Page 1


The International Monetary Fund has approved the loan for Romania and sent the financing memorandum to the local government See page 4


Exports on the German market and the local Rabla program influence Dacia sales while importers cut prices to maintain sales See pages 8 - 9


Shrinking advertising budgets make it hard for the printed press to cover costs, and 20 percent of the titles could dissapear by year-end See page19



APRIL 27 - MAY 3, 2009 / VOLUME 14, NUMBER 15


ArcelorMittal Galati has postponed making USD 100 million investments and started a production and cost cutting program, as well as a voluntary leave scheme, says CEO Augustine Kochuparampil VISTA

See pages 10-11



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ANA HOLDING TO SEE 30 PERCENT FALL IN BUSINESS é Ana Holding, the group of companies controlled by businessman George Copos, estimates a turnover of EUR 100 million in 2009, down 30 percent on the previous year, company representatives have said. The estimations follow the poor results posted in January and February, according to Copos. Ana Holding has EUR 200 million of capital tied up in different projects. The group comprises companies such as Ana Hotels, Ana Imep, Ana Pan, Ana Trans International and Ana Aslan Health Spa. Ana Imep SA Pitesti, for example, is expected to generate a turnover of EUR 30 million in 2009, compared with EUR 42 million in 2008.


The IMF will discuss the loan at a meeting at the beginning of May

The Romanian government received last week the International Monetary Fund (IMF) approval for its loan request with no changes to the terms of the deal as initially agreed. The IMF memorandum is now set to be signed by the minister of finance Gheorghe Pogea and Central Bank governor Mugur Isarescu, and then re-sent to the IMF for the loan procedures to start. Romania has agreed a EUR 12.95 billion loan from the IMF, within a total financing package of EUR 19.95 billion, with the additional money coming from the European Union, World Bank and European Bank for Reconstruction and Development (EBRD). The loan program will be discussed by the IMF in May, according to previous announcement, and the first disbursement, some EUR 5 billion, should be available to Romania immediately after that.

The European Commission (EC) has recently proposed a EUR 5 billion loan to Romania on the medium term. At the time Business Review went to print, the Romanian government was set to meet and discuss both the IMF and EC financing programs. Revising the pension system and public sector pay will be one of conditions attached to the IMF loan, along with reform of the inspection system for certain public enterprises, which will keep the government busy for the next two years. Low inflation, within the Romanian Central Bank target of 3.5 percent, for this year and the next is also crucial, said IMF representatives. Measures to keep the local banking system well capitalized and strengthen it, plus key support for foreign banks in Romania are also on the to do list. Corina Saceanu

data on the budget situation, including net external financing, advance payments to European institutions and requests for European funds é Finance and Labor Ministries to send data on monitored public companies é Inflation targets: 6.4 percent for June, 5.7 percent for September, 4.5 percent for 2009 and 2.5 percent for 2010; if inflation is higher, the Romanian Central Bank (BNR) will discuss new measures with IMF experts é Stress tests for all banks with more than 1 percent market share based on assets and to smaller lenders selected along certain criteria é BNR to decide the necessary supplementary capital for banks following stress tests, to ensure liquidity rates of over 10 percent é Stress test scenarios and capital needs will be advised by IMF experts é BNR reserves can drop by maximum EUR 9 billion this year on the EUR 25 billion at the end of 2008; in 2010, the reserves can drop by up to EUR 500 million é The BNR can decide without a court decision when a lender can't reimburse a deposit é The BNR gets more involved in starting insolvency and liquidation procedures, even voluntary ones, for lenders é Legislation change for judiciary administrators to have higher power to restructure the insolvent company through asset sales, bridge banks

EBRD buys into Renault technology unit in Titu Renault Technologie Romania (RTR) has managed to attract financing for its technology center in Titu through a share capital increase. The European Bank for Reconstruction and Development (EBRD) has pledged to put EUR 44 million in a share capital increase for RTR, which will result in 50 percent ownership for EBRD. Renualt plans to increase RTR's share capital from EUR 28 million to EUR 90 million to cover the investments needed in its development center in Titu, where the company tests Renault and Dacia models. The investment in the first phase of development will amount to EUR 166 million, while the total investment in the center


SMITHFIELD EXPECTS 20 PERCENT MEATIER TURNOVER é Food producer Smithfield wants to continue organic growth in Romania with new production units and estimates it will increase its turnover by 20 percent this year. The USbased company plans to buy over 250,000 tonns cereals from local agricultural producers, more than it acquired last year from the local market. The company has invested USD 600 million in Romania so far, most of it in its farming division, and USD 100 million in its slaughterhouse division, Smithfield Prod. It has also invested in two fodder production units. Smithfield Farms owns 39 operational farms in Timis and Arad counties and nine farms under construction or approval.

Main provisions of the IMF memorandum: é Quarterly budget deficit targets é Finance Ministry to send monthly


SEALED AIR HOPES TO SEAL 15 PERCENT TURNOVER RISE é Packaging products distributor Sealed Air estimates a 2009 turnover 15 percent higher than the previous year’s USD 6 million, the company said. The firm is represented in Romania by two divisions, Cryovac and Shrink Packaging, and expects to widen its local distribution chain to four companies. Worldwide, the group recorded a turnover of USD 4.9 billion in 2008. On the local market, the wrapping products distributor has a portfolio including such companies as Chipita, Alka, Supreme Chocolat, Excelent, Trimus Prod, Transavia, Ifantis and Campofrio.

IMF sends loan memorandum for Romania’s signature

The EBRD will own 50 percent of RTR

will reach EUR 450 million. The EBRD has been active this year in Romania but only through loans to locally active companies, not

through a share purchase. Its last such deal in Romania was the five percent share takeover of E.ON Gaz Romania. Recently, the bank exited cement business Lafarge in Romania, selling its 20 percent participation for EUR 215 million. The EBRD is planning a substantial increase in investments in 2009 in response to the severe impact of the global economic crisis on Central and Eastern Europe, to reach EUR 20 billion in EBRD-led financing, the bank has announced. It has sent a letter to shareholders suggesting they invest up to EUR 7 billion in 2009, a record amount for any single year since the bank was founded. Corina Saceanu BUSINESS REVIEW / April 27 - May 3, 2009


Romania still in the mental crisis phase, says AT Kearney

BUSINESS REVIEW / April 27 - May 3, 2009


The worst of the crisis has yet to be felt in Romania, but will come in 2010, according to management consultancy firm AT Kearney. “If you look at the numbers, there is no crisis. We only have people panicking – it is a mental crisis. We don't have a high jobless rate compared to what’s happening in Europe – not so many companies going bankrupt, not so many banks with problems,” said Michael Weiss, head of AT Kearney Romania and vice-president of the firm. Banks asking for more documentation and proof of income is not a crisis, but a normalization. Romanian business leaders should use this time to prepare for the next step, says Weiss. “We will see the crisis in 2010. Now, crisis is what we’re seeing in Ukraine and Hungary, but Romania has been quite stable. 2009 is a wakeup call, saying we are no longer at the never-ending party,” added the VP. Companies are announcing that they will let people go later this year, and by the end of the year there will be fewer people with real bonuses in their pockets. “This year we will not

Michael Weiss, vice-president of AT Kearney

see it, but it will impact on 2010 spending,” Weiss believes. When demand was very high for companies in Romania, everybody was paying salaries because they needed people, not because they needed performances. “At high speed, it didn't matter. Now this is a more sensitive area, companies are asking about the specific contribution of each individual and department. Some companies are for the first time reviewing their marketing spending,” says Weiss. AT Kearney has seen demand from companies reviewing their

spending, their position on the market and profitability per product versus how much they spend on marketing, among other things. “In the last few years it was about keeping the operations up and running. Those who were asking critical questions were disturbing. Now, companies have limited money and are asking themselves what they can achieve with it. There are marketing campaigns even in the crisis,” says Weiss. Demand for AT Kearney is also coming from companies that have started a restructuring process and need to speed it up. “In recent years we have seen the cost of growth, companies growing at a fast speed, so to grow was not a masterstroke – companies just needed to be faster than other firms. Due to the speed, they had to make some compromises, tolerate some things, like shortcomings in the organization, in the strategy, in the skills of the people. To shift from a high speed growth to a flat environment is a big challenge,” Weiss concludes. Corina Saceanu

State goes cold turkey on privatization plans for drug maker Antibiotice With several privatization attempts already under its belt, Romanian drug producer Antibiotice Iasi is set to remain under state ownership. At the beginning of May, the company will return to the portfolio of the Health Ministry, which was its main shareholder between 2002 and 2005. The Romanian state had tried to privatize the drug producer several times since 2000 but to no avail. The latest plan is to create a Romanian Pharmaceutical Company (CFR) which should include Antibiotice Iasi, Sanevit Arad, Unifarm and the vaccination departments in the Cantacuzino institutes in Bucharest and Iasi. This holding, a project supervised by Iona Nani, vice-president of the Authority for the Recovery of State Assets (AVAS) and former general manager of Antibiotice, should reach EUR 100 million in turnover in several years. A similar holding idea has been put forward for the energy sector. Antibiotice Iasi estimates a EUR 59 million turnover this year, up 10 percent on the last, and a profit of EUR 3 million, 20 percent higher than in 2008. ■




COMETEX TO MERGE WITH ALTEX, AWAITS EUR 11 MILLION OF CREDIT é Cometex Suceava, the real estate arm of Altex Romania, is expected to merge with the group controlled by businessman Dan Ostahie, and is awaiting a credit of EUR 11 million from the Romanian Commercial Bank (BCR), the company said. Cometex ended 2008 with EUR 1.39 million in net profit, four times lower than in 2007. The firm has a market value of EUR 3.47 million. ARVAL TO PUT EUR 18.6 MLN IN 1,300 NEW CARS é Operational leasing company Arval Romania, controlled by BNP Paribas, plans to invest EUR 18.6 million in buying 1,300 new cars in 2009, according to the company. The firm expects to manage a fleet of 3,000 vehicles by year-end, representing a growth of 6.5 percent over 2008, when it managed 1,700. Arval Romania anticipates a turnover of EUR 17 million in 2009, double the level in 2008.


Traian Simion, general manager of Albalact

opened a new logistic center in

Bucharest, a EUR 3 million investment, and modernized its farm in Vaidei at a cost of EUR 2 million. “2008 was a hard year for Albalact. We opened a new production unit and had to keep the old unit operational for several months. This led to high operational costs and low profitability,” says Traian Simion, general manager of Albalact Alba Iulia. Albalact wants to grow at above the rate of the dairy market this year, which is estimated to advance by 10 percent. In 2008, the firm upped by its turnover 23 percent, which was above the local dairy market growth of 17 percent, according to the company. ■

Vienna Insurance Group posts EUR 176 mln turnover in Q1 Vienna Insurance Group (VIG), owner of five insurance companies in Romania, ended the first three months of the year with a EUR 176 million turnover, a growth of 2.5 percent on the same period in 2008. The general insurance segment, where VIG is active with Omniasig, Asirom and BCR Asigurari, subscribed 1.6 percent lower premiums of EUR 159 million. The life insurance segment saw an increase of 72 percent in sub-

scribed premiums, to EUR 16.7 million. VIG covers the segment through BCR Asigurari de Viata, Omniasig Asigurari de Viata and Asirom. “The development was due to the consolidation of the recently acquired BCR Asigurari de Viata. The numbers show the continuous demand for life insurance products in Romania,” said VIG representatives. Vienna Insurance Group is the largest insurance company on the Ro-

Heineken sees local Q1 sales falling in line with region


C&A'S BETTER THAN EXPECTED SALES TRIGGER BIGGER EXPANSION PLANS é Fashion retailer C&A, which has recently entered the Romanian market, posted higher than expected sales in its Bucharest store, which has triggered the company's decision to plan more than three stores for this year. C&A Europe will invest over EUR 600 million in expanding its network of stores across Europe by 2011. The retailer opened at the beginning of April its first store in Romania, within Militari shopping center in the capital city.

Local dairy producer Albalact Alba Iulia posted a profit three times higher in the first quarter of this year compared to the same period of the last, when it invested money in opening a factory in Odejdea, which affected its profitability that year. Albalact ended Q1 of the year with almost EUR 500,000 in profit. Its turnover grew at a slower pace during the period, when it was up 33 percent on Q1 last year, at EUR 14.7 million. The company opened a new factory in Odejdea last year following an investment of EUR 17 million. It also bought 77 percent of cheese producer Raraul Campulung Modovenesc. Albalact further


WOLF THEISS ADVISES ON HVB SALE TRANSACTION é Law firm Wolf Theiss has advised Bank Austria, member of UniCredit Group, HVB Munich and Vereinsbank Victoria Bauspar AG over the sale transaction of HVB Banca pentru Locuinte to Raiffeisen Group, the company has announced. The law firm advised throughout the entire sale process, which started in October 2007 and was completed this month.

Albalact milks triple profit in Q1, plans to grow above market rate in 2009

The local beer market is worth EUR 1.7 billion

Beer producer Heineken Romania has seen its sales dropping in the first quarter of the year, similar to other Central and Eastern European markets. The brewer, which posted EUR 225 million in turnover last year, saw a 6.3 percent drop in the volume of sales in CEE, while on other markets, such as Austria, the fall was even bigger. Poland was the only country in the region where Heineken's sales did not decline as much in Q1 this year as in

the same period of the last. Throughout last year, the brewer managed to increase its turnover by 20 percent compared to 2007. The drop in the first quarter was due to a combination of the unfavorable economic background and bad weather. Heineken, which has been active in Romania since 2003 when it bought the majority share package in Brau Union, went on to buy Bere Mures last year. The Romanian Brewers Association, saw beer sales rise 4.1 percent last year, with canned beer sales up 25 percent. PET makes up the bulk of beer sales in Romania, at 46 percent, followed by bottled beer, at 37.5 percent. Local brewers invested over EUR 200 million here last year, reaching EUR 950 million in total investment since their market entry. The local beer market amounts to EUR 1.7 billion based on players' turnovers, according to the association. Corina Saceanu

manian market, and is followed by Allianz, Groupama and Generali PPF. VIG bought BCR’s insurance arms from Erste Group last year, in a regional deal worth EUR 1.4 billion in total. The Romanian insurance companies bought in the deal were worth EUR 244 million. VIG was also a seller last year, when it handed insurer Unita over to the Austrian insurer Uniqa. Corina Saceanu

BitDefender wants 30 percent turnover growth, looks at public projects Romanian information security systems producer BitDefender hopes to achieve a 30 percent turnover and profit growth this year, after ending the first quarter of the year with a 20 percent advance in profit. “It was better than expected. We are more profitable because we used the crisis as an opportunity to improve our operational efficiency,” says Razvan Valceanu, country manager of BitDefender Romania. The producer is looking at projects in the public sector for further growth, and if those fail to unblock, the company won’t be able to increase its turnover this year, but will instead stagnate. BitDefender does not rule out acquisitions on the market or joint ventures, nor selling some of its shares. A share package sale would not be a first for BitDefender, which sold a 7 percent share package to seven minority shareholders in 2007 for $7 million. Corina Saceanu BUSINESS REVIEW / April 27 - May 3, 2009


EVENTS, BUSINESS AND POLITICAL AGENDA APRIL 27 é 9.30 - The Bucharest STock Exchange (BSE) organizes official trading

opening with Princess Margareta and Prince Radu. é 19.00 – The South African Embassy in Romania celebrates the South

Africa national day at a reception to be held at Intercontinental Hotle, Ronda hall. By invitation only. é 19.00 - Business Superbrands organizes trophy awards ceremony at the

JW Marriott hotel, Constanta room.

APRIL 28 é 8.30 – The British Romanian Chamber of Commerce (BRCC) organiz-

es business breakfast with UK ambassador to Romania Robin Barnett, at Crowne Plaza hotel, Primavera room. By invitation only é 10.00 – BenQ organizes press conference to present new products at

Embassy Club, 8 Lahovary Square. é 17.30 - Unimpresa, the association of Italian companies in Romania

organizes press conference on SMEs, at Hilton, Brancusi hall.

MAY 13 é Business Review organizes Greek Business Forum at Intercontinental

Hotel in Bucharest.

MAY 27 é Business Review organizes Dutch Business Forum

NNDKP gets Chambers Europe award for Romania


Ion Nestor, managing partner of NNDKP

Local law firm Nestor Nestor Diculescu Kingston Petersen (NNDKP) has received the Chambers Europe award for excellence in 2009 for Romania, and is one of the 27 European law firms awarded by Chambers Europe. While NNDKP took the only prize awarded for Romania, other countries in the region, such as Poland and the Czech BUSINESS REVIEW / April 27 - May 3, 2009

Republic, had winners in both local and international categories. The award for Central and Eastern Europe went to law firm Salans, which operates in Romania. Clifford Chance, also active locally, was named the European law firm of the year. NNDKP was nominated along with five other law firms: Badea & Asociatii in association with Clifford Chance, CMS Cameron McKenna, Musat & Asociatii, Popovici, Nitu & Asociatii and Tuca Zbarcea & Asociatii. Last year Chambers Europe did not offer an award for Romania. Several other firms with local operations were awarded on other markets: Wolf Theiss in Austria, Allen & Overy in Belgium, Garrigues in Spain and Gide Loyrette Nouel in France. NNDKP employs over 100 lawyers and has offices in Bucharest, Timisoara and Brasov. Corina Saceanu

WHO’S CLAUDIO ZITO has been appointed new country manager and president of Enel Romania. He is currently planning and control manager in Enel’s international division. Zito is a member of the administration board of Enel in Romania and has accumulated experience within the group in activities such as planning, control and development of the activity of the international and commercial divisions. He has also previously worked for other multinational companies. MIHAIL VARTOSU has been appointed chairman of the jury of this year’s edition of the Effie advertising festival. Vartosu has extensive experience in marketing and advertising, being the founder of the first multinational agency of its kind in Romania. He is a consultant in management, marketing and communication, former regional executive manager of Grey Worldwide Balkans and honorary president of the International Advertising Association (IAA) Romania.

NEWS ALAN SIKORA, 54, has been appointed by Ursus Breweries as technical vice-president. He has 27 years of experience at SAB Miller. He was appointed brewing manager for SAB Isando Brewery in 1990. He later worked as production manager at SAB Pietersburg Brewery, and general manager of Southern Associated Maltsters and also SAB Prospecton Region. In 2004, Sikora joined SABMiller China as technical manager. Before joining Ursus Breweries, he worked as production and logistics manager at Dreher Breweries Ltd. SAGIT TZUR–LAHAV will withdraw in August from the position of VP marketing at Tnuva Romania after four years at Tnuva Romania and 12 years at Tnuva Israel. Tzur-Lahav started in the firm’s dairy division. Before coming to Romania, she was business manager for the entire division of Tnuva dairy products.

Business Review welcomes information for Who’s News from readers. Feel free to contact us on 206 0680 (10 lines), by fax at 335 3474 or e-mail:

Romanian public procurement framework gets changed The framework for public procurement has been changed in an attempt to increase its flexibility and speed and make review procedures more effective. The key modifications made include requiring documents to be provided electronically by the contracting authority, with hard copy acceptable only in exceptional circumstances, and allowing contracting authorities to purchase products, services or works without a bid process where their value does not exceed EUR 15,000, a 50 percent increase. “Whilst we have to wait to see the effect these changes have, they can only be considered as a positive step. Increasing the speed and certainty of the procurement process will help increase industry confi-

dence in the process itself. Ultimately the timely implementation of publicly procured projects is key to the resilience of the Romanian economy in the current economic climate,” said Neil Foster, associate director with WSP Group. While previously, the contracting authority could prolong or delay its decision indefinitely, the new rules change the time for sending invitations to participate in restricted auctions and the time within which the contracting authority can conclude the public acquisition agreement. The changes are intended to implement EU directives aimed at improving the effectiveness of review procedures for the award of public contracts. Dana Ciuraru 7

ANALYSIS By Dana Ciuraru


Importers are resorting to price cuts to maintain sales

Local car sales grind to a halt Exports on the German market and the Rabla program in Romania are the two main factors currently influencing Dacia sales. Market specialists say the boost in sales is artificial and it will influence sales from 2010 and 2012. Importers with operations on the local market are playing their best card to boost sales in times of crisis: price cuts, which can be as high as EUR 5,000. 8

The sales of French carmaker Dacia on the local market fell by 59.5 percent in the first quarter of this year, to 8,682 units. Last month, the figure reached 4,073 cars, down 44 percent from March 2008, but with a slight increase from the previous month. In February, Romania slid to the third largest market for Dacia sales, after Germany and France, having previously been the firm’s main market. Francois Fourmont, the company’s GM, estimates that exports will reach 75 percent of total sales this year, up from about two thirds of the total last year. Since 2006, exports have exceeded imports, after, in 2004 and 2005, the local market absorbed more Dacia cars than were sold abroad. “Dacia is now profiting from subsidies in Europe for replacing old cars with new ones. Instead of second-hand cars, people are going for the cheap Logan. On Western markets, such as France, Germany and the UK, these subsidies are taking the demand from future years and absorbing it now, and destroying the second-hand market too because drivers are not selling their cars to anybody else,” said Michael Weiss, head of AT Kearney Romania and vice-president of AT Kearney. He added: “All suppliers are also profiting, along with Dacia, and everything seems to be booming at the moment. Opel and Volkswagen had their best Q1 sales in recent years, so there is no crisis for them. We have now seen all the demand from 2010, 2011 and even 2012. In Romania, the leasing market has collapsed, but it was partially balanced by international demand. This is virtual demand, which will go down because governments have limited money.” According to the Dacia Group GM, the local car market saw 35,000 units sold in Q1, equal to a single month’s sales from last year. In Q1 last year, 82,000 cars were sold, meaning a slump in sales of 57 percent year-on-year. Fourmont estimates that the local car market will drop by 45 percent to 180,000 units this year, the level last recorded in 2004. Besides exports, Dacia is also seeking a boost in its fortunes from BUSINESS REVIEW / April 27 - May 3, 2009



Romania is no longer the largest market for Dacia sales

the Romanian car fleet renewal program. The company exhausted in one week the entire quota of 1,731 units allotted in the “Rabla” program, through which people who give up their old cars receive a subsidy towards a new one, while other dealers have only used up half. Dacia received a total of 5,000 orders in the first week after the program was

BUSINESS REVIEW / April 27 - May 3, 2009

launched, and says it will ask for a larger quota in the future. By way of comparison, Metrotehnica, a SEAT dealer, failed to shift the 17 units it was allotted. The same goes for the Suzuki dealers. Citroen dealer ATS managed to place almost half of the 39 units it was allocated, while Kia had only 100 orders compared to its quota of 216 units.


In an attempt to stimulate sales, Mazda Romania is currently offering discounts of up to EUR 5,000 on its vehicles in stock. But the Japanese carmaker’s strategy has not yet reaped positive results: company sales in Q1 fell by 53 percent from the same period of last year, to 161 units. Cristian Rigu, the company’s country manager, said that Mazda had sold 2,537 cars in Romania last year in all 16 showrooms, and estimated that this year the local market for new imported vehicles would stand at 115,000 units. The top end of the market is also being hit. Sales of famous luxury carmaker Mercedes-Benz on the Romanian market were down 63 percent year-on-year in Q1 to 961 units from 2,597 units last year, due to the financial crisis. According to company officials, Mercedes-Benz Romania cannot set a target for this year owing to the economic situation on the local market. The company had a turnover of about EUR 396 million last year. However, the carmaker has announced that it will launch new models. It plans to release the new

E-Klasse Coupe in May, and carry out an S-Klasse facelift in June and Mercedes-Bnez GL facelift in July. The economic context has also affected Volkswagen sales, which reached about 3,000 vehicles during the first three months of the year, down from last year’s 5,792, said Matei Albulescu, the Volkswagen brand manager. The company estimates that the Romanian auto market will rebound sometime between 2010 and 2012, and will stabilize at 350,000400,000 cars a year. Albulescu said that Volkswagen had not abandoned its long-termed economic growth objectives, and expected its market share to rise year-on-year. Volkswagen invested more than EUR 15 million last year in its distribution network, extending it to Focsani, Alba Iulia, Targu Jiu and Bucharest. It now has 26 authorized distributors. Statistics showed that car sales on the local market fell by 35 percent in January versus the same month of the previous year, following the sharp decline of lending due to the global financial crisis. ■


INTERVIEW By Dana Ciuraru

How has the economic crisis affected the steel industry, in particular ArcelorMittal? I have been in the steel industry for the last 34 years, but I have never seen such a crisis affecting the business. The impact on the steel industry has been dire, with demand and prices plummeting since Q4 last year. We thought that we would see some kind of improvement from Q2 this year, but it seems that the duration of the crisis will be much longer than estimated. The latest EUROFER data show that the level of new orders and deliveries in the past two months dropped more than 60 percent. All sectors that consume steel, like construction and carmakers, are affected.


ArcelorMittal Romania steels itself for impact of the crisis Cutting production, slashing costs and bringing in a voluntary leave scheme are part of the crisis strategy of steel producer ArcelorMittal Galati. The firm’s CEO, AUGUSTINE KOCHUPARAMPIL, told Business Review that the steel giant would rein in its investments, with USD 100 million of plans put on hold for when the crisis ends. 10

What changes has ArcelorMittal made as a result of the crisis? Even since Q4 last year, we started taking preventive actions. We cut production and sold only what was really required by the market. We also started a cost optimization and liquidity improvement plan. We have put in place a new strategy to optimize our costs. This consists of operating a limited number of assets just to meet the requirements of the market. Just to give you an idea, in Europe we used to operate 25 blast furnaces and now we operate just 11, two of which are in Galati. What’s the status of your operations on the local market? We continue to operate two blast furnaces, one steel melting shop, one hot rolling mill and one cold rolling mill, a galvanizing unit and one heavy plate melt. We had to stop coke production in Romania. We are going to provide the necessary coke through one of the biggest coke producers, located in Poland. We are currently in the process of finalizing a ten-year contract to get coke for cheaper than it is manufactured in Romania. We have recently been operating at some 40-45 percent of total capacity, and we used to ship out 3.5-3.9 million tons of steel, in the last two, three years. Prices have come down, so has demand, but costs are still high. The first two quarters of this year look extremely challenging. We don’t know what to expect in the second half of the year. What are the company’s investment plans this year? We have had to review our investment strategy. We will continue with some environmental projects, for inBUSINESS REVIEW / April 27 - May 3, 2009

INTERVIEW stance a second de-dusting in steel plant number one, which is a USD 22 million investment. And we have other ongoing investments in environmental protection. But there is obviously a reduction in the value of investments. Last year we invested more than USD 100 million and this year will see a significant drop. As I told you, demand has come down to around 40-45 percent, that may be the level of investments. Which projects have been postponed? The new coke battery for which we have the land and all the permits is one of the delayed projects. Once the crisis is over we will revive this project, and we estimate that we will need 15-18 months to finish it. We have also postponed two coke product projects – a saturator and coke gas purifier and two other projects in steel plate production. We’ve had a slight setback for blast furnace number five. All these investments would have been completed this year or next year, and total about USD 100 million.

What’s the situation with lay-offs? We had 13,700 employees at the beginning of this year. Currently some 2,000 employees are on the voluntary leave scheme, so now we’re functioning with 11,700 workers. We have 1,500 workers who used to work at the coke plant, out of whom 250 employees have signed up for the voluntary leave scheme. Of course, the scheme is not closed. We don’t have any targets for the number of employees, but we have to improve our productivity level from the current figure of 300 tons per worker per

year in order to be competitive. Also, a decision was taken in the group that the salaries of the top management would be cut by 10 percent. Have you discussed any state aid with the Romanian authorities? We have been in touch with various government agencies, but we have not asked for state aid. On the contrary, we have made certain suggestion to the government of how to encourage steel demand. One of the most important suggestions was that Romania needs to continue with its infrastructure projects and

really actively encourage the banks to start lending. Does ArcelorMittal have difficulties meeting the requirements of the privatization contract? This is a matter under discussion with the government. There is an audit which is going to be finished at the end of June and we will see then. I do not want to rush to any conclusions, but according to the information that we have, we have fulfilled the privatization contract requirements.

Which are your main markets? One of the most important markets for us is Turkey, where we used to sell 35-40 percent of our production. Our results on this market are being influenced by the crisis and dumping prices from companies which sell steel products from the Soviet countries. Fortunately, Turkey has taken some measures to limit these negative effects, but the market continues to be a difficult one in terms of volume and prices. The second biggest market is Romania, and here the economic downturn has also hit demand for steel. In the past, 30-35 percent went to the Romanian market, the same as today. When do you estimate that the steel market will recover? Two weeks ago we finished a market assessment. We came to the conclusion that the crisis is going to last longer with demand and prices down, and when the recovery comes it will be gradual. It will take a couple of years until demand reaches last year’s level. The only positive thing that I can report is that I do not foresee any further deterioration in terms of price or volume. Another indicator that we follow is the stock level, which has dropped since the end of last year. In December 2008 the stocks in the market were at about 2.8 or 2.9 months’ equivalent, which is historically a very high level. After Q1 this level reached 2.6 months and we expect it to reach 2.1 months by the end of Q2. This gives us the confidence that fresh orders will come into the market. BUSINESS REVIEW / April 27 - May 3, 2009




APRIL 27 - MAY 3, 2009 / VOLUME 14, NUMBER 15


Manage your business environment !

Spanish Avantia puts EUR 90 million aside for Romanian residential projects


Juan Francisco Diaz, general manager of Avantia, says developer’s first project, a EUR 12 million development, will be in Bucharest

Spanish real estate group Avantia, which has launched its first residential building on Boulevard 1 Decembrie in Bucharest, said it plans to start two other projects in the second half of 2009. These are an office complex and a residential project. The firm’s shareholders, Spanish group Peyber and other private investors, have raised a share capital of EUR 90 million to start Romanian projects. According to Juan Francisco Diaz, general manager of Avantia, the company uses its own funds to start projects and is also looking at using loans. “So far, at least for the 1 Decembrie project, we are in negotiations with banks which would give us 65

percent of the entire financing but we think we can increase the participation to 70 percent,” said Diaz. The project on 1 Decembrie is worth EUR 12 million, including the 1,500-sqm plot of land purchased in 2006, which cost EUR 3 million. Currently, the project, which comprises an 11-storey building of 110 residential units on a 11,000-sqm built area, is awaiting construction permits. The developer plans to start work on the project in June this year, with delivery expected in 2011. An apartment in the complex can be bought from EUR 64,300 for a 48-sqm studio up to EUR 140,000 for a four-room apartment of 120 sqm. Parking spaces cost EUR 9,500 without VAT.

On the long term, the company has plans to develop 200,000 sqm of office space and 5,000 homes on the five plots it has acquired in Bucharest. Among its plans are a 20,000-sqm office building on Mantuleasa Street and a 300-unit residential compound in Obor. Avantia also has 12 hectares of land in the Lacul Morii area for a more complex development, for which the company has assigned an architect and developed the master plan. The company entered the Romanian market in 2006 by acquiring five plots, totaling over 140,000 sqm in and around Bucharest, for which it paid around EUR 67 million. Magda Purice


Dedeman opens first store in Bucharest Praktiker Romania sees sales drop in stores by 2015. This year the firm will open units in Buzau and Iasi Q1 due to currency depreciation too.

Construction material distributor and retailer Dedeman has recently opened its first unit in Bucharest, part of its expansion strategy in the south-east of Romania. The new unit, located on Soseaua Giurgiului, is part of the retailer's plan to expand its network from 12 to 30

NEPI fund offers EUR 46.4 million for owner of Atrium Malls Central and Eastern European property investment company New Europe Property Investment (NEPI) has offered EUR 46.7 million for the investment fund Carpathian, which is listed on the AIM market of the London Stock Exchange. The offer is 14 percent higher than Carpathian’s current market capitalization of EUR 40.5 million. NEPI’s EUR 0.2 per share offer for Carpathian’s shares does not mean a takeover will occur, according to the fund. On the Romanian market, Carpathian is involved through Atrium Centers in developing four commercial centers in Arad, ClujNapoca, Satu Mare and Baia Mare, totalling an investment of EUR 300 million. Carpathian, previously known as Dawnay Day Carpathian, said it was evaluating the sale of the entire company in an attempt to maximize value for shareholders. Last year, the fund appointed Hawkpoint Partners to assist it in undertaking a strategic review of the company, along with Collins Stewart Europe 14

as its nominated adviser and sole broker. In February last year, NEPI bought a portfolio of 18 properties in Romania from Central Eastern European Real Estate Shareholdings BV, a company of Avrig 35 Group, in a transaction worth EUR 46 million. Before the deal with Avrig, New Europe Property Investments PLC, which is managed by NEPI, made two other investments in 2007. The first was a portfolio of four properties located in Bucharest, Iasi, Bacau and Brasov, for a total sum of EUR 11.8 million. The properties were acquired from Flamingo International and Flanco International at a composite yield of 8.6 percent, according to NEPI’s official data. The second acquisition, an industrial warehouse and office facility located in Rasnov, was concluded in December 2007 for EUR 15.7 million. The property was acquired from Hi-Lo Sisteme de Depozitare SRL at a yield of 7.75 percent. Magda Purice



Dedeman will also open units in Buzau and Iasi

Dedeman, which is owned by local businessmen Adrian and Dragos Paval, started in Bacau, and expanded to Moldavian cities, with only three units out of 12 located outside the region, in Targoviste, Constanta and Braila. The retailer has plots of land in eight other cities but the decision whether to expand and use them is based on the economic conditions. Dedeman, which had expected to reach a EUR 200 million turnover in 2008, managed to increase its turnover to EUR 250 million last year, up 35 percent on the previous one. This year, the firm believes it will achieve a figure similar to last year’s. Company representatives are dealing with a drop in demand for construction materials, the depreciation of the Romanian currency as well as financing difficulties due to the effects of the financial crisis, triggering an increase in sale prices. Corina Saceanu

Expressed in lei, Praktiker’s sales in Q1 dropped by 2.6 percent

German DIY retailer Praktiker Romania saw its sales drop in the first quarter of the year due to the depreciation of the Romanian currency over the period. The firm suffered a 15.6 percent drop in sales, some EUR 45.2 million. In lei, the fall was only 2.6 percent from the same period of 2008. At an international level, Praktiker saw its sales diminishing by 13.6 percent in Q1. In Romania, the group currently has 25 units. Praktiker also has a new general manager. Michael Krahn has been appointed manager of Praktiker Romania as of next month. He was previously general manager of Praktik-

er Poland for five years. He replaces Guenter Vosskaemper, who will be transferred to the Turkish branch of the company. Krahn was a member of the administration council of Praktiker in Romania between 2002 and 2007. He was also part of the team which set up the chain's local operations in 2002. Krahn has been working for the business since 1990. The DIY market, a highly competitive one in Romania, has welcomed several new names in the last two years, including Obi, Hornbach and Mr. Bricolage, besides local chains Dedeman, Arabesque and Ambient. ■

PremiumRed to complete 60 percentleased PremiumPoint in June Austrian real estate developer PremiumRed has leased 60 percent of the Premium Point office building in Bucharest, due to be completed in June this year, according to Jones Lang LaSalle, the exclusive agent for the project. The ten-storey building close to Victoriei Square covers 6,000 sqm, with the main tenant on the space occupied so far being insurer Aviva, which will have its headquarters here, as well as a life assurance retail center on the ground floor. “Tenants are taking longer to make decisions, which has considerably impacted take-up volume in the first part of the year, causing a decline in take-up in the first quarter in comparison with Q1 2008,” said Kevin Harrington, head of the office

department at Jones Lang LaSalle in Romania. Vacancy rates have increased slightly but remain in the low single digits for central locations. In contrast, decentralised submarkets may see vacancy rates in the double-digits by year-end, he warned. “Takeup in 2009 will be down as much as 40-50 percent from 2008. However we expect take-up to begin to rebound in 2010 in line with improving economic growth,” added Harrington. “In the meantime, developers wanting to start projects will be forced to compete aggressively for pre-leases.” PremiumRed completed Premium Plaza last year, as well as Baneasa Business Center. Staff BUSINESS REVIEW / April 27 - May 3, 2009

ESTATES & CONSTRUCTION MARKET Shopping center stock deliveries down 32 percent on 2008, prices and demand fall across board – C&W

The stock of ongoing commercial centers expected to be delivered in 2009 is 32 percent lower than in 2008, and represents a total rentable area of 490,000 sqm, according to real estate consultants Cushman & Wakefield. The demand for anchortype international buildings remains steady, but retailers are interested in spaces delivering at most 500 sqm for their expansions. Rents for projects outside or close to Bucharest are also down while the vacancy

rate is up, especially for remote locations and cities with fewer than 200,000 inhabitants. Available office space in 2009 is estimated to reach 283,000 sqm, mostly located in north Bucharest, representing an increase of 62 percent compared with last year’s stock. Demand for these spaces is expected to drastically decrease, dragging rental prices down with it. The vacancy rate for office space is expected to reach 5-7 percent in 2009. The industrial segment is set to reduce stock delivery to 125,000 sqm in Bucharest area, representing half of 2008’s stock. Bucharest and other big Romanian cities will see the delivery of several projects started in 2007 and the first half of 2008. In spite of significant supply, the demand for residential is not estimated to revive in the short term, with mortgagetype credits still restricted. Prices on the residential market will continue to fall for both new and old apartments due to reduced demand. Magda Purice

Diana Metiu International agency doesn’t sell real estate projects, but it helps them be sold by their own power


Ten percent of class A offices are now empty

Despite being one of the least affected by the current falls on the local real estate market, even the office segment has a vacancy rate of up to 10 percent for A-class projects, and up to 30 percent for B and C classes, according to a study conducted by Esop Consulting. Esop estimates that office rents in 2009 will fall to levels last seen in 2004 and 2005, with 2010 predicted to be difficult for Romanian real estate and the overall economic situation. Compared to 2008, demand for office space is down 15-20 percent from SMEs and around 25-30 percent from the corporate segment, large and

multinational companies. Relocation budgets have shrunk accordingly, with companies now assigning EUR 1,800-6,000 for spaces of 100-500 sqm, according to the study. Larger companies are looking at spaces of 800-1,200 sqm within B and B+ class office buildings, with a rental budget of EUR 8-12 per sqm. But while they claim to be aware of the crisis, only 40 percent of developers have enough understanding to have adjusted their offers to the current market conditions, say Esop consultants. “Many owners maintain their expectations for sale price margins, in the hope of better market conditions. In our opinion, on a new market when the consumer is more powerful, developers should take a more flexible approach when negotiating a transaction,” said Irina Petrescu, partner at Esop. Owners with vacant spaces in their office buildings do not lower their asking price for four or five months, thereby losing the rent for that period. Some 60 percent of owners have just completed their projects and are renting for the first time, a segment which adapts more easily to the current market conditions. Magda Purice

Retail rents slide back to levels last seen five years ago, but not much room for further drop – RE/MAX


The real estate agencies, as the developers too, are working into a changing market, with a huge concurrency. Many residential projects are finished today, their prices went down, special offers are everywhere and the developers already used all their trumps trying to sell their houses. In Romania we already have few big real estate companies that people trust and they are still selling. But they have the advantage of a huge trusting foundation, many real estate

projects finished perfectly in the past and also they are an active part of the community were they build. The PR agency is the one that suggests and organizes this kind of promoting events but also the one that guarantees that the information is getting to the target, raising the trust in the promoted company. Based on communication, on good relationship between people and on human psychology, DMI invests its whole knowledge in these campaigns, doubled with passion and creativity; the result is every time a totally new, unique, complete different, but prolific campaign for each client. For those who understand the extraordinary impact of those promotion campaigns and the way that they can make a product or a service to sell by itself, Diana Metiu can be contacted at 0744 552 446 or



Retailers look for up to 500 sqm per store

Esop: Office rents slump to 2004 level, demand for space declines

Retail rents have fallen in the first part of the year, with highstreet locations in downtown Bucharest seeing a 28 percent reduction in rents in the first quarter of 2009. But even so, some locations remained empty, according to real estate agency RE/MAX. “The rents within big commercial centers posted an average 10 percent fall, while the malls registered a 19 percent reduction for rents,” said Ana Maria Ionita, real estate consultant of RE/MAX Bastion. In January 2009, rents in commercial centers comprising hypermarkets posted levels of EUR 30-50 per sqm, while in March 2009, the rents dropped to EUR 25-40 per sqm. In shopping malls, rents which stood at EUR 60-100 per sqm in January, by the end of March were down to EUR 50-80 rent per sqm

per month. “This is the lowest level registered in years, with asking prices for rents being at the same level as 2003 and 2004, when 1 sqm would have been rented for at most EUR 60 in the very center of Bucharest,” said Ionita. With even lower asking rental price of under EUR 50 for main street spots, locations out of the center posted values of EUR 15-30 in March 2009, after the owners asked EUR 20-45 for these spaces in January 2009. RE/MAX Bastion consultants estimate that prices will continue to fall but not at so dramatic a pace. “From now on, the commercial space market could see a even lower trend for rents, but with smaller percentage falls,” said Cristina Ifrim, real estate consultant at RE/MAX Bastion. Magda Purice BUSINESS REVIEW / April 27 - May 3, 2009

ESTATES & CONSTRUCTION MARKET Cegis Imobiliare’s managed commercial centers see visitor traffic up by 35 percent over Easter


On a regular day, the traffic reaches 200,000

Cegis Imobiliare, part of the French group Cegis which manages 11 commercial centers in Romania, recorded a visitor traffic up by 15-35 percent in its malls for the Easter holiday. The figure is compared with the traffic seen on a regular day, around 200,000 visitors, of whom, during holidays and celebration days, 70 percent are buyers. “This traffic evolution is what we expected and reflects the Romanian

BUSINESS REVIEW / April 27 - May 3, 2009

consumer’s purchasing habits. Romanians take advantage of the promotions offered by retailers, with small differences between Bucharest and other Romanian cities due to the greater purchasing power of the Bucharest consumer,” said Gabriel Florea, marketing director of Cegis Imobiliare. Commercial center Carrefour Orhideea recorded a traffic of over 50,000 visitors at Easter this year, an increase of 15 percent compared with regular days. Cegis, present in Romania since 2003, administrates marketing, commercial and other collateral services for Orhideea, Esplanada, Carrefour Colentina and Grand Arena mall in Bucharest and another two Carrefour units in Ploiesti and Brasov, Promenada malls in Bacau and Focsani, Tom commercial center in Constanta, Felicia and Era commercial centers in Iasi, and another Era commercial center located in Oradea. These developments deliver a total commercial space of over 120,000 and a traffic of around 200,000 visitors daily. Magda Purice




Print media is forced to cope with shrinking advertising budgets

Printed media in dire straits The mass media, and the printed press in particular, has been reeling from the sharp blow of the financial crisis since last year, but lately the effects have been more drastic. The cut in advertising budgets made it hard if not impossible for many publications to cover their costs. A preferred alternative was the migration of some publications to the online. By Otilia Haraga

The Romanian media started to feel the acute effects of the crisis in November last year, Petrisor Obae, owner of the site site, tells Business Review. “That was the first month when budgets were drastically reduced, not only for the written press but also other mass media channels.” He explains it is almost impossible to predict what the evolution of the press BUSINESS REVIEW / April 27 - May 3, 2009

will be in 2009, but press managers talk about the fact that there will be fewer titles coming out by the end of the yeareven 20 percent fewer. “Until then, most editors have taken steps to cost efficiency, which unfortunately, also includes lay-offs like in the case of Evenimentul Zilei and Romania Libera.” These have been measures that were taken lately regarding the two publications. At the end of March, Ringier Romania announced it slashed 40 jobs, these being journalists and copy editors

from the Evenimentul Zilei daily. As a result, two departments were closed down, while several others were downsized. Previously, Ringier had closed the free daily Compact Bucharest that it had launched in May 2006. This came as competition on the market of free dailies had intensified with the appearance of “Ring” and “Adevarul de seara” and the downsizing of advertising budgets. Ringier Romania said in a press release that Compact had not managed to attain the performance parameters in the initial business plan. “This decision was made after careful analysis carried out on the forecasts regarding the evolution of the title, which shows that on the medium term, Compact cannot recuperate the gap especially in the current market conditions (production, advertising, distribution),” says the press release. With the closing of the newspaper, 22 employees were laid off. At the beginning of April, Romania Libera daily also announced it would lay off approximately 20 employees. One part of the market where the crisis struck hard was that of niche publications, which did not benefit from the support of a big media group. The music, film and urban culture magazine Republik ceased to appear on the market starting with April. The decision was announced in a press release of the publisher Igloomedia. The decision was explained in “the global context- the economic crisis and the local context- the crisis of the Romanian publishing market.” Republik first appeared on the market in 2005 edited by Re:Cool Media. After the editorial team left the magazine in the summer of 2008, Republik was repositioned and was taken over by Igloomedia. “At the end of the crisis we will be counting the inspired managers,” says Obae explaining that the unpredictable nature of the crisis makes it impossible to give a prognostic. “I don’t think there is any recipe for coming out of the crisis and the cost management differs from one institution to the other. So far we have seen cases in which salaries were cut, there were lay-offs or a lower number of pages were printed.” He says that the brand is also an important factor that can help a publication to keep floating in times of crisis. “As advertising budgets are reduced, the brand and the way the product is positioned on the market matter significantly. When advertisers are forced to give up titles from the mix of media, category leaders are at an advantage.” He says all publications are affected by the crisis but tabloids are “at a small advantage due to their circulation and large sales

which makes it possible for them to cover some campaigns.” One preferred strategy was the shift to the online. Naturally, this had started a long time ago, and all publications had also an online edition, but the crisis only made the shift to the online more poignant. “Clearly the future of the press cannot be conceived without the online version,” says Obae. Recently, Mario Garcia, the designer in charge with over 450 publications among which “The Wall Street Journal”, “Miami Herald” or “Die Zeit” explained, during a visit in Romania, for the coexistence of print and online. “It would not be economically viable for newspapers to move online exclusively at least in Romania, since the number of readers attracted online is not proportional with revenues from advertising. The revenues from an online magazine are not enough to support the complex editorial office of a title that intends to migrate on the internet completely. At least for now,” says Obae, explaining Garcia’s vision. “Forecasts show online is the only medium which is growing of all media channels. Still, budget differences between the internet and the other channels are still to the disadvantage of the online,” he explains. A study carried out by AT Kearney and released in March 2009, entitled “How to make the right marketing choices, act fast, and win in the Marketplace” shows that the Romanian media market had an annual growth rate of 27 percent in between 2003 and 2008 and is expected to slow down to an annual growth of 5-8 percent until 2013, in line with developed markets. The study says that inflation, rapidly increasing advertisers base and subsequent demand for inventory are the main characteristics of a very fragmented media market. “In 2009, the media market could decrease below 90 percent of its 2008 total since major spenders have already announced cuts in marketing expenses,” according to the study. In 2003, the print market amounted to 32.6 percent of the media market In 2007 it amounted to 16.5 percent while in 2008 the print amounted to 14.9 percent. This year, advertisers have not set budgets for the entire year. “They adjust gradually their investments in advertising depending on their needs but also depending on the decisions made at the headquarters of the large multinationals. Many budgets, although they exist, have not been allotted for cautionary reasons. The biggest reductions in budget which reached as much as 60 percent were in the car industry, the financial sector and FMCG.” ■ 19


FILMREVIEW: Vicky Cristina Barcelona

Cruz control: Spanish Oscar winner Penelope Cruz steals the film with a dazzling performance

Two pals, straight-laced Vicky and bohemian Cristina, leave the US to spend the summer in Barcelona, a last hurrah before Vicky marries nice-but-dull stockbroker fiancé Doug. Once there, they both fall for the same man, a temperamental Spanish artist, who is dogged by an even more volatile ex-wife. Chaos ensues. It sounds like a run-of-the-mill French bed-hopping comedy, with a healthy dose of let’s-all-laugh-atgauche-Americans-in-Europe, and could well have been, but for the direction of New York legend Woody Allen. With his unique assembly of neuroses, Allen adds to a lighthearted romp an undercurrent of sadness and frustration, which seems to assert that humans can never find real fulfilment through their relationships. The story is carried along by a rather pompous narration. Vicky and Cristina are staying with Vicky’s relatives, a well heeled ex-


patriate couple who offer to show their guests the city’s cultural life. At a fancy art reception, lusty Cristina (Scarlett Johansson) spots handsome lothario Juan Antonio (Javier Bardem), who is the subject of hot gossip in the art community over the violent demise of his marriage to Maria Elena (Penélope Cruz). When Juan Antonio casually saunters up to the pals later that evening in a restaurant, and invites them to fly away with him for the weekend to the city of Oviedo so that they can see the sights, drink great wine and all make love, sensible bluestocking Vicky (Rebecca Hall) is appalled, but reluctantly agrees to accompany the up-for-it Cristina. The tangled events that ensue lead both women to reflect on their view of life and relationships. While various characters fall in and out of love and bed with each other, the viewer is only going to fall for one thing in this film: Spain. Allen’s locations – both Barcelona

and Oviedo – are dreamily beautiful places of dappled orchards, sunkissed monuments, perfect restaurants, vintage wines and glorious colors. The whole film could easily have been sponsored by the Spanish Tourist Board. And the characters are – almost – as physically beguiling. Though it’s the American friends who are the focus of the plot, it’s the Spanish exes, in particular Cruz, who steal the show. Bardem, as the object of the women’s affections, delivers the right mix of desirability, soulfulness and sleaze. But when Cruz’s character bursts into the film halfway through, after receiving a slow-burn build up, she is a sensation. Maria Elena, a hysterical, seductive, raging whirlwind of Catalan mania, is a gift of a part for Cruz, and she makes the most of it. The looming arrival of fall – and of devoted but dreary Doug, who decides to sweep Vicky off her feet by flying into Barcelona to marry her early – presage the end of the pals’ summer of love. But a hitherto

minor character springs a surprise of her own on Vicky, setting up a dramatic finale. Though it will inevitably be compared unfavourably with Annie Hall, Allen’s Oscar-winning comedy of 1977, Vicky Cristina Barcelona is probably the most successful work of the director’s European phase. There are plenty of laughs, wit and insight into human foibles. And unlike the slew of identikit romantic comedies that the Hollywood production line churns out non-stop, the ending comes with a large measure of ambiguity fully in synch with Allen’s pessimistic disposition. Even in the captivating Catalan capital, life and love don’t always work out as we wish. Debbie Stowe Director: Woody Allen Starring: Rebecca Hall, Scarlett Johansson, Javier Bardem, Penélope Cruz On at: : Hollywood Multiplex, Movieplex, Starplex, The Light

Scarlett woman: Johansson plays one of two American pals seduced by Javier Bardem’s Casanova

BUSINESS REVIEW / April 27 - May 3, 2009

Romanian film directors CORNELIU PORUMBOIU (in pic) and Cristian Mungiu have again been selected by the Cannes International Film Festival, in the Un Certain Regard section of the event. The festival will take place from May 13-24. After picking up the Palme d’Or in 2007 for “4 Months, 3 Weeks and 2 Days”, Mungiu returns with the movie “Memories from the Golden Age” which covers the communist period, like his previous film. Porumboiu, winner of the Camera d'Or award in Cannes in 2006, was selected for a detective movie “Policeman. Adjective” about a police officer in a small provincial town.

Prince ALBERT II OF MONACO (in pic) arrived in Romania last week for an official two-day visit, with a stop at the Danube Delta. The Prince was greeted by President Traian Basescu who had invited him to Romania, and a Romanian delegation which included the culture minister, Alexandru Paleologu. The prince visited the Danube delta as he places great importance on policies protecting bio-diversity and preventing climate change.




US band WHITE LIES (in pic) are one of the latest confirmations at the B’estfest music festival, which will take place at Romexpo in Bucharest between July 1 and 5. The band will perform on July 1, on the same day as The Killers, Patrice and Snails. The White Lies’ debut album “To Lose My Life” was considered a revelation, and the band, who play a mix of post-punk and new wave, are considered the successors of Joy Division. So far, White Lies have played other big festivals such as Isle of Wight, T in the Park, Oxegen, Benicassim and Coachella. The B’Estfest line-up also includes famous artists such as Moby, Franz Ferdinand, Santana, The Charlatans, the Ting Tings and Manowar. A program that will make a major contribution towards equipping public libraries in Romania with computers and internet access will be fi-

The Prodigy, Nine Inch Nails and DJ TIESTO will perform at the seventh edition of the CokeLive

nanced by the Bill & Melinda Gates Foundation. The na-

Peninsula Festival that will take place in Targu Mures between July 23 and 26. British electronic

tionwide program, entitled

group The Prodigy are currently promoting their latest album “Invaders Must Die” which climbed to

Biblionet, will be launched

first place in the Billboard European Top 100. US industrial rock band Nine Inch Nails are long await-

by the International Research

ed by Romanian fans. The band did an extensive tour of the United States last year. DJ Tiesto is one

& Exchanges Board. The Bill & Melinda Gates Foundation will donate USD 26.9 million

Management, which is responsible for the already famous Sziget Festival in Hungary.

to the program.

BUSINESS REVIEW / April 27 - May 3, 2009


of the most acclaimed artists on the clubbing scene. The Peninsula festival is organized by Sziget



The THEODOR AMAN MUSEUM was partially reopened last week after undergoing restoration works. Three of the display rooms of the museum will be reopened to the public. The rooms contain works of art that were restored thanks to the financial contributions of private individuals. However, most of the necessary funds for the restoration of the museum came from two main sponsors, the United States embassy which in 2001 offered USD 20,000 and the Rotary Club which donated approximately EUR 40,000.

Classically trained artists can compete at the Orange Awards for Young Musicians, now on its fourth edition. Nine of the most talented entrants will be awarded during a final that will take place in October this year. The competition is open to musicians aged between 14 and 24 with three categories: string instruments, piano and canto. The total value of the prizes reaches RON 60,000. The top three artists will each receive a prize. There will also be special prizes awarded, and for the first time, a prize for “the most promising talent.”


Australian singer GABRIELLA CILMI (in pic) completes the line-up of the B’Estfest music festival. Cilmi, a young artist who is best known for her song “Sweet About Me”, which has enjoyed significant airtime on music television and radio channels, will perform on July 3, on the same day as bands such as Franz Ferdinand, Klaxons, Orbital, Alternosfera and AB4. Cilmi came to international attention after the release of her debut album “Lessons to Be Learned” which features “Sweet About Me.” She has been performing from a young age, having been signed by a big music label when she was just 13. She is influenced by artists such as Nina Simone, Led Zeppelin, Janis Joplin, The Sweet, T.Rex and Cat Stevens. The B’Estfest music event will take place from July 1-5 at Romexpo in Bucharest.

A painting exhibition entitled “Culise” (Backstage) by Rodica Ion opened on April 23 in Bucharest. The exhibition is hosted by the Romanian Academy, the National Foundation for Science and Art. “Culise”, which comprises 20 black and white paintings, is dedicated to fragile womanhood and vulnerability, depicted in the two most powerful colors. Women’s bodies are painted to appear firm, mineral, similar to sculptures, while their gentle, white silhouettes fade away in the black background. Black and white means light and darkness, appearance and essence, yin and yang, which are all limited by details that define them once brought to light.

Emigration victims to receive care International pilots expected at FAI in special project Mamaia World Elite Aerobatic Formula run until 2011, will in its first stage

FAI Mamaia World Elite Aerobatic Formula, is described as a spectacular aerobatic competition, will take place at Mamaia beach from July 10-12. This is the first aerobatic event ever organized in Romania under the aegis of the FAI 22



The competition will take place July 10-12

(Federation Aeronautique Internationale). “Mamaia – World Elite Aerobatic Formula” will be attended by top pilots from Romanian and international aviation and aims at maximizing the creative potential of the best aerobatic pilots in the world. The competition consists of two parts: aerobatic against time (AAT) and aerobatics freestyle (AF). So far, the list of world renowned pilots who are expected to join includes Ramon Alonso from Spain, overall World Champion 2007, the winner of Aerobatic Formula in Al Ain UAE; Eric Vazeille from France, overall World Champion 2000; Svetlana Kapanina from Russia, five times World Champion; Hubie Tolson from the USA, National Champion; Tom Cassel from the UK, National Champion; and Zoltan Veres from Hungary. Otilia Haraga

Children and elderly in Iasi county are the first target of the project

“Migrations – Romania,” a project dealing with the negative effects of migration upon children and old people who are left at home after the departure abroad of their close relatives, has been started by the Association Alternative Sociale and Unidea – the Unicredit Foundation. The project, which will

benefit 600 children and 500 old people in Iasi County. They will receive psychological, social and legal assistance, as well as food, books, clothes and medicine. “Labor migration affects both children and old people. Although many of the parents who leave to work abroad leave their children in the care of their grandparents, our experience found that very often old people need psychological, social and medical assistance services. This is why we are addressing both children and old people,” said Catalin Luca, executive manager of the Alternative Sociale Association. The project was initiated with funds worth EUR 480,000 from Unidea – UniCredit Foundation. This is the third initiative of this kind, after similar projects were run in Serbia and Germany. In the Moldova region of Romania alone, 100,000 children had had at least one parent go to work abroad two years ago. Otilia Haraga BUSINESS REVIEW / April 27 - May 3, 2009

Business Review Issue 15, 2009  

Steeling for tough times

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