Business Review Issue 17/2014 May 12 - 18

INTERVIEW: BRD-Groupe Societe Generale, the second biggest lender in Romania, is ready to finance the local economy, with consumer loans and mortgage demand starting to pick up, Philippe Lhotte, the bank’s director and CEO, told BR »page 6

ROMANIA’S PREMIER BUSINESS WEEKLY

PROPERTY

MAY 12 - 18, 2014 / VOLUME 18, NUMBER 17

SKANSKA ROMANIA HAS COMPLETED 80 PERCENT OF THE FIRST OFFICE BUILDING OF GREEN COURT BUCHAREST AND IS LOOKING TO BUY MORE LAND IN THE CAPITAL »PAGE 10

After being embraced by multinationals, the outsourcing industry is now making waves among mid-sized companies, with Romania well placed to capitalize on the trend, players told BR » page 5

OUTSOURCING TAKES MIDDLE ROAD NEWS

CITY

Euro goal

‘Art of gold

Romania has to meet real economic convergence criteria and catch up with its Western peers before adopting the euro, says the NBR governor

A series of cultural events culminating in an art auction will bring top contemporary artists together to support disadvantaged local children

» page 4

» page 12

www.business-review.eu Business Review | May 12 - 18, 2014

NEWS 3

NEWS in brief AGRICULTURE Meat producer Agricola Bacau beefs up business by 15 pct in Q1 The Agricola Bacau group of companies reported a RON 133.732 million turnover (approximately EUR 30 million) in the first quarter of this year, up 15 percent year-on-year, the meat producer has announced. The increase is higher than the 5 percent gain posted in Q1 2013.

Agricola International, the group’s main company and the entity responsible for poultry production and logistics, increased sales by 12 percent, to a total of RON 76.96 (approximately EUR 17 million).

In the first quarter of 2014, the meat producer’s poultry sales were up 12 percent in volume and 7 percent in value as the average price dropped.

Photo: Mihai Constantineanu

BANKING CEC Bank net profit up 5.4 pct y-o-y CEC Bank net profit climbed 5.4 percent year-on-year to EUR 39 million, as the state-owned lender maintained assets of RON 26.9 billion with deposits from clients up 10 percent year-onyear, according to bank president, Radu Gratian Ghetea. The lender recorded a pre-tax profit of RON 56.2 million, up 67 percent year-on-year, when it posted a gross result of RON 33.5 million.

After taxes, the bank registered a net profit of RON 39 million, which combined with its social capital would hike the latter to RON 1.163 billion from 1.124 billion.

CEC recorded an operational profit of RON 567.3 million last year, with provisions worth RON 511 million, up 9 percent year-on-year.

COMPETITION Competition Council expects to levy EUR 20 mln of fines this year The Competition Council will launch 20 new investigations this year and estimates it will apply fines worth EUR 20 million, with comparable targets to last year, said Bogdan Chiritoiu, president of the institution, quoted

by Mediafax.

“Last year we began 20 new investigations and applied fines of EUR 20

A chapter of history: library building celebrates centenary The Central University Library building in Bucharest this week marks one hundred years since its establishment.

Construction of the building, which faces the National Art Museum, MNAR, started in 1891, under the supervision of French architect Paul Gottereau, who was also tasked with overseeing the Savings Bank, CEC, building on Calea Victoriei and the old Royal Palace, which today hosts the MNAR. million. This year, we want to maintain the same level of fines and number of open investigations. We aim to open around 20 new cases a year and we will be completing major cases this year,” said Chiritoiu.

The Competition Council president said various investigations are ongoing into cartels and agreements between competing companies.

Cases due to be completed this year involve the media market, false tenders and the food trade, among others.

ENERGY Monsson Group buys controlling stake in Emon Electric Monsson Group, the local wind energy developer, said last week it had ac-

quired a controlling stake in Emon Electric, a provider of energy infrastructure services, for an undisclosed sum, in a bid to expand its support business for wind players.

The group has developed over 2.4GW of wind installations in the last decade, including the 600MW wind project sold to Czech utility CEZ. Following this acquisition, the group’s headcount has increased by 100 people to over 350 employees, who will work on various areas including design, installation and the maintenance of wind farms and electrical installations.

The company has worked on various industrial and electrical traction projects in Romania and the EU. It put online the electrical system of traction for the tram system at the Athens Olympic Games in 2004, as well as the extension of Line 2 of the Greek capital’s subway.

MOL Romania’s 2013 turnover up 5.1 percent to EUR 979 million MOL Romania, the local subsidiary of Hungarian oil group MOL, registered a turnover of nearly EUR 979 million in 2013, up 5.1 percent from EUR 931 million a year before, due to higher sales volumes. Last year MOL Romania recorded a total sales volume of 503,000 tons, up 7 percent from 469,000 tons in 2012, according to data provided by the company.

Diesel fuel sales rose 8 percent on the year before to reach 365,000 tons.

MOL Romania sold a total of 133,000 tons of gasoline, up 6 percent yearon-year. Between 1996 and 2013, the firm invested USD 400 million in Romania and this year the investments will total EUR 10 million, with a focus on expanding and consolidating its gas station network.

www.business-review.eu Business Review | May 12 - 18, 2014

4 NEWS FINANCE

Romania needs clear terms, consensus for 2019 Euro target, says NBR governor C

entral bank governor Mugur Isarescu has said the country’s plan to join the Euro zone in 2019 is “ambitious”, and that intermediary targets and consensus across the political spectrum will be needed to get it through.

Isarescu commented that establishing this objective is a political matter, which does not depend solely on the central bank, adding that a “consistent political consensus” has to be reached before attempting to join the Euro zone.

“I do not think 2018-2019 is entirely out of the question, but it is good, if we pursue this objective, to adopt some intermediary terms, because it will not happen just like that: on January 1 2019 someone will wave a magic wand and say we have entered the Euro zone. There are objectives that could be annual,” said the governor, quoted by Mediafax newswire.

Any EU member aiming to join the Euro zone has to meet the five criteria outlined in the Treaty of Maastricht.

They include a rate of inflation below

Mugur Isarescu, NBR governor

3 percent and national budget deficit and national public debt of below 60 percent of GDP. Prime Minister Victor Ponta said last week that Romania had met all the nominal convergence criteria in the Maastricht Treaty on inflation,

public debt and the deficit. However, he added that the country has not yet met the real criteria, meaning the local economy cannot compete with the 18-nation Euro zone bloc.

Citing official sources, Mediafax reported that the government has not included any target for Euro zone accession in the convergence program submitted to the European Commission, the executive arm of the EU. According to Claudiu Cercel, BRD vice-president, Romania’s goal of adopting the euro in the next five years is realistic, but he suggested that attempting to bridge the standard of living gap with its Western peers is paramount for the country.

Romania’s GDP per capita adjusted to purchasing power parity reached 50 percent of the EU average in 2012, according to Valentin Lazea, the NBR’s chief economist. In his opinion, the local economy would have to outpace EU growth by 2 percent over the next decade to reach 60 percent of the average EU GDP. In a presentation before ambassa-

dors of EU members last week, the governor pointed out that although most of the CEE-based members, including Romania, have fulfilled or are close to meeting the nominal convergence criteria, “a wait-and-see approach seems to prevail”.

“The ‘put your house in order’ approach by each country prior to euro adoption is seen as a prerequisite for the success of euro zone enlargement Only in this way will euro adoption by new EU member states entail benefits both for themselves and for the monetary union as a whole,” said the governor’s presentation, posted on the NBR website.

According to the presentation, Romania has only missed the inflation rate criteria, which stood at 2.3 percent in March, 1.1 percentage points above the required target. It should not be more than 1.5 percentage points above the average rate of the three EU members with the lowest inflation over the previous year (Cyprus, Latvia and Bulgaria). ∫ Ovidiu Posirca

www.business-review.eu Business Review | May 12 - 18, 2014

NEWS 5

WHO’S NEWS

WEEK AHEAD

BR welcomes information for Who’s News. Submissions may be edited for length and clarity.

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

Frederic Bellon

is the new general director of the local subsidiary of French retailer Auchan. He is replacing Patrick Espasa who was appointed president of Auchan Italy and Romania.

Bellon, 45, came to Romania in 2009, since when he has served as financial director and store manager. Before being promoted to general director he was sales director and had responsibility for the integration of the new Auchan stores (the 20 local Real hypermarkets Auchan took over in September last year following a regional deal with Metro Group). Between 2008 and 2009 Bellon worked for Auchan’s Sabeco in Spain. This was his first appointment abroad. Bellon joined Auchan in 1991 as department head. He graduated from the University of Lyon in trade and administration. Espasa, 55, had served as general director of Auchan Romania since 2009.

Before that he was general director of Auchan Italy. He has been working for the retailer since 1979.

Nicoleta Eftimiu

has been appointed marketing director of Coca-Cola Romania and

Moldova. She will coordinate activities for the company’s entire product portfolio. Eftimiu has been working within the Coca-Cola system for close to 11 years. Her previous position was sparkling soft drinks senior activation marketing manager.

Francois Saint-Paul

is the new French ambassador to Bucharest. He is replacing Phillipe Gustin, who had held the position since early 2012. Saint-Paul, 53, was France’s ambassador to Croatia between 2004 and 2009, after which he served as director of the department of French citizens abroad and the consular administration department.

He has also previously worked as part of France’s diplomatic corps in Mexico.

Roberto Scagnoli

has been reelected president of the Italian Chamber of Commerce in Romania (CCIpR). He is the country manager for Romania of Telespazio (Finmeccanica-Thales Company) which is present locally through Rartel, a joint venture between Telespazio and Societatea Nationala de Radiocomunicatii. Scagnoli has been a member of CCIpR since 2006.

Meanwhile, Paolo Mariani (Banca Italo Romena-Gruppo Veneto Banca), Alessio Menegazzo (Enel Romania) and Roberto Musneci (Serban Musneci & Associates) have been elected

VPs while Carlo Barban (Gruppo Winmarkt) becomes treasurer.

May 15 Presidential debate

Liliana Solomon

is the new global chief financial officer of Unify, formerly Siemens Enterprise Communications. She most recently served as European CFO at the Vodafone Group, and was previously CEO of the company’s operations in Romania.

Solomon has also held financial controller and CFO roles during her 20-year career at companies such as Cable & Wireless, Deutsche Telekom and O.Tel.O Germany. She will replace Ray Leclercq of the Gores Group who has held the role in an interim capacity since mid2013.

May 15-16 Business Model Generation Master Class At this two-day master-class on Business Model Generation at Impact Hub Bucharest, Oana Toiu and Vlad Craioveanu, partners of Business Models Inc. CEE, will help participants understand how to systematically invent, design and implement powerful business models. For registration and further details, please email info.cee@businessmodelsinc.com.

Cristian Ustinescu

has left DTZ Echinox to work for Immofinanz as senior transaction manager. He will be in charge of the Austrian group’s transactions in Central and Eastern Europe. Ustinescu’s last position at DTZ was investment director. While holding this position he handled the deal in which South African fund NEPI took over one of the logistics parks developed by Belgian group BelRom.

More Tarom board members heading for departures

May 17-18 Bucharest International Half Marathon BIHM gives runners the opportunity to pound the flagship thoroughfares of Bucharest. Approximately 4,000 contestants took part in the event last year.

All routes are flat and fast. The half marathon course is AIMS/IAAF-certified.

Starting and finishing at Constitution Square in front of the Palace of Parliament (the world's largest parliament building), the 3km run comprises one loop around the palace, whereas participants in the longer races do a circuit along Bucharest's impressive boulevards, including the 3.5km-long Bulevardul Unirii. More information at www.bucuresti21km.ro.

MOST READ Courtesy of Tarom

The Transport Ministry has decided to replace four of the six members of the administration board of stateowned airline Tarom, according to Mediafax.

Manuel Donescu, Florin Luca, Constantin Sebesanu and OvidiuPetrisor Artopolescu have lost their positions, leaving Dante Stein, former advisor to the prime minister Victor Ponta, and Razvan Filipescu, president of the National Tourism Authority, on the board. Another member, Bogdan Speteanu, quit his position a month and a half ago.

Tarom’s board is currently led by Stein.

The last time the line-up underwent significant changes was in November, when former president Dan Pascariu, Valentin Macec, Ciprian Ladunca, Marius Ghenea and Dumitru Prunariu were replaced, following conflict between the board members and the airline’s CEO, Christian Edouard Heinzmann.

Pescariu said in February that the

On May 15 – one week before the polls open – the five candidates for the presidency of the European Commission will gather at the Parliament building in Brussels, Belgium, for a televised debate. The discussion will cover a wide range of topics of significance for the EU, the US and the transatlantic relationship.

Up in the air: Tarom’s board has undergone many changes recently

members who were dismissed in November have decided to sue the firm.

Tarom is the first state-owned company in Romania for which private sector management was appointed, as part of a deal with the International Monetary Fund. However, the process has not been easy. The initial proposal,

Heinrich Vystoupil, former head of the Austrian Airlines representative office for Romania and the Republic of Moldova, stepped down shortly after being elected at the end of 2012, following contractual disagreements. Heinzmann, a former president of Luxair, was appointed CEO in November 2012.

www.business-review.eu 1 Check in and log on: Romania is the global leader of free hotel WiFi

2 Survey: One in ten Romanians has a smartphone but highschoolers and students are ahead of the game

3 Pro TV strikes back, says it will

retain key programs and people

4 Lake Vacaresti becomes

Bucharest’s first natural urban park

5 7 wrong ideas about the Ukraine crisis explained by Alina Mungiu Pippidi

www.business-review.eu Business Review | May 12 - 18, 2014

6 NEWS EU ELECTIONS

3Q Renate Weber MEP the National Liberal Party

Local MEP hopefuls hit the campaign trail O

What is the local electorate like compared to other countries?

Voters in each country are different, for several reasons. A collective memory, but also civic participation depends on the role that education, churches and civil society have played over the years.

Obviously, the press has a major role.We had a culture of civic participation in the interwar period, but it was destroyed by decades of communism. Some politicians try to buy their voters with electoral gifts. This is not peculiar to Romania, but is something that happens in other EU countries as well, although on a much smaller scale, involving citizens of the poorest and most isolated areas of their countries.

What is at stake for Romania in the European elections?

After seven years as a quiet and rather pointed at EU country, we have to prove that Romania is different, that we can perform at a level comparable with other member states. It is interesting to note that Romanian MEPs performed better than Romania as a country. A report released last week by VoteWatch clearly stated that on various aspects of business, the Romanian delegation was always in the top third of the league, in sixth or seventh position. oana.vasiliu@business-review.ro

European elections facts and figures* 506.8 million EU citizens Around 400 million eligible voters 37.4 million eligible first-time voters 28 member states EUR 16 million is the cost of the electoral campaign for all 28 countries and 24 languages EUR 0.0316 per EU citizen or EUR 0.0388 per eligible EU voter

*information provided by the European Parliament, September 2013.

Photo: Mihai Constantineanu

How many Romanian voters do you expect to turn out?

Personally I do not expect a turnout of more than 30 percent. I want to emphasize two factors on this. First, our electoral register has nothing in common with reality. In Romania, over 18 million people are eligible to vote, according to the register. They do not exist. And since the turnout is calculated using the total number of people on these lists, we have a lower percentage. Second, we have a large number of citizens living and working abroad, probably more than 2.5 million. In general, few of them want to vote in this kind of election.

n May 25, more than 18.3 million Romanians will choose who will represent them in the European Parliament, appointing MEPs as ambassadors for their interests in the EU decision-making process.

For these elections, Romania will have 15 political parties who have put forward 572 candidates, while eight candidates met the eligibility criteria to run as independents: former gymnast Corina Ungureanu, neurosurgeon Constantin Filip, former deputy Danut Liga, surgeon Paul Purea, director and publicist Pericle Capsali, Romanianborn US lawyer Peter Costea, actor Mircea Diaconu and businessman Valentin Daeanu.

Some 20 MEPs are running for another mandate at the European Parliament, including such names such as Corina Cretu, Monica Macovei, Ramona Manescu, Marian-Jean Marinescu, Norica Nicolai, Cristian Preda, Daciana Sarbu, Theodor Stolojan, Adina Valean, Renate Weber and Corneliu Vadim Tudor.

On April 17 the election watchdog BEC finalized the order of the parties on the voting list, as follows: the Liberal Democrat Party first, followed by the Popular Movement Party, the Democratic Union of Hungarians in Romania, the electoral alliance of the Social Democratic Party, National Union for the Progress of Romania and Conservative Party, then the remaining parties and the independent candidates. Expatriate Romanians can cast their ballots in one of 43 polling stations, most of them in Romania’s embassies or consulates.

First past the poster: local politicians are spending to raise their visibility

Electoral adspend According to Romanian newspaper Evenimentul Zilei, the Social Democratic Party is running its electoral campaign with the help of Multimedia Foundation, owned by Bogdan Teodorescu and Dan Sultanescu, the National Liberal Party is using the services of Tempo Advertising, while the Popular Movement Party is working with ex TV-presenter Stefan Lungu, who is currently the head of advertising agency La Palat.

The Liberal Democrat Party surprised many by taking charge of its own campaign, with the support of the internal communication team and the Youth Liberal Democrats, citing lack of money, says Gheorghe Flutur, quoted by Evenimentul Zilei.

Campaign costs For candidates interested in promoting themselves and their political visions on TV, a news website covering the media market, www.PaginadeMedia.ro, gave a full breakdown of costs, as follows: DIGI24 will not take any money from candidates, as its channels will

Romania’s Euro vote 580 local candidates 15 political parties 8 independents 32 MEP positions more than 18.3 million eligible Romanians voters 20 MEPs are running for another mandate at the European Parliament

only broadcast political debates, not political advertising. Antena 3 is charging from EUR 1,240-8,252, depending on the week of the campaign and the TV show whose breaks will contain the advertising. Realitatea TV wants EUR 360 for a campaign clip and EUR 7,500 for 30 minutes of live transmission of a candidate on the campaign trail.

TV presenter Radu Morar of Nasu TV charges EUR 100 for a 30-second campaign clip and EUR 500 for 30 minutes of live debate for a candidate. âˆŤ Oana Vasiliu

www.business-review.ro Business Review | May 12 - 18, 2014

BANKING 7

Lending on road to recovery Philippe Lhotte, director and CEO of BRD-Groupe Societe Generale, says the loan market is starting to recover, pointing to BRD’s gains in consumer lending and mortgages. However, the bank is grappling with low demand in the corporate sector, with small, local companies barely starting to recover from the crisis. He expects the economy to grow by up to 3 percent this year, and describes Romania’s goal to join the Euro zone in 2019 as “ambitious”. big firms, the most important ones based on exports and so on, are really wealthy. The problem in Romania is with the small companies, and the high rate of non-performing loans is mainly due to small businesses.

There are many reasons: the lack of domestic demand during the past year; you see companies that do not export and their market is based on Romanian consumers who have a problem with purchasing power and so on, so we need greater domestic demand in Romania in order to help small companies. This is the main challenge in 2014.

∫ OVIDIU POSIRCA

CV Philippe Lhotte

What are your business expectations for BRD this year?

We are more optimistic than in 2012 and our Q1 result (EUR 8.2 million in net profit) has shown some improvement on the year before so I consider the Q1 result satisfactory. Romania’s economy is definitely improving. You’ve got the low interest rate, low state indebtness, low inflation rate and so on. What is missing now is more significant growth.

To ensure better economic growth in the country we need more loans to the economy. We are ready to grant more loans; we can afford to lend more to the economy. Afterwards, what is missing is the bankable demand. Now, we are improving our consumer loans and mortgages, and our outstanding (e.n. loans) are increasing. Our corporate loans, which decreased last year, are now stable and slightly increasing as well.

We expect demand to increase slightly in 2014. The bank has to profit from this higher demand; we have to remain the best in terms of quality, to remain competitive and so on. The market is highly competitive now so I am reasonably optimistic.

What is your forecast for non-performing loans this year?

The rate of non-performing loans stands at 22 percent for the whole banking system and my opinion is that we have reached a peak. I do not expect a significant decrease soon. I think it will remain stable at around 22 percent, but we have reached a peak or are really close to one. We have a capital adequacy ratio of more than 15 percent and the target (e.n. minimum requirement of the central bank) is 10 percent, which means we are able to lend more and finance the economy.

Do you think Romania’s ambition to join the Euro zone by 2019 is feasible? Can Romania actually bridge the standard of living gap with the more mature economies in Western Europe?

It is a mid-term target; it will take time.

Joining the Euro zone by 2019 is ambitious. We have to have a target. But is it unrealistic? It is possible. The country is not ready today. The five-year period is short but we need challenges.

Do you expect more deals in the banking sector this year?

I do not know, and, frankly, as chairman of BRD, I do not mind because I rely on organic growth, internal growth. Because there are over 40 banks in Romania, maybe some of them are going to merge. Beyond this we do not plan to buy any competitors and we rely on ourselves.

Courtesy of BRD

Have you seen higher demand for loans on both the retail and corporate segments?

Compared to last year, we (e.n. have registered) higher demand in all the markets, especially from individuals.

From companies, it is better but it is not enough. We could lend more to companies. I think the country needs more investments in more projects and we are able to finance. I hope we will have higher demand in the coming months, and I am once again optimistic.

October 2012-present director and CEO of BRD-Groupe Societe Generale November 2012-present chairman of the board of directors of BRD 2005-2012 chairman of the board and CEO of SG Expressbank AD in Bulgaria, a subsidiary of Groupe Societe Generale 1998-2004 regional director of Group Herault (Montpellier) Bachelor of Law from the University Paris 2 and diplomat of the Institute of Political Studies in Paris

What are your financing channels? Do you rely on parent support or deposits?

I understand your question because there was a debate last year – okay, you are reimbursing money to your parent company. When the shareholders in Paris or Vienna send us money we do not need we reimburse them. But believe me, as soon as we need the money it is back immediately, so if we have more demand, if we have to grant more loans to the Romanian economy, they give us the money we need. But this is not the only funding we have.

We have funding from the EBRD, EIB and so on. Everybody today is ready to finance Romania, because its image on the international market is constantly improving, so it is easy to attract fund-

ing from abroad when necessary – I am optimistic. Romania has a good image on the international market, due to its good macroeconomic indicators.

How do you expect the economy to do this year? The European Commission, the executive arm of the EU, said last week in its spring forecast that Romania’s GDP was set to grow by 2.5 percent in 2014.

I think it is realistic. Maybe it could be a little better and we can reach 3 percent growth this year.

Although the macro-economic figures look good and you say that BRD is ready to finance companies, why is there weak demand on the companies’ side?

There are two kinds of companies. The

Are the tensions in Ukraine impacting the Romanian financing sector?

Generally, I think the impact of the crisis in Ukraine on the Romanian economy will be very low because the commercial links between Ukraine and Romania are very small. We do not massively export to or import from Ukraine.

Does Groupe Societe Generale have a big exposure in Ukraine and Russia?

In Russia it is different. We have a major subsidiary in Russia but we are confident about Russia on the mid-term and when we invest it is for the long term, so beyond the crisis. Russia is a strong country with high potential and I think we were right to invest there.

So you are staying in Russia?

Yes, definitely. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | May 12 - 18, 2014

8 LINKS

Mid-size firms to drive outsourcing growth Mid-sized companies will trigger new growth for the outsourcing market in the medium term, as more and more of these firms in Romania and the region are choosing to outsource services to cover the deficit of skills and reduce costs. solutions,” says Marcin Grygielski, territory manager for Eastern Europe at Interactive Intelligence.

Approximately 30 percent of con“When the outsourcing phenomenon tact centers are contemplating moving was gaining momentum globally, in the their operations to the cloud this year, 1980s and 1990s, this was first of all a according to an online survey carried model that large companies used to cut out by the company in January. costs. (...) Now it is the turn of midFurthermore, more than 7 percent sized firms to go through an outsourcof companies have already drawn up ing process similar to the one that most plans to shift their activities to the multinationals have gone through. Of cloud. And 25 percent of contact cencourse, there are certain differences, ters have already moved some of their mainly due to the different experiences business communication applications of the transition of business processes,” there. says Vladimir Sterescu, country man“The number of agents in contact ager of CGS Romania. centers who will be using cloud soluHe added that, currently, outsourctions to provide customer relations ing is a “business trend” and a “core services is expected to increase by apissue” in the strategy of many firms. proximately 20 percent this year, while “Over the next two or three years, midthe number using systems implesized companies will be the ones that mented on location will grow by only 2 generate a large chunk of the new projpercent,” adds Grygielski. ects on the outsourcing market,” he Even though most companies are says.

About 30,000 people work in Romania’s call center and BPO sectors, say pundits cautious about cloud, due to the techCGS currently has three local connological, legal and security challenges, tact centers, in Bucharest, Brasov and TELUS International currently has there is currently an understanding of Sibiu, with approximately 3,000 em- international players have established ployees. Romania is a regional hub for a presence on the Romanian market via 400 employees in Romania, divided this business model and, consequently, between two centers, with 300 in much greater acceptance that cloud contact center services and also a hub acquisitions,” he points out. for CGS, since the bulk of the comMost of the activities outsourced to Bucharest and the rest in Craiova. The can be secure.

This year, players expect considerpany’s total 5,500 employees are based the CGS contact centers in Romania company plans to double its local staff able progress in providing customer here. cover front-office operations and come to reach 800 by December 2014.

“Only a few international players service via mobile devices, with the “In the first two months of 2014 alone from industries such as telecom, bankwe advertised 250 jobs for Romanian, ing, IT, insurance, healthcare and retail. have entered the Romanian market help of dedicated applications.

Marketing departments and contact English, French, Spanish, German, Ital“Romania remains one of the top over the past couple of years. Romania ian and Dutch speakers. Most were countries for multilingual call center is a mature outsourcing destination,” centers are also poised to have a much tighter collaboration to generate better newly created posts, because we won outsourcing in Europe, according to a says Vigroux. customer interaction, says the firm. new clients. The centers we have still recent A&T Kearney ranking. The main Approximately 60 percent of comoffer the necessary space to accommo- reasons are the excellent language skills, Cloud, mobility and analytics panies are in favor of channeling indate new positions. But of course, after strong aptitude for IT, and cultural shape sector reaching a certain growth level, we proximity to Western Europe. In addi- Several major business and technology vestments to a mobile outlet to deliver must consider opening new locations,” tion to that, Romanians are great prob- trends that will have a substantial better customer experience.

The investments are going into both says the country manager. lem solvers, which is a very important impact are currently taking shape in The cost of labor in Romania in this aspect in delivering great customer ex- the contact center industry. Firms creating new dedicated mobile applicaindustry is not the lowest in the Euro- perience,” says Gregoire Vigroux, sales will adopt more and more cloud tions as well as improving existing ones, pean Union, as Bulgaria has a lower av- & marketing director of TELUS Interna- applications and strengthen relations according to Interactive Intelligence erage salary and lower corporate tax. tional Europe. with clients via mobile devices with data.

Last but not least, the number of anHowever, on the positive side, Romania Today, about 30,000 employees the help of dedicated applications. Orcan always meet large activity volumes work in Romanian call centers and the ganizations’ need to manage interac- alytical solutions will also grow, to genand provide a high number of jobs, BPO sector, says Vigroux. With more tions via social media will increase and erate a deeper understanding of adds Sterescu. than half of them based in Bucharest, analytical solutions will gain momen- business development trends. By ana“Although the call center market is this creates strong competition to at- tum, according to Interactive Intelli- lyzing past and present behavior, future behavior can be more easily predicted, relatively mature, it has developed over tract the very best talent from the labor gence. the past ten years. During this time, the market.

“More and more companies have which will create better customer expeBPO (business process outsourcing) in“To overcome this issue, TELUS In- become convinced of the benefits of rience. As a result, the need for platdustry in Romania has consolidated ternational Europe has launched a call software solutions in the cloud, and if forms that will more rapidly process around medium and large local and in- center in a city where there is no call this trend is very visible in the United the information will increase, accordternational companies that continue to center competition at all. We launched States right now, Eastern Europe and ing to the firm. develop support centers in various our Craiova site in 2012 and today it has other emerging markets are catching cities, and, as happened in 2013, major 100 employees,” he says. up after a delay in adopting cloud otilia.haraga@business-review.ro

∫ OTILIA HARAGA

Courtesy of CGS

www.business-review.ro Business Review | May 12 - 18, 2014

LINKS 9

Deutsche Bank inaugurates DB Technology Center in Bucharest On May 9, Deutsche Bank (DB) officially inaugurated the DB Global Technology Center in Bucharest, the German lender’s fourth such facility worldwide. The site will employ up to 500 highly skilled IT specialists by the end of 2016.

Left-right: Mihai Ionescu, Bill Cunningham, Liviu Voinea, Victor Ponta, Marian Popa

∫ OTILIA HARAGA Marian V. Popa, 59, was chosen to take the helm of the DB Global Technology Center (DBGT). Popa will be in charge of the management and development of the facility, the fourth center opened by DB worldwide, where up to 500 IT&C specialists will be working by the end of 2016.

The recruitment process started at the end of 2013 and the company expects to have hired 100 experts by mid-2014.

Popa has worked in the management of major IT&C companies in Romania and Europe for 30 years. More recently, between 2004 and 2012, he served as CEO of Endava in Central and Eastern Europe.

“The choice of Bucharest as a location for the Deutsche Bank technology center is an acknowledgement of the significant reserves of talent that out country has. I am confident that DBGT will become a landmark for talented people who wish to make an exceptional career in IT&C both at local and international level,” said Popa.

Deutsche Bank has so far invested EUR 10 million in the project.

The average salaries of employees are around EUR 1,500-EUR 2,000 per month.

DB also applied to a state aid scheme, and received EUR 15.6 million for a project worth EUR 39.2 million in total, according to Hotnews.ro.

The inauguration of the center was attended by the prime minister, Victor Ponta.

DB has three other such facilities worldwide, two in Russia and one in the United States.

The technology center in Bucharest will develop high-quality software for the bank’s global operations and will be a platform for highly trained software engineers, said DB officials.

“DB Global technology will develop advanced technological solutions for numerous Deutsche Bank activities, which illustrates the enormous potential of the local IT&C sector,” said Mihai Ionescu, representative of Deutsche Bank in Romania.

By the end of the year, DB estimates that 200 specialists will be working at the facility.

DB has been present in Romania since 1998. otilia.haraga@business-review.ro

www.business-review.eu Business Review | May 12 - 18, 2014

10 PROPERTY

BRIEFS Government lifts Black Sea coast building ban The ban on construction work on the Black Sea coast between May 15 and September 15 will be lifted for investments financed with EU funds. The developers will be obliged to ensure tourists’ safety, prime minister Victor Ponta said on Tuesday, writes Mediafax.

He argued that it was important for works in development to be continued and completed, but “only if tourists are protected”. Constanta’s mayor, Radu Mazare, said afterwards that after the law is passed, the authorities will decide which private projects can be completed during the summer and under what conditions. He added that the deadline for finishing work on the Mamaia coast is June 15

The local subsidiary of French construction materials producer Lafarge sold 37.4 percent more cement in the first quarter of 2014 compared to the same period last year, the company has announced. The increase was mostly fuelled by good weather.

Lafarge Romania runs two cement factories – in Medgidia and Hoghiz – and in addition to the cement business has divisions for aggregates, concrete and additional services. The firm has a market share of about 30 percent in Romania. Its main competitors are Swiss Holcim and Carpatcement, part of German HeidelbergCement AG, each with similar market shares.

French Lafarge and Swiss Holcim announced last month that they had reached an agreement to merge their global activities. This will also impact the companies’ local operations. The two construction materials producers will need to sell 43 percent of their combined production capacity in Romania in order to obtain competition authorities’ approval for a merger, according to analysts from Deutsche Bank, cited by the Wall Street Journal.

Tagor to buy toxic real estate assets from local banks Real estate developer Tagor has launched a new business line that will acquire distressed real estate assets that banks wish to offload from their portfolios to reduce their volume of non-performing loans. Tagor Asset Management (TAM) will be backed by UK-based Patron Capital, a EUR 2.5 billion investment fund. It aims to acquire assets or create joint ventures with banks. According to the company, non-performing loans in Romania stand at around EUR 10 billion for both retail and corporate customers.

Swedish construction and development company Skanska has completed 80 percent of the first office building of Green Court Bucharest and is looking to buy more land in the capital. ∫ SIMONA BAZAVAN Skanska “is likely” to close a land transaction by yearend as it is looking to increase its footprint on the local market, said Marcin Lapinski, president of Skanska Property, last week during a press conference. The company, which is currently developing the first phase of the Green Court Bucharest office project in the Floreasca-Barbu Vacarescu area, said it was interested in buying more land in the same part of the capital or in other central locations with access to the metro. Land prices in these neighborhoods have remained relatively stable over the past few years and the fact that Skanska is not using external financing is a plus in the negotiation process, he added.

The first block of Green Court Bucharest is 80 percent complete and should be delivered in the last quarter of this year. The 12-storey construction has a leasable area of some 19,500 sqm.

Another two similar buildings will be raised as part of the same project, which will contribute to a total leasable area of 52,000 sqm. The construction of the first building and the foundation of the second require a EUR 46 million investment.

Starting the construction of building number two depends on how the leasing of the first one goes, said Lapinski.

So far the developer has signed up only one tenant, Schneider Electric Romania, which has leased approximately 3,100 sqm. However, Lapinski said he was

Courtesy of Skanska

Lafarge Romania builds cement sales by 37.4 pct in Q1 on good weather

Skanska seeks tenants, wants to buy more land in Bucharest

Richard Burleigh, president of Skanska Construction Romania, and Marcin Lapinski, president of Skanska Development Romania

confident the entire building would be leased by yearend and the second building could “still be completed” in Q2 2015. The company “is in advanced negotiations” with both companies entering the local market and existing players who want to relocate.

After the buildings are completed and fully leased, Skanska wants to sell the project, but Lapinski does not rule out the possibility of selling the blocks off one at a time, even before the completion of the entire project, and to different buyers, should the company get a good offer. As for potential buyers, he said that in addition to the players already present in Romania “more and

more people are showing interest in coming to Romania and investing here”.

In addition to the office segment, the firm is also interested in doing contractor work in Romania, said Richard Burleigh, president of Skanska Construction Romania.

Skanska Group has 57,000 employees in selected home markets in Europe, the US and Latin America. Headquartered in Stockholm, Sweden, and listed on the Stockholm Stock Exchange, its revenues in 2012 totaled SEK 132 billion (EUR 15.8 billion). simona.bazavan@business-review.ro

Anchor Group starts work on Plaza Romania’s EUR 10 mln facelift ∫ SIMONA BAZAVAN Real estate developer Anchor Group has begun refurbishment works on the Plaza Romania mall in western Bucharest, a project that will require a EUR 10 million investment, the company announced last week.

Works should be completed in 18 months and will include changing the building’s façade, adding a new entrance, changing the interior design and turning 8,000 sqm of the mall’s surface area into office space. By the end of the refurbishment process the mall will cover 40,000 sqm.

Anchor Group will invest a total of EUR 25 million in the refurbishment of its two local malls, Plaza Romania and Bucuresti Mall, said GM Razvan Gaita.

The investment has been halved over the past two years. In 2012, the group, at that time headed by Ali Ergun Ergen, announced plans to invest EUR 50 million in refurbishment and increasing the surface area of the two projects. The EUR 25 million comes from Fiba Group holding, of which the developer is part.

Works at Bucuresti Mall could start at the end of June.

Plaza Romania began operating in 2004, but after AFI Europe opened the AFI Palace Cotroceni mall in the vicinity five years later, it started to lose business. The refurbishment project is meant to help both projects better cope with competition and ensure sustainable development over the next 5-10 years, added Gaita.

Plaza Romania has at present a 65 percent occupancy rate, which is above

the 55 percent it reported at the same time last year. Timeout and Cinema are the most recent retailers the mall has signed, and Koton and LCWaikiki will soon open stores at the retail facility.

Fiba Group holding comprises 76 companies from 12 countries. It has been present in Romania since 1997, investing in retail, real estate and the residential market. As well as the Bucuresti Mall (the first Western-style shopping mall in the capital when it opened in 1999) and Plaza Romania retail centers, Anchor Group’s local portfolio includes the Anchor Plaza office building and the InCity Residences project. The company has invested a total of EUR 350 million in Romania so far, according to its data. simona.bazavan@business-review.ro

www.business-review.ro Business Review | May 12 - 18, 2014

11

www.business-review.eu Business Review | May 12 - 18, 2014

12 CITY

Art goes under the hammer to help children in need Conceived by Princess Marina Sturdza as a series of cultural events culminating in an art auction, the Art for Children project brings together the country’s top contemporary artists for the first time to support disadvantaged children in Romania. ∫ OANA VASILIU

Alina Slimovschi’s Innocence

Camil Ressu’s Claca la porumb

Photo: Vlad Petri

A charity auction is due to take place on May 28 to benefit abandoned children, with the support of UNICEF and the National Bank of Romania, as well as Artmark, which has managed to obtain almost 100 works of art worth EUR 500,000. Contemporary artists have joined forces with art collectors to donate a host of pieces to support disadvantaged children through the Art for Children charity event, organized by Princess Marina Sturdza.

“For me, the story began in 1989, when the first films and photographs coming from the country showed one of the most devastating effects of communism, when Romanians, along with the rest of the world, discovered what was hiding behind those institutions we did not even know existed,” the princess said.

She added that around 110,000120,000 children were living in conditions that are hard to describe, barely surviving in state institutions, where they had already been scarred for life and dealing with problems that could not be solved rapidly because the necessary professional and psychological expertise did not exist. “Personal tragedies that embodied a national tragedy for Romania, which suffered a lot because of this sad heritage and is still affected by this black spot,” the princess said.

“Miracles were performed, which were not sufficiently appreciated, but there were miracles! Most of these future-less children managed to find a family space or something very close to this ideal, and now Romania has the right to be proud of its efforts and the proven results,” Sturdza added.

“Still, Romania is left with a difficult task. The way we take care of children today translates into the Romania we will have in 10 or 20 years. It is crucial not only to take care of them, and give them access to education and a job, but also to help them integrate into Romanian civil society and find their place in the European community,” the princess argued.

Artists have heeded her call. “This is the first time that I have donated one of my paintings and

I’m glad to do it for such an initiative, especially because I know Princess Marina Sturdza and I really appreciate her charity work,” said contemporary artist Zoltan Bela – who has also involved his eight-year-old son Luca in the auction. The budding creator is donating one of his best paintings, entitled Robot on the Moon, which specialists say has artistic merit, because, he said, “I don’t like to see children on the street begging for mercy.”

According to Alexandru Baldea, co-founder of Artmark, the works in the auction come from both established names like Nicolae Tonitza, Camil Ressu, Theodor Pallady and Stefan Luchian as well as contemporary Romanian artists, such as Dulhan Amalia, Ciobanu Claudiu, Zidaru Marian, Sofian Albert, Paraschiv Christian, Bota Dan, Tar Aurel, Slimovschi Alina-Ondine, Topan Dorel, Muntean Ada, Docea Mihai Constantin, Ilfoveanu Ana-Ruxandra, Zoltan Antoaneta, Pacea Constantin, Neamtu Sorin, Tipoia Alexandru, Tipoia George and Ruxandra Grigorescu.

Asked by BR the ratio, Baldea answered that in every category, pieces come equally from heritage artists, contemporary names and emerging talent.

Some of the contemporary artists who decided to donate paintings – , Francisc Chiuariu, Dorin Cretu, Sorin Ilfoveanu, Mircea Roman and Vladimir Setra – are represented by AnnArt Gallery.

“We want to (re)make together a tradition through which art is publically recognized as having both value and social responsibility in Romania,” said Gabriela Massaci, director of the AnnArt Gallery. “We are proud and honored that contemporary Romanian artists represented by our gallery have decided to support the Art for Children initiative and donate a painting.”

The highlights of the auction will be Stefan Luchian’s “Tarancuta cu broboada galbena” (Country girl with Yellow Shawl), expected to raise EUR 35,000-65,000, Nicolae Tonitza’s portrait “Baticul galben” (Yellow Scarf), with a guide price of EUR 30,00050,000, which he painted during the period he spent in Balchik, Bulgaria, Theodorescu-Sion’s “Liolea” (EUR 20,000-30,000) and Camil Ressu’s

Francisc Chiuariu’s Shade

www.business-review.ro Business Review | May 12 - 18, 2014 “Strengarul” (Naughty boy, with an estimated value of EUR 10,000-16,000).

The guide prices are from Artmark’s official website.

Art for Children is a two-year event through which Romanian artists are encouraged to create and donate artworks for disadvantaged children, thereby helping raise funds for longterm programs. This year’s focus is on abandoned children. The project will support major initiatives in the child protection, education and vocational fields, as well as contributing to projects to promote child abandonment and the early institutionalization of children, plus training and monitoring. Currently, a shortlist of NGOs that support abandoned children is being analyzed by the organizing committee.

Child abandonment in facts and figures The focus of this year’s fundraising charity event is abandonment.

UNICEF Romania’s official statistics show that in 2013, 1,449 newborns were left in maternity wards across the country. Romania has almost 8,500 under-age mothers and 60,000 children are living in institutions.

In 2013, the Minister of Labor, Family and Social Protection said that 60,000 children were in foster care, of whom 35 percent were living in residential institutions, meaning special

CITY 13 apartments where social workers stay permanently with a limited number of children. The rest live in extended families, and in some cases are reintegrated into their birth families. Nine out of ten of these children are not in fact orphans, but instead come from families that cannot afford to take care of them.

Some 45,000 of the children awaiting adoption are over six years old, making it more difficult to place them with families. Other problems are children’s ethnicity, diseases, and potential physical and psychological problems, according to a study released by the Romanian Office for Adoption, UNICEF and the Faculty of Sociology in April 2013.

In terms of employment opportunities for people interested in helping these children, there are more than 14,000 vacancies in the General Direction for Social Assistance and Child Protection, of which more than 8,000 are in the area of child protection.

The exhibition will be officially opened on Monday, May 12, at 18.00, at the National Bank of Romania, and exhibits can be viewed at Artmark, from May 14 to 27. The invitation-only auction is scheduled for May 28, at the National Bank of Romania. oana.vasiliu@business-review.ro

Princess Marina Sturdza

www.business-review.eu Business Review | May 12 - 18, 2014

14 CITY

DON’T MISS

FILM REVIEW

ROMANIAN DESIGN WEEK

May 16- 25 The Palace of the National Chamber of Commerce in Bucharest As many as 150 confirmed designers and over 350 works and projects will reflect this year’s theme: design in public space. The major exhibitions focus on architecture, interior design and urbanism, fashion, graphics, advertising and branding, lifestyle and product design.

All the works in the exhibition and the 60 side events of the 2014 Romanian Design Week (RDW) were selected following a call for proposals conducted earlier this year by a committee of curators including Adrian Soare (architect partner, SYAA), Costin Popescu (managing partner, CAP), Domnica Margescu (fashion director) and Maurice Munteanu (fashion editor, Elle), Mihai Gurei (creative director and owner, Intro) and architect Attila Kim, also responsible for the exhibition concept and design.

The adjacent events have been grouped according to their type: De-

DEBBIE STOWE Director: Wally Pfister Starring: Johnny Depp, Rebecca Hall On at: Cinema City Cotroceni, Cinema City Sun Plaza, Grand Cinema Digiplex Baneasa, Hollywood Multiplex, Movieplex, The Light Cinema

Design for life: a catwalk creation

sign Expo involving mainly exhibitions; Design Talks with conferences and debates organized by creative entities, whether designers, studios or concept stores; Design Happens with events in public spaces, interactive workshops and parties; Design Sells involving fairs and sales events and also places promoting Romanian design throughout the year; and Design Kids with a treasure hunt and other interactive educational programs. This year, a brand new event is being organized as part of RDW, the trendiest evening of the year: Fashion’s Night Out. It will trace the most glamorous route via fashion concept stores and designer showrooms in Bucharest including Adelina Ivan, MURMUR, Band of Creators, EVA, Ioana Ciolacu, Studio Lena Criveanu, Valentina Vidrascu, Carmen Secareanu, Molecule F by Night, RO Select and Irina Marinescu on the night of May 20.

Over 350 works will be on show

Computers – aren’t they amazing? They underline your spelling mistakes, bring you pictures of cats on radiators and put you in touch with Nigerian fraudsters who want to steal your life savings. But Johnny Depp thinks they can do even more than that. He’s a hot-shot scientist trying to build a sentient computer that could one day be cleverer and more capable than humans (not difficult, judging by the news most days).

However, not everyone is happy with what Johnny, or Dr. Will Caster as he is here, is up to. A series of guerilla attacks on computer labs and the boffins leading the development of this artificial intelligence leaves Will at death’s door. But his devoted wife Evelyn (Rebecca), herself a scientist, has an idea: how’s about they upload all of Will’s memories, thoughts and physical specs and merge them with the AI, so the good doctor can live on inside the computer? Ignoring the protestations of Concerned Best Friend Max (Paul Bet-

tany), Evelyn proceeds with the mad scheme and Johnny goes live.

Transcendence then briefly enters Her territory – the recent Spike Jonze sci-fi curio about a romance between a man and his operating system. Able to converse with Evelyn as a talking head on a screen, Will can still have candlelit meals whipped up and play sweet soul music on a phonograph, the old smoothie.

But director Wally Pfister has bigger concerns than the relationship dynamics of humans and machines. Having harnessed the power of the internet, computer-Will’s mega brain capacity allows him to amass an overnight fortune on the stock market, and he and Evelyn start building a massive data center (which sounds boring but it’s not) in the desert, where they are soon healing the sick and making the blind see again.

The government and guerillas are worried. Is Will going to be a force for good? Or is he an avatar with a god complex, getting ready for world domination? Are the resistance fighters ruthless technophobes with no respect for human life or progress, or are they right to use expedient tactics to stop a megalomaniac before it’s too late? One of the highlights of Transcendence is that it doesn’t deal in neat moral certainties: it’s not always clear who you should be rooting for.

First-time director Pfister is a cinematographer, which is evident in the artistry of the film’s visuals – from Will’s desert super-base to the droplets of water and green shoots that symbolize all the sciency stuff. A frequent collaborator of Inception director Christopher Nolan, here executive producer, the latter’s influence or their shared narrative philosophy is manifest in Transcendence’s willingness to grapple with big ideas and make its viewers’ think.

Proceedings start slowly – this is not a movie for the popcorn-munching blockbuster brigade. As the plot moves into the final act, it begins to look a lot like Terminator, but Depp’s hasta la vista baby is far more ambiguous.

oana.vasiliu@business-review.ro

Johnny Depp and Rebecca Hall

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Transcendence

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