, systems applicable

dustry. We began to research and

to developing countries targeted

develop technological solutions

by the World Bank’s initiative in

in Romania, when their potential

this field.

wasn’t anticipated by the market.

The third factor is experience.

Historically, outsourcing coming from major western technology companies has been one (and still is, to a slightly lesser

A current example is that although exporter of original Romanian IP. This is a goal we work intensely towards.

degree) of the main drivers of Romanian IT growth for more than a decade. Still, Roma-

the local drones industry is still at its beginnings, Teamnet is the only company in the country which has already exported 100% Romanian Enterprise UAVs at regional level and that NATO acknowledges for its

up of veterans in the field of technology. And

To what extent is Romania perceived as a player that brings its added value in the technology field?

the combination of creativity and experience

Aside from the factors mentioned previously,

is very attractive.

I think there are a couple of key differentia-

competences for the technological develop-

tors, when it comes to foreign perceptions

ment of our country, thus contributing to the

What is the value of the total investments attracted as a result of the partnership between Teamnet and the World Bank?

of the Romanian technology industry. The

implementing of the INSPIRE Directive in

first is a cultural compatibility with the

Romania, standard set by the European Com-

top players in the field. The mix between a

mission for all Member States.

The investment plan has been conducted

very well prepared, multilingual and highly

in three rounds so far by the International

skilled labor pool and the cultural proximity

112 solution, the most important system of a

Finance Corporation, a member of World

to Western Europe makes our country one of

country. Did you know that in 2015 Romania

Bank Group: EUR 5 million in 2014, EUR 1.36

the top choices when it comes to IP creation

has been declared the country with the best

million in 2015 and EUR 4.5 million in 2016.

and development for both European and

112 Emergency Calls Center in the European

The financing obtained as of 2014 from pres-

North American companies.

Union, according to the results reported by

nian companies – even start-ups – are made

tigious financial institutions such as the IFC

Another is that Romania is both a creator

“Romanian Hirrus”, after the participation at Unified Vision trials.

We also anticipated the importance of GIS

Teamnet has also developed the national

the European Emergency Number Asso-

and Black Sea Trade and Development Bank

and a market for technology, so we don’t

ciation? And the list of such examples can

has been based on the business strategy de-

have that cultural separation between

continue.

www.business-review.eu Business Review | November 2016

26 COVER STORY

Capital market prepares for upgrade to emerging status with privatizations pipeline With daily equity trading on the Bucharest Stock Exchange (BVB) at EUR 7.3 million in the first nine months of the year, up 2 percent on last year, the BVB has this year rolled out a series of initiatives designed to attract more retail investors to the market and is currently preparing a new program to convince more local firms to list on the stock exchange.

W

By Ovidiu Posirca

ith no

executive.

listing of a

company in more

Several SEOs preparing for listing

than two years,

Miruna Suciu,

the executive team

managing partner

of the BVB has

at law firm Suciu

focused on bring-

Popa, says that Ro-

ing SMEs onto a

mania could have

special market

gotten more state-

called AeRo. Some

owned companies

large state-owned

of the firms present here have already sold bonds. For instance,

to launch initial public offerings in the past two years, claiming,

Romanian IT training company Bittnet raised RON 4.18 million by

“Such an initiative would be very well received, given the sound eco-

selling three-year maturity bonds at a fixed interest rate of 9 percent

nomic fundamentals of Romania and the volume of contributions

per year this summer.

received by private pension funds.”

“For the last three years and especially

“Of course, the transition from a frontier

since the launch of AeRO in ‎February 2015,

market to emerging market status depends

a number of companies have debuted on

on the value of transactions, the size of

this market, either introducing shares or

the companies listed on the Bucharest

bonds to trading. We are advocating solu-

Stock Exchange, as well as on the access of

tions in the fiscal area that are intended to

institutional investors with large available

ensure fundraising through the market is

funds to the Romanian capital market, and

treated equally to financing from banks,

Hidroelectrica’s announced listing, as well

and incentives for individual investors,”

as the sale of the minority package in OMV

Ludwik Sobolewski, CEO of the BVB, told

Petrom by Fondul Proprietatea, may be

BR.

decisive for the Bucharest Stock Exchange,”

The head of the BVB added that after three years of reforms, the Romanian capital market is more accessible to foreign investors in the technical sense – for instance,

Suciu told BR. She suggested that state-owned salt producer Salrom and national post operator Posta Romana could be among the viable candidates

through the procedure for securities ac-

for listing by the end of 2017.

counts opening.

The government approved in October a

“Foreign investors are very sensitive to

memorandum in which the sale of minority

corporate governance issues. In that matter,

stakes in state-owned companies deemed

the BVB introduced a new, fully modern

strategic was announced. The operators of

Code of Corporate Governance for the listed

the airports and ports in Romania are on

companies, together with a new system of

this list, alongside rail freight player CFR

compliance. Consequently, FTSE, one of the most renowned institutions classifying markets, and relying for that

Marfa.

The IPO of Hidroelectrica should happen in around six months,

on the feedback from international investors and intermediaries, put

according to a recent estimate by the minister of energy, Victor

Romania on the so-called Emerging Market Watch list,” added the

Grigorescu.

www.business-review.eu Business Review | November 2016

27 - PARTNER CONTENT -

Financing opportunities of 2017: state aid reported to and approved by the European Commission.

particular areas of Romania.

•

Yearly budget: ~50 million euros

Romania continues to welcome investors to access several types of available incentives, un-

Such incentives can be granted to large,

der different types of regional state aid schemes

medium-sized and small (both newly set-up

which are available for access up to 2020:

and existing) enterprises, depending on the type of investment, the field in which the

G.D. 807 / 2014 supporting investments having a major impact on economy

investment is to be implemented and the

•

Initial investment in minimum 10 million

for. Incentive granting is conditioned by

euros in tangible and intangible assets in

obtaining the financing agreement of the

one of the eligible fields of activity

responsible authority, as preliminary to

The eligible expenses are constructions of

investment launch and subject to fulfilling

all kind (up to 375 euros/sqm), leasing costs

the eligibility criteria applicable both to the

of buildings (up to 5 euros/sqm/month),

investor and the investment. The state aid

new technical installations, machinery and

incentive is payable after the eligible expen-

equipment and intangible assets.

diture is totally or partially paid, according

Yearly budget: ~145 million euros

to the financing agreement.

•

•

Still being one of the leading FDI recipients in the region, Romania has a competitive, investmentconductive business climate and continues to offer a wide range of financing tools and fiscal incentives. A glance at next year’s financing opportunities reveals one of the most advantageous financing resources, namely state aid, granted either as cash reimbursement for up to 50 percent or more of eligible costs associated with an investment project.

G.D. 332/2014 supporting investments promoting regional development by jobs creation

financing opportunities looks promising for

•

Initial investment that generates within

ly beneficial state-aid schemes, as stimulat-

maximum 3 years at least 10 new jobs (out

ing investments leads to economic growth

of which at least 3 for disadvantaged work-

and helps create regional synergies. This

ers), in one of the eligible fields of activities.

win-win partnership comes hand in hand

The eligible expenses are the salary costs

with a series of long-term commitments

for all new employees recorded for a period

to be undertaken by both parties and the

of 2 consecutive years, within the limit of

business environment salutes the Romanian

the medium national gross salary.

government’s extensive support granted to

Yearly budget: ~100 million euros

investors in order to turn business opportu-

•

•

As aforementioned, a glance at 2017’s the economy: Romania has drafted mutual-

nities into value-added projects.

G.D. supporting investments carried out by SMEs (draft version) •

Initial investments of a total value of minimum 4,5 million lei (exclusive of VAT), the equivalent of ~1 million Euro.

In a nutshell, the regional state aid represents a transfer of Romanian state resources

provisions of the state aid scheme applied

•

The eligible expenses are constructions of

to private beneficiaries (companies) that

all kind (up to 375 euros/sqm), leasing costs

carry out their investments in Romania, and

of buildings (up to 5 euros/sqm/month),

it is an addition to the already available EU

new technical installations, machinery

funds or de minimis aid. Romanian state aid

and equipment and intangible assets. The

schemes have been drafted in accordance

percentage of reimbursement can reach

with EU legislation and have been already

up to 70% for small enterprises located in

Manuela Furdui, Managing Partner, Finexpert

www.business-review.eu Business Review | November 2016

28 COVER STORY

Romania vying for fresh R&D investments with IT talent pool and lower taxes The authorities are simplifying the tax legislation and looking to increase funding for research and development in a bid to attract both foreign and domestic companies that can develop locally technologies and products that can be sold worldwide.

By Ovidiu Posirca He told BR, “The government currently has under development a fund of EUR 100 million, focused on high-end industries with added value.”

The former government official did not elaborate on this comment, but he stated that 5.6 percent of GDP is currently generated by the IT industry alone.

Romania looking to advance in EU R&D expenditure ranking According to players in the IT industry, although Romania has a lot Talking finance: The funding of R&D in the EU stands at 2 percent of GDP

T

he R&D field has a special section in the Competitive Roma-

of skilled engineers, there is a lack of product specialists that can identify market trends and bring new business.

“We are exporting a lot of IT, but we are doing it as man-hours, no

nia strategy document, which was presented recently by the

matter if we are talking about smaller or multinational firms,” Alex-

government. It includes some measures that have already

andru Lapusan, CEO and co-founder of local IT firm Zitec, told BR.

been mentioned by the private sector, such as the development of an ecosystem around Extreme Light Infrastructure – Nuclear Physics (ELI-NP), the close to EUR 300 million cross-border project that will

And then there is the ongoing problem of the lack of sufficient specialists, primarily in the IT segment.

Companies have been calling for years for closer cooperation with

host the most powerful lasers in the world. Some 100 researchers are

technical universities educating, for instance, software engineers.

already working on the project, which should be fully operational in

And the number of students enrolled in such schools is not that high compared to the EU

2018.

average. For instance,

The country has already attracted key R&D investments from carmakers Renault and Porsche, as well as from car parts maker Con-

in 2013, only 5.3 per-

tinental. In addition, technology giant Siemens is doing R&D in three

cent of tertiary educa-

centers across Romania.

tion graduates were in science, mathematics

“The automotive industry is very well represented in our country, as most major automotive components providers have set up fac-

and computing, while

tories here. Considering the amount of R&D performed in general,

the EU average was

in the automotive industry’s search for safer and more efficient

10.5 percent, ac-

technologies for the future, focusing on the setting up of more auto-

cording to Eurostat.

motive R&D centers in Romania seems like a logical next step. This

Around 9,000 gradu-

also naturally builds on the pool of IT skills which is well developed

ates in Romania got a

in our country,” Monica Pascu, tax manager at professional services

university diploma in this sector. In engineering, manufacturing and

KPMG, told BR.

construction, however, the country fares better.

Nonetheless, it should not be forgotten that Romania spent 0.39

Lower taxes in place for researchers

percent of its GDP on R&D in 2013, while the EU 28 average was 2

The recent approval of a tax exemption on the 16 percent income

percent. In 2014, Romania came last in the EU by this indicator. But

tax levied on employees in the R&D field shows that the government

the authorities have ambitious plans and the media reported this

is focusing on enhancing such investments, according to Manuel

summer that the government was talking with carmakers about

Costescu, departing head of InvestRomania, the government agency

setting up a plant for electric vehicles, although for such high caliber

tasked with handling foreign direct investments projects in the

investments, low taxes are only one small piece in companies’

country.

decision-making chain.

www.business-review.eu Business Review | November 2016

29 - ADVERTORIAL -

ABB introduces YuMi®, its dual arm robot to Romania

ABB, the leading power and automation company, HAS announced that YuMi, the world’s first truly collaborative robot, IS showcased at Magi*k, an interactive exhibition which opens today and runs through November 15, 2016 at the Sala Dalles in Bucharest.

while ensuring the safety of those around it.

300,000 robots worldwide and of over 900

Thanks to its dual-arms, flexible hands, universal

industrial robots in Romania alone. ABB is a

parts feeding system, camera-based part location

market leader in Romania in the Robotics do-

and state-of-the-art motion control, YuMi has

main, the main applications served including

equal application in any small parts assembly

welding, painting, packaging, palletizing and

environment.

handling. ABB also offers preventive mainte-

“We are excited about the new possibilities

nance to the solutions implemented for its

YuMi brings to Romania. Specifically designed

Romanian customers. With YuMi, ABB is once

to replicate human attributes, YuMi is a game-

again pushing the boundaries of robotic

Magi*k is part of “Creative Sweden,” an event

changing innovation providing complete

automation by fundamentally expanding the

focused on design, technology, science,

solutions to our customers in the automation

types of industrial processes which can be

education, authenticity and innovation and

of small parts assembly domain.” – said Tomasz

automated with robots.

aims at bringing together and making known

Wolanowski, Country Managing Director of ABB

the accomplishments of Swedish companies

in Romania.

ABB (www.abb.com) is a leading global technology company in power and auto-

YuMi can operate in very close collabora-

mation that enables utility, industry, and

ences and workshops, expecting over 30,000

tion with humans thanks to its inherently safe

transport & infrastructure customers to

visitors.

design. It has a lightweight yet rigid magnesium

improve their performance while lowering

in Romania through exhibitions, confer-

skeleton covered with a floating plastic casing

environmental impact. The ABB Group of

collaboration, bringing innovation and

wrapped in soft padding to absorb impacts. YuMi

companies operates in roughly 100 countries

productivity to ABB’s Romanian customers

is also compact, with human dimensions and hu-

and employs about 135,000 people.

in the manufacturing and assembly field. It

man movements, which makes human coworkers

is a perfect robotic co-worker able to work

feel safe and comfortable.

YuMi heralds a new era of human-robot

side-by-side on the same tasks as humans,

ABB has an installed base of more than

www.abb.com/ro e-mail: abb.office@ro.abb.com

www.business-review.eu Business Review | November 2016

30 COVER STORY

Top 100 private companies ranked by their 2015 net profit Rank Company County Industry

Net profit (RON) Turnover (RON)

Average number of employees

1

Banca Transilvania SA

Cluj

Banking

6,435

2

Banca Comerciala Romana SA

Bucharest

Banking

2,417,668,444

2,733,577,313

3 Continental Automotive Products SRL Timis

4 Dedeman SRL Bacau

963,426,958 2,881,886,296 6,047 710,056,865 2,848,850,558 2,381 Manufacturing of automotive parts Retail

563,025,627 4,361,619,720 7,656

5 Automobile Dacia SA Arges

6 BRD Groupe Societe Generale SA Bucharest

Manufacturing of cars Banking

447,938,323

19,164,558,589

13,884

445,422,092

2,568,052,821

7,195

7 Raiffeisen Bank SA

Bucharest

Banking

437,564,405

2,068,346,596

5,298

8 British American Tobacco (Romania) Trading SRL

Bucharest

Wholesale trade of tobacco products

435,868,993

7,350,865,953

715

9 Cameron Romania SRL Prahova

Manufacturing of equipment for extraction and construction

332,036,396

1,284,647,037

1,103

10 OMV Petrom Marketing SRL Bucharest

Retail of fuels in specialized stores

331,008,143

14,776,387,601

222

11 Orange Romania SA

Telecommunications

262,151,267

4,585,755,248

2,386

12 Coca-Cola HBC Romania SRL Ilfov

Bucharest

242,721,956 Production of non-alcoholic beverages, mineral waters and bottled waters

2,112,882,161

1,511

13 Unicredit Bank SA

Banking

1,164,830,489 1,696,555,756

2,909 1,605

Bucharest

14 Silcotub SA Salaj

Manufacturing of steel tubes and accessories

222,054,978 220,946,025

15 Holzindustrie Schweighofer SRL

Alba

Wood industry

206,262,204

1,984,902,242

2,055

16 Citibank Europe Plc, Dublin – Romanian Branch

Bucharest

Banking

200,711,760

358,774,546

217

17 Delphi Diesel Systems Romania SRL Iasi

Manufacturing of car parts

178,685,205

1,881,153,589

1,724

18 Societatea de Investitii Financiare -Transilvania SA

Financial brokerage

158,597,060

675,319,836

52

Brasov

19 Arctic SA Dambovita

Manufacturing of home 139,691,781 appliances

1,784,345,197

2,942

20 Societatea de Investitii Financiare Oltenia SA

Financial brokerage

132,405,011

260,339,602

52

21 Nidec Motor Corporation Romania SA Arges

22 Carrefour Romania SA Bucharest

Manufacturing of engines, electric generators and transformers Retail

128,617,273

63,593,955

288

127,672,891

5,149,498,472

7,985

23 Holcim (Romania) SA

Manufacturing of cement 127,564,354

1,123,282,485

744

24 Azomures SA Mures

Manufacturing of fertilizers and nitrous products

1,728,273,019

1,413

25

Heidelberg Cement Romania SA

Bucharest

Manufacturing of cement 119,824,299

748,137,902

752

26

Heineken Romania SA

Bucharest

Manufacturing of beer

1,205,906,433

1,102

27

CRH Ciment (Romania) SA

Bucharest

Manufacturing of cement 105,740,276

852,095,747

461

28

Pro TV SRL

Bucharest

Media (TV)

104,556,136

635,976,760

896

29

Mega Image SRL

Bucharest

Retail

102,841,396

3,562,917,265

8,077

30

Societatea de Investitii Financiare Moldova SA

Bacau

Financial brokerage

100,340,327

289,335,539

30

Dolj

Bucharest

123,271,101

111,026,822

www.business-review.eu Business Review | November May 2016 2016

COVER STORY 31 14

Rank Company

County Industry

Net profit (RON) Turnover (RON)

Average number of employees

31 Global E-Business Operations Centre SRL Bucharest

Business and 99,399,594 management consultancy

336,554,854

2,363

32 Linde Gaz Romania SRL Timis

Manufacturing of industrial gas

545,771,116

453

33 Autoliv Romania SRL Brasov

Manufacturing of car 94,320,935 parts

3,051,791,239

8,124

34

Lease and sub-lease of 92,582,413 its real estate properties

70,027, 191

1

35 Mediplus Exim SRL Ilfov

Wholesale trade of 88,026,548 pharmaceutical products

3,360,058,016

885

36 Max Bet SRL

Bucharest

Betting activities

86,743,062

326,007,798

924

37

Procter&Gamble Marketing Romania SRL

Bucharest

Data processing, 83,370,366 web page administra- tion and related activities

120,244,648

298

38

Allianz-Tiriac Asigurari SA

Bucharest

Insurance industry (except life insurance)

81,757,849

1,289,658,694

1,421

Ilfov

Car dealership

81,704,411

2,018,086,693

136

40 Contitech Romania SRL Timis

Manufacturing of car parts

81,307,378

667,932,630

1,622

41

Engineering and technical consultancy

79,840,221

941,307,574

282

42 Gaspeco L&D SA Bucharest

Brokerage in the com- merce of fuels, miner- als, metals and chemi- cals for industry

77,503,372

444,564,734

216

43

Financial brokerage

75,324,568

140,229,318

48

44 Michelin Romania SA Ilfov

Manufacturing of automotive parts

74,373,092

2,081,101,283

2,823

45

Fan Courier Express SRL

Bucharest

Delivery industry

74,090,191

399,323,193

1,723

46

Zara Bucuresti SRL

Bucharest

Fashion retail

73,290,295

504,765,479

789

86,772,319

5

Societate Dezvoltare Comercial Sudului (SDCS) SRL

39 Porsche Romania SRL

Schlumberger Logelco Inc. Panama Ciudad de Panama

Societatea de Investitii Financiare Banat-Crisana SA

Bucharest

Bucharest

Arad

94,976,874

47 Clarimar Impex SRL Bucharest

Extraction of decorative and construction stones 72,587,503

48 Mol Romania Petroleum Products SRL Cluj

Retail of fuels in specialized stores

72,111,545

4,421,926,935

201

49 J.T. International (Romania) SRL Bucharest

Wholesale of tobacco products

71,757,771

3,219,410,302

675

50

IBM Romania SRL

IT consultancy services 67,975,000

744,599,760

2,172

51

Generali Romania Asigurare Reasigurare SA Bucharest

Insurance industry

67,954,975

743,899,008

433

67,860,374

227,281,024

433

Manufacturing of aircraft

67,551,975

239,531,325

720

Bucharest

52 TMD Friction Romania SRL Caras Severin Manufacturing of

car parts 53 Premium Aerotec SRL Brasov

54

Constanta South Container Terminal SRL

Constanta

Naval services

66,284,953

182,683,506

450

55

56

Societatea de Investitii Financiare Muntenia SA Agricost SA

Bucharest

Financial brokerage

63,855,737

219,742,905

11

Braila

Agriculture

63,387,377

365,271,060

924

57 Fildas Trading SRL Arges

Wholesale of pharma- ceutical products

62,832,439

1,676,006,372

712

58 Coficab Eastern Europe SRL Arad

Manufacturing of electric and electronic cables

62,799,111

1,413,212,084

424

59 Pumac SA Bucharest

Lease and sub-lease of 62,394,563 its real estate proper- ties

0

1

60 Danya Cebus Rom SRL Bucharest

61 Baneasa Developments SRL Bucharest

Construction of resi- 61,419,295 dential and non-resi- dential buildings Lease and sub-lease of 61,130,425 its real estate properties

174,901,167

57

208,995,551

185

www.business-review.eu Business Review | November 2016

32 COVER STORY

Rank Company

County Industry

Net profit (RON) Turnover (RON)

Average number of employees

62 Samsung Electronics Romania SRL Bucharest 63 Hewlett-Packard (Romania) SRL Bucharest

64 Henkel Romania SRL Bucharest

65 Bitdefender SRL Bucharest 66 Astra Rail Industries SRL Arad

67 Garanti Bank SA Bucharest 68 Transavia SA Alba 69 Euro Auto Plastic Systems SRL Arges

70 Avon Cosmetics (Romania) SRL Bucharest 71 Arcada Company SA Galati 72 Aviatia Utilitara Bucuresti SA Bucharest

73 Timken Romania SA Prahova

74 Auchan Romania SA Bucharest 75 Profi Rom Food SRL Timis 76 Aerostar SA Bacau

77 Cetelem IFN SA Bucharest

Wholesale of IT products 60,077,620 Wholesale of IT and 58,657,328 software products Manufacturing of 58,294,763 cement, concrete and gypsum Software industry 57,604,725 Manufacturing of roll- 57,538,654 ing stock Banking 57,070,785 Agriculture 56,183,013 Manufacturing of car 55,362,800 parts Retail

55,203,148 Railway construction 55,155,346 Lease and sub-lease of 54,856,219 its real estate properties Manufacturing of car 53,216,151 parts Retail

52,898,610 Retail

52,569,277 52,268,445 Manufacturing of aircraft Financial services 52,175,494

3,308,303,515 288,941,948

122 345

640,882,215

497

387,037,483 609,850,538

708 2,452

406,844,603 462,311,203

944 1,145

466,571,419

615

497,741,928 295,389,397 5,154,186

351 239 32

358,926,633

891

4,444,160,904 2,547,961,743 329,763,579

9,430 7,354 1,659

353,738,348

658

78 Contitech Fluid Automotive Romania SRL Satu Mare

Manufacturing of gum products

51,922,806

674,563,777

1,538

79 Computer Generated Solutions Romania SRLBucharest

Call center

49,801,568

190,611,562

2,300

80 Lear Corporation Romania SRL Arges

81 Dinamo 1948 SA Bucharest

Manufacturing of car parts Sports

48,740,126

771,486,370

4,070

48,691,828

18,922,507

70

82 Ipsos Interactive Services SRL

Market research

83 Metaleuroest SRL Prahova

47,102,745 Lease and sub-lease of 46,917,197 its real estate properties

216,681,610 1,087,434

844 2

84 Romaqua Group SA Harghita

85 Zentiva SA Bucharest

86 Unicredit Consumer Financing IFN SA Bucharest

Production of 46,809,430 non-alcoholic beverages, mineral waters and bottled waters Manufacturing of 46,204,961 pharmaceutical products Financial services 45,856,216

632,129,861

1,895

396,824,592

497

361,346,148

272

87 Coral SRL Tulcea

Construction of 46,204,961 residential and non-residential buildings

396,824,592

497

88 Triplast SRL Mures 89 SAP Romania SRL Bucharest 90 Arabesque SRL Galati 91 Premier Restaurants Romania SRL Bucharest 92 Koyo Romania SA Teleorman

93 A&D Pharma Holdings SRL Ilfov

94 Genpact Romania SRL Bucharest

Manufacturing of plastics 44,945,406 Software 44,925,500 Retail

44,823,643 Restaurants 44,716,877 Manufacturing of car 44,672,316 parts Business and 44,262,719 management consultancy Support services 44,258,872

136,937,833 183,889,316 1,548,539,425 511,884,423 344,875,867

150 371 2,603 2,892 1,462

4,068

1

95 Ursus Breweries SA Bucharest 96 Oscar Downstream SRL Ilfov

97 Hutchinson SRL Brasov

98 Selgros Cash&Carry SRL Brasov 99 ERB Retail Services IFN SA Bucharest 100 Romcab SA Mures

Manufacturing of beer Wholesale of fuels and derivatives Manufacturing of gum products Retail

Financial services Manufacturing of fiber optic cables

Source ONRC

Bucharest

404,753,142

2,811

44,176,488

1,582,551,058

1,419

43,838,264

1,763,935,788

372

43,503,572

382,048,533

996

43,215,460 42,805,423

2,934,450,404 119,724,907

3,745 133

42,130,193

837,073,867

500

www.business-review.eu Business Review | November 2016

34 BR EVENTS

Local firms set to learn from Polish regional business expansion model Polish companies have dealt in the past with some of the challenges facing Romania at the moment – the lack of a complex road network and an insufficient number of skilled trades people – but this didn’t stop the country from becoming one of the economic tigers of Central and Eastern Europe. Polish firms have now ventured into Romania to fuel their international expansion, seeking higher growth rates, as the market back home has become saturated, said officials during the first Polish Investors Forum organized by Business Review magazine. By Ovidiu Posirca

“

There is already a critical mass of Polish companies on the local

Sectors that attract Polish capital

market,” said Marcin Wilczek, the Polish ambassador to Roma-

Financial services, manufacturing and B2C businesses are of particu-

nia. He added that there are now more than 800 companies

lar interest to private equity investors, explained Jakub Lerner, associ-

with Polish capital on the local market whose combined investment is

ated partner at Noerr Warsaw.

close to the EUR 500 million mark.

“We have three projects for investments in Romania from Poland,” said the international lawyer. He also mentioned some of the

How Polish companies became key players in the region While Romania’s GDP is set to expand by around 5 percent this year, Poland has kept up strong growth in output for a decade, on the back of foreign direct investments and European funds.

“In 2005 it was so hard to convince Polish companies to move into the EU, outside the country’s own borders,” said the ambassador.

Now, Polish companies are looking at Romania as a core market, said Cristian Cornea, executive general manager of Can Pack Romania, an aluminium packaging company.

“We have a very good IT infrastructure, we have the geographical position, very suitable for various business scenarios,” said Cornea, the lack of qualified workforce.

“Romania is missing 4 million people at peak capacity,” said Cornea, referring to the Romanians who have moved abroad. He added that it was crucial for the country to attract foreign investments in the production sector.

The GM said that multinational firms that need skilled employ-

instance, there is a lack of electrical engineers and qualified operators of robotics equipment.

Marcin Wilczek, The Embassy of Poland in Romania

2 Cristian Cornea, Can Pack Romania

>>>>>>>>>>

firms simply can’t afford to do so. The executive explained that, for

1 >>>>>>>>>>

ees have developed their own training programs, but smaller-sized

Photos: Mihai Constantineanu

who added that a serious problem for companies in the future will be

The Can Pack representative said that from his experience, at least 25-30 percent of blue-collar workers resign after one month.

Aside from the ongoing issue with the workforce, Cornea considers missing logistics and infrastructure a business opportunity, underlining the fact that there could be more companies providing rail cars on the local market.

There is already a critical mass of Polish companies on the local market

We have a very good IT infrastructure, we have the geographical position, very suitable for various business scenarios

www.business-review.eu Business Review | November May 2016 2016

COVER BR EVENTS STORY 35 14

challenges faced by a foreign legal expert working in Romania, citing the fairly low competition thresholds, the lack of sufficient case law following the roll out of the New Civil Code five years ago and the current legal regime for the acquisition of limited liability companies.

“For political reasons, Poland and Hungary have not had good coverage in the international press in the recent period, compared to Romania,” said Lerner. He noted that Germany is a gateway to West-

Romanian companies invited to cooperate with Polish economic players

By Ovidiu Posirca

ern Europe for Polish companies. Then there is CEE – Romania is the

ABOUT

second largest economy in the region after Poland and thus a natural

Wlodzimierz Sadzik, counselor, head of the Trade and Investment Promotion Section of the Embassy of the Republic of Poland in Bucharest

expansion target for Polish businesses, according to the Noerr Warsaw representative.

For Tomasz Ignaczak, general director of KRUK Romania, the debt collection firm, the local market has offered significant opportunities in terms of employees. The company has 600 people in Romania, but he said that a growing number of local managers are getting jobs in Italy, Spain, but also in Poland, countries where KRUK has operations.

One of the main examples of Polish capital being put to work in Romania has been the case of retail chain Profi.

Polish equity fund Enterprise Investor announced this spring that

How close are Romania and Poland in terms of trade?

it was considering all options for the retail player, which it acquired in

For many years Romania has been a very important economic partner

2009. Back then, the company operated 67 stores, while by the end of

for Poland. We have a long history of successful and dynamic coopera-

September 2015, Profi had reached 448 units.

tion. In 2015 our bilateral trade turnover amounted to a record value

“Leading international private equity houses are interested in

of more than EUR 4.5 billion. In 2016 our bilateral trade should exceed

buying Profi,” said Lerner of Noerr Warsaw. In April, EI fund took over

the historical value of EUR 5 billion. It means an increase of over 10

Noriel Group, the biggest toys and games retailer in Romania, claim-

percent. Poland exports a wide range of goods to Romania includ-

ing that it was looking to replicate the development model seen in the

ing machinery and equipment, mineral products, agro-food items,

case of Profi.

furniture and many others. On the other side, Poland imports from Romania mechanical equipment, metal products, motor vehicles and spare parts, wood materials and many other products.

Our largest investors in Romania include: Maspex Tymbark (soft drinks and food products), Ciech (soda products), Profi (network of supermarkets), Can Pack (beverage cans), Pryszynski (roofing tales), Forte (furniture), Barlinek (wooden panels), Porta (construction woodwork, doors), Asseco (computer services), Orlen Asfalt (asphalt bitumen), Idea Bank (banking services), Kruk (financial services) and many others.

What are the benefits and challenges of the Romanian economy?

Every year more and more Polish companies are interested in entering the Romanian market. There are good prospects for further investments, not only in the industrial area, but also in the financial sector and services. Of course, we realize that Romania also has a lot of problems and still much to be done. The biggest barriers to further

3

For political reasons, Poland and Hungary have not had good coverage in the international press in the recent period, compared to Romania

Tomasz Ignaczak, KRUK Romania

economic regulations, poor absorption of European funds, and lack of

>>>>>>>>>>

>>>>>>>>>>

Jakub Lerner, Noerr Warsaw

dynamic economic development are the large bureaucracy, unstable

4

qualified employees in industrial sectors. But fortunately, in all these cases Romania is making a lot of progress.

How can Romanian firms team up with Polish companies?

There are a lot of possibilities for cooperation with Polish companies in such areas as automotive, electronics, biotechnology, renewable en-

Romania was the first foreign market for KRUK in 2007

ergy, the food sector and many others. We are ready to provide further information and assistance in this area. So we encourage Romanian companies to contact the Trade and Investment Promotion Section of the Polish Embassy in Bucharest.

www.business-review.eu Business Review | November 2016

36 COUNTRY FOCUS

Pole position: local Polish investment gains prominence A growing number of Polish companies have been venturing into Romania in the past few years. Close to 450 firms have launched local operations in search of new growth avenues outside their home market.

By Ovidiu Posirca

T

he local business environment already

retail investors and to ease the access of for-

has some key figures of Polish origin,

eigners with capital on the market. The BVB

Polish firms present in the main economic sectors

especially on the capital market. For

is also working to grow the market for smaller

Poland is currently one of the emerging inves-

instance, the head of the Bucharest Stock

companies that can get financing on the

tors in Romania, with total FDI in the country

Exchange (BVB), Ludwik Sobolewski, came

capital market, instead of going, for instance,

amounting to EUR 446 million at the end

to Bucharest in 2013 after managing

of 2015, according to data from the

the Warsaw Stock Exchange, which

National Bank of Romania.

under his tenure developed a new

Nevertheless, firms with Polish

market for SMEs from scratch. Then,

capital have quickly covered the

there is Greg Konieczny of Franklin

whole spectrum of the economy,

Templeton, the Pole who has been

from financial services to construc-

managing the closed-end fund Fon-

tion, IT, manufacturing and FMCG.

dul Proprietatea. During his admin-

According to an analysis by ICAP

istration, the FP was also listed in

Romania, 445 companies had more

London and the executive has been

than 10 percent direct Polish share-

one of the strongest promoters of the

holding as of August 2016. However,

implementation of corporate gov-

only 263 firms had declared finan-

ernance principles in state-owned

cial data by December 2015. These

companies.

Sobolewski is currently working with his team to make the BVB more accessible for

companies accounted for EUR 840 to banks, following the model implemented

million in turnover and had 5,916 employees

in Poland.

at the end of last year.

www.business-review.eu Business Review | November 2016

COUNTRY FOCUS 37

The wholesale and retail trade sector ac-

group Maspex Wadowice got the green light

counted for 46 percent of the total number of

from the Romanian Competition Council to

companies, while the manufacturing industry

take over water bottler Rio Bucovina.

registered 54 percent of the total number of employees.

Active dealmakers on the local market

The buyer owns several juice, instant

Capollini in 2013.

In the financial sector, Idea Bank, the lender created by Getin Holding after the acquisition of Romanian International Bank,

drinks and snack brands in Romania, includ-

reported its first profit in the first half of 2016,

ing Tymbark and La Festa, and has been pres-

EUR 1.6 million, and increased its portfolio of

ent locally since 1996.

loans.

In addition, a new Polish player

The financial and retail sectors have

entered the local financial market in

seen some deals that have involved

October. Credit Value Investments,

Polish players in the past few years.

a provider of debt financing, said it

For instance, last year AmRest Hold-

was looking to provide local SMEs

ings took over the Starbucks fran-

with EUR 100 million in financing

chise in Romania and Bulgaria, in a

across the whole credit spectrum, in-

move estimated at EUR 16 million.

cluding senior and mezzanine debt.

This summer, the Polish operator of

The company hasn’t yet opened an office in Romania, and will initially

the franchise reported a 25 percent increase in gross earnings in Romania, the

The Rio Bucovina deal is the third acquisi-

manage local operations from Poland.

The debt collection sector is home to

highest among countries where AmRest oper-

tion the Polish FMCG player has made in

ates the coffee shop brand.

Romania after buying the pasta brand Arnos

several Polish players, including Kruk, which

in 2007 and the snack brands Salatini and

employs 600 people.

Earlier this year, Polish food processing

www.business-review.eu Business Review | November 2016

38 HR

Romania looking to attract investments in poorer areas with worker mobility bill With some parts of Romania having been grappling with a chronic lack of investment in the past few years, the government has rolled out a National Mobility Plan designed to help residents of disadvantaged areas relocate to other parts of the country where there are more jobs and fresh investments.

By Ovidiu Posirca

professional courses, mainly for school leavers, according to Penes of Smartree.

At present, there is high demand for relocation services from industries that are currently booming, such as automotive and manufacturing, for which there is a shortage of qualified staff. Companies are also looking for unemployed workers in logistics and construction.

Lucian of Musat & Asociatii added that Romania is probably not the only country in the EU dealing with a low rate of staff relocation, and policymakers can roll out certain initiatives to boost the process.

“In countries without a strong ‘tradition’ of work relocation within their borders, like the former communist countries, support for such relocation through legislative measures should be a target in order to attract investments in certain areas and to mitigate the risk that existing investors move to other countries due to the lack of human resources,” said the law firm partner.

But the experience of one foreign investor that tried to hire people in a poorer area of Romania may suggest that the government’s mobility initiative should have been implemented years ago.

In September, car parts market EKR-Elek-

Raluca Penes, Smartree

T

Ileana Lucian, Musat & Asociatii

trokontakt, part of German group Nexans, scrapped its investment plans for an EUR 18 million production plant for car cable

he measure should also help employ-

bor market by offering employers for the first

wiring systems in Targu Jiu, southwestern

ers in the manufacturing sector, for

time RON 900 a month for each employed

Romania, because it could not find enough

instance, who are struggling to find

NEET, for 12 months,” Lucian told BR.

people to hire, national business daily Ziarul

new workers in the country. Bosses have also

Up to now, companies had to manage the

Financiar reported that month. The company

been trying to convince people to relocate to

relocation of employees on their own based

said the investment project, which was also

another part of the country, but their success

on their needs, stated Raluca Penes, HR

eligible for state aid, was stopped because of

has been limited so far, according to pundits.

coordinator at Smartree, the recruitment

challenges in recruiting personnel and the

consultancy.

dynamic of staff expenses. Aside from the is-

“In recent years, due to the lack of quali-

sue of relocating staff, Romania also faces the

How does the relocation work for companies and employees?

fied personnel in certain geographical areas,

While this facility is new as regards the

one of the solutions was relocating work-

Romanian citizens who exercised their right

force from underdeveloped industrial areas,

sector, representing a foreign company, re-

to free movement of labor in EU/EEA regions,

especially in the east of the country,” Penes

cently warned that around 4 million Roma-

for the unemployed, it represents a signifi-

told BR.

nians at their peak performance, who would

RON 3,500 up to a maximum of RON 15,500,

Sectors where relocation is in high demand

according to Ileana Lucian, partner at law

Aside from the support of transport and

firm Musat & Asociatii.

accommodation expenses for employees

“The new enactment also encourages

An executive in the local manufacturing

be a great fit for local companies, are working

cant increase in the compensation that they could receive in the event of relocation, from

challenge of a massive brain drain.

that choose to relocate to another part of the

NEETs – 16- to 24-year-olds Not in Employ-

country, some of the multinational compa-

ment, Education or Training – to enter the la-

nies present in Romania are also providing

abroad.

www.business-review.eu Business Review | November 2016

40 BR EVENTS

Next industrial revolution to effect massive changes in business and society Today’s digital society is standing on the brink of an unprecedented industrial revolution that will dramatically change both the way people live and work, and also the way companies in the IT and telecom field run their operations. This means new opportunities for those who are able to ride this wave, but also challenges, because of the pressure to do so. Pundits attending the Technology & Telecom event organized by BR discussed how this will affect their businesses.

By Otilia Haraga

“

We are facing a greater transformation than we have been used to until now. 5G will be commercially available in 2020, but before that we have many challenges in front of us. We need

Romania.

A project proactively detecting problems before they are even noticed by the customer is currently being implemented by Deutsche

to change the way we work. We are dealing with virtualization and

Telekom, announced Timos Tsokanis, chief technology and infor-

customer oriented strategies. Add to this the digital society context

mation officer at Telekom Romania. “Instead of the traditional NOC

we are in, and this will mean a full transformation of our operations,”

(network operations centers), there is software looking at network

Mihai Tudor, head of service quality & efficiency management at Or-

parameters in real time and deciding how we can improve a certain

ange Romania, said during BR’s seventh Technology & Telecom event.

parameter in a certain area. This is a pilot project we are implementing

One of a list of challenges that operators are adapting to is what Tudor calls the “IT-zation of the network. There will be a lot of space for NFV (network function virtualization),” he predicts.

Other telecom representatives on the panel agreed with this vision.

Dragos Spataru, head of the telephone and mobile communications division at RCS&RDS, says that the trend points towards virtualization and adding on more software. “Virtualization and on-demand services have been coming over the last seven years. Building a network involves coping with so many services, and the need for more capacity and services is pushing us forward. As an enterprise, it makes sense to pay for a service only when you use it. Virtualization/ software solutions and whatever can help you keep the costs down will work in the future.”

Customer experience is another challenge on the big telco’s list, given that investments are still needed in this field. Spataru says that at the moment, collecting data is becoming easier; however, analyzing the collected data is the real challenge. “We will try to implement to identify a problem before the customer does,” says Spataru.

Proactively solving customers’ issues is one of the strategies that most operators are using.

“One of the things that I check every morning is what our customers tell us about the network. I have an app on my phone where we check the feedback we get from customers. We get more than 100,000 pieces of feedback per month. The second area in which we have invested is customer experience network performance, which means that we look at the network performance starting from the customer.

Often the network can look clean but the customer is experiencing problems,” said Catalin Buliga, chief technology officer at Vodafone

Photo: Mihai Constantineanu

artificial intelligence to spot some problems. It’s always best to be able

Left to right: Catalin Buliga, Vodafone Romania Dragos Spataru, RCS & RDS

www.business-review.eu Business Review | November May 2016 2016

COVER BR EVENTS STORY 41 14

in Greece and now in Romania. This results in a proactively improved

cars, you really need to get to that 1 millisecond delay. The benefits for

customer-experience,” he outlined.

the customer will be seen between 4G + and 5G,” said Buliga.

Orange Romania has launched an application called The Fun Kit,

Higher speeds and shorter delays will bring changes to the ecosys-

which enables users to vote on which areas 4G coverage should be

tem, but not all of them good. For instance, the number of cybernetic

extended to. Following the vote, Orange intends to expand the 4G

threats is expected to increase.

network across the 20 most popular counties.

In terms of network rollout, operators are complaining that the authorities’ reaction is not keeping pace with the required speed of implementation. “The challenge is coming from the environment. So

Malware is a billion-dollar business. For every dollar spent, hackers make 1,400 times more, according to Liviu Arsene, senior e-threat analyst at Bitdefender.

To the conventional threats known from previous years, such as

many times, to get authorization to roll out infrastructure does not de-

banker Trojans (like Zeus, Carberp or SpyEye), information stealers

pend on us. The regulatory environment and administration can still

(especially password stealers), and spam sending Trojans, new threats

make a lot of improvements to help us roll out our investments. This is

have been added, such as ransomware, exploit kits and advanced

the biggest and only challenge that we still have,” complained Buliga.

persistent threats. The bad news does not stop here: approximately 60

New technologies are knocking at the door: just four years from now,

percent of targeted malware is aimed at small and medium businesses

technology buffs can expect the launch of 5G, which is being hailed

because they have fewer resources to invest in security.

as a major upgrade, but also brings new challenges. “5G is going to be

Cybercriminals are also organizing into outsourcing companies.

a gradual transformation because it needs to enable applications that

Malware is now available as a service, in the form of malware creation

depend on it. (…) This is going to cost a lot of money but it will enable

toolkits selling for between USD 100 and USD 10,000 – some are even

all the things that we see around. It’s going bring a lot of investments

free of charge. There are hourly updates to these malware toolkits,

in the country,” predicted Tsokanis.

as well as technical support for “customers” included. “We found a

In terms of the new benefits that 5G will bring, Buliga argues that

ransomware kit somewhere at around USD 3,000,” said Arsene.

there will be two major transformations: the speed of the network

The costs to businesses are astonishing. Some 74 percent of small or-

and the bandwidth, and very short delays. While with 4G, delays are

ganizations reported a security breach last year. The cost was around

around 40 milliseconds and with 4G+ around 25 milliseconds, with 5G

USD 99,000 per crypto-malware or ransom attack.

the delays will be just 1 millisecond. “For some apps like self-driving

At the moment, Romanian companies are not prepared to fight this threat. According to Arsene, Romanian firms are still living with two mentalities: that “this will not happen to me” and that “this will not happen to me twice in the same month.” The reality is quite different.

Many small and medium organizations have reported more than one security breach per month. a “The industrial revolution 4.0 is blurring the physical and digital divide,” commented Marius Filipas, Microsoft services delivery manager director at Microsoft Romania. He said that 50 percent of CEOs in the Top 500 believe that their main priority is the digital transformation. The view of the visionaries is that every company in the world will become a software company. Filipas gave as an example Amazon, which is the biggest retailer in the world, but has zero salespeople.

This means that the focus will shift even more in the future.

He is not alone in this view. “The pillars of digital transformation are redefining customer experience, something that has already started, digitizing core business operations, which is going on right now, and reshaping companies’ business models, which will be going on in the near future,” pointed out Teodor Blidarus, managing partner at Softelligence Romania.

He added that in 2008, there was a great rupture of trust between consumers and operators of financial services. “I would say that in the not too distant future, payment companies will be tackling customer relations and banks will be dealing with risk management,” he predicted.

The way customers are dealing with financial institutions has

Vangelis Karelis, Accenture Consulting Mihai Tudor, Orange Romania Timos Tsokanis, Telekom Romania

changed. “Customers have migrated towards digital and now the problem is to create services that cover their needs. Digital will increase twofold while office interaction decreases,” forecast Robert Anghel, head of digital channels, ING Bank Romania.

www.business-review.eu Business Review | November 2016

42 MARCOMM

Seasonality fizzles in this year’s marcomm market Not even the summer vibe managed to slow down full service projects and campaigns that took over agencies’ lives this year.

By Romanita Oprea may offer. We also felt, more than

He says he has tremendous admiration for

ever, that we had more brand

brand managers and marketing managers that

awareness on the market and this

have an eye for creative ideas and the heart to

directly impacted our develop-

go for it, sometimes risking their job to make

ment – being more visible, due

them happen.

both to our results and our grow-

more relevant note consumption is grow-

us to continuously attract new

ing on virtually all FMCG sectors, “so, yes,

opportunities,” said Raluca Ene,

it’s been a challenging beginning of the year,

managing director at Chapter 4

with the first and second trimester very ac-

Romania.

tive. What I am very busy with, however, in

Other PR agency representa-

T

The economy is posting growth, and on a

ing client portfolio, has helped

times like this, is with managing the people

tives that BR spoke to said the

right, our people, because a lot of this posi-

same. According to Sorina Mihai,

tive economic climate translates into a very

managing partner at Porter

busy period in the agency, thus a potentially

Novelli, 2016 has so far been a lot

stressful time for my colleagues. In times like

busier than the previous ones for

this you always have more to do, faster, so

the company. “It might be true as

another thing you need to look at, as head of

he last two-three years in the Roma-

a general trend. Still, seasonality is influenced

the agency, is if your product does not dilute,”

nian marcomm industry all started

by the types of clients an agency communi-

added Tranca.

with big hopes and expectations,

cates for and their business peaks during the

But is this buzzing and working hard also

project proposals and new business. How-

year. We always believed a diverse portfolio

starting to reflect on finished campaigns or

ever, this year, they’re slowly beginning to

would ensure constant activity in client

is it just a desire to satisfy a client’s point of

fade away after the first or second trimester.

service, strategy and creative departments, as

view? Are campaigns seeing the light of the

Also, summer used to be a time when many

well as the solid development of the agency.”

day or are they still mostly proposals, ideas,

agencies closed their doors, sent people on

There is also enthusiasm from the clients’

meetings and more meetings with no pal-

vacation or simply told them to take it easier

side that is translating into more work and

pable end result? In the Chapter 4’s represen-

on the work front. However, so far at least,

attention for the agencies. Sorin Tranca,

tative point of view, the answer depends on

2016 is proving to be a very atypical year; it’s

managing partner at TBWA\ Friends, sees a

the market and on the type of business. Most

proving to be a year of non-stop projects. The

lot of enthusiasm and new energy, most of

small businesses try many options before

energy, desire and optimism of the first half of

its clients boasting encouraging figures and

working out which is the right communica-

the year didn’t fizzle out during the summer,

being more satisfied with market conditions,

tions tool for them. As it turns out, PR is

which used to be, more or less, an easier and

at the moment, he says. “Nobody wants to

usually not the perfect fit for their business

more relaxed period of time for the marcomm

work with gloomy, dark people who fear los-

objectives, so often times the agencies offer

industry. “We have actually never stopped

ing their job, especially when you’re trying

their general experience and a lot of consul-

receiving offer requests over the year. From

to sell them creative ideas. And I feel I don’t

tancy before closing any deal. “On the other

this point of view, it has been a very active

say this enough, so bear with me as I will say

hand, larger businesses, more attuned to us-

year, with potential clients constantly looking

it again and again and again: ‘creative’ ideas,

ing PR services, have become more efficiency-

for the best communication solutions for

that is ideas that can transform a business or

oriented and, therefore, also more demanding

their needs, at a moment when our industry

a brand, always have a risk attached. They

in terms of ROI and the measurable results

itself faces changes and transformations in

are not easy to buy into, because you kind

they expect. For us, this sometimes means

terms of the expectations clients have as well

of have to risk along with your partners, and

expanding our portfolio of services with

as the range of services we, as PR agencies,

sometimes it’s not easy,” commented Tranca.

activities that haven’t traditionally been

www.business-review.eu Business Review | November 2016

MARCOMM 43 experiments and progressive thinking, who trusted our advice and whose brands stand for something meaningful. Enthusiasm and passion always pay off. And they are essential to building trust between us and the clients because, in the end, we want to do great things for companies that want to build great brands,” said Mihai.

Still, Tranca is more reserved, stating that investment in advertising has not even come close to a decent ratio vs. growth. The TBWA\ Friends managing partner thinks the crisis has left some deep marks on local business

Raluca Ene, Chapter 4 Romania

Sorin Tranca, TBWA Friends

habits, because “idea” budgets (creative, strategic, executional) are still much smaller

specific to PR, but have become part of the

been finalized, we strongly feel it is only a

than before. “Sometimes, yes, I will admit,

content management strategy we are building

matter of time before these companies take

I am frustrated by this Becali-like approach

together with our clients,” added Ene.

the final leap to choose an agency,” concluded

to doing things: everything must be better,

At the same time, the dynamics of a PR agency’s work and proposals is very much

Ene. What about the budgets? Is agencies’ work

faster and cheaper simultaneously in Romania, while truly believing that we can win the

influenced by the industries it services. This

becoming more appreciated or not, in the

UEFA cup with a fraction of the investment

year, Ene has been approached and had talks

eyes of the client? Sorina Mihai is convinced

major clubs do. Consistent success requires a

with several businesses from growing, active

that good strategy and inspiring creativ-

different mentality.

industries, for which PR was, until now, not

ity will always be appreciated by the client.

a priority. However, as the economy is mov-

“Nevertheless, sometimes budget or time

are your partners now, you cannot under-

ing full-steam ahead and demand for these

constraints pressure us to adapt the ideas and

mine their expertise and dismiss their feed-

segments is growing, this situation is bound

rethink the creative solutions. But this comes

back all the time. Being a great club (brand)

to change. “Therefore, while there have been

with the territory. Over the past few years, we

means collaboration and a truly nurturing

new business opportunities that have not yet

have managed to attract more clients open to

climate,” concluded Tranca.

The public and the players and the coach

www.business-review.eu Business Review | November 2016

44 SMART CITIES

How Vienna is steaming ahead on development under smart cities concept Walking through Aspern, a district of Vienna, might seem like a regular neighborhood stroll, but some of the buildings here are fitted with sensors monitoring everything from room temperature to water consumption and air quality, as part of a massive EUR 5.5 billion development program.

Some 2 million pieces of data are generated every day in Aspern and the information will help the consortium to come up with innovative solutions for the production of energy in cities.

The Austrians started to build this city from scratch in 2008, on the grounds of a former airport, and it will cover 2.4 square kilometers in total.

At the moment there are around 6,000 people living here and over 2,000 jobs. The target of the project is to have 20,000 inhabitants and jobs. At the end of the 20 years of development, there will be 10,000 apartments in total.

The first people moved here in 2015, two

By Ovidiu Posirca

years after the metro line linking the district to the rest of Vienna was put into operation.

In the development stage, the construction firms have focused on sustainability, while keeping costs down. For instance, an artificial lake was constructed in one of the outskirts of the district, and the concrete dug up from there was used to build the apartments. This was a measure that saved both money and time, because the trucks didn’t have to bring the material from another part of the city.

The construction phase of the project runs through to 2028 and the whole development will cost EUR 5.5 billion.

Who is moving in and how is energy put to work?

The developers are saying that ultimately, they want Aspern to be an urban area where everybody finds a home and job, be it individuals or families, on higher or lower All photos: Siemens

incomes, as well as with different educational backgrounds. And the way in which the residential part of the project is handled reflects this principle.

The mixed-usage project under developInvestment: The development of Aspern district needs EUR 5.5 billion

W

ment in Aspern will accommodate large office buildings, aside from the apartments and

hen you see children playing in

developed in public-private partnership

retail areas. A new train station is planned

the park and adults going shop-

called Aspern Smart City Research. The

that will be sited on the rail links between

ping or running, you wouldn’t

initiative, which has a five-year budget of

Bratislava and Vienna.

The surface areas of the flats range from

imagine how much tech is present here with

EUR 38.5 million, is backed by technology

the ultimate goal of making urban areas

conglomerate Siemens, which has the biggest

25 to 160 sqm and there are subsidized rent

around the globe make better use of energy,

stake in this project of 44.1 percent, together

schemes available of up to EUR 10 per sqm.

which would also bring cleaner air and lower

with the companies providing energy to the

For those looking to buy an apartment, prices

costs for inhabitants.

Austrian capital, Vienna Business Agency and

range from EUR 2,500 to EUR 3,000 per sqm.

It’s all part of a complex research project

the property developer Wien 3420 Holding.

In terms of energy production, some of

www.business-review.eu Business Review | November 2016

SMART CITIES 45

used in the school building with kindergarten.

Romania planning to implement smart city principles in Alba Iulia Future of the city: 20,000 people and jobs will be found in Aspern

Similar to what’s happening in Aspern, authorities in Romania are trying to implement smart cities principles in an Alba Iulia pilot project with the help of private companies.

The town will be included in a research study carried out by Siemens in several cities across Europe. Researchers will look at ways to improve the traffic and energy consumption in the city. 5G technology is also set to be tested here.

Infrastructure: Authorities plan to roll out the solutions researched at Aspern across Vienna The mayor of Alba Iulia Mircea Hava

the buildings are fitted with solar panels and

vices provided by utility firms such as flexible

have heating pumps. However, Aspern is

energy tariffs that would also take into ac-

suggested that getting the label of smart city

linked to the central district heating system,

count prosumers – consumers that will also

will attract more tourists. Some 7,000 people

because the ultimate goal of the research

generate their own electricity and feed it into

visited Aspern last year, more than the cur-

project is to come up with solutions that can

the smart grids.

rent number of inhabitants.

The energy markets are also set to benefit

Although a lot is being said about smart

rent residential stock. In addition, the build-

from this research. For instance, the produc-

cities in Romania, the pace of implementa-

ings are fitted with batteries, for the storage

tion of energy will become more efficient

tion of such projects has been rather slow.

of energy.

based on weather conditions that are verified

For instance, Bucharest got a smart traffic

in real time.

system that broke down because a cable was

be applied in the rest of Vienna, to the cur-

Right now, the research is being car-

severed during construction works on a road.

How will the research help inhabitants and municipalities?

ried out based on data provided from three

This spring, a pilot project under the smart

The researchers are currently collecting data

buildings. Student lodgings are fitted with

cities concept was rolled out in a Bucharest

and running different scenarios in order to

solar panels, batteries and electrical heating

park.

develop new ideas under smart concepts,

cartridges. In addition, 213 apartments are

which include the user, the buildings and the

equipped with seven different heat pumps,

infrastructure that can accommodate,

markets.

hybrid panels for solar-thermal generation

for instance, the Internet of Things (IoT),

and PV, geothermal heat accumulators, hot

authorities should actually look at the PPP

working with a massive pool of data that

water accumulators, batteries and apartment

legislation, which investors say is not work-

should lay the groundwork for future ser-

automation systems. Similar systems are

ing properly.

At present, the research consortium is

But before putting in place the new

www.business-review.eu Business Review | November 2016

46 GOING OUT

Thirst for opportunities: alcohol brands drink in the culture Local BTL strategies seem to be coloring the cultural scene, offering promotions and surprises to those attending festivals and events across Romania. Over the summer, Business Review sat down with some of the most fashionable alcohol brands in Romania, Absolut Vodka, Campari, J&B and Staropramen, to find out how they link their products with the hottest events on the cultural calendar.

By Oana Vasiliu ers. During the festival, we invited guests to the Absolut Cocktail Bar, where they were able to customize their own bottles of vodka. At this event alone, more than 240,000 consumers interact-

By Oana Vasiliu

ed with the on-site brand in the Untold perimeter,” Radu Moldovan Petrut, marketing director of Pernod Ricard, told BR. Through each brand activation, consumers

Photo: Absolut Vodka

who come in contact with Absolut Vodka should have a memorable experience, starting from the product itself to the universe created around it. For example,

Carousel of good ideas for consumers

this year, the brand offered

Bean good: coffee tops the beverage charts

intake per day is 630 ml, excluding water and

subscriptions to Untold Festival and ac-

milk. Furthermore, 1 in 10 adults consume at

commodation in the special camping zone,

According to a GFK study released this June,

least one drink a day in bars, restaurants and

everything winnable through an online

one out of four Romanians consumes alcohol

ter-races, and the daily frequency increases

game, where every action of the player would

on a daily basis. Throughout the year, the

by approximately 20% in the summer.

turn into a real experience at the festival, said officials.

amount of alcohol drunk varies, peaking in the warm season, April to September. Ro-

Viva vodka!

manians’ favorites are beer and homemade

“Undoubtedly, a successful activation of the

The Italian job

wine, with consumption changing with the

Absolut Vodka brand for June 2015-June 2016

“Over June 2015-June 2016, the Aperol

season: in summer, beer is most popular,

was our participation in the first edition of

caravan campaign had its biggest success,

while wine is consumed especially in cold

Untold, both in terms of awareness and sales.

its purpose being to bring Aperol Spritz to

weather. Looking at the general share of con-

The PR and communication campaign last

mid-level consumers, and create a pretext for

sumption, it emerges that Romanians prefer

year secured a reach of over 80 percent of the

socializing. When you say Aperol Caravan,

hot beverages, mainly coffee and coffee-

target group. The activation started with a

thoughts immediately turn to the moving

based mixes – accounting for almost half

bus which travelled from Bucharest to Cluj-

Aperol bar, the sparkling symbol of celebra-

of the total number of drinks drunk. Over a

Napoca, the #AbsolutRoadToUntold. During

tions and atmosphere. Last year, the caravan

third of beverages imbibed are soft drinks,

activation, ‘absolute heroes’ were challenged

aimed to find four brand ambassadors and

while alcohol represents only 16 percent of

to demonstrate the skills needed to become

this year, we decided to focus on our special

the total consumption. The quantity of fluid

pure absolute fairytale character travel-

activations at fun festivals such as De La

www.business-review.eu Business Review | November 2016

48 GOING OUT

Hoya, JEMF, Airfield and Electric Castle,” said

acapella for the public inside the airplane.

Beer we go

Andreea Neagu, brand manager at Gruppo

(…) In terms of sales, this Blending Spirits

“One of the most successful activations that

Campari.

campaign had the greatest impact in the last

we have launched so far is the Tapwriter

three years,” Raluca Sava, brand manager at

writing machine, the first beer draft that can

Diageo, told Business Review.

be controlled by a typewriter. People were

Aperol officials say that as it is an aperitif and also a drink suitable for fun, the firm invests in Spritz moments to spread and create

A festival is an opportunity to reach the

challenged to activate the beer tap by typing

recognition for the perfect Aperol Spritz 321

consumer that every brand wants to exploit,

the continuation of an existing story into the

serving suggestion. “Our desire is to improve

but most importantly, the brand wants the

sheets of the typewriter. Then, when certain

the festival experience, which is why we

benefits from the image, attachment and

letters were typed, the tap activated and filled

invest in everything at the festival, from fur-

brand loyalty of consumers, so it can be

the beer glass,” said Teodora Agafitei, brand

niture to other items that

manager for Staropra-

visually show how faithful

men. The beer brand

the brand is. The budgets

has launched an online

we allocate to festivals do

cultural platform where

not offer a return on invest-

news and articles from the

ment, but any combination

Romanian cultural scene

of this type has long-term

can be found. “Beyond

benefits in terms of awareness, loyalty or

associated with a moment or an enjoyable

beautiful, clear and entertaining communica-

recruiting new consumers,” added Neagu.

experience. “Sometimes, scale campaigns

tion, a brand today has to come with facts

For example, at this year’s Electric Castle,

developed for festivals are influenced by

and evidence of love in order to consolidate

besides the moving Aperol

the existing relationship

Spritz bar and lounge, the

with consumers and to

company brought a hot air

attract new categories of

balloon and rides could

consumers. A brand needs

be won by buying Aperol

to go where consumers

Spritz. Therefore the festi-

are and where they would

val experience was connected directly with

previous sales, so the relationship between

like to be found in order to facilitate new

the drink.

revenues and investment in communica-

experiences and enrich and improve on those

tion is very tight. In other cases, for example

experiences consumers already live,” said

Whiskey in a jar

Agafitei. Staropramen’s

“2016 was a busy year for

roots are in the spirit of

J&B, and our communica-

Prague, a city with a strong

tion has evolved because

cultural heritage. Since it

we wanted to be relevant

entered urban Romania,

to the new generations of consumers. In

at Electric Castle, we wanted to provide an

the brand has had to adapt to local values.

November 2015 we launched the Blending

original experience for participants, our bet

It did this, identifying here huge cultural

Spirits campaign, inspired by the brand’s

on the festival. (…) At the perimeter of the

potential, which officials want to capitalize

DNA. Since then, ideas and

on in the long term. “With

energies resulting from

each of these events, our

‘Blending Spirits’ meet-

excitement grew with

ings can be found on our

the artists and cultural

dedicated platform, www.

managers with whom we

blendingspirits.ro. Most ap-

worked. So we naturally

preciated by our consumers

wanted more, to expand the list of partnerships

were blends between original music, between Adda and Macanache,

festival we had a dedicated space accommo-

and especially to begin to communicate in

Alex Velea and Robin and The Backstabbers

dation – J&B village, a private jet from Bucha-

a more authentic, effective and relevant

and Delia and Doc. Also part of the campaign

rest to Cluj-Napoca, the acapella concert and

way with our core target, which puts a high

was our presence at Electric Castle, where

a special festival kit bag with rubber boots, a

value on experiences with really valuable

consumers, competition winners at J&B Lem-

raincoat and a bottle of whiskey inside. We

substance. (…) Thus, the story of Oameni si

onade Twist, journalists, bloggers and vlog-

believe that through the activation at Electric

Gusturi (People & Tastes) was designed from

gers had an experience at 10,000 meters. The

Castle, we managed to offer a unique festival

the outset as one of identification and urban

10 km-high party in the party jet powered by

experience, form loyal customers and gener-

revival, addressing both culture creators and

J&B featured Delia and Adi Despot singing

ate real engagement”, added Sava.

consumers,” concluded Agafitei.

www.business-review.eu Business Review | November 2016

49

- ADVERTORIAL -

Holograma 3D eyes further growth on video services market beginning we focused on video services and

bringing our contribution to the success of

our main objective has been to always offer our

a wide range of events: product launches,

clients new solutions based on the latest equip-

conferences, congresses, fairs, exhibitions,

ment there is. We have always tried to innovate

festivals and concerts. Important names in

and this is why in 2008 we introduced in Romania

our portfolio include: Orange, UPC, Samsung,

a holographic projection system, a completely

Renault, Autoitalia, Bayer, 3M, Accenture,

new system on our market.

Coca Cola, The Mission, Summer Well, Forbes, Becks, Telekom, Rompetrol, OMV-Petrom,

How has your product and client portfolio

Servier, Sanofi, Zentiva, HaHaHa Production

evolved over the years?

and Nikon.

Our product portfolio has been in constant evo-

There is increasing demand for the latest generation video solutions, says Alexandru Roibu, managing director of Holograma 3D.

lution both in terms of numbers and especially

How do you see this market further evolving?

in terms of the quality we offer. We are active

Over the last period we have seen a lot of re-

in an industry where technology is changing at

quests for new solutions, either holographic

a fast pace and we want to keep up with that.

projection systems or interactive and 3D

We started with conventional displays (plasma

video mapping, which goes to show that our

screens, video projection systems, LED screens)

clients too are focusing on presenting them-

and we have grown to the point where we now

selves in new ways and thereby attracting

When did you enter the local market and

offer both conventional systems at full HD

as much as possible their clients’ attention

what are your main accomplishments so far?

resolutions as well as holographic systems which

to their products and services. We think this

We started operations in Romania at the

vary in terms of size and use.

trend will continue and our main challenge

beginning of 2007 by offering audio-video equipment rental services. From the very

Over the years we have worked for important companies with a global presence and others,

will be to be able to offer these innovative solutions within existing budgets.

www.business-review.eu Business Review | November 2016

50 PATRIMONY

The long journey of raising funds for art The woman, carved from limestone, sits with her folded arms tucked behind her knees and looks enigmatically ahead. She is regarded as one of Romania’s finest modernist artworks and has been the talk of the town since going on sale. BR outlines the most important milestones of this piece of Romanian patrimony.

By Oana Vasiliu

1907: The work dates from the same creative period as Brancusi’s celebrated sculptures The Kiss and The Prayer, during which the artist explored concepts such as universal Photo: Adi Bulboaca

value, expressed in starkly minimal forms.

For The Wisdom of the Earth, the sculptor used a block of stone from Paris’s catacombs for the body of the statue.

1911: The statue was purchased by engineer

Brancusi’s Wisdom of the Earth

and art lover Gheorghe Romascu from the artist himself.

1957: It was forcibly confiscated by the Art

paid by October 31, 2016.

government building. The banner features the image of the sculpture alongside the Roma-

Museum’s Communist leadership.

May 19, 2016: The government and Min-

nian flag and the message “Brancusi is yours,

1989: After the fall of dictator Nicolae

istry of Culture launched the national public

just as this country is also yours.”

Ceaușescu a lengthy trial started to return the

fundraising campaign “Brancusi is mine”

sculpture to its legal owners after 51 years.

(Brancusi e al meu) for the collective purchase

July 19: The Minister of Culture announced

of Brancusi’s Wisdom of the Earth.

that 7,920 people had donated to the sculp-

2008: The owners recovered the statue.

ture fund during the Electric Castle festival.

Funds: EUR 5 million.

September 2014: The owners announced

Since the beginning of the fundraising campaign, over EUR 305,000 had been raised.

they were putting the sculpture on the mar-

May 23: Romanian PM Dacian Ciolos joined

ket and Artmark auction house notified the

the government’s effort to buy the work, do-

Romanian state about the potential EUR 20

nating his April salary, almost RON 15,800.

Funds: EUR 306,773 July 22: Romania’s Ministry of Culture

million sale.

Funds: + EUR 3,500 March 2015: The Romanian government

launches text message donations for the Brancusi sculpture.

negotiated with the owners of the statue,

June 20: A banner promoting the public

agreeing on a price of EUR 11 million, to be

fundraising campaign was placed on the

August 18: Uber also took part in the

www.business-review.eu Business Review | November 2016

PATRIMONY 51

campaign, offering every Uber rider taking the

September 15: Romanians donated over

culture minister Corina Suteu announced

car-sharing service to the BNR Museum until

EUR 525,000 by transferring money into the

on Facebook. Another donation of over EUR

September 16 the opportunity to donate half

Ministry of Culture’s accounts, some EUR

11,000 came from the Bucharest National

of the fare to the Ministry of Culture for the

62,000 through eMag.ro, over EUR 158,000

Theater.

sculpture.

through the campaign’s website brancusiealmeu.ro, and over EUR 85,000 via text

August 30: Romanian DIY retailer Dedeman

September 30: The official campaign for

donated EUR 127,000 for the sculpture, the most significant financial contribution made

Funds: + EUR 121,327

messages.

Funds: + EUR 525,617

the public fundraising campaign ended.

September 26: The Russian Embassy in

Total Funds: EUR 1,273,668

by a private company in the public fundraising campaign so far.

Bucharest donated EUR 100 to the campaign.

Funds: + EUR 127,000

“The embassy joins the action and makes a

October 12: The government decided to

modest financial contribution to the fund

meet the remaining costs to purchase the fa-

September 2: French retailer Carrefour

created for this purpose,” wrote the Rus-

mous sculpture. Almost EUR 10 million from

joined the campaign, donating 1 percent of

sian Embassy in Bucharest on its Facebook

the state budget will be added to the EUR 1.3

the sales of private label products in its local

page, leading to many negative comments in

million raised from public donations to cover

hypermarkets and supermarkets.

response. A protest was initiated calling on

the cost.

Romanians to gather in front of the Russian

September 14: Romanian IT group Bitde-

Embassy in Bucharest and return the dona-

October 12: The government also decided

fender donated EUR 100,000.

tion in 1 cent coins.

to set up a special fund, called the Brancusi

Funds: + EUR 100,000

September 27: Famous local artist Adrian

art in the future. It will be managed by the Na-

Ghenie sold one of his paintings for EUR

tional Cultural Administration Fund (AFCN),

September 15: The national TV broad-

70,000 through the Thaddaeus Ropac Gallery,

which is under the Ministry of Culture, and

casting service cancelled a telethon for the

and donated the money to the national fund-

the money will come from private donations,

acquisition of the sculpture, which had been

raising campaign. The Romanian Academy

sponsorship, and from the state budget.

previously announced for September 18.

also contributed EUR 40,000 to the campaign,

Fund, which will be used to buy other works of

www.business-review.eu Business Review | November 2016

52 UPCOMING

HBO Romania’s The Silent Valley to shake up local and regional audiences HBO Europe is putting a focus on developing original drama as it builds on the success of a raft of adaptations across its core Central and Eastern European territories. For the past few years, HBO Europe been working on producing local movies with Romanian actors, and one of the first is expected to bring some challenging themes to local screens.

By Oana Vasiliu

T

he subscriber-based satellite service

The new HBO Europe production features

appearing in a movie and then being part of

launched its latest fresh drama, The

actors Theodor Soptelea and Vlad Balan,

such a production is ideal for any actor, but

Silent Valley / Valea Muta, on October

making their screen debuts, Rodica Lazar (Or-

unfortunately, the situation in Romania is a

izont, Carmen, Live) and Emilian Oprea (De ce

bit difficult, while theaters can’t offer jobs to

23, on HBO and HBO GO. According to the broadcaster, Valea Muta

eu?, Autoportretul unei fete cuminţi) in major

the new wave of actors, salaries are pretty low

explores the mutual attraction between two

roles. The cast of the miniseries also includes:

and not everyone has the chance to follow

teenage boys, whose clandestine rendezvous

Corneliu Ulici, Alexandra Fasola, Ovidiu

these steps. HBO offers visibility and a great

becomes fraught with emotion when they

Niculescu, Mihai Calin, Alina Berzunţeanu,

learning process of what true professionalism

witness multiple killings in a remote moun-

Mihaela Trofimov, Remus Margineanu and

really means because the quality of the pro-

tain area. Based on the Norwegian show

Ioan Tiberiu Dobrica. The production is

duction is pretty high. Every Romanian actor

Eyewitness, the series takes a realistic and

directed by Marian Crisan (Orizont, Rocker,

should benefit from this kind of professional

unprejudiced approach to the relationship

Morgen), and the director of photography is

treatment.”

between two teenagers confronted by events

Tudor Mircea (Comoara, Cand se lasa seara

that test their feelings and identities. Ele-

peste Bucuresti sau metabolism, Rocker).

expected to prove controversial for Roma-

Asked by BR if a leading role in an HBO

nian viewers, Antony Root, HBO Europe’s

ments of thriller and drama intertwine while

Directed by Marian Crisan, the drama is

the investigation of the murder case (led by

mini-series could be considered the peak of

executive VP of original programming and

Elena Zamfir, an ambitious prosecutor, who

a Romanian actor’s career, Lazar replied, “I

production, told The Hollywood Reporter.

is also Filip’s adoptive mother) advances,

don’t know and I don’t think anyone has an

“Something that may not have been seen as

and the relationships between the characters

answer to that. Every single performance has

particularly controversial for Norwegian audi-

reach sensitive thresholds that transform into

its characteristics and every time is different

ences will play very differently in Romania,”

hard-to-manage conflicts.

so there are no rules, in Romania, or world-

he said to the publication.

Valea Muta guides its audience among

wide. I truly believe that you need the luck of

Valea Muta will be available to HBO

controversial topics: prejudice, the under-

the draw. Everything should be considered

Europe subscribers in 19 countries, including

belly of the contemporary families, the

a step in your career, an experience that will

its core territories of Hungary, the Czech Re-

chasm created between the generations,

improve your skills and capabilities of becom-

public, Slovakia, Poland, Romania, Bulgaria,

the dysfunctional relations between state

ing a better you on stage. This job we had can

Moldova, Slovenia, Croatia, Serbia, Kosovo,

institutions, the discrepancies between social

be improved only by doing it, better or worse,

Montenegro, Macedonia and Bosnia and Her-

stratification, and an organized crime net-

but doing it.”

zegovina. It will also be available to viewers

work, which perpetuates suffering, injustice

Oprea, the other leading actor, added

of HBO Nordic in Sweden, Norway, Finland

and poverty in a world full of contrasts, add

“This journey of becoming an actor, from

and Denmark and in the Netherlands via HBO

HBO officials.

university, then acting in a theater, then

Nederland.

www.business-review.eu Business Review | November 2016

54 EXPAT EYE

Bringing up baby in Bucharest In our regular look at life here from an outsider’s perspective, BR’s resident expat presents seven reasons to raise a child in Romania, and one reason not to.

afternoon, perhaps in April or October. You’re strolling round the local park with your little one, who’s sensibly dressed in a coat, and en-

By Debbie Stowe

Pros

Con Hat mania. Picture the scene. It’s a mild

joying the spring/autumn breeze. You won’t table. And when your offspring responds to

get far before a bystander warns you darkly,

You can take your child out late.

being wheeled round a gallery by repeatedly

“That child should have a hat on.” “But it’s 16

In the UK, babies and toddlers are often being

screaming (because what a great echo it has!),

degrees!” you reply, astonished. Doesn’t mat-

prepared for bed from about 5pm. If you go

other art lovers smile indulgently. What a

ter. The Baby Hat Police will get you. It might

out with your infant in the evening, especial-

relief!

be warm, you might be about to get into your car, you might even be indoors. Your kiddo’s

ly to a restaurant or other adult-orientated venue, you’ll be about as popular as Donald

Grandparents!

hatlessness will be remarked upon. It’s not

Trump in a women’s changing room. Not so

Many British baby boomers, having lucked

that Brits won’t judge your parenting – they

in Bucharest, where the Latin family vibe

out on the property market, are now busy

will (although they’re not so stringent about

(think of those convivially nocturnal family

chasing autumn years’ fulfillment – tak-

hats on mild days). But they’ll never tell you

gatherings in Spain) means your little ones

ing cruises, volunteering, doing courses…

to your face.

can roam freely after the sun goes down.

In short, not making themselves available

(This was annoying before I became a parent,

for round-the-clock babysitting. So selfish!

but it’s great now.)

Romanian seniors are much more likely to be seen pushing their grandchildren around the

Parks are safe. Few would dare set foot

park than off on a coach tour of Croatia or at

in a British park after sunset – when they

art class.

become the preserve of threatening teens drinking cider. Maybe it’s because most Brits

Childcare is affordable.

live in houses and so have their own garden,

Of course, not every parent is lucky enough

and therefore have less need for public green

to have nearby grandparents to rely on, and

space, or maybe it’s the presence of guards,

if you don’t, you might need paid help. The

but Bucharest’s parks have a welcoming fam-

average cost of sending an under-two to

ily atmosphere until late at night.

a nursery full time in Britain is EUR 240 a week – a week! So nearly EUR 1,000 of your

The smoking ban. Before March 16th,

paycheck is eaten up by having just one child

doing things in Romania while pregnant or

looked after. Here, not only are nursery fees

with children was a real problem, owing to

more reasonable (perhaps excluding those at

the smokiness of almost everywhere (except

the fanciest international schools), but you

malls, some posh cafes and museums and

can probably also stretch to a wonderful bona

galleries). Since then, you can safely drag

(nanny) to help out in your own home.

your brood anywhere you fancy going. Why not get them started young La 100 de Beri?

Brexit. Who wants to raise their kids in a

(Joke.)

close-minded, xenophobic country where talking in a foreign language can prompt a

Romanians like children.

passing knuckle-dragger to shout, “Speak

Okay, some Brits like children as well. But,

English!”? Sadly, such thugs feel empowered

unless you pick a really family-friendly café

and legitimized since the UK’s senseless act

or restaurant, if your little darlings start act-

of self-sabotage (the EU referendum vote).

ing up a bit, you’ll get The Look from your

Much better for your young ones to grow up

nonplussed fellow customers. In Bucharest,

in a country where (most) people believe that

most people actually laugh and say hello,

things are getting better, which is forming

rather than tut, and genuinely don’t seem

closer ties with other nations, not retreating

to mind if your fleeing toddler eludes your

to isolationism and bringing economic disas-

grasp and pops his head out from under their

ter upon itself.

www.business-review.eu Business Review | November 2016

56 CITY

The Girl on the Train FILM REVIEW

By Debbie Stowe

DIRECTOR: Tate Taylor STARRING: Emily Blunt, Rebecca Ferguson, Haley Bennett, Justin Theroux, Luke Evans, Allison Janney, Édgar Ramírez, Lisa Kudrow ON AT: Grand Cinema & More, Cine Globe Titan, Hollywood Multiplex, Cinema City Cotroceni, Cinema City Cotroceni VIP, Cinema City Sun Plaza, Cinema City Mega Mall, Cinema City ParkLake, Cinema City VIP ParkLake

movie enters classic whodunit territory.

Hawkins’s book relies on interior monologue to explore the complicated psychology of its trio of protagonists, and by necessity, the film is poorer in that regard. We don’t come to understand the characters to the same depth, and, while troubled Rachel gets enough screen time to be fully fleshed out, Anna and Megan remain opaque.

However, director Tate Taylor manages to condense a rich storyline for film reasonably

Rachel (Emily Blunt) is a sad, alcoholic divor-

well, with, for example, the true nature of

cee, whose recollections of events cannot be

Rachel’s relationship with her ex, Tom, dealt

relied upon – or can they? Megan (Haley Ben-

with through a nice cameo by Friends’ Lisa

nett) has a loving relationship with her de-

Kudrow. Rachel’s hazy, shifting memories are

voted husband – or does she? Anna (Rebecca

also conveyed fairly convincingly through

Ferguson) is really lucky to have a beautiful

the visual medium.

family – or is she?

Appearance and reality are hard to disen-

Blunt gets the meatiest role, and it’s possibly her best performance yet, capturing

tangle in this somber psychological thriller,

the complexities of Rachel: the sadness, the

based on the 2015 smash hit Paula Hawkins

rage, the vulnerability, the delusions, the

novel. The book switches between the view-

bitterness and the courage. The character

points of the three main characters, giving

has, however, been “Hollywoodized” from

diary-style insights into their psyches and

the frumpy fatty of the novel, whom nobody

home lives, which jump forward and back in

would be desperate enough to go out with.

time – a framework the movie has retained in

Even drunk and with no makeup, she still

a largely faithful adaptation (aside from the

looks like Emily Blunt.

action having been moved from London and its surrounds to New York).

The women are connected by their neigh-

Taylor’s supporting cast do what they can with their roles, despite their more limited screen time preventing them from delving

borhood: Rachel’s ex-husband Tom (Justin

too deeply. Unusually for Hollywood, the

Theroux) shares their former marital home

men are of less importance than the women

on Beckett Road, in a sleepy Westchester sub-

(although Theroux, Mr. Jennifer Aniston, is

urb, with his new wife Anna and their baby. A

probably used to that).

few doors down live the apparently loved-up Megan and Scott (Luke Evans).

Rachel’s daily commute to the city takes

At times, the narrative does move slowly, although the 112 minute running time is justified in allowing the director to squeeze in

her past both houses, and to avoid torment-

as much from the book as possible. The plot

ing herself by peering through the windows

is juicy with various twists, as characters’

at her ex and his picturesque new family

back stories are gradually and tantalizingly

when the train stops at a nearby signal, she

revealed. Events do veer into soap opera ter-

fixates on Megan, and daydreams about how

ritory, but it’s a very high-end and satisfying

wonderful her life must be.

soap opera.

But, despite the picture-perfect ap-

Having read the novel first, this reviewer

pearances, all is not rosy in the gardens on

can’t really speak to the success of the big

Beckett Road, and when one of the women

reveal. But, by the time the train is pulling

becomes imperiled, hidden connections

into its final destination, the ride has been

between the residents are revealed, as the

gripping enough.

www.business-review.eu Business Review | November 2016

58 CITY

Cultural calendar Pierre Alechinsky and the Writers Until January 2017, National Museum of Art of Romania

By Oana Vasiliu

with his traditional Arabic instrument the oud, presenting his latest album, which will be released in March. He will be joined on stage by American drummer Mark Guiliana. Youssef built his own oud in the 70s. The instrument, shaped like a pear, is believed to have been the ancestor of the acoustic guitar. Tickets

of Thrones, and Craig Parker,

for the Bucharest concert cost

famous for his role in Lord of

RON 120, 150 and 180, and can be

the Rings. Tickets are available

bought online from Eventim.ro.

through the Eventim network.

Bucharest Art Week November 4-12, several locations

Jean-Michel Jarre concert November 11, Cluj-Napoca

been seen by millions of people around the world, the new live show promises again to be an immersive musical journey, with 2016 will see the Godfather of

Jarre set to showcase new music

The first major presentation of

The theme of the event – now on

Electronic Music, Jean-Michel

from his two-part LP, Electron-

Pierre Alechinsky’s graphic oeu-

its third run – is The Lesson of

Jarre, perform a spectacular live

ica, alongside classic material

vre at the museum. Sixty-six

Nature. “The intentions of this

show in Romania for the first

from previous albums such as

works selected from the collec-

curatorial proposal, which will

time. Famed for staggering visu-

Oxygene and Equinoxe. Ticket

tion of the Centre de la Gravure

define Bucharest Art Week 2016,

als and the use of cutting-edge

prices are between RON 110 and

et de l’Image Imprimée in La

as it resumes a kaleidoscope

digital technology, which has

495.

Louvière (Belgium) explore the

format – solo and collective exhi-

close relationship established

bitions, discussions and lectures,

between text and image as

workshops and artists’ residenc-

illustrated by the collaboration

es – are to explore, in a dialogue

between the artist and famous

with artists, theorists and the

writers such as Michel Bu-

audience, the way in which

tor, Eugène Ionesco, François

a series of extremely diverse

Nourissier and Emil Cioran.

artistic practices, together with observations and philosophical

Dhafer Youssef concert October 27, Radio Hall

inquiries, start from and/or stop at nature, how they strip it, question it, and imagine it in keeping with new scenarios,” says guestcurator Oana Tanase.

East European Comic Con November 11-13, Romexpo East European Comic Con, the biggest comic convention in Romania, will present this autumn Tom Wlaschiha, best known for his role as Jaqen H’ghar in the Tunisian musician Dhafer

second, fifth, and sixth sea-

Youssef returns to Romania

sons of smash TV series Game