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MEDLIFE OPENS NEW UNITS AND HAS EUR 20 MLN TO INVEST BY 2013, P4 NEWS

INTERVIEW

FOCUS

Enel Green Power Romania and El-

Covalact is investing EUR 1.3 million by

While some commentators have wel-

comex are going to develop a wind

next year in portfolio diversification, ca-

comed the new PPP law for its greater

farm in Dobrogea, about 30 km from

pacity expansion and improving prod-

clarity, others are worried that it is

the Black Sea coast

uct quality, says VP Zsolt Kovacs

silent on several key areas

See page 4

See page 9

See pages 12-13

BUSINESS REVIEW

www.business-review.ro

ROMANIA’S PREMIERE BUSINESS WEEKLY

JULY 19 - 25, 2010 / VOLUME 14, NUMBER 27

Romania is jumping on the 3D bandwagon, with everyone from pop bands to sports newspapers embracing the new technology. But is it a

3D OR NOT 3D?

gamechanger or just a flash in the pan? Business Review canvasses the opinion of those leading the 3D charge LAURENTIU OBAE

See page 10-11


IN TOUCH GOODBYE MINIMUM TAX, HELLO MANDATORY INSURANCE Romania’s minimum tax on income will be no more come fall. Prime Minister Emil Boc affirmed government support for the flat tax, said progressive taxation was a non-starter in Romania and that

had done its job. Already reeling from tumbling property prices, Romanian home-

IN TOUCH Water woes I’m not generally an avid reader of the business press, but the picture on your front cover last week, which showed a Romanian town underwater, caught my eye. What a sad sight, and the quotes and stories of the flood (No state sympathy as Romania is submerged, issue 26) were even more upsetting. It seems incongruous that in the European Union, in the 21st century, anyone should be dying in floods – although events in New Orleans in the US and Gloucestershire in the UK over the last few years show that this is not restricted to less developed countries. I realize that governments are currently trying to reduce expenditure not spend more, but some proper urban planning and moving people from affected areas now could save a lot both in terms of the financial and human cost years down the line. Rachel Kettering, Bucharest Taking a tourism lesson It doesn’t take an expert to figure out

why Romania’s tourism potential is being wasted (Sun finally set to rise on Romania’s tourism potential, issue 26). Although the raw ingredients – beautiful scenery, picturesque traditions, monuments, pretty villages, a decent coastline, mountains, the delta – are all in place, the infrastructure is desperately lacking. When I visited the delta, for example, we stayed in pensions which could have been run with a warm welcome and fabulous food but were instead perfunctory establishments. The only ‘proper’ hotel we found was ridiculously expensive. And despite the wealth of seafood that should be available, the meals served in restaurants were largely the same, uninspiring fare that is found in third-rate Bucharest eateries. In Greece, hospitality is passed down from one generation to the next in excellent family restaurants. Romania has to work out how to import this. It could become an unusual and interesting low-cost destination – if the hospitality industry improves. James McMahon, UK

owners now have to dig deep in their pockets – they have six months to insure their houses, since a law on mandatory home insurance came into force. A million mandatory home insurance policies are expected to be taken out over the next six months.

What we are working on DANA CIURARU Senior Journalist... is working on an article about expectations for the local

economy

this year. OTILIA HARAGA Senior Journalist... is writing a piece about Romania’s IT upgrading and

name and location. For consideration for inclusion in the next edition,

its effects on the

length, clarity and accuracy. BUSINESS REVIEW / July 19 - 25, 2010

B USINESS R EVIEW JULY 19 - 25, 2010 / VOLUME 14, NUMBER 27

Please send your letters to editorial@business-review.ro, including your letters must be received by noon on Thursday. Letters may be edited for

LAURENTIU OBAE

STOCKEXCHANGE

the minimum tax

public.

Founding Editor BILL AVERY Editor-in-Chief SIMONA FODOR Senior Journalists DANA CIURARU ANCA IONESCU OTILIA HARAGA Journalists SIMONA BAZAVAN CORINA DUMITRESCU Copy Editor DEBBIE STOWE Photographer LAURENTIU OBAE Layout BEATRICE GHEORGHIU

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Business Review is a founding member of the Romanian Audit Bureau for Circulation (BRAT)

3


NEWS

BRIEFS

EUR 1 BLN OF CONTRACTS AWARDED THROUGH SEAP é The value of contracts awarded through the System of Electronic Public Acquisitions (SEAP) has risen to a total of EUR 1.03 billion (RON 4.4 billion) up to July 12, according to a study carried out by the National Center of Informatics Society Management (CNMSI).

4

ed by DIICOT involve insider trading rather than market manipulation. According to DIICOT, the defendants allegedly used privileged information to create unfair trading conditions, manipulating the supply and demand of BT shares. Silaghi, member of the BT board of directors and a founding member, acquired between May and December last year 43,646,740 BT shares

(BSE:TLV) worth RON 74,797,448 (approximately EUR 17.6 million), through his 74-year-old mother-inlaw’s account. On December 7, he sold a 33.6 million share package out of this account to the Bank of Cyprus Public Company Limited for RON 80,640,000 (approximately EUR 19 million). Prosecutors claim that Silaghi acted on privileged information as he knew as early as the autumn of 2008 that Bank of Cyprus intended to buy BT shares. Ciorcila is accused of having sold to the Bank of Cyprus on the same day 8,918,671 BT shares worth RON 21,404,762 (approximately EUR 5 million) through Dodworth Limited, an offshore company headquartered in Cyprus, which he owns. Ciorcila and Silaghi allegedly got word Bank of Cyprus’s intention to buy BT shares from Christofourou and Isaakidis who also transacted BT shares. Simona Bazavan

Enel Green Power agrees to develop wind farm with Elcomex Enel Green Power Romania has inked an agreement with Elcomex, a company active on the local energy market, to develop a 272 MW wind farm in the Dobrogea area, about 30 km from the Black Sea coast. According to company information, the project will be connected to the national grid once operational, but it has not been revealed whether an understanding with Transelectri-

The wind farm is near the Black Sea coast

ca is in place yet. Enel Green Power Romania has the option to buy the project company after all necessary approvals are obtained. It will advance Elcomex a contribution of the total costs related to the project development, money which will be refunded if the Italian company decides not to exercise its option to purchase. Dana Ciuraru

MedLife opens new units, to invest EUR 20 mln by 2013 MedLife has sealed an agreement with the International Finance Corporation (IFC), part of the World Bank group, for EUR 10 million of financing. This sum will be used in an investment program that will total EUR 20 million, with the firm supplying the other EUR 10 million, to be deployed until 2013. “This investment reflects a strategic priority of the IFC – to support networks and medical suppliers who increase the penetration of accessible medical services in areas where offers like this are low,” said Guy Ellena, manager of the health & education division at the IFC, adding that the investment program would also increase the IFC’s current participation in MedLife’s capital. The firm will make these investments in order to expand its operations in Romania by developing new projects. The first major one was finished last

COURTESY OF MEDLIFE

HOME INSURANCE TO BECOME MANDATORY é Romanian homeowners have six months to insure their homes, as the law on mandatory home insurance has come into force. Adopted in November 2008, it stipulates that all homeowners must insure their house for at least EUR 10,000 and no more than EUR 20,000. Premiums also should not exceed EUR 20.

BT’s shares were suspended from trading

LAURENTIU OBAE

MINIMUM TAX TO BE ABOLISHED THIS FALL é Romania will eliminate the minimum tax on income as of this fall, Prime Minister Emil Boc said last Friday. He added that keeping the flat tax at 16 percent was the government’s priority as an alternative, progressive taxation would not bring additional revenue to the state budget. “The minimum tax has already produced its intended effect and it will be cancelled in the fall,” Boc stated.

Horia Ciorcila, chairman of Banca Transilvania (BT), has been charged by the Cluj Directorate for Investigating organized Crime and Terrorism (DIICOT Cluj) with stock market manipulation and money laundering, and was sent to trial last Monday. Investigators to the case cite an illegal profit of approximately RON 200,000. Claudiu Silaghi, former vicepresident of BT, Georgios Christofourou, general manager of the local subsidiary of the Bank Of Cyprus, Anastasios Isaakidis, employee of Bank Of Cyprus, Mirela Silaghi, Silaghi’s wife, Dorina Marioara Cojocaru, Silaghis’s mother-in-law, Sergiu Dan Dascal, operations director at BT Securities, and Radu Codrut Jurcovan, broker at IFB Finwest, are all charged with manipulation of the stock market. Representatives of the National Securities Commission (CNVM) said last week that the transactions investigat-

COURTESY OF BANCA TRANSILVANIA

ASESOFT DISTRIBUTION PLANS TO UP TURNOVER TO USD 180 MLN é IT&C distributor Asesoft Distribution foresees that its 2010 turnover will rise to USD 180 million. During the first half of this year, the company posted a turnover of USD 67.8 million, a 33 percent growth on a comparative basis on the first half of 2009. Last year, Asesoft Distribution posted a total turnover of USD 140 million, a 10 percent growth year-on-year, while sales posted after the first half of last year reached USD 51 million.

Banca Transilvania chairman charged with stock market manipulation

Mihai Marcu, president of the Medlife board

week as MedLife took over an 80 percent stake in the Clinic of Rapid Diagnosis in Brasov, for which it paid more than EUR 3 million. In the future, the investment program will see the erection of a large hospital which will include an emergency unit, five operating theaters and 140 beds. For this project, MedLife has rented a building of approximately 9,500 sqm in a central area of Bucharest.

The firm will also start a new project in Brasov, which will be rolled out in two stages. The first will be to launch the MedLife Hyperclinic, which will be the largest private medical center in Brasov, by the end of this summer. Secondly, a private hospital will be opened nearby. The project in Brasov will be developed on a surface of 2,800 sqm. MedLife runs 5 hyper-clinics in Romania, 5 analysis labs, 28 centers of general medicine, 6 centers with unique specialization and has collaborations with over 110 partner-clinics all over the country. Aside from the Marcu brothers, the firm has two more shareholders: IFC, the investment and consultancy division of the World Bank, and SGAM Eastern Europe, a private investment fund of Societe Generale Asset Management, subsidiary of Societe Generale Group. Otilia Haraga BUSINESS REVIEW / July 19 - 25, 2010


NEWS

BAT signs EUR 134 million cooperation CEZ drops plans to build gas-fired agreement to tackle illicit tobacco trade power plant in Galati

British American Tobacco (BAT) has signed a cooperation agreement with the European Commission and member states of the European Union to collectively tackle the illicit trade in tobacco, the firm has announced. “The total losses sustained by the EU and its member states as a result of illicit tobacco run into billions of euros every year,” said

BUSINESS REVIEW / July 19 - 25, 2010

STOCKEXCHANGE

STOCKEXCHANGE

Up in smoke: BAT is taking action against the smuggling that is burning a hole in its profits

company representatives. Under the agreement, BAT plans to join forces with and work alongside the European Commission and the law enforcement authorities of the member states. The agreement includes the funding by BAT of USD 200 million (EUR 134 million) over the next 20 years. “This agreement marks a significant step in strengthening cooperation in the fight against tobacco crime throughout the EU. Along with the European Commission and the member states, we are sending out a very strong message to the criminals who counterfeit our products and evade taxes by smuggling: their activities will not be tolerated. We are confident that by working alongside the European Commission and the member states, we will make a serious impact on the levels of illicit trade in tobacco,” said Jack Bowles, director of Western Europe for the company. Simona Bazavan

CEZ signed a memorandum with Termoelectrica to expand and upgrade the Galati power plant

Energy company CEZ Romania has shelved plans to build a 400 MW gas-fired power plant in Galati, eastern Romania, on the site of the existing CET Galati. The decision was taken after a feasibility plan conducted by the company over the past two years showed that the project would not be viable due to high costs. CEZ signed a memorandum with local Termoelectrica in 2008

for a venture to expand and upgrade the Galati power plant. The company is currently building a 600 MW wind park in Dobrogea, which became partially operational last month. The Czech energy firm is also locally involved in EnergoNuclear, a Romanian venture to build and operate two nuclear reactors at Cernavoda. Staff

5


NEWS

BRIEFS

PROVUS TAKES OVER ROMCARD é Provus Services Provider, a company active in the card-processing sector, has taken over RomCard, as announced by BCR, BRD, UniCredit Tiriac Bank, Raiffeisen Bank and Financiara, owners of a 100 percent stake in RomCard. The new entity will provide a complete range of cardprocessing services to both domestic and cross-border clients. “As of today, Provus manages over 1,500 ATM terminals, 4,500 POS terminals, 2.8 million cards and 3.5 million transactions per month,” said Cem Yenigul, the CEO of Provus. 6

BCR BpL said it had had a good half-year

the hard economic times that the Ro-

manian economy is facing. Especially in such times, customers choose to save their money through safe systems, like saving-crediting contracts in RON and with a fixed interest rate. Although it is still very new in Romania, the saving-crediting system for housing has the potential for fast development and we are confident that it will become very popular,” said Alexandru Ciobanu, president of BCR BpL. BCR BpL was launched in July 2008 and is part of the BCR Group. Simona Bazavan

A&D Pharma opens new Anima clinic in Pantelimon A&D Pharma Holdings NV has opened its third Anima clinic in the Pantelimon district of Bucharest. “The clinic in Pantelimon is the third we have opened, after Anima Victoriei and Anima Titan, and represents one more step in our strategy to impose on the Romanian market the ‘close to you’ concept of medical care,” said Robert Popescu, CEO of A&D Pharma. The new clinic has a surface of 600 sqm and includes 14 departments with specialties such as general, internal and family medicine, pediatrics, cardiology, dermatology, ORL, gynecology, labor medicine, gastro-enterol-

LAURENTIU OBAE

MINISTRY OF COMMUNICATIONS FINANCES WEB PORTAL FOR NIS é The Ministry of Communications will finance the implementation of a web portal for the online receipt of statistical data, serving the National Institute of Statistics. The financing will be transferred through an intermediary entity of the ministry. The contract, which was signed last August, has a total value of almost EUR 5 million, and will be entirely financed from structural funds. The project is currently in an advanced stage of implementation as it must be finished within 14 months of the contract being signed.

BCR Banca pentru locuinte (BCR BpL) has signed over 165,000 saving-crediting contracts for housing in the first six months of the year, worth over RON 4.6 billion. The average value of a contract during this period was EUR 25,000-30,000. According to its own data, it is the leader on the market of saving-crediting financial products for housing acquisitions. “Just like in 2009, the first half of this year has also been a very good period for BCR BpL. We have succeeded in becoming market leader in terms of closed contracts, in spite of

LAURENTIU OBAE

NUMBER OF NEWLY REGISTERED FIRMS DROPS é The total number of newly registered companies reached 58,000 in the first half of this year, compared with 60,800 registrations during the same period of 2009, according to the National Trade Register Office (ONRC). Also, some 42,000 companies were suspended from the ONRC in the period, a 47.4 percent decrease compared with a year previously.

BCR BpL inks over 165,000 saving-crediting contracts for housing in the first half of the year

This is A&D Pharma’s third Anima clinic

ogy, nutrition and obesity, psychology, surgery, homeopathy, family planning, alergology, urology, neurology,

rheumatology, endocrinology, pneumology, lab analysis and 4D ecography. On the ground floor of the clinic is a Sensiblu pharmacy. Patients of the Anima clinics will be cared for by around 150 doctors at this point. However, by the end of the year their number will surpass 300. The Anima clinics are developed by the business line Anima Specialty Medical Services SRL, founded at the beginning of 2010 in partnership with a team of doctors and health professionals to answer the demand for private medical services on the Romanian market. Otilia Haraga

Romania and Canada aim to foster closer ties The European Union and Canada are currently in negotiations to seal an economic partnership. Romania is regarded as a key part of Canada’s free trade agenda and as an important partner in advancing the Comprehensive Economic and Trade agreement (CETA) between Canada and the EU. The first stage of the CETA negotiations took place in Prague, in May 2009. The fourth round will take place from July 12 to 16 in Brussels, and the fifth in October in Ottawa, thus bringing forward the finalization of the agreement, initially estimated for the end of 2011. So far, Canadian exports to Romania have been modest, totaling EUR 56.4 million in 2009, with new and potential opportunities identified in consumer and agricultural markets, infrastructure, as well as government procurement. Among the top mer-

chandise import items from Romania in 2009 were woven apparel, footwear, and iron and steel products. Canada’s direct investments in Romania reached EUR 151.4 million at the end of 2009. The North American country’s investments are present in Cernavoda, at the nuclear power plant, while Sterling and Bombardier Transportation are two of the major Canadian companies present on the Romanian market. Thousands of other smaller such firms successfully operate in Romania, according to Peter Van Loan, Canada’s minister of international trade. Gabriel Resources, the Canadian mining company, is a controversial name on the Romanian market, due to the high-profile opposition to the development of a mine in Rosia Montana in Romania, with many fearing the area would be destroyed,

both culturally and environmentally, by the mining process. Van Loan, however, called for Gabriel Resources’ activity in Romania to be treated with more fairness and less negativity by the media. Van Loan was in Romania from July 15-16 to promote the CETA between Canada and the EU. He met with secretary of state of the Ministry of Economy, Trade and Business Environment Maria Parcalabescu, minister of Foreign Affairs Teodor Baconschi, president of the Senate Mircea Geoana and other parliamentarians and business representatives to promote Canadian-European Union trade negotiations, highlight the North American country’s trade and investment advantages and enhance Canadian-Romanian business cooperation. Corina Dumitrescu BUSINESS REVIEW / July 19 - 25, 2010


NEWS

NEWS

WHO’S STEFAN KLINGLER, 35, is the new marketing manager of the detergents division of Henkel Romania. He joined Henkel in 2002, in Germany, and over the next years held various positions in marketing and sales. German Klingler graduated from the Faculty of Economic Sciences of the Heinrich-Heine University in Dusseldorf. DORIS THEODORA MIRCEA is the new general director of the Public Diplomacy General Directorate, within the Ministry of Foreign Affairs. She will manage the ministry’s public communication. Mircea has previously worked as deputy-director of the Communication Directorate, press attache and spokesperson of the Romanian Permanent Representation to the EU in Bruxelles. She graduated from law school and holds a master’s degree in international politics from the Universite Libre de Bruxelles. Mircea has been working for the Ministry of Foreign Affairs for ten years. RAZVAN SIN was promoted to director of the retail department of DTZ Echinox. He joined the company in early 2007 and over the next years worked with clients such as Atrium Centers, Plaza Centers, Belrom and Argo Capital Property. Sin is a graduate of the Facul-

ty of International Business of the Babes-Bolyai University in Cluj. He also worked for two years in the US in the field of franchise management and FMCG. IULIUS DAN PLAVETI was appointed president of the Romanian Energy Regulatory Authority (ANRE) through a decision of Prime Minister Emil Boc which was published in the Official Journal of Romania last Thursday. He is taking over from Petru Lificiu who has resigned from the position. He was later appointed vice-president of the same institution, the position previously held by Plaveti. ANA-MARIA IONESCU has joined CallPoint New Europe as an implementation manager. She has over 10 years of experience in the call center and customer care field. Ionescu has previously worked for Astral Telecom as a national customer care manager and for UPC Romania as a call center & back-office manager. As implementation manager she will be in charge of implementing all new strategic projects. Ionescu holds a master’s degree in social communication and PR from the National School of Political Science and Public Administration.

Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Feel free to contact us at editorial@business-review.ro

EVENTS, BUSINESS AND POLITICAL AGENDA JULY 20

é 11:00 BCR Asigurari organizes a press conference at Hotel Novotel. By

invitation only.

SEPTEMBER 23

é Business Review organizes the second edition of the Austrian Business

Forum at InterContinental Bucharest. By invitation only.

OCTOBER 7

é Business Review organizes the second edition of the French Business

Forum at InterContinental Bucharest. By invitation only.

OCTOBER 21

é Business Review organizes the Turkish Business Forum at InterConti-

nental Bucharest. By invitation only. In BR 26, on page 7, the picture of Sergio Cielo, founder of Cielo Venezia 1270, was miscaptioned as representing Alexandru Caravaniez, managing partner of the Romanian subsidiary of the company.

BUSINESS REVIEW / July 19 - 25, 2010

7


INTERVIEW

Milking opportunity on the dairy market

What are Covalact’s current production and logistics capacities? Through our production units we can process up to 250,000 liters of raw milk every day, which is one of the highest rates in Romania. We have made significant investments in our production units over the past few years, which are currently among the most modern in the country. In terms of logistics, we are currently working on expanding our facilities. As a matter of fact, this is one of the priorities that we have announced for the year and we have included logistics in our EUR 1.3 million investment plan for 2010. At present, we operate a large warehouse at our production unit in Sfantu Gheorghe and a regional storage facility in Bucharest. How will you finance the investments? Our company will call on its own resources and loans to sustain the invest8

for the time being we have established very good collaboration with the producers from our county and across all Transylvania. We respect the traditional Transylvanian way of farming, and we support the development of our suppliers, as our joint effort creates better and tastier products. At present, we collect over 130,000 liters of milk per day.

COURTESY OF COVALACT

Dairy producer Covalact, owned by US investment fund SigmaBleyzer Southeast European Fund, has announced it is investing EUR 1.3 million this year and next, according to its development plan, covering portfolio diversification, an expansion in production and logistics capacity and increasing the quality of its products. ZSOLT KOVACS, VP of operations with Covalact, outlines the company’s upcoming plans and strategy to Business Review.

ment plans for 2010. Moreover, in the past, we drew up some projects and completed the investments with funding from the European Union and this is another of the options that we have to complete our current development plans. What does the portfolio diversification entail? Our portfolio covers the whole range of dairy products, from yoghurt, sour cream, cottage cheese, cheese, milk, kefir, cream, yellow cheese, powdered milk and products that have innovated the market, such as our goat’s milk range. The key differentiator for all our products is that we keep the ingredients natural; we process them under the safest and best conditions and using traditional recipes from Transylvania. Moreover, since the beginning of the year we have added several new products to our portfolio, including the Sana and Kefir lines, and we are happy to report that the sales for our new product ranges totaled some 11 percent of the overall sales volumes during the past month. By the end of the year we plan to add a few more products to the yoghurt and cheese segments and we are also preparing to launch dedicated products with some of the major hypermarket and

supermarket retailers. We will continue expanding our portfolio in order to accommodate the market demands. What will you do to expand the distribution? Expanding the distribution and logistics are an ongoing process and a natural step in the evolution of a growing company. We have announced plans related to such activities for this year and they were integrated in the EUR 1.3 million investment budget for 2010-2011. Most of the distribution and logistics will be organized on the existing routes and capabilities so that we will achieve this important milestone at relatively minimum extra cost. By the end of the year we will add some more hubs to our current network. In terms of distribution, our strategy is to deliver on a certain market the products they are used to, without trying to change their consumption habits dramatically. What are you collection capacities? Covalact has positioned itself as a traditional producer, which puts very high value on the quality of the ingredients. In order to be able to have natural products we must organize very rapid collection and delivery for the milk, and

What are the best sold products in your portfolio? Covalact is the market leader on the cottage cheese segment with Branzica de Casa and among the top 10 producers for the other dairy products with its Covalact de Tara brand. The top selling products, which have also made an important contribution to raising brand awareness, are Branzica de Casa and the goat’s milk dairy range, as Covalact is the company that established this segment on the market. Another segment that is performing very well is yoghurt, as well as the recent additions from the Sana and Kefir ranges. What is the company’s strategy for the medium term? Our strategy on the medium term is to become recognized for the traditional taste of our products. For that, we will focus on communicating this to the public and on consolidating our position in the market. We will continue capitalizing on our relationship with local producers, in order to secure quality milk and provide them with the support they need to expand their farms. On the medium term we also plan to complete the integration of the two production units in the group. As far as the financial targets are concerned, we plan to acquire more market share in certain areas, such as the yoghurt and cheese segments. As a company, we also want to maintain a constant increase in our general market share, with values that exceed the average evolution of the market. From 2010-2011, Covalact will continue its development plans and invest over EUR 1.3 million to increase product quality, diversify the portfolio and expand the production and logistic capacities. Starting this year, Covalact has also initiated an aggressive communication campaign, which is aimed at consolidating our position on the market and making known the fact that we produce traditional, quality dairy products, which are in high demand at this time. ■ BUSINESS REVIEW / July 19 - 25, 2010


PROPERTY Ikea investment fund buys Timpuri Noi plot for EUR 34.6 mln

LAURENTIU OBAE

Ikea has bought the rights to open its own store

which was previously a franchise owned

by Moaro Trading. The move made Ikea Romania part of Ikea Group, after three years as a local franchise. In 2009, the retailer reported EUR 83.2 million in turnover, down 9 percent year on year. The group has 301 stores in 37 countries, out of which 268 are operated directly and 33 through local franchises. The main shareholder of Timpuri Noi is its Employees Association, which owns 73.64 percent of the shares, while SIF Muntenia holds 21.95 percent. ■

Krammer & Wagner launches Family Center commercial galleries in Botosani, Giurgiu and Ramnicu Valcea

COURTESY OF KRAMMER&WAGNER

Developer Krammer & Wagner has announced the launch of three Family Center commercial galleries in Botosani, Giurgiu and Ramnicu Valcea. Family Center is a project built by Real4You in partnership with Oasis Consulting. In all thee locations, the center will be anchored by a Kaufland store. Similar Family Center stores have been developed in Austria, Hungary, the Czech Republic, Slovakia and Croatia. The Botosani Family Center has 6,201 sqm of built space, and 6,045 sqm of

Similar stores are open elsewhere in the region

rentable space. It has nine stores and 510 parking spaces, and is set to open in November of this year. The Family Center in Giurgiu will have eight stores and 430 parking places. Its entire built space will reach 4,328 sqm, while the rentable area will be of 4,260 sqm. Construction works on this project are expected to finish this November. The Ramnicu Valcea store will offer 80 parking places and 7 stores on a total rentable built space of 3,428 sqm, and a total rentable space of 3,364 sqm. ■

Lufkin Industries purchases 33-ha plot in Ploiesti West Park for new plant SC Allianso Business Park SRL, the Romanian subsidiary of Alinso Group, has sold Lufkin Industries a 33-ha plot in Ploiesti West Park. The Texas-based oil company plans to build a USD 126 million manufacturing facility which will employ 300 people by 2012. "The new operation in Romania is a critical step in our strategy to expand our geographical reach to better serve our global customers. This will enhance our competitive position in the growing markets of the Eastern Hemisphere. Using Lufkin's proven regional manufacturing strategy, the Romanian operation will be a strategic hub to serve the European market as well as acting as the focus for exports to Russia, Central Asia, North Africa, the Middle East and markets in East

Asia,” said Jay Glick, CEO and president of Lufkin Industries. He added that Romania offers the company an advantageous location as it is becoming a regional energy hub. Glick cited advantages such as the political stability provided by EU membership, the strategic benefit of significant local oil resources, access to local sources of raw material and castings, a strategic location for shipping routes and a technicallycapable and highly-educated local workforce. Ploiesti has a lower average distribution cost than Bucharest (by around 12 percent). Allianso Business Park SRL already delivered a 30,000-sqm warehouse to Unilever in April. A new 20,000-sqm logistics building will be available by the end of

September this year, according to company representatives. Allianso also plans to build an SME building complex on the Ploiesti West Park site. Law firm Salans has advised Lufkin Industries Inc. on state aid incentives worth EUR 28.1 million involved in the transaction. Salans' team of advisors included Nicoleta Mihalache, Cosmin Bonea and Amalia Lincaru. Earlier this year the law firm has also advised Lufkin on acquiring the plot for the plant. The real estate team was made up of Laura Tiuca, managing counsel and co-head of Salans Bucharest's real estate team, associate Raluca Radu and counsel Stewart Middleman, and was overseen by Christopher Berlew. ■

Namco Bandai Networks moves to Atrium House, Riverplace Namco Bandai Networks Romania is moving to Riverplace, in the Atrium House building, from this summer. The transaction was done through consultants The Advisers/Knight Frank. The company has leased 1,418 sqm on the third floor of the building, which is BUSINESS REVIEW / July 19 - 25, 2010

owned by Austrian investment fund Europolis. The contract has been signed for a five-year period. From November 2008 to June 2010 the company was headquartered in Global Business Center, where it had a 1,600-sqm space. The Riverplace complex is made up

of two buildings – Riverview House and Atrium House. It has a total rentable surface of 50,000 sqm and is the first development phase of Sema Parc. Namco Bandai Networks Romania is part of Bandai Namco Group and develops and adapts video games for mobile devices.

LAURENTIU OBAE

Investment fund Interprime Properties, part of Swedish group Ikea, has bought the platform of Timpuri Noi’s plant in Bucharest for EUR 34.6 million, the latter has announced. The plot consists of over 51,000 sqm, and is located at Splaiul Unirii 165. In 2007, the company put the same piece of land up for sale at EUR 100 million, without VAT. The land is 60 percent taken up by various constructions. In March Ikea bought the rights to operate its own store in Bucharest,

Billa opens new supermarket in Oradea, reaches 51 units

Billa now has 51 stores countrywide

Retailer Billa, part of Rewe Group, has opened a new supermarket in Oradea. The move takes the German group’s network in Romania to 51 units. The new supermarket in Oradea will be located at 1 Cetatii Square. It will have a sales surface of 840 sqm and sell approximately 6,500 items. “Oradea is one of the most important cities in north-western Romania and an important economic center. As a result, the decision to open a new store came naturally and it is part of Billa Romania’s plan to offer its products and services in many cities in the country,” said Sabin Fane, marketing manager of Billa Romania. Billa has been active locally since February 1999 and is part of German group Rewe, which also runs the retailers Selgros and Penny in Romania. In Europe, Rewe has more than 15,000 stores and 320,000 employees.

Dinu Patriciu merges property businesses under one brand Real estate investment fund Black Sea Global Services (BSGS) and Quintet Asset Management, controlled by businessman Dinu Patriciu, have been merged into a new company, DinuPatriciuGlobalServices (DPGS). The newly founded firm will manage a property portfolio estimated to reach EUR 1.3 billion. “Due to the expansion of the property portfolio managed in Romania and Western Europe, we have decided to create a group structure that will be responsible for the strategy, management and development of the company. As such, Quintet and Black Sea Global Services will merge and will be included into the newly created group, DinuPatriciuGlobalServices (DPGS Bucharest),” said company officials. DPGS will do business in Bucharest, Frankfurt and London, specializing in real estate management, investment counseling and development management. ■ 9


FOCUS

3D trains its sights on Romania Gadgety whim or turnaround technology that will alter the way we see images in the future? The launch of 3D technology has not failed to make an impact in Romania, in various fields. To name just a few, 3D has penetrated television, cinema, the music industry and the media. Some LAURENTIU OBAE

pundits in Romania see it as a turning point, others merely as a new technology which does not herald revolution. Otilia Haraga The main difference between 2D and 3D images is that a 3D image brings depth and realism to any moving subject, giving the viewer a sense of participating in the action. Meanwhile, the conventional image displays objects in two dimensions, making it impossible to express the natural depth and presence the characters/objects have in the real world. By contrast, three-dimensional imaging applies the knowledge that humans see things with two eyes that are set slightly apart, to reproduce a sense of depth. In addition to horizontal and vertical information, 3D more closely resembles the way people sense space, creating a new way of visual expression, Taiju Ishikawa, branch manager of Sony 10

Pressing need: media companies are using the novelty of 3D to create a buzz in an era of falling ad revenues and circulation

Romania, tells Business Review. “Romanians are pretty open to technological innovations, therefore we are quite sure that the 3D revolution is one technology they will adopt fairly early,” he says. Of course, a certain level of income is required to keep up with the Joneses and afford the latest trends. Information that Sony gave Business Review indicates that a 3Dready device will set the viewer back approximately EUR 2,000 (a pair of 3D glasses and 3D receiver included). All this for a better image experience. “The Sony 3D TV buyer is an early-adopter, he/she can already predict that this is the present and the future even now. The buyer is a middle/high income consumer, rather young enthusiast, passionate about gadgets, interested in the latest technology, but also in the quality of the product,” says Ishikawa.

SPORTS

NEWSPAPERS DO BATTLE ON THE 3D FRONT

The pioneer of 3D print on the written press market in Europe was

a Belgian newspaper La Derniere Heure, the first ever in Europe to release a 3D edition. It was followed by the British tabloid The Sun which also went 3D at the beginning of June. Just a couple of months after these European launches, two of the leading sports newspapers in Romania released 3D editions. Competitors Gazeta Sporturilor and ProSport published their first 3D editions on the same day, at the beginning of this month. “The moment when 3D newspapers appeared abroad, it was clear to us that ProSport needed to offer its readers at least one such edition,” Cosmina Noaghea, publishing director of PubliMedia International, tells Business Review. So far, there have been two ProSport 3D editions – on July 1 and 12. If advertisers continue to be interested in these projects, the publication is willing to release more. All the investment required was in the special glasses that reached the paper’s readership in the same package as the newspaper. But then, this paid off since there were higher

revenues from advertising, says Noaghea. “Of course, more effort was required from everyone involved in this project – the editorial, marketing, production and distribution departments,” she adds. For instance, much greater effort for processing the images is needed for a 3D edition. The lay-out department started working a few days earlier in order to process the pictures. All the images were processed and the 2D images modified using a depth map in order to emphasize the various fronts. Thus, most pictures had three fronts – the main front, the secondary front and the background. More attention was also given when the paper went to print. The 3D format was seen as an opportunity “to bring one more argument in favor of the value of the written press. It does not represent the future of the written media,” says the director. But it appears that for a while at least, until 3D mania dies down – if it does – these newspapers have found the successful recipe to keep BUSINESS REVIEW / July 19 - 25, 2010


FOCUS print relevant. “We do not yet have the figures from the distributors. From the surveys we have carried out at kiosks, there should be zero returns, but we will see when we get the figures,” says Noaghea. Meanwhile, the print press in Romania is plagued by the financial crisis, which has triggered lay-offs, lower sales and circulation figures and a cut-back on advertising, all in the context of a general migration from print to online.

3D

ENTERS THE MUSIC MARKET

Romanian dance music outfit Morandi released the first 3D video filmed in Romania called Rock the World, the second single off their Zebra album, to be launched in fall by the record label Universal Music Romania. “While in the film industry 3D technology has been used for some time, it is still undergoing tests in music (…) There is indeed a trend to introduce many 3D elements in videos and I think in the future this will become a must,” Ana Diaconu, marketing manager at Universal Music Romania, tells Business Review.

BUSINESS REVIEW / July 19 - 25, 2010

Morandi are part of a league of Romanian artists who have used 3D elements in their videos – such as Ana Maria Ferentz, Alb si Negru, Paula Seling and Ovi – however, they are the only band who have shot stereoscopically, which is very rarely done in the music video industry. “Romania is evolving fast and is receptive to anything new, so 3D technology is definitely the next step in the music evolution in Romania,” says Diaconu. What is the appeal of such a video? Well, a 3D video offers “a feeling of immersion, it takes you to the world of parties and joy created by the video. It is like you are having fun with the artist,” says Diaconu. In order to shoot a video in 3D, two cameras are used in parallel. The same image has to be followed with the same focus at the same time. Post-production lasts longer than for a 2D video and requires more image and color effects. Equally, the costs of a 3D video are three times higher than the production of a 2D video. Morandi’s 3D video will be launched on the YouTube 3D site. The plan is also to screen the video

in several 3D movie theaters in the country. It can be downloaded and watched on fans’ personal computers with the help of the glasses that can be found on the website www.getmusic.ro/rocktheworld. “I honestly think that in the near future music videos will all be shot in 3D, and, why not, 6D,” concludes Diaconu.

FILM

VIEWERS PREFER

3D

Avatar, Alice in Wonderland, Clash of the Titans, Shrek Forever After, Toy Story 3 – so far, these five films in this particular order, which were screened in 3D, have captured the imagination of viewers but also taken a great deal at the box office. Of course, this ranking may change when some popular summer films have run on the big screen long enough. “When a film is screened in 3D and 2D, of course the 3D version will be preferred. However, leaving this aside, what matters is the quality of the film and of the actors’ performances (…) The 3D format is not appropriate for all types of films, only for a certain director’s vision, which is why both the 2D

and 3D formats will continue to coexist and enjoy viewers’ appreciation,” Corina Gonteanu, marketing& PR manager at Cinema City Romania, tells BR. Cinema City has 72 rooms in seven multiplexes. In the next two months, a new Cinema City will be opened in the Atrium mall in Arad, which will have 10 movie theatres. By the end of the year, the chain plans to open cinemas in Braila, Baia Mare and Targu Mures. Gonteanu explains that in a multiplex there are several 3D movie theatres, and the main investment is the purchase of the 3D projector. Such a piece of equipment can cost between EUR 100,000 and EUR 120,000, which is three-four times more expensive than a 35 mm projector. When the return on investment comes depends on the number of 3D films that are released and how popular they are. The most attractive will be 3D films, irrespective of the genre. Traditionally, Romanians have preferred comedies and action flicks, but their appetite for one or the other depends on the quality and number of such films thrown out on the market in a certain year.

11


FOCUS

PPP law gets qualified A-OK The new public-private partnerships law elucidates the concept and brings new clarifications regarding the project company, while at the same time leaving undefined aspects like the evaluation criteria, sanctions, warranties and the minimum obligations for private investors interested in entering a PPP. The new draft law governing public-private partnerships (PPP), not yet rubberstamped by the presidency, brings new clarifications seen as a breath of fresh air by investors and lawyers, but continues to leave room for interpretation in key aspects regarding PPPs. It is expected to make clearer PPPs, as for instance foreign investors are lined up to invest billions of euro in brownfield investments in co-generation and nuclear energy generation units.

PPP,

NOT A CONCESSION

Simplicity, time effectiveness and clarifications on duties are just some of the pluses of the new PPP draft bill identified by top law firms. “The new law endeavors to establish an efficient process for the conclusion of PPP agreements by using a simplified and time effective procedure based mainly on direct 12

STOCKEXCHANGE

Dana Ciuraru

With the new PPP law it remains to be seen if the regulations can attract private investors for public-private partnerships

negotiations between the authority and preselected potential investors,” Alin Buftea, location head of real estate at DLA Piper Romania, tells Business Review. According to specialists, the fact that the bill establishes a new PPP concept is reason to celebrate. “The new law refers to a new concept regarding PPPs, close to the Anglo-Saxon one, thus making a difference between the initial form of PPP in Romanian law which was more like a concession,” says lawyer Catalin Giscan, partner with Bostina & Asociatii. He adds: “The concept of the new PPP law is a practical one and could lead to the conclusion of a PPP contract to deadline which could be planned in a realistic way and provide the public authorities

with sufficient levers to ensure that the project can be completed exactly to their requirements, from its first stages.”

CLARIFICATIONS

TO THE PROJECT COMPANY CONCEPT

The main progress made by the PPP law is the possibility of establishing a special purpose vehicle for the development of the project, in which both the public partner and private partner will be represented as a result of their participation in the public-private project. “Such innovation is useful considering that the establishment of the project company shall be made pursuant to a public-private partnership agreement, which shall also establish the rights and obligations of the two partners,” lawyer Anca

Parascan, partner with bpv Grigorescu, tells BR. A project company established for the management and performance of the investment will be an efficient tool in finishing the project and managing relations between the investor and the authority on a longterm basis, believes Buftea, particularly as the PPP law does not provide for any maximum term of the PPP agreement. But how do the authorities define the project company? Serban Paslaru, partner with Tuca Zbarcea & Asociatii, tells BR that the new law characterizes the project company as “the company with both public authority and private investor as shareholders. We believe that the law should also cover those situations in which the priBUSINESS REVIEW / July 19 - 25, 2010


FOCUS

COURTESY OF WHITE & CASE

COURTESY OF TUCA ZBARCEA & ASOCIATII

COURTESY OF BPV GRIGORESCU

COURTESY OF DLA PIPER ROMANIA

Anca Parascan partner with bpv Grigorescu

Serban Paslaru partner with Tuca Zbarcea & Asociatii

Delia Pachiu partner at White & Case

vate investor creates a vehicle company for this particular project only (without having the public authority as shareholder) as well as those situations in which project companies or vehicle companies for the project aren’t created.” He goes on: “The project company will take over the obligations of both parties. This is a statutory measure, whereas the absence of regulations apportioning responsibility for the project’s success and transferring the risk to the project company has previously created problems in practice.” White & Case partner Delia Pachiu tells BR that the new law covers those situations in which the project financing is provided by the private investor, while the public authority comes into this partnership with a public asset, the project targeting the creation of a public good or service.

stipulations, relating to the limited way in which public goods can be exploited. “The most important problem posed by the PPP law consists in the numerous derogations and lack of coherence with other legal provisions, some established by organic laws, by the constitution or by European directives. The draft PPP law contains no reference to principles which are essential for the PPP field of applicability, such as the principle of unrestricted competition,” says Parascan. According to Buftea, what the law also lacks is clear instructions for the establishment of transparent evaluation criteria and scoring ratings which should have been established in order to avoid any suspicion of the procedures criteria and ratings being tailored for the benefit of one specific investor, as has often happened in the past in public acquisition procedures.

such as lobbying by interested investors,” cautions the DLA Piper official. Moreover, the PPP Law was expected to establish a clearer way (and the applicable legal regime) in which certain assets of a public authority (both private and public) may be transferred into the patrimony or the use (as a concession right or right to lease) of the project company. “A clear rule for such aspects would have also been useful for the clarification of the type of guarantees which could be offered to the financing parties of PPP projects, who may be different from the parties establishing the PPP,” says Parascan. According to her, regulations on the financing of PPPs should have made up a more extensive part of the PPP law, which currently contains only sparse provisions in this respect. All such deficiencies are likely to have an adverse impact on the attractiveness of PPP projects to banks and other creditors. Inflexible provisions mean the assets that result from the implementation of a PPP project shall be transferred free of charge and free of any liens and encumbrances to the public partner upon the termination of the PPP project. But the law should have permitted the establishment of real guarantees for the assets of the project company and the shares of such company, as well as other provisions that would have enabled the continuation of a PPP project with another investor or the continuation

of the project by the public authority without losing the financing for the project, say experts. Another issue, according to Paslaru, is that, “The selection procedure of private investors for a PPP contract will be based on standards chosen by each public partner. We believe that this area of interest should have uniform rules for everybody, at least by imposing minimum and mandatory requirements, at least in terms of the awarding procedure.” He fears that otherwise, it creates conditions allowing some authorities, central or local, to act independently and introduce regulations which affect the principles of the law and the general interest in developing PPPs in Romania. dana.ciuraru@business-review.ro

LACK

OF SANCTIONS

The new PPP law provides for the limited involvement of the Romanian National Authority for the Regulation and Monitoring of Public Acquisitions only regarding the cancellation of the PPP contracts and not each step of the way, which worries some experts. “Without express sanctions to be applied at each stage of the procedure, it is difficult to ensure the strict observance of the legal procedure,” warns the DLA Piper Romania official. Moreover, the Bostina & Asociatii representative adds that the new law will meet difficulties regarding the constitutionality of some of its BUSINESS REVIEW / July 19 - 25, 2010

WHO

OWNS THE GOODS AFTER THE PPP IS OVER?

Another important issue raised by the new law is that it doesn’t apply to concession services or public works. “Although it is stated that the PPP regulations will not apply to concessions of public works or services contracts, the authorities do not have clear criteria to choose between the application of a concession procedure and the PPP procedure for a specific project. For this reason, there is a risk that the authorities will choose between the two procedures depending on criteria not related to the public interest,

COURTESY OF BOSTINA & ASOCIATII

Alin Buftea head of real estate at DLA Piper Romania

Catalin Giscan partner with Bostina & Asociatii 13


CITY

Medieval Castle in Sibiu hosts cultural exhibition

The castle dates back to the 16th century

The Museum Collection of the Transylvanian Armenians is open to the public from July 15. The exhibition is taking place in a sixteenth century castle in Sibiu and showcases the history, religion and private lives of the Armenian com-

munity in Romania. Organized by the National Network of Museums in Romania, it consists of images, ideas, objects and photos representative of the Armenian identity. The event is a first in Romania, the inaugural public-private partnership aimed at the rehabilitation of a historical monument. It is organized by the Local Council of Dumbraveni, the Armenian community in Dumbraveni, Transylvania Trust Foundation and Folkeuniversitetet Fjellregionen from Norway. Corina Dumitrescu

Jazz and nature combine at Garana festival Garana Jazz Festival, an established event on the Romanian and international jazz scene, will take place between July 22 and 25 in Poiana Lupului, in Caras-Severin county, at an altitude of 1,000 meters. The line-up of the event includes international and local names, such as Funky Growl (Romania), Elina Duni Quartet (Switzerland), Terje Rypdal, Miroslav Vitous & Gerald Cleaver (Norway), Marcin Wasilewski Trio (Poland), Wolfred Brederode Quartet (the Netherlands), Wolfgang Muthspiel (Austria), Djabe (Hungary), Bega Blues Band (Romania), Patricia Barber (USA), Dan Berglund’s Tonbruket (Sweden) and Trygve Sein & Frode Haltli (Norway). A one-day ticket costs RON 50, a

The festival enjoys a bucolic setting

three-day pass RON 130 and a full pass for four days RON 170, while children under 14 can enter free of charge. More details about the event, artists and location can be found at garana-jazz.ro or on the Garana Jazz Fest Facebook page. Corina Dumitrescu

ed in Adunatii Copaceni, a transited area close to the southern area of Bucharest, in which an airport will be constructed. The restaurants will open in Adunatii Copaceni and in Buzesti as part of the Blue Air building. The group of companies owned by Nelu Iordache registered a EUR 500 million turnover in 2009 and currently has 2,500 employees. Corina Dumitrescu

First Romanian Kindle book for children released Vlad’s Trip to the Other Land (Calatoria lui Vlad in Celalalt Taram), a novel written by Sinziana Popescu and illustrated by Ciresica Litinschi, has recently become the first children’s book to be published in Romanian for the Amazon Kindle platform. It is the story of a boy who suddenly enters the Other Land, a fantasy world of mythological Romanian characters, populated by Iele, 14

Mika is heading to Romania this summer

British artist Mika will perform in Romania, at Mamaia’s H2O beach. Access to the July 24 concert will be free of

charge, as it is part of the fifth Orange PrePay Party. The British performer, born Michael Holbrook Penniman Jr, made his debut in 2007, when his single Grace Kelly became an international hit. His first album, Life in Cartoon Motion sold over 6 million copies worldwide and brought the musician a Brit Award and a Grammy nomination. In September, Mika released his most recent album, The Boy Who Knew Too Much.Australian indieelectronic trio Cut Copy will open the show. In previous years the Orange PrePay Party has brought Sophie Ellis-Bextor, Akon, Sugababes, Duffy and I am Kloot to Romania. Corina Dumitrescu

Tributes paid to singer Madalina Manole

Blue Air owner flies into HoReCa sector Nelu Iordache, owner of the holding of companies of which airline Blue Air and construction firm Romstrade are part, has added two restaurants and a hotel to his business portfolio. One restaurant, located in the Buzesti area of Bucharest, opened last week. The four-star hotel is due to be finished at the end of the summer after a EUR 4 million investment and is situat-

Mika to perform in Mamaia

Ursitoare, Sanziene, Zmei, Balauri, Solomonari, Blajini, Capcani, Uriasi, Cai Nazdravani Pasarea Maiastra. The book was victorious in the children’s literature section at the Association of Writers in Bucharest Awards. The Kindle version of the book is available on Amazon for USD 3.99 in the US plus USD 6.89 for shipping to Romania. Corina Dumitrescu

The music community is paying tribute to Madalina Manole, who was found dead at her home in Otopeni on Wednesday, her 43rd birthday. According to the forensics report, Manole committed suicide, after leaving a goodbye message on her husband’s mobile phone. An ambulance was called to the singer’s home early in the morning by her husband. Early indications were that suicide was the cause, as, according to sources, Manole had made a previous attempt to take her life several days before. It is believed that the singer had had health issues, as she had been hospitalized in May. The forensics report on Thursday confirmed suicide as the cause of death. Manole had just released an album, 09 Madalina Manole. Media speculation on the reason for the singer’s suicide included depression.

Late Romanian singer Madalina Manole

Madalina Manole made her artistic debut at the age of 15, before going on to become one of the big names of the Romanian pop scene in the 1990s. Manole is survived by her second husband and had recently become a mother. Corina Dumitrescu

Celebrities draw attention to bear sanctuary British singer Leona Lewis has visited a WSPA bear reservation in the Romanian town of Zarnesti. Meanwhile, Australian pop star Natalie Imbruglia has starred in a documentary about the same sanctuary, near the city of Brasov, Transylvania. Lewis visited the sanctuary last weekend to see how the abused

animals were recovering. Imbruglia fronts a one-hour documentary that captures the Australian singer traveling across Romania with the World Society for the Protection of Animals helping to rescue imprisoned brown bears and to bring them to the Zarnesti reservation. Corina Dumitrescu

Romania and Italy present cultural heritage The exhibition Romania Mon Amour is the first cultural project borne from a public-private collaboration between Romania and Italy. It will take place between July 22 and 25 in Sardinia. Romania Mon Amour will feature presentations of the Romanian-Italian common cultural heritage, photography and paintings by national artists, hand-

painted porcelain, as well as traditional Romanian costumes from various geographical areas. On the occasion, the Romanian Collection will be represented by Wagner, which consists of a collection of one-of-a-kind hand-painted porcelain, combining folklore elements with gold and platinum. Corina Dumitrescu BUSINESS REVIEW / July 19 - 25, 2010



Business Review Issue No. 27, July 19-25