Business Review No.24, July 4 - 10

Interview: On a growing private healthcare services market, Nicolae Marcu, general manager of MedLife, says further sector expansion is likely as patients become increasingly insistent on quality of service »page 7

SUMMER SCHOOLS SUMMER MONTHS ARE A PERFECT OPPORTUNITY FOR BOTH CHILDREN AND ADULTS TO ENHANCE THEIR SKILLS. BR LOOKS AT THE OPTIONS

ROMANIA’S PREMIERE BUSINESS WEEKLY

July 4 - 10, 2011 / VOLUME 16, NUMBER 24

»PAGES 16-17

Notorious for its poor infrastructure, which keeps many foreign investors at bay, Romania is taking timid steps towards improving local schemes with a potential EUR 4.8 billion available »pages 8-11

BIO AGRICULTURE Local organic farming is starting to take off as demand from external markets rises and more financial support becomes available to local players » page 14-15

RECYCLING As the EU presses for more responsible waste disposal, an innovative local industry is emerging. BR takes a look at how Romania is faring » pages 12-13

RESTAURANT American-style diners serve up easy cuisine, and recently opened Jukebox delivers when it comes to prices, food quality and service expectations » page 19

Photo: Laurentiu Obae

ROAD TO INVESTMENT

www.business-review.ro Business Review | July 4 - 10, 2011

NEWS 3

NEWS in brief

3Q Lorian Ovidiu Vintila

WEEK in numbers

1.2 Photo: Laurentiu Obae

million hectares is the amount by which Romania’s agricultural land has shrunk since 2003, when it stood at 8.2 million hectares Photo: Laurentiu Obae

Operations and Strategy Director, ZTE Romania Has ZTE signed contracts with the Romanian state?

In January ZTE signed an agreement memorandum between the Romanian and Chinese ministries. Globally, ZTE has allotted USD 15 billion to investments in telecom. We are now waiting for projects to be implemented in Romania, which will tap into this sum. Romanian state companies are currently studying the possibilities. By the end of Q3, we will probably have the first signs from them regarding the domains in which we should invest. We are very interested in the equipment of fiber optic, delivering wireless services such as WiMax and also providing handsets, as ZTE Corporation is the fourth global producer of handsets worldwide.

How many people work in the Romanian office?

ZTE has up to 150 employees but I cannot give you an exact figure because every month we get help from colleagues from the R&D department and production lines in China. This year we will continue to expand the team, and are currently actively recruiting. We need people specialized in the customization of handsets and engineers for equipping fiber optic.

In the first stage, we will be recruiting almost 20 more people by the last two weeks of Q4.

What turnover did ZTE post in Romania last year?

Last year we posted a turnover in excess of EUR 40 million. This year we forecast a total of nearly EUR 60 million. We have learned not to build a business of the cash-and-carry type, but a consultative business. This is one of the basic strategies of ZTE Romania, which I joined in 2007. We offer a system called Supplier Loan, with a grace period of two-three years, after which we have a preferential rate of interest, which I cannot disclose, but I can say that it is exaggeratedly small compared to the millions of EUR that are behind the services and products we deliver to certain operators such as Orange, Vodafone, Cosmote, Romtelecom and RDS&RCS. otilia.haraga@business-review.ro

IMAGE of the week Is that a giraffe in your subway?

Pedestrians passing through the Universitate underground passage in downtown Bucharest could spot the lower body of a giraffe extending out into the Universitate intersection. The wild animal was placed there as part of a photographic challenge by the Grigore Antipa Natural History Museum. Preparing for its imminent opening, the museum is inviting photographers to take pictures of a Bucharest wild animal for the chance to win an invitation for two to the museum’s opening.

This is the first part of a campaign with wild animal arrangements, mixing sound and color to transport passers-by to the heart of nature.

50 million EUR is how much Nuclearelectrica will spend on stress tests for the Cernavoda power plant

137 billion RON is the amount of company and individual deposits in May, up 1.2 percent compared with April of this year.

STOCK EXCHANGE RETAIL

HEALTHCARE

Property Fund appoints ING Bank as custodian

Carrefour opens 36th local supermarket

Free social polyclinic opens in Bucharest

Franklin Templeton, the investment manager and administrator of the Property Fund, has selected ING Bank to be the fund’s custodian and depositary, following a selection process that took place this June.

The contract becomes valid in August, after the current deal with Bancpost expires. Six lenders took part in the selection process.

Carrefour is opening its 36th local supermarket in Galati, eastern Romania.

The new store is located in the Potcoava commercial center, in the city’s downtown area, and has a total sales area of 480 sqm. The supermarket employs 50 people.

Out of the total 5,200 products, 1,000 are under Carrefour’s private label, the retailer has announced. In addition to its 36 supermarkets, Carrefour also operates 23 hypermarkets in Romania. Another two will be opened this year, company representatives have previously announced.

The first free clinic for people in financial difficulties has been opened in Bucharest by the Regina Maria Foundation. The polyclinic serves homeless people from Bucharest as well as those without medical insurance. Its activity will be funded by private health network Regina Maria, the Bucharest City Hall and the General City Council of Bucharest through the general Direction of Social Assistance.

According to Regina Maria statistics, Bucharest has over 2,400 homeless people and around 100,000 people with no medical insurance.

The polyclinic is located on Dristor Street, 81-88, Sector 3 and will be staffed by full-time doctors as well as volunteers.

MACRO Budget deficit reaches 1.36 percent of GDP in May Romania’s general consolidated budget registered a deficit of RON 7.42 billion (about EUR 1.76 billion) at the end of May. It went up to 1.36 percent of GDP, higher than the 1.2 percent deficit previously announced by finance minister Gheorghe Ialomitianu. The five-month deficit was generated by revenues of RON 70.7 billion, while expenses amounted to RON 78.17 billion.

The budget gap also increased by RON 3 million compared to the 0.8 percent reported in April.

The Romanian government agreed with the International Monetary Fund to keep the budget gap below 4.4 percent of the GDP this year.

ONLINE Google launches local Google Maps navigation for handsets Google has launched its Google Maps (Beta) navigation service for mobile phones in Romania. The service, which is free of charge, is available on smartphones with GPS and Android operating system, as well as mobile internet.

Dan Bulucea, country manager at Google Romania, explained that Google acquires maps from specialized providers, but also makes its own in some cases. Additionally, it also receives feedback from users in Romania.

NGOS Peace Corps to end Romanian program in 2013 The Peace Corps will end its Romanian program in 2013, US Ambassador to Bucharest Mark Gitenstein announced.

The announcement comes as the Peace Corps celebrates 50 years of activity worldwide and 20 years of presence in Romania. In the period, the program has created over 1,000 successful partnerships between US volunteers and various Romanian organizations.

www.business-review.ro Business Review | July 4 - 10, 2011

4 NEWS TELECOM

ADVERTISING

Romtelecom GM Ioannidis steps down

McCann Erickson takes home nine Cannes Lions for campaign kept secret even from GM

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Courtesy of McCann Erickson

Courtesy of Romtelecom

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orgos Ioannidis, general manager of Romtelecom, has stepped down from the position with immediate effect, putting an end to weeks of speculation. Company representatives confirmed the news to Business Review, without specifying his next move or his replacement.

“Mr. Ioannidis will leave the company on July 1. His successor at the head of Romtelecom will be announced in the near future. This is all the information we can provide at this point,” they said.

Media reports suggest Ioannidis will be replaced by Stefanos Theocharopoulos, currently CEO of Cosmote. When asked by Business Review, the two companies declined to comment on the issue.

The speculation is based on the announced merger between Romtelecom and Cosmote, both part of Greek group OTE. The move came at the same time as the Greek group, which owns 54.01 percent of Romtelecom shares, announced that it could not come up with an offer for the remaining Romtelecom shares which the state, owner of the remaining 45.99 stake, wanted to sell. OTE then proposed a merger between Romtelecom and Cosmote. Since then, the two companies have already launched six integrated stores, as well as convergent services.

Ioannidis, 61, was appointed GM of Romtelecom in February 2007, and steered the company through a major restructuring process, which repositioned the firm from a landline operator to internet, telephony, TV and electronic entertainment services provider.

Ioannidis was previously GM of OTENET, starting June 2007, and CTO of OTE, since September 2004.

Romtelecom’s revenues declined 10.9 percent in the first quarter of this year on the same period of last year, to EUR 166.3 million. The operator’s EBITDA fell 62.6 percent in the first quarter, to EUR 22.2 million. However, the EBITDA that does not include restructuring costs was EUR 42.9 million, according to an OTE report. Romtelecom announced at the beginning of the year that it would start an efficiency program through which it would axe 1,400 positions. ∫ Otilia Haraga

he Rom American advertising campaign, run in October last year, has won full-service communications agency McCann Erickson Romania nine awards at the so-called industry Oscars, the Cannes Lions awards. The haul makes the firm the most awarded agency in the global group and the region. The campaign, which depicted a fully Romanian chocolate bar bearing the national flag on its wrapper, was rebadged as American but returned to its original packaging within a week after a huge public backlash, was kept so secret by agency members that not even the GM, Bogdan Enoiu, knew anything about it.

Enoiu said he saw a Rom American commercial on the street and was shocked to discover the outdoor campaign. At the start of October, the bar was released in new packaging, bearing the US flag, as well as a new slogan, “The taste of coolness”, replacing the former “Strong Romanian sensations since 1964”. “I immediately called the agency. They did not want to tell me what it was all about and I was afraid that I would get a call from the American embassy,” Enoiu said, which had happened during a previous campaign. This campaign was however well received by Americans, who were amused by its irony, he added.

Rom Tricolor was the first Romanian chocolate bar, created in 1964 by Excelent, which under capitalism became Kandia Excelent and was later taken over by Kraft.

Mihut Craciun, GM at Kandia Dulce, said Rom sales had grown constantly since the Rom American campaign last October.

Although the market had dropped by almost 10 percent at the start of 2011, Rom sales have grown by 6-7 percent. The product continues to rank behind American competitors like Mars and Snickers, which are about two percent up, although the GM

Adrian Botan, creative director McCann Erickson; Sorin Alexandrescu, former general manager at Kandia Excelent; Mihut Craciun, general manager at Kandia Dulce; Bogdan Enoiu, general manager McCann Erickson added that they are sometimes neck and neck. Last year, Craciun said, Kandia Dulce had a turnover of EUR 25 million.

The agency won a total of nine prizess at the Cannes Lions. It picked up the final two on Saturday, the Titanium distinction, awarded for the most innovative ideas of the festival, and a Gold Lion in the Integrated category. Adrian Botan, creative director of the agency, said the Titanium award had had 10,000 entries from 75 countries and only two more winners, Nike and Volkswagen. The Integrated category reflected the 360-degree approach of the campaign, said Enoiu, likewise the prizes won by the agency for the media, PR, promotion and direct marketing aspects of its communication.

The reason why Rom became American overnight was an ironic reaction to the fact that the most popular chocolate bars are

American brands, said agency representatives. Through the campaign, Rom doubled its young consumers and generated EUR 300,000 worth of free publicity. Some 20,000 people started and joined “Get the old Rom back” Facebook campaigns in just six days, Facebook fans grew by 300 percent and the bar saw a 79 percent increase in market share which put the product at the top of its category. Rom is now back to its 100 percent Romanian branding and former slogan. The Cannes Lions International Festival of Creativity is one of the world's largest celebrations of creativity in communications. As the most prestigious international advertising awards, more than 24,000 entries from all over the world are showcased and judged at the festival.

This year, it took place between June 19 and 25. ∫ Corina Dumitrescu

STATISTICS

EBRD: Life satisfaction in Romania lowest among transition countries

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ife satisfaction in Romania is the lowest in the entire transition region, according to the second edition of a survey carried by EBRD across transition countries, which encompasses Central Europe and the Baltic states, SEE, the Caucasus, and Central Asia.

Romanians were already less happy than the transition region average in the 2006 edition of the survey. Since then, Romanians’ life satisfaction has decreased by a further 15 percentage points. At the same time, optimism about the future has more than halved since 2006.

Only about one fifth of Romanians questioned believe that their children will do better than their own generation. This proportion is now comparable to the average proportion of comparable Western European countries (France, Germany, Italy, Sweden and the UK) who think that their children will have better lives than they themselves have had.

Almost two thirds of households have been impacted by the economic crisis, the EBRD report found, with the downturn

hurting over 70 percent of the middle-aged population, and over two-thirds of lowerincome group.

When it comes to attitudes towards democracy and the market economy, just one third of Romanian respondents claim to prefer a market economy to any other economic system. Still, attitudes towards democracy have fared better, as 43 percent of respondents unequivocally support it.

At the same time, Romanians do not believe that certain basic democratic conditions exist in their countries. Only 27 percent of respondents think they have free and fair elections and only 23 percent believe the country has law and order.

Trust in public institutions has decreased as well, with only 14 percent of respondents trusting the presidency, while only 7 percent trust the government or Parliament, and less than five percent trust political parties. Religious institutions have retained the greatest level of trust.

As regards corruption perceptions, irregular payments in the health care sector are seen as particularly high. Over 43 per-

cent of respondents believe such payments are common, a 13 percent rise since 2006.

As far as priorities for government spending are concerned, half of respondents to the survey want the government to prioritize additional spending on healthcare. One quarter would have their government focus on education and 12 percent want more generous pensions.

“In some ways, the advanced European transition economies are close to the Western European comparator group – for example, with regard to corruption, which is relatively low, and satisfaction with public services, which is quite high,” said Erik Berglof, EBRD chief economist.

He added, “In contrast, most of the advanced European transition economies report significantly lower levels of life satisfaction, optimism about the future, faith in the market, support for democracy, and trust in public institutions than both Western European countries and less advanced transition economies in the east.” ∫ Staff

www.business-review.ro Business Review | July 4 - 10, 2011

6 NEWS FMCG

E-COMMERCE

Olympus opens EUR 55 mln dairy factory

Gecad ePayment rebrands as PayU, starts international expansion

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reek dairy producer Olympus has announced the opening of its first greenfield factory in Halchiu, Brasov county, following an investment of over EUR 55 million. The company’s total investment in Romania since 1999 is estimated to reach EUR 70 million by the end of this year.

Ilias Pliatsikas, deputy managing director of Olympus Romania, said the company chose Romania for this investment due to its geographical position and available raw materials.

“We are in Romania to stay. We have chosen to build this factory here because, first of all, it offers us good access to the European market and, secondly, after 12 years of local investments we are sure that we can obtain good quality milk from local farmers. Also, after 12 years of running operations in Romania we have a good knowledge of the local consumer,” said Ilias Pliatsikas, deputy managing director of Olympus Romania.

The factory covers 25,000 sqm and at full capacity can process 40,000 liters of milk and produce 16,000 liters of PET milk per hour and produce up to 120 tons of yogurt and 100 tons of white cheese per day. By the end of 2011 the factory is estimated to be running at around 30 percent capacity and it should reach full capacity in three years’ time, company representatives have announced. All the necessary milk comes from local farmers and milk collecting centers. About 60 percent of the total production will be exported to Europe and the US. Olympus Romania reported a EUR 20 million turnover in 2010 and plans to increase the figure to EUR 24 million this year and EUR 30 million in 2012. After this, company representatives say the target is to boost turnover by EUR 15 million each year to EUR 70 million.

The Greek producer has been present in Romania since 1999 when it bought a dairy factory in Baraolt, Covasna county, which, following the opening of the new unit, has been closed. The company also owns a 23 percent stake in local dairy firm Prodlacta. ∫ Simona Bazavan

Courtesy of Gecad

Courtesy of Olympus

Ilias Pliatsikas, deputy managing director of Olympus Romania

ecad ePayment, which has been taken over by the integrator of online payments PayU, part of South African group Naspers, plans to expand its operations in ten European countries, a total market of EUR 20 billion.

“In the first stage, we will invest EUR 2 million during our expansion in Europe and the first market where we will establish a presence in the next weeks, is Hungary,” said Daniel Nicolescu, CEO of ePayment. The Romanian electronic commerce market will this year reach EUR 350 million (a figure which does not include tourism and utilities transactions). By comparison, the market in Hungary, a country with a population half the size of Romania, is valued at EUR 625 million. In the Czech Republic, the market is EUR 1.3 billion while in Poland it totals EUR 4 billion.

Asked by BR what drives the firm to move into a foreign market, Nicolescu said, “We take into account the operations of the group on the respective market and the potential of that market,” he said.

Daniel Nicolescu, CEO of ePayment

He added, “The potential of the market in Romania is much higher for a player such as PayU compared to a market like

Germany which is very mature and where the players are already established and well known, so the time taken to increase our market share would have been much longer. So we are looking at countries in this region where we can make a difference via financial power, resources, experience and operations that we are already deploying in that country.”

In order to carry out its strategic plans, ePayment, which currently works with a team of 36 specialists, will add 44 more to its roster. They will work in software development, project management, implementations and testing. ePayment estimates it will process 2.4 million transactions this year in Romania, which will total more than EUR 160 million. This represents a 30 percent growth compared to the previous year.

Gecad ePayment will also undergo a re-branding process that will last several months, after which it will eventually be called PayU. ∫ Otilia Haraga

PUBLISHING

Former Academia Catavencu editorial team launches new paper called Catavencii

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he editorial team of Academia Catavencu has left the newspaper after the second public auction for control of the satirical weekly was won by Claudiu Padurean. The departing staff will start a new editorial project called Catavencii.

Padurean is a journalist at newspaper Romania Libera. He was bidding on behalf of Dan Adamescu, owner of the publication for which he works.

The former team, still led by editorial manager Doru Buscu, will work under a new president, the poet and political analyst Mircea Dinescu, according to paginademedia.ro Dinescu has already appeared with his colleagues in a video announcing and promoting the new peri-

odical. The new paper will reportedly be released under the umbrella of Adevarul Holding, which is owned by businessman Dinu Patriciu. However, Patriciu has not yet confirmed the reports.

During the second public auction, held after the first was annulled when the winning bidder proved unable to come up with the money, Academia Catavencu sold for EUR 882,659 (EUR 711,822 plus VAT), under half the sum of the highest bid the first time round. The other bidder was Orlando Nicoara, general manager of Mediafax Group. Nicoara could not be reached by Business Review for comment by press time.

Buscu, former editorial manager of Academia Catavencu, won the first auc-

tion with a bid of EUR 1.6 million (VAT included), but did not manage to come up with the entire sum. He did not participate in the second auction.

Bidding again started from EUR 149,322, excluding VAT, and each new bidder upped the sum by EUR 7,500 when placing a new offer.

According to Buscu, Academia Catavencu currently sells 21,000 copies of each edition, which is close to the circulation of the magazine when it appeared on the market in November 1991.

However, its heyday was in the mid 90s, when the magazine regularly sold 120,000 copies. By June 2010, the circulation had fallen to 26,000. ∫ Otilia Haraga

APPLIANCES

Romania is Miele’s highest growing market in SEE

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iele, the producer of premium home appliances, estimates it will post a total turnover of EUR 2.5 million at the end of this year. “At the moment, Romania is the country with the highest rate of annual growth for Miele in South-Eastern Europe,” Leo Popescu, sales manager at Miele Appliances Romania, told BR. He added that the local market of premium home appliances is in the process of becoming more mature. The company ended the first half of the year with a turnover of EUR 1.2 million, 45 percent up on the same period of 2010 (January-June).

The laundry care segment made up 30 percent of the turnover, ovens 25 percent,

refrigerators 20 percent, and dish washers 20 percent. “As for vacuum cleaners and kitchen furniture, we calculate these separately from large appliances,” Popescu said.

Miele started its activity in Romania as Miele Appliances SRL in 2007. The company currently has over 40 stores in the main cities nationwide via a network of 30 partners. In February, the producer announced the opening of an exclusive showroom in Brasov, in partnership with the company Neomine, the third showroom opened by Miele in Romania. The company’s two other such mono-brand shops on the local market are in Bucharest, since 2007, and Arad, since last year.

In 2009, Miele decided to expand its production capacity in South-Eastern Europe by inaugurating the production unit Miele Tehnica, also in Brasov, at Feldioara.

Company officials have repeatedly said that Romania is a development hub for Miele in the SEE region.

The firm launched several products on the market last week, including washing machine W 5000 Supertronic. Others include the W 5965 WPS, another washing machine, and the clothing dryer T 8000 Supertronic, top of the range at Miele. The new vacuum cleaner S 5211 Eco Line Green joins the line-up. ∫ Otilia Haraga

www.business-review.ro Business Review | July 4 - 10, 2011

INTERVIEW 7

Private health sector fighting fit despite ailing economy The private health services sector is one of the few not infected by the economic crisis. This has left room for small businesses to emerge, but now the giants are seeking to get their healing hands on a greater slice of the market.

NICOLAE MARCU, GM at MedLife, a local medical services provider with EUR 25 million of investment plans for this year, says local consumers have high expectations for service quality. ∫ CORINA DUMITRESCU

cannot be postponed on account of the crisis.

Moreover, Romania is one of the few European countries where this market segment is very dynamic and there is still considerable potential for the development of private medical services.

How do Romanians regard the private medical system? Have you observed any major changes in recent years?

The medical services market is very dynamic and the main companies in the field are already at the level of those abroad, in terms of services and conditions. However, the market remains fragmented on account of the high number of proximity surgeries and small medical groups owning one-two clinics. Unfortunately, in such cases, I do not know if we can speak about professionalism, but more of market inertia. This domain is profitable and has continued to develop even when other economic sectors were hard hit by the crisis, which is why so many opportunists took advantage of this effervescence in order to open a neighborhood surgery, with only a few medical specializations, but which probably provides a constant source of income.

In spite of this, the major players in this domain have an aggressive extension policy, which also targets taking over smaller medical groups with experience and proven results over time. Therefore I am confident that the market will slowly begin to consolidate. We can be sure that it will continue to grow in the future.

Moreover, we will witness an explosion in hospital investment and other medical units, due to two factors: the deterioration of the state medical system, which cannot meet the real needs of patients, and Romanians becoming increasingly aware of the quality and comfort of private services. Payment efficiency in this system, owing to the informal state contributions, is another aspect.

In 2007, you announced regional expansion plans with the MedLife brand. Is that still the case?

For the moment, we are focusing on the Romanian market, but we will not give up on our expansion plans in the future.

Courtesy of MedLife

How has the behavior of the private medical services consumer changed over the past couple of years? What makes Romanians choose one provider over another?

Consumer behavior has changed significantly in recent years. The consumer has become more educated, more demanding, has higher expectations and is a lot more careful about his or her personal health. Indeed, we are going through a period in which the consumer is more reserved over spending, but as health is not an area to cut corners, local people are more willing to pay in order to solve their medical issues.

In terms of which factors shape the choice of a clinic, the criteria are clear – first of all the doctor’s expertise, the complexity of the supplied services, equipment that gives a correct diagnosis and, last but not least, the safety of the medical procedures and patient comfort.

Do you plan to add new medical specializations to your current portfolio?

We will probably develop major projects to add new specialties to our portfolio.

Recently, we opened the MedLife Pediatrics Hospital, the first hospital in Romania and in Central Eastern Europe to be fully dedicated to children. We will also open two new hospitals: a specialized one focusing on orthopedics, another premiere in the private sector, and a general one in Brasov.

What is the state of the Farma Life project?

Last year, we started a new line of business – pharmacies. We chose this business for two reasons: we aim to provide a full complement of medical services at MedLife and to a substantial number of clients at our facilities – through which we serve an estimated 4,000 people. So far, we have seven functional units – concentrated more within our larger facilities – and we are planning to extend our pharmacy chain this year.

state-of-the art medical equipment, similar to what is found in clinics abroad, we involve doctors in interdisciplinary collaboration, we send them to international congresses and conferences and we continuously adapt to their needs. All of these criteria have helped us not just to keep the doctors that we have, but to bring back those who had gone abroad.

We value their experience. We have doctors that have worked in Canada, France, England, and are now working for us.

How do you think Romanian doctors could be persuaded to stay here and practice medicine in their home country?

First of all, we should create adequate working conditions for them, giving them the chance to practice in full teams with the aid of functional medical equipment for their day-to-day work. We try to accomplish this every day – we acquire

How has the private healthcare system evolved since the beginning of the crisis and what do you think 2011 will bring?

In spite of the economic climate, the medical services market has grown, proving to be one of the few businesses to have avoided the effects of the crisis.

This is also due to the nature of the business – as dealing with health problems

Is there room for new entries on the local private medical care system?

Romania is one of the few countries in Europe registering dynamic growth on the private services market, with a high potential for development and extension.

This includes the prospect of new entries, projects, niche coverage and major acquisitions.

We are far from having a saturated market and the investment explosion that we are witnessing right now confirms the dynamism of this market segment and last, but not least, investors’ interest in the private health area.

corina.dumitrescu@business-review.ro

CV Nicolae Marcu 2008: MD in psychiatry 2002: Becomes a specialist doctor in psychiatry at the Alexandru Obregia Psychiatry Hospital 1998: Holds a teaching position in the Psychopathology and Psychiatry department of the Hyperion University 1997-2002: Resident psychiatrist at the Alexandru Obregia Psychiatry Hospital 1996: Graduates from the Carol Davila University of Medicine and Pharmacy A member of several psychiatric associations, he has published 20 psychiatry works and 20 on the history of medicine.

www.business-review.ro Business Review | July 4 - 10, 2011

8 FOCUS INFRASTRUCTURE

∫ ANDA SEBESI

Photo: Laurentiu Obae

Long and winding road: Romania’s attempts to improve its infrastructure have not had an easy ride

Romania builds hopes for better infrastructure Romania is due to receive around EUR 4.6 billion for transport infrastructure from EU funds. But while there are several major projects in progress, the country still has one of the lowest levels of investment in infrastructure, making foreign investors cautious about putting their money here, because of the high costs of transportation.

BR investigates the hold-up.

Romanian infrastructure has been the subject of significant debate for many years and the progress made towards improving its systemic infrastructure problems continues to be limited. Weak infrastructure is both a huge disincentive when foreign investment decisions are made and a financial burden for all companies that operate in Romania, as transportation continues to be more expensive because of poor road conditions. According to the most recent data from the Romanian Agency for Foreign Investment (ARIS), the level of foreign direct investment dropped from EUR 9.5 billion in 2008 to EUR 3.48 billion in 2009 and again to EUR 2.26 billion in November 2010, with the current economic crisis the main factor. In addition, weak infrastructure has dampened foreign investors’ interest in Romania.

According to a report by the World Economic Forum, cited by Mediafax, Romania is ranked 134 out of 139 countries regarding the quality of its roads. Despite being the ninth largest country in the EU, Romania has only 313 km of motorways, which is less than three percent of the German motorway network.

Meanwhile, in Hungary, for example, the State Motorway Management Co. Ltd., founded in August 2000 by the merger of three companies, is responsible for the operation and maintenance of roughly three quarters of the country’s highway system. This totals more than 700 km of highway, some 200 km of motorway and roads and a 366 km long road junction branch.

“Comparisons with CEE and EU countries are striking: the density and quality of the roads are a tenth as good. Romania has very few kilometers of highways and investments in absolute terms continue to be very low compared to local needs. It would take tens of years to close the gap at the current pace of development, especially as we are talking about two key components: extension and improvement of the existing infrastructure,” says Bogdan Belciu, partner, advisory services, at PwC Romania.

He adds that while growth in the development of Romanian infrastructure is high compared to other countries, the statistics are distorted by the fact that we are starting from a very low base.

Daniela Nemoianu, executive partner at KPMG, says that many of the infrastructure projects are not exactly nice luxuries. “They are projects that are essential to people’s lives, which government simply cannot afford to put aside, pending a return to happier economic times. The budgetary constraints on public sector funding remain, though, and are becoming worse. This is why we could now see up an upswing in the attempts to pursue infrastructure projects through Public-Private Partnerships (PPP), tapping into private sector funds and resources to deliver public infrastructure amenities,” says Nemoianu.

She adds that tackling the infrastructure investment challenge relies on Romania raising its game. “The people in charge of the EU funds’ pursestrings will need to be persuaded that the government is transparent and compliant about contracting and delivering these projects. Leveraging the limited public money available through access-

www.business-review.ro Business Review | July 4 - 10, 2011

10 FOCUS INFRASTRUCTURE

Photo: Laurentiu Obae

Slow progress: only a fraction of the kilometers needed to make Romania easily traversable have materialized

ing private funds will have the maximum input on infrastructure,” says the KPMG representative.

One of the main problems that Romania faces is its degree of absorption of funds for developing its infrastructure.

According to the World Economic Forum report, Romania will receive EUR 4.6 billion for transport infrastructure by 2013.

Anca Boagiu, minister of transport, said earlier this year that she intended to increase the ratio of absorption of European funds from 4 percent at the beginning of 2011 to 20 percent at the end of this year.

“We have managed to grow the absorption from EUR 32 million to EUR 113 million in the past months. I think we will manage to absorb the majority of funds although it is a tremendous effort. We will increase it to 20 percent by the end of 2011,” stated Boagiu at a seminar organized by Ziarul Financiar in March.

She added that in order to reach this ratio, payments from European Commission need to increase from EUR 113 million to EUR 500 million. Boagiu intends to make payments of EUR 2.7 billion for projects by the end of 2012, rising to EUR 3.6 billion by 2013. she has said.

Big projects in Bucharest, but few

contested since the beginning by many NGOs that have criticized the decision to destroy some historical monuments in its way. In November last year, Sorin Oprescu, the mayor of Bucharest, described the Buzesti-Berzei-Uranus project as “the largest urban operation in the last 20 years”. Local authorities estimated the value of the investment at about EUR 330 million at that time.

Motorways still stalling Although Romania has few kilometers of motorways, the future seems to be brighter, at least according to the minister of transport. She says that Romania will have 845 km of motorways in the coming years as the result of a EUR 5.17 billion investment. ”There are 313 completed km of motorways and another 276 underway,” said Boagiu at the end of May. She also signed

Cost efficiency in question On the topic of cost efficiency, Belciu says that not only does Romania need to use all available sources of funding, but it also

En route: projects due to start this year l Rehabilitation of the Campina-Predeal railway line. The project started back in 2007 and is worth EUR 312 million l Timisoara-Arad motorway. Final delivery will be next spring. The project started in 2009 and is estimated to cost RON 483 million, without VAT l Moara Vlasiei-Ploiesti segment. The 42.5 km project is estimated at EUR 238 million

Photo: Laurentiu Obae

Bucharest’s Basarab Bridge was officially opened in mid-June. The most important infrastructure project of the last 20 years links Nicolae Titulescu Boulevard, Orhideelor Highroad, Grozavesti Bridge, Vasile Milea Boulevard (for tramways) and Grozavesti Highroad. The EUR 160 million plus deal was signed back in 2006 and had an execution period of 45 months.The Bucharest subway is also set to expand, with Metrorex announcing that it intends to extend Line Four to include two more stations, Laminorului and Straulesti. The estimated value of the contract is RON 375 million without VAT, with the deadline for completing the work being two years.

Last month the Ministry of Transport launched a public debate about the prospective extension of Line Four to the area of Straulesti Lake, where a terminal

with parking space, a dispatcher and a car station will be built. The investment for this project is estimated at EUR 298.5 million with VAT included, financed by a loan from the European Bank for Investments, the state budget and Metrorex. At moment, Line Four has just four stations – Gara de Nord 2, Basarab 2, Grivita and 1 Mai – while two more – Pajura and Parc Bazilescu – will become operational in July. Metrorex has also signed a contract for the Raul Doamnei-Eroilor transom of Line Five with a consortium led by the Italian company Astaldi and delivery in 2014.

The contract is worth EUR 215 million without VAT, out of which 50 percent will be funded by the European Bank for Investments and the remaining 50 percent by the Romanian state budget.

Another project that could be delivered this year in Bucharest is the over-expansion of Pipera Highroad and the passage over Barbu Vacarescu Boulevard.

The work started last year and has 2012 as the deadline, with the contract worth EUR 25.3 million, including VAT. But there has also been bad news for Bucharest: the minister of tourism and regional development, Elena Udrea, recently announced that she had asked the State Inspectorate of Construction (ISC) to halt the building of the Buzesti-Berzei segment of the future Buzesti-BerzeiUranus Boulevard. The project has been

the first five contracts for 98 km of Corridor IV with a total value of EUR 692.68 million and a deadline of 2013. Asked if the average price per km for the five contracts – about EUR 7 million – was bad value, Boagiu said that this didn’t reflect passages and bridges, operations that are included in these contracts.

Further good news is that the Basarab-Constanta transom of the Soarelui (Sun) Highway and the Constanta ringroad on a single lane will be finished in July. The Basarab-Constanta section is part of the Medgidia-Constanta route where Astaldi and Max Boegl are working with a contract worth EUR 211 million. The money came from the European Bank for Investments and the state budget.

Meanwhile work on the Deva-Orastie highway transom, part of the Trans European Corridor IV Nadlac-Constanta, began in April this year. The 32.5 km road will be split into two segments: SimeriaOrastie (which will be completed in August 2012) and Deva-Simeria (to be finished in February 2013). The value of the contract is about EUR 178 million, without VAT, out of which EUR 109 million came from the European Commission and the rest from the Romanian government.

Despite the new launches that have taken place this year, the Transylvania motorway is still posing big problems for the Romanian authorities. They have to negotiate a new deadline with American company Bechtel, which will overrun the established one in 2012. The project to construct the Transylvania motorway’s Brasov-Bors transom started back in 2004 based on a EUR 2.2 billion contract signed with Bechtel. But work stopped in the middle of 2005. The Transylvania motorway will be 415 km long, with the total segment built by now with the financial support of the state hardly exceeding 10 percent of the total route.

Driving forward: motorists want alternative routes to alleviate city traffic

www.business-review.ro Business Review | July 4 - 10, 2011

The five contracts for the Corridor IV motorways Job: First segment, 10 km of TimisoaraLugoj sector of motorway Consortium / company: Romanian-Italian association Spedition UMB-Tehnostrade-Carena SpA Impresa di Costruzioni Contract value: EUR 63.62 million Job: First segment and the link road of the transom of Nadlac-Arad motorway Consortium / company: Romanian-Portuguese association Romstrade-Monteadriano Engenharia e ConstrucaoDonep Construct Contract value: EUR 115.8 million Job: The second segment and the link road of the transom of Nadlac-Arad motorway Consortium / company: Alpine Bau Contract value: EUR 124.45 million Job: First segment of Lugoj-Deva motorway Consortium / company: Tirrena ScaviSocieta Italiana per Condotte d’AcquaCossi Construzioni Contract value: EUR 205.9 million Job: The third segment of Orastie-Sibiu motorway Consortium / company: Impregilo Contract value: EUR 182.91 million Source: Mediafax needs to do it in the most cost effective manner, avoiding waste, excess or unjustified costs. According to Stefan Ponea, managing partner at Industrial Access, any building contractor includes in its quote extremely high margins in order to be able to cover for any unpredictable costs.

“This generates a very inflated cost structure for each stage of the project,” he says. Referring to Romanian building contractors, he adds that Romania has a low enough cost of labor and they prefer to work that way rather than adopting new working methods. “Another important issue in managing production costs is that Romanian building contractors prefer to buy equipment even if they haven’t been working at 60 percent of capacity for five years consequently.

This is reflected in fixed costs, amortization, storage costs, security services, maintenance, rental costs, etc,” says Ponea.

He adds that in countries with more developed infrastructure such as Great Britain, Germany and France, many building contractors lease their equipment rather than buy it. Last but not least, the efficient planning of a project could cut the final cost by 30 percent, from labor force costs to transportation.

At a crossroads Romania risks falling behind in the global race to develop efficient and sustainable economic infrastructure and the nation’s future economic growth depends on the success of a rapid and coordinated national revitalization of Ro-

INFRASTRUCTURE FOCUS 11 manian infrastructure, say commentators.”The crisis and growing global infrastructure demand mean Romania now faces even greater competition for the finance and resources we need to complete our most pressing projects.

Unless we can fund these infrastructure projects, we face the prospect of an increasingly stagnant economy and attendant increases in the level of unemployment,” warns Nemoianu of KPMG. Belciu of PwC adds that Romania has some key issues that need to be resolved for the country to adapt to the current economic context. “First, it is about creating of a clear strategy for infrastructure development. With huge needs and limited funding available, investments need to be prioritized carefully in order to direct the funds to the areas that need most support,” says Belciu. He adds that the usage of EU funds for infrastructure, a sector where their absorption has been very low, must be maximized.

“It is also important to identify com-

plementary funding as EU funds will not be sufficient to address the development needs, which is a difficult task given the ongoing budgetary constraints.

In this context, the leverage of PPPs, euro – the amount concessions or similar methods could provide in certain instances an important Romania expects to source of alternative funding. receive for transport These methods are widely used in many EU countries, including France, Italy, infrastructure Portugal, Spain, Great Britain, Ireland, and to a relatively large extent in other CEE countries like Hungary,” says line, terms and required quality of work Belciu. were not met,” says Ponea.

Ponea of Industrial Access suggests “The lack of a realistic long-term nathat a potential solution for optimizing tional strategy (at least ten years) is the Romanian infrastructure would be to reason for the current blockage.” take the same path that other Eastern and In his opinion the real liberalization Western European countries have folof the market by eliminating the politilowed. cal factor in allocating infrastructure “When the state or local authorities projects could be the right approach for haven’t been able to manage some inmanaging efficiently all the players that frastructure projects efficiently and have infrastructure projects in Romania. quickly – because of a lack of money – the only sustainable solution was to lease to “There is no lack of funds, bidders or demand for roads. There is a lack of vision,” private companies, specifying clear exsays Ponea. ecution terms and penalties if the dead-

4.6 bln

www.business-review.ro Business Review | July 4 - 10, 2011

12 LINKS RECYCLING

The Waste Land: Romania disposed to meet EU recycling norms Europe’s need to deal with the resources in its own back yard in a responsible way has become a pressing issue.

Many are increasingly hard to find, lying outside European borders. Meanwhile, EU member states have to meet strict recycling targets. How is Romania doing? Unfortunately, not very well. BR presents the first in a series of articles to shed more light on this business of the future. ∫ OTILIA HARAGA

Courtesy of ROREC

Junk trading: scrap items can be a useful source of recycled resources

Marius Costache of GreenWEEE raw materials is the major cost savings for producers,” says Marius Costache, general manager of GreenWEEE International.

EU Directive 96, which came into force on August 13, 2005, applied to all the member states, at that time 25. When Romania and Bulgaria joined the EU on

to grow collection targets and reintroduce secondary raw materials, which result from recycling, into new products.

Natural resources, as we know very well, are limited and Europe in particular does not have them in its own territory.

What this new directive means to achieve is higher independence for producers of new equipment by reusing secondary raw materials. There’s even a concept to define this, urban mining,” says Costache.

Directive 96’s collection target for each member state is 4 kilograms of WEEE per person, which in Romania means 84,000 tons annually.

While Western countries are coping very well with these demands, Eastern Liviu Popeneciu of RoRec European countries are falling below the target. Romania is one of the laggards.

January 1, 2007, they 'inherited' this law “In 2009, the peak year of WEEE collection as well. The directive has been under rein Romania, the not-yet-final figure revision for some time and the new Euroleased by the National Agency of Envipean directive that regulates WEEE ronment Protection is 35,000 tons. As should come out this year. practitioners in this field, we have reason “Currently, there are still discussions to believe it was not more than 30,000 about collection and recycling targets, real tons, the remaining quantity being but one thing is for sure: the intention is in fact only on paper. If we relate this Courtesy of RoRec

Courtesy of RoRec

“As consumers, we have bought into quick replacement, which means the life cycle of electronic equipment has dwindled. European producers are under pressure to make new equipment because of consumers, but this also means high consumption of resources. How can we quench consumers’ thirst for the new while also managing the resources this requires? This seemed hard a while ago but today it can be done,” Liviu Popeneciu, president of the RoRec Associations, tells BR. Resources are running out, so the only way to get more is via recycling. Not to mention the political pressure generated by the lack of resources within European borders. “The attitude of the European Commission and European Parliament means that economic activities are being steered in such a way that by 2020 Europe will have become a society of recycling,” says Popeneciu.

Of the overall waste generated by a community, household trash represents more than 80 percent. Next comes solid waste such as construction debris which accounts for 7-8 percent. Then it is toxic waste such as oils and paints, at 3-4 percent. Waste electrical and electronic equipment (WEEE) makes up 5 percent at most of the total quantity generated by a community. However, the European trend is to recycle as much WEEE as possible.

So, why the big fuss about only 5 percent? There are three main reasons. One is that WEEE contains highly polluting substances. Secondly, some of these ingredients can be recovered and reused in new equipment. Thirdly, a law at EU level, also applicable in Romania, very clearly stipulates the do’s and don’ts when it comes to 'getting rid' of old equipment.

The WEEE treatment process results in two types of fractions. Some are dangerous for the environment such as Freon, mercury and fluorescent powder which can also contain mercury, plus glass with a high amount of lead. There are also fractions with a positive worth, which go into the category of secondary raw materials, such as ferrous and nonferrous materials, plastic materials and so on. The dangerous fractions are sent to be neutralized either in Romania or the wider EU. As for the positive fractions, they can end up in Romania or outside its borders at the producers of raw materials for industry, where they are re-introduced into the economic circuit.

“The advantage of using secondary

www.business-review.ro Business Review | July 4 - 10, 2011

quantity to a population of 21 million Romanians, we are talking about 1.4 kilograms per capita,” says Popeneciu. It gets worse. “In 2010, our estimations are that the total quantity of collected WEEE is 25,000 tons, which means 1.25 kilograms per capita,” he continues.

What does this mean? “Romania did not manage to collect in three years what should be the collection target for one single year,” says Costache. It also means that Romania is running on borrowed time since failure to meet targets constitutes an infringement. “As a member state, Romania has certain targets and obligations to the EU and not attaining them will incur penalties. These can reach as much as EUR 200,000 a day,’ he adds.

One of the major causes of this failure to collect is also the parallel flow of waste.

“Annually, very large quantities of WEEE are lost in other fluxes of waste such as scrap iron, and household waste dumps. Unofficial figures show that more than 30,000 tons of WEEE are lost in this way each year, which means nearly half of Romania’s annual target,” says Costache. Getting rid of your WEEE waste at the dump or giving it away for scrap iron is, of course illegal, but few Romanians know that. In other European countries, disposing of your waste irresponsibly can earn you a fine and may also constitute a criminal offence. In Austria, for instance, it is punishable with a prison sentence, says Popeneciu. Not so in Romania.

This is bad for producers who have certain targets to meet. “Unfortunately,

RECYCLING LINKS 13 WEEE collection rate in 2008 Sweden 14.8 kg/capita Norway 10.5 kg/capita Finland 9.8 kg/capita Latvia 2.7 kg/capita Lithuania 3.4 kg/capita The Netherlands 6.1 kg/capita Belgium 8.2 kg/capita United Kingdom 6.9 kg Ireland 9.0 Germany 7.8 kg Austria 8.8 kg/capita Italy 2.6 kg/capita Spain 6.3 kg/capita Portugal 3.9 Greece 4.0 kg/capita Cyprus 2.9 kg/capita Czech Republic 4.3 kg/capita Slovakia 3.5 kg/capita Poland 1.0 kg/capita Hungary 4.5 kg Romania 0.8 kg/capita Bulgaria 5.1 kg/capita Source: Eurostat

this violation of the law cannot be punished by applying the specific legislation, government decision 1037/2010, because there is no amendment in this sense.

We are thus in the absurd situation in which, if we miss our waste target even by 1 percent (for example, attaining 79 percent instead of 80 percent), we can be

punished with a fine of between RON 40,000 and 50,000 and the temporary suspension of activity. On the other hand, illegal waste dumping is very difficult to punish, possible only by invoking environmental protection legislation (government emergency ordinance 195/2005 approved through the Law 265/2006) with fines starting from RON 5,000 and with no consequences for continued activity,” complains Mioara Bolozan, marketing manager of Whirlpool Romania.

European Directive 96 does not only impose targets for WEEE collection. “The waste extraction target is 80 percent, which is still low, because technologies have evolved tremendously and it can now reach 92 percent. There are about 250-280 recyclers in Romania at the moment of which only three installations meet the criteria,” says Popeneciu.

The framework in Romania was begun even before the country was admitted into the EU. Government decision 448 in 2005 was adopted by the Tariceanu government, and remained unchanged until the fall of 2010. Now, the law stipulates that there should be WEEE collection infrastructure consisting of one center per every 50,000 inhabitants.

The first such centers were built by RoRec in Tulcea and Valenii de Munte in the last two weeks. “We are very much insisting on partnerships with city halls for the construction and administration of a national network of collection centers. These will not be opened at random, but taking into account criteria such as the public’s capacity to generate waste, access roads, thecoverage area, the size

and type of population and investment costs,” says Popeneciu.

The initial estimated investment in such a center that meets EU norms was calculated at around EUR 50,000. “We managed to keep costs even lower and in Tulcea the investment was below EUR 30,000. We now wish to take future investments down to EUR 20,000. However, as there will be a national network of 100-120 such centers, you can add up the figures,” he said.

Big cities that usually spearhead change in any domain are not scrambling to enroll in this initiative. “The most complicated thing is that the city hall needs to make available a publically owned strip of land that covers, on average, 500 sqm, and free of charge. This is why Bucharest is not even in the scheme yet,” says Popeneciu.

With a population of over 2 million, the capital would require 40 such centers.

At the moment, there is none, even though discussions are under way with sector 4 and sector 6 city halls.

“The recycling industry is a business of the future that has become a strategicpolitical preoccupation. This means that European politicians will relentlessly pursue WEEE recycling and bring it out of the black and grey markets, which is especially the case in Central and Eastern Europe. This means that in Romania, we should not harbor the illusion that nobody can see us. Because this issue is about a fundamental need in the future,” Popeneciu adds.

otilia.haraga@business-review.ro

www.business-review.ro Business Review | July 4 - 10, 2011

14 FOCUS BIO AGRICULTURE

Seeds of organic farming begin to sprout leaves Driven by demand on external markets and more consistent financial support, Romanian organic agriculture is beginning to show signs of germinating. To find out more about investing in organic farming, BR talked to Wil van Eijsden, a Dutch entrepreneur who chose the Romanian region of Transylvania to set up an organic herb farm. ∫ SIMONA BAZAVAN

Courtesy of Agri+Cultura Transilvania

“I must admit that being an experienced conventional farmer myself, up until recently I didn’t believe that organic farming was worth the attention,” said Adrian Radulescu, state secretary with the ministry of agriculture and rural development, during a recent press conference on organic farming.

The politician revealed that he reconsidered his position after accompanying a Romanian delegation to the BioFach organic trade fair in Germany – the largest in the world – where Romanian farmers managed to sign contracts worth EUR 150 million in a single day, according to Radulescu.

Low incomes, little in-depth public information on nutrition and lack of tradition mean that the domestic market for organic products is a far cry from mature ones in Western Europe. On the other hand, it is exactly the increasing demand on these markets that has given a helping hand to local organic farmers. Export prices for organic products can be up to three times higher than the price of conventional agricultural equivalents.

Further growth could come from exports alone but the problem is that Romania doesn’t have the physical capacity to match internal production with the increasing external demand, the state secretary said.

The area of ecologically farmed land has grown in Romania around 15 fold in the last ten years, to 260,000 hectares – making up almost 2 percent of total farm production, according to the Agriculture Ministry's data. Citing the same source, the local organic farming sector has registered average annual growth of 23 percent. In 2010 there were about 3,100 Romanian organic farms and organic food producers.

The Romanian organic food market reached approximately EUR 40-50 million last year and could see a 20 percent increase in 2011, said Marian Cioceanu, president of Bio Romania, the association of Romanian organic farmers. The predicted growth rate is similar to the figures registered in the past couple of years, he added.

Compared to previous years, local organic farmers have managed to get more attention from the authorities. Their stated target is to increase the number of organic farmers and exports of products with a higher added value. In 2011 Romanian certified organic farmers received subsidies for the first time after Romania renegotiated the structure of the National Rural Development Program

Cultivating a profit: organic products attract a price premium from health conscious consumers (PNDR) with the European authorities.

Subsidies vary from EUR 163/ha for cereal crops to EUR 393/ha for orchards and vineyards. Should the sums be doubled during the conversion period from conventional agriculture to obtaining organic certification, only then would Romanian farmers be able to compete on equal terms with their European counterparts and local organic farming would grow to a share of about 12 percent of total agriculture, thinks Cioceanu.

By the end of this year, the authorities plan to have formulated a clear strategy for Romanian agriculture, including organic, for the short and medium run, and organic farming is already a chapter in the country’s export strategy for 20112015. The potential is there and everyone agrees on this. The key to success is to create strong producers associations, clusters that would give small farmers access to know how, financing and the benefit of collective marketing, authorities say.

Such business models could also mean upgrading exports from mainly raw materials to better priced processed organic products under individual brands.

One product that could benefit from the creation of such brands is local organic honey. Presently, organic beekeepers export their honey in bulk to

countries like Germany only for it to be later resold, at a higher price, under German brand names.

Last year Romania imported organic food products worth EUR 35 million while exports reached EUR 150 million.

Cioceanu says imports are so high because for now Romania is mainly a producer of raw materials for the European organic food industry. Internal consumption has been rising in the past few years but Cioceanu says that exports were the biggest income generators, especially for local farmers who don’t get subsidies. "Without exports, we would not be talking about ecological farming in Romania," he went on. The major produce from ecological farming in Romania are cereals, honey and wine.

Organic is the long game “Organic farming is a choice one makes, confident that it is the right thing to do.

When you approach it only from the aspect of discounted cash-flow and IRR, then you’d better make another choice.

Start making PET bottles or shoes but don’t go into (organic) farming,” Wil J. van Eijsden, director and owner of Agri+Cultura Transilvania, told Business Review.

He runs an organic herb farm in Cristuru Secuiesc, a village in Harghita

county in central Romania, but the Dutch investor has over 30 years of international professional experience in farm systems and organic agriculture, food processing and trade. He has been involved in various projects in a large number of countries – from the Netherlands and China to Mozambique and Paraguay. van Eijsden argues that given the international context and the pressure to feed a mushrooming world population, investing nowadays in organic agriculture means investing in something that is becoming mainstream and unavoidable.

And also something that can score well on the economic side by operating in a niche

Organic certified companies in Romania in 2010 Total number: 3,160 Agricultural producers: 2,979 Food processors: 83 Aquafarmers: 3 Retailers: 93 Data from the Agriculture Ministry

www.business-review.ro Business Review | July 4 - 10, 2011

50 mln euro – the estimated value of the local organic products market

As for setbacks, bureaucracy ranks top, according to van Eijsden, along with the fact that many local workers are leaving the country to work abroad. “Organic farming and thinking requires long-term planning and not only short-term profits.

That is not a very easy concept to sell when wages are low and survival is very often the first thing to think about,” he says. Another issue remains scattered land ownership in very small plots.

Van Eijsden came to Romania in 2001 and his first impression was a shocking one. “I came to work and live here in 2006 when things were already much better. I was working for English investors to create an organic buffalo farm,” says the Dutch investor.

He was responsible for building and running the organic buffalo farm in Transylvania but at the same time he also set up his own company, Agri+Cultura Transilvania, with what he calls an eye on the future. “I started with the farm, getting a rental contract on 350 hectares of neglected pasture land and a collapsed farmyard with useless buildings, and made it into a functioning organic farm with 300 dairy buffaloes and its own feed base of high quality hay,” recalls van Eijsden.

The farm required an investment of over EUR 1.5 million.

He later left the company to set up his own business, growing organic herbs.

“Herb production had always been something I was very eager to do professionally and at the same time the concept of social enterprises had always been an important aspect of organic farming for me,” he says. The project started on a small scale. “As a foreigner in a very tra-

Photo: Laurentiu Obae

industry with the benefit of a price premium.

He is confident that organic farming has a great future in Romania and the potential is huge for those with a longterm perspective. “Until now organic development was mainly concentrated on the larger arable farms, often with foreign owners, in the south. However I see enormous potential in Transylvania with its traditional agriculture, sufficient precipitation and very good soils,” he adds.

In the Dutch farmer’s opinion there are plenty of incentives to start an organic business locally, albeit not necessarily coming from the authorities. But this is not entirely bad news, he argues, adding that long-term dependence on grants and government support has always failed in the long run. ”Do not invest too much in direct payments but limit them to get good things started and not as a long-term idea. Reducing taxes on clean technologies and increasing them on polluting activities is a much better way than subsidies,” he argues, adding that authorities should direct investments towards the triptych of research, education and extension.

BIO AGRICULTURE FOCUS 15

Wil J. van Eijsden, director and owner of Agri+Cultura Transilvania ditional area you just cannot jump in with all your ideas,” he says. Soon after he started production under the Szt Abraham label, the name of the village where the farm is located.

The company now produces special herbal teas and herb mixtures for gourmet cooking, various types of herb salt using salt from a nearby mine and relaxing salt pads. It uses natural packaging and the small scale production allows a very strict control of the final products’ quality. “We are selling the products in Romania and Hungary for the moment and export is still small but our products have also been introduced in the Cora su-

permarket chain in Hungary. Talks are ongoing with a large chain of gasoline filling station in Romania,” says van Eijsden. The medium-term target is to start contracting herb production with local farmers and integrating the Roma population into herb collecting. ”The ultimate goal is to make the watershed basin of the small river on the bank of which we live totally organic and to produce together with the locals and to maintain the traditions and the nature here based on a sustainable way of living,” says the entrepreneur.

simona.bazavan@business-review.ro

www.business-review.ro Business Review | July 4 - 10, 2011

16 BALANCE SUMMER SCHOOLS

School’s in for summer School may be out for summer but the long vacation is a perfect opportunity for children, teenagers and even adults to enhance their skills in various ways. Programs vary throughout Bucharest and across the country, offering creative alternatives to the standard educational curriculum as well as personal enrichment opportunities. BR got out its exercise book and sat down with school directors and project managers to review some of the options.

1

3

Courtesy of Mark Twain

Courtesy of Mark Twain

2

4

Courtesy of Medieval Praxis

Courtesy of Shakespeare School

1. Young people boost their creativity through music 2. Language skills are a popular component of summer schools 3. Children learn the traditional art of pottery 4. A young Robin Hood gets to grips with some medieval skills

∫ CORINA DUMITRESCU

Children offered wide palette of activities

English-speaking youngsters can spend their holiday getting acquainted with the Bard. Shakespeare School, an English language learning center founded in 2002, usually addresses young people aged 5-25 with general language courses and international examinations such as Cambridge and IELTS, as well as conversation clubs with native teachers. The school currently has 13 teachers licensed in English, teaching in two centers in Bucharest, which have reached over 1,000 students and have posted growth on previous years, say officials.

The institution also organizes summer schools for English language improvement both in Romania and abroad, in locations such as Oxford, Cambridge, London, New York and California. So far, over 400 children and teenagers have been sent on English language courses in the US and Great Britain and over 120 young peo-

ple have received advice on admission into British universities.

This year’s summer school, entitled Colored Summer Sessions, is taking place at the school’s headquarters in Bucharest, in two-week modules. The concept is original and was devised by Shakespeare School teachers, say representatives. “The young ones have been sent out for an adventure in the world of English fairy tales, while elementary pupils will become assistants to the famous detective Sherlock Holmes or perform modern versions of Shakespeare’s plays,” said Adriana Alionte, director at Shakespeare School. The Teenagers’ Guide to Drama course, she adds, “will bring lords and ladies into the age of social networks”.

Scholarships are also available at the school. Able students who have achieved top marks in school, but whose families lack the means to pay the fees, can follow free English language courses throughout the summer. Winners of junior spelling bees and essay competitions are also offered free courses, or significant discounts,

while collaborations with local NGOs are being formed. The school has a registered turnover of EUR 430,000 in 2010, with a profit rate of 30 percent, an increase compared to previous years. It is also preparing to open a new center in Bucharest (sector 1), which will become functional this September.

Some of the Shakespeare School team will head to the mountains to run an English-language summer medieval camp, entitled Back to Shakespeare’s Time. Medieval seems to be quite the trend, as the third Medieval Camp for Children takes place between June 19 and August 13, running six times over six series. For seven days, aspiring knights and ladies will dress in accordance with the times and disport themselves amid medieval decor, says Laurentiu Constantin, general manager at Medieval Praxis, organizer of the camp.

Last year’s workshops included medieval sword handling, archery, painting and medieval heraldry, manual paper manufacturing, medieval theater and improvisation. This year two more join the list,

medieval music and dance, as well as clay modeling. In the evenings, children will hear medieval legends or watch historical films. On the last day of the camp, they will take part in a festive evening, during which they will be ennobled with titles. As in 2010, the camp takes place in the RucarBran area, in Fundata and Moeciu de Sus. Back in the modern day, and Mark Twain International School (MTIS) covers all four segments of the pre-university educational system: kindergarten, primary, elementary and high school. The establishment is currently “the only one in the national school system to bear the quality ranking IB World School, and is presently organizing the International Baccalaureate, besides the National Baccalaureate,” says Mihaela Bachmann Iliescu, Mark Twain School marketing & PR manager.

The summer school that MTIS runs is described by Bachmann Iliescu as “an educational as well as entertaining program which aims to foster a different way of thinking about life in collectivity. The pupils’ personality development is also tar-

www.business-review.ro Business Review | July 4 - 10, 2011

SUMMER SCHOOLS BALANCE 17

Courtesy of Alexandra Copos

Alexandra Copos

“Unfortunately, the years before 1989 have left deep marks, which still represent serious obstacles in the full development of the leadership abilities and the entrepreneurial spirit that we Romanians have,“ Alexandra Copos, Aspire Academy. geted, through their being encouraged to take part in various recreational activities: visual arts, sports, foreign language learning, field trips and more.”

The MTIS summer program is structured differently for the two MTIS campuses: junior and senior. Both student bodies are offered access to international camps in Austria and Greece, themed local camps in the MTIS locations in Busteni and Costinesti, one-day trips to Stirbey Buftea Palace, Mogosoaia Palace, Snagov Monastery, the capital city’s old center, as well as the MTIS summer school. The latter consists of: creativity, music and English, French and German workshops, piano and swimming lessons. Older children can take lessons in history, mathematics, the Romanian language, Cambridge preparation classes, clay modeling, applied geology, biology or Diploma Program preparation. Starting this year, pupils who do not go to MTIS may also attend the summer school.

Moreover, since MTIS is a bilingual school, it caters for families of which at least one member is foreign. Almost 20 percent of the children here are from expatriate families, French, Chinese, Canadian, Italian, Spanish and Portuguese, among others. Children take part in intensive Romanian and English classes so that they can use either in three months maximum, adds Bachmann Iliescu.

MTIS also offers scholarships for children from disadvantaged families, Rainbow scholarships in partnership with Rainbow Language School in Greece and full scholarships, at the school’s own initiative, which are awarded according to merit.

Another educational establishment providing summer school activities is Little London. Little London Summer addresses children aged 2 to 12 from multicultural backgrounds, supplying physical, intellectual and social activities. The

entire concept is based on Sports, Arts and Smart Play. Children do swimming lessons and other sports, they play, create and express themselves, and discover nature and the world in an international and multicultural environment (with over 20 nationalities). The main language is English, but Romanian is also used occasionally. The fun can continue over the weekend when the school’s facilities (including pool area with barbecue, playground, tennis court, green area) can be rented for parties, special events or simply for get-togethers with friends.

The British Council also organizes a summer school, offering intensive English courses for young learners. It will take place between 9 August and 1 September.

The junior program (for children in grades 2 - 4) will draw on songs and stories that are familiar to all British school children and which also have a universal appeal. The senior program (for children in grades 5-8) will focus on aspects of contemporary British culture appropriate to the age group, using specially designed British Council teaching materials. Topics will include themes such as the Royal Family and Royal Wedding and the London Olympics, and will also focus on topics from the British National Curriculum, including issues such as recycling, nutrition and global warming. All the groups have classes Monday to Friday, two hours per day, from 10.00 to 12.00 or from 14.00 to 16.00.

University students and adults invited to personal development summer schools

The Aspire Academy is a week-long summer program for undergraduate students across Eastern Europe taught exclusively in English, which takes place in Poiana Brasov between July 26 and August 3. It exposes participants to world-class leadership and entrepreneurship skills through case studies, lectures from Harvard University instructors and discussions with successful local entrepreneurs. No fees are charged – the only requirement is knowledge of English.

This year, Aspire Academy will cater for 40 students with courses delivered by Arthur Daemrich of the Harvard Business School, Phil Malone from Harvard Law School and Luciana Hermann from Harvard Kennedy School, to name but a few.

Moreover, Alexandra Copos of the Academy tells BR, “Raed Arafat (e.n., the creator of the Mobile Emergency Service for Resuscitation and Extrication in Romania, aka SMURD) will speak about opportunities in the health sector, Dan Pescariu will focus on finance and Mihnea Constantinescu will discuss public administration.” Copos adds that there have been 450 applicants in total, of whom 70 hail from abroad.

“Unfortunately, the years before 1989 have left deep marks, which still represent serious obstacles in the full development of the leadership abilities and the entrepreneurial spirit that we Romanians have,” Copos motivates the necessity of such an initiative in Romania.

Elsewhere, this year’s Bucharest Summer University takes place between August 14 and 28, in the capital. Some 55 students from all over the world will take part in conferences focusing on the theme of Energy and Economic Growth. The summer school is geared towards license and master’s degree students. Ioana Burghelea, marketing coordinator at the Bucharest Summer University, organized by the Economic Studies Academy, told BR that spe-

cialists such as Jennifer Anna Giroux, Crisis and Risk Network (CRN) senior researcher, Eidgenössische Technische Hochschule (ETH) Zürich, Switzerland; Bianca Sarbu, Center for Security Studies (CSS) junior researcher and PhD candidate, ETH Zürich; Oystein Noreng, PhD, professor of Petroleum Economics and Management, BI Norwegian Business School, Norway; and Petre Lificiu, PhD, vice-president of the National Authority for Energy Regulation (ANRE), Romania, are the key speakers at the summer school.

The 2011 program covers fundamental aspects of the energy field (production, transport, refining) applied to conventional forms of energy (oil, natural gas and coal), among other topics. Recreational and socializing activities will also feature. At the end of the summer school, students will have to pass a graduation exam worth 5 ECTS points, internationally transferable.

Burghelea adds that the competition is tough for the Bucharest Summer University, with around four-five candidates per place every year. Candidates, who are all accommodated at the Economic Studies Academy campus, come from various cultural backgrounds, such as Romania, Germany, Macedonia, Georgia, Austria, Latvia, Lithuania, England, France, Turkey, Spain, Belarus, Switzerland, Croatia, Egypt, Sweden and Hungary, to name only a few.

The average age is 22-23 and scholarships are available.

Business Summer School is another interesting option for those who wish to spend their summer learning. The BSS is an academic program of learning in an international context, and a forum for developing intercultural understanding. Dur-

ing a two-week stay in Sibiu, the European Capital of Culture in 2007, from August 1427, both Romanian and foreign students will participate in debates, workshops and seminars. Academic and practical approaches are combined in order to fully explore the subject matter. The BSS uses the case study teaching method developed by the Harvard Business School.

The theme is Investing in Emerging Markets.

Florin Grosu, project manager at BSS, says that teachers from Harvard, MIT, Columbia, NYU and Wharton are brought yearly, as are professionals from companies such as JP Morgan, Morgan Stanley, Merrill Lynch, HSBC, McKinsey and PwC. An estimated 450 candidates apply to the school, of whom a maximum of 40 are selected for each program. The average age is 24 years.

Summer schools also run Romanian courses for those who would like to learn the language of their host nation. Linguist Mona Pologea, general manager at Rolang School, says that the institution organizes two such courses, over July 11-22 and August 15-26, which consist of 30 hours of classes for beginners, intermediate and advanced speakers of Romanian.

The school also provides accommodation, if needed, and the EUR 230 fee includes 30 hours of courses and text books. There are over 150 registrations per year for individual, group and online classes. There are also six free classes organized per year. The next such course takes place on July 6, between 17.00 and 18.30 at Casa Universitarilor, in Bucharest.

corina.dumitrescu@business-review.ro

www.business-review.ro Business Review | July 4 - 10, 2011

18 PROPERTY RETAIL

OPINION This is a marathon of patience, not a sprint…

NEPI puts EUR 5 million into Auchan hypermarket expansion

Income Properties: Many clients, limited (good) stock If there is one market segment with more foreign clients than good properties, it’s the one of income generating assets. There are many players looking to invest in this market, but few of them find what they are searching for. The limited stock of good properties will not increase and this will be the first segment where prices will pick up.

2011 is definitely a better year than 2010. No one can say otherwise. But despite the positive signs, the first six months have not seen many transactions completed. The growth is still slow, after two years of “silence”. It looks like the Romanian real estate market has become a marathon similar to the grand prix of Monaco, where patience and careful moves overcome speed.

Slow, fragile recovery This year is the first when we are seeing prices reaching some kind of stability. The number of investors who declare any sort of interest is twothree times bigger than in the past, but this has not led to many transactions. Buyers are careful, banks are “not so willing” to offer loans and the country is still not a priority for major institutional investors around Europe.

Despite the fact that many properties are for sale at less than half their 2008 prices, very few of them can be called “opportunities”. The number is probably less than 10 percent of the available stock today. And as the majority of transactions focus on targeting top properties at attractive prices, the majority of transactions we expect will be ones where the owner will meet the client’s expectations.

Office: Busier than 2010 Relocations have been dominating the first half of 2011. But this year we are witnessing serious interest from some new companies looking to enter the Romanian market (Bucharest, Cluj, Timisoara). The prices are more or less stable. Tenants’ needs come first and good deals have been signed. At the same time, the available A class stock is shrinking. This is why the following 12 months are considered to be the last excellent ones to lease space.

Industrial: Slowly picking up A “peaceful” market, with a few new projects, which is probably the most stable of all. It is dominated by major companies who have made the right moves during the crisis.

Overall, we seem to have come out of the “eye of the storm’, but any number of major international financial problems could block us once more.

This is why investors will remain careful, until they are sure that Romania’s growth is steady. I personally see the glass as being “half full”.

How about you?

Ilias Papageorgiadis is the CEO of More Real Estate Services and initiator of the campaign Real Estate is Good

More in store: Auchan is set to gain an extra 3,500 sqm of space

Investment fund New Europe Property Investments (NEPI), which was recently listed in the REITs category on the Bucharest Stock Exchange, will invest EUR 5 million in expanding the store Auchan is renting in Pitesti. The hypermarket’s surface is set to increase by 3,500 sqm.

Following the expansion, new retailers will be added to the hypermarket gallery, while the net sales surface will increase to 12,500 sqm.

“We have an interesting plan to renovate and expand the commercial center in Pitesti. The contract we have signed is meant to establish Auchan as a leader among Pitesti retailers and in the region, and will add value to the existing retail park,”

said Tiberiu Smaranda, retail executive at NEPI.The South African fund bought the spaces taken by Auchan and Bricostore in the Iris Shopping Center for EUR 20.94 million last year. The seller in the transaction was Avrig 35, a group controlled by businessman Alexander Hergan.

NEPI’s portfolio in Romania includes 27 properties, evaluated at EUR 314 million at the end of 2010.The group’s most recent investments are Floreasca Business Park (December 2010), an extension of Promenada Mall Braila (April 2011), the completion of a refurbishment of an office building in Brasov (June 2011) and the acquisition of retail development land in Ploiesti and Brasov (Q1 of 2011). ∫ Staff

LOGISTICS

Mega Image opens its own logistic center in Popesti-Leordeni

Photo: Laurentiu Obae

Residential: A new generation of projects is in the pipeline With “Prima Casa 4” having started, most people are focusing on its details. But at the same time, there is a significant change in the market. The second generation of residential developments is in the pipeline, with some projects ready to start this year and plenty more being prepared for the following two. The main difference compared to the past is that they will be more central, better designed and at a more affordable price, closer to Romanian middle class expectations.

Retail: More players expected Retail in Romania is under expansion, with more players interested in entering. But, once again, everyone is trying to avoid risks and keep costs under control.

Photo: Laurentiu Obae

Ilias Papageorgiadis

Investments: More interest, more deals to come Many retailers (or retail developers) are looking for land across the country, this time trying to find it positioned as centrally as possible. Also, since the beginning of the year we have seen several investors who are searching for the best location or price ratio. As this market includes many distressed owners, there are plenty of transactions which are under due diligence, or in other phases of preparation. This does not mean that the prices have picked up, but that we have clients for properties which combine location, potential and price.

Let us not forget large compact agricultural land and forests, which have been the least affected by the crisis and are “hot” once more.

Mega Image has opened its own logistic center in Popesti-Leordeni, near Bucharest, following an investment of over EUR 20 million. The warehouse covers approximately 40,000 sqm and was built on a 100,000-sqm land plot. Construction on the site began two years ago. The project was delivered by the construction company Arxikon.

Before building its own center, the re-

tailer used three different warehouses for its local operations. Mega Image representatives said the new facility is one of the company’s largest projects in Romania so far and will support the retailer’s expansion plans.

Part of Belgian Delhaize Group, Mega Image operates the largest supermarket network in Romania. It has 80 units under the Mega Image, Red Market and Shop&Go brands. The latter represents a new concept which was launched last year with good results so far, the company has said. Currently there are two Shop&Go convenience supermarkets in Bucharest. Starting this year the 11 existing Red Market discount supermarkets will be rebranded as Mega Image units, the retailer has previously announced.

Mega Image plans to invest EUR 50 million this year in expansion with eight new supermarkets having been opened since the beginning of the year. This mainly includes the opening of Mega Image supermarkets in Bucharest and its outskirts. ∫ Simona Bazavan

www.business-review.ro Business Review | July 4 - 10, 2011

CITY 19

RESTAURANT REVIEW

The Yanks are coming

Photo: Laurentiu Obae

Jukebox jury: the verdict was favorable at this US diner style eatery

Jukebox American Diner Turturelelor 11 Reservations: 0213237084 ∫ MICHAEL BARCLAY So what is the safest job in the world, a job where it is impossible to screw up?

Well, it has to be the job of stacking supermarket shelves. After all, the worst mistake you could make would be placing one tin upside down! And it is the same with restaurants.

For the safest restaurant to own would be an American-style diner. Again and after all, you know in advance what the menu will be, and given that it is simple and authentic, how could they possibly screw up? It’s impossible, or almost.

So what we have with the Jukebox is the first all-American diner, serving honest all-American comfort food. It’s a wonder that nobody has done this before in Bucharest. Situated just off the fountains in Unirii, you enter a ’shack’ with a small terrace. The shack is the restaurant, and as you walk through it, it ‘morphs’ into a cavernous dance club with live music in the evening.

So let’s look at the utterly predictable menu. This is strictly for the young Lipscani crowd rather than the fitze people of Herastrau and the ‘Bucharest beach’ walk of Radu Beller. So leave the Bentley at home and dress down when you come here.

There are no surprises, other than the fact that as you will see, what we had was exceptionally good. So, there were four salads priced at RON 13 lei, Greek, tuna, Caesar and vegetarian. No surprises there. Then there were grills such as eight buffalo wings in a spicy coating for a mere RON 12. But we went to town on this section starting with piquant spare ribs at RON 20. This was a ‘baby back’ of four ribs of smoked pork which had correctly been boiled and it was great. It was accompanied by a perfect sweet and spicy house-made sauce.

You may think four ribs is small, and in the USA it would be. But the USA is the world’s capital of obesity where being a female fat-arsed tub of lard, or a male gut-bucket slob is considered to be perfectly normal. These physical aberrations are due entirely to the American obsession with over-eating whale-sized portions. The House wisely serves smaller, standard European sized portions

RESTAURANT SELECTION Business Review gives you a selection of top Bucharest restaurants. You can check the full-length versions of all the reviews by our resident restaurant critic, Michael Barclay, on our website www.business-review.ro

which thankfully keeps us European men looking as slim and fit as Greek Gods, and European women looking as beautiful as Aphrodite incarnate.

Chez Marie So we followed with a cheeseburger, Cuisine: International which was the same size and price as a Address: Dionisie Lupu 48 Mac Muck, but twice as tasty. Off to a Reservations: 0730.344.810 chicken satay. However, having tasted Here you have a delightful, warm place, a the sauce on my spare ribs, I expected a great location, excellent prices with four similar pleasant surprise with my satay pork grilled dishes priced at RON 20 each, sauce. And I got it! I suspect the kitchen 11 salads priced at an average of RON 9, may have purposely left a few lumps of nine chicken dishes priced around RON 24, peanuts not entirely creamed by the 14 vegetable or potato side dishes priced blender just to prove it was house made. around RON 10.

No matter, it was good. Peanuts blended with cream and coconut milk and as Ginger good as it gets.

Cuisine: Modern European Away to a chicken fajita. This was a Address: 194 Calea Grivitei tortilla wrap with moist chicken and a Reservations: 0752 167703 few vegetables fried in a tomato based It is on the wrong side of town, but oh boy sauce. It was accompanied by a side of is it worth the drive to get there. With an exfresh tomato salsa. But the salsa cried out cellent array of familiar main courses to be spiced up with hot jalapeno peppers. priced around a ludicrously low RON 30, And this means the sliced pickled Ameryou can complement your meal with a botican variety of jalapenos which they did tle or two of Chateau Petrus 2001 at a snip not have. So jump to it House and get of EUR 3,300. Yes, it has the finest and some! largest wine cellar in the entire land. At There was a pizza section priced the other end of the scale, they have superb around RON 18 which was comprised of: house wines starting at RON 19.

Margarita, Capricciosa, Diavola, Tuna and Calzone. I shall not patronize you Le Monde with a description of these as you know Cuisine: International exactly what they are. But I just had to Address: Buzesti 50 have their premium pizza topped with Reservations: 0736101010 Parmesan, Gorgonzola, Cheddar, olives With a few changes, Le Monde really has the and tuna. The waitress said it came on a potential to shine. My advice to them would thick pastry base, but I asked for it to be be to tear up the menu which is presently changed to a thin crust. They did so “international bistro”and change it to somewithout complaint. It was perfect, all the thing more upmarket at the same price, more so because I added an extra topping such as contemporary French. But I may of anchovies. All the usual toppings cost well be wrong. Maybe my expectations are a mere RON 3. placed too high, and it could well be that Desserts were: Apple strudel with their customers like this safe and familiar Blueberry, Waffles with maple topping, menu over my choice of adventurous, risky, Cheesecake with cherry jam and Apple leading edge stuff. In any event, I sincerely pie with ice cream. recommend the place. Irrespective of my I have purposely refrained from delvreservations we experienced a calm, ing into recipes and techniques, for the friendly relaxing atmosphere and I will defifood is so simple to make. To make it well, nitely return. all you have to do is use fresh ingredients, imagination and patience; and the House Roberto’s has these three in abundance. I opened Cuisine: Italian by stating that it would be almost imAddress: Episcopiei 1-3, at the Hilton possible for the House to screw up (and Reservations: 021 303 3777 they absolutely have not screwed up) but With a new Italian chef, new management they could improve. and a total facelift, they really have gone to For instance I would like to see genextraordinary efforts to ensure that their uine American ice cream-based giant dishes are unique to the House and are not milk shakes, together with all-day breakfound elsewhere in other restaurants, and fasts. Above all, they should look at enI must commend them for that. The prices hancing their decor. The heyday of dinare all so reasonable that they can compete ers in the USA was the 1950s. They on an equal footing with any other quality should go ‘total 50s retro’ with their restaurant in town. decor, including starting a wild new Romanian fashion trend by decking their The Loft staff out in kitschy 50s clothes AND Cuisine: Top French hairstyles. Although they have some Address: 64 Iancu de Hunedoara pictures of Elvis and Marilyn etc, these Reservations: 075 638 5638 are not enough to envelop you in ‘retro This is without a doubt the top French feel’. They need artifacts which they restaurant in town. It has a state of the art should start collecting now. spacious design and food which would be at The food is good, the prices are corhome in Paris. All dishes are beautifully rect, and they even have a take-away depresented, although the waiters were pretty livery service. What could be better? miserable. Maybe they were jealous of our

mab.media@dnt.ro

so obviously enjoying the Chef’s fabulous creations.

20 TRAVEL

www.business-review.ro Business Review | July 4 - 10, 2011

A visit to Iraq for fun, curiosity and business Erbil, the capital of Kurdish Iraq, effectively an independent country for twenty years, safe to visit, democratic sort of, in the midst of an economic boom and dreaming of being another Dubai in a decade.

PAUL WOOD Clean lines of a brand new airport.

The mildly Islamist Turkish Prime Minister Erdogan officially opened it the week after we arrived. Tony is not waiting for us but then I remember this is because we need a 2 km bus ride to the area where he is allowed to be.

There he is, stocky and shortish and energetic, waving.The countryside is usually, Tony says, parched and brown, but in March a down of an almost unnaturally bright green covers the ground for a moment.

Lidl, our driver, speaks some English. Just enough. He is not a Kurd, he says, but a Christian. Even though he is that rare thing in Iraq: an atheist.

Tony tells me there are two kinds of Christians, Assyrians and Chaldeans, speaking different languages. This is the British Museum made flesh.

Off to the mountains, stopping in a place called Shaklawa which Tony describes as the Kurdish Sinaia, but seems a place of little interest. We try to find a hermitage and glimpse a chapel in a cemetery.

A Christian church, modern, bare interior like a church hall rather than a church. Heart-warming to see Christians in a part of the world I think of as Muslim.

A ramshackle town built of breeze blocks is a bazaar straggling along the main road. Here we buy Turkish delight and halva and then we turn back just as the scenery becomes interesting. A very slow crawl through many military road blocks in to Ankawa.

This is not usual at all, says Tony, even though Friday is the Muslim Sunday and Saturday is Monday. The jam is caused by Nowruz, the festival of the spring equinox, a pre-Islamic festival which has become a symbol of Kurdish national identity since the 1950s. It was banned in Turkey and under Saddam.

Every Kurd leaves town for the day and picnics.

Plus the road we were on leads to the Kurdish President’s home town and is guarded jealously. And of course we are here at a time of political unrest in Kurdistan and upheaval across the region.

There were bonfires at the side of the road, Kurds were dancing in the evening light and flags were

The total lack of curiosity of people about anywhere outside the town they grew up in. An extraordinary and very moving place. There is something very spiritual about the temple and its setting.

The boys who live beside the temple are the temple servants, we were told. The snake emblem by the main door (the Muslims and others accuse the Yazidis of devil worship). Fire inside a little shrine. Fire worship? The dark interior. The hanging cloths which we are told it is lucky to tie, make a wish, then untie. This seems a religion of superstitions rather than St Thomas Aquninas.

The underground cave which is forbidden to us. The sound of water. I thought: where Alph the sacred river ran, through caverns measureless to man, down to the sunless sea.

The temple is surrounded by ruined and semi-ruined buildings, a sense of decay and untidiness, but the hills Iraq inspiration: Wood journeyed off the beaten track in Kurdish Iraq that surround the place have a moving and strange quality. They really do feel very spiritual. This place has a very waved. Marina, a large gloomy restauuncooked. This I like. Like all tourists moving and eerie but attractive atrant where we can only get a table in I am chasing authenticity which by def- mosphere. And all unexplained. Even the gallery. Noemi is one of only two the net has little. inition cannot be chased. women in the place. The rest are men An arch decorated with a symbol of Two coaches made my heart sink with Saddam moustaches drinking but they had brought a party of pil- the sun leading seemingly to nowhere. beer, not looking joyous. Good grims from Erbil who were on a three- Strange and touching. I wanted to Lebanese food, good Lebanese wine, a day pilgrimage. No signs explaining the evacuate my bladder a mile away but group of musicians with Saddam history of the place, but it is always Tony wisely told me we were on sacred moustaches strike up Kurdish music best to be told history not to read it. I ground. and I think they could be a lithograph A birthday party for a handsome found a monk who spoke English who from a mid 19th century travel book. explained the story of the place. They Lebanese Christian businesswoman Everything in this sub fusc place seems at Speed Centre, a go-karting place are Assyrians. to be in sepia.

Many Christians had taken refuge in with pizza restaurant attached where Tony’s house in Ankawa, which is Kurdistan from the Arab South, he foreigners go and women are normal. penetratingly cold, as he had warned. said. He agreed sadly that things had This is one of two expat places. Gloomy, The kind of cold that comes from been better for the Christians under depressing. Lots of nice intelligent never having been anything else than Saddam.The monastery is large and I Lebanese here to make money but cold. later found on the net (where there is very bored in the evenings. Missing I have a stamped Iraqi visa in my not much to find) that the lower parts Beirut. So would I. passport, therefore I am. One travels to We rather drag Tony to it and the of the church are old but the monastery prove one objectively exists. Does one was left in ruins after the Mongols crowd in their late 20s are, he says, too ever quite succeed? Iraq has British sacked it, was rebuilt in the 18th cen- young for him. I hadn’t noticed they three-prong plugs which I suppose were younger than me and I am seven tury and then in 1845. are iconic. Proud-making.

Women wander around in jeans years his senior. I tell him this. I supLidl's morose cousin, a devout and it is good, said Tony, to be with pose I am immature, I say. No, eccenChristian unlike Lidl, knows a way to one’s own people. Benign monks. tric, he replied. the Mar Matei monastery which does Everyone but us is Lebanese and Christianity is very beautiful and the not leave the Kurdish Regional Army’s ancient churches of the East so much only one is Muslim and he, I am told, is remit where all is safe. We do it in only more so than the recent Protestant ‘modernized’ but the man sitting next 90 minutes. heresies. I suppose the Church of Eng- to me, when I ask him if he is a ChrisMar Matei (St Matthew, named afland is a teddy bear with its stuffing tian or a Muslim, says I don’t mind this ter its founder, a monk who sought question but it could be considered falling out. Here as among the refuge from the persecution of Julian Catholics and the Orthodox is the real racist. the Apostate) is a fourth century A man shows me his Phalange thing. monastery mostly rebuilt in 1845. It is The Christian Middle East. The membership card and says no-one at very close to the border between the Middle East is not only Muslim and this table knows I have this. He tells me safe Kurdish region and the unsafe Iraq Christianity is Middle Eastern, not Eu- his father told him Muslims cannot live held by the federal army. ropean, despite Belloc’s 'Europe is the in a country where they are not the I had found it with some searching government.

Faith and the Faith is Europe'. in Google images and only one person Lalish. Our devout Christian driver I spoke to in Iraq had heard of the place. got terribly lost looking for Lalish It stands in the mountains commandthough he asked people repeatedly. Paul Wood is the director of executive ing a ravine. No sign posts and, once He finally insisted that a brand new search firm Apple Search. there, no explanations. building standing empty in a field was Read the full account of his This is tourism, to use Roland the temple and we had to call Lidl to March 2011 visit to Iraq on Barthes’ pretentious Marxist jargon get him to keep looking. www.business-review.ro/balance

www.business-review.ro Business Review | July 4 - 10, 2011

CITY 21

RECORDS

MUSIC

Bucharest Ambulance Service to Tickets for 20th George Enescu go for world CPR lesson record Festival go on sale

Record breaker? SABI gears up

Courtesy of Artexim

The Bucharest Ambulance Service (Serviciul de Ambulanta Bucuresti-Ilfov, or SABI) will attempt to break the world record for the largest CPR training class,

by gathering 7,000 people at Dinamo Stadium for a teaching marathon at the end of July. The current record was set in Mexico last year, when 6,577 people took part in the mass lesson.

The event will begin on July 26 at 7 pm and will last between 50 and 80 minutes, Around 700 specialized instructors will teach participants about the basics of CPR. After the crash-course, attendees will have to put the techniques into practice on 700 dummies.

A Guinness World Records official will be at the scene. The event will be supervised by the Carol Davila Medical University in Bucharest.

Participants can register at the SABI headquarters or on the website www.sabif.ro. ∫ Corina Dumitrescu

AIR SHOW

Otopeni Air Show prepares for July 16 takeoff

Orchestral maneuvers: top ensembles will grace Bucharest this September

STOCKEXCHANGE

The top local classical music festival and international competition and one of the biggest in Eastern Europe, the George Enescu Festival, has announced its 2011 program and tickets have officially gone on sale. The event will take place between September 1 and 25, at several locations across Bucharest: the Romanian Athenaeum, Sala Palatului, Sala Radio, Bucharest National Opera, Bucharest National Music University and George Plane sailing: top pilots will show off their moves Enescu Square.

The work of the man who is regarded as the greatest of all Romanian comof the Ministry of Administration and InThe top professional pilots of the moposers, George Enescu, remains central ternal Affairs, the SRI Aviation Structure ment will take to the sky between 9.00 and and the flight test center from Craiova. to the program, as it has been since 13.00 on July 16. A special guest will be Svetthe festival’s foundation in 1958, organThe program includes a demonstration of lana Kapanina of Russia, a multiple world izers have said. Enescu’s legacy and lastIacarilor Acrobats and flight schools parade champion and believed to be one of the best ing influence on Romanian music is involving the Higher School of Civil Aviafemale acrobatic pilots in the world. marked in the form of his compositions tion, Regional Air Services, Fly Level and Representatives of the local civil, sports interpreted by artists born since his Carpatair Flight Training. Access to the and military aviation will participate: the death in 1955, such as Livia Teodorescuevent is free of charge from 8.00. ∫ Romanian Air Club, Tarom, Romanian Air Ciocanea, Carmen Carneci and Iancu Corina Dumitrescu Force Staff, General Aviation Inspectorate Dumitrescu.

The George Enescu Festival has once FILM again secured a stellar cast of orchestras, ensembles and artists for its 20th run. Its “Great Orchestras of the World” strand opens on September 1 with Enescu’s First Symphony and Shostakovich’s Tenth Symphony performed by the Residentie Orkest and Christian Badea. It Bucharest’s Piata Victoriei subway station ironic depiction of the labor market. Okcontinues on September 8 when the will host the screening of short films betapodi (Quentin Marmier, Thierry MarcLondon Symphony Orchestra performs tween June 23 and July 23. The film prohand, François Xavier Chanioux, Emud Constantin Silvestri’s Prelude and Fugue jections will take place on the platform Mokhberi, Julien Bocabeille, Olivier DeNo.2, Glazunov’s A minor Violin Concerto of Piata Victoriei 2 that goes to Piata Rolabarre, France, 2007) tells the story of (with Nicola Benedetti) and Mahler’s mana and ultimately Berceni. Harp, saxtwo octopuses trying to rescue one anSixth Symphony in Bucharest’s Palace ophone and double bass performances other. It received over six international will be held in the open air, in front of the prices and an Oscar nomination in 2009. Grand Hall.

The series unfolds with two comUnirea store and the fountain by the The outdoor music performances will Bucharest University (Universitate). take place from 8.30-9.30 in the morning, pelling programs from the Mariinsky Orchestra and Valery Gergiev (11 & 12 SepAmong the short films that will be shown 12.30-13.30 and 18.00-19.00. The event is tember), the second including Enescu’s at the subway station are J’attendrai le being organized by Grolsch beer. ∫ substantial Symphony No.3 performed in suivant, The Job and Oktapodi. J’atCorina Dumitrescu company with the Academic Choir of the tendrai le suivant (I’ll Be Waiting for the Romanian National Radio Society. The Next One, directed by Philippe Orreindy, Staatskapelle Berlin has scheduled France, 2002) is an Oscar-nominated The outdoor music performances will take Bruckner’s Symphony No.7 and Liszt’s short about a man searching for his love place on the dates mentioned above at Faust Symphony for 13 & 14 September, in the subway (where else?). The Job 8.30-9.30 in the morning, 12.30-13.30 each work prefaced by a Mozart piano (Jonathan Browning, USA, 2007) is an and 18.00-19.00.

Short films go underground and music takes to the street this summer

concerto directed from the keyboard by Daniel Barenboim.

Franz Welser-Möst conducts the Vienna Philharmonic Orchestra on September 16 in works by Mozart, Enescu and Dvořák, while Vasily Petrenko and the Royal Liverpool Philharmonic Orchestra present Enescu’s Suite No.2 in C major and Prokofiev’s Seventh Symphony on 17 September. Midori joins Petrenko and his Liverpool musicians in Walton’s Violin Concerto.

Other festival highlights include the Academy of St Martin in the Fields in a program including Dinu Lipatti’s Sinfonia concertante for two pianos and strings (20 September); period instrument performances by the Orchestra of the Age of Enlightenment, the Venice Baroque Orchestra, Il Complesso Barocco and the Amsterdam Baroque Orchestra, and stagings of Wagner’s Lohengrin (3 & 6 September) and Enescu’s Oedipe (15 September) by the Bucharest National Opera. The festival’s cast of chamber music performers, meanwhile, reads like a Who’s Who of international recitalists, with Boris Berezovsky, Ian Bostridge, the Fine Arts Quartet, Angelika Kirchschlager, Gidon Kremer, Murray Perahia, Yundi and Christian Zacharias among the list of featured artists.

The festival is organized by Artexim and Arcub and 90 percent of its funding comes from the Romanian government.

Corina Dumitrescu Tickets can be purchased in the Eventim network, as well as online at www.eventim.ro. Costs depend on the event and category: “Great Orchestras of the World” (RON 40, 50, 65 and 75), “Recitals and chamber music” (RON 65 and 75) “By midnight” (RON 65 and 75), “Opera and ballet” (RON 65 and 75), “World Music” (RON 40 and 50), “21st century music” (RON 7) and “Enescu and his contemporaries” (RON 7 and RON 10).

www.business-review.ro Business Review | July 4 - 10, 2011

22 IN TOUCH CULTURAL EVENTS

BUSINESS AGENDA

Concerts July 10 Bon Jovi Piata Constitutiei Bon Jovi’s concert in Romania (their first here) is part of 135 shows in the Circle Tour, which started in February 2010 and includes 30 countries. Fans of the New Jersey rock band can look forward to renditions of their classic hits such as You Give Love a Bad Name, Livin’ on a Prayer and Wanted Dead or Alive, along with more recent numbers like It’s My Life. Tickets, which cost from RON 130 and 480, are available in the Eventim network and on www.eventim.ro.

International events that will take place at the Comic Book Museum will include film projections by the Austrian Cultural Forum and the Czech Center in July and an exhibition by Portuguese artist Eugenio Silva. Autumn will also bring a series of events organized by the British Council.

Festivals July 30 Liberty Parade 2011 Venus-Saturn beach (in Constanta) One of the most high-profile dance festivals in Romania, Liberty Parade, is bringing acts such as Sharam, DJ Optick, DJ Allen, Vali Barbulescu, Christian Green, DJ Andi, Liviu Hodor, Vika Jigulina, NTFO and DJ Raoul to the beach between Venus and Saturn resorts in Constanta. Access to the 12hour house music marathon is free of charge.

By 31 December 2011 Theodor Pallady Museum (Spatarului Street, 22) Volume and Perspective in the Graphic Creation of Theodor Pallady This event is part of a cycle of exhibitions which began in 2003 with the purpose of placing under the spotlight the graphic work of Pallady, supported by the Serafina and Gheorghe Raut Collection.

August 13, 14 Summer Well Buftea (near Bucharest) The new Summer Well Festival has confirmed its lineup and will bring one of the best known indie rock bands of the moment, Interpol, to Domeniul Stirbey (“Stirbey Property” in Buftea, near Bucharest). Other big names at the festival include: Plan B, Noisettes, Mystery Jets, Graffiti6, Chew Lips, The Raveonettes, The Wombats, Chapel Club and Alex Clare. Two-day tickets cost RON 99 and are available at easytickets.ro, eventim.ro and from Orange shops.

Classical Music September 1-25 George Enescu Festival The Romanian Athenaeum (among other locations) Tickets for the George Enescu Festival – see the City page for more details – have officially gone on sale. They can be purchased from the Eventim network, and at www.eventim.ro.

Museums June 16 – October 16 Contemporary Art Museum, 4th floor Romanian Comic Book Museum

ISSN No. 1453 - 729X

Contemporary Art Museum June 9 - August 28 In between Frames Artists: Adad Hannah, Anetta Mona Chisa and Lucia Tkacova, Bettina Hoffmann, Jason Arsenault, Jerome Delapierre, Perry Bard, Rozalinda Borcila

Stand-up comedy July 9 Mojo Club The eighth comedy night at Mojo club and the last one before the summer break. Entry costs RON 50, payable on the door. To reserve tickets or a table call Michael Fraser on 0723 927894 or drop into Mojo any day after 12pm. The opening act will be Taylor Glenn, the compere is Geof Whitting and the closing act is Craig Murray.

Open-air July 1 (premiere) Another Year Henri Coanda Airport The top professional pilots of the moment will take to the sky between 9.00 and 13.00, access being free of charge from 8.00. A special guest is Svetlana Kapanina, one of the best female acrobatic pilots in the world.

Cinema July 1 (premiere) Another Year Directed by: Mike Leigh Starring: Jim Broadbent, Ruth Sheen, Lesley Manville Plot: A look at four seasons in the lives of a happily married couple and their relationships with their family and friends.

On at: Hollywood Multiplex, Studio

FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALIST Otilia Haraga JOURNALISTS Simona Bazavan, Corina Dumitrescu COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi, Michael Barclay ART DIRECTOR Alexandru Oriean PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

July 5 10:00 Microsoft Romania organizes it annual press conference at the company’s headquarters. By invitation only.

11:00 Palladium organizes an event to mark the launch of local operations at the Radisson Blu Hotel. By invitation only.

11:00 Nokia Siemens Networks i n Romania organizes a press conference for the appointment of its new country manager at Grand Café Van Gogh. By invitation only.

July 6 10:00 Duraziv organizes a press conference to present its results for the first semester. By invitation only.

11:00 Brand Academy organizes an event to celebrate the one-year anniversary of the APT (Performing Entrepreneurship through Training and Counseling) at the Minerva Hotel. By invitation only.

July 7 11:00 Michelin organizes a press conference at Crowne Plaza Hotel.

By invitation only.

WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro

Angela Haraga is the new country manager of Nokia Siemens Networks Romania, replacing Dragos Chivu, according to Mediafax newswire. Chivu stepped down from the position in early May. Haraga has over 13 years of professional experience in telecom, having previously held various sales positions with Nokia Networks Romania and Nokia Siemens Networks Romania.

Cristina Iordanescu is the new deputy managing director of Saatchi & Saatchi Romania.

She is moving to the new role from the strategy director position. Radu Florescu will continue to serve as managing director and CEO of Centrade Saatchi & Saatchi. In her new role, Iordanescu will be in charge of new business development and strategic planning. She started her career in advertising in 1997 as copywriter with Leo Burnett, then moved to Bates, where she was creative director.

Countdown to fourth of July As Bucharest’s American community gets ready to celebrate the 4th of July, BR presents some fun facts and figures about the occasion, which is celebrated all over the world. n July 1776, there were an estimated 2.5 million of people living in the newly independent nation. The US’s estimated population this July Fourth is 311.7 million.

In 2010, the dollar value of US imports of American flags was USD 3.2 million. The vast majority of this amount (USD 2.8 million) was for starspangled banners that were made in China. The value of US flags exported in 2010 was USD 486,026. Mexico was the leading customer, purchasing USD 256,407 worth. The annual dollar value of shipments of fabricated flags, banners and similar emblems by the nation's manufacturers

was USD 302.7 million.

The value of fireworks imported from China in 2010 was USD 190.7 million, representing the bulk of all US fireworks imported (USD 197.3 million). US exports of fireworks, by comparison, came to just USD 37 million in 2010, with Japan purchasing more than any other country (USD 6.3 million).

The value of American manufacturers' shipments of fireworks and pyrotechnics (including flares, igniters, etc.) in 2007 was USD 231.8 million.

PUBLISHER Anca Ionita EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Adina Milea SALES & EVENTS Ana-Maria Nedelcu, Claudia Munteanu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 Fax: 031.040.09.34 EMAILS Editorial: editorial@business-review.ro Sales: sales@business-review.ro Events: events@business-review.ro

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Source: US Census Bureau