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Lending to small and medium-sized enterprises has dried up this year against the overall slowdown of the banking sector, but banks are coming up with products to suit the new climate See pages 10-11

Car sales have stalled because of the re-

French outsourcing and auditing companies have had a good year working to consolidate and even expand, while those active in the energy sector have started new projects See pages 18-21

cession, with the government’s car replacement program remaining one of

BUSINESS REVIEW the few aids to auto businesses

See page 16


NOVEMBER 2 - 8, 2009 / VOLUME 14, NUMBER 39


Calin Tatomir, GM of Microsoft Romania, is leading the company through a busy period: the local roll-out of Windows 7 in early November and a move to new headquarters in early 2010 See page 12


IN TOUCH Brainless bonuses As an infrequent visitor to Bucharest for business, my interest was piqued by your article on salaries in the banking sector (Banker pay backslides after bonfire of bonuses, issue 38). Bonuses are still a hot topic in the UK, where many people are angered that the obscene amounts paid out in recent years are making a comeback – just a couple of weeks ago Goldman Sachs announced an enormous bonus pot which works out at an eye-popping USD 172,581 per employee for the quarter. It is well known that these huge sums played a big part in causing the credit crunch, and such news particularly grates when Romanian partners tell me that here banks have generally demanded high deposits for mortgages and the like. Good. I hope that Romania avoids the reckless banking practices (125 percent mortgages etc) that have caused such chaos around the


for many people their “bonus” is still having a job at all. My

AFI Palace Cotroceni opened in Bucharest last week, the 10th mall in the capital. Located at the intersection of Vasile Milea Street and Timisoara Boulevard, the mall features 250 stores, around 3,000 parking places, a Real hypermarket, the first IMAX cinema in Romania, a karting ring, two casinos and an artificial lake. AFI Palace Cotroceni is owned by AFI Europe, one of the largest developers in Central and South East Europe.

world. David Kennedy, London On a wing and a prayer Your feature on airlines (Profits no longer falling from the

Week in NUMBERS 1.6

skies, issue 36) raised an important issue for many Romanians. While we might welcome the fare promotions designed to get us back flying again, if more carriers go the way of MyAir and

Erste Bank will launch a capital increase with an estimated out-

SkyEurope, ultimately it will lead to less competition, which

come of EUR 1.6 billion in rev-

will surely push fares back up. The arrival of low-cost airlines

enues from IPOs in Romania,

in Romania over the past few years has brought air travel and

Austria and the Czech Republic

therefore the possibility to visit foreign countries (outside the


Balkans and Eastern Europe) within the reach of many Romanians for the first time. A return flight to Western Europe used to cost more than the average monthly salary. I hope that the industry bounces back from its current economic problems. Ioana A ncuta, Bucharest Please send your letters to, including your name and location. 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 / November 2 - 8, 2009

The Romanian lottery prize has reached EUR 5.6 million this week

76,000 The recently opened AFI Palace Cotroceni shopping mall covers 76,000 sqm, the largest such project in Romania

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Executive Director GEORGE MOISE Sales & Events Director OANA MOLODOI Marketing Manager ADINA MILEA Sales & Events IULIAN BABEANU CLAUDIA MUNTEANU FREDERIC VIGROUX Sales Consultant GIUSEPPINA BURLUI Research & Subscription ALEXANDRA TOADER Production DAN MITROI Distribution EUGEN MU{AT

Str. Alecu Russo 13 - 19, et. 7, ap. 14, Bucharest - Romania E-mails:; Phone: +4021 210-7734, Audited 1H 2007 Fax: +4021 210-7730 ISSN No. 1453 - 729X BMG is a founding member Printed at: of the Romanian Audit Bureau MASTER PRINT SUPER OFFSET for Circulation (BRAT)




BCR Group profit falls by almost 44 percent

FITCH FORECASTS 7.5 PERCENT ECONOMIC DROP IN ROMANIA THIS YEAR é Romania's economy will fall by 7.5 percent this year, while its budget deficit will reach 7 percent of the GDP, according to a recent forecast from Fitch Ratings. The National Prognosis Commission had previously predicted a 7.7 LAURENTIU OBAE

percent economic drop in Romania in 2009, while the International Monetary Fund put the GDP decline between 8 and 8.5 percent for this year. The latter revised its forecast in August from the 4.1 percent forecast it made earlier in March. Fitch predicts a 2 percent economic increase in Romania next year and a budget deficit of 4.5 percent of the GDP, while the increase in the country’s economy should reach 4 percent in 2011, according to the ratings agency.

BCR Group’s results have been hit by the increasing cost of risk

BCR Group’s net profit, after taxes and minority interest, has fallen to RON 699.5 million (EUR 166.1 million), down 43.9 percent on end-September 2008, mainly due to higher provision expense and lower fee income due to lower consumer expenditure, the group has announced. It posted an increased operating result of RON 2,223.4 million

BT posts higher results in first nine months

CME SEES REVENUES AND PROFITS DOWN IN FIRST NINE MONTHS é Central European Media Enterprises (CME), owner of several TV stations in Romania, posted net revenues of USD 120 million in the first three quarters of the year in Romania, down on the USD 197 million posted last advertising market in Romania. Its BT foresees another tough quarter

exceeded by its revenues from the Czech Republic, at USD 181 million. CME made only an USD 18 million operating profit in the first nine months of the year in Romania, down from USD 70 million in the same period of last year. It posted falls in its revenues and profits on all the markets on which it is active, except Bulgaria, where activity started in August last year. CME owns PRO TV, PRO TV International, Acasa, PRO Cinema, and MTV Romania. 4

Banca Transilvania (BT) has posted an increase of 83 percent in its operational profit in the first nine months compared to the same period of 2008, according to its financial report. “We focused on efficiency and caution in those nine months. We intend to reach all our objectives for this year, including estimated gross profit. The next quarter will be as difficult as the current one in terms of the business environment,” said Robert Rekkers, general manager of BT. According to the lender’s financial report, operational incomes saw an increase of 23 percent on September 2008, to over RON 930 million.

The bank’s loan-deposit ratio was 0.84, with BT continuing to keep an appropriate balance, better than the 0.93 posted at the end of 2008. The lender also posted a solvability rate of 13.53 percent and balance sheet assets of RON 18,246 million. According to the same financial report, BT’s loans portfolio is a stable one, with the local currency being predominant and with less than 4 percent exposure to real estate developers. BT’s total volume of loans increased to RON 11,659 million at the end of September, of which 57.53 percent were corporate loans and 42.47 percent individual ones. One of the lender’s priorities was the strict controlling of costs. BT’s cost/income ratio was 55 percent at the end of September, better than the 70 percent in September 2008 and 62 percent in the first half of 2009. Operational costs fell from RON 527 million (September 2008) to RON 512 million (September 2009). The bank’s customer portfolio includes over 1.35 million active clients, both companies and individuals. BT also owns 100 percent of Compania de Factoring IFN, as a result of a 50 percent stake acquisition from Intermarket Bank A nda Dragan

Hilton signs with SIF BanatCrisana to run Double Tree hotel in Oradea


year, due to the decline of the nine-month local income was only

(EUR 528 million) in the first three quarters of 2009, up 24.9 percent on the same period of 2008. The main driver was the operating income growth (up by RON 387.4 million or 12.5 percent on the first nine months 2008) while operating expenses decreased moderately, by RON 55.3 million or 4.2 percent on the third quarter of 2008, in the context of

continuing branch network expansion and RON depreciation. The cost-income ratio improved to 36.3 percent at the end of the period, from 42.7 percent at endSeptember 2008). Meanwhile, BCR Bank’s market share passed 22 percent on overall lending since the end of September 2008, driven by corporate loan growth. The bank says it is enjoying strong liquidity and has adapted its range of products to the current economic context. Retail lending had a stable overall market share on 2008. “While the operating result continues to be positively managed, this is not sufficient to outweigh the growth in risk costs, where we are taking a prudent approach as the economic conditions remain difficult,” said Dominic Bruynseels, BCR CEO. The group is active on the local market through BCR, BCR Banca pentru Locuinte, BCR Administrare Fond de Pensii, BCR Leasing, BCR Asset Management, BCR Securities, Anglo Romanian Bank Limited and BCR Chisinau. Anda Dragan

Hilton will add a new name to its network

Hilton will affiliate its first Double Tree unit in Romania, in Oradea, to add to Hilton-branded hotels in Bucharest and Sibiu. Hotel Calipso is owned by SIF Banat-Crisana, which invested EUR 10 million in the 147-room property. It will open next autumn. The other two local Hilton-affiliated hotels are owned by businessman George Copos (the Athenee Palace Hilton in Bucharest) and Nicolae Minea (Hilton Sibiu, the former Palace Resort and Spa Sibiu). The latest facility, a five-star unit, has 115 rooms, while the hotel in Bucharest has 242. Staff BUSINESS REVIEW / November 2 - 8, 2009


Orange Romania revenues fall by 22.9 percent in Q3


Orange has increased its customer base

Orange Romania revenues in the third quarter of the year amounted to EUR 269 million, a 22.9 percent decrease on the same period last year, when the company posted EUR 349 million. Average revenue per user was EUR 100. “Although indicators such as network traffic and the number of clients have started to increase again, revenues continue to come under the pressure generated by the deterioration of the economic context, regulations and the reduction of tariffs, as a measure to answer the

needs of residential and business clients in the period of economic recession,” said Thierry Millet, the firm’s CEO. In the first nine months of the year the mobile operator’s revenues were EUR 800 million, an 18.1 percent drop on the same period last year. “Revenues fell 5.4 percent in Europe, mainly due to the 18.1 percent decline in Romania and to regulatory measures,” said France Telecom officials. Romania was “heavily impacted by the economic downturn and strong competitive pressures,” added the sources. Nevertheless, Orange Romania posted a 4.8 percent increase in its number of customers at the end of Q3, 2009. On September 30, Orange Romania had 10,694,000 users. The company attracted 340,000 more customers in Q3, from Q2, 2009. Of the total number, 2,236,000 are broadband internet customers, a 95 percent growth on the same period of 2008. Among the most significant projects that the company has carried out recently in Romania was to reposition its portfolio of postpay offers for residential customers. Otilia Haraga

Petrom invests EUR 90 million in new gas-processing plant in Midia Oil and gas producer Petrom has completed a EUR 90 million investment in a new gas-processing plant in Midia, near Constanta. The plant was designed and built by German Linde Group with the support of subcontractors from Romania, Germany, Ukraine and Hungary. With more than twice as much capacity as the old installation, the plant can process the firm’s entire offshore gas production. “The new gas-processing plant is much more efficient than the old installation and is compliant with all applicable EU norms explicitly regarding emissions,” said Johann Pleininger, Petrom executive board member, responsible for exploration and production. The Midia plant can process up to 3.8 million cubic meters of natural gas per day with a 99 percent recovery of heavy components, allowing for an improved recovery of 340 tonnes per day BUSINESS REVIEW / November 2 - 8, 2009

of liquid natural gas products, reported Petrom. In comparison, the former gas plant was able to recover only 100 tonnes per day. In addition, the new site has its own gas-fired power generation unit with a capacity of 10 MW including a redundant 200 tonne per day steam generation capacity. This allows the factory to operate independently of any external electric power supply. Petrom is the largest Romanian oil and gas company. It exploits an estimated proven oil and gas reserves of a 0.9 billion barrel oil equivalent (boe), has an annual refining capacity of 8 million tonnes and around 550 gas stations in Romania. The company also has an international network of 269 filling stations located in Moldova, Bulgaria and Serbia. Last year, its turnover was EUR 4,552 million, and EBITDA EUR 969 million. Energy group OMV holds a 51.01 percent share in Petrom. Dana Ciuraru 5


BRIEFS REAL OPENS EUR 23 MLN HYPERMARKET IN SHOPPING MALL é Real,- Hypermarket has opened a hypermarket within the AFI Palace Cotroceni shopping mall, following an investment of EUR 23.4 million. The new store, Real's 22nd unit in Romania, and is also the first of the retailer's units to be located in a shopping mall. Real, which is part of German Metro group, posted a EUR 638 million turnover last year in Romania, almost double

Pharmaceutical products distributor Farmexpert expects to generate EUR 20 million in the next two years from its newly established collaborations. The company has recently formed a partnership with Austrian producer Kwizda Pharma in order to launch a portfolio of 14 products by 2011. “The plans have been made until 2015. In the next two years we want to have 10,000 active products compared to the current 8,000,” said Octavian Iacob, executive director of Farmexpert. The alliance is part of Kwizda's expansion strategy in Central and Eastern Europe. It involves EUR 400,000 of investments in medical marketing and promotion, with a target to reach a EUR 2 million


covers 7,500 sqm of retail area

Farmexpert signs partnership with Kwizda Pharma, aims to make EUR 20 million

Octavian Iacob, executive director of Farmexpert

turnover from the partnership in the next three years.

Farmexpert made a EUR 109 million turnover in the first six months of this year. The distribution company ranked second among pharma distributors in Romania, with an 11 percent market share, according to its own data. It is 60 percent owned by Andreae Noris Zahn AG (Anzag), with the rest of the shares in the hands of Dr Eugen Banciu. Farmexpert employees 720 people. Kwizda Pharma, part of Austrian group Kwizda, is an OTC producer which posted EUR 50 million in turnover last year, with two production units and 140 employees. In Romania, it is present through Busscher & Hoffmann GmbH. Corina Saceanu

on the previous year. AFI Palace Cotroceni was developed by AFI Europe, part of Africa Israel group. The shopping mall is opening for the public today.

LukOil Romania sees nine-month turnover halve

Sanofi Aventis starts local production of new medicine for German market

SALE OF BT AEGON PARTICIPATION FUELS HIGH Q3 PROFIT FOR BANCA TRANSILVANIA é Banca Transilvania posted a EUR 8.7 million profit in the third quarter of the year, four times higher than its result in the first LAURENTIU OBAE

half of the year. The increase was mainly due to the sale of the bank's stake in pensions fund BT Aegon, which resulted in an

LukOil is planning to increase its local investments next year

exceptional profit. The lender

Oil and gas company LukOil Romania posted a USD 939 million turnover in the first nine months of the year, almost half the figure for the same period of last year. The results were influenced by the current economic situation and by the falling price of oil on international markets. The company posted a USD 47 million pre-tax profit (EBITDA), down 23 percent on the same period of last year. According to Constantin Tampiza, LukOil Romania’s GM,

posted another record profit in the third quarter of last year, when it sold its participation in insurer Asiban. BT made a profit of EUR 11.3 million in the first nine months of the year. Its assets grew by 7 percent during this period, but its loans were up by only 1 percent. 6

the company’s investments on the local market next year will rise to USD 45 million and will go into the Petrotel refinery and local filling station network. The refinery was acquired by the Russian oil company in 1998. In the past 11 years, the company has invested more than half a billion dollars in Romania. LukOil Romania has a filling network of 310 units and ten oil product storage facilities. Dana Ciuraru

Pharmaceutical producer Sanofi Aventis, which bought producer Zentiva this year, will start producing a new medicine in Romania in 2010, to be sold only on the German market. The company said it might start making new products in Romania, using its 30 percent production capacity from the former Sicomed factory. Sanofi Aventis has also said it is planning to start exporting the Gerovital brand. The company has finished integrating Zentiva and has structured the business into four divisions, original RX, generic RX, OTC and vaccines. It has reported a 10 percent market share by value and 16 percent by sales volume, based on information from Cegedim. “The group had totals sales of RON 730 million between August 2008 and August 2009,” said company officials. Although the businesses have been integrated, Sanofi Aventis and Zentiva will continue to operate as distinct firms, as well as corporate brands within the Sanofi Aventis group, said Dan Ivan, country manager of Sanofi Aventis Romania and president of the administration board at Zentiva. Corina Saceanu BUSINESS REVIEW / November 2 - 8, 2009


Cinema City’s IMAX movie theater premieres this month

The IMAX screen is the world’s largest

Cinema City International, the largest chain of multiplex cinemas in Central and Eastern Europe, will inaugurate this month its new Samsung IMAX cinema. The movie theater is part of the megaplex Cinema City Cotroceni, which will be opened on November 20 inside AFI Palace Cotroceni. In addition to the Samsung IMAX, the movieplex comprises another 17 movie screens and three VIP screening rooms. The

BUSINESS REVIEW / November 2 - 8, 2009

IMAX screen is 26 meters high and 37 meters wide, equivalent to almost half a soccer pitch. The capacity of the theater is 398, while in total the Cotroceni megaplex has nearly 4,300 seats. In Romania, Cinema City has opened three new cinemas since October 2008, and aims to open between 20 and 25 more by the end of 2012. The next project that it will complete will be Cinema City Sun

Plaza in Bucharest, a multiplex containing 15 screening rooms. “The market is far from saturated. At the moment even Bucharest, which has the biggest appetite for film in the country, is at the ratio of approximately 1-1.2 cinema visits per capita per year, compared to other European countries where the annual average is from 2-3.5,” Corina Gonteanu, marketing manager at Cinema City Romania, told Business Review. In September 2009, Cinema City International had a chain of 66 multiplexes and a total of 609 movie theaters in six countries: Poland, the Czech Republic, Hungary, Romania, Bulgaria and Israel. Poland represents the biggest market for Cinema City, providing the firm with 45 percent of its total revenues in the first half of 2009. By contrast, Romania only contributes 2 percent, up from 1 percent in the same period last year, according to company data. In Romania the firm’s revenues in H1 amounted to EUR 2.6 million. Otilia Haraga

BRIEFS GE HEALTHCARE TARGETS LOCAL INVESTMENTS é General Electric (GE) has launched a new investment fund, Healthymagination GE, which will invest in medical technology suppliers, with Romania being one of the investment targets. The available financial assistance can cover research and development, as well as expertise in the investment activity. STUDY: THREE IN FIVE ROMANIANS BEHIND WITH MONTHLY BILLS é Around 60 percent of Romanians can't keep up with their bills and 90 percent of the Romanian population believes poverty is widespread in Romania, according to recent research published by the European Commission. Only 9 percent of Romanians say they find it easy to pay their bills and debts.





Consumer goods producer Unilever has leased 30,400 sqm in Ploiesti West Park, in one of the biggest industrial leases in Romania this year. The first industrial hall of Ploiesti West Park, some 11,000 sqm, has already been completed. Works on the next two industrial halls in the project have recently started. Expanding on a 220 ha surface, Ploiesti West Park is expected to require over EUR 750 million and create nearly 16,000 jobs. The project is being developed by Alinso

Group in a joint venture with Petrica Usurelu, founder of Piritex group. Unilever owns a factory in Ploiesti, where it has been transferring production lines from other units in the Central and Eastern European region, which have been closed in the meantime. Unilever produces detergents, deodorants and food products. Among its brands are Dero, Rexona, Dove for detergents and deodorants, and Rama, Delma, Knorr and Algida on the food side. Corina Saceanu

Stefan Gheorghiu joins developer Willbrook


ROMANIA RANKS 48TH OUT OF 104 IN PROSPERITY LEAGUE é Romania has come 48th out of 104 states in a league table of global population prosperity, between the United Arab Emirates in 47th and Jamaica in 49th. Other Eastern European countries rank higher: Slovenia in 20th position, the Czech Republic in 25th, Hungary 27th and Poland 29th. The table was compiled by the Legatum Institute, based on economic fundamentals, entrepreneurship and innovation, democratic institutions, education, healthcare, safety, governance, personal freedom and social capital. Romania received average scores for most of these, expect for personal freedom and social capital, where it underscored. Finland topped the table.

Unilever manufactures detergents, deodorants and food products

Stefan Gheorghiu, now of Willbrook

Romanian real estate profession-

al Stefan Gheorghiu is the new commercial director of developer Willbrook and will take charge of the company’s entire portfolio of products in Romania. Gheorghiu, who has previously worked as country manager for investment fund Europolis and for American developer Polimeni, had started his own consultancy company, Tegron Consulting. Willbrook is working on several projects in Romania, including office scheme Cathedral Plaza, which has stalled due to a legal wrangle with the Roman-Catholic archbishopry, residential venture Oxford Gardens, Logimax industrial project in Timisoara and mixed development Willbrook Grand in Pipera, Bucharest. Corina Saceanu


DEUTSCHE BANK TO LAUNCH LOCAL OPERATIONS NEXT YEAR é Deutsche Bank will launch services for companies in Romania next year, according to a recent announcement by Juergen Fitschen, CEO of the bank's German operations, quoted by international media. The bank had previously tried to enter the Romanian market when it took part in the bid to take over the largest local lender BCR.


BANEASA AIRPORT CANCELS DISCOUNTS FOR AIRLINES é Airlines operating out of Baneasa airport in Bucharest will have to pay higher airport taxes than those that use Otopeni airport and could even decamp to Otopeni, leaving Baneasa to serve only SMURD and Police flights, said George Mihalcea, general manager of Baneasa airport. This would impact the profits of airlines that use Baneasa, all of which are lowcost carriers. In other European states, airports located in the city charge two to four times more than those outside, Mihalcea added. He said that Baneasa had canceled the discounts it used to offer carriers, of between 4 and 30 percent.

Competition body wants notary law changed to bring down fees

Unilever leases 30,000 sqm of warehouse space in Ploiesti West Park

Notaries have attracted criticism for their hefty charges and anti-competitive practices

The Romanian Competition Council is planning to propose changes in the legislation governing notary services in the country, which would remove restrictions on the number of notaries, tariffs and advertising. The new rules should reduce the cost of notary services, which are now 14 times higher in Romania than in Germany, and four times more expensive than the European Union average, according to a study released by the council. On a EUR 100,000 real estate transaction, a Romanian buyer would pay EUR 5,000 to the estate agent and EUR 1,070 for the notary services. The fees for real estate agents put Romania fifth in the EU, while those for notary services place the country seventh among 21 EU countries which were analyzed for the report. The average real estate agent’s fee for such a deal in the EU is EUR 3,764, while for notary fees, the average is EUR 916. Such high fees indicate anti-competitive practices, believes the council. “The notary services market is one of the most crowded in Romania. The situation in our country is far worse than in the European Union,” said Bogdan Chiritoiu, president of the Competition Council. Corina Saceanu BUSINESS REVIEW / November 2 - 8, 2009


EVENTS, BUSINESS AND POLITICAL AGENDA NOVEMBER 3 é Soros Foundation Romania and Habitat for Humanity organize the

‘Ambassador's Build’ event in Baltesti, Prahova County.

NOVEMBER 3 – NOVEMBER 4 é Finance Trainer International organizes the Romanian Finance Sympo-

sium at the JW Marriott Hotel. By invitation only.

NOVEMBER 4 é Business Review organizes the French Business Forum at the Intercon-

tinental Hotel. For more details go to

NOVEMBER 4 – NOVEMBER 6 é The European Forum on Intermodal Passenger Travel (ILS) and the Ro-

manian Union of Public Transport (URTP) organize the second European LINK conference on passenger intermodality in Europe at Howard Johnson Grand Plaza. By invitation only.

NOVEMBER 5 é The Embassy of Italy in Romania, Halewood International Ltd and

Marchesi Antinori SRL, organize a press conference on the Romanian and Italian wine industry.

NOVEMBER 10 é Business Review organizes the ‘Investing During a Downturn’ event in

partnership with Tuca Zbarcea & Asociatii and Ernst & Young at the InterContinental Hotel. For more information go to

NOVEMBER 10 é TotalSoft organizes a press conference to mark its 15th anniversary at

Hotel Radisson SAS. BUSINESS REVIEW / November 2 - 8, 2009

WHO’S ANDREAS HADJIDAMIANOU has been appointed partner within the assurance practice of Ernst & Young Romania. He has 13 years of experience in assurance. Hadjidamianou has been involved in IPOs for the admission of companies to the Athens, London and New York Stock Exchanges, and has participated in numerous conversion projects of financial statements from local standards to IFRS for large groups of companies. He has experience in special transaction projects for mergers and acquisitions and has been in charge of numerous auditing teams. Hadjidamianou is a member of the Institute of Chartered Accountants in England and Wales and also the Institute of Certified Public Accountants of Cyprus. CHRISTIANA PANAYIDOU has been appointed partner within the assurance practice of Ernst & Young Romania. She has 13 years of professional experience having worked as an executive in charge of audit teams serving large multinational corporations in the utilities, telecommunications and manufacturing industries. Panyidou has a specialized focus on International Financial Reporting Standards (IFRS). She holds a BSc in accounting and financial analysis from the University of Warwick and is a chartered accountant with the Institute of Chartered Accountants in England and Wales. CHRIS COLLINS has been appointed chief operating officer of Wizz Air. He has

NEWS extensive professional experience in the air transportation industry, having held different management positions at People Express, Continental Airlines and their subsidiaries for 15 years. American Collins joined JetBlue in 1998 as senior operations manager, a position he held for seven years, being one of the company’s first employees. He later worked for Frontier Airlines as chief operating officer for four years. RINO TIZZANINI is the new general manager of CDE R Interex. He has taken over this position from Stanislas Mainfroy, whose term came to an end this summer and who has decided to dedicate himself to other professional projects. Tizzanini has previously worked in the Romanian retail industry for nine years, serving as general manager at companies such as Spar and Profi. His main responsibilities in this position will cover the management and development of the company’s national retail network. SERGIU GANSCA is the new sales and marketing manager for Romania at Mio Technology. Over the last ten years he has amassed extensive professional experience in sales, having previously held the position of sales director at AroBS Transilvania Software. In his new role Gansca will be directly involved in further increasing the company’s brand awareness and developing the local market for car navigation systems. He holds a bachelor’s degree in Economic Sciences.

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

Alcatel says it will transfer Romanian employees to partner firms, not fire them Telecommunications company Alcatel-Lucent will transfer some of its employees from Romania to other companies it has set up with partner firms, and will not fire any of its local staff, international media said last week. The move will be part of a program of outsourcing services, such

as marketing and IT. Alcatel-Lucent said last week it would let go of 564 employees in Romania. The firm was planning to give up or outsource 4,500 jobs in Europe this year and in 2010, out of a total of 26,000. Alcatel-Lucent currently employs 1,600 people in Romania. ■ 9


Credit crunch bites into small businesses Lending to small and medium-sized enterprises (SMEs) has dried up somewhat this year, as it has across the rest of the Romanian banking scene. Lenders have continued to grant loans to small borrowers, but at lower levels than in recent years. To meet the challenge, banks are tailoring their products to the gloomy climate and exercising more STOCKEXCHANGE

caution over whom they lend their cash to. SMEs find it harder to secure financing due to the volatility of their operations

Anda Dragan All companies active on the local market have felt intensely the manifest and dramatic consequences of the global credit crunch and subsequent recession. A significant shrinking of turnovers, higher levels of temporary or final unemployment, difficulties in collecting money and the drying up of cashflows are some of the negative effects that SMEs are feeling at the moment. After many years of high growth rates, these companies have seen their outlets take a hit, and have been forced to adapt their business strategies to the current climate. SME managers have also had to adjust their planned investment projects, to go back to the drawing board with their strategies and to take cost-cutting measures. Moreover, cash-flow difficulties have had another negative impact: lenders have seen their customers’ late payments increasing from month to month. With many invest10

ment projects having been canceled or postponed, lending activity has decreased too. “Many SMEs didn’t have enough money at the beginning of the crisis, and they didn’t manage to impose new payments terms and collections for their customers,” said Roxana Hidan, deputy manager of the SME product management division at OTP Bank Romania. The future isn’t much brighter, at least for SMEs. According to a study conducted by the National Union of Romanian Employers (UNPR), Romanian businesspeople are pessimistic about the possible recovery of the local economy in 2010. Some 37 percent of respondents told the researchers that their turnover had dropped by over 20 percent this year on 2008, while 27 percent reported that this financial indicator was down by around 20 percent. Some 19 percent said that their turnover had fallen by 10 percent this year on 2008 while 17 per-

cent of them declared a 5 percent decrease. In this context, cost-cutting measures are one of the main objectives for SMEs. According to a study conducted by Ka&Te Associates, an IT consulting and services firm, 60 percent of small and medium companies in Bucharest now outsource their IT infrastructure and administration to another firm, in order to cut costs. The study was conducted on 200 SMEs. The significant reduction of SME activity this year has also influenced their capacity to secure bank financing. At the same time, lenders have become more cautious when granting loans, whether to a company or an individual borrower. “Fewer entrepreneurs have been interested in signing a new loan contract this year, and lenders have also been more prudent over their financing requests,” confirmed representatives of Banca Transilvania (BT).

Elsewhere, Dragos Cabat, managing partner at financial consultancy firm Financial View, admitted that lending to SMEs was blocked in the first part of this year. “We noticed a little revival in the last few months, but now SMEs are able to access lower financing than in the past, at the same level of guarantees requested by the banks,” said Cabat. SMEs are among the most high-risk borrowers, based on their weak financial structure, reduced access to financing and strong competition on some of their markets. As for the total value of new loan contracts signed by SMEs this year, Cabat said that it had been at least 85 percent lower than in 2008, while the loan balance had shrunk by about 50-70 percent. According to Cabat, the local credit crunch was down to banks’ more limited access to refinancing sources and the increased importance of the state as a banking customer: lenders have become more interested in financing the state due to its higher profitability. “Besides, banks have been more cautious over lending to small companies with volatile incomes and lower real estate guarantees,” added Cabat. Meanwhile, BT representatives said that the bank’s volume of loan contracts signed in 2009 was comparable to that posted in 2008. “This year we registered a marginal increase in our lending volume to SMEs. Our annual increase rate has been about 60-70 percent in recent years, except 2008,” they added. As for OTP’s loans evolution in 2009, Huidan also said that it was comparable to last year. According to Lucian Cojocaru, executive manager of the network’s commercial area at BRD-Groupe Societe Generale, the SME sector is currently suffering from both the economic downturn and its inherent structural weaknesses. “Generally we are trying to adapt our offer to each company, which means paying more attention to details and analysis. No SME customer is rejected for financing by default,” said Cojocaru.

DIFFERENT STRATEGIES FOR DIFFERENT LENDERS Lenders’ strategies for SME customers are different from one player to another, but they all have someBUSINESS REVIEW / November 2 - 8, 2009


thing in common: caution and adaptation to the current economic conditions. BT for example chose to bring onto the market its Ready Guaranteed Loan (“Creditul Gata Garantat”), in partnership with the National SME Credit Guarantee Fund (FNGCIMM). Bank representatives said they expected to double the number of this type of loan to over 3,500 by the end of the year. “We have signed almost 2,000 loan contracts so far. The launch of the Ready Guaranteed Loan has led to an increase in other credits from our portfolio,” they added. As part of the lender’s strategy for this year, Huidan said that OTP had set up a restructuring plan for its loans but continued to lend to those SMEs that were able to adapt to the current market conditions and come up with valid projects. “We have signed loan contracts with both existing customers and the new ones,” added Huidan. Some banks are counting on launching new products for SMEs, with Raiffeisen Bank being one of



Dragos Cabat, managing partner at Financial View

Raiffeisen Bank is launching new products for its SME customers

them. The lender recently launched its nano overdraft, a credit line dedicated to SMEs with less than EUR 1 million in turnover (RON equivalent) that have not previously borrowed from the bank. Would-be borrowers must have had an average of over EUR 5,000 pass through their account each month throughout this year. The nano overdraft is a small credit line that doesn’t require real guarantees and has no interest or fixed monthly fee charged in relation to the value of the credit. “This product is dedicated to those highly dynamic SMEs which have put significant sums through our accounts,” said Monica Udrescu, manager of the SME division at Raiffeisen Bank.


remain the main driving force for capitalist economies, so a recovery in their financing is expected. But he hopes that the market will not see financing for speculative purposes sooner, and that lenders will be more responsible regarding their exposure to risk. The current crisis will distinguish the sound SMEs from the others and will force the survivors to become more professional in the fi-

nancial, marketing and sales areas. “Lending will bounce back along with the economy’s recovery, but it will be a gradual recovery,” predicted Cojocaru. As for the evolution of lending to SMEs, representatives of BT expect the next quarter to be a difficult one and predict an increase only after that period. The lender intends to launch some loans adapted to the new conditions on the market next year. ■


Things are getting better for SMEs in terms of lending, bankers say. The first signs of recovery have been visible since September. “I just hope this trend will be a sustainable one on the medium term,” said Cabat. According to him, SMEs will

SMEs in figures é 54 percent have no delays in loans payment é 26 percent will restructure their staff in 2010 é 29 percent will halt their investments next year é 10 percent will cut their marketing budgets é 28 percent will not take negative measures in 2010 é 19 percent will hire people next year é 30 percent will make investments in 2010 Data extracted from a study conducted by National Union of Romanian Employers (UNPR) between October 19 and October 23, on 2,000 managers of SMEs with fewer than 100 employees BUSINESS REVIEW / November 2 - 8, 2009



Microsoft goes in hard with Windows 7 target in IT at world level. Here, there are the Microsoft competence center, Oracle, IBM, Hewlett Packard, Alcatel and Siemens. Nearly all large companies have competence support centers or call centers here. Let us not forget that 10 percent of the country’s GDP goes into IT&C. Consequently, of course, the adoption of Windows 7 is also due to the maturity of the IT community in Romania which is highly appreciated, mature and technically savvy.

Otilia Haraga Tell me about your hiring process. Microsoft Romania has 313 employees, split into three teams: sales and marketing, the global support center, and the company Ciao from Timisoara which Microsoft acquired. The biggest one is at the global support center, where there are probably around 160-170 employees. I think over the last 12 months we have increased the number of employees at the center by 20-25 percent. Our estimations for the next 12 months are along the same lines, between 10 and 20, maybe even a 30 percent growth in the number of employees. The center offers technical expertise and support to all French- and German-speaking countries. Around 20-30 percent of the employees at this center are not Romanian. They are from Africa, the United States and Western Europe. We recruit them in various ways, starting from the HR department to certain personnel recruitment partner-companies. We participate in many job fairs and also work with sites who suggest candidates to us. What are the trends on the market and how has it been hit by the crisis? From our point of view, the IT market in Romania was one of the worst affected. Statistics showed that the demand for labor, which was traditionally 12


CALIN TATOMIR, GM of Microsoft Romania, says his hardest task at the company has been changing deep-rooted mentalities, sustained by Romania’s economic growth, into adaptable and flexible outlooks. Microsoft is in a busy period locally: it will launch Windows 7 on November 5 and move to a new HQ at the beginning of 2010. The firm works with over 3,500 partners in Romania, and the GM says he has no information about Microsoft’s mooted software lab in Craiova. very high in Romania in IT, had decreased by 60 percent. But it is clear the IT market has been hit in CEE. As far as Romania is concerned (and I would also add Poland), it is on the list of countries that have very good prospects for 2010. All the statistics that I’ve seen so far show that Romania and Poland are the only two countries with a chance to grow slightly in 2010. Firstly, because of the size of the population, they represent rather good markets for those who wish to invest in this region. The forecasts show something like 0.5 percent growth in 2010, maybe a little more. Are you tempted to work on public projects during this unstable period? Microsoft Romania does not bid directly for projects with the state; we are represented by our partners. During the last fiscal year (ended on June 30, 2009), the results were somewhat disappointing in the public sector, precisely because these projects that we were counting on did not happen. I think no more than 20 percent of our total revenues come from the public sector. I would say that 30-35 percent of the turnover comes from the residential sector and 25 percent from SMEs. But it is a rather hazy appreciation, since these sectors can overlap. Are you moving to a new HQ? Some time at the end of January or

the beginning of February, we will move to a new headquarters in one of the towers in Free Press Square (ed. note: City Gate). We have a telesales team which is in a third location in Bucharest and we are trying to channel our energy into one single area. The telesales center will remain where it is for now because it covers three stories and has a dedicated purpose. But in the new building there will probably be some space left and, if we can, we will try to make this move. The space is rented. How do you expect Windows 7 to perform in comparison with Vista? In Romania alone, over the last few months, over 100,000 Windows 7 have been downloaded pre-launch. I think that here, Vista makes up 20 percent of the operating systems market. I still maintain my aim that, in at most nine months, the market share of Windows 7 will surpass that of Windows Vista. It’s an aggressive vision. We hope that at the end of the fiscal year (in June 2010), at least 70-80 percent of computers will have pre-installed Windows. How does Romania rank in terms of the adoption rate of Windows 7? Statistics say that in first place for the degree of adoption of Windows 7 is one of the Baltic countries, and that Romania is second. Romania is very visible

What are the most popular operating systems on the local market now? At this moment, XP is definitely above Vista for the degree of use. If we consider reported use (and we know the piracy rate is 66 percent in Romania), XP is probably equal to Vista. But taking the real numbers, XP by far surpasses Vista. So, I am only speculating, but if Vista makes up around 20 percent, XP is probably somewhere around 75 percent. The remaining 5 percent is represented by other operating systems which are either very old Microsoft systems or ones not created by Microsoft. Anyway, even though we do not have clear statistics, we think our market share is definitely above 90 percent here. Your 2008 turnover was reported as EUR 30 million. Can you confirm it? We cannot disclose the local results but the real figure is actually much higher and includes the sums made by all Microsoft partners who make orders and pay directly in Ireland. Microsoft’s results at global level amounted to USD 12.9 billion in the first quarter. Many of the investments that are made are costs for the Microsoft Corporation but the money comes from abroad, not from the Romanian branch, which is why it is hard to give such a precise answer. How was this year for Microsoft Romania, compared to 2008? We will probably not reach the level of 2008 any time soon. We already said at the end of the fiscal year (June 2009), we had had a 12 percent decrease in the 2009 turnover compared to the 2008 figure. The evolution that Microsoft Romania will have in the next fiscal year (July 1, 2009-June 30, 2010) will probably not compensate for the 12 percent decrease. So 2010 will probably not return to the level of 2008. We would like to get there but I think we have a realistic budget and fiscal plan and at this point we are on target. BUSINESS REVIEW / November 2 - 8, 2009


ENTREPRENEUR TAKES SPECIALIZED ROUTE With many years of experience as a lawyer at multinationals, IULIAN PATRASCANU, managing partner at Fine Law – Patrascanu and Associates, decided to stop working for somebody else in 2007. Since then he has set up his own business: a law firm. He is expecting a turnover of over EUR 400,000 this year from his enterprise and intends to buck the trend by keeping it highly specialized. Anda Dragan Iulian Patrascanu is an entreprenuerially-minded professional who decided to set up his own business instead of being an employee. In 2007 he left the associate law firm of Ernst & Young, where he held a senior manager position. He also declined to work as a legal manager at one of the multinationals active in Romania at that time, although he was close to signing a work contract. But he gave up all of that to take a big step forward: becoming his own boss. Although he admits that he never dreamed of running his own law firm, Patrascanu decided to set up just such a business: Fine Law – Patrascanu and Associates. The firm is specialized in legal and financial consulting services such as employment, mergers & acquisitions, all forms of liquidation, due diligence, regulatory and compliance law, plus intellectual property for microfirms and medium-sized Romanian enterprises. But its portfolio also includes multinationals active in the soft drink segment, business-process outsourcing companies and investment funds. Fine Law is also a member of the Law Firm Network, an international network that includes the legal firms of the Magic Circle. “2007 was the beginning of my entrepreneurial experience. Although I was very close to becoming the legal manager of a multinational, I decided BUSINESS REVIEW / November 2 - 8, 2009

Iulian Patrascanu gave up the relative security of life as an employee to set up his own firm

to start a business, as the result of a proposal from one of the large customers of Ernst & Young I worked for. He asked me to help him in a significant project,” remembers Patrascanu. After mulling the two proposals over, he decided that entrepreneurship was just a matter of hard work and tenacity and it was worth taking a chance. The entrepreneur adds that both his self-esteem and an objective evaluation of his experience combined with the favourable context and being the ideal age persuaded him to take the plunge. Patrascanu faced some teething troubles, as many entrepreneurs do. Despite this, his motto was to set up a business in the most responsible way. “I can’t blame the craziness of the beginning, because I truly believe that entrepreneurship is a question of responsibility, both to your customers and your team,” says the managing partner. He adds that his first months as entrepreneur were very difficult, as he bore the burden by himself. “I had to do everything for the business to make sure it worked out well.” But one of the

key factors in his success was to pay attention to his customers’ feedback on the company’s services. Although professional expertise is one of the most important aspects in setting up a business, it doesn’t guarantee success. “You can communicate better if you are helped by marketing tools. But it is all about years of experience and managed projects, in the end,” says Patrascanu. In his opinion, one of the things that give a consultancy business the edge is the unique selling point that distinguishes the firm from other consultants. “I am a committed supporter of customized services. The high quality of work and services, added value and customized services are the main ingredients of a successful consultancy business,” says the lawyer. He says that consultants are selling services whose added value is visible on the medium and long term. Entrepreneurship is a unique experience that teaches many business lessons. As Patrascanu says, he learned to explain to his customers exactly where their business would be at the end of

the consultancy project. “You can lose a customer if you don’t show them what you have achieved in a simple and objective manner.” When it comes to the importance of personal branding for a business consultant, Patrascanu says that it counts for 100 percent at the beginning. “When you start a business the brand means professionalism, seriousness and awareness of your potential customers,” adds the entrepreneur. In terms of strategy, Patrascanu doesn’t intend to grow the turnover in the first stage of development. He sees potential rather than a tough time in the current economic turbulence. “The crisis is a big opportunity for us because there is no segmentation on the legal services market in small, medium and large law firms. The quality of consulting services and the flexibility of fees are primary now,” says Patrascanu. According to the lawyer, the quality of its services combined with the value of its fees are the main competitive advantages that Fine Law has over larger law firms. “These firms have grown a great deal in a short time so they have needed to recruit many weaker consultants. Besides, they have high operational costs so they can’t afford to charge low fees at present,” says Patrascanu. He adds that both SMEs and Romanian and multinational companies could not afford to pay higher fees to their consultants this year. And the situation will stay the same in the months to come. “In such a context, middle-sized players, with a higher level of expertise, will also be able to target customers such as investment funds or multinational companies.” As for the future, Patrascanu intends to keep his firm as a specialized business, despite the current trend of law firms offering complete and general services.

Fine Law – Patrascanu and Associates é 2008 turnover: EUR 295,000 é 2009 estimated turnover: EUR 425,000 é Number of employees: 6 é Initial investment: EUR 75,000 é Total estimated investment for future developments: EUR 175,000


PROPERTY Correct valuation, transparency and double fees come under real estate professional scrutiny

Taking the market pulse at Realty 1

According to property professionals at Business Review’s Realty forum, real estate brokers are used to clients requesting a certain valuation figure to match their financing needs, because the valuations are essential to secure bank loans. But the frequency has started to increase in the last couple of years. “We have always had clients asking for a higher or a lower valuation figure. Three years ago, there was a clear distinction between such clients and the rest,” said Mihai Grigore, chief operating officer at Colliers International. But now brokers are seeing more clients looking to cut costs at the expense of quality. “We lost a valuation project to a company that not long ago used to do transactions with old residential units, which had no experience in valuation,” said Grigore. “Too many people have got a pat on the back from valuers in the past, but the valuer must criticize the project if necessary, and say if the value has gone down. Many valuers have been told by their clients that they need a certain figure to get their loan, which shouldn’t happen anymore,” commented Andrew Pierson, MRICS and country manager with King Sturge in Bulgaria. When it comes to ethics in local real estate, Tim Wilkinson, joint man-



aging director of DTZ Echinox, said there were few opportunities to learn such a moral code in Romania. “The main problem of unethical behavior in the local market has stemmed from a combination of the lack of available real estate education and short-term greed to close transactions in any way possible. Such behavior tends to come from a minority but impacts the majority by dragging the property industry’s image down,” Wilkinson remarked. Despite the competition between real estate agencies on the market, they should share certain information and even research on occasions. “Much about ethics is based on greater transparency,” said Wilkinson. Sometimes agencies give different market values, which confuses the client, who will choose to do what he thinks best, said Radu Lucianu, managing director of CBRE Eurisko Romania. As for the phenomenon of double fees (where the agency gets a fee both from the seller or landlord and from the buyer or tenant), which still goes on in Romania, real estate brokers say this practice was common in the first days of real estate activity in the country. “We also did it in the early years, but CBRE doesn’t do it,” confirmed Lucianu. Staff

Banks’ distressed asset sell-off would be catastrophic for market, say consultants 4


■ 1.L to R: Catalin Hanu, CTP Invest; Michele Nusco, Nusco Group; Andrei Vacaru; JLL, Bill Avery , Business Review; Cristina Rosca, Real Time; Dan Ioan Popp, Impact ■ 2. L to R: Tim Wilkinson, DTZ; Andrew Pierson, King Sturge Bulgaria; Speranta Munteanu, ANEVAR; Nicoleta Radu, Zanti Exclusive; Mihai Grigore, Colliers; Radu Lucianu, CBRE Eurisko ■ 3. L to R: Nicoleta Radu, Doina Badea, King Sturge Romania; Vlad Revnic, MT&T Property Management, Brigitte Schmitt, DTZ Echinox; Gisj Klomp, ING RE; Yvonne Toader, Gran Via; Raluca Nastase, Biris Goran; Vlad Constantinescu, Biris Goran; Stefan Gheorghiu, Willbrook ■ 4. The event gathered an audience of 150 14

The local real estate market has yet to see developers and owners restructuring their products or any distressed sales – for the time being. “We haven’t seen any distressed assets on the Romanian market yet, nor foreclosures from banks,” said Victor Constantinescu, partner at Biris Goran law firm. The foreclosure process can last between four and six months, if not more, he added. “Some companies might consider the option of insolvency to get the bank off their back. This buys the developer time to restructure the project,” Constantinescu said. Those who hold distressed assets are not doing anything for now, just waiting to get a value for their property, and this will have damaging repercussions next year, commented Raluca Nastase, partner at Biris Goran. “We

will see a dramatic fall next year. On the residential side, if the banks lower their interest rates, there may still be hope for the sector,” she added. Banks are reluctant to disclose how many now distressed assets they have financed for fear of harming their reputations. A massive sale of these assets from banks’ portfolios would be a recipe for disaster for the market, if not well handled, agreed participants at Business Review’s Realty event last week. Local bankers are keen to start selling distressed assets, but regional or headquarter heads of those lenders, many of whom have just been appointed to their positions, are afraid to make the decisions yet, added Ulrik Rasmussen of Pedersen & Partners. Corina Saceanu BUSINESS REVIEW / November 2 - 8, 2009


CTP Invest starts solar panel project, draws on new financing

Industrial developer CTP Invest has started to work on a project installing solar panels on its industrial facilities across Central and Eastern Europe. The project was financed with a EUR 400 million loan from the European Bank of Reconstruction and Development (EBRD), said Catalin Hanu, business development manager at the firm. “The project began this year with an industrial park in the Czech Republic and will continue to 18 of CTP Invest’s 36 parks in the region,” said Hanu at Business Review’s Realty forum last



Catalin Hanu, business development manager at CTP Invest

week. The developer had previously planned to start an initial public offering (IPO) in order to finance its expansion, but has now postponed its plans due to the unfavorable situation on the financial markets, said the manager. “We have had cash-flow difficulties and delays in payments to contractors, so the situation was delicate towards the end of last year,” added Hanu. But as the developer had previously borrowed EUR 200 million from various banks, it went back to get another loan, which it secured from Erste Bank, for around EUR 146 million, in January this year. “This was the turning point for us. We then started to deliver our projects and managed to get new financing which was not possible before, when projects were not yet completed,” said Hanu. “We haven’t drawn all the available money yet.”CTP Invest owns plots of land in several Romanian cities, where it intends to build a chain of logistics projects. One of the projects will be in Bors, in Bihor county, another one in Madaras, another is planned for Pitesti, and a fourth for Turda. Corina Saceanu

ING RE homes in on Bucharest, has trouble selling Romania to shareholders

Gisj Klomp, managing director of ING RE

Institutional investor ING Real Estate, which owns a retail property in Iasi, has realized that secondary cities have smaller pools of potential customers and is currently looking at retail projects in Bucharest alone. “In retail it is still pretty bad, but we ex-

pect it to bottom out next year. We have learned the lesson that secondary cities have small catchment areas, so we’re looking at Bucharest for retail investments,” said Gisj Klomp, managing director of ING Real Estate. “It is difficult to sell Romania to our shareholders nowadays. The country has an unattractive risk profile. Our investors don’t know what the right price for properties here is, and if they decide on a certain price, they are not sure whether they will get it or not,” added Klomp. As for existing projects which will need to be restructured, Klomp commented, “It is difficult to turn around a project. If the bank forces you to change a project, it will happen; otherwise, it’s hard.” ING Real Estate owns Felicia Shopping Center in Iasi, a project which it bought in 2007 for around EUR 40 million. Corina Saceanu

Retailers seek rent reductions instead of better marketing, consultant says Retailers that have opened units in existing retail projects are putting pressure on developers to offer them lower rents and other types of benefits, despite some of them not facing financial difficulties. “Some retailers really have problems, while others are just trying to take advantage of the situation and press for better conditions,” said Andrei Vacaru, retail consultant at JLL Romania. Retailers are pushing for benefits such as a year rent-free, but only developers in a distressed situation themselves would offer such benefits, he went on. While most owners are open to helping retailers, those in a better market position are reluctant to give big rent reductions. “Without stable rents, it is difficult for developers to continue their activity,” said the consultant. “Retailers are rushing to ask for rent reductions, although sometimes they should instead seek better marketBUSINESS REVIEW / November 2 - 8, 2009

ing for their project, which would help them improve their sales.” Retailers are nowadays less willing to provide the same guarantees to developers as they did before. “Tenants are asking for turnover rents nowadays,” said Vacaru. This impacts developers, as the retailers’ sales are at lows. However, a developer needs a much higher level of pre-leases in order to secure bank financing nowadays than in the past, he added. Although companies have announced that around 100 retail projects will be constructed across Romania in the next couple of years, only a few of them are actually being built. Moreover, “this year almost no new development projects have been announced. We have seen developers leaving the country or simply stopping investments,” Vacaru observed. Corina Saceanu 15


Recession drives car sales into the ground The government’s car replacement program was intended to boost the sales of importers and producers of mid-range models, but ended up serving as a life vest for a market that fell to 102,000 sold units – less than half last year’s results over the same period. It is clear that market players were losing the sales battle as they strove to deal with the recession and implement cost-cutting measures. For next year, importers and producers told Business Review that they have already set their sales strategies: to adapt their ranges to customers’ needs and purchasing power, to make advantageous financing available and to launch new models. Dana Ciuraru The government’s car replacement program has been a breath of fresh air for the major players on the local auto market in a period during which the recession has suffocated sales in this sector. Proof that local car sales are in freefall comes from the Association of Automobile Producers and Importers (APIA), which reveals that 102,000 units were sold in the first nine months of this year, less than half last year’s figure for the same period. But car market representatives say that the car replacement scheme has boosted this year’s business. “About 25 percent of our sales in the first nine months of the year were made through the renewal program. We sold 20,144 cars during this period, compared with 20,042 units sold in January-September 2008,” Vlad Rusu, Skoda brand 16

more efficiently, from using media channels with higher success rates to a more sensible use of company cars.” Meanwhile, the Dacia representative told BR that the main measure the carmaker had taken was to adjust to commercial demand, implement technical lay-off periods from November 2008 to January of this year, maintain stocks at an appropriate level and freeze wages. “At the same time, some Dacia investments that were not priorities for the current year have been halted and expenses were also limited,” said Sepciu.


Breakdown: the car market has undergone a massive decline during the recession

manager at Porsche Romania, told Business Review. Similarly, Dacia officials told BR that the government program has served as a stimulus for local sales. “The company is the only player on the local car market which has used up its entire quota allocated through the car replacement scheme. This program played an important role in underpinning Dacia’s sales in Romania,” said Silviu Sepciu, head of media relations at Dacia. In this poor economic climate, Dacia remains top of the list of companies by car sales, having shifted 33,509 vehicles in the first nine months of this year, although the number represents less than half the carmaker’s sales during the same period of last year. Dacia’s positive results have been heavily influenced by the car replacement programs rolled out in France and Germany this year, the main export markets for Dacia. Whether the new administration continues the local car replacement scheme is of concern to all market players. “If the government decides not to run this program next year, the local car market will definitely feel the effects. All importers would

report ongoing falls in sales,” Herbert Stein, AutoItalia Group president, told BR.



During these tough times, imported car sales have held up best on the more affordable segments. “For AutoItalia Group, sales have been concentrated around the price of EUR 11,000 including VAT,” said Stein. The group sold 5,528 cars in the first nine months of this year, down 60 percent on the same period of 2008. Skoda’s brand manager added, “For the small class, sales have clustered around EUR 10,000 including VAT, rising to EUR 13,000-16,000 including VAT for compact cars.” Importers have had to make some big changes to deal with the recession. “We have rapidly ‘cleaned’ the car stocks since the beginning of the year, in order to bring to the market offers adjusted to the current economic climate. This means car models configured with less equipment, focusing more on safety, coupled with accessible financing offers,” said Rusu. “We haven’t cut costs, but we have spent


In order to attract new customers next year, AutoItalia is betting on product variety. “For Fiat alone we have ten models we’ll offer to potential buyers. We will also launch the new Punto Evo and a new engine series. Furthermore, we recently opened a new integrated auto complex in Bucharest in order to have broader coverage in the capital,” said the AutoItalia Group president. According to him, the company has invested about EUR 13 million in expanding its dealership network this year. Skoda, meanwhile, is planning a company first: to increase its customer base in 2010 by providing simpler financing products. “We will attract customers next year by continuing to sell car models with equipment appropriate to our customers’ demands and to ensure the availability of financing. Regarding new models, we will launch the Combi version of our Superb model and also Fabia and Roomster redesigns,” said Rusu. “We have expanded the dealership network with three new partners this year, while next year we plan to open two new dealerships in the country.” Dacia is also bringing out new products. “Next year we are launching our brand’s first SUV. At the same time we shall continue to apply the pricing policy which makes Dacia the most accessible brand on the market,” said Sepciu. The most optimistic market players expect the car market to stay at the same level registered so far this year, far from the sky-rocking results enjoyed before the recession hit. BUSINESS REVIEW / November 2 - 8, 2009


Local market learns to love lobbying customers, your business will be profitable. But it is hard to attract new customers in such a context. The market is underdeveloped; people are wary of this activity and think they have expertise in everything. Besides, not all multinationals active in Romania have their own public affairs corporate culture. But the services sector is more profitable than other ones, such as manufacturing, for example.

LAURA FLOREA, managing partner at Point Public Affairs, took her first foray into the world of public affairs in 1995. At that time, the concept was just beginning to become established. Fourteen years later, the Romanian public affairs market is still emerging and needs fiveseven years to close the gap with other more developed markets, predicts the partner. Anda Dragan How has the Romanian public affairs market changed since you entered it? The Romanian public affairs market, as a self-contained one, has slowly evolved since 1995. Companies, NGOs, civil society and social partners have rolled out more or less public affairs and lobby activities during this time, but without using those terms. Specialized public affairs agencies came into existence later on. I started my career in public affairs in a specialized agency that was the first player on the market and, for a long time, the only one. But the local public affairs market has really begun to emerge in the last three-four years and more significantly since Romania’s EU accession. Romanian institutions’ need to interact with European ones and other players’ intention to enter onto the local market were among the main reasons for the development of the local sector. How would you characterize the market? There is no doubt that it is an emerging one, and there is plenty of space for future development. Poland, Hungary and the Czech Republic have more developed marBUSINESS REVIEW / November 2 - 8, 2009

kets than ours. There are only fivesix specialized public affairs agencies in Romania, and they are still small. But I think that the gap between Romania and other countries will be closed in the next five-seven years, owing to Europe’s tangible and significant interest in Romania and the country’s size (it is ranked seventh in Europe for population and area). What is the value of the local public affairs market? The Romanian lobbying and public affairs market was worth about EUR 50-70 million last year, according to our estimations. This figure includes public affairs and lobby agencies’ turnovers, sums resulting from public affairs activities conducted by some PR agencies, companies’ costs for public affairs activities and lawyers’ returns generated by such projects. Turnovers of specialized agencies represent just a small percentage of this total. Besides, we also took into consideration the 50 biggest companies in Romania that carried out public affairs activities and budgeted for them in their financial reports. What kind of customers do you have? Our customer portfolio includes companies, business and professional associations, and NGOs – all

those stakeholders that need or intend to lobby for public policies and want to intervene with public authorities or to promote their cause to them. How would you characterize public affairs as a business model? Do companies need more help from public affairs agencies now than ever? Companies need lobbying rather than public affairs services. As a business, I haven’t seen a larger development this year than in 2008. Besides, our agency has only been active on the market for two years, so it is to be expected that we would post a growth in activity in 2009. Is a public affairs company more difficult to run than other businesses that focus on providing professional services? I think that a public affairs business is the most difficult one in the professional services businesses category, because it is multidisciplinary. We need expertise in communication, law, political analysis and sociology. It is hard to find all of these skills and put them together. Plus, we have to be creative no matter how arid this field is. How profitable is such a company on the local market? As long as you are good and get

What added value do public affairs agencies bring to a company? Analysis and research are the essential base of our activity. We monitor in a specialized way the draft laws and conduct political analyses, which is the first added value. As for lobbying, it is evident that it is hard for a company to makes it voice heard in the business community. Lobbying refers to a whole industry interest rather than to a single company one and it is conducted through business organizations and professional associations. The agency’s role is to lobby, supported by professional and specific mechanisms. Companies may run public affairs activities internally, but it is more expensive than to outsource it to a specialized agency. What is the difference between public affairs and lobbying? Public affairs is about promoting an industry to the public authorities, while lobbying is more specialized and refers both to influencing public policies and legislative changes. What are the most common mistakes in lobbying? The first and most common mistake is not to monitor the legislative activity of state authorities such as parliament, government, ministries and European institutions. If lobbyists don’t do this, companies are over a barrel and have no idea what happened. Many people think that daily monitoring is a waste of time. Another frequent mistake is if an organization says from the very beginning: “No! We don’t want this, we don’t agree with it and we’re kicking up a row!” No one will succeed that way. You have to come up with a solution instead. Last but not least, many people currently don’t bone up on an issue. 17


French bon appetit for Romania continues despite crisis Real estate, construction,

around EUR 100 million, which includes its investment in the future SUV Dacia, a new model range scheduled for launch in 2010. The dramatic decline of the Romanian car market was one of the major obstacles for Dacia this year, but it has managed to partly overcome the situation “through its success on export markets, especially on the Western European markets,” adds Ion. Another problem which this time would require some state spending is that of infrastructure. “One of the most important things that would help the activity of a large exporter like Dacia is the development of the transport infrastructure – roads, motorways and the development of the Constanta port facilities,” says the director.

consumption and banking haven’t had their best year in Romania, and French firms working in these areas have taken various measures to keep up with developments on a market in a downturn. But while some have delayed investment plans, others have in fact started new projects in sectors like energy. It was also a good time for companies working in


outsourcing and auditing to consolidate their business and gain some market share. Business Review STOCKEXCHANGE

looks at how 2009 has been for the main French investors in Romania. Corina Saceanu Romania’s EUR 6,300 GDP per inhabitant places the country at the other end of the spectrum from France, with its figure of EUR 30,400. But the analysis of several economic development indicators such as the GDP per capita has shown French companies that there is plenty of room for growth for Romania, which translates into business opportunities. At the end of last year, French investments in Romania reached a total stock of more than EUR 7 billion, putting France third among countries of origin for foreign investments in Romania, according to data from the Economic Mission of 18

France ranks third among the main sources of foreign capital to Romania

the French Embassy in Romania. Last year alone, Romania had a EUR 9.2 billion flow of foreign direct investments, while this year the amount is likely to be around a mere EUR 3.5 billion. So a steep decrease in FDI will be reported by year-end, and although French companies are among the largest foreign investors in Romania, their investments in the country are following the general downwards trend. The economic slowdown has been also visible in the trade volumes between Romania and France this year. While bilateral trade had been increasing constantly year-onyear in the last three years, with a recent 8.8 percent increase in Romanian-French trade in 2008 on the

previous year, 2009 brought an expected change. The first four months of the year saw a 22 percent drop in bilateral trade. Among the exported Romanian products which were not excessively affected by the crisis is the Dacia Logan, produced by French investor Dacia-Renault. In fact, one of the main challenges for Dacia this year has been “to adjust its production activity to the commercial demand,” says Liviu Ion, the company’s communication director. “Dacia is on track to end 2009 with a higher volume of sales than in 2008, mostly due to the rise in our exports. At present, exports account for more than 85 percent of total sales.” This year, the carmaker has invested

Infrastructure requires builders, on one hand, and construction materials, on the other, so French companies have taken these opportunities too. Constructors like Vinci and Boygues benefited from the boom on the local construction market in previous years, and while private developments have given construction companies less work lately, state-funded infrastructure may be an important source of revenues. Construction materials producers have been equally hit by the real estate slump and some have had to postpone the investments they had planned to increase their production capacities. Lafarge’s investment program, amounting to EUR 90 million, was extended to 2011, instead of 2010 as was initially announced. Its cement production subsidiary in Romania saw sales drop by 36 percent in the first half of the year. The company has been focusing on the local market to generate its sales, with products coming from two cement factories in the country and a grinding station. BUSINESS REVIEW / November 2 - 8, 2009


Elsewhere in the construction area, do-it-yourself stores are not making as much money as they used to. But DIY retailers have kept on opening new stores, although at a slower pace than in the past. Bricostore, which invested EUR 50 million in opening five new stores in Romania last year, has only two planned for this year, and a third unit for next year. Each of its stores requires around EUR 10 million in investment. The bright side of store openings these days is that land comes cheaper than two or three years ago, while construction materials and the cost of labor are also lower. But when it comes to opening new stores, a name to look out for is French retailer Carrefour, which has been expanding in Romania since 2001. The retailer owns 22 hypermarkets and 24 supermarkets across the country. Its most recent store openings were supermarkets in six Romanian cities and two hypermarkets in Bucharest and Oradea. Carrefour, which reported EUR 1.9 billion in sales in Romania last year, has seen its nine-month sales in euro in the country shrinking by 1.2 percent compared to the same period of last year. Falling sales have hit French producers of goods as much as they have retailers. For dairy producer Danone, the first quarter of the year brought 10 percent lower sales in Romania than in the same period of 2008, but it expected to post similar sales by the end of this year as it did in 2008. Another dairy firm, Lactalis, is also one of the new French names on the Romanian market, after the company bought local brand LaDorna last year. BUSINESS REVIEW / November 2 - 8, 2009

Judging by the so-called lipstick index, one could say that cosmetics companies should have had at least some types of products selling well even during these tough times. French L’Oreal saw its Romanian subsidiary grow at a slower pace this year in terms of business volumes than last year, and expects to post a 10 percent turnover growth by the end of this year. Last year, the company made a EUR 65 million turnover.



Patrick Gelin, chairman and CEO of BRD-Groupe Societe Generale

Jean-Pierre Vigroux, managing partner of Mazars in Romania

other hand, on a close supervision of its parameters, especially those linked to costs. But what was worse this year was that the bank had to face the depreciation of the financial situation of individuals, SMEs and some large companies. “The cost of risk has strongly increased in spite of the fact that we remain at a level significantly lower than the banking system,” says Gelin. The second

problem was the fall of credit demand and the freeze of the real estate market. What does BRD hope for in Romania? “We expect first of all a stable government able to put in place a coherent medium-term plan defining the top priorities. The second expectation is the capacity to mobilize the European funds available for Romania,” adds Gelin.

NO VIE EN ROSE FOR BANKS BUT INVESTMENTS CONTINUE The shrinking consumer spending of this year came after several years in which banks have been fueling consumption in Romania. That was no longer the case this year. Lending froze and so did bank investments in the country. In the past, much of lenders’ investments went into opening new units, but expansion plans have been postponed until better times. But BRD has managed to keep its investments this year at a similar level to last year. “By the end of 2009, we will have invested approximately EUR 60 million. This level of investment does not differ much from 2008 and 2007, when we invested EUR 64 and 68 million respectively,” Patrick Gelin, chairman and CEO of BRD-Groupe Societe Generale, told Business Review. So far, 2009 has been a difficult year for the banking sector, “and the perspective is not going to change for the better until this year-end,” says Gelin. He adds that the bank has been focusing on helping its clients get through the crisis using its consulting capacity, and, on the 19




Dacia-Renault has managed to counterbalance the drop on the local car market with exports on Western European markets

Carrefour has slowed down the pace of opening new stores and started focusing on the supermarket segment


Despite an increasing number of customers, the company reported EUR 800 million in revenues in the first nine months of the year, down 18.1 percent on the same period of last year. It had 4.7 percent more clients during this period, reaching 10.6 million at the end of September. Orange’s revenues were affected by the difficult economic environment, by the strong competition on the market, as well as by the volatility of the leu-euro exchange rate. Construction materials producer Saint Gobain group, which has invested EUR 230 million in production units in Romania in the last four years, has postponed its investments in several new production units in the country. It has instead only increased production capacities in existing units in Romania. The biggest Saint Gobain investment in Romania was its float glass factory in Calarasi, a EUR 130 million investment. Gas de France Suez was one of the few firms to have committed to new investments this year. The company has started a greenfield energy production project, in partnership with Termoelectrica. The project should require EUR 400 million in investment and will be one of the many investments in the production of energy that GdF has promised for Romania.


Funding, or to be precise, the lack of it, was the main problem seen this year by Jean-Pierre Vigroux, managing partner of Mazars in Romania. “Funding was made difficult by the shortage of bank facilities and the problems incurred by our clients with their own debtors. We went through a form of financial blockade, as Romania experienced from 1990-1997, though not so harsh. We have set cash collection as our absolute priority. The situation on this front is far better now,” says Vigroux. Mazars’ initial budget for this year was optimistic. “The revised version of the budget has been adapted to what is actually happening. We have seen a very significant decrease of what we call the ‘expert’ work, like due diligence and international taxation. We have compensated for this shortage of value-added jobs with the development of our assurance, outsourcing and compliance departments, so that we eventually achieve the same total fees as last year,” adds the managing partner. The firm says it has adopted a reasonable attitude when negotiating its fees for next year and has avoided taking unpleasant measures with its staff, like lay-offs, fixed salary reductions or mandatory unpaid leave. Vigroux’s hopes in terms of the state’s contribution to the local busi20

ness environment are the same as every year for the last 20, he says. They include fewer legislation and taxation changes, better infrastructure, more transparency in dealings with the public authorities and better public services. Making an effort to be prominent in the public awareness is French insurer Groupama’s target in Romania, since it has launched its consolidated operations in the country. The insurer has started a marketing and communication campaign and has signed distribution agreements with several banks on the Romanian market. The marketing and promotion campaign alone requires an investment of EUR 2.5 million, according to estimates. Groupama has put EUR 600 million into Romania so far, in acquiring BT Asigurari, Asiban and OTP Garancia, which have been consolidated under the same Groupama brand.

FIRMS SHOW SANGFROID TO KEEP THEIR PIECE OF THE PIE While one company tries to push a new brand on the market, others, with already established names on the scene, are trying to hold on to their market share. Mobile phone operator Orange, which has faced increasing competition in Romania this year, has recently started a large marketing campaign, pushing several new products and services.

The energy sector is rare in still attracting investments nowadays. Alstom is another French investor active in this area, and the firm too has started greenfield investments in the country. The company has decided to invest in a EUR 20 million production unit for equipment destined for thermo power plants. It will be located south of Bucharest. Tire producer Michelin already owns three factories in Romania, and because of the slump in the car market, with its impact on tire sales, might not need more production units for the time being. Earlier this year, Michelin stopped production in some of its local units for two weeks, but has since restarted it. While some are slowing down activity, others are finding it timely to speed up and gain market share, as growth can be achieved even during the low points of the economic cycle. “We have multiplied our turnover fourfold in one year, from EUR 300,000 in 2008 to EUR 1.2 million this year. In order to reach our target for 2010, which is EUR 5 million, we will reinforce our business development measures in Q1 2010, with more energy and new ideas,” says Gregoire Vigroux, director in charge of business development with CallPoint Europe. “We have been investing more in 2009 than the year before. Since the beginning of the year, we have spent a total of EUR 400,000 to sustain our growth. Our main investments are a new technical call center infrastrucBUSINESS REVIEW / November 2 - 8, 2009

FRENCH INVESTMENT REVIEW French companies with activities in Romania é é é é é é é é é é é é

Accor Air France Air Liquide Alcatel- Lucent Alstom Atisreal Auchan BNP Paribas Bouygues BRD Bricostore CallPoint

é é é é é é é é é é é é

Carrefour Credisson Credit Agricole Dacia-Renault Danone Decathlon Dexia Eurocopter Gas de France Suez Groupama Intermarche L'Oreal

é Lactalis é Lafarge é Lagardere Group é Mazars é Michelin é Orange é Saint-Gobain é Unbisoft é Veolia é Vinci


Groupama has invested over EUR 600 million in Romania so far

ture and a brand new 1,500-sqm class-A location in Bucharest,” says the director. For the outsourcing business, the recession has actually helped. “The crisis has had a relatively good effect on our business on offshore markets. Several French, Italian, Spanish and US clients, who were previously working with call center vendors in their own countries, came to us for competitive prices as they wanted to reduce costs. To a client based in a Western country, working with a Romanian-based call center represents a cost reduction of about 50 percent,” says Vigroux. But here, too, obstacles present themselves. “The main problem we had to face in 2009 was clients not paying their invoices. Fortunately, these were minor accounts. We decided to stop working with them. Now that we work for multinationals mostly, the risk of having bad debtors has decreased,” says the CallPoint representative.



With so many of the large French companies already active in Romania, the chances are low that many new, big names have yet to come to the country. But there are exceptions. French insurer Axa has announced its plans to enter the Romanian market either through a start-up company or through an acquisition. There are still large French companies out there which haven’t included Romania on their expansion list, like Dassault Group, Ales Groupe, Pierre Fabre Group and Sopra Group, for example.

BUSINESS REVIEW / November 2 - 8, 2009



Alessandro Safina to play the Palace Hall

Italian operatic tenor Alessandro Safina

Italian artist Alessandro Safina will perform a recital at the Palace Hall in Bucharest, on November 2. He will be accompanied by an instrumental band from Italy and by the Bucharest Metropolitan Orchestra, which is made up of

30 musicians. Safina will play several classics such as Time to Say Goodbye (Con Te Partiro), Vivo per Lei and Aria e Memoria in a duet with young singer Ianna. The stage of the Palace Hall will be decorated with hundreds of white roses and Thai orchids, Safina’s favorite flowers, which will be brought in from the Netherlands on the day of the concert. Safina is being put up in Bucharest at the Radisson SAS Hotel, in one of the most luxurious suites on the top floor. He is known as an admirer of the Romanian wine Feteasca Neagra, which he sampled on a previous visit to Romania last year. The remaining tickets for the show are on sale at the Palace Hall, in Germanos, Carturesti, Vodafone and Diverta stores or online from the sites, and

British actress Rachel Weisz films in Romania British actress Rachel Weisz, who has starred in films such as The Constant Gardener, Constantine and The Fountain, came to Romania last week to work on a movie called The Whistleblower. It is based on the true story of Kathryn Bolkovac, a US policewoman who goes on a peacekeeping mission to Bosnia in 1999. She is played by Weisz, who won an Oscar for her role in The Constant Gardener. The film also features other famous actresses such as Monica Bellucci and Vanessa Redgrave. The cast will include Romanian actors such as Florin Busuioc, Vlad Ivanov and Co-

Rachel Weisz plays a policewoman

ca Bloos. The Whistleblower, directed by Larysa Kondracki, will be shot at the MediaPro studios in Buftea.

A new Starbucks café, the first openspace one in Romania, has opened on the ground floor of AFI Palace Cotroceni. The new outlet has a surface area of 165 sqm and a capacity of 65 seats. The first Starbucks café in Central and Eastern Europe was opened in Bucharest’s Plaza Mall in April 2007, as a result of the joint venture between Starbucks Coffee Company and its European partner Marinopoulos Group. Twenty years have passed since the fall of the Iron Curtain. To commemorate the far-reaching events that changed the face of Europe, the office of the European Commission in Romania has opened an exhibition called A Story about Freedom, in the presence of historian Andrea Varga and the European Commissioner for Multilingualism, Leonard Orban. The exhibition is being held at the Information Center on the ground floor of the office of the commission. It will be open to the public between Monday and Friday, until February 2010. 22


Love Happens

Flower power: Aniston and Eckhart pair up

Put a team of greeting card poets in a room with James Blunt, Julio Iglesias, Barry Manilow and some telenovela scriptwriters, and the amount of schmaltz their combined efforts would produce would still pale in comparison with the slush fest that is Love Happens. It is difficult to imagine a more mawkish, maudlin movie. Consider the dramatis personae. Our hero is Burke Ryan (Aaron Eckhart), a tragic but handsome widower still mourning his wife’s death in a car crash three years earlier. Despite being utterly devastated, he has managed to parlay his grief into a lucrative career as a self-help guru and author. Burke spends his time touring the US, delivering inspirational seminars to the grateful grief-stricken. But the huge irony is that he can’t apply his advice (all extraordinarily perceptive and original revelations like the importance of moving on and taking the first step) to himself. What can help him escape the past and embrace life once again? Could it be the love of a good woman, perhaps? Step forward Eloise (Jennifer Aniston). We know she’s got soul, because she’s a florist, wears sensible woolly hats and writes bizarre words like quidnunc on hotel walls under pictures. Oh, the kookiness! In between leading the sorrowful masses back into the light, Burke is in negotiations with some cold-hearted corporate types over taking his brand global, getting his chiselled jawline on every network in the country and flogging his followers a range of gloriously tasteless products like diet pills (because if there’s one thing the newly bereaved just don’t need it’s to pile on those pesky pounds through comfort eating). Momentarily forgetting both his ambition to be the nation’s chief grief

guru and his deep-seated anguish, Burke manages to rapidly fall for and then pursue Eloise, who slowly helps the melancholy self-help mogul confront his loss and love again. Although he’s the lesser star of the two, Eckhart is the main focus of the film, with the romance almost a secondary thought. There’s more tension in Burke’s fraught relationship with his father-in-law (a brief appearance from Martin Sheen, whose presence invests the film with some gravitas it doesn’t deserve, and invites the question what on earth was he thinking of when he signed up). Another game-raising, pathos-inducing turn comes from John Caroll Lynch as a small-town blue-collar worker mourning the loss of his son. The comic part of the proceedings, what there is of it, comes mainly from Burke’s smarmy manager (Dan Fogler), and Eloise’s quirky assistant (Judy Greer). Post-Pitt, Jennifer Aniston, never exactly associated with gritty realism, seems to have become the go-to actress when you need a valiant 40something singleton who hasn’t given up on love, and she could have made this movie in her sleep. Eckhart combines the slick professional with the tortured widower, and while the leads don’t have huge chemistry they make a likeable enough couple. The main problem is that the film can’t seem to decide whether Burke’s self-help empire is cynical hokum or uplifting miracle cure. How can we root for someone who wants to sell weight-loss products with his face on to the grief-stricken? Leaving that incongruity aside, Love Happens is a glossy, effectively made movie, and more sensitive viewers may feel a tear welling despite themselves. It has its charms, though in limited servings. But expect them to come coated in syrup. Debbie Stowe Director: Brandon Camp Starring: Aaron Eckhart, Jennifer Aniston, Dan Fogler, John Carroll Lynch, Martin Sheen, Judy Greer On at: : Baneasa Drive in Cinema, Cityplex, Hollywood Multiplex, Movieplex Cinema, Starplex, The Light BUSINESS REVIEW / November 2 - 8, 2009

Business Review Issue 39, Nov 2-8, 2009  

Windows reloaded Calin Tatomir, GM of Microsoft Romania, is leading the company through a busy period: the local roll-out of Windows 7 in ea...

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