Page 1



The local telecom regulator is testing

General manager Misu Negritoiu re-

Stefan Gheorghiu, the founder of

the ground for a new 3G licence and

flects on ING Bank’s 15 years on the

Tegron Consulting, reveals the blunders

looking at the available resources, such

market and outlines the long-standing

he witnessed that caused him to fall out

as radio spectrum

lender’s new strategy

of love with the real estate business

See page 12


See page 11

See page 13


SEPTEMBER 14 - 20, 2009 / VOLUME 14, NUMBER 32


Household consumers only make up 10 percent of watercooler companies’ portfolios, but their strategy is to focus more on this segment, as corporate spending has dried up See page 14-15


IN TOUCH Up in smoke The fact that Romanians spent EUR 2 billion on cigarettes in 2008 (Week in numbers, issue 32) will not surprise anyone who dines out in Bucharest, as I do on my regular trips to the city. The recent law that obliged smaller outlets to be either entirely smoking or non-smoking, while probably well intentioned, only made things worse, as many places abolished the small smoke-free sections they had. On a recent trip to London, where smoking is now banned in enclosed public spaces, the situation seemed to suit both smokers (many of whom would like to give up, or at least smoke less) and nonsmokers. How about starting a campaign for cleaner air in Bucharest? Rebecca Scott, Stockton, England Culture shock I can certainly empathize with the experience of Volker Moser upon his arrival in the country (Bucharest Angels extend anxious expats a helping hand, issue 32). Stray dogs, chaotic driving, aggressive passers-by, dishonest taxi drivers and frustrating bureaucracy were the main problems I encountered in Bucharest. It took a while before I could see it as part of the city’s charm! David Martin, Baneasa, Bucharest Park life Jogging in Izvor Park earlier this month, I was disappointed to see the state of the place following the recent Madonna concert and Tuborg festival. It is one thing to have to dodge round big trucks and fenced-off sections in the run-up to an event, quite another if the damage is not repaired. While it’s great to welcome big stars to Bucharest, Madonna is here for one night – we live here. Izvor Park is a much loved green space and I hope it will be restored to its former glory. Catalina Mihai, Bucharest Banging on Your brief on Romanians’ love of DIY (Staying in is the new going out for Romanians, issue 32) make sense. This must be why in my apartment I hear non-stop banging, sawing and drilling from my neighbors! Bogdan Antonescu, Bucharest Please send your letters to editorial@busi, including your name and lo cation. For consideration for inclusion in the next edition, letters must be received by noon on Thursday. Letters may be edited for length, clarity and accuracy. BUSINESS REVIEW / September 21 - 27, 2009

CAUTIOUS OPTIMISM? REPEAT AFTER ME… When will the Romanian economy turn around? Not until well into 2010 according to our report last week. That also seemed to be the general feeling at our Advertising and Media seminar which we organized at the Intercontinental before our Business Mixer [see pages 22-23]. As a follow up to what I wrote last week about the decline in advertising revenues this year, Peter Jansen mentioned the industry rule of thumb gearing ratio of 1:3, where a 1 percent change in a country’s GDP results in a 3 percent change in the advertising business – more for developing countries. So, if the Romanian economy is 8 percent down this year, that indicates at least a 24 percent drop in advertising volume. Maria Tudor of Zenith Media implied the decline this year was more then 30 percent. Bright spots in the industry include the PR sector and digital media development. Andreea Rosca of Realitatea/Catavencu described the challenges of knowing your audience and what they want. I spoke about our efforts to reach out to our premium readership though our magazine, networking events and our new website – which is still under construction. Even the redesign of this page is something we hope will encourage our readers to connect with us on multiple levels – from emailing us your opinions to following the news on twitter. We want to continue to serve the business community by offering various platforms for discussion. Perusing the international business media there are signs the recession in the US is over, and we are in for a long, slow recovery. Construction permits are up, along with the stock market, and jobless claims are down. There seems to be a sense of cautious optimism among economists, although that is not really helping the person on the street yet. If the impact in Romania of a turnaround in the US comes, say, after six months, then it makes intuitive sense that the local economy might get on track again by next spring. But, just because people wish for it, won’t make it happen. Right now, most company chiefs are still throwing up their hands because the market won’t permit any forecasts or planning that makes sense, which still makes 2009 a complete wash-out. Bill Avery Publisher

What we’re working on OTILIA HARAGA Senior Journalist... is working on an article on the telecom industry ANDA DRAGAN Senior Journalist.. . is researching the local training market for a feature DEBBIE STOWE Copy Editor... is looking forward to reading more of your letters for In Touch

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BRIEFS EXCHANGE RATE ‘TO REMAIN HIGH’ é The exchange rate will stay at RON 4.2-4.3/EUR until the end of 2009, provided inflation does not slip, said the executive manager of Alpha Bank, Sergiu Oprescu. He added that the local currency was likely to rise. OPIC LENDS VERIDA CREDIT USD 30 MILLION é Non-banking institution Verida Credit, specialized in mortgages and residential housing loans, has recently signed a USD 30 million borrowing agreement with the American government agency Overseas Private Investment Corporation (OPIC). The transaction is the first OPIC investment on the local mortgage market. The financing will be used by Verida Credit to fund mortgages. GEBRUDER WEISS CHUGS INTO RAILWAY FREIGHT SEGMENT IN ROMANIA é Austrian logistics and transport company Gebruder Weiss has entered the railway market in Romania, a move which reflects the maturity of its operations in the country, the company has announced. GW Rail cargo, the subsidiary which will be active in Romania, transported 870,000 tonnes of merchandise in Austria last year. GW Romania employs 180 people and has invested EUR 15 million in 2008 and 20009 in developing its logistics terminal in Bucharest. The firm forecasts EUR 15 million in turnover for this year in Romania.


Telefonica enters the Romanian market

Spanish Telefonica is the last telecom giant to move into the Romanian market

Telefonica has opened an office on the Romanian market, the Spanish telecom operator announced last week. The company has set up operational offices in 15 European countries, including Romania, “to further

enhance the integrated telecommunications services it offers multinational corporations across the region,” according to officials. “Telefonica’s global capabilities allow us to quickly and efficiently de-

liver both fixed and mobile solutions to multinational corporations anywhere in the world. The new offices and network infrastructure being deployed in Europe, supported by a new online experience and enhanced products and services, reinforce our commitment to this strategically important market segment. Telefonica is making good progress and is executing in line with the strategy to expand its presence and services to corporate customers already announced in December 2008,” said Matthew Key, chairman and CEO of Telefonica Europe. The new offices are in France, Belgium, Greece, Italy, Netherlands, Portugal, Sweden, Denmark, Estonia, Poland, Hungary, Switzerland, Austria, Romania and Bulgaria, where Telefonica had no presence up until now. Otilia Haraga

Alexander Adamescu becomes chairman of the Flamingo International administration board Alexander Adamescu, the son of businessman Dan Adamescu, shareholder of 17.54 percent of Flamingo International, has become chairman of the administration board of the IT&C retailer. He replaces Dragos Simion, who stepped down from the position. “The alignment of the shareholders’ interests over the re-launch has been my principal objective over the last nine months. I believe this objective has been fulfilled and the company has access to new financial resources, both on the capital market

and at the banks,” said Simion. He will remain a member of the administration board but said the new development cycle of the company should begin with a new president. This move follows the exit of QVT Fund, which had a participation of 22 percent in the company and retired from its shareholding structure. QVT had previously requested the dissolution of Flamingo International and opposed the decision of the Shareholders’ General Meeting to inject new capital into the company through a bond issuance.

QVT sold its participation to a foreign fund which entered its shareholding structure and will support the company’s re-launch strategy. The transaction amounted to EUR 1.2 million. QVT also announced it would drop all legal action against Flamingo. The main shareholder in Flamingo International is Dragos Cinca, with 25.2 percent of the capital. Businessman Dan Adamescu, through two of his companies Nova Trade and Astra, has 17.54 percent of shares. Alexandru Ion Tiriac holds 5.12 percent. Otilia Haraga

BUSINESS REVIEW / September 21 - 27, 2009


Carrefour works with 40 local producers on private label

Cheaper private label products are in demand

Carrefour has launched its second private label for Romania, under the Carrefour brand, and is using several local companies as suppliers of these products. Out of a total of 1,200 products under the label, 500 are produced

BUSINESS REVIEW / September 21 - 27, 2009

locally by 40 companies, including Reinert Romania, Orkla Foods, Vascar and Farmec Cluj-Napoca. Private, or own brand, labels, which are usually cheaper products, have started to sell better than more expensive ones during the current economically difficult times. “We wanted to launch the Carrefour private label now, because of the crisis, but also because we had to reach a certain number of stores so that the sold volume makes it profitable for the producers,” said Andreea Mihai, marketing manager for Carrefour in Romania. The French hypermarket firm also sells products in Romania under the No.1 private label. Private labels account only for around 5 percent of retailers’ sales in Romania, compared with up to 30 percent in Western European countries. Corina Saceanu

GM Matanya Schwartz leaves Strauss Romania Matanya Schwartz has stepped down from his position of general manager of Strauss Romania. His departure was based on mutual agreement with the management of the Strauss Group. “In the near future I will be spending two months at Harvard University Business School undertaking an advanced management program and later I will turn to other professional challenges,” said Schwartz. The executive took over the management of the Strauss Balkans division two years ago, having been directly involved in the process of rebranding and repositioning the company. The re-branding included a name change from Elite to Strauss Romania. The management of the Strauss Group has named financial manager Avraham Ben Baruch as interim GM. Otilia Haraga

BRIEFS IKEA UPS ROMANIAN SALES BY 7 PERCENT é IKEA posted EUR 95 million in local sales in the financial year from September 2008, according to the firm. Its sales in local currency are up 7 percent. In the first six months of the period, sales grew by 20 percent, while between March and August they dropped 6 percent. The volatility of the EUR/RON exchange rate affected the company, as most of its products in Romania are imported. The firm recently forecast a sales increase of 12 percent on last year. HEINEKEN CLOSES MALT PRODUCTION UNITS é Brewer Heineken Romania will close its malt production units in Hateg, Craiova and Miercurea Ciuc in October and lay off 61 employees. The firm has given up malt production due to the costs of high energy and water consumption. It will buy malt from other suppliers instead.




Pharma sales to see 10.8 percent fall in Romanian currency by year-end

Catalin Rotaru country manager KAI Romania What is KAI Romania’s presence on the local market? In spring this year we created a local subsidiary in Romania, with the aim of entering all market segments by establishing partnerships both with distributors and retailers. Currently, our products are sold in Baumax, Bricostore and Praktiker. We also have a strong national, regional and local presence, thanks to contracts signed with PremierCom, Delta Distribution and some other regional and local distributors. We aim to become the leading supplier of ceramic tiles in Romania, given that we act as a local producer, even though the two factories are located in Bulgaria, a EUR 40 million investment. What are your targets on the short and medium term? Our expectations are to reach a 15 percent market share and between EUR 8 to 10 million turnover, by the end of the year. For next year, we aim to gain a 25 percent market share, which should put us in the lead or at least thereabouts. I believe that the expansion of the company will be significant, quarter to quarter. We can produce up to 10 different models a day and more that 15 different sizes of tiles. What new things are you bringing on the local ceramics market? At the moment, our designs are developed in collaboration with Spanish and Italian designers, who have the necessary know-how. Our aim is to start working with well established and experienced product designers and architects from Romania and to help them learn about designing ceramic tiles. The first project will be developed in partnership with an architecture office with operations here which we have already selected. Dana Ciuraru 6

A bitter pill to swallow: sales are tipped to fall

The local pharmaceutical market saw a 15.3 percent drop in sales volume in the third quarter of the year, while sales in euro were down 8.8 percent to EUR 450 million, according to pharma market research firm Cegedim. The overall market will stabilize at the end of this year, although sales have been in decline since last year. Drug sales will drop by 3.9 percent by year-end compared to last year, when calculated

in the European currency. Sales in the Romanian currency will see a bigger fall, of 10.8 percent, although the third and fourth quarters of this year will see a slight comeback in sold volumes. “2010 will continue to a certain extent the decline of 2009. Purchasing power will not improve and the public resources and the way they are administrated don’t encourage market recovery,” said Petru Craciun, head of Cegedim Romania. The pharma market has been used to seeing two-digit increase in recent years. It is expected to fall back to EUR 1.73 billion this year, after exceeding EUR 1.8 billion last year. In April and May, sales of drugs to hospitals generated EUR 54 million. Hospital sales have in fact seen a greater decrease, 15.6 percent in the second quarter of the year, compared to the 7.8 percent drop in retail sales through chains of pharmacies. Corina Saceanu

EC investigates Oltchim over ‘state aid’

The European Commission is set to investigate the state’s planned help for chemical firm Oltchim

The European Commission (EC) has started an in-depth investigation into planned Romanian state support for chemical producer Oltchim Ramnicu Valcea. The move was prompted by the Romanian government’s intention to provide Oltchim with a EUR 135 million debt-to-equity swap and a EUR 339.2 million guarantee, covering 80 percent of a commercial loan. Also under EC scrutiny is the conversion of the company’s public debt into shares worth approximately EUR 135 million. The commission, the bloc’s reg-

ulatory arm, suspects Romania’s aid to Oltchim would not have been offered by a private-sector lender or investor. “The commission has to verify if the measures proposed in the Oltchim case constitute state aid and, if so, whether these measures would raise a competition issue,” said Neelie Kroes, competition commissioner. European Union rules prohibit most state subsidies to business, including loans provided at belowmarket rates. Dana Ciuraru

Petrom starts production at two new offshore wells

Petrom operates two offshore perimeters

Oil and gas company Petrom has announced its first oil production from the recently drilled offshore wells Delta 6 and Lebada Vest 04, located in the offshore block Histria XVIII in the Black Sea. “The production start-up at the Delta field in the second half of this year is a great achievement, given the technical difficulties we experienced while drilling Delta 6. As the concept of extended reach drilling has proved to be successful, Delta 6 might become our most valuable well in Romania,” said Johann Pleininger, Petrom executive board member responsible for exploration and production. Petrom currently operates two offshore perimeters (Istria XVIII and Neptun XIX), which cover an area of 13,880 square kilometers. The present-day output amounts to about 18 percent of the firm’s production in Romania. Petrom exploits oil and gas reserves estimated at 0.9 billion barrels of oil equivalent, has a maximum annual capacity of eight million tonnes and about 550 fuel distribution stations in Romania. Austrian oil and gas company OMV owns 51.01 percent of Petrom shares. Dana Ciuraru BUSINESS REVIEW / September 21 - 27, 2009


Kaspersky Lab revises market Banca Italo Romena launches share downward by 5 percent cent this year to EUR 10-12 million. newlyweds’ credit The first semester was rather slow. Banca Italo Romena has recently launched a newlyweds’ loan, as an alternative to the First Home program. The bank lends up to EUR 150,000 to firsttime buyers. The loan’s interest depends on its duration, varying from 4.32 percent a year for a 10-year loan to 5.32 percent for a 30-year one. “With its newlyweds’ loan Banca Italo Romena offers an alternative to the First Home credit, and lends under-35s money to buy their first home,” said bank officials. Under the borrowing terms, the newlyweds’ loan does not require a deposit, with 100 percent of the property’s value being financed by the lender. “The new product comes in addition to Creditul Imobiliar, which other clients may access. Through Creditul Imobiliar customers can borrow up to EUR 300,000 for a maximum period of 25 years,” said the general manager of Banca Italo Romena, Antonio Bianchin. Anda Dragan

BUSINESS REVIEW / September 21 - 27, 2009

Teodor Cimpoesu, GM of Kaspersky Romania

Kaspersky Romania has revised its market share down by 5 percent in the context of an IT security solutions market that did not deliver on growth expectations. The local market will grow by only 10 percent this year to EUR 10 million, from 2008, according to Teodor Cimpoesu, general manager of Kaspersky Lab for Romania and Bulgaria. At the beginning of the year, market intelligence firm IDC predicted the industry would increase by 10-20 per-

According to Cimpoesu, the business segment grew this year, up 50-60 percent compared to the same period of last year. However, the company has not managed to reach its target, that of obtaining 60 percent of sales from the business segment. Additionally, the retail segment was also slow in the first semester, and the IT security provider had to revise its market share downwards, from 30 to 25 percent. Currently, the residential and business segments make up equal weight in the total sales. The company has projects in the public sector for clients such as city halls and the Romanian Road A u t h o rity, and a contract to deliver 13,000 licenses to the Ministry of Justice. Kaspersky launched last week Kaspersky Internet Security 2010 and Kaspersky Anti-Virus 2010, a new generation of solutions to protect residential customers against IT threats. Otilia Haraga

Week in NUMBERS 90 the local construction equipment market has dropped by 90 percent this year from the last, according to the Association of Construction Materials Producers

53.5 New car sales in Romania have fallen by 53.5 percent in the first eight months of the year, says the Association of Car Importers and Producers (APIA)

4.4 The budget deficit stood at 4.4 percent in the first eight months of the year, according to the Finance Ministry



EVENTS, BUSINESS AND POLITICAL AGENDA SEPTEMBER 23 é Business Review organizes German Business Forum at Intercontinental


SEPTEMBER 24 é 9.00 – IBM organizes IBM Smart Service Oriented Architecture Day at

Radisson Hotel.

SEPTEMBER 28 é 19.00 – Groupama organizes launch event at the Romanian Atheneum.

SEPTEMBER 30 é Business Review organizes Italian Business Forum at Intercontinental


OCTOBER 7 é Business Review organizes Austrian Business Forum at Intercontinental


OCTOBER 13 é 9.00 – Pierre Audoin organizes conference on software business solu-


NOVEMBER 4 é Business Review organizes French Business Forum at Intercontinental


WHO’S SONIA NASTASE is the new general manager of Howard Johnson Grand Plaza Hotel. A former senior associate at Trend Hospitality and previously director of sales and marketing at the same hotel, Nastase has 12 years of experience in the hospitality field. She is a graduate of the Romanian-Canadian MBA and has been trained at international hotel chains such as Hilton International and Wyndham Hotel Group. SAGIT TZUR LAHAV is the new chief operating officer of McCann Erickson Romania as of midSeptember. She joined the team after four years as marketing vice-president at Tnuva Romania. She began her career 12 years ago at Tnuva Israel in the marketing department where she held various positions. ADRIANA IONESCU has been appointed marketing director at Tnuva Romania, in charge of developing and implementing brand strategies and annual marketing plans. She has had a career in marketing and strategic and operational management. Previously, she worked for Procter& Gamble for 13 years. CRISTIAN POPA was appointed sales director at Tnuva Romania, where he will be in charge of the sales and distribution departments. He has 17 years of experience in sales at multinational companies such as JTI, Stimorol, P&G and InBev. In 1996, Popa joined the sales team of Procter Gamble as key account manager. Over the next seven years, he held various positions at P&G. Before joining Tnuva, between 2003 and 2009 he was sales manager at InBev Romania, part of InBev Group. NARCISA O PREA was promoted to part-

NEWS ner in the Bucharest office of Schoenherr law firm. She joined the team in May 2008 as coordinator of the capital market department. Since then, she has been involved in the listing of Transelectrica, the founding of STK Financial, the issuance of Eurobonds Yioula Glasswork, the Alumil listing and the initial public offering of Transgaz. This year, she was appointed member of the commission for selecting the administrator of the Property Fund. Until 2002 she coordinated the judicial department of the Bucharest Stock Exchange. VALENTIN VOINESCU has joined NNDKP’s banking and finance department as a senior associate. He advises clients on a wide range of financing transactions, with a focus on project finance. He also provides legal advice in connection with restructuring and insolvency matters. Voinescu graduated from the University of Bucharest Law School. SIMONA IACOB has joined NNDKP’s mergers & acquisitions department as an associate. She provides legal assistance in connection with mergers and acquisitions, corporate law and commercial contracts. Iacob graduated from the University of Bucharest Law School. MADALINA IVANESCU has joined NNDKP’s Dispute Resolution department as an associate. She represents clients in relation to various litigation matters such as administrative and civil, commercial law, as well as intellectual property matters. Ivanescu graduated from the University of Bucharest Law School and holds a master’s degree in Business Law from Nicolae Titulescu University in Bucharest.

Business Review welcomes information for Who’s News from readers. Submissions will be edited for length and clarity. Feel free to contact us at


BUSINESS REVIEW / September 21 - 27, 2009


BANKS SWITCH ATTENTION TO SAVINGS PRODUCTS high earnings on the long term,” said the executive director of the business development and retail products division of BCR, Sorin Mititelu, recently. He added that players now have the opportunity to create and bring onto the market products that offer savers higher returns. One such example is Garant, recently launched by BCR along with BCR Asigurari de Viata Vienna Insurance Group. It offers a safe investment, a minimum guaranteed return and life insurance.

The Romanian banking market has significant potential to increase its savings products segment, and the current crisis has forced many lenders to pay more attention to these products than ever. According to specialists, fixed-term deposits remain the main saving option for Romanians, while the market is increasingly offering banks opportunities to come up with


products geared towards higherearning customers. Anda Dragan The current financial and economic crisis hit all banks worldwide so violently that they needed to go back to the drawing board with both their regional and international strategies. Even though Romania felt the crisis later than other countries, the consequences are manifest and dramatic. Along with massive layoffs and bankruptcies of small local firms, the freeze in lending activity was one of the most significant negative effects. Although most financial analysts anticipated last year that the first green shoots for lending in Romania would probably appear in the first quarter of 2009, the recovery is still awaited. In spring, specialists tipped borrowing to recover in summer, but later shifted their predictions to this fall. Banks have continued to suffer from the crisis and needed an escape route from this nightmare. In this context, bank deposits seemed to be a breath of fresh air. Lenders have also adapted their marketing strategies to the new conditions. From a “sell as many loans as you can” ap10


Some banks offer savings products for the mass market, while others go more exclusive, targeting a specific, richer segment of customers. While the first strategy brings volume, the second ensures value. BCR and BCR Asigurari de Viata Vienna Insurance Group chose to address a limited number of clients – high earners. The minimum deposit is RON 9,000 or EUR 2,250. When the savings deal comes to an end, BCR Garant offers a minimum guaranteed return of 84 percent for RON investments and 45 percent for EUR ones.


At least one lender a month has launched a new savings product

proach, they have moved to a “get as many deposits as possible” policy. In fact, launching new savings products and offering more and more attractive interest rates to existing account holders have been the main ways that banks have used to communicate their new approach. Last but not least, banks’ strategy to persuade customers to put some money aside has been pretty aggressive. At least one lender a month has launched a new savings product or offered savers a more attractive interest rate, both for RON and foreign currency deposits. Banks’ switch to savings has had a two-fold effect on the market:

both educating people on the benefits of saving and generating extra revenue for lenders during the crisis. An underdeveloped savings product market – like Romania – brings risk as well as opportunity: banks see great potential on the local market from this point of view. Another well-known feature of the Romanian banking scene is the lack of choice in savings products. Financial products that serve as an alternative to classic deposits account for just 3 percent of the total financial products market at present, according to specialists. “Fixedterm deposits will remain the main savings product, but will never offer


But despite banks’ best efforts and the market potential, it seems that Romanians are still reluctant to save their pennies for a rainy day. Some 40 percent of parents have considered setting money aside for their children’s future education, although almost two thirds of them say they are concerned about their kids’ professional future, according to an online survey recently conducted by insurance company Aviva Romania. The research also found that the annual cost of putting a child through higher education varies from EUR 1,000 to EUR 5,000. The study was conducted on 1,000 individuals nationwide. “The Romanian market for savings products for children is still emerging, but it is increasing and we hope that in a few years it will be as mature as other comparable foreign markets,” said the CEO of Aviva Romania, Shah Rouf. BUSINESS REVIEW / September 21 - 27, 2009


ING banks on customers and goes back to basics force. All the measures we have taken were meant to curb potential excesses.

ING Bank Romania, the first

What is your strategy for the Ro manian market? We intend to adopt a “back to basics” strategy, which means curbing the excesses and limiting ourselves to basic banking products and services. We are completely ruling out speculative transactions, which anyway have never been part of our product and services portfolio.

multinational financial institution to enter Romania, recently celebrated 15 years of local activity. On the occasion, general

In a time of crisis, what are the key themes for ING Bank Romania? Our main focus is on clients, both retail and wholesale customers, because we want them to be satisfied. To measure the assumed risk cautiously and to limit it as much as possible is the second important objective for us. Finally, it’s about cost efficiency and transparency on the market.

manager MISU NEGRITOIU told Business Review about the lender’s strategy on the local market and emphasized the main challenges that ING had faced during its time in Romania. According to him, the first green shoots in lending will be visible next year, while a full recovery is unlikely before 2011. Anda Dragan Negritoiu says the bank he runs will focus on a ‘back to basics’ strategy

How would you characterize ING Bank’s 15 years on the Romanian mar ket? I have the feeling of mission accomplished. We have developed in a good, lasting and meaningful way. It is possible that the initial plan was not too well defined, but the final result was positive. If I take a look at other countries in the region, Romania probably had the most coherent development. Fifteen years ago, the bank’s approach was something of a short-term one. Like many other international banks, ING came to Romania based on the “follow the customers” principle. Now, after 15 years, we are completely rooted on the Romanian market.

15 years of presence on the local mar ket? I think that the main challenges we have had to face in Romania have been the market volatility, both on a local and regional level, the Asian crisis of 1997, the Russian one a year later and the current economic and financial crisis. All those factors have influenced our activity on the local market. The biggest challenge was the volatility and the reform measures taken by the authorities at the time. ING came to Romania when the local market was undeveloped and the monetary and exchange rate policies were pretty confused.

What are the main challenges that ING Bank has encountered during its

How has the current crisis altered ING Bank’s local activity, and what are

BUSINESS REVIEW / September 21 - 27, 2009

the main measures the bank has taken to neutralize the negative effects? ING Bank Romania was neither significantly affected by the financial and economic crisis nor immune to it. If it weren’t for the crisis, we would have extended our operations on the local market much more. But the actual development level is a comfortable one for us. Obviously we made some administrative corrections but they were more cautionary than necessary. To this end, we rolled out an important cost cutting program, both in advertising and human resources. We didn’t open any new branches (currently we have a total of 220 nationwide), we froze salaries and stopped hiring new people. But we only had a marginal reduction in our work-

When do you think that the loan drought on the Romanian market will end? Lending picking up depends on both the local economy and companies’ future development, and also on the progression of the combined earnings of the public. I think that any recovery in borrowing will be slow and protracted. We’re not going to get a sudden bounce back. We will see the first green shoots next year and it is possible that a full recovery will come in 2011. Besides, ING Bank Romania has already seen an increase in borrowing from month to month. I think that next year lending activity will be about 30-50 percent of the level registered before the crisis, compared to the10 percent that we have today. How do you see banks’ strategy of focusing on savings products? Since the very beginning, I believe that ING Bank Romania has focused on savings products for individuals. Furthermore, we also noticed that our competition very quickly copied our services. I think that savings products are welcome in an economy that needs to rebalance the ratio of investments to consumption. As far as we are concerned, I can say that ING Bank is in the ideal position: our loans/deposits ratio is about 98-100 percent. Anyway, savings products are good for Romanians, allowing them to put more money aside and helping them to realize that it is better for everyone to invest or save. 11


NEW 3G LICENSE MAY BE IN THE PIPELINE The telecom regulator in Romania is testing the ground to see whether there is room for a new 3G license on the market. The first step is to reorganize the available radio spectrum which could facilitate the advent of new operators. Meanwhile, Spanish player Telefonica announced last week that it had opened an office in Romania to serve its multinational corporate clients. And local player RCS&RDS has launched mobile internet services. Otilia Haraga

Media rumors that the regulator has decided to take out a new 3G license have some foundation. “ANCOM has not decided to grant a new license for 3G services, it has only initiated a series of discussions with the industry to establish to what extent there are still resources available for a new supplier of 3G services,” says president Catalin Marinescu. He said the decision would only be made when there was radio spectrum and concrete demand from the market. “ANCOM’s target is to reorganize the radio spectrum to make resource allocation more efficient, which will facilitate the entrance on the market of new operators. We believe the introduction of 3G services in the 900 MHz bandwidth will stimulate the development of the communications market in Romania, since it could help cover less populated and rural areas,” he adds. On September 1, the draft decision regarding the harmonization of the use of various radio frequency bands was released for public con12

The first step for a new 3G licence to be launched is to reorganize the radio spectrum

sultation. Currently, these bands are given through license to Orange, Vodafone and Cosmote, which use them to supply 2G services. Under the ANCOM project, the operators who own these bands through license will also be able to offer 3G mobile communications through UMTS systems (multimedia services and data transmission). The draft will be under public consultation until October 1. Demand is likely, given that Telefonica has announced its arrival on the Romanian market. It is the last large operator to enter the Romanian market, which is already home to players such as France Telecom, Vodafone and Deutsche Telekom (with 25 percent in Greek company OTE, which runs Romtelecom and Cosmote). Telefonica has opened operational offices in 15 European countries. “Its entrance on the Romanian market will create strong and balanced competition among large international groups – France Telecom, Vodafone, Deutsche Telekom and Telefonica – which is extremely beneficial for Romania and the consumer,” says the ANCOM president. The Telefonica office in Roma-

nia will focus on business services for multinationals. “For a year or two, we cannot talk about competition between Telefonica and the other large players on the market, at least not on the residential side. For business services, Telefonica already has a portfolio of clients in Romania, and will probably try to launch offers to other large companies,” Madalin Lazarescu, research manager at IDC Romania, tells Business Review. Telefonica notified ANCOM in July of its intention to supply networks and electronic communications services. “More competition on a market that is almost saturated [editor’s note: 130 percent mobile telephony penetration] means lower tariffs and, therefore, more accessibility. A new 3G license requires the reorganization of the spectrum and then a public auction that might end, or not, in success. In this recession period, it can remain only in project stage like the WIMAX licenses,” Lazarescu adds. “At this point, no player on the market would be likely to invest in a 3G license since the recession has strongly affected their revenues, and investments in such a network cannot be neglected. In all likelihood, ANCOM thinks that

Telefonica, which recently entered the local market, will need a 3G license at some point.” Although it has had a 3G license since 2007, RCS&RDS was offering only Digi Mobil voice services (on top of Digi TV cable and satellite television, Digi Net internet and landline telephony Digi Tel). Last week the firm launched mobile internet services Digi Net Mobil, becoming a five-play operator. Currently, RCS&RDS has a million internet users. Its mobile internet service, with speeds of up to 7.2 Mbps, has been launched only in Bihor and Timis county, but will be extended to all large cities in Romania by year’s end. “Currently, in the rest of RCS&RDS’s 3G national network, mobile internet is available at access speeds of up to 384 kbps,” say company representatives. Digi Net Mobil will be available for a subscription of up to RON 15 (nearly EUR 3.5). “If small tariffs bring many users, then revenues might grow. For this, RCS&RDS needs national coverage to be able to target Romanians everywhere,” says Marinescu. While RCS&RDS offers mobile internet speeds of at most 7.2 Mbps, other players have already tripled that. Only recently, Vodafone and Telemobil (Zapp) each launched an HSPA+ network which mainly addresses business clients with high speed necessities. For both companies, this technology will first be available in Bucharest. “Vodafone and Telemobil offer speeds of 21.6 MHz in limited areas. They will compete better when the coverage is complete. Also, RCS&RDS, through its strategy, targets a different segment of clients – on lower incomes and with standard communication needs. RCS&RDS customers who today have access to cable internet will be able to acquire mobile internet services, and prices are low, which means the number of customers could be high. Finally, in the context of a crisis, other Romanians could become interested in cheap mobile internet access.” The challenge that RCS&RDS has to face right now is that it needs to ensure enough area coverage to reach large numbers of the public. BUSINESS REVIEW / September 21 - 27, 2009


MARKET MADNESS BRINGS REALTOR TO CAREER CROSSROADS Two years down the road after starting his own real estate development and consultancy company, Tegron Consulting, Stefan Gheorghiu has decided to give up on this dream and seek opportunities elsewhere. He talks to Business Review about his experience with Tegron and the lessons he has learned. Corina Saceanu It took Stefan Gheorghiu six months from when things started to look bleak for his company, Tegron Consulting, until he stopped activity and took the two-month vacation he felt he had deserved but hadn’t taken in more than five years. Tegron, the firm he started in 2007 after working as country manager for investment fund Europolis and US developer Polimeni, had a good start as an owner-developer. Gheorghiu had worked on three development projects, one shopping center and two office projects. In the first year of activity, from consulting solely on those projects, the firm made EUR 500,000. He was planning to have 30 employees by the end of this year, and thought it was achievable with those three projects alone. But it all went downhill due to a series of bad decisions by his clients and unfortunate timing with the development of the market. For the shopping center, the owners who were working with Tegron and who had no previous experience of real estate, decided that although the land was bought, financing was available, a forward purchaser BUSINESS REVIEW / September 21 - 27, 2009

Stefan Gheorghiu has three options now, and one of them doesn’t involve real estate at all

had been found and even a tenant was on the cards, they would wait to get a better selling price. The project, which was supposed to require EUR 100 million in total, land included, was planned for a provincial Romanian city. The owners would have made a 150 percent profit on equity in two years, according to Gheorghiu. After refusing that deal at the beginning of 2008, the foreign investors went back to get the financing, which towards the end of 2008 had become more expensive. However, the forward purchaser had halted all acquisitions and was no longer interested in the project. Now the owners are trying to build a smaller scheme and having difficulties in

coming up with even less money for it. “If they had proceeded with the project as I had advised them, they would have had it 90 percent built, 80 percent leased and already sold by now,” says Gheorghiu. For him, it was another lesson – aside from the fact that he is still awaiting payment for the work he did. “I wouldn’t accept compromises anymore, not even small ones. When I saw clients were not listening to me, I shouldn’t have tried in vain for year and a half. I would focus on serious customers who understand what a professional brings to the business,” Gheorghiu tells Business Review. It was a frustrating experience he

had had before, at all large firms he worked for. People hired to do a certain job should be listened to, he says. “For example, in December 2006 I told the Europolis board they should sell everything in Romania. But they said it was not company policy at the time so they refused,” Gheorghiu remembers. “I was looking at other markets that were settled, such as Amsterdam and London, and realized that the yield of 6.2 to 6.4 at the time was not going to get much lower. On the short term, I was wrong, because America House was sold at 5.8, but it was just the short term. [...] I wasn’t listened to,” he says. However, this was not why he left Europolis. “It was strictly personal. I wanted to grow; I didn’t have room to grow in the firm and I wanted more action,” says the businessman. From that period, he remembers, after six months of staying in the shade, he managed to impose his views, but not as much as he would have wanted. Laid back and relaxed, in jeans and T-shirt, Stefan Gheorghiu now says he has three options for the future. “Either I get a job in Romania, but only doing something I believe in and where I have the chance to add something to the firm. I could also leave the country. I have worked abroad before – I am not afraid to go anywhere in the world and work in top management, I have already proved that. The third option is to give up on real estate, it hurts me to say, and focus on a different business. But I hope I will stay in real estate,” he adds. It is easy to become disgusted at some market practices, says Gheorghiu, and he is close to losing interest in what happens in the industry. “I see that the crisis didn’t do what it was supposed to do, namely to get rid of unprofessionals and speculators from the market,” he says. For much of what happened in local real estate before the financial crisis, he lays some of the blame at the door of the financial media, which reported the plans many had to invest billions of euros in just a couple of years, which were not sustainable and which were thrown on the market much too easily. 13



Main watercooler

tanks has been quenched this year,

production and

after budgets dried up in the crisis.

distribution firms

But distribution companies are now

La Fantana was set up in 2000 by Cristian Amza under the Aqua Natural brand. In 2001 it was taken over by Swedish fund Oresa Ventures and re-branded as La Fantana. In 2004, it entered the Serbian market. In 2007, Oresa Ventures exited the business, selling to Innova Capital Investment Fund, the majority shareholder. Founder Amza stayed on as minority shareholder. It posted EUR 25 million in sales from Romania and Serbia last year.

whetting their appetites over household demand for watercoolers. It may be a drop in the ocean compared to the overall market, but the sector could make a splash even amidst economic turbulence, say players. Corina Saceanu Distribution companies started delivering watercoolers to household consumers several years ago, but it was only this year, when corporate clients cut their spending on such products, that the companies started to focus more on homes. Watercooler firms have started to push this new product to the market, hoping it will help them offset the drop on the corporate consumer side – and, for some, it seems to have worked. At first sight, it appears that this strategy might erode the sales of mineral water bottlers, who sell through retail chains and with whom watercooler firms are competing for end-consumers feeling a lot poorer than they were last year. La Fantana started to focus on households for its watercooler products in 2008, and step by step has managed to up this segment to 10 percent of its portfolio. “Sales on the corporate segment have de14

Cool profits: Cristian Amza, CEO of La Fantana, says his firm is homing in on household consumers

creased because of the economic situation, but the household consumer segment has increased,” Cristian Amza, CEO of La Fantana, tells Business Review. The idea came about based on demand from employees of the firms where La Fantana was already delivering its products, says Amza. An interesting twist transpired when companies started ordering fewer watercooler products, while home consumption increased. The La Fantana CEO doesn’t see home use of watercooler products as a real threat for mineral water companies. “There is no direct competition because you can’t make

a direct comparison,” he says. In fact, one mineral water bottler has also come up with a watercooler product: Perla Harghitei launched the Cristalina brand, bottled in 19liter tanks. The product represented one percent of the amount of water bottled by Perla Harghitei this year and a mere 0.7 percent of its sales, Barabas Ede, area manager at Perla Harghitei, tells Business Review. The watercooler product was launched in 2006, and its main groups of customers are companies with fewer than 50 employees, which make up 45 percent. Next come firms with between 50 and 500 employees, with 38 percent,

Cumpana is a local watercooler producer and distribution company set up in 1999. In 2007 the firm acquired Aqua Regis bottling and distribution company from RTC Holding, for EUR 1 million. Perla Harghitei is a mineral water bottling company set up in 1990 and privatized in 1994. The company sells bottled mineral water as well as watercooler products. It was expecting a EUR 17 million turnover for last year. BUSINESS REVIEW / September 21 - 27, 2009

STRATEGY followed by distribution companies or resellers, 9 percent, and private and state institutions of over 500 employees, contributing the remaining 8 percent. Mineral water sales dropped by 30 percent this year compared to the last, according to Ede. The Perla Harghitei representative says that the worst affected customers were state companies and firms with more than 700 employees. “Although a slight increase in the consumption of mineral water in Romania has been predicted, I believe it has actually stagnated, one of the most affected channels being HORECA, where we have seen a decrease,” says Cristian Amza. In 2007 mineral water bottlers were working at full capacity to satisfy market demand, and the hot summers that followed helped producers achieve year-on-year growth. The same applied to the watercooler market. However, in the consumption of bottled water, Romania was lagging behind most of Europe mid-last year, with a figure two and a half times less than the European average. La Fantana is betting on the

BUSINESS REVIEW / September 21 - 27, 2009

household delivery product and plans to develop more on this segment in 2010. “2010 will be as difficult as 2009 is. We expect sales to stay at the same level as this year on the corporate segment, but we will develop household delivery services,” says Amza. This year, the firm will focus on improving its distribution, which is its main activity. “Efficient distribution will help us keep our existing customers, which is hard in difficult economic circumstances. It will also help us grow the B2C portfolio in 2010,” adds the CEO. Last year, La Fantana posted EUR 25 million in sales from Romania and Serbia, which was 20 percent higher than the previous year, but expects stagnation this year. Perla Harghitei is currently distributing its watercooler products only at regional level, in Harghita, Covasna, Mures, Brasov, Sibiu and through a distribution company in Bucharest and the south of Romania, but plans to expand nationwide. Last year, the company posted around EUR 9.6 million in turnover.


PROPERTY Seven shopping center deliveries push Romania high up European rankings

Lagermax-AED leases warehouse space in Equest Logistic Center

Seven shopping centers were finished in Romania this year, totaling some 135,000 sqm of gross lettable area (GLA), while three existing ones were expanded by a total of 28,800 sqm of GLA, according to a recent report by Cushman & Wakefield. Grand Arena Bucharest, Galleria Suceava, Real II Constanta, Central Plaza Bacau, Galleria Piatra Neama, Era Shopping Park Oradea and Trident Sibiu were all completed this year. Plaza Romania, Militari Shopping Center and Iris Titan Shopping Center were the three expanded projects. Europe saw 120 new shopping centers delivered in the first half of the year, with Romania among the top countries based on delivered surface area. New shopping center deliveries in 2009 will total 8.7 million sqm by year-end, a 5 percent drop on 2008. In the first half of the year, 3.1 million sqm of retail space was opened in Europe, down 18 percent on H1 in 2008. Russia ranked top with 580,000 sqm of shopping centers delivered during the period. As for 2010, only 7 million sqm of shopping center space might be delivered then, according to Cushman & Wakefield. The figure could fall even further in 2011, when 5 million sqm of retail space is expected to be opened in Europe. This would be the lowest amount since 2003. The stock of shopping centers was at 2 million sqm of GLA at the end of last year, equivalent to 94 sqm per inhabitant. By the end of the year, an additional 89,000 sqm of GLA is expected. The Bucharest stock was 535,000 sqm of GLA at the end of last year. Corina Saceanu

Austrian logistics and transport firm Lagermax-AED has rented 2,230 sqm of warehouse and 356 sqm of office space in Equest Logistic Center, according to DTZ Echinox, which intermediated the deal. The Austrian firm intends to expand to the new location, after relocating its headquarters to Arad. Equest Logistic Center is owned by investment fund Equest Balkan Properties. The project is located on the A1 highway, 14 kilometers from Bucharest. The first building was opened in February 2008 and is fully occupied. The second building, made up of some 18,000 sqm, was ready in October last year and is more than half leased. The third building, also covering 18,000 sqm of warehousing, was finished in


March this year and is also half leased. DTZ Echinox has also intermediated the lease of 3,200 sqm of warehousing space to Fresenius Medical Care in Immoeast’s NordEst Logistic Park. Leasing deals on this segment had reached 40,000 sqm by the end of August this year, way down on the 200,000 sqm leased in the capital last year. There has been no warehouse leasing deal exceeding 10,000 sqm this year, according to DTZ Echinox. The available class A warehouse stock in Bucharest has reached 750,000 sqm, most of which is located in the west of the city. The vacancy rate on this segment has increased by 10 percent. Corina Saceanu

CBRE: Too much room at the inn leads to hotel delays and room closures Around 5 percent of hotel rooms in Bucharest have been closed off for H2 and almost 65 percent of new hotel openings postponed, reveals a recent study by CB Richard Ellis. Hotel demand in Bucharest slumped 10.5 percent in H1 from the same period of last year, putting pressure on room rates and occupancy. Competition involved slashing rates, reducing operating costs, adding new services and special offers to up occupancy. Profitability in revenue per available room (RevPAR) in H1 fell 39 percent from H1 2008 and 27 percent from the second half of last year. Economic turmoil made financing ongoing development projects hard and

has caused delays of four-seven months in the delivery of future supply. “Based on the information available, we estimate further delays, with projects being completed in Q3 2010. However, the signing of a management agreement with Courtyard by Marriott for a 187room hotel to be delivered in 2011 has been officially announced. New supply in H1 2009 was mainly four-star and located in the center and north of Bucharest,” reports CBRE. Bucharest’s hotel capacity will grow in H2 with the opening of the five-star Grand Continental hotel (60 rooms), and four-star Phoenicia Express (200 rooms). Corina Saceanu

Genesis Development puts EUR 40 mln into student digs

Rob Stewart, head of Genesis Development

Romanian firm Genesis Development has put EUR 40 million into a residential project consisting of student rental accommodation. The first building in the complex, called West Gate Studios, located in the Militari area of Bucharest, features 375 studios and two-room apartments. Two other building will deliver 600 units mid-next year. The compound features fully furnished and equipped apartments, which can be rented from EUR 80 per person per month, depending on the size of the unit. The complex also includes agreement areas within West Gate Club, a supermarket, restaurant and medical center among others. Genesis Development was set up in 2004 and has been developing office space in Bucharest. It currently owns Novo Park in the north of the capital and West Gate Business District. Corina Saceanu

BUSINESS REVIEW / September 21 - 27, 2009

PROPERTY Baumix expects local mortar market to recover in 2011 after 30 percent drop

Augustin Russu, general manager of Baumix

The local mortar market, which is currently on a downwards trend, may recover in a year and a half, according to producer Baumix. The company puts the market drop at some 30 percent and forecasts a further five percent drop for next year. Last year, the mortar products market was valued at some EUR 350 million. The drop in sales follows a decrease in the number of construction per-

mits issued this year. “While 2009 has still seen sales, generated by projects that were started in 2008, we predict that 2010 will be the most difficult year for the local mortar market, due to an estimated 10 percent drop in the number of projects launched in 2009 and the first half of 2010. Based on information from developers, we expect this market to rebound in 2011,” says Augustin Russu, general manager of Baumix. The mortar products market will not reach its 2008 value for three years from now, while the annual growth rate will only be 10 to 15 percent. In previous years, the market was growing by 30 to 40 percent a year. Baumix posted a RON 18.5 million turnover in the first half of this year, up 10 percent on the same period of 2008, against an overall market fall of 30 percent, according to the company. The firm has two production units in Ploiesti and Cluj counties. Corina Saceanu


Industrial developer ProLogis has extended its lease agreement for 26,000 sqm of warehouse space in ProLogis Park Teresin with Schenker. The logistics firm currently leases more than 162,700 sqm of warehouse space in 11 ProLogis facilities throughout Europe. ProLogis Park Teresin is located 40 kilometers from Warsaw city centre. The distribution park comprises six buildings of a total of 160,000 sqm. The ProLogis portfolio in the Warsaw area comprises nine distribution parks in 39 buildings, with total warehouse space of more than 760,000 sqm. PANATTONI AND AXA REIM BUILD TRNAVA PARK IN SLOVAKIA

Polish industrial developer Panattoni Europe has expanded into the Slovakian market through the development of Trnava Industrial Park, located next to the Peugeot-Citroen plant. The development will be carried out in partnership with Axa Reim. Currently BUSINESS REVIEW / September 21 - 27, 2009

the park holds more than 50,000 sqm of developed industrial A class space, with plans to expand it by around another 130,000 sqm. OMA BUILDS DIY STORE IN MINSK

Retailer OMA, the Belarusian subsidiary of Rautakesko’s subsidiary Senukai, is developing an 8,500-sqm “do it yourself” store in the Belarusian capital Minsk. The store will be completed by mid-2010. The entire building and home improvement market in Belarus totals some EUR 1.3 billion, of which OMA holds a 5 percent share. POLAND EXPECTED TO RECOVER AFTER LOW INVESTMENT ACTIVITY

Despite low investment activity and caution among occupiers, the Polish real estate market is expected to recover quickly, according to a recent report by King Sturge. The volume of investment activity fell by more than 45 percent in Poland during 2008 to EUR 1.7 billion, approximately one third of the deal volume in the peak year 2006. 17


TOUGH TIMES TEST TEUTONIC TITANS The global recession is no respecter of national origin, and Germany’s famously solid firms have suffered along with the rest in Romania. But, the country’s new ambassador says, they are here to make sustainable investments, not as fly-by-nights. Business Review surveys the big German investors, their recent results and moves, and how they plan to ride out the recession. Dana Ciuraru, Anda Dragan, Otilia Haraga, Corina Saceanu



Retail is one of the segments German companies have homed in on in Romania, with several companies active on this segment in the country. DIY retailer Praktiker Romania runs a chain of 26 stores locally, opened during seven years of activity in Romania. The German retailer has cut back its investments


The Germans have planted their flag in retail, energy, cars, construction, telecom and finance

across Eastern Europe due to worsening market conditions, which has impacted on Romania as well. In the first half of this year it opened just one store in Focsani, a EUR 11 million investment. The firm has also put EUR 2.2 million into expanding its existing shop in Craiova by 2,000 sqm. Last year, by contrast, Praktiker opened five stores in Romania, with investments between EUR 8 and 15 million. The retailer’s sales in Romania reached EUR 110 million in the first half of the year, down 14.3 percent on H1 in 2008. The decline in sales was also fueled

by fluctuations in the RON/EUR exchange rate. Its sales in local currency were only 1.3 percent down. Hornbach, another DIY retailer, started its Romanian story with two shops in Bucharest, then expanded to Brasov. Having entered Romania in 2007, the company has put EUR 63 million into its two units in Bucharest, and EUR 19 million into the Brasov outlet. It plans to open another store in Bucharest, according to previous announcements. Tengelmann Group runs two re-

tail chains in Romania. One is the Plus discount chain, which has been expanding throughout the country since 2002. Plus Discount has 82 stores in Romania, but it plans to reach 170 shops in total in the next couple of years. So far, Plus Discount has invested around EUR 300 million in Romania. For future developments, the retailer targ e t s cities with over 20,000 inhabitants. The latest store was opened in Deva, the 11th opening this year, which required a EUR 1.6 million investment. DIY retailer OBI, also part of Tengelmann Group, has been among the few new German investors in Romania of late. The retailer opened its first outlet in the country in November last year in Oradea. Now it runs four stores, one of which is in Bucharest. The average investment in an Obi store is EUR 5 million. The cash and carry segment in Romania is represented by two German retailers, Metro Cash & Carry and Selgros Cash & Carry. Metro Cash & Carry is also the largest retailer on the Romanian market ranked by turnover: EUR 1.5 billion last year. The firm, which entered the local market in 1996, has opened 24 retail centers, with an average investment of EUR 20 million each. The latest opening was a shop in Deva. It has renovated eight of its stores, in an investment program worth EUR 40 million. The company is analyzing the market and considering opening other stores, according to its representatives.

BUSINESS REVIEW / September 21 - 27, 2009

GERMAN INVESTMENTS REVIEW Selgros Cash & Carry, part of the German group Rewe, has recently opened its 18th store in Romania, with an investment of EUR 38 million. The shop, in the Drumul Taberei area of Bucharest, is also the fourth it operates in Bucharest. The average investment in opening a Selgros store in Romania is around EUR 17 million. The retailer posted an EUR 858 million turnover last year. The Rewe group’s other retail chains, Billa and Penny Market, also have a local presence.

ENERGY COMPANIES KEEP INVESTING, CAUTIOUSLY The energy and oil and gas sectors also boast important German investors. Linde Gas is a significant player on the gas market with hundreds of millions of euros in investments so far. This year, the company announced that it would invest EUR 250 million in an air separation factory to supply oxygen to the ArcelorMittal Galati unit, which is estimated to be fully functional in two years. Also, at the beginning of the year, the German firm inaugurated a second air separation unit worth EUR 25 million at Otelul Rosu. Part of this unit’s production will go to the local plant, controlled by Mechel International Holding. The first air separation unit, built at Ramnicu Valcea, was inaugurated in 2005 by the German investor. Another well-known name in the energy sector is E.ON. The German company’s first investment in Romania was made in 2005, when it acquired the majority share packages in Distrigaz Nord and Electrica Moldova, previously controlled by the state. In the past few years, the company has repeatedly expressed its discontent over the gas and energy price policies implemented by the Romanian Energy Regulatory Authority. “In the current economic context, E.ON Romania’s main objective is to consolidate our company’s position on the local energy market by developing our client portfolio and ensuring a secure gas and energy supply for consumers,” Frank Hajdinjak, E.ON Romania GM, told Business Review. According to him, last year E.ON Moldova Distributie invested about EUR 43 million, while E.ON Gaz Distributie allotted approximately EUR 50 million to modernization investments. According to Hajdinjak, the company has BUSINESS REVIEW / September 21 - 27, 2009

The German car brand has got a new look: the Trabant NT was launched at the Frankfurt Auto Show

implemented some draconian measures during the current economic crisis, such as client debt management, in order to keep operations under control.



Automobile Bavaria was established in Brasov in 1994, since when it has extended to cover 10 important cities, with its own BMW outlets. Michael Schmidt, Automobile Bavaria Group president told Business Review the company’s total investment in Romania reached tens of millions of euros. According to him, building an outlet with a showroom and service center involves costs of about EUR 3 to 4 million, while EUR 12 million was invested in the BMW headquarters in Baneasa in 2006. But every investment has paid off, he said. “In 1994, when we entered the market, we sold 11 BMW, while last year the number reached over 2,600 new BMWs and Minis, not to mention used cars,” added the president. However, this year the market for luxury cars has declined, with the credit freeze and buyer reluctance the main drawbacks. The Automobile Bavaria Group president said that despite the market situation, the company would soon open a new service center for BMWs and Minis in Craiova, following other million-euro investments made this year. “In May we opened a brand new BMW facility in Sibiu worth EUR 3 million, while in February MAN received a new center in the same city,” said Schmidt. Another important German investor in the automotive sector is Continental. The firm made its first investment in Romania in 1998, in a tire plant in Timisoara. The site,

which employs 1,350 people, has received EUR 250 million of investments. Gradually, Continental extended its operations in Romania, and currently owns eight production units and three research and development centers in Timisoara, Sibiu, Carei, Arad and Iasi, a joint venture in Slatina and an Eastern European tire distribution centre in Sacalaz. The slump in the car market has also negatively impacted the company’s results. Thierry Wipff, Continental fac-

tory manager in Timisoara, told BR that the corporation’s main goal was to reduce its net indebtedness – generated by the acquisition of Siemens VDO in 2007 – further. “Additionally we also have to deal with the effects of the financial crisis on the automotive business. In order to respond to all the challenges, we have introduced, corporation wide, an extensive cost-cutting program. This includes various measures. Also, most of the investments for the coming years have been postponed,” said Wipff. According to him, the biggest impediment for Continental at the moment is “the lack of support from the local authorities in Timisoara and the state of the infrastructure, which has hardly improved over the last 11 years we have been here.”

CONSTRUCTION DOWNTURN AFFECTS GERMAN COMPANIES Several German companies are also working in the real estate and construction segments. Builder Heberger Constructii, the local subsidiary of German Heberger Bau, has been working in Romania since 2004.



Metro is one of the German companies carving up the local retail market

The local subsidiary posted last year a quarter of the group’s entire business.While this type of activity doesn’t involve the same level of investments as retail, for example, constructors are putting their share into developments which do need large sums. PVC profiles producer Gealan, subsidiary of Gealan Fenster Systeme GmbH, has been working in Romania since 1997. The company, which doubled its turnover once every two years in Romania until 2008, has been experiencing lower sales volumes, 10 to 15 percent down on last year. But the overall PVC profiles market has dropped by more, around 30 percent. The company was planning to relocate its production and offices and also increase production capacity, but has delayed the project until better times. The German ceramic manufacturer Villeroy & Boch started its operations on the local market in 1996,


when it acquired a 51 percent share package in the Romanian company Mondial Lugoj, a local manufacturer of ceramic sanitary ware. For this stake the company paid EUR 10 million and since then the German firm has invested an additional EUR 25 million in the development of the local operations. In 2006, Mondial reported a net profit of EUR 3.65 million while last year’s results show a net loss of EUR 3.8 million.

GERMAN FIRMS ARE ON THE MONEY German investors have always been well represented on the Romanian fin ancial market. Both German insurance companies and banks are among the most important players. Allianz-Tiriac Asigurari, Euler Hermes, Signal Iduna Asigurari de Viata and German Romanian Assurance are some of the big-name insurers on the local market.

Moving onto banks, Commerzbank and Deutsche Bank each operate through a representative office, while MKB Romexterra Bank and ProCredit Bank have branches nationwide. The biggest player on Romanian general insurance market is Allianz-Tiriac Asigurari. The company posted a RON 351.3 million gross written premium revenues and a RON 5.2 million aggregated operational result in the first quarter of 2009. Furthermore, gross written premium revenues on life insurance increased by 7.4 percent on the same period of 2008. “Like the whole insurance market, we’re also feeling the effects of the crisis but are managing better the pressure from unfavourable market conditions,” said Allianz-Tiriac Asigurari GM Cristian Constantinescu. Meanwhile, Euler Hermes, member of Allianz Group, is another significant player on the market. It came to Romania in 2003 and last year launched Euler Hermes Kreditversicherungs-AG Bucharest Branch. The firm operates along with Euler Hermes Servicii Financiare. “In the last few years the local economy has increased tremendously and has created a great potential for commercial loans insurance. We are able through our branch to reach the group’s international standard in terms of products and services tailored to Romanian consumers,” said board member of Euler Hermes Kreditversicherungs-AG in Germany, Jochen Dumler. Elsewhere, another insurer, Signal Iduna, launched its operations on the local market last year. At that time, company represen-

tatives announced that average and high earners were the main target along with employers which intended to retain and motivate their employees. Last year, Signal Iduna’s representatives said the company wanted to become leader on the Romanian private health insurance segment in four years. One of the German banks active in Romania is ProCredit Bank, part of ProCredit Holding. It was established in 2002 under the name of Banca de Microfinantare Miro (Microfinance Bank Miro). ProCredit Holding is the parent company of a global group of 22 ProCredit banks and was founded as Internationale Micro Investitionen AG (IMI) in 1998 by the development finance consultancy company IPC. ProCredit Holding is committed to expanding access to financial services in developing countries and transition economies by building a group of banks that are providers of financial services for very small, small and medium-sized businesses as well as the general public in their countries of operation.



Deutsche Telekom AG is one of significant global operators present on the Romanian market. The German company has a stake of 25 percent in Greek operator OTE, which runs two large telecom players on the local market: Romtelecom and Cosmote. However, it currently has no representative on the management board of the two operators. Previously, Panagis Vourloumis, president and CEO of OTE, said there would not be a merger between Romtelecom and Cosmote, and no rebranding, but the two companies would collaborate much more closely than hitherto.

BUSINESS REVIEW / September 21 - 27, 2009


German firms want long-term links So far, I think I chose Romania. I hope the moment is not too far off when Romania chooses me.

ANDREAS VON METTENHEIM, the new German Ambassador to

What was the value of German di rect investment in Romania in 2008, and what is the forecast for 2009? How many German companies have been registered to invest in Romania in 2008 and how many are expected to do the same in 2009? German direct investment in Romania in 2008 amounted to EUR 2.33 billion. This represents more than 10 percent of overall FDI. Since some German firms invest in Romania through their non-German subsidiaries, the de facto significance of Germany as a source of FDI is even greater. In 2008, Romania had over 16,000 firms with German financial participation, the majority of which were small- and medium-sized enterprises. You may label this as of strategic importance. As for the outlook for 2009, we all know that, in the first half of 2009, there has been a significant drop in overall FDI to Romania and worldwide. However, interestingly, the numbers available to us so far for the period show us that there has been a steady increase in both the number of registered German investors and the volume of listed capital, which is an encouraging signal. It might be too early to draw general conclusions, but I think it is safe to say that Romania remains an interesting market for German investors.

Romania, told Business Review about his hopes for future economic relations between the two countries, what German firms look for on the local market and his experience here so far. Anda Dragan How important are German in vestments in Romania and what posi tion does Germany occupy in the ranking of foreign investors in Roma nia? Germany is Romania’s most important trading partner and ranks third for foreign direct investments (FDI). This proves that Romania is of key importance to German business and vice versa. Romania’s strategic position, the size of its market and its comparative advantages as a location for production – such as its comparatively low labor crease now that there are not many costs – attract a large amount of Ger- large companies to come? That is difficult to foresee. Many man companies. companies made their investment deciWhat are the most attractive sec - sions before the onset of the economic tors and regions of the country for crisis and we are glad to see that they the German companies that are ex - are sticking to them. This shows that pected to enter the local market this German companies are interested in sustainable economic relations rather year? Romania offers interesting busi- than in continual coming and going. ness opportunities in all fields related How would you characterize the to infrastructure and the environment, such as water and waste management local economic environment? What and components for green energy. In incentives do German companies these fields, a significant demand want in order to invest more in Roma meets a specific German expertise. We nia? also continue to see a strong interest in I believe that the specific advansome sectors of retailing, where some tages that Romania offers are still there. German companies are expanding. Business profits still result from relatively low wages and an attractive doIs the volume of German invest - mestic market within the European ment in Romania still expected to in - Union. However, it is also clear that BUSINESS REVIEW / September 21 - 27, 2009

Romania will have to do its homework to maintain these advantages: it needs to make serious efforts at improving and expanding its infrastructure and at reducing bureaucracy and improving transparency. Investors also need to be able to rely on the fact that their contract partners meet their obligations. These are points that German investors raise over and over again. We also hope that the EU funds that are available for these purposes will be put to use. After a relatively short time as the Ambassador of Germany in Roma nia, how do you find the country and the business scene? Did you choose Romania or did Romania choose you? I deplore the fact that I did not come to know Romania much earlier in my career. I try to learn and listen.

Which was the value of the com mercial exchanges between Romania and Germany in 2008 and what is your estimate for the current year? In 2008, German imports to Romania reached EUR 8.7 billion, while exports of Romanian goods and services to Germany accounted for EUR 4.8 billion, thus resulting in a trade volume of EUR 13.5 billion. In the first five months of 2009, bilateral trade between Romania and Germany totaled EUR 4.5 million, whilst Romania’s current account deficit in the trade between our two countries has gone down significantly. In which field do you think Ger man investments will be more active this year and in the years to come? We’re currently seeing a strong interest in sectors such as renewable energy components, building materials and IT. 21


Your old new Business Review! 1










■ 1. Business Review’s Media and Advertising seminar gathered about 40 participants to share views on industry trends ■ 2. Maria Tudor of Zenith Media described this year’s budget cuts. Listening are Peter Jansen of RAAA and Cohn&Jansen ad agency (left), Shuja Shaikh of Kubis Interactive and Bill Avery (right) ■ 3. Marten Schoenrock, GM of Intercontinental, JeanPierre Vigroux of Mazars and Kurt Strohmayer of Aducco ■ 4. Angela Rosca of TaxHouse and Andreea Rosca of Realitatea/Catevencu media group ■ 5. Andrei and Sorana Savu of Premium PR ■ 6. Jonathan Youens, head of RICS in Romania, and Marten Schoenrock ■ 7. Kurt Strohmayer, Roberto Musneci of Serban, Musneci & Associates and George Alberts of KD Investments

■ 8. Stacy Quinney of Valhalla Gold Mining, Guy Burrow of CEC Govt Relations and James Gray-Cheape of Pegasus ■ 9. Friedrich Neimann of Hilton, Kurt Strohmayer and Tinu Sebesanu ■ 10.Steven van Groningen of Raiffeisen Bank, and Eric Royer ■ 11. Oana Nastase, Valeria van Groningen and Gina Royer of BRD ■ 12. Dierk Zeigert of News Outdoor and Octavian Popescu of Initiative Media ■ 13.R-L: Paolo Chighine of Enel, Bill Avery of Business Review, Radu Florescu of Saatchi & Saatchi, Steven van Groningen and Edit Vesser of BNP Paribas


BUSINESS REVIEW / September 21 - 27, 2009




Media agency representatives discussed the impact of the economic crisis on the media market as well as market trends during an event organized by Business Review on Thursday at the Intercontinental Hotel. “While this year is not over yet, I generally use a 1:3 factor to establish what is going on: if the GDP goes down 1 percent, advertising goes down 3 percent. This year, the downfall will be between 25 and 30 percent,” said Peter Jansen, president of Cohn & Jansen creative advertising agency. “It is also true that over the last two-three years, salaries have gone through the roof.” Maria Tudor, managing director of agency Zenith Media, says the decrease will be more than 30 percent at the end of the year. Alina Stanciu, business director at Ogilvy Public Relations, said clients have used PR services more than in previous years. “PR is at the same level, if not higher than last year,” said Stanciu. Andreea Rosca, director of business press at the Realitatea-Catavencu group, explained how the group was affected by the crisis. “We didn’t have a consolidated position on the market, we didn’t finish investing in our brands and suddenly, there is no money on the market. So we said: maybe we will be losing something between 30-40 percent (less than that for Realitatea TV).” Their strategy was to create integrated projects. Shuja Shaikh, managing partner of Kubis Interactive, said he still has problems recruiting quality employees specialized in the internet field. However, things are looking up in the online market, which has registered progress in the past one-three years, but clients still need to learn the importance of issues such as search engine optimization. Bill Avery, publisher of Business Review, presented the new format of the magazine and Business Review Plus concept, which stands for integrated media presence: print. online and events. The seminar was followed by a cocktail party celebrating BR’s new look. Almost 150 people attended the evening event held at the recently opened 21st floor of the Intercontinental Hotel. Otilia Haraga BUSINESS REVIEW / September 21 - 27, 2009



STATE ENERGY SECTOR REORGANIZATION GETS MESSIER Despite months of discussions and scenarios, the creation of the two state energy companies is far from a fait accompli. State officials disagree on the type of management for the companies, the people in charge, the Bucharest Stock Exchange listing, the Property Fund’s stake in these companies and what will happen with the ongoing contracts of the firms that will form the statecontrolled energy giants. Dana Ciuraru The plans for the creation of the two energy companies change from one week to another, after more than half a year of tough discussions and negotiations. The latest scenario is that the first company will include Turceni, Rovinari and Craiova energy complexes, the nuclear units from Cernavoda, Valcea, Slatina and Sibiu hydro power plants and Societatea Natinala a Lignitului Oltenia (SNLO), a lignite-mining company. In the same scenario, the second company would be formed of Paroseni and Deva energy production units, Electrocentrale Bucharest (ELCEN) and the hydro power plants not included in the first company. It is a big ask for any manager in charge of such different assets, which is why the state energy giants’ management has been a problem from the beginning of the discussions. Until a week ago, Adriean Videanu, economy minister, maintained that the management of the two state energy companies could be private, and added that he would present this scenario to the government. But things have changed since then, as Tudor Serban, secretary of state for energy, recently said the exact opposite. 24

“The restructuring process will be long and painful. We also have to restructure our staff. In six months, the two companies could be operational on paper, but practically it may take two years. If they succeed, it will be a revolution that will radically change the market in the coming years,” says Baicusi.



Constantin Balasoiu, CEO of CEN Craiova

Mihai David, CEO of Hidroelectrica

Pompiliu Budulan, GM of Nuclearelectrica

Tudor Serban, secretary of state for energy

“When I said that we want private management at both companies, we mean management on private principles, not bringing in other people from London to show us how stupid we are,” said Serban. State officials are not even consistent in their positions on the actual managers of these two companies. Serban said in an conference that the heads of the companies would be Constantin Balasoiu, current CEO of CEN Craiova, supported by the Democrat Liberal Party (PD-L), and Mihai David, CEO of Hidroelectrica and a Social Democrat Party (PSD) member. Subsequently, he added that they would just coordinate the activities of the two companies, until the appointment of the actual CEOs.

2010, the two national energy companies will be functional on paper, but we can only talk about their being actually operational in 2012. Until then they will toil in vain,” said Serban. He also announced that one option was to list 15-20 percent of the shares in the energy firms on the Bucharest Stock Exchange (BSE). The secretary believes that the Property Fund’s stakes in the pair is another key issue. The uncertainty has drawn a clamor from unions across the energy sector. After protests from the Hidroelectrica union, complaints arose from workers at Electrica and its subsidiaries. Moreover, Nuclearelectrica union reps also disagree with the plans for the energy reorganization. Adrian Baicusi, general manager of Transelectrica – who came to work for the state after extensive experience in the private sector, his last position being that of CEO of Siemens LLC – does not believe that the two giant energy companies, which will unite most assets’ local production, will be ready in six months, as declared, barring a “real revolution”.

TO BE LISTED OR NOT TO BE LISTED ON THE BSE? The initial term for the emergency ordinance to set up the two companies was September. But now Economy Ministry officials are saying the end of the year. David said it would take six months from establishment until the two companies become operational. “From January 1,

The creation of the two national energy companies has upset not only the unions, but also market players that have already negotiated energy purchase contracts and are now in the situation of not knowing what will happen next year. For example, Hidroelectrica will renegotiate the price of energy supplied to the aluminum producer Alro Slatina, currently EUR 25 per MWh, a price already hiked by 14 percent as a result of recent negotiations. “There will be a substantial increase but we will have to see how things progress from the beginning of the year,” said David.The fire test in the forming of these companies will be reviewing the loans taken out by the stateowned companies, because lenders are likely to require early repayment of loans worth tens or hundreds of millions of euros. Also, recently, Mihai David announced that the state giants could take part in the investment company for the construction of nuclear units 3 and 4 at Cernavoda. But this is another confusing statement from the Economy Ministry, as “the current memorandum of understanding signed between all investors clearly states that if an investor renounces some of his shares that stake will be equally split between the other investors,” says Pompiliu Budulan, GM of Nuclearelectrica. One certainty in this messy state energy reo rganization is that Romania is about to complete two agreements with Hungary and Austria for the unification of the energy markets that will enable local producers to export to Germany and take advantage of demand in several European countries, really putting Romania on the European energy market. BUSINESS REVIEW / September 21 - 27, 2009



So-fia, so good: excellent Bulgarian cuisine at the former Four Seasons


hat a surprise it was for me to rediscover this place. It really is superb and I ask you to check it out for yourselves, as it would be a crime against gastronomy if it were to fail due to local indifference! I found this location ten years ago when different owners had it. Then it was called Four Seasons and it was the happiest, loveliest most successful restaurant (Turkish) in town. But it was too happy, too beautiful and too successful for the mean, evil minded communist neighbours who live in a squalid block above the restaurant; for with all the hate and envy that can only exist here, they had it closed down under the dubious pretext of there being a cooking aroma emanating from the restaurant. So after an absence of many years, along came Bulgarian investors and opened up the location as Balcic (look for La Perla Restaurant, and enter by the sign saying Patisserie; Balcic is on the left). They have spent a small fortune on renovating the place and it now caters for 160 covers which means it can compete with the major hotels in town. And compete it does on several levels. The décor is clean, wooden and rustic. But here the food and wine do the talking.

I was initially attracted to it because I cannot find Bulgarian wine anywhere in this country. To put it simply, you can take the highest quality and most expensive Romanian wine, and its Bulgarian equivalent in quality will cost a mere EUR 6! For this reason, I join many people who drive to Bulgaria each month to stock up on food and wine, all of which costs a fraction of greedy Romanian prices which are charged here for lesser quality products. I approached Balcic, knowing I could find some fine wine, and if the food was good value, I would consider it to be a bonus. So let’s go through my bonus treat together. You can dine on a multitude of starters in the Greek ‘mezza’ fashion, or alternatively be more traditional with main courses and desserts. We tried as much as we could eat. ‘Buffalo Sausage’ sliced as thin slivers was both aromatic and spicy and a great side dish at RON 9. So too was the ‘Kaiser’ sliced paprika beef and the lamb Pastrami at the same price. Our waiter suggested a Bulgarian version of focaccia bread which was as good as any simple Italian focaccia I have eaten here. So we passed on a selec-

BUSINESS REVIEW / September 21 - 27, 2009

tion of some 50 Mezza-style baby dishes costing from a mere RON 4-9 and got stuck in to the big stuff – the main courses. With nearly 100 mains and sides on offer, there was only one beef dish! All was pork and lamb, and I had no problem with either of them. So at a cheap RON 35 I had a lamb ‘St George’; which was a perfect casserole of a whole shoulder of lamb which was far too big for me to finish. It came with rice and vegetables which had shared the same casserole dish – and to my delight there was a small bowl of the meat juices from the lamb. Girlie chose a lamb kebab, which failed as it was not quite the Arabian-style ‘kofta’ on a stick you would expect. No, it was a simple dish roasted, small end-ofrack ribs. But it was a mistake in translation so they are forgiven. I took with me a shavenheaded best friend who must have shaved his brains off with his hair, for he chose a simple chicken schnitzel with chips. He passed on a rich selection of non-Romanian dishes, including a whole roast rabbit! Although I don’t eat desserts, Girlie just had to order a fat, choccie, creamy Tiramisu which she loved, but as it arrived she unreasonably requested that it should be garnished with some fruit puree. Well, the House did just that without a complaint from them. Bravo House! In order to save my fingers from too much work in writing this further, may I suggest you check their menu on their site: And my last word… the Bulgarian wine was excellent – it always is! Michael Barclay

Tales from the Golden Age premiers in Bucharest this week

Piggy in the middle: the livestock gets comfortable

The film recreates popular urban myths of the period

Romania’s rustic culture is depicted

Tales from the Golden Age, the film written by Romanian director Cristian Mungiu, of 4 months, 3 weeks, 2 days fame, and directed along with Ioana Uricaru, Hanno Hoefer, Razvan Marculescu and Constantin Popescu, is set to hit Romanian screens on September 25 with its first part, Comrades, Life is Beautiful!, while the second part, Free Time Love,

will run from October 23. The film details the final 15 years of the Ceausescu regime, the worst in Romania’s history, and adapts for the big screen the most popular urban myths of the period. It aims to re-capture the mood of the time, portraying the survival of a nation having to face daily the twisted logic of a dictatorship. 25


White Nights at the National Art Museum Carturesti opens first French book

store at the French Institute

The National Art Museum in Bucharest was open between 7pm and 4am last weekend as part of the Bucharest Days celebrations. The European Art Gallery inside the museum can be visited free of charge on Saturday.

First movie fest for children kicks off Kinodiseea, the first movie festival for children in Romania, will take place in Bucharest from September 22-27 at Gloria Cinema and the Romanian Peasant’s Museum. In having a children’s festival of its own, Bucharest will join other large cities such as New York, Chicago and London. The event aims to inject new life into the local film industry for children and provide an alternative to Hollywood productions. All in all, 12 feature-length movies for children, which were shown at international festivals, will be broadcast. Three big-name local productions will also be included in a special day – The Day of the Romanian Movie. Organizers


Local book chain Carturesti has opened its tenth location, inside the French Institute. The outlet will cater for a French-language audience with a wide editorial selection of over 2,000 titles. In addition to the new bookstore, a coffee house serving French pastry products will feature. Besides its main use, the space is set to accommodate events organized by the French Institute and Carturesti. The bookstore was designed by Studio Kim Bucsa Diaconu in partnership with Lundi et Demi, represented by Attila Kim and designer Ciprian Tocu. ■

Serban Radu and Nicoleta Dumitru, owners of Carturesti

estimate the event will draw a crowd of up to 10,000 over the five days of the festival, which not only targets Romanian but also foreign children. The event was started with the aim of shaping the tastes of children between 6 and 12 and offering them easier access to culture. Despite recent high-profile Romanian movies garnering attention for the national industry, cinema attendance and movie theater use are very low. “For this reason, we have an acute and worrying crisis. Very rarely has there been a greater contrast between the excellence of an art form and the public response,” say organizers Metropolis Film and the Cultural Association SCRIPT. Otilia Haraga

BUSINESS REVIEW / September 21 - 27, 2009

Business Review Issue 33, 2009  

Tapping into the household market Household consumers only make up 10 percent of watercooler companies’ portfolios, but their strategy is to...

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