Business Review Issue 5/2012 February 20 - 26

INTERVIEW: David Hay, CEO of AFI Europe Romania, tells BR about the company’s local development plans, for which it has secured a EUR 13 million financing line, and upcoming openings such as AFI Palace Ploiesti »page 15

ROMANIA’S PREMIERE BUSINESS WEEKLY

FEBRUARY 20-26, 2010 / VOLUME 16, NUMBER 5

LINKS: ACTA WITH ACTA OPPONENTS CLOSING RANKS, SOME COUNTRIES CHANGING THEIR STANCE AND A KEY ECJ DECISION GOING AGAINST IT, WILL THE TREATY GET DERAILED? »PAGE 12 3Q

Global shift Razvan Iorgu, general director of CBRE Romania, says the company’s aim is to align its service portfolio at a global level » page 3 NEWS

Profi-table move Retailer Profi has changed its format from discounter to proximity store » page 4 FOCUS

Ploughing on Sales of agricultural equipment are on the rise after a good year for crops » page 14 POWER

Deregulation debate Keeping energy prices regulated could deter investment in local energy infrastructure » page 16 PLUS Gourmet restaurant Phill launches with a Gordon Ramsay tie-in » page 17 Tinker Tailor Soldier Spy comes under our critic’s surveillance » page 17

www.business-review.ro Business Review | February 20 - 26, 2012

NEWS 3

NEWS in brief

3Q Razvan Iorgu

PICTURE of the week Royal seal of approval Prince Paul of Romania was officially recognized by the High Court of Justice in Romania as an official heir of Prince Carol II of Romania. Paul, 64, and his wife Lia have a son, Carol Ferdinand, born in 2010, and baptized

by President Traian Basescu.

The Royal House of Romania has an estimated fortune of EUR 180 million.

ENERGY Romanian electricity exports may be limited or stopped Grid operator Transelectrica can limit or stop electricity exports due to shortages in the national energy system (SEN), under a bill approved last week by the government. The measure can be applied between February 16 and March 15, if consumption and generation capacity are not balanced. At present, Romania generates 8910 MW, while consumption totals 8702 MW. The Ministry of Economy says there is an electricity deficit due to decreases in river flows and on the Danube, the increased cost of natural gas imports and the difficulty in delivering coal and natural gas.

Transgaz puts EUR 10 mln into Nabucco project Romanian gas transmission company Transgaz will contribute EUR 10.2 million to the consolidated budget of Nabucco Gas Pipeline International in H1. The sum represents the 16.6 percent stake that Transgaz has in Nabucco. Transgaz’s net profit improved by 4 percent y/y to RON 392 million in 2011, by Romanian accounting standards, as the quantity of natural gas transported hiked by about 5 million MWh. Increased revenue from fines and penalties, along with interest and exchange rate gains, contributed to the growth. Turnover increased by 2.6 percent y/y to RON 1.3 billion.

FAST FOOD Local KFC, Pizza Hut and PHD

ditch Pepsi for rival Coca-Cola Coca-Cola HBC has become the new supplier of soft drinks for the local network of KFC, Pizza Hut and PHD restaurants, replacing rival Pepsi. In total there are 64 restaurants in Romania under the KFC, Pizza Hut and PHD brands, which are owned by American company Yum!. The local business is controlled by Gabriel Popoviciu and Radu Dimofte. Another

WEEK in numbers

10k doctors have left Romania since 2007 as a result of migration and recruitment freezes in the system

3.2bn euros is the EU funds taken by Romanian agricultural producers over 2007-2011, 42 percent of the total available

change announced by the company is that as of the end of last year, Mark Hilton is the new CEO of the Yum! brands in Romania.

INNOVATION First Romanian nano-satellite shot into space Goliat, the first Romanian nano-satellite, which was developed by a research consortium led by the Romanian Space Agency, was launched last week, the institution announced on its website. The launch took place during the inaugural flight of the Vega rocket belonging to the European Space Agency, which departed from a base in French Guiana. Goliat is a cubic-like satellite with sides measuring 100 millimeters each and a weight of 1,062 grams. Its standard mission will last six months.

REAL ESTATE Octagon posts 23 percent profit hike for 2011 Octagon Contracting & Consulting signed new contracts worth EUR 3 million last year, while its total turnover reached EUR 12.5 million. The company’s profit amounted to EUR 580,000, up 23 percent y-o-y.

Last year it established an office in Iraq, Baghdad, and acquired 58.5 percent of Comat Electro, an industrial park in Bucharest. The company was set up in 2005 by Alexandros Ignatiadis and his partner, Paschalis Paganias.

RETAIL Three oil brands take up 70 percent of visible shelf space in modern retail Edible oil reached an average of 5,588 cm of visible shelf space in modern retail outlets, from June-November 2011, according to data from Iway Media Interactive, a company providing real-time retail audit tracking services. Sunflower oil takes up 77 percent of the space, followed by olive oil with 14 percent. The remaining 9 percent is taken up by other edible oil (palm, corn, peanut, etc). Three competitors – Bunge, Cargill and Argus – make up almost 70 percent of the category. Private and exclusive brands have an average of 16.2 percent of the shelf.

TELECOM Vodafone outsources applied management services to Huawei Vodafone Romania has outsourced to Huawei its applied management services in the technology area. The five-year-partnership includes website maintenance and construction as well as infrastructure activities. Approximately 70 experts from Vodafone will join Huawei as part of the team in charge of these activities.

general director CBRE Romania What do you think will be the most attractive real estate sector for investments this year?

Like last year, office and retail will remain the most active sectors. 2013 and 2014 will be the years when several larger office projects are delivered, especially in the Barbu Vacarescu and Orhideea areas. Some of these projects were begun last year, others will start in 2012.

As for retail, last year 200,000 sqm was delivered. In the last quarter of last year alone, several projects including Maritimo in Constanta (50,000 sqm), Galleria Arad (33,000 sqm) and Oradea Shopping (30,000 sqm) were finished, while Baneasa Shopping City was extended. Bearing this in mind, we can say that this segment too is in full development.

Overall, we expect 2012 to be at least as good as 2011. The premises have already been set with several projects having been announced, which makes us optimistic.

Will financing continue to be a problem for the local real estate market in 2012?

Getting financing and its cost continue to be an issue for the real estate sector. The lack of financial resources is a problem for all Central and Eastern European markets. Right now transactions are rare – financing is the only element missing.

Moreover, projects are not feasible at such a high financing cost.

Investors are looking at the local market because prices are low and because the country has a lower indebtedness ratio compared to other regional markets.

According to Eurostat, at the end of 2010, Romania had a debt-to-GDP ratio of 31 percent, while in Poland it was 55.

Do you intend to launch new services this year?

Some of the most significant changes we are undergoing right now are due to the arrival of James Heyworth Dunne, the new head of capital markets at CBRE. Our medium-term objective is to extend our service portfolio, which means aligning it at global level. The segments that will be developed in the coming period will be project management and property management. The first steps in this direction were already taken with the acquisition of Euro Mall Centre Management by CBRE at a global level. simona.bazavan@business-review.ro

www.business-review.ro Business Review | February 20 - 26, 2012

4 NEWS RETAIL

BUSINESS AGENDA February 21 11:00 Lufthansa organizes a press conference to present its operational results at Radisson Blu Hotel. Patrick Artiel, general director Lufthansa Passenger Sales Romania and Moldova, will attend. By invitation only.

February 22 20:00 BR organizes the seventh edition of the Annual Investment Awards at Athenee Palace Hilton Hotel. Details at www.business-review.ro/events.

By invitation only.

February 23 10:00 The National Council of Small and Medium Sized Private Enterprises in Romania (CNIPMMR) organizes a seminar on ways to boost enterprises during the economic crisis, at its headquarters in Bucharest. By invitation only.

February 29 ∫EVENT BR organizes the first edition of the Access to Finance forum. The event will focus on PPP, EU Funds and State Aid. Details at www.business-review.ro/events. By invitation only.

A

fter having closed all of its 107 outlets for one day last week, retailer Profi has reopened them as proximity stores. The retailer previously operated as a discounter.

“The retail business environment has changed and the borders between discount stores, supermarkets and hypermarkets are becoming increasingly uncertain as each of these formats borrows from the methods and characteristics of the others,” said Pawel Musial, general director of Profi Rom Food. He added that the new format is neither a discount store, nor a supermarket, but simply “close” to the customer.

Profi stores have been refurbished and the product portfolio extended. Musial disclosed that while the investment made in opening a new shop amounts to “several hundred thousand”, the refurbishing of an outlet costs between EUR 100,000 and EUR 200,000.

The firm’s product portfolio has been increased to about 5,000 items and the retailer also plans to focus on private labels, which grew to represent 18 percent of the company’s sales last year.

Photo: Laurentiu Obae

February 23 Asebuss organizes the conference Business of the Brain – Customer Satisfaction or Customer Loyalty. Entrepreneur and innovation management professor Neale Martin will attend.

By invitation only.

Retailer Profi changes format from discounter to proximity store

Pawel Musial, Profi general director Profi reported for last year sales of RON 1.04 billion (approximately EUR 214.5 million), up 29 percent y-o-y. The growth was mainly generated by the

RETAIL

Optimistic Flanco targets 27 percent turnover hike to EUR 140 million also closed seven outlets for reasons that had to do with too small sales areas, inadequate locations or poor performance.

The stores opened in the second half of 2011 as well as those which will be opened this year are based on a new concept launched in October 2011 in the Unirea Shopping Center outlet.

Flanco has budgeted investments of EUR 3.5 million for 2012, which will go into the opening of five new shops under the new concept.

Last year, the retailer also boosted its team from 600 to 870 employees. In 2012, it aims to add 100 more people to its roster. The firm also had a marketing boost, with ten people working in this department, Luca told Business Review.

February 23 10:00 UPC organizes a press conference to present its financial results for Q4, 2011 at SkyBar. Severina Pascu, CEO of UPC Romania, will attend. By invitation only.

February 22-23 Digital Marketing Forum, an event that reunites marketing and advertising professionals, is organized at Athenee Palace Hilton. By invitation only.

March 1 11:00 Honda launches the new Civic model at the Honda Carpati Motor showroom in Bucharest. Masahiro Matsushita, president of Honda Trading Romania, will attend. By invitation only.

March 14-15 PR Forum, a two-day conference that analyses trends in the public relations business, is organized at JW Marriott Bucharest Grand Hotel. By invitation only.

opening of 26 new stores, while like-forlike sales growth was 7.5 percent. The retailer plans to open about 30 new outlets this year and estimates that it will close two or three of the existing ones.

Profi discount stores are owned by Enterprise Investors, a Polish private equity company that bought the retail network in 2010 from Duna Waiting Participation for EUR 66 million. Enterprise Investors announced last October a EUR 10 million investment in further expanding the retail network.

Musial said that Enterprise Investors has no plans to sell the business for the time being. “The most likely scenario for Profi is that the current ownership structure will be maintained or it will be listed on the Bucharest, Vienna or more probably the Warsaw stock exchange,” he revealed. The option of selling has not been ruled out should a company offer “three or four times” the value of the investment made by Enterprise Investors, but Musial thinks this is an unlikely scenario in the present economic context. ∫ Simona Bazavan

Romania, still a green market Thinking big: Flanco plans to expand its sales surface by 20 percent in 2012

T

he level of retailer Flanco’s business in Romania is predicted to reach EUR 140 million in 2012, a 27 percent surge year-on-year. At the same time, the firm’s estimated operational profit for this year is EUR 4.7 million, up 34 percent on the previous year, as announced by Violeta Luca, marketing manager at Flanco.

The retailer ended 2011 with a turnover of EUR 110 million, up 37.5 percent year-on-year. Its operational profit was EUR 3.5 million last year, according to the financial indicators announced by the company. Last year, Flanco had a market share of 11 percent.

This was the second year of growth

According to Flanco estimations, the overall market will reach EUR 1.25 billion this year, up from EUR 1.1 million in for Flanco, which was declared insolvent 2011. The average expenditure per capiat the end of 2009. Things started to look ta on IT products and electronic home up for the retailer after the former Asesoft appliances in Romania was EUR 60, up Distribution, controlled by businessmen from EUR 52 in 2010. In 2012, this could Iulian Stanciu and Sebastian Ghita (curgo up by 5-7 percent, compared to the rently Network One Distribution) previous year. took over a 60 percent stake in the ailing By comparison, in countries such as firm. the Czech Republic and Slovakia the avFlanco ended 2011 with a sales surface erage expenditure per capita was EUR of 41,500 sqm, but plans to expand this 265 and EUR 165, respectively. by 20 percent in 2012. At the end of last This means that Romania has very year it had 77 stores, of which 83 percent high potential. However, the possibility were in shopping centers and 17 percent of new entries on the market this year is in street locations. “slim to nil” because of the low level of In 2011 Flanco opened 14 new shops, expenditure recorded per capita, said following investments of over EUR 8.5 Luca. ∫ million, including stock. However, it Otilia Haraga

www.business-review.ro Business Review | February 20 - 26, 2012

MACRO

Romania’s economy grew by 2.5 percent in 2011

GDP rose 2.5% in 2011, says the INS

A

flash estimate from the National Statistics Institute (INS) made public last week indicated that Romania’s GDP had increased by 2.5 percent in 2011.

The euro zone economy gained 1.5 percent while EU 27 grew by 1.6 percent, according to statistical bureau Eurostat.

“The economic growth registered last year was fueled by exports of industrial output and a good harvest year, but these growth engines will slow down this year, due to a sharp decrease in investments,” Melania Hancila, head of the research and strategy department at Volksbank, told BR. Hancila says that a slow recovery has been registered in construction and retail, on a favorable basis effect, following the steep contractions of the previous years.

INS data also show the economy decreased by 0.2 percent from Q3 to Q4 of 2011, although the growth in Q4 was 2.1 percent versus Q4 2010. In Q4, the EUR 27 lost 0.3 percent. The Volksbank economist says the economy will further shrink in the first quarter of this year, due to bad weather and a lack of stimulus for the real economy.

Thus, two consecutive quarters of GDP decrease will see Romania slip back into recession.

“We forecast the economy will slow its growth to 1 percent y/y in 2012,” says Hancila. “We will have a modest GDP growth, as this year elections will be organized, and authorities will pour money into the economy,” she adds.

The acceleration of infrastructure projects, increases in pensions and salaries, plus advances in EU-funded projects should help the economy avoid the black clouds of recession.

Foreign direct investment totaled EUR 1.9 billion in 2011, down 80 percent from the all-time high of 2008, according to data from the National Bank of Romania. However, the country is focusing on public investments and EU-funded projects to grow the economy. The government has set an ambitious target of EUR 6 billion in EU funds attraction. At the same time, the authorities want to lower the deficit to 3 percent of GDP on EAS standards this year, from 4.2 percent in 2011. ∫ Ovidiu Posirca

NEWS 5 RETAIL

A predictable outcome: Mic.ro files for insolvency

D

work from their money, as Mic.ro paid inu Patriciu’s Mic.ro Retail, the them more than 240 days late. company that owns the Mic.ro Mic.ro stores were launched in Octoproximity stores, filed for insolber 2010 with big ambitions for the future. vency last week. Mic.ro outlets have been facing difficulties for several months now “If I have a wish, it is that the commerce imported piecemeal from the West should due to outstanding debts to suppliers die,” said Patriciu at the time. The busiand banks. Many of the shops were disnessman previously announced EUR 200 playing empty shelves while others were simply closed after the rent was not paid. million of investments and plans to open 1,000 fixed shops and 2,000 mobile units The announcement comes only two by the end of 2011. weeks after Minimax Discount, a disThings, however, did not move as count chain bought by the businessman swiftly as he had initially hoped. In Sepin 2010, also filed for insolvency. tember 2011 there were about 830 Mic.ro Among the company’s suppliers that stores and 58 Macro (former Minimax have called for Mic.ro Retail to be liquidated are Romaqua Borsec, Dorna Lactate, stores) and Minimax outlets. The Macro and Minimax stores were operated by Dr. Oetker, Vel Pitar, Ocean Fish and Patriciu’s Mercadia Holland company. more recently Tiriac Auto, the company This January Mediafax newswire anowned by local businessman Ion Tiriac. nounced that Patriciu was negotiating the Suppliers accuse Patriciu of having fisale of Mic.ro or a possible association nanced the expansion of the Mic.ro net-

with 7 Eleven, the largest proximity store operator in the world.

“Negotiations with 7 Eleven started in the autumn of 2011 and will be finished by March 2012. There is talk of a possible EUR 60 million capital infusion into the Mic.ro network,” markets sources told Mediafax at the time. 7 Eleven was founded in 1927 in the USA and now operates 43,500 stores in 16 countries.

Patriciu was named Romania’s richest businessman for the third consecutive year in 2011, according to the Forbes rich list, with a fortune estimated at EUR 2.2 billion. With investments in media, energy, real estate, banking and IT&C, he made most of his money by selling oil company Rompetrol to Kazakhstan’s stateowned energy operator KazMunaiGaz in 2008. ∫ Simona Bazavan

www.business-review.ro Business Review | February 20 - 26, 2012

6 NEWS STOCK EXCHANGE

Property Fund net profit increased by 20 percent in 2011

T

he net profit of the Property Fund (FP) increased by 20 percent y/y to EUR 128 million in 2011, in the first year since Franklin Templeton became the sole manager of the fund, and during which time the FP was listed on the Bucharest Stock Exchange (BSE). Shareholders will receive dividends worth EUR 120 million, which represents 96 percent of net profit.

The fund’s revenue increased by 7 percent year-on-year to EUR 145 million, while expenses decreased by 34 percent year-on-year to EUR 17 million.

The next three quarters will bring public offerings from six energy companies in which the FP has stakes. The IPOs include Romgaz, evaluated at EUR 280 million, Nuclearelectrica, at EUR 116 million, and Hidroelectrica at EUR 384 million, companies where the FP has 15 percent, 10 percent and 20 percent stakes respectively.

The FP is a closed-end fund and its shares are currently being traded at a 50 percent reduction, but hedge fund Elliott Associates, whose stake in the fund is close to 13 percent, wants Franklin Templeton to start selling assets in the FP’s portfolio. At present, the fund manager is paid a quarterly fee of 0.47 percent of its market capitalization. Selling assets would guarantee the fund managers an additional fee worth 1.5 percent of the sums distributed to shareholders through

Greg Konieczny, Franklin Templeton fund manager, expects the FP SPO to take place on the Warsaw Stock Exchange in the first half of this year

to 2013, falling to 1 percent in 2014.

The Property Fund will seek a second listing on the Warsaw Stock Exchange, where 38 successful IPOs have been launched last year, and shareholders

should vote on this initiative by summer.

The heirs of Nicolae Malaxa, the Romanian industrialist, whose stake in the fund is close to 7 percent, have already expressed their agreement with the move.

Top shareholders are Elliott Associates hedge fund, which holds a 12.9 percent stake, fund management group City of London Investment Management, on 7.2 percent, and Georgia Palade van Dusen with 6.5 percent.

Around 46 percent of the fund shareholders were foreign institutional investors and 11 percent Romanian institutions. The Ministry of Public Finance held a 37 percent stake, but had no ownership left as of December 2011.

The FP’s net asset value (NAV) totaled EUR 3.48 billion at end-January which includes stakes in 73 companies, out of which only 27 are listed on the BSE, with a market capitalization of EUR 1.6 billion on the stock exchange.

The number of FP traded shares was 10.8 billion, representing 81 percent of the share capital, while the average daily turnover was EUR 4.8 million. The value of traded shares was EUR 1.3 billion in the last three weeks.

Around 86 percent of the NAV or EUR 2.9 billion is included in the energy sector. Oil and gas represents 34 percent, electricity utilities generation 33 percent and electricity and gas utilities – transport, distribution and supply – account for 19 percent. Top holdings include stakes in Hidroelectrica, OMV Petrom, Romgaz, CE Turceni, Nuclearelectrica and Transgaz. ∫ Ovidiu Posirca

www.business-review.ro Business Review | February 20 - 26, 2012

AIRLINES

Low-cost carriers seek blue skies after turbulent 2011 Wizz Air shook up the local airline market last year when it overtook national carrier Tarom. BR surveys some of the other major changes on the market and budget carriers’ plans for 2012. boring country but the only detail he “Following last year’s natural selection on gave was that it was not Hungary. the airline market, I believe the survivors The carrier has also announced that it are safe now,” said Sherif Ussama, GM of Blue Air, at a recent press conference. will increase its number of flights on several routes. At peak season it will operate While internationally tough economic 85 flights per week from Otopeni and anconditions have led to the collapse of other 36 from Bacau, its second hub. For Spanair and Malev, locally, too, the marthis the carrier has acquired two more airket has undergone considerable strucplanes and a third should be added this tural changes. summer, taking Blue Air’s fleet to 10 airThe most important was low-cost carcraft. rier Wizz Air’s dethroning of national airline Tarom last year after boosting its number of passengers by 28 percent From Baneasa to Otopeni y-o-y.

As of March 25 all low-cost flights to In total, Wizz Air reported 2.76 million and from Bucharest will be relocated passengers in Romania in 2011, while from their present hub at Baneasa to Tarom failed to reach its 2.4 million pasOtopeni, said representatives of the senger target, flying only 2.19 million.

Bucharest Airports National Company, The local low-cost airline market is according to media reports, adding that dominated by Hungarian Wizz Air and lobudget carriers will be forced to transfer cal Blue Air while international giants after airport taxes at Baneasa are hiked. haven’t yet managed to gain considerable Ussama said Blue Air was ready to market share. Some players had a hard make the shift, commenting that the time in 2011. Easy Jet, the second largest change would not generate significant low-cost airline in Europe, announced it hikes in fares. “Some have spoken of would close its local operations. The airprice increases of EUR 4, 5 or 10. In fact, line had operated flights to Milan and prices are set by supply and demand and Madrid from Otopeni for four years, reon most of our routes they will not inporting about 200,000 passengers in Rocrease,” said the Blue Air GM. Blue Air repmania annually. resentatives added that due to the inGerman Wings, the low-cost division crease in airport taxes at Baneasa it was no of Lufthansa, will also scale down local oplonger cost-efficient to operate from there. erations this year. The airline announced Wizz Air’s corporate communications that it had given up on flights on the manager told BR last week that the comBucharest-Stuttgart route and flights to pany “has not received any formal notifiBerlin will also cease, leaving only the cation or confirmation about a possible Bucharest-Koln route. price increase at Baneasa Airport, so it Wizz Air now claims a 66.4 percent would be premature to speculate about share of the Romanian low-cost market. any potential scenarios”. He added that The company says that the budget seg- “any increase in airport charges has a mament will continue to be the main driver jor pressure on ticket prices”. of passenger increases through the main Jozsef Varadi, Wizz Air’s CEO, said airports in Romania, but the market will last November that should low-cost airline continue to face challenges not only locally be forced to operate from Otopeni, the airbut also at a regional European level – line would have no other choice but to involatile fuel prices, the new carbon cercrease fares and adjust flight capacity tificates and the exchange rate, Balazs Vardue to the higher taxes at Otopeni. The carro, corporate communications manager at rier has often denounced in recent years Wizz Air, told BR. what it considers to be a very high level of The Hungarian carrier estimates that airport taxes at Otopeni. the low-cost segment has a 36 percent share of the entire local market. This year The battle for Budapest the airline has plans to consolidate its poThe announcement that Malev had sition in Romania, launch new routes succumbed earlier this year left a gap on from Bucharest to Budapest (March), the local market too, which Wizz Air and Verona and Palma de Mallorca (June), Tarom scrambled to fill. and from Cluj to Budapest (April) and inOn the Romanian market, Malev opcrease the frequencies on other routes. erated flights to Budapest from Bucharest, The second biggest player on the marCluj-Napoca and Targu Mures, having ket, Romanian carrier Blue Air, reported about 300,000 passengers in 2010. Comfewer than 1.5 million passengers last patriot Wizz Air announced shortly after year, down by about 200,000 against the the news of the Hungarian flag carrier’s depeak recorded in 2009. The decrease mise that it would expand its operations comes after the airline reduced its flight cafrom Budapest, including the launch of pacity by 15 percent in 2011, following a reflights to Bucharest, while Tarom also structuring program. Blue Air estimates a said it would increase its number of flights EUR 149.5 million turnover for 2011, down on this route.

9 percent y-o-y, but said that it has manBlue Air on the other hand said that aged to “slightly” increase its profitabiliit was not planning to expand in Hungary ty. This year it is hoping for a turnover inas it wouldn’t be a good move for the crease of 3 to 4 percent. airline, because Wizz Air and Ryanair had For 2012 Ussama has disclosed that his got in there first. ∫ airline has plans to expand to a neighSimona Bazavan

NEWS 7

www.business-review.ro Business Review | February 20 - 26, 2012

8 BR AWARDS

BR AWARDS 2012 shortlist The seventh edition of the BR Awards, an event dedicated to rewarding local achievements in business, is closing this week with a varied shortlist of top companies from across the sectors. This year’s event features revamped categories devised to recognize recent developments in the IT and online field, sustainable business practices and retail. Below we outline the contenders, who will hear the jury’s decision in a gala event this week. This year’s jury is made up of: Steven Van Groningen, president of the Foreign Investors’ Council (FIC) and CEO of Raiffeisen Bank, also president of the jury; Florin Pogonaru, chairman of the Romanian Businessmen Association (AOAR); Wargha Enayati, managing director, Regina Maria, the Private Healthcare Network; Emma Popa Radu, managing director, Advent International Office in Bucharest; Aneta Bogdan, managing partner, Brandient; Dan Bulucea, country manager, Google Romania; and Oana Petroff, managing director, Mindshare Romania. ∫ OVIDIU POSIRCA

SUSTAINABLE BUSINESS PRACTICES Judging criteria: – community involvement – the chain-reaction effect, meaning creating more sustainable business around the core activity

Carrefour: Filiera Calitatii (Quality Lines) Program Set up to sign direct supply contracts with local farmers, Carrefour’s Quality Lines program was extended last year with Romanian potato producer Agrico-M, which supplied about 20 percent of the potatoes sold in 2011 by the retailer. Carrefour said it intends to boost the share in the coming years and sign deals with other local farmers. In 2010 Carrefour launched its first two Quality Lines with local farmers for carrots and trout. Through this program the retailer eliminates intermediaries, while supporting investment opportunities in local agriculture.

Raiffeisen Bank: Raiffeisen Comunitati program Launched in 2009 as an annual offline financing program, Raiffeisen Comunitati developed into a blog supporting the bank’s ongoing dialog with the communities where it operates and a contestbased financial program supporting the development and implementation of community projects. The program was also widened to support the best NGO projects, hospitals and schools in communities where there is at least one Raiffeisen Bank branch, either financially, through volunteering or through knowledge dissemination. The maximum value of an allocated grant was EUR 5,000.

Raiffeisen Comunitati had four targets: the internal audience made up of Raiffeisen Bank employees; local NGOs working in the 210 urban communities in which

the bank is present; active bloggers; and the communities targeted by projects.

The grant program reported 391 project submissions, of which 156 applications were accepted. Some 17 finalist projects won financial support from Raiffeisen Bank.

Unilever South Central Europe: Global Sustainability Program The FMCG producer launched last year a global sustainability program which also impacted its local business. The program’s main objectives are to halve the environmental footprint of the firm’s products by 2020 and source all its agricultural raw materials sustainably.

The company has managed to reduce electricity consumption after investing EUR 50 million in the past two years in expanding the production capacity of its detergents factory in Ploiesti by 30 percent.

RETAIL STRATEGY Judging criteria: – new aspects of the market entry/expansion strategy in relation to the industry segment and the company’s previous strategy – investment in development against the achieved results – (marketing) strategies for developing a customer base or retaining and growing the existing one: new ideas, customer-centric approach, results

Carrefour: Carrefour Express franchise Part of its global multi-format strategy, Carrefour Romania launched last year its first local proximity store through a franchise agreement with local meat producer and retailer Angst, under the name of Carrefour Express. There were three such stores at the end of 2011. This year the scheme will be extended to all 24 existing Angst outlets and any new ones that will be opened in the meantime, according to Angst officials.

In addition to the three Carrefour Express stores, the retailer also runs 46 su-

permarkets and 25 hypermarkets in Romania.

able it to double its turnover in two years’ time.

eMag: online retail strategy

ONLINE STRATEGY FOR BUSINESS DEVELOPMENT

Last year, eMag launched Marketplace, the first online platform in Romania to host various retailers. On this platform, any of the retailers can promote and sell their products to eMag clients, with the product range, promotions and logistics of the orders being dealt with directly on the platform by the individual retailer. eMag marketplace has since seen the addition of new categories of products and services such as toys, books, music and even insurances policies. eMag, along with Flanco, also pioneered the Black Friday initiative, which brought the firm sales of EUR 8 million in just one day. According to the study Superbrands 2011, eMag is the most recognized brand on the electro-IT segment. It is also the largest online retailer of IT&C products, with seven showrooms in Bucharest, Iasi, Ploiesti, Cluj, Timisoara, Constanta and Craiova.

Mega Image: outlet location strategy Throughout 2011, Mega Image stepped up its expansion pace, opening 33 new stores and taking its national network to 105 outlets under the Mega Image and Shop&Go brands, the latter also having been launched last year. The Belgian retailer now owns the largest supermarket network in Bucharest.

In order to support its expansion pace in 2011 Mega Image invested in opening its own 40,000-sqm logistics center in Popesti Leordeni, following an investment of over EUR 20 million.

Murfatlar: Crama Murfatlar The largest wine producer in Romania decided to invest in its own retail wine store network, Crama Murfatlar, which reached more than 100 shops country-wide in 2011.

The shops are run under a franchise scheme in partnership with local entrepreneurs.

Sales reached 8.1 million liters of wine, worth EUR 14.5 million. The company plans to expand to 150 outlets by the end of 2012 and hopes that the stores will en-

Judging criteria: – innovative character of the online project with reference to the local market and the respective industry – the response generated by the project in terms of revenue, community building, public awareness

Citibank: Smart Banking Branch Citibank developed a complex digital banking platform in Romania, for corporate and retail consumers. The lender opened its first digital smart branch locally last year, unique in the Europe and Middle East region, but also developed a smartphonefriendly banking application, all part of the smart banking strategy rolled out by Citi.

The launch of a co-branded card with Vodafone and a permanent chat service are part of Citibank’s efforts to improve its customers’ banking services experience.

eMag: Black Friday Initiative eMag pioneered the Black Friday concept in Romania, the day after Thanksgiving when promotions kick off the Christmas shopping season. A total of 1.2 million Romanians accessed the eMAG website that day, which represents over 5 percent of the Romanian population. In total, 100,000 products were ordered and EUR 8 million in sales achieved in just one day.

Raiffeisen Bank: Studentocard online platform Raiffeisen Bank promoted its Studentocard among university students, attracting around 35,000 customers by end-August 2011. The online channel studentbank.ro accounted for 35 percent of total applications for the debit card, registering traffic

www.business-review.ro Business Review | February 20 - 26, 2012

BR AWARDS 9

of 450,000 visitors and 1.5 million page views. The lender was able to attract more than 9,000 fans to the Facebook page specially designed for this program.

by RTR in Romania, accounted for almost 50 percent of the local carmaker’s sales in 2011.

Vodafone: Manager SRL online video game

Last year, Romanian company Televoice, launched the Evolio Neura tablet PC with Android OS, which it positioned as “an iPad killer,” claiming it offers more at a similar size and for a fair price. The overall investment in the project was in excess of USD 1 million.

The device was designed in Romania but the hardware was manufactured in Shenzen, China. Other launches included the EvoTab1 and EvoTab2 tablet PC as well as the Evobook2 eReader.

Televoice focuses on innovative products based on open standards and platforms that are competitive on the international market as well. In 2011, it came third in the tablet PC sales race in Romania, after Apple and Samsung.

Vodafone Romania carved out a niche in the online sector by launching last year Manager SRL. This marked several premieres, as it was the first online interactive movie campaign in Romania, the country’s first business game experience and also the first Vodafone OpCo to launch a full roleplay interaction to this extent.

So far, the website has registered over 100,000 unique visitors who have viewed over 700,000 video scenes. As many as 10,000 players shared their Manager diploma on social media while 11,000 wanted to receive info about Vodafone’s business products (which is optional). Overall, 95 percent of contacted users said they had found the experience positive or highly positive, while 90 percent found the campaign to be innovative and enjoyed the experience.

INNOVATION IN TECHNOLOGY Judging criteria: – innovative characteristics of the product – local R&D activity

Bitdefender: security and antivirus product portfolio 2011 was a year of premieres for Bitdefender as the company launched the 2012 generation of products targeting a global market: Total Security 2012, Internet Security 2012, Antivirus Plus 2012, as well as a free anti-virus solution launched exclusively in Romania.

Three of the most important independent testing organizations in the world voted Bitdefender’s consumer products the number one choice (in terms of internet security), last year. Having established itself as a technological leader in consumer endpoint protection technologies, Bitdefender took a quantum leap, by targeting an emerging enterprise market: virtualization security.

As an aspiring provider of holistic security solutions, the firm launched an entirely new public/private/hybrid cloud platform supporting endpoint security across physical, virtual and mobile infrastructures. With a team of 623 people, Bitdefender keeps its innovation guns at home, as 99 percent of the research is done

by Romanian-based teams.

Renault Technology: Dacia Duster SUV model Renault Technologie Roumanie (RTR) was inaugurated in 2007, quickly becoming Renault’s largest engineering center outside France, employing almost 2,500 people in three locations: Bucharest (home to its automotive engineering and design offices), Titu (testing center) and Mioveni (technical support to Dacia plant).

Last year saw the completion of the Titu Technical Center project following a EUR 166 million investment. RTR is the engineering hub for all vehicles developed on the Logan platform and the R&D center reported a turnover of approximately EUR 100 million in 2010.

The Duster, Dacia’s SUV model, which is the most important project developed

Televoice: Evolio range

Visual Fan: Allview range Visual Fan, a Romanian-based company operating since 2002, sells IT&C products under the Allview brand. In 2011, the producer launched the first dual SIM smartphone under a Romanian brand, PC tablets – such as the AllDro Speed tablet – and smart TV boxes based on Android OS. For this, Allview developed hardware and software systems and integrated them in the DroSeries product range. Allview also introduced the Selfcare application, a portal pre-installed on every dual SIM mobile phone and PC tablet under its brand.

INTERNATIONAL EXPANSION Judging criteria: – scope and reach of the international presence – results achieved on foreign markets: (share in the company’s financial performance), products introduced, operational use of international locations

Bitdefender Bitdefender’s international expansion aspirations materialized last year into a suite of products thrown onto the global market, new offices opened in foreign locations, a rebranding campaign and, overall, a more aggressive leader-oriented approach to the global market. Ten years after it came into being, Bitdefender completed a two-year, EUR 1 million rebranding process that reflected its Romanian roots and global aspirations to become world leader on the security solutions market.

Also last year, Bitdefender added a new international office, located in Dubai, to the list of two offices in the United States, one in Silicon Valley and another in Fort Lauderdale, Florida. It also has offices in Great Britain, Germany and Spain and in addition a support center in Chile with a team that serves clients in South America.

Floating on the stock exchange remains a priority for the company, which has 623 employees. It last year reached the 400-million clients mark and aims to gain another 100 million by the end of the year.

Siveco Software and consultancy provider Sive-

co is present in 17 countries in Central and Eastern Europe, the CIS, North Africa and the Middle East, and has 20 ongoing contracts for the European Commission.

In 2011, Siveco signed 224 national and international contracts in fields such as eBusiness, eLearning, eCustoms, eHealth, eAgriculture and eNuclear. The company is in an expansion mode that will see it establish a presence in 50 countries in four years from now, as its long-term mission is to become a global software integrator. Siveco’s portfolio of clients has increased to 1,400 due to new contracts abroad.

Totalsoft Romanian company Totalsoft dates back to 1994 and is now part of the Global Finance investment group. With offices in Bulgaria, Greece, Serbia and Qatar, Totalsoft announced at end-2011 the opening of its first office in a Western European country, Austria, which caters to the Central Eastern European region and Germanspeaking countries. A company with 490 employees which posted a turnover of nearly EUR 26 million in 2011, Totalsoft saw a 30 percent y-o-y increase in international revenues.

One major achievement in 2011 was its selection as project management consulting provider for the biggest project in the world – the construction of the Jubail Refinery in Saudi Arabia. It also continued the Charisma solution roll-out in multinational companies, with implementations in new countries for its portfolio, such as the Czech Republic, Poland, Slovakia and even Senegal.

TeamNet Last year, TeamNet was ranked among the top ten companies in the Deloitte Central Europe Technology FAST 50 ranking for the fourth year in a row, with a 59 percent growth in sales y-o-y, the only Romanian company so garlanded. TeamNet, which dates back to 2001 and employs around 350 people, posted a turnover of EUR 32 million in 2011.

The company has offices abroad in Brussels and Chisinau and opened a new office in Belgrade in 2011. It was also among the top ten IT suppliers in the Republic of Moldova.

BEST EMPLOYMENT INITIATIVE Judging criteria: – number of appointments and quality of the jobs created – effort to retain workforce despite difficult economic environment

Endava: comprehensive employment program Last year British IT company Endava, which has three delivery centers in Romania (in Cluj, Iasi and Bucharest), announced an extensive employment program. Its headcount in Romania hiked by 33 percent in 2011, reaching 340 people in total.

The company organized Endava Career Days, developed a new recruitment program, a new line management approach and a talent management strategy to streamline its operations. The recruitment process that started last year will go on in 2012 as well: in the first half of 2012, 250 more people will be added to the

roster. Endava has been present on the Romanian market since 2006 and posted a EUR 9.2 million turnover in 2011.

Intel: hired highly trained employees for its R&D center Last year, the Intel software development center more than tripled its initial jobs forecast, hiring over 50 people as software engineers, quality engineers, software engineering managers and interns.

The team also moved to a new permanent office, with state-of-the-art facilities for R&D. The products that the R&D employees have worked on in the past year are used in the current Intel mobile platforms introduced to the market this year.

Siveco: doubled the number of employees Set up 20 years ago, the company doubled its number of employees in 2011, reaching 1,200 people as a result of 224 national and international contracts it signed last year, including for European Commission institutions.

In Romania, the company also opened two more work points in Brasov and Ploiesti, on top of its existing ones in Cluj, Timisoara, Constanta, Craiova and Galati. Recruitment will continue this year too, as Siveco plans to hire about 150200 people. In 2011, the firm saw its turnover grow by 12 percent to EUR 67 million.

Sfantul Constantin & Regina Maria private hospital campus: hired highly skilled medical personnel Regina Maria opened a medical campus in Brasov, following a EUR 4.2 million investment, on the premises of the Sfantul Constantin private hospital, a EUR 20 million investment by Teo Health inaugurated last March following . The 3,000sqm campus was built in partnership with Teo Health and includes an obstetrics and gynecology unit, a pediatrics unit, a polyclinic and a laboratory. Over 65 doctors were hired, along with other type of medical personnel.

BEST BUSINESS INITIATIVE IN SMEs Judging criteria: – innovation of the business idea – achievement within the industry and looking at the resources involved

Artmark auction house Artmark currently leads the local art market with a 77 percent share. The company positions itself as a one-stop-shop for art enthusiasts, encompassing an auction house, gallery and cultural center, and offering a wide range of services from advisory and guarantees to restoration, evaluation, private sales, logistics and related services. Last year Artmark launched the Art Consecrated Index, a monitoring tool of the weekly evolution of the art market for the 100 most representative Romanian artists.

In 2011 Artmark also released the Artmark Live application, which facilitates real-time bidding over the internet, and opened the Art Shop Dependent de Art, specialized in contemporary fine arts and decorative arts.

www.business-review.ro Business Review | February 20 - 26, 2012

10 BR AWARDS The firm reported a turnover of EUR 12 million last year, and a EUR 530,000 profit for the first half of 2011.

BOOKbyte digital library The 28-year-old entrepreneurs Anca and Radu Apostoae are the owners of BOOKbyte, the first digital library with a full DRM integrated solution. BOOKbyte is focused on eBook distribution, eBook software development and eReader retail.

Launched in November 2010, the venture focused last year on developing a strong product package, with end-to-end solutions for clients and publishers. At the time of the launch only around 30 books were available for download. At the end of 2011 more than 400 titles were available from 10 Romanian publishers, most of them in a digital format for the first time. Last year BOOKbyte developed partnerships for ePub conversion and eBook creation services. It also became the official importer in Romania for Booken (a French eReader brand) and launched the Orizon, the world’s thinnest eReader.

F64 Photo Store Marian Alecsiu, currently general manager, and Daniela Becheru, managing director, started F64 at the beginning of the 90s, initially as a small photography studio. F64 officially opened last year its flagship store in Bucharest’s Piata Unirii, the largest photo store in South-Eastern Europe and one of the largest worldwide.

The showroom has a surface of 1,300 sqm and a capacity to display approximately 5,000 products, selected from a range of 100 brands. F64 forecasted an annual turnover of EUR 14 million for 2011, which represent a 23 percent growth yearon-year. In 2012, the figure is expected to reach EUR 17.5 million.

Zebra Pay: instant payment network Founded by Lucian Butnaru in October 2009, ZebraPay is an instant payment terminal company conceived as the first local model of one-stop-shops. Last year, Zebra Pay made USD 1.5 million of investments in its infrastructure, taking the self-service kiosk network to national level. At the end of 2011, the firm had installed 500 terminals in 30 cities across the country, with 15 services available at these points. Zebra Pay has 22 employees and posted a turnover of USD 750,000 in 2011.

ENTREPRENEUR OF THE YEAR Judging criteria: – development of the business over the past two years – unique characteristics of the business – results achieved against investment and the overall industry

Dragos Atanasiu: Eurolines Dragos Anastasiu, founder of the Eurolines group 17 years ago, struck a deal in 2011 with German company TUI Travel under which 25 of the local operator’s agencies will be rebranded as TUI Travel Center. The agencies will sell TUI products under the concept of Travel Hypermarket. “TUI did not have a distribution network in Romania while we did not have a brand. We have now joined forces,” said Anastasiu. The Eurolines Group, which has 500 employees, posted a turnover of EUR 46 million in 2011,

a 22 percent hike. As part of the partnership, Eurolines Group has acquired Danubius Travel, more than 70 percent of which belonged to the TUI group.

Alexandru Baldea and Manuela Plapcianu: Artmark Manuela Plapcianu, along with her partner Alexandru Baldea, are running one of the most interesting entrepreneurial ventures on the local market. Alexandru Baldea founded the Artmark galleries in July 2008 together with Radu Boroianu, benefiting from financing from a Dutch investment fund. Baldea is a founding member of the ArtSociety Cultural Center and teaches at the Art History department within the Bucharest University since 2010.

Plapcianu took over in February 2009as CEO of Artmark, a business in which she owns 20 percent. An art collector since 1985, Plapcianu has over 15 years of experience in management and leadership positions across the financial sector. She is an expert in financial markets, M&As, retail and corporate banking, crisis management and other fields. She holds an EMBA Asebuss from the Washington and Columbia NY universities.

Dragos Petrescu: Trotter Prim Dragos Petrescu is a name strongly linked to the local restaurant industry. The Romanian entrepreneur owns shares in City Grill network of eateries and the manager of Caru’ Cu Bere.

2011 proved a good year for the businessman. Petrescu launched three new brands on the local market – Hanu’ Berarilor, Cantina Sport Bar and the Bundetot shaorma shop. He managed to increase sales by 16 percent and open five new units including a City Cafe unit in the Otopeni airport, Hanu’ Berarilor Elena Lupescu, the second restaurant under the Hanu’ Berarilor brand, and the BackWerk bakery on Magheru Blvd.

Ioan Popa: Transavia Ioan Popa, the owner of the main shareholder of local poultry producer Transavia Group, has managed in the past 20 years to take the business to market leader position.

At the end of 2011 the company had more than 1,300 employees and a production capacity of more than 50,000 tons of poultry per year. Due to the increasing price of fodder, in 2011 it expanded its business to crop production. About EUR 10 million has been invested into the new division. Popa hopes to reach a total surface of 10,000 hectares of land for cereal cultivation.

Iulian Stanciu: Network one Distribution, eMAG and Flanco Iulian Stanciu created Asesoft (with Sebastian Ghita) when he was still a student at the Academy of Economic Studies in Bucharest. At the end of 2011, Asesoft Distribution rebranded as Network One Distribution (NOD), with ambitions to become an international player and expand in the CEE region.

Stanciu is president of the NOD board, with a EUR 180 million turnover in 2011, up 24 percent y-o-y. He is also manager and major shareholder in Dante International, the company which runs the largest online retailer in Romania, eMag. Additionally, he is a major shareholder in IT&C retailer Flanco, which posted a turnover of EUR 110 million in 2011.

Camelia Sucu: Piata de gros After investing in the furniture business, local businesswoman Camelia Sucu is putting

her faith in agriculture as one of the sectors that will bring considerable returns in the years to come. She bought Piata de gros – a wholesale market for agricultural products in Bucharest which is supposed to bring together producers and retailers – in 2010 for EUR 5.5 million. Last October she announced plans to invest between EUR 10 million and EUR 15 million in modernizing and expanding the project. Sucu also invested last year in a cattle farm in Transylvania. The businesswoman owns the Class Living luxury furniture retailer and cofounded furniture company Mobexpert.

DEAL OF THE YEAR Judging criteria: – financial details of the transaction – impact within the industry/ local business scene – novel elements characteristic to the transaction

Ameropa Holding buys Azomures and Chimpex Swiss grain and fertilizer trader Ameropa acquired Romanian fertilizer producer Azomures and Chimpex and Chimpex, a harbor operator in Constanta, both listed on the Stock Exchange, in a deal worth between EUR 100 and 275 million, according to media sources. Azomures reported a turnover of RON 1.6 billion last year, and a profit of RON 405 million.

Erste buys four SIFs’ shares in BCR Austrian Erste Group Bank increased its stake in BCR to 89 percent after acquiring a 24 percent share package from financial investment firms SIF Banat Crisana, SIF Transilvania, SIF Muntenia and SIF Moldova. The transaction totaled EUR 389 million, involving a cash payment and a share swap between Erste and BCR, based on an average price of EUR 17.6 per share in July 20111-January 2012 and an average EUR/RON rate of 4.3143 in the same period. Erste consolidated its presence in CEE last year by achieving a maximum equity interest in BCR.

MetLife buys Alico The American group MetLife has bought the divisions of the insurance company Aviva from Romania, Hungary and the Czech Republic. The transaction will be completed this year after regulators from Romania and the United States approve it. The move is in line with the strategy of focusing on large markets that Aviva announced in November 2010. Aviva is present on the local market through Aviva Life Insurance and Aviva Private Pensions. The takeover will be done through Alico Asigurari Romania, a company that it is part of MetLife, along with Alico.

NEPI buys City Business Center South African New Europe Property Investments has acquired City Business Center, three adjoining office buildings in Timisoara, covering 27,150 sqm, from businessman Ovidiu Sandor. Although the deal was sealed this January, negotiations were carried out in 2011. The acquisition involved a share transfer from Sandor to NEPI totaling EUR 16.5 million. The office buildings have a value of EUR 45.6 million.

NEPI was listed on the Bucharest Stock Exchange last summer and has invested

around EUR 250 million in real estate in the last two years. The fund’s assets totaled EUR 360 million at end-2011.

BUSINESS LEADER OF THE YEAR Judging criteria: – remarkable individual (entrepreneurial) or group results achieved within the context of a specific industry (turnover/sales against the company's previous performance and industry average) – standing and presence in the company and industry community – resources and innovation involved in achieving the results

Inaki Berroeta: Vodafone Romania In December 2010 Spaniard Inaki Berroeta was named CEO of Vodafone Romania, the second biggest operator on the local market, with 8.32 million customers after the third quarter of the financial year 2011/2012.

The operator was ranked number one in the list of Top Social Brands 2011. During his leadership Vodafone gave a strong push on the mobile internet segment, posting a 75 percent boost in its customer base and a 58 percent hike in its revenues on this segment y-o-y. Last year, the operator was certified by independent auditor P3 communications as having the best performing GSM/UMTS/CDMA network for mobile data in Romania. Vodafone is also leader of the business sector in Romania, with a 50 percent share of the market of mobile communication services for companies.

Cornelia Coman: ING Life Insurance Romania Cornelia Coman has been at the helm of ING Life Insurance for more than three years, striving to keep the insurer in a leading position despite a difficult market.

ING has rolled out customer feedback and personal financial plans, while upskilling their consultants and sales force. Last year, the firm increased its life insurance and voluntary pension sales by 11 percent, reporting gross written premiums of RON 544 million. In addition, the net assets of the two voluntary pension funds reached RON 200 million.

Mariana Gheorghe: OMV Petrom Mariana Gheorghe has been CEO of OMV Petrom, the largest oil and gas group in South-Eastern Europe, since 2006. Under her mandate, the group has invested over EUR 6.6 billion in modernization and increased efficiency. In 2010 the group’s turnover was EUR 4.4 billion, while its EBIT was EUR 709 million.

This February, US Exxon Mobil and OMV Petrom, which teamed up in 2008, made a historic breakthrough by finding gas deposits in the Black Sea, during exploration works that started last year.

Prior to joining the group, Gheorghe worked for the European bank for Reconstruction and Development (EBRD) for 13 years, focusing on the oil and gas sector.

Robert Rekkers: Banca Transilvania Until he stepped down recently, Robert Rekkers had been one of the longest-serving managers in the Romanian banking in-

www.business-review.ro Business Review | February 20 - 26, 2012

dustry, working as general manager at Banca Transilvania for almost a decade.

During his tenure the lender became the third biggest bank in Romania and managed to increase its value on the stock exchange from EUR 55 million in 2002 to EUR 1.7 billion in 2007.

Under his watch BT was always a target for financial groups planning to enter the local market. His arrival at BT coincided with the drawing up of a new business strategy by the management board of BT that involved three aspects: consolidating the bank, launching the BT Financial Group and repositioning the lender on the Romanian banking system.

Irina Socol: Siveco Irina Socol is one of the pioneer businesswomen in Romanian IT, having started the software and consultancy provider Siveco in 1992 with her husband, Alexandru Radasanu. Socol is now CEO and president of a company which has doubled its headcount to 1,200 employees and reached a turnover of EUR 67 million in 2011, up 12 percent y-o-y. Siveco’s footprint reaches 17 countries in Central and Eastern Europe, the CIS, North Africa and the Middle East.

Last year, the firm signed 224 new local and international multi-annual projects.

It will provide software development and maintenance services worth EUR 10 million to six organizations in the European Union. Socol’s ambition is to turn Siveco into a global software integrator which will be present in 50 countries in four years.

Listing the firm on the stock exchange in a few years’ time is still an option.

Florin Talpes: Bitdefender One of the pioneers of the software industry in Romania and a math graduateturned-Silicon Valley entrepreneur, Florin Talpes has transformed his flagship company Bitdefender into a major player on the global security market. Eleven years since its inception, Talpes’s success is measured in 400 million clients and a worldwide presence in over 100 countries.

In 2011, Bitdefender’s consumer products were voted the number one choice (in terms of internet security) by three of the most important independent testing organizations in the world. Talpes’s entrepreneurial journey started in 1990 as founder of Softwin, one of the most prominent home-grown Romanian software and services companies.

He also set down the basis of the Romanian Association of the Software Services Industry (ANIS), leading a team to develop the National Strategy for Software Services in Romania.

EXCELLENCE IN BUSINESS Judging criteria: – innovative character and/or development achievement/potential of a business developed locally – performance achieved base on the principles of customer focus, stakeholder value, process management

Bitdefender

year, including a free anti-virus edition launched exclusively in Romania. Last but not least, a pivotal change in Bitdefender’s philosophy took place, as it embraced a more aggressive corporate identity which should help it achieve its world leader target.

A new logo for the “defenders of the new digital world”, the Dacian wolf-dragon, and the slogan “Awake” were adopted during a EUR 1 million rebranding campaign. Bitdefender has reached the 400 million clients mark, and has a presence in 100 countries all over the world. Despite being a global company, it keeps its R&D operations at home, with 99 percent of its research done by Romanian-based teams.

Group Renault Romania Car manufacturer Dacia, Romania’s leading exporter, sold around 30,000 units domestically on a declining auto market last year, but compensated through exports to France, Germany and Italy, where it sold around 160,000 vehicles last year.

Dacia has used the research center set up in Romania by Renault, which developed parts of the Duster, the SUV model that accounted for 47 percent of the brand’s total sales in 2011. Some 200,000 Dacia cars were manufactured at the Mioveni plant, while 1.5 million cars were produced on X90 platform. The Renault Group Romania is focusing on a complete car chain.

eMag The largest online retailer in Romania, eMag, has been building up steam for the past ten years. eMag was one of the initiators of last year’s Black Friday campaign, bringing to Romania a shopping-ata-big-discount concept that has been successfully tested on Western markets. The result was that in just one day, the firm’s website was visited by 1.2 million people, more than 5 percent of the Romanian population. Sales on that day reached an unprecedented peak of EUR 8 million, and 100,000 products.

Also last year, eMag moved its office to Swan Office and Technology Park where it rented 2,700 sqm, while its showroom and service continue to operate at Grant Mall. The retailer posted a EUR 62 million turnover in H1, 2011, with EUR 150 million estimated for the whole of the year, 50 percent up on 2010.

Orange Orange kept its leader position on the Romanian telecom market, with 10.18 million customers and EUR 698 million in revenues after the first nine months of 2011.

Additionally, the operator saw a 43 percent quarterly boost in its mobile internet base, reaching 4.3 million clients. Orange put EUR 110 million into network expansion, coverage of rural areas, new products and customer experience improvement. It also budgeted investments of up to EUR 600 million for 2011-2015.

Last year, the mobile operator kicked off an extensive project modernizing its communication network and supplying broadband services to rural areas, to be completed by end-2012. It also launched high-speed mobile internet in Bucharest and several other large cities, allowing 43.2 Mbps download speeds and 5.76 Mbps upload speeds.

Meanwhile, the operator revamped its network of stores and launched the Orange Care Center for mobile phones. In July, 2011, Frenchman Jean-Francois Fallacher was appointed at the helm of Orange Romania.

PARTNER CONTENT

4 lies and 4 truths for the Romanian solar energy sector If the Romanian not you produce solar or wind energy. renewable energy Most likely you will buy the same market has one transformator. (By the way, there are sector where peo- “optimum capacities” for Solar energy ple bend the truth, projects, in order to reduce the cost this is by far the per MW installed). solar one. Let us go over 5 com- 6. Solar energy is easier to fit into mon lies and 5 the grid truths that we True. For several different reasons.

Ilias Papageorgiadis hear in our daily For example the capacity of the solar business activity: projects is smaller, thus making them easier to fit almost anywhere and build 1. Romania has 1.400 – 1.750 hours them close to large energy consumers. of annual irradiation But there are also many other techniLie. All serious players prepare their cal aspects that confirm this statebusiness plans estimating a produc- ment. tion of maximum 1.400 hours per annum, at the most. Usually they cal- 7. By investing in Romanian solar enculate a 5 – 10% lower production. The ergy production, you benefit from a solar maps that present Romania as a very high price and profitability state located… south of… Greece Lie. The production of solar energy in have nothing to do with reality. Ask for Romania is “rewarded” with 6 green the maps that banks are using to cal- certificates per MWh. This means that culate. almost 85% of the total income is related to the volatility of the green cer2. The potential of Romanian solar tificates’ price. The estimated income / energy sector is excellent MWh that an investor can reach is very True. IAf we listen to the experts, who good indeed. But don’t expect have verified several advantages that miracles, unless you are willing to risk. an investor has when producing If you choose to stay on the solar energy in Romania. But this is safe side (for example, by using PPA not going to last forever. It is a viable contracts in your calculations) the remarket for the next 2 or maximum 3 sult will be “attractive” but not “inyears. credible”.

3. Don’t spread the word, but you can buy solar projects that have approved European grants and they benefit from 6 green certificates per MWh as well.

Lie. If you get grants, you get less green certificates. So with 50% grants, you will get 50% of the green certificates. Plus these grants were given for different technologies and costs.

Personally, I would look for something else before checking these projects.

4. In Romania you can develop a solar energy greenfield project in 6 months’ time.

True. More or less. But only if you have very good consultants and experts who know how to do this. It took me 2 years to find them. Don’t believe in easy promises.

5. It is cheaper to connect 10 MW of solar energy to the grid than 10 MW of wind one.

Lie. If you produce 10 MW in one hour and you need to evacuate it to the grid, you will not avoid the cost, whether or

8. Prices for new solar energy projects in Romania can be higher than in the majority of European countries nowadays.

True. Most of the European countries have either stopped giving subventions to new solar energy projects or offer an axed feeding tariff, which is reduced every 6 months. The Romanian scheme offers a good IRR at the minimum price scenario, which may increase a lot if the prices of green certificates remain high.

Solar energy in Romania is a promising field for investments, but I would suggest you calculate “without hopes and dreams”. Like this you will be happy with the total outcome.

PS. Upon request, I can provide you with a short memo for the subvention scheme applicable to all renewable projects in Romania, solar included.

Ilias Papageorgiadis CEO More Real Estate Services (www.more-group.eu%29

ADVERTORIAL

Last year, three of the most important independent testing organizations in the world voted Bitdefender’s consumer products the number one choice (in terms of internet security). The company’s 2012 range of security products also hit the shelves last

BR AWARDS 11

www.business-review.ro Business Review | February 20 - 26, 2012

12 LINKS

ACT(A) interrupted: public pressure threatens treaty As opposition against the Anti-Counterfeiting Trade Agreement (ACTA) builds in various EU member states, the question is what chances the treaty stands of being ratified in its current form. While some EU countries have already suspended the ratification, several Romanian cities have also joined in the rallies. BR asks internet pundits what are ACTA’s pitfalls and what outcome they predict. ∫ OTILIA HARAGA The stated purpose of the Anti-Counterfeiting Trade Agreement, signed so far by the United States, Australia, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, Switzerland and the European Union, is to establish international standards for the enforcement of intellectual property rights and eradicate counterfeit goods and copyright infringement on the internet. Twenty-two European Union member states, including Romania, signed ACTA at the end of January 2011 in Tokyo.

In order to be put into practice in the EU space, the treaty must be ratified by all member states and approved by the European Parliament (EP), and should be put to the vote in the EP no later than June.

However, countries like Germany, the Netherlands, Estonia, Slovakia and Cyprus have refused to give their consent to ACTA. Even more seriously, the European Court of Justice dealt ACTA a heavy blow in mid-February, ruling that a social network cannot be required to install an anti-piracy filtering system. Meanwhile, countries that had already signed the treaty, such as Poland, Latvia and the Czech Republic, have got cold feet, after massive protests urged officials to reconsider. As recently as last week, Romania’s neighbor, Bulgaria,

also announced it would suspend the rat- “ACTA has ambiguities that allow suspicions ification of the agreement, followed days regarding abuses that could be committed later by Lithuania. by the authorities.”

In Romania, people are still waiting for Accusations were flying that the signtheir politicians to take an official position, ing process of the treaty was kept too with the newly elected prime minister, hush-hush, both at European level and in the signatory EU member states. Secondly, concerns are being voiced that the text “ACTA opens a Pandora ’s is ambiguous and leaves plenty of room for Box and things cannot go the abuse of fundamental rights.

The first accusation has been rejected in a positive direction. It by the European Commission, which states that the “negotiations of the Anti-Counseems that the risks are terfeiting Trade Agreement, like all other higher than the benefits. government negotiations, were held in a The risks are connected confidential setting; however that does not mean that the negotiating process was to the control of personal not a very open one. The European Cominformation, the supreme mission regularly consulted the European Parliament during the negotiations, shared stake from now on.” all draft negotiating texts with members of Mugur Patrascu, the European Parliament, and invited, met and debriefed NGOs, academia and repremanaging partner iLeo sentatives from political parties from the beginning of the negotiations.”

Razvan Mihai Ungureanu, announcing last But some disagree. “It is hard to explain week that the government would have “a why the authorities were so secretive and very consistent viewpoint” on this, withno sufficient debate was organized on this out giving any clue as to what it might be. matter, since we are dealing with a docuRomanians are keeping their fingers ment that could fundamentally change crossed, since Razvan Mustea, the new the way we use the internet,” Sergiu Biris, minister of communications, has admitted, general manager of Trilulilu, a video shar-

ing site, tells BR. Bogdan Manolea, executive director of the Association for Technology and the Internet, adds, “Romania had no representative in the negotiations because the EU represented the member states, which is a questionable procedure when what is negotiated is beyond the community acquis.”

Blogger Camil Stoenescu (http://stoenescu.eu/) attributes this to “ignorance rather than willful secret-mania” from the Romanian authorities, adding that “the discussions over ACTA were ‘discreet’ at least (if not ‘secret’) and the EU was represented as a distinct political entity. Romania did not have a distinct voice on this context.

Even the European Parliament complained about the lack of transparency of negotiations that preceded the signing of ACTA.” On the other hand, it is also true that Romania’s reaction came later than in other countries, but this may have some contextspecific reasons. “The excuse would be, perhaps naturally, that at the time when people in Poland were going out on the streets against ACTA, in Romania they were taking to the street for other reasons.

The period that followed was rather confusing, culminating in the prime minister’s resignation,” Dragos Stanca, managing partner Q2M, tells BR. There are many voices alleging that the reason negotiations happened behind closed doors is that the text has the potential to drastically curtail freedom of speech and privacy.

“The matter of online copyright protection and intellectual theft is rather specific and cannot be regulated in the same way as the counterfeiting of Louis Vuitton bags.

Of course, discussions should not take an absurd turn: yes, intellectual property rights must be protected,” says Stanca.

Nevertheless, it was not the fight against counterfeiting that prompted people to take to the streets in protest. If ACTA is adopted as it is, “the consequences will be drastic,” predicts Mugur Patrascu, managing partner of iLeo. “This opens a Pandora ’s Box and things cannot go in a positive direction. It seems that the risks are higher than the benefits. The risks are connected to the control of personal information, the supreme stake from now on.”

He adds, “The public can only lose from this. Those who stand to gain are those who wish to protect their intellectual property rights. So far, the latter have proven that they are more united and more professional in pursuing their interests,” adds Patrascu.

Article 27, paragraph 4, is one of the thorniest issues in the text. It implies that internet providers must act as prosecutor, judge and jury, monitoring internet users’ actions and deciding whether the information they upload or download is pirated or not. Additionally, if a record or film studio suspects foul play, the internet provider may be compelled to divulge users’ personal data to them. These firms can then go to court with the respective information, without users suspecting what is happening behind their back.

Just on the basis of suspicion, the internet provider can disconnect the user from the internet. Users can even get a criminal record. These stipulations have raised multiple concerns about the potential abuse of fundamental rights and the violation of privacy.

“On the privacy issue, this is a rather long discussion. When over 4 million Romanians post their family albums on Facebook, the concept of privacy starts to be reshaped and gains new meanings,” says

www.business-review.ro Business Review | February 20 - 26, 2012

Stanca.

But do internet providers possess the technical capacity to filter and process such a huge amount of data? Pundits asked

by BR seem to think they do.

“If we look at the way content and internet access can be censored in China or monitored to detect terrorist activities in the US, I don’t think we would be too wrong to believe that internet providers have the technical capacity to monitor the flux of information from users. And if they don’t yet, things can change in the future,” says Stoenescu.

In fact, mechanisms may already be in place for this to happen.

“I read the statements of our officials and gathered that from the technical viewpoint, everything is already implemented; it is only that the stipulations are not put into practice on a large scale. Over the last few years, a series of organized crime networks on the internet have been smashed so the authorities’ progress is already significant. This is why I tend to believe that these results could be registered only with the help of such technologies,” says Biris.

Of course, this also raises the issue of costs and who will foot the bill. In theory, at least, the expenditure issue does not sit well with internet providers in Romania. Recently, Mihai Batrineanu, president of the National Association of Internet Service Providers, complained during a debate on ACTA that the treaty transforms these companies into “internet police”. Moreover, he said this would burden internet providers with the “huge investments” necessary for “monitoring, scanning and storing an immense amount of traffic.”

While at first glance internet providers can cope, a more in-depth look will show

LINKS 13 that “no business in Romania can afford to allot resources to monitor everything that can be monitored, because eventually the cost will reach consumers. “In other words, internet users will be watched on their own money,” says Stanca.

Everybody is holding their breath until the agreement reaches the EP, no later than June. That body has only two options: ratify the treaty in its current form or reject it entirely. It is not entitled to modify the text or bring amendments.

“The EP has already expressed some concerns regarding ACTA, and if we add to this the massive anti-ACTA reaction from European civil society as well as the fact that five member states did not vote in Tokyo, I think the chances for it to be ratified in its current form are slim. Surprises can happen, though,” says Stoenescu.

Public pressure may be the key to deciding ACTA’s fate. “I think this will be a political vote. If enough people are against it, the Euro MPs will also vote against it. Honestly, with a few exceptions, I doubt they understand anything about ACTA and its possible consequences. But they do understand that if they vote against those who elected them, sooner or later they will be penalized at the ballot,” says Stanca.

Some pessimistic – or maybe realistic – pundits believe that this is in fact only one of many attempts to come which seek to bring the virtual space under tabs.

“From a logical perspective, I don’t think governments can leave the internet free.

The risks are too high, at least in theory. As a result, whether it is in one or ten years, the control of what you do on the internet will somehow be implemented,” concludes Patrascu.

otilia.haraga@business-review.ro

ONLINE

BR revamps online presence

New look: Business Review is launching a revamped version of its website

B

usiness Review is launching its new-look website this week, featuring a new structure, additional sections and redesigned layout, devised to offer an improved reading experience and easier access to information.

The new www.business-review.ro features breadcrumb navigation for im-

mediate access to all of the site’s sections.

News, features and interviews are now grouped under categories such as Investments, Money, Tech, Energy, Property, Bucharest Going Out and Lifestyle.

The home page slider has been redesigned, while the site’s online content is now integrated with the its social media presence. ∫

www.business-review.ro Business Review | February 20 - 26, 2012

14 FOCUS

Photo: Mihai Constantineanu

Local farming machinery market ploughs on While it is hard to estimate how many tractors or other agricultural machines are operational at present in Romania, everyone – authorities, farmers and dealers – agrees that the fleet of agricultural machinery is considerably undersized and obsolete. Following a good agricultural year in 2011, local dealers saw sales go up by more than 20 percent.

The trend is expected to continue throughout 2012, although poor weather conditions currently point to a lower growth rate. ∫ SIMONA BAZAVAN Confident in the local market’s potential for growth, US-based Titan Machinery announced last month that after acquiring local agricultural equipment dealer Agroexpert in 2011, it estimates that in its first year of activity on the Romanian market it could double its sales to about EUR 40 million.

Romania is the first foreign market to which the American agricultural and construction equipment dealer has expanded.

Based in West Fargo, North Dakota, Titan Machinery now runs 91 service and dealership offices in the US. According to the most recent available data, there were around 177,000 tractors in Romania in 2009 and about 24,000 cereal combines, meaning that a physical tractor covered a whopping 53 hectares of arable land compared to the European Union average of 12 hectares. Probably more important than the actual figure is the fact that 75 percent of the agricultural equipment owned by Romanian farmers is estimated to be more than five years old, requiring upgrades and in most cases replacement.

All this is good news for local dealers who should be looking at considerable future growth, judging from last year’s results too.

“Overall, the agricultural machinery market grew considerably in 2011 against the previous year. We grew by 25 percent but our competitors have also grown at a similar rate. 2011 was a good agricultural year in terms of crops and prices and this has allowed farmers to make investments in high-performing agricultural machinery,” Florin Neacsu, deputy general director of NHR Agropartners, a local agricultural machinery dealer, told BR.

“The market is still well below its potential. Farmers still buy land instead of equipment.”

Andreas Feichtlbauer, GM of Biso Romania The company imports agricultural machinery and equipment under brands such as New Holland, Poettinger, Hardi, Bogballe and Guestrower.

Not only did the number of new pieces of machinery go up, but Neacsu says that in the past few years he has also witnessed an increase in demand for more powerful and better performing machines, although

the 100-150 horsepower (hp) category continues to be the best sold.

Biso Romania, another player on the local market, saw its business grow by 40 percent last year and has similar expectations for 2012 as the company plans to expand its number of local dealerships. The company sells locally New Holland tractors and combines as well as the entire product portfolio manufactured by mother company Biso Schrattenecker in Austria. The firm estimates that Romanian farmers who cultivate more than 1,500 hectares spend on average up to 40 percent of their annual investment budget on equipment, Andreas Feichtlbauer, general director of Biso Romania, told BR. While everyone agrees that the market grew last year, it is hard to make accurate estimations about the actual number of agricultural machines sold in Romania based on the information supplied by dealers, Neacsu said. He added that nor is there information regarding what he calls “grey” imports of machinery, which is registered abroad and later brought unofficially into the country, or cheaper no-brand products sold locally.

Biso Romania’s director, on the other hand, estimates that about 450 combines and approximately 2,000 new tractors are sold each year in Romania, leaving plenty

of room for future growth. “If we compare this with other countries, the market is still well below its potential. Farmers still buy land instead of equipment – which is right of course. But with the help of European Structural Funds, Romania will continue to grow in the agricultural sector,” he said.

As for what can be expected in 2012, Neacsu is cautious in his predictions. “So far 2012 points to weaker results because almost all farmers had issues with the drought during the summer and autumn of last year – the rape crops were compromised and the other crops sprang late and didn’t have a chance to develop adequately before the frost. We hope that the recently fallen snow will make up for the lack of water in the soil and will protect the crops from frost. As long as we don’t have floods – this would be a disaster for local farmers,” he said.

In the past three years Biso Romania has invested EUR 7.5 million in its headquarters in Drajna, home to its showroom, a service center and spare parts area, and where it has also built a production facility for 200 employees, although this is not yet operational. NHR Agropartners was bought by Austrian company VA Intertrading 11 years ago and has since grown constantly, according to Neacsu.

Financing future growth Financing continues to remain an issue for many local farmers, especially small ones, who are looking to buy new machinery.

NHR Agropartners works with several banks and leasing institutions, as most of its clients choose credit while fewer go for EU funds. “Unfortunately the number of European Agricultural Fund for Rural Development (EAFRD) projects has decreased considerably in recent years, although there is a clear need to buy more agricultural machinery so that the local agriculture industry can get close to the standards of its EU competitors. Local farmers too would have wanted to access more projects,” he said, adding that the criteria that a project must meet in order to get EU financing often prove discouraging. “I can’t comment on a situation on which I don’t have all the information, but I don’t understand why more criteria have been introduced to disqualify projects rather than help fund absorption,” he explained.

In order to supports clients, Biso Romania launched three financial support schemes earlier this year for farmers looking to buy new agricultural equipment, two of which are in partnership with Agricover Credit IFN.

Not made in Romania The local agricultural machinery market is dominated by imported products, especially when it comes to large-capacity machines like tractors and combines. Mihai Ivascu, marketing director of the Romanian Association of Manufacturers and Importers of Agricultural Machinery (APIMAR), told BR that an estimated 1,500 new tractors are sold in Romania each year, out of which 90 percent are imported.

After UTB Brasov, the largest local tractor manufacturer was closed in 2007 after more than 60 years of activity, and there has remained only a handful of local tractor manufacturers. They include Mat Craiova, Geda Prodexim, which operates a factory in Campina, Prahova county, Irum Reghin and Hoyo Romania, which is a Chinese investment in Rasnov, Brasov county.

simona.bazavan@business-review.ro

www.business-review.ro Business Review | February 20 - 26, 2012

INTERVIEW 15

Post-crisis market A-OK for AFI AFI Europe Romania is planning to start three more commercial projects this year, hoping to replicate the profitability of AFI Cotroceni Mall. Will they enjoy the same success as their forerunner or was the developer just lucky? David Hay, CEO of AFI Europe Romania, told BR about the local development plans of the company, which has just obtained over EUR 13 million of financing for the first phase of its office project in Bucharest. ∫ ANDREEA CEASAR

sqm and all our negotiations of preleases are with IT companies. Next week we will probably announce our first tenants.

Market sources say you have the most profitable mall in Bucharest. How did you do it?

We developed Cotroceni at the worst time because it was the middle of the crisis and we delivered at the peak of the crisis, when everything was very grey and nobody was expecting to see the light. We opened the shopping mall with more than a 90 percent occupancy rate and since then we have worked intensively on our mix of tenants, bringing in international tenants and taking out those who didn’t work as well as we had expected. Of course there is the design of the shopping mall, its size and its position. But people make it happen.

International retailers are moving into secondary cities. Is this why you’re planning two commercial projects outside Bucharest?

Today retailers recognize that they have a very good opportunity to expand, as it is cheaper. The fact that many tenants from Cotroceni are coming with us outside Bucharest makes us feel more confident in the projects, as we know that others have done their studies and come to the same positive conclusion. And as hypermarkets are investing large amounts of money themselves in opening with us, we think we are moving in the right direction.

Do you also have the financing?

So far we don’t have it for Bucuresti Noi or Ploiesti, but for Ploiesti you will learn the financing bank in the coming weeks.

Aside from these three commercial projects, do you have any unused land plots?

Photo: Laurentiu Obae

You are also planning commercial spaces in Bucurestii Noi, Bucharest, Ploiesti and Arad.

What should we expect from them?

For the 30,000-sqm shopping mall connected to a DIY store in Bucurestii Noi we have signed the lease agreement with Real.

We have already signed 30 percent of the preleasing contracts, and are aiming to be 80 percent leased by the end of 2012. We will start construction this year and aim to finish it towards the end of next year. The advantage of this shopping mall will be that it has a metro station inside – like at Sun Plaza, but better as the connection with the metro station will be shorter. You will walk 20 meters and you are in.

At AFI Place Ploiesti, another 30,000sqm shopping mall, we have completed the demolition and we will start construction this spring. We have not decided on the builder as we are completing the tender process. Our aim is to open in 2013. It is already more than 50 percent leased with the anchor tenant as Cora. We estimate that by the end of the year we will have it 80 percent leased with most of the tenants coming from Cotroceni. As they have had a good experience with us, they have decided to follow us. As for the retail park in Arad, we are negotiating over the hypermarket, and we intend to start the construction this year.

This year many tenants will end their fiveyear contracts in office buildings. What will you do to bring them to your project?

These tenants are our target market. And although the rent is an important factor for all companies, I believe our solution to their expansion plans, as well as parking spaces and location, is an opportunity.

We have plots in the south and north of Bucharest, in Pipera. We have a plot opposite the former Vulcan factory, where in two years’ time we plan to develop a retail and office park. We are starting the design and permitting process. Previously we wanted to do a residential project, but because of the market situation we think it would be premature.

Are you considering returning to the earlier idea of building residential?

No. The group’s strategy is to concentrate on commercial developments like retail and offices. In Romania we won’t do residential, neither today nor in the near future.

You have obtained over EUR 13 million in credit for the first office building of the five included in the AFI Business Park Cotroceni project, a real estate project, in fact, that obtained finance from Unicredit Bank Austria in these hard times. How did you do it?

Because of the new European rules and the new constraints imposed by the Basel III standard, banks are more reluctant to finance real estate investments. So it was very difficult, but due to our good relationship with the banks and the fact that we have never disappointed them we succeeded. Unicredit has financed our projects in Serbia, the Czech Republic and now Romania, building a positive relationship. In these times if you have a good relationship and a sustainable project, you will obtain financing. If one of these criteria is missing you won’t.

When you say it was difficult, does this mean that the bank’s requirements were hard to fulfill?

I am not talking about the terms of the con-

CV David Hay Hay is the company’s regional director for CEE. Before he joined AFI Europe in 2006 he served as VP of Hail Holdings.

Hay has over 20 years of experience in international real estate development and marketing. He graduated from Buckingham University with an LLM.

tract, but the whole credit approval process.

I think that only very experienced developers can fulfill the banks’ present requirements.

There are plenty of newly built office spaces with one tenant per floor or just sitting empty. What are your expectations for your own project?

If you look at these offices most of them are located in Pipera or having legal problems.

But if you look at the market in the city center you will see that the vacancy rate is very low, approximately 5 percent. Our project has three main advantages: location, parking spaces and the possibility of the tenant expanding within the current location, as we will be building another four buildings next to the actual project, totaling 70,000 of leasable sqm. Large companies are looking for this option, which is why we do not deal with small firms and lease a minimum of 1,000 sqm. For our own project we target as tenants IT companies and back offices of insurance companies or banks, as we see a high demand from these segments, with potential to expand in two or three years to the other office spaces which will be built. Currently we are negotiating 5,000

By what percentage did the cost of building fall between 2008 and 2011? It seems all developers are taking this into consideration as the start of many projects is being announced this year.

Indeed, the amount of construction in the market has decreased considerably, bringing costs down. The cost of building materials has also fallen. When we were building Cotroceni it was very difficult to find a construction company. Today it is very easy as prices fell by roughly 20 percent between 2008 and 2011, which is a lot.

After building the projects, will sales come?

A developer by definition develops and sells.

Our strategy is to develop, hold for some years and then sell. Last year we saw the best proof that we are doing a good job. In the Czech Republic we built Palac Flora shopping center for approximately EUR 73 million, sold half of it in 2004 to Avestus Capital Partners for EUR 120 million and last year Atrium European Real Estate acquired the project in Prague for EUR 191 million from us and Avestus Capital Partners. This is the kind of investment we are looking for.

Is AFI Cotroceni Mall also for sale?

At the moment we have no intention of selling Cotroceni, but once the market gets back on its feet we will reassess the situation. Many businesspeople and investment funds are interested, but we are not on the sales market. This project is bringing in a very good income and in this period cash flow is essential, so it is a good property to keep. A study conducted in 2011 regarding retailers’ sales at AFI Palace found that they went up year on year by 23 percent, which is an excellent result. In addition, we have a good number of visitors.

During December, over the weekend we had traffic of 84,000 people per day.

Did you expect this traffic?

Not 84,000 visitors; we thought 70,00075,000. The figures show we had 70,000 visitors on weekdays.

So, tenants didn’t ask you to lower the rent?

The tenants understand the quality and success of the project. Those who asked are no longer here, as they were the ones who were not performing well. And tenants that are not performing well leave or are advised to leave.

andreea.ceasar@business-review.ro

www.business-review.ro Business Review | February 20 - 26, 2012

16 POWER

Romania’s energy price conundrum Investments are needed in the energy sector, but keeping regulated prices could act as a deterrent for large companies that would otherwise consider putting money into Romania’s energy infrastructure, say experts. At the same time, the EU is trying to create a common energy market that will push up the local cost of energy. Will the economy be able to cope with increased prices? ∫ OVIDIU POSIRCA “Romania has to transpose European directives 72 and 73 from 2009, which stipulate among other things the independence of the energy regulator, ANRE, which should establish and approve tariffs based on proposals from energy transporters and distributors,” says Alexandru Lupea, partner, audit services, and group leader for energy, industry, mining and utilities at accountancy firm PwC Romania.

Lupea says that investments of around EUR 10 billion are needed in the gas and electricity sectors in the next five to ten years, while a transparent pricing policy that reflects real generation and distribution costs, ensuring a decent profitability level at the same time, would attract investors.

sources that “stress” the grid.

Paun says that once electricity prices start to increase, a share of the regulated market, starting with energy used by large industrial producers, will be sold on the energy market OPCOM.

Gas for a profit The supply of natural gas for industrial consumers came in equal measure from domestic sources and imports last month, while households and thermal energy producers received 92 percent domestic gas and 8 percent from imports.

Lupea says almost one third of Romania’s gas consumption comes from imports originating in Russia, at three times the cost from domestic sources.

However, the ANRE set up a natural gas basket for consumers, which uses 70 percent natural gas from domestic sources, and 30 percent from imports, the final price paid by consumers representing the weighted average of the two.

The PwC partner says the authorities provided support for industrial sectors with high energy consumption, including the chemicals sector, which received cheaper gas from domestic sources, a move that helped the industry remain in shape despite the economic downturn.

However, gas suppliers and distributors had to import expensive gas to supply households and the extra costs have not been taken into account by the ANRE, resulting in losses for companies. At present, the gas market includes companies such as E.On, GDF Suez, Petrom and Romgaz. “Liberalizing gas prices would provide an incentive for companies to invest in production, storage and distribution facilities,” says Paun.

Deregulation by half

Privatization panacea

Romania had agreed to deregulate prices in electricity and gas from 2013 for industrial buyers and 2015 for households, but the ongoing financial crisis has forced the authorities to have these dates put back. President Traian Basescu negotiated a rescheduling of price liberalization with the troika (the IMF, European Commission and World Bank).

The government says the average price of natural gas in Romania was 68 percent of the EU-27 average for industrial consumers at end-2011 and 50 percent for household consumers. For electricity the average price was 78 percent of the EU average for industry and 61 percent for domestic consumers.

“If we deregulated energy prices tomorrow, I would have difficulties in my paying my energy bills, although my housing and car are provided by the Presidency,” said the head of state, following talks with the troika. “I wanted to present to the finance technocrats a technical reality: what wage would Romanians have to earn to pay gas at market levels, for things to become flexible,” he added.

The presidential negotiations with the troika proved partially successful, as electricity prices for the industry will be deregulated from this year, while households received a two-year delay from 2015 to 2017. For gas, the situation is still uncertain and the next IMF missions scheduled for April will shed some light in this area.

“Half of the electricity market is currently regulated and this keeps down the price to a point that some companies run a loss. Low electricity prices are also a

Romania agreed in the letter of intent signed with the troika under a EUR 5 billion stand-by program to privatize several state-owned enterprises (SOEs), mainly in the energy and transportation sector, assign private managers to state companies and deregulate energy prices to attract private investments.

Mark Gitenstein, US ambassador in Romania, said recently in a speech that Romania has 760 SOEs, with a value of 11 percent of GDP, and the floating of these companies on the capital market could improve Romania’s growth prospects.

It will be a busy season for the Bucharest Stock Exchange as the government wants to organize IPOs (initial public offerings) for Hidroelectrica, the largest hydro generator; Nuclearelectrica, the sole nuclear generator; and Romgaz, the largest gas producer in Romania, plus SPOs (secondary public offerings) for OMV Petrom, the oil and gas producer; Transelectrica, the grid operator; and Transgaz, the natural gas transporter.

However, the lack of a liberalization schedule may impact these listings, and the government could receive a lower price for the listed shares.“The calendar for price deregulation is crucial for evaluating energy companies, and the state can gain more by clarifying this aspect before public offerings,” says Lupea.

Paun predicts the listing of SOEs, even minority stakes, will have a positive impact, encouraging transparency and making it more difficult to hide the misuse of funds.

Analysts say EUR 10 billion of investments are needed in the energy sector in the coming decade cover to keep bankrupt producers online,” says Alexandra Paun, junior analyst at Candole consultancy.

Romania may have some of the lowest energy prices in Europe but more effort needs to be put into preventing energy waste. “To compensate for the negative effects of adopting energy prices to EU values, energy efficiency programs should be encouraged, by granting a fiscal stimulus to consumers that invest in efficiency or use EU funds for this objective,” says Lupea.

Right voltage for electricity Romania has mixed energy sources, including nuclear and hydro, allowing more generating flexibility in the national energy system. Renewable generating capacities have sprung up in Romania in the last five years, mainly in wind, where CEZ, Enel and Electrica are operating or plan to open wind farms.

These are the most important players in Romania’s electricity market. Installed wind capacity jumped from 11 MW in 2008 to 982 MW at present, and a generous governmental scheme that grants

tradable green certificates for output from clean sources should attract further investments. Other clean sources include 380MW in small-hydro plants, 25 MW for biomass and 1 MW in solar. Last week, wind parks in Dobrogea reached a maximum output of 1,000 MW due to the snowy weather, but in summer this falls by half. However, Romania is still generating more than half of its electricity from carbon-intensive sources such as coal and hydrocarbons.

Octavian Lohan, general director of grid operator Translectrica, says that around EUR 500 million is needed for the development of ten lines of 400KV by 2022. The grid operator has started developing capacities that will allow electricity exports to a regional market that will be set up by 2015.

The PwC partner says that big investments are required to upgrade large coal-generating capacities, and for building new gas and nuclear capacities. Further investment is needed to interconnect Romania to the European energy system, but grid capacity has to be increased to accommodate renewable

ovidiu.posirca@business-review.ro

www.business-review.ro Business Review | February 20 - 26, 2012

CITY 17

RESTAURANT LAUNCH

FILM REVIEW

Phill links up with Ramsay cookbook

Tinker Tailor Solider Spy DEBBIE STOWE Director: Tomas Alfredson Starring: Gary Oldman, Colin Firth, Tom Hardy, John Hurt, Toby Jones, Mark Strong, Benedict Cumberbatch, Ciaran Hinds On: Cinema City Cotroceni, Cinema City Sun Plaza, Grand Cinema Digiplex Baneasa, Hollywood Multiplex, Studio, The Light Cinema

Photo: Laurentiu Obae

Have your Phill: the gourmet restaurant was launched with a Gordon Ramsay book

120 Strada Drumul Potcoavei, Pipera 0743 172 017 DEBBIE STOWE Phill, a new gourmet restaurant that opened recently in the Pipera area of Bucharest, marked its official unveiling in conjunction with the launch of the Romanian edition of the cookery book Ramsay’s Best Menus, by colorful Scottish TV chef Gordon Ramsay.

The glitzy bash was attended by the cream of the crop of the local and international business and Romanian artistic communities, including names from the world of acting, music and TV presenting.

Those who braved the snow-bound journey to the northern suburb of Pipera were greeted with a selection of delicacies inspired by the mercurial Ramsay’s culinary creations.

Journalist and writer Dan Boerescu of bucatarescu.ro, Antonina Sociu of sweet nothings-culinare.ro and Antena 1 anchor Anca Rusu, of printesapolonic.ro, had put together a menu featuring some of the celebrity chef’s dishes, which were served up along with Phill’s own branded food and washed down with Lacerta wines.

Boerescu and Rusu addressed the attendees at the launch event, along with Sorin Chirita, Phill general manager, Raluca Tarnauceanu, marketing coordinator at Editura Litera, publisher of the Romanianlanguage edition of Ramsay’s Best Menus, and Adina Scortescu, food editor of the local version of the magazine Good Food, which was also involved with the event.

Housed in a large villa, Phill takes its name from the four-meter elephant guarding the staircase to the venue. The interior, the work of architect Robert Marin of Nuca Studio, embraces a contemporary

style, featuring elements of pop culture such as manga and vinyl toys. It’s a place of clean lines and bright colors, suited to Gordon Ramsay’s modern brand of gastronomy.

According to the owners, the restaurant’s menu was designed to reflect a global journey, with references to countries with top culinary credentials such as France, Italy, Japan, Thailand, Austria and China. Dishes on the menu include: Sashimi new style, Black Angus beef, Miso Black Cod, Tartar de Boeuf, Tournedos Rossini and Linguine all’astice, put together under the auspices of chef Prevenda Hristu. However, the owners plan to overhaul the menu at least twice a year.

The English edition of Ramsay’s Best Menus came out in 2010. The book is a collection of 52 menus, or 156 different recipes, that a creative chef can combine in 140,000 ways.

One useful feature for home chefs is its design – with an approximately A4 format, the pages are sliced into three parts horizontally, allowing the reader to select any starter, main course and dessert and have all three visible simultaneously when cooking, with no need for flicking between pages.

The was conceived as an accompaniment to the Scottish chef’s TV series Ramsay’s Best Restaurants, which focused on the UK’s favorite international cuisines: Italian, French, Spanish, Mediterranean, British, Chinese, Thai, South East Asian, Indian, Moroccan, Mexican and Middle Eastern. It includes recipes drawn from these gastronomies, as well as Ramsay’s special seasonal menu suggestions.

Each recipe, which is expressed through a simply explained method, specifies the number of servings and complete ingredients, while overhead photographs of the end result indicate what the novice chef should be aiming for. Accompaniments and essential basic recipes are also included.

They might perform poorly in the blockbuster stakes, but the Brits come into their own with two film genres: low-budget comedies about the plucky working classes triumphing over adversity, and lavish period pieces, often starring Colin Firth.

Tinker Tailor Solider Spy, in the latter category, was therefore looking like a good bet.

Based on the classic John le Carré spy novel of 1974, the story has already been brought to the screen once, in a classic seven-part BBC series. The key phrase here being seven part: the film condenses events to a running time of just over two hours.

This poses a significant problem: so much plot has to be crammed in that unless the viewer is already steeped in Smiley (the central character) and the story, TTSS the movie at times verges on the impenetrable. This is not helped by a reliance on flashback.

As in most espionage flicks, the central premise is: who is the double agent?

Is it national treasure Colin? Is it that nice young man who plays Sherlock Holmes

on the BBC? Is it one of that sinister cabal of chaps who sit around in smoky rooms? The difficulty is that so many characters are introduced in the first part of proceedings that the novice is likely to struggle to work out who they are all, let alone spot subtle clues as to whether they might be the mole.

Another problem is that TTSS is – barring the odd classily executed action sequence – rather staid. Bond and Bourne have set a blueprint for spy films that includes exotic locations and regular thrills and spills, and while TTSS deserves credit for its cerebral eschewing of glamour and gimmicks, there does seem to be a superfluity of low-key office scenes featuring men in brown suits.

But there’s a lot to admire here too.

The production values and performances ooze class. TTSS is clearly ambitious, confident and high minded. And by about three quarters of the way through, by which time even the most baffled newcomer should have worked out what’s going on, there’s tension in the dénouement.

The seventies are brought beautifully to life, with their badly fitting brown suits and smoke-filled offices, while it’s all dispatched to a stellar soundtrack.

Clearly many viewers and critics did understand and like it – or at least say they did – as the film has recently garnered three Oscar nominations amid a slew of other accolades. So unless TTSS virgins are willing to spoil the surprise of the ending by gemming up with the novel, the TV series or Wikipedia in advance, perhaps this is a film best served by a second viewing. ∫

Spy games Cumberbatch and Oldman search for a traitor in their ranks

www.business-review.ro Business Review | February 20 - 26, 2012

18 IN TOUCH

WHO’S NEWS

CULTURAL EVENTS AGENDA AUCTIONS Martisor auction February 21-23, Artmark February 21, Martisor I – Painting and Sculpture, Hotel Pullman

The auction gathers a selection of 172 small works by the most famous Romanian artists of all periods. Among the most valuable are two Grigorescu paintings: Apple Flowers, painted in oil on wood, predicted to raise between EUR 30,000 and 50,000, and House at Campina, oil on canvas, estimated at EUR 15,000 to 25,000.

February 22, Martisor II – Vintage Martisoare, Jewelry and Decorative Arts, Hotel Pullman A fine selection of ornaments and decorations made of precious metals by famous decorative art workshops throughout Europe. One of the most remarkable pieces is the Faberge Cigarette Case in silver and gold, bearing the princely monogram Trubetkoi-Calinescu, estimated at EUR 3,000 to 6,000, made in a famous workshop which served the Russian Imperial House.

February 23, Martisor III – Hotel Athenee Palace Hilton The auction, entitled Memorable Cinema, brings under the hammer personal items, photos and props from successful movies and plays belonging to the top Romanian actors. The second part of the evening is dedicated to a Postmodernism and Contemporary Auction displaying 62 artworks by postwar and contemporary classic Romanian figures, such as Corneliu Baba, Alexandru Ciucurencu and Constantin Piliuta; icons of the 60-70s generation, Paul Neagu, Horia Bernea, Stefan Caltia, Sorin Ilfoveanu and Viorel Marginea; and notable modern artists like Dan Perjovschi and Teodor Graur.

More details about the Martisor auctions can be found at www.artmark.ro.

Angela Meade is the rising star of Verdi’s gripping drama and Marcello Giordano, Verdians Dmitri Hvorostovsky and Ferrucio Furlanetto round out the cast in a performance of approximately 3 hours and 50 minutes. Tickets can be purchased from The Light Cinema, Liberty Center, 151-171, Progress Road.

Fairs Martisor Fair February 24 – 29 10.00 to 18.00, National Museum of the Romanian Peasant A traditional Martisor fair where over 200 artisans, artists and students will gather to exhibit and sell all sorts of amulets tied with red and white string to celebrate the coming spring. Embracing either surreal or vintage design, some recycled, they are mastered in clay, textile, paper, felt and wool. Culinary delights from the different regions of Romania, such as gingerbread, sweets, plum jam, kurtos kalacs, apple juice, honey and other goodies, become for this week the gastronomic martisoare of the season.

Dance Sensation – The Ocean of White April 21 22.00, Central Hall, Romexpo

Comic Strips Show in Bucharest in November 2011, the comic strip exhibition by the artist Livia Rusz, organized with the support of the Romanian Cultural Institute and Hungarian Cultural Center, once again gives Bucharest audiences the opportunity to revisit their childhoods. The exhibition will run until March 13. Curator: Alexandru Ciubotariu.

Concerts Nigel Kennedy April 2 19.00, Palace Hall One of the best-selling violinists in the

OPERA Ernani February 25 19.55, The Light Cinema (The Met Live in HD)

Exhibition Comic strip by Livia Rusz February 9 – March 13 Mon-Thu 10.00 to 17.00, Fri 10.00 to 14.00 – Hungarian Cultural Center in Bucharest After its great success at the European

ISSN No. 1453 - 729X

FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALIST Otilia Haraga JOURNALISTS Simona Bazavan, Ovidiu Posirca COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi ART DIRECTOR Alexandru Oriean PHOTO EDITOR: Mihai Constantineanu PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

Jerome Lionet has been appointed general manager of Saint-Gobain Glass Romania. He began his career working in military shipbuilding.

Lionet spent the last eight years working for various SaintGobain companies in regional emerging markets. His various assignments took him from Poland to Russia and from the Middle East and North Africa to Turkey, Romania and other CE countries. He graduated from Ecole Polytechnique, and then Ecole Nationale Superieure des Mines in Paris.

Daniela Budurea world, the British artist Nigel Kennedy accompanied by his band, the Nigel Kennedy Quintet, will take their audience on a bold adventure through various musical styles from classic to jazz, fusion and rock. Tickets, costing from RON 80 to RON 250, are available at www.vreaubilet.ro, from the box office at the Palace Hall and the kiosk at Unirea Shopping Center, second floor, as well as through the Vreau Bilet Agency.

Pink Martini Orchestra May 26 20.00, Palace Hall On their promotional tour for their latest album, A Retrospective, the Pink Martini

Hailing from Amsterdam, Sensation, the most famous dance event in Europe, will debut in Romania in April. The famous Ocean of White performance, where participants traditionally dress exclusively in white, will showcase amazing sea creatures, DJs, dancers, fireworks, waterfalls and lasers. Tickets are on sale through the Eventim network. The first 1,000 tickets in the Ring area will cost RON 175, followed by the Delux category at RON 440 and VIP category at RON 770 (table place and bar voucher included).

Business Review welcomes information for Who’s News from readers.

Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro

is the new country director of Western Union Romania and Bulgaria. She previously served for six years as group country manager of money transfer services company Angelo Costa Romania.

During the same period, she set up and managed Foreigners in Europe, a Costa Group media company. She also ran Angelo Costa International Romanian branch, a company providing call-center and support services to Costa Group money transfer companies in Italy and Spain. A graduate of the Bucharest Academy of Economic Studies, Budurea holds an executive MBA from the Vienna University of Economics and Business.

Gilles Antoine

Orchestra will stop in Bucharest, the scene of several previous concerts by the outfit. In keeping with the theme of the album, the concert will serve as a retrospective of the act’s 16-year career, including hits like Una Notte a Napoli, Hang On Little Tomato, Donde estas Yolanda and Que Sera Sera.

Tickets are available online at www.eventim.ro or through the Eventim network.

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

has been appointed country general manager of L’Oreal Romania.

Frenchman Antoine started his career at L’Oreal France 17 years ago, in the sales organization. He has held several international assignments in countries such as Mexico (as sales director for the consumer products division), Brazil (as commercial director for Latin America, consumer products division) and Venezuela, where he served as the GM of the consumer products division. In 2009 he returned to France as deputy GM for consumer products Latin America.

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