Interview: Bruno Roche, general director of Apa Nova Bucuresti and presi-
EU FARMING POLICY REFORM
dent of the French Romanian Chamber of Commerce (CCIFER), gives his dual perspective on the local business environment and shares his advice for prospective foreign investors »page 12
ROMANIA’S PREMIERE BUSINESS WEEKLY
October 24 - 30, 2011 / VOLUME 16, NUMBER 37
ROMANIAN FARMERS COULD GET HIGHER DIRECT PAYMENTS UNDER THE NEW COMMON AGRICULTURAL POLICY, REACHING EUR 200/HA IN 2018 »PAGE 7
SMALL CHANGE Salaries in the banking industry have posted a smaller increase than other sectors this year. Business Review finds out more »page 10-11
Dreamstime
FILM Tissues at the ready! Our movie critic found a huge helping of sentiment along with some fine performances in tear-jerking comedy The Help » page 13
NEWS Farm equipment producer Ruris is aiming to up its sales as the market shows green shoots despite fragmentation and competition from low-cost rivals » page 7
NEWS The Foreign Investors Council launches its latest White Book, calling for a VAT cut and greater focus on transport, energy and agriculture » page 6
www.business-review.ro Business Review | October 24 - 30, 2011
NEWS 3
NEWS in brief
3Q Bogdan Apahidean
COMPANIES Infopress Group buys Hungarian printing house Révai
Courtesy of ASLO
president of ASLO (the Association of Operational Leasing Companies)
What is the attitude of corporate clients towards operational leasing? Companies are starting to switch from direct purchases of vehicles or financial leasing due to cost efficiency. So, the new trend will be operational leasing, even if it happens at a slower pace than we had expected, given the experience of multinationals in more developed economies. Even clients with large budgets for vehicle purchases have realized that investing money in vehicles that can rapidly lose value is not feasible nowadays. Opting for operational leasing should lead to a 10 to 30 percent decrease in fleet management costs, depending on how companies used to contain costs before adopting this lease plan. Has ASLO lobbied the national authorities with any legal proposals? We have formulated legal proposals, along with the ALB (Association of Financial Companies in Romania) on the bill changing the ordinance 195/2002, which governs traffic on public roads. This bill is currently under public debate and we have two main proposals in the interests of operational leasing companies and clients. The first is the exemption of leasing companies from the mandatory replacemenɴ of car talons once the companies change address. The second initiative proposes that leasing companies be able to de-register vehicles on their own, excluding the possibility of fines that could otherwise be levied against these companies if the cars are not deregistered by the buyer, but sold to third parties instead. ovidiu.posirca@business-review.ro
Romanian Post trims EUR 441 million off costs The Romanian Post has announced it is back in the growth zone, having posted a profit of approximately RON 600,000 (nearly EUR 138,000) in August, and the upward trend is expected to continue. The positive results come as a result of the implementation of efficiency and cost optimization measures, according to postal officials. The company reduced expenses by EUR 441 million by cancelling unprofitable contracts and reorganizing its branches, taking its network to 5,856 units at the beginning of the month. The state is seeking an investor to become part of the shareholding structure of the Romanian Post. The Post is currently controlled by the Ministry of Communications, which owns 75 percent of the shares, and the Property Fund, with the other 25 percent.
HOSPITALITY Ibis Romania sees occupancy rate hike 18 percent in Q3 The hotel network Ibis Romania has reported an 18 percent increase in its room occupancy rate for the third quarter of 2011, compared to the same period of 2010. According to the company, it is the third consecutive trimester of growth that the hotel chain has posted in Romania. The Ibis network operates four threestar hotels in Romania: two in Bucharest, and one each in Constanta and Sibiu. The highest occupancy increase was registered in the Sibiu outlet, up 30 percent compared to last year. At the end of September 2011, Accor announced a new strategy for its economy properties, where Ibis becomes an umbrella for three existing hotel brands: ibis (current hotels); All Seasons, which will turn into ibis styles; and Etap Hotels, which will be rebranded as ibis budget.
TELECOM Orange and Cosmote to introduce iPhone 4S by yearend Telecom operators Orange and Cosmote are trying to bring the new iPhone 4S to Romania before the end of the year, company officials have announced. JeanFrancois Fallacher, CEO of Orange Romania, said intense ongoing discussions
Courtesy of Terra Park
How will the operational leasing market do in 2012? We estimate growth of 15 to 20 percent, a continuation of the trend of recent years. If the net turnover at industry level for this year surpasses EUR 250 million, it will probably exceed EUR 300 million next year. Over 70 percent of the market will be shared by complete operational leasing services (financing and fleet management), followed by approximately 20 percent for fleet management, while financing services will go below the 10 percent threshold next year. Around 12,000 new vehicles will be delivered through this leasing system in 2012, from the 9,400 units set to be delivered in 2011.
Infopress Group Romania, owned by private equity firm GED Capital, has bought 100 percent of Hungarian printing house Révai. The joint group’s consolidated turnover will reach EUR 80 million and it will have around 500 employees, making it the largest printing company in Central and Eastern Europe. With this acquisition, GED has invested more than EUR 15 million in both firms.
IMAGE of the week That’s entertainment: Terra Park opens in Bucharest Terra Park, an entertainment park with an initial investment of EUR 25 million, opened last week in Bucharest on Timisoara Boulevard. The facility, which covers 30,000 sqm, is owned by Rami Dacia, a Romanian company manufacturing synthetic diamonds. were being held with Apple, which decides when the iPhone 4S will be launched in each country. Meanwhile, Panos Makris, commercial manager of Cosmote Romania, has also announced an end-of-year date for the launch of the iPhone S.
Vola.ro tops Deloitte Technology Fast 50 Romanian airline ticket online retailer Vola.ro ranked first in Deloitte’s 2011 Central Europe Technology Fast 50 with a revenue growth rate of 6,219 percent over the past five years, according to the survey. This breaks Poland’s seven-year monopoly of the top slot. The list of Romanian finalists this year includes Vola.ro Student Adventure, TeamNet International, Crys Computers, CoSoSys, Fortech and AROBS Transilvania Software.
PROPERTY Carrefour opens hypermarket in Colosseum retail park French retailer Carrefour has opened its 24th hypermarket in Romania in the Colosseum retail park in northern Bucharest. Carrefour Colosseum, also the company’s eighth hypermarket in the capital, has a sales area of 8,400 sqm. This year the retailer will establish two more hypermarkets in Botosani and Deva and eight more supermarkets. It presently operates 39 supermarkets, 24 hypermarkets and a proximity store which was opened last week in partnership with local meat producer Angst.
Tibbett Logistics to open second terminal in Bucharest Contract logistics company Tibbett Logistics, part of the UK-based Keswick Enterprises group, has announced plans to open a second intermodal (road-rail) terminal in the west of Bucharest. The new site is based in Europolis Park Bucharest, part of CA Immo Group's property portfolio in Romania, and will handle Tibbett Logistics' own block trains between the city and the Port of Constanta, and trains to and from Western European countries.
WEEK in numbers
3.5 percent is Romania’s inflation rate in September, according to Eurostat
45 million euros is the value of the census started in Romania last week, set to be the most complex since 1989
www.business-review.ro Business Review |October 24 - 30, 2011
4 NEWS EQUIPMENT
Ruris aims for 65% sales boost on farm equipment market
Courtesy of Ruris
Catalin Stroe, founder of Ruris
L
ocal motorized farm equipment manufacturer Ruris hopes to register a sales increase of about 65 percent this year, taking the total to EUR 5 million. The company estimates that the Romanian market for such equipment has grown by about ten percent this year to EUR 60 million, despite the fact that the overall market is fragmented and the boost was mostly fueled by sales of low-cost and noname equipment. Ruris was set up in 1993 in Craiova, southern Romania, by Catalin Stroe, a Ro-
manian engineer who also fully owns the business. The company’s product range includes chainsaws, bush cutters, lawn mowers and tillers. In the future the firm intends to expand its product portfolio to include larger farming equipment and has announced that it has plans to produce a medium-sized hybrid tractor. The products are assembled in Craiova with parts supplied both locally and from abroad – the US, Japan, China, Germany, Italy and Turkey. This year Ruris will invest EUR 500,000 in matrixes for series production, and an additional EUR 2 million will be invested by 2012 in expanding the production capacity. Distribution is carried out through DIY chains – bauMax, Dedeman and Hornbach – as well as specialized shops and the company’s own 14 stores. Ruris hopes to decrease the share of sales made through the DIY chains to 30 percent from 52 percent presently. Another developing direction is to further invest in innovation. The manufacturer has registered several products and technologies with the State Office for Inventions and Trademarks (OSIM) and says that the fact that its offer is adapted to the needs of Romanian consumers has helped it to grow over the years. This has also allowed Ruris to compete with international manufacturers like Husqvarna and Stihl, who dominate the local market. ∫ Simona Bazavan
INVESTMENT
FIC calls for VAT cut, anti-corruption efforts
T
he Foreign Investors Council (FIC), a business lobby group, launched last week the 2011 White Book, which assesses Romania's current status in the main sectors of the economy and puts forward solutions to improve the business environment as a whole. More than 120 people from the private sector contributed to the document. The White Book praises Romania's efforts to pursue macroeconomic stability, which secured GDP growth of 1.5 percent this year. However, the economic outlook in 2012 is dependent on the solving of the Eurozone debt crisis. FIC representatives recommend that VAT should return to 19 percent, from the current 24 percent, as this would boost business and contribute to the economic recovery. The proposals also cover the legal system, where Romania needs to act on the recommendations of the European Commission in the Report of Justice and focus on anti-corruption. The council also advised that the staffing levels in busy Courts be improved and that judges be trained to deal with insolvency cases. According to the
FIC, over 50,000 companies are going through insolvency proceedings but only 50 have had their restructuring plans approved. The council has also made liberalization proposals in the energy sector, where the price of natural gas from local sources is not aligned with international standards. The same goes for the electricity market, where cross-subsidies exist between captive household and captive business customers. Romania’s labor productivity in the agricultural sector is seven times lower than the EU average, although the country has 9.4 million hectares of arable land. However, the FIC states that 65 percent of this land belongs to farms with a surface area smaller than 2 ha. The potential in agriculture could be exploited if the banking sector cofinanced structural projects and authorities implemented state aid schemes. The FIC also urges the government to focus on ten major investment projects in areas such as transport, energy and agricultural infrastructure, worth an accumulated 23.7 percent of GDP. ∫ Ovidiu Posirca
In the October 17-23 issue of Business Review, the “Efficient energy powers healthy returns for investors” interview included an incorrect spelling of the name of Schneider Electric Romania’s president. The correct spelling is Saulo Spaolanse.
www.business-review.ro Business Review | October 24 - 30, 2011
6 NEWS TECH
Local firms have ‘missed out on innovation’, says Bitdefender CEO
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omania has missed out on innovation since it was outsourcing rather than intellectual property that developed in the country, said Bitdefender founder Florin Talpes. Global companies, he said, became interested in opening development centers and having R&D teams here, but this has harmed the intellectual property scene in Romania, as local firms have failed to make their own products and market them under their own brand, taking them to a global level. “Ten years ago, we as an industry were looking to Romania to become the India of Europe. Unfortunately, this has happened. I say unfortunately, because a country like Romania has a limited pool of software specialists and can never compare to India which ‘releases’ somewhere between 100,000-200,000 new IT specialists every year,” said Talpes, CEO and founder of Bitdefender, at the ZF Digital event. Romania is a country with a tradition in the IT industry. “In Romania, we had the first IT sector strategy at the end of the 1960s. The basis of informatics was set then. The Pipera platform was a kind of Silicon Valley,” he said. The software industry in Romania is one of the fastest-growing branches of the economy, holding many career opportunities for IT specialists. At the moment, around 100,000 people are working in software and services in Romania (development and outsourcing included). Romanian IT faculties annually produce around 10,000 graduates, but not all those who work in IT studied the subject at university. “There are between 5,000 and 8,000 new employees a year, which means that over the next five years, optimistically speaking, there will be between 40,000 and 50,000 new workers in this industry,” added Talpes. The CEO noted that the market is currently ready to soak up any new graduates. “The market can absorb the entire labor force at this time, so I think the ‘factory’ is undersized. In the future, software will be everywhere, every technology will be using it,” said Talpes. Nevertheless, local companies should change their mentality and always ask the
Magnificent Seven: Romanian firms that have expanded abroad Softwin, started in 1990 as the first software company with entirely Romanian capital, has branches in Bucharest, Great Britain, Germany, Spain and the USA. Bitdefender, a security solutions company with an office in Silicon Valley since 2007, split from the Softwin Group that same year. Netopia System, founded by Antonio Eram, has also opened an office in Silicon Valley. The company has a self-service SMS marketing division and a mobile payment division. ePayment, formerly Gecad ePayment, is now part of online payment integrator PayU group. It plans to expand to more than ten European countries. Avangate, a player on the software electronic distribution market, split from Gecad ePayment. It has offices in Amsterdam, Mountain View (USA), Taipei (Taiwan) and Bucharest. Siveco, active in e-learning, eHealth, eCustoms, eBanking, eTraining, eAgriculture, eAdministration, ERP, business intelligence, document management and similar areas, was founded in 1992. It has now expanded to 17 countries. TotalSoft, a Romanian software development company, has opened offices in Bulgaria, Greece, Serbia and Qatar. question: “Can we take this product abroad?” suggested the Bitdefender founder. “Unfortunately, it is the local market that generally creates the offer, and here the required level of knowledge marketing is not very high. The difference compared to other markets is just huge. On the sales and marketing side, Romania is far behind other markets in shaping knowledge,” said Talpes. ∫ Otilia Haraga
FMCG
Lactalis hopes to see LaDorna grow by 10 percent this year
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hree years after taking over dairy producer LaDorna from Romanian businessman Jean Valvis for an estimated EUR 100 million, Lactalis Romania has announced that the business has prospered, against a declining market. “Perhaps shareholders would have preferred double or triple growth, but the business has had a positive evolution on what is a shrinking market,” said Dorel Radu, managing director of Lactalis Romania since 2010. Last year the company registered a EUR 40 million turnover and hopes to see an increase of about 10 percent in 2011. The main development directions will continue to be UHT milk and white cheese,
which together account for more than 80 percent of the company’s total sales. Another objective is to increase the volumes of the LaDorna organic dairy products. The company is confident that in the next three to five years it will represent up to 15 percent of the entire dairy market. Lactalis exports about 2 percent of its local production to countries like the Czech Republic, Spain, Greece and Poland, and plans to increase this share over the coming years. “We don’t intend to leave Romania. We want to make this very clear. We are preparing some important investment projects to increase the production capacity,” said Radu. ∫ Simona Bazavan
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FOCUS 7
If the CAP fits: Romanian farmers await EU reforms Greater financial support is just one of the benefits that Romanian farmers stand to reap from the Common Agricultural Policy (CAP) for 2014-2020.
Photo: Laurentiu Obae
Dacian Ciolos, EU Commissioner for Agriculture and Rural Development
∫ SIMONA BAZAVAN While keeping farm spending roughly at its current level of EUR 55 billion per year until 2020, or about 40 percent of the total EU budget, the legislative proposals made by the European Commission to overhaul the existing CAP after 2014 bring profound changes, including to the way funds will be
distributed between member states. Romania, along with other new joiners, will gain additional funding in the fiscal period 2014-2020. The main changes to the CAP include making support more transparent, fairer, simpler and more focused, while at the same time backing environmental protection and linking agricultural production to research and innovation. After the draft reform of the CAP for 2014-2020 was presented in Brussels, Romania was the first country visited by the agriculture commissioner for the same purpose. “There are elements that better reflect the country’s specifics, compared to the present CAP, and others that Romania will probably want to amend,” said Dacian Ciolos, the EU Commissioner for Agriculture, at the end of his visit to Romania.
Romanian farmers reap higher direct payments One of the most important changes proposed for the new CAP is a new basic payment scheme which, if implemented, will reduce discrepancies between the levels of payment stipulated by the current legislation – between farmers, regions and mem-
ber states. About seven EU countries will enjoy increased direct payments, including Romania. Ciolos had previously announced in Brussels that farmers in all countries should receive at least 90 percent of the average level of direct payments – currently about EUR 270 per hectare – but added that this target could be only partially implemented by 2020, according to Reuters. Romanian farmers could receive EUR 200 per hectare in direct payments from the EU from 2018, said Ciolos. The present level of the subsidy is about EUR 100 per hectare and it will reach approximately EUR 135 in 2013. Overall, direct payments for local farmers will grow by about EUR 3 billion by 2020, but they will receive EUR 200 per hectare – which is the maximum level for 2014-2020 – from 2018. There are currently EU countries that receive lower per hectare payments than Romania, naming the Baltic States. Higher levels are reported in countries like Italy and Greece where farmers receive about EUR 400 per hectare on average. His proposal to balance direct payments between member states also means that some states will receive less than they do now. Ciolos stressed that this redistribution process also has a political dimension, especially as the decision on the new CAP will be taken simultaneously with the decision regarding the EU’s budget for 20142020. “We make this proposal without knowing what the exact budget for CAP will be,” said Ciolos, adding that the member states with the highest per hectare payments are also net contributors to the EU budget, paying more in than they receive back. The commissioner commented that a very
rapid redistribution process could persuade some member countries to vote against the global budget, which would affect not only the CAP but all budgetary allocations.
Planting the seeds for greener future growth The draft reform also proposes simplified support schemes for small farms that have decided by 2014 to take part in the program, by offering an annual fixed payment of between EUR 500 and EUR 1,000. Farm consolidation and increasing the number of medium-sized farms is encouraged through a financial scheme targeting smaller farmers who decide to sell their land. Young farmers will benefit from 25 percent higher direct payments per hectare in the first five years after setting up a farm from 2014, in addition to existing installation aid. Targeting subsidies towards environmentally friendly practices such as crop diversification and rotation has already caused discontent among some farmers in Western member states, but these proposals should not be a problem for Romanian farmers who are more accustomed to such practices, argued Ciolos. Overall, the draft reform stipulates that 30 percent of direct subsidies will be conditioned on meeting these environmental criteria. But in order for Romania to fully take advantage of the future CAP, adjustments must be made by 2014, said Ciolos, giving the example of the legal framework for land consolidation and farmers’ organizations and the restructuring of the agricultural research sector. ∫ Read an extended version of this article at www.businessreview.ro/investments.
8 FOCUS
www.business-review.ro Business Review | October 24 - 30, 2011
Constanta port sails on despite infrastructure issues When it comes to logistics, Constanta has the most favorable geographical position in Eastern Europe. Its location, next to the Black Sea, near the Danube Channel and with connections to two Pan-European transport corridors, should have made it the second biggest maritime hub and logistics development in the European Union. But while the volume of cargo is growing annually, developers’ reservations have left ambitions for the port all at sea. ∫ ANDREEA CEASAR According to data from Constanta Port in 2010, its volume of cargo posted an 11 percent year on year increase, reaching 47 million tons of goods. Some 9.6 million tons of crude oil, oil products and natural gas, 12 million tons of cereals, 5.3 million tons of ferrous ore and 2.5 million tons of metal products passed through the port. “After the previous two years of global recession, 2010 brought real signs of recovery for the port of Constanta. With a traffic increase of 13 percent in 2010 on the previous year and the infrastructure projects that have already started, we are confident, and we are preparing the port for the expected growth,” says Aurelian Andrei Popa, general manager of the National Company Maritime Ports Administration, Constanta. Unfortunately, these figures have not influenced the development of the area in terms of logistics parks and warehouses. Companies need facilities, infrastrucSea change: improved facilities should help get Constanta’s port in shipshape ture and economic stability, and until this happens investors are still contemplating current logistics and warehouse stock is old, work for transferring the goods and their the potential of the area and waiting for betconsisting of B and C class spaces. The ownter times to come. impeccable infrastructure,” says Bordei. ers have renovated their spaces to make Like any modern port Constanta needs Figures show that the price and delivery of them suitable for use. professional logistics activities. “These acAsian goods would benefit from an Eastern tivities require a logistics park where storEuropean gate. This is why Constanta age and value added services can be pershould be the second biggest maritime Supply and demand formed. Interest is mounting in these achub of the European Union, but has not Because of Constanta’s lack of logistics tivities, but firms are very often disapmanaged to increase the volume of cargo and warehouse spaces, the rent per square pointed by the relative absence of many of channeled into Romania, to the detriment meter has remained at the same value as in the necessary ingredients,” says Robin of Western countries, because of the fiscal 2008 and 2009, EUR 4-7 per sqm, deMartens, managing director of conditions and infrastructure. “We annupending on the rented surface, the contract European Gateways Platform, stressing ally receive requests for logistics spaces in duration and the quality of the space. “The that such ingredients include infrastructure the port’s area, but investors are holding area has huge potential as there are many accessibility, the availability of good qualback because of the uncertain legislative companies that would like a European ity labor at competitive costs, distribution center in Constanta. The main and fiscal framework,” concludes the CBRE education, legal and procedural aspects, problem is the lack of infrastructure, which representative. transparency and stability, a good leads to a small capacity of places to deposit,” political climate and advantageous confirms Dragos Geletu, managing direcStrategy: buy land and wait taxation. tor of integrated logistics provider KLG Even though the Belgian industrial develThese issues are problematic for ConRomania, who complains that the prices of oper Warehouses De Pauw (WDP) has two stanta. “At this moment, the volume of depositing in Constanta have not dropped large projects in Constanta, it is not intergoods coming into the port is delivered to at all and are comparable to those in ested in speculative developing. Instead it the logistic parks in Bucharest and then disBucharest. is waiting for the right clients. One project tributed through the whole country,” says The company currently has a 21,000is in Kogalniceanu, close to the airport, Dana Bordei, senior broker, industrial, of sqm warehouse on the A1 Bucharest-Pitesti and one is in Agigea, both with a surface of the real estate consulting company CB motorway and plans to develop another more than 10 hectares bought in 2007. Richard Ellis (CBRE). 20,000 sqm in the same area. In Constan“We believe in the potential of this area, National real estate agencies have little ta, KLG has rented a 1,000-sqm space, but and even if the interest is today quite low, or no information on this area, as they have plans to build its own property on the as soon as we find the right mixture of focused their attention on the capital and long term. clients we will start developing the sites,” some western cities. “We don’t have sta“Today we transport electronics, IT, says Valentin Stanciulescu, business detistics regarding the state of logistics detoys and industrial equipment from Convelopment manager of WDP. In Romania, velopment in Constanta, but the area has stanta, and the volume hasn’t changed in the firm currently owns approximately 2 no class A industrial development, alrecent years,” states Geletu. “We could million sqm of land in ten locations close though the logistic players have often demonstrate that this port is truly the to Bucharest, Pitesti, Ploiesti, Constanta and shown their interest in these types of inEastern European gate, but for this we must Brasov. vestments and industrial developers have offer some facilities like VAT deferment or And WDP is not the only investor scanalready bought land in strategic parts of the tax-free property. We could still attract inning the horizon in search of potential city. Despite all this, no major industrial vestors.” tenants. Mercury Development Real Estate, park client has agreed to sign a build-to-suit Facilities for investors are the refrain a private Romanian-owned company dethat could change the face of the area. veloping real estate projects, has for two contract,” adds Bordei. The economic situation seems to have dissuaded logistics “Constanta could become an important loyears been trying to sell a huge project with gistics hub for the goods entering Europe players from signing five-year lease cona total surface area of 68,000 sqm in Ovidiu, part of the Constanta Metropolitan tracts for a minimum 5,000-10,000 sqm. from Asia and the Middle East. But this type of cargo instead goes through Western Area. The position of the investment land Today the Constanta area and port have no ports, thanks to the attractive fiscal frameseems advantageous as it is close to the new new industrial parks being developed. The
Constanta Ring Road, the Danube Black Sea Channel and Kogalniceanu Airport, and also has a 200m fluvial loading ramp. “Customers just seem to find it hard to decide,” confirms Raluca Capalneanu, representative of Mercury Development Real Estate. The developer of the newly built Swan Office & Technology Park in Pipera has also built up a stock of 100 hectares in south Constanta since 2007, and like every developer in the area it is analyzing the market. “The area has great potential on the long term, which is why an investment here in logistics space is extremely positive and strategic. We cannot blame Constanta for the current situation, meaning the lack of contracts signed for logistics developments. The situation must be viewed in the context of the general economic climate. And the balance between risk and returns is currently tricky,” said David A. Allen, managing partner of Chayton Capital, stressing that the road infrastructure is getting better and better. “It’s very unclear for us when we will start building. It is clear, though, that we will not build speculatively and nor will we sell the land. As the surface of land is huge, we are looking for a joint venture,” says Allen, adding that the only land the firm sells is to increase the attractiveness of the zone. The future opportunities of the area have piqued the interest of Sorin Preda, manager director of Global Vision, one of the biggest players on the property management market, evaluated today at EUR 100 million. “We administrate there is 600,000 sqm of office space in Bucharest and Timisoara, and in the next two years we will be opening five new regional property management offices which will cover the top ten cities by demographic and economic growth,” says Preda. One of them is Constanta, a city with what the MD sees as the right opportunities. “We appreciate the potential of property management services for industrial and retail buildings, and in this area there is an increased need for them,” comments Preda. According to Allen, Capalneanu and Stanciulescu, who don’t want to sell anything their company has bought, in the medium term the area will attract ambitious companies that will become tenants of the present on-paper projects.
andreea.ceasar@business-review.ro
BR EVENT Realty 2011 The Romanian logistics sector will be under discussion at BR’s Realty 2011 event, along with the office and retail segments. Willbrook Platinum November 2nd, 2011
www.business-review.ro Business Review | October 24 - 30, 2011
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www.business-review.ro Business Review | October 24 - 30, 2011
10 MONEY
Beleaguered bankers see salaries hold up Salaries in the local banking system posted an increase of about 2-3 percent this year, but this modest rise is still low compared with other sectors. However, specialists say that remuneration is no longer the main force keeping an employee with a lender these days, while the current economic crisis has brought about significant layoffs across the industry.
∫ ANDA SEBESI Since the economic crisis, all lenders active on the Romanian market have had to adjust their strategies to suit the prevailing economic and financial conditions. Many of the players decided to put on hold their plans to open new branches or are being more prudent in extending their local networks. Despite this, things are moving on, and several lenders have continued to open branches this year. For example, Raiffeisen Bank opened a new office at its Unirea branch in Bucharest at the end of September, with the lender now operating throughout a network of 541 units nationwide. “At present our network of units is the right size and provides good coverage of the whole country. It is in line both with our development objectives and our customers’ needs. Nevertheless we are in a permanent and dynamic process of repositioning our network, based on the evolution of the real estate scene and changes that have occurred on the local market. This process is very complex and has various elements such as renegotiating rents, relocating offices and so on. In conclusion, we are looking very carefully at any possible quality location that is well positioned, in commercial areas with high traffic,” said Vladimir Kalinov, vice-president of the retail division of Raiffeisen Bank. The lender’s strategy for this year has been to relocate some of its agencies in big cities like Constanta, Iasi, Timisoara and Bucharest. The locations were chosen for their business potential and the coverage that the lender already had in those specific areas. Elsewhere, another major player on
Case by case basis: while some bank employees have netted pay rises, others are seeking work in different industries the local market, BRD Groupe Societe Generale, operates through a network of over 930 branches. As Guy Poupet, president and general manager of BRDGroupe Societe Generale, told Business Review in an interview earlier this year, the lender thinks that this can meet its needs. However, it is not ruling out the possibility of opening or closing some units depending on the conditions. Meanwhile, BCR has a significant network of branches, a total of 667. Dominic Bruynseels, CEO of BCR, told Business Re-
view earlier this year that the bank’s strategy remains to optimize its results from its current network. Last but not least, UniCredit Tiriac Bank opened five new branches – two in Bucharest, two in Constanta and one in Bacau – in the middle of October. “We intend to be as close as possible to our customers and local communities and to prove to them that we are a partner that it is easy to work with. The opening of these new branches is part of a large development plan that UniCredit has for the
Romanian market,” said Emanuele Butta, vice-president responsible for the retail division of UniCredit Tiriac Bank. The lender currently operates throughout 240 branches nationwide. Many banks are now being more prudent about extending their local branch network, which has become a secondary priority. “We intend to conserve our network. We don’t envisage a significant increase or decrease in the number of our outlets,” Johan Gabriels, CEO of RBS Romania, told Business Review earlier this
www.business-review.ro Business Review | October 24 - 30, 2011
year. The lender has 25 branches in 15 cities serving both corporate and retail clients, and four “lounges” for what it terms “Royal Preferred Banking” clients.
Pay policies According to the National Bank of Romania (BNR) annual report for 2010, banks closed 255 units last year, and reduced their headcount by 1,145 people. Looking at remuneration, Mihaela Forgaciu, owner of Fork Capital HR Advisory, a company specialized in HR strategy consultancy services, says that in the banking industry salary policies are in line with banks’ business strategies. “Obviously there are both directly productive and support employees, with the latter having no direct impact on the financial results. Fixed salaries have fallen in the last twelve months as sales commission policies were adjusted in line with the targets established for the sales force,” said Forgaciu. She added that many lenders have chosen to optimize their salary processes and costs, which is a natural step, but there are still professionals in key positions who have not suffered major changes in their pay packets. “Generally the increase in salaries in the banking industry was between 2 and 3 percent this year and bonuses were awarded mainly to the management team,” said Catalin Ilie, senior consultant at Professional. He added that the key positions from middle and top management and specialist level posted salary hikes. “There was no increase for entry-level and support positions. The policy of lenders was still to cut
MONEY 11 their costs and foster their productivity,” says Ilie. According to him, job cuts and some bank employees’ wish to find a better position in other industries were the main reasons for the high staff turnover in banking. “Few decided voluntarily to leave their jobs. Those that have chosen to seek work in other fields are principally support and administrative workers whose skills can easily be applied in other industries without any special training programs,” added Ilie. According to him, sales, customer relations (entrylevel and mid-weight), IT, risk analysis, inspection, reporting and audit were some of the vacancies advertized by lenders. Asked how a bank can motivate its employees, Forgaciu says that the first condition is to respect them. “There are many ways to motivate them, from emotional benefits, e-learning programs and learning platforms to innovation, creativity and giving them decision-making power. Many studies have shown that the salary is no longer the most important employee motivator. Professional recognition, involvement and decision-making power are factors that statistically count more for the vast majority of employees,” added Forgaciu. Ilie of Professional commented, “In the banking industry benefits related to offering credit have always been an advantage, and their importance has increased, especially given the current economic conditions. In addition, lenders have insisted on internal promotion policies.”
anda.sebesi@business-review.ro
WHO TAKES HOME WHAT? Corporate banking department Relationship Manager: EUR 1,800 – 2,200 Corporate Sales Representative: EUR 950 – 1,500 Senior Relationship Manager: EUR 2,200 – 2,600
Retail banking department Loan officer: EUR 700 – 1,000 Loan analyst: EUR 950 – 1,200 Risk analyst: EUR 950 – 1,200 Account administrator: EUR 750 – 1,000
Administrative department Receptionist: EUR 450 – 500 Secretary: EUR 500 – 600 Investment director/Property: EUR 1,000 – 1,800
HR department HR officer/ HR generalist: EUR 900 – 1,300 Recruitment manager: EUR 1,500 – 2,000
Compensation & Benefits Analyst: EUR 1,000 – 1,300 HR Development Specialist: EUR 1,200 – 1,500 HR Director: EUR 2,500 – 3,500
Financial-accounting department Financial analyst: EUR 1,100 – 1,200 Accountant: EUR 850 – 1,000 Chief accountant: EUR 1,500 – 2,000 Financial manager: EUR 2,500 – 4,000
IT department Specialist: EUR 1,100 – 1,200 Programmer: EUR 1,100 – 1,600 Network administrator/data base/ applications: EUR 1,200 – 1,700 IT Manager: EUR 1,500 – 2,500
PR/Marketing department PR Manager: EUR 1,500 – 2,200 Source: Executive search and management consulting companies. Data represents the minimum and maximum level of net salary
www.business-review.ro Business Review | October 24 - 30, 2011
12 INTERVIEW
CV Bruno Roche 2008 General director Apa Nova Bucuresti 2003 General director Apa Nova Ploiesti 1989 Graduated from l’Ecole Superieur de Chimie de Clermont Ferrand
body won’t function well. This sums up local infrastructure: few high-speed routes and a national road system in poor condition. If you want to expand a business in several parts of Romania, one of the big problems is the undeveloped infrastructure. Romania is one of the large markets of South Eastern Europe and a market like that cannot stay at this level. Think about the possibility of a neighbor like Serbia developing its infrastructure in the near future, providing an alternative route for transport that bypasses Romania. I’m not an economist, but it is a question of common sense: if you have big infrastructure projects funded by the EU, this means growth for the economy and attracting more foreign investors. It seems there is no clear view of the future for Romania.
Dual view of Romania’s business scene Bruno Roche, general director of Apa Nova Bucuresti and president of the French Romanian Chamber of Commerce (CCIFER), speaks about the Romanian business environment and the infrastructure project as a driver of future economic growth, and shares his top tips for potential investors. ∫ ANCA IONITA What advice would you give to a foreign investor considering investing in Romania now, in your dual capacity of general director of Apa Nova Bucuresti and the president of CCIFER? My first piece of advice would be to prepare very well before coming here, following the decision to invest in a certain industry, in order to understand whether it’s really possible or not. The Chamber of Commerce can help the investor in preparing the project, by providing the macroeconomic toolkits, updated reviews of the legislation, etc. Once the decision to invest in Romania is taken, the CCIFER can assist in opening a business here. And what kind of warnings? Although Romania is in the European
Union, one should still pay attention to the corruption issue, which, I hope, will decrease over time. The CCIFER has recently issued a barometer of the economic and business environment in Romania. What do the indicators say about these two issues? We devised a questionnaire for the CCIFER members asking them to rate business in Romania. There are two sets of questions, with ratings from 1 to 5 (1 being the worst and 5 the best): one on the political and social environment, and the other focusing mainly on business issues. The mark for the socio-political context is 2.5, meaning that French investors are not very happy with the current state of affairs. But, when they speak about their own business, the indicator is around 3.5, which means that they are
happy about how their business is doing right now and, at the same time, optimistic about the future of their business here. If you take the integrated view given by both indicators, it means political issues do not have a crucial influence on the business environment. I think the fact that none of the big companies that are members of the CCIFER have left Romania since the beginning of the crisis is a sign of confidence in this market and its future. All foreign investors complain about the poor development of the country’s infrastructure. How critical is this issue for the further growth of the economy? It is a crucial issue! A country is like a human body – there is the heart and the artery and vein circulatory system. You can have a good heart, but if you don’t have the arteries to pump the blood out, the
Do you think that there are no strategies for the economy in place? There are, but they are not being implemented. The construction of the promised high-speed roads has not started yet! I think the only way to speed up the process is through a PPP (Public Private Partnership); this is the best way of implementing the infrastructure projects, a format that worked for France. You have money but you don’t have projects! Is it difficult to get access to the government, to the authorities, if you want to propose changes to laws that will help the economic and business environment? Not at all. This is what we did with the White Chart for Energy that was issued by the CCIFER, French Embassy in Romania and the Romanian department of the French Foreign Trade Council, which contains pragmatic proposals concerning energy efficiency, the regulatory body (there are two, right now), etc. We submitted it to the Ministry of Economy and Industry and we are waiting for a response. What about the Glina waste water treatment plant? Building of the plant started during Ceausescu’s time, but it was not put into operation. The Municipality of Bucharest decided to do an ISPA project. They finished the works in July, and we are the first company to operate the plant. We are talking about 10 cubic meters per second. Before that, all the waste water would go directly into the Dambovita River. What development plans do you have for Apa Nova? Around Bucharest, we have the management contract for the water system in Otopeni (including the airport), and of the Portland Industrial Platform located outside Bucharest, near the highway to Pitesti. We are currently working on expanding to other cities in Romania.
anca.ionita@business-review.ro
www.business-review.ro Business Review | October 24 - 30, 2011
CITY 13
FILM REVIEW
The Help
Black and white issue: Viola Davis (standing) plays Aibileen, a Mississippi maid suffering at the hands of racists such as Bryce Dallas Howard’s Hilly (second right)
∫ DEBBIE STOWE Directed by: Tate Taylor Starring: Viola Davis, Emma Stone, Bryce Dallas Howard, Octavia Spencer Check listings for forthcoming screenings 1960s’ Mississippi. Not a great time to be a woman. An even worse time to be a black woman. The latter survive by working as maids for white families, raising their children, cooking their food and cleaning up their mess. Based on the novel of the same name, The Help tells the stories of these voiceless maid servants of the privileged white classes. Though ‘privileged’ is moot: the bee-hived white women of Jackson have money, true, but they are largely jobless helpmeets, who spend their languid hours playing bridge, organizing charity benefits, attempting to snare rich husbands and bitching. As well as jealously preserving the social apartheid. But Skeeter (Emma Stone) is cut from a different cloth than her Stepford Wife peers. Rather than simply stalking the nearest wealthy tall man, as recommended by her jaded mother, she aspires to become a writer. The casual racism of her social circle drives her to embark on a secret project cataloguing the stories of Jackson’s “helps”, with all the indignities, cruelty and occasional kindnesses they experience from their white employers. But as the civil rights movement gains momentum and Ku Klux Klan violence erupts nearby, the project – with its taboo fraternizing of the races – becomes riskier.
Subtle, The Help is not. Sentimental, yes – and then some. Racism is an ugly topic, and director Tate Taylor uses a broad brush to depict it, simplistically dividing his characters into good and bad. But some sterling performances and a wealth of goodwill save the film from drowning in its own maudlinism. The star is undoubtedly Viola Davis as the long-suffering Aibileen, a career maid whose own son was killed by white indifference while his mother raised 17 white children with the care and love absent in many of their parents. Her sidekick, Minny (Octavia Spencer), is another beautifully drawn character, whose volatility and spirit see Spencer steal many a scene. On the opposite side of the white picket fence is Miss Hilly (Bryce Dallas Howard), the Southern belle from hell who crusades for separate toilets for the races and has a great line in those Jane Austen style deceptively innocuous observations that are actually withering putdowns. Dallas Howard delivers a deliciously vile turn as the villain of the piece, oozing malevolence from behind a thin-lipped smile. Jessica Chastain, as the kind-hearted “white trash” also ostracized by Hilly and her coven, shines in her supporting role. The schmaltz and caricatures will deter some, but The Help will win many viewers over with its huge heart and the truth and power of its message. Moments of warmth and wicked humor provide relief from the depressing prejudice – this is no Mississippi Burning. In fact the only thing burning is fried chicken. Taken in the spirit in which it was meant, The Help is a big ole delight.
editorial@business-review.ro
www.business-review.ro Business Review | October 24 - 30, 2011
14 IN TOUCH Business Edu
BUSINESS AGENDA
Aviad Goz: A true leader must always set the direction
October 24 10:00 TotalSoft holds a press conference to announce its financial results, at Radisson Blu Hotel. By invitation only. October 24 10:30 Petrom organizes a press conference to launch of a new CSR program. By invitation only. October 25 09:00 PwC organizes the Human Resource Conference at its headquarters in Lakeview Building. By invitation only.
ISSN No. 1453 - 729X
October 25 10:30 Sabion organizes a press conference to launch a jewelry collection at Cocor store. By invitation only. October 26 09:00 Entersoft organizes a press conference at Novotel Hotel. By invitation only. October 26 11:00 Adrem Invest organizes a press conference at Intercontinental Hotel. By invitation only. 10:30 Flanco will organize a press conference to present its financial results at Cinema City Afi Cotroceni. By invitation only. October 27 10:30 Huawei organizes a press conference for the launch of a new line of products at Epoque Hotel. By invitation only. 13:00 Immofinanz Group will organize a press conference to mark the opening of Maritimo Shopping Center in Constanta. By invitation only. 19:30 The Romanian Association for Audience Measurement (ARMA) will organize an event to celebrate ten years of activity at Radisson Hotel. By invitation only. November 2 09:00 Business Review organizes the 11th Realty 2011 at Willbrook Platinum. Details at www.business-review.ro/events.
ADVERTORIAL
Aviad Goz, the prestigious international trainer who has coached Microsoft and some of the world’s most profitable multinationals, gave an inspiring speech about leadership and organizational development in times of change during the eight edition of Business Edu Forum. Taking place between October 11-13, the event focused on Learning&Development strategies and aimed to bring together HR specialists, managers, entrepreneurs and HR consultants. For Aviad Goz, achieving success means following a simple and efficient path: N.E.W.S – an intelligent instrument for establishing goals and action patterns. During his presentation at Business Edu Forum, Aviad Goz showed the audience how organizations can survive in an unstable market or business environment. According to his coaching model, N.E.W.S, a company will operate effectively only when its leaders set a clear common objective for the entire team – the organization's North. The North implies the future direction, the mission and the vision of the company. Nevertheless, in order to reach North, a manager must pay attention to the East, which represents the motivation and the values of an organization or team. Moreover, the leader is also required to indicate the West of a company – the plans and the methods of action. At the same time, a company should always take into consideration its South – internal and external hurdles that prevent employees from fulfilling their tasks. Aviad Goz has been an international trainer since 1986. He has trained at over 1,500 companies in 50 different countries. Amongst his clients are many "Fortune 100" companies such as: Microsoft, Intel, Cisco, IBM. GE, HP, Pfizer, City Bank, P and G, Coca Cola, Schering Plough, MSD, Johnson and Johnson, Sanofi Aventis, Eli Lily and many more.
November 3 09:00 Business Review organizes the 2nd edition of Focus on Telecom. Details at www.business-review.ro/events.
FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALIST Otilia Haraga JOURNALISTS Simona Bazavan, Ovidiu Posirca COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu
WHO’S NEWS
Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Regis Lhomme country manager of Amgen Romania, has been elected new president of the Romanian Association of International Medicine Manufacturers (ARPIM). Lhomme has been running Amgen since October 2009, when it was launched in Romania. He has 30 years’ experience in the pharmaceutical industry, mostly in CEE. From 2000-2009 he coordinated the activity of Pfizer in Romania and in Russia while prior to this, he supervised the opening of the Romanian subsidiary of Smith Kline Beecham.
Nicholas Hammond managing partner of Hammond, Bogaru & Associates, has been appointed director of the British Romanian Chamber of Commerce (BRCC). The other newly elected members of the board of directors are: Stan Dunlop of Dunlop Mills, Colin Lovering of Premier Global International and Madalina Vintu of Rentrop & Straton. Hammond has over 40 years’ international legal experience and has been involved in representing many UK and foreign investors in Romania since 1990.
Monica Zarnescu has been promoted to manager of finance and green office at the Romania Green Building Council. She is responsible for managing the council’s internal green office operations and promoting green solutions to the business community. Zarnescu has a master's degree in Hydraulics from the Polytechnic University of Bucharest and has gained prior business and finance experience in multiple entrepreneurial environments.
Cristina Siu has been promoted to director of development & marketing at the Romania Green Building Council. She has been responsible for media relations,
PUBLISHER Anca Ionita EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat
event organization, and marketing to build the council from its inception to over one hundred member companies. She earned a master’s degree in Project Management and a bachelor’s in Economics from the Academy of Economic Studies in Bucharest.
Valentin Tic-Chiliment has been appointed head of the tax department of Accace Romania. He has over 15 years of professional experience in tax consulting. Tic-Chiliment has worked for three of the Big Four companies both in Romania and abroad, holding the positions of consultant, manager and later partner. His area of expertise covers various tax related issues such as income tax, investments both in Romania and abroad, profit repatriation and mergers and acquisitions.
Dragos Nicolae has joined Accace Romania as tax manager. He previously held the same position for one of the Big Four companies. Nicolae has over seven years of professional experience in taxation and he is specialized in consultancy, fiscal reviews as well as tax reporting both for direct and indirect taxes. Nicolae is also a member of the Romanian Chamber of Fiscal Consultants.
Bogdan Badea has been appointed business development manager by Accace Romania. He specializes in the sale of B2B solutions, service outsourcing, software, acquisitions and HR consultancy. He has previously co-founded two companies.
Ana-Maria Lungan has joined the sales & marketing department of Ramada Plaza Bucharest & Ramada Bucharest Parc as PR manager. She graduated in 2006 from the Romanian American University and since then has had various positions in the hospitality industry in Romania, Greece, America, the Netherlands and the UK. Her expertise includes both operations and managerial level within prestigious chain hotels.
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