business review issue 35, oct 5-11, 2009

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With its hectic traffic Bucharest is not the ideal city for cyclists, but as the trend has

started to catch on in Romania there is now a choice of outlets to rent or buy bikes.

Business Review saddles up and shows you the options for cyclists in the capital

See Balance section on page 24

With its hectic traffic Bucharest is not the ideal city for cyclists, but as the trend has

started to catch on in Romania there is now a choice of outlets to rent or buy bikes.

Business Review saddles up and shows you the options for cyclists in the capital

See Balance section on page 24

MONEY2009 and 2010 will be crucial for pri-

vate banking in Romania, and prospects

are good as many wealthy individuals

have yet to choose a private lender

See page 10

AUSTRIAN INVESTMENTRanked second for FDI in Romania by

the Trade Registry, Austrian cash is be-

hind some of the biggest businesses in

the country

See page 20

PROFILEFilm director Cristian Mungiu talks to

Business Review about shooting his

most recent movie and reveals his sur-

prise dream job from when he was four

See page 23

TICKET TO RIDETICKET TO RIDE

BNR SLASHES KEY INTEREST RATE TO 8 PERCENT; SEE NEWS ON PAGE 5

BUSINESS REVIEWROMANIA’S PREMIERE BUSINESS WEEKLY OCTOBER 5 - 11, 2009 / VOLUME 14, NUMBER 35

www.business-review.ro

BUSINESS REVIEW / October 5 - 11, 2009 3

Audited 1H 2007

BMG is a founding member of the Romanian Audit Bureau

for Circulation (BRAT)

Str. Alecu Russo 13 - 19, et. 7, ap. 14, Bucharest - Romania E-mails: [email protected]; Phone: +4021 210-7734, Fax: +4021 210-7730 ISSN No. 1453 - 729XPrinted at: MASTER PRINT SUPER OFFSET

PublisherBILL AVERY

Editor-in-ChiefSIMONA FODOR

Deputy Editor-in-ChiefCORINA S~CEANU

Senior JournalistsDANA CIURARUANDA DRAGAN OTILIA HARAGA

Copy EditorDEBBIE STOWE

ContributorMICHAEL BARCLAY

ResearchSIMONA BAZAVAN

PhotographerLAURENTIU OBAE

LayoutBEATRICE GHEORGHIU

Executive DirectorGEORGE MOISE

Sales & Events DirectorOANA MOLODOI Marketing Manager

ADINA MILEASales & Events

IULIAN BABEANU CLAUDIA MUNTEANUFREDERIC VIGROUX

Sales ConsultantGIUSEPPINA BURLUI

Research & SubscriptionALEXANDRA TOADER

ProductionDAN MITROI Distribution

EUGEN MU{AT

OCTOBER 5 - 11, 2009 / VOLUME 14, NUMBER 35

Picture perfect

What a beautiful building pictured in your news section

last week (Stirbei Palace gets EUR 150 mln facelift,

issue 34). Over the course of my visits here I have come to re-

alize that Bucharest has so many well hidden architectural

gems like this. It’s a pity that more is not done to promote

them, as the average foreigner associates only grim Commu-

nist housing and the People’s Palace (okay, it’s impressive but

not exactly beautiful) with the city, and knows nothing of such

places. Please tell me where Stirbei Palace is located.

Andrew Jackson, UK

Shady dealings

Your piece on Romania’s shadow economy (Unreported econ-

omy reaches one third of GDP on low electronic payments and

Week in Numbers, issue 34) sounds about right – if anything I

am surprised the figure isn’t even higher. The bureaucracy in-

volved and the regular media reports of misused public money

would deter all but the most honest and determined from doing

things legitimately, when they can be done under the table.

No, it’s not right, but until the system is cleaned up and made

more user-friendly, where is the incentive to do things by the

book?

Name withheld

In the club

Well done for the feature on clubs last week (Club owners

dance their way around slowdown, issue 34). It was good to

see an article on a business area that does not usually get much

press coverage.

Cristi, Bucharest

I N T O U C H

What we’re working onDANA CIURARU Senior Journalist...

is preparing a

feature on

wind farms

OTILIA HARAGA Senior Journalist...

is taking the

pulse of the

music industry

B USINESS REVIEW

Please send your letters to [email protected], in-

cluding your name and location. For consideration for inclu-

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TALK TO US !

or connect via www.business-review.ro

Write to us at [email protected]

The PSD’s members of

government have re-

signed after minister of

the interior Dan Nica

was fired; see news on

page 8

I N T O U C HTENTH EDITION OF REALTYSET FOR OCTOBER

The 10th edition of Realty, Ro-mania’s Forum on the Real EstateMarket, takes place later this monthOctober. The event will gather in-dustry professionals interested inspotting new opportunities andtrends, meeting decision makers,and finding potential business part-ners. This year’s program will focuson topics such as: how players in

Romania (developers, agencies)have changed strategies and adaptedto face the new realities of the mar-ket; what the new financing condi-tions for RE companies in Romaniaare and what to do when in financialtrouble; elements which havehelped/will help the market recover.

Realty is organized under theBusiness Review Forum series ofevents, and in partnership with Zan-ti Exclusive. ■

BUSINESS REVIEW FORUM

BRIEFSAUTOMOBILE DACIA GIVESSECOND PAY RISE OF 2009é Romanian carmakerAutomobile Dacia will grant itsemployees a wage hike of RON110 (some EUR 26) and anaverage bonus of RON 400(around EUR 100) as ofSeptember 1, the company hassaid. This is the second time thecarmaker has raised its staff’s paythis year. The first round ofnegotiations in February resultedin a raise of RON 70 fromJanuary 1 and RON 40 as ofApril 1. Employees received abonus of RON 700 this year fortheir contribution to thecompany's 2008 profit, a RON614 bonus for Easter and avacation bonus of RON 818. Thecompany, owned by Frenchcarmaker Renault, is among thefew local companies to haveincreased their employees' paythis year.

HIDROELECTRICA PLANSENERGY PRICE HIKEé Electricity producerHidroelectrica is planning toincrease the price of the energy itsells to the traders with which ithas long-standing agreementsonce the two national energycompanies are set up. “Theenergy market will changecompletely starting next year. Wewill renegotiate the sale price forall our contracts, and in somecases we will even double them.We will keep the amounts, butincrease the prices. We have todraw a line and startsomewhere,” said Mihai David,general manager ofHidroelectrica.

N E W S

BUSINESS REVIEW / October 5 - 11, 20094

International financial and insur-ance group Groupama launched itsoperations on the Romanian marketlast week. The firm is the result ofAsiban and BT Asigurari Transilva-nia’s merger. The integration of the third company, OTP Garanciawill take place by the end of this year.

The cumulated result of Groupa-ma’s companies in Romania rankedthe insurer third on the market with acombined market share of 10 percent,at the end of the first semester. Ac-cording to Groupama Asigurari rep-resentatives, the company is targetinga 25 percent market share on the gen-eral insurance segment (except car in-surance), and a 20 percent marketshare of life insurance in the next fouryears. It also intends to maintain itsposition (a 15 percent market share)in the car insurance sector.

Currently, the insurer has 300

agencies and points of sale nation-wide, across eight regions. The com-pany also launched a single loss cen-ter in Cluj-Napoca.

The new brand, Groupama Asig-urari, will be promoted through acampaign that includes advertising,PR and CSR activities under the slo-gan “Groupama Asigurari. We insureeverything that matters to you.”Company representatives said thatthe group was interested in makingacquisitions in countries where it isalready present, but that they alreadyhad a strong basis to contribute tomarket development in Romania.

Worldwide, the company has 16millions customers and over 38.500employees. The group has extendedits operations mainly to emerging andfast growing markets, such as Hun-gary, Romania, Bulgaria, Turkey andSlovakia.

Anda Dragan

Groupama launches officialoperations in Romania

CO

URTESY O

F GRO

UPA

MA

UPC Romania last week launchedhigh-definition television in Romania.The new service is available from Octo-ber 1 across the country.

“At the end of last year, the Roman-ian market of HD-compatible TV setsreached a total of 642,000 HD Readyand 78,000 Full HD devices. The totalnumber has now reached nearly 1 mil-lion,” said Iulia Florea, manager of cus-tomer relations and retail sales at UPCRomania.

Florea said UPC representatives ex-pect an increase in the number of clientswho ask for this service especially be-cause Romanians are ready for HD.“The rate of penetration of HD Readyand Full HD television sets in Romaniais 10 percent, which is 3 percent morethan last year,” said Florea.

She estimates the penetration of HDtelevision will reach 40 percent from2009-2013 and 50 percent by 2013.

Investments in HD television werepart of the annual budget for infrastruc-ture, which amounted to EUR 50 mil-lion. For now, only five channels in theUPC portfolio can be seen in high defi-nition. “By the end of the year, we ex-pect to have more channels in HD, sincewe are negotiating a great deal of con-tracts now,” said Florea.

The only operator that has an HD of-fer in Romania at the moment is iNES,but this company has a limited customerbase. UPC Romania had revenues ofEUR 61 million in the first half of theyear, 19 percent down on the same peri-od of last year.

Otilia Haraga

UPC Romaniadebuts HDtelevision

Jean - Francois Lemoux, general manager Groupama International, Jean Azema, CEO of Groupama,Denis Rousset. general manager Groupama Asigurari


UK-based company Liberty In-ternational has announced that itplans to invest EUR 150 million inbuilding a steel plant in Oltenita,Romania by 2011.

The plant’s production capacityis planned to reach 500,000 metrictonnes of steel and turnover is ex-pected to reach EUR 300 million in

the first year of operations. According to media reports, the

steel producer is going to build afoundry first and then a rolling mill.Half of the plant’s output will besold in Romania and the remainderwill be exported to the EuropeanUnion, North Africa and the MiddleEast.

Liberty International, via its Ro-manian subsidiary Transdanube In-dustries, acquired the Turol castinghouse in Oltenita for EUR 16 mil-lion two years ago. In Romania, thenew plant will be competing withthe Russian steel producer Mechel,Romanian pipe producer TenarisSilcotub, a member of SilcotubGroup, and with ArcelorMittalGalati.

The Liberty International groupcontrols steel factories in Nigeria,Sudan, Morocco and India with atotal capacity of one million metrictonnes. Liberty estimates that it willtriple its production from all facto-ries by 2012.

Dana Ciuraru

Liberty International plans to build EUR150 million steel plant in Romania

The plant’s production capacity should reach500,000 metric tonnes of steel

N E W S

Romania was down five placesfrom last year in the recently pub-lished European Health Index,which compares health systems inEurope.

The country was ranked last butone among 33 European countries,having received 489 points out of1,000. Top of the list was theNetherlands, followed by Denmarkand Ireland. The only country whichscored worst than Romania wasBulgaria.

“Romania has unfortunately re-ceived bad scores in most of thehealth related areas,” said ArneBjornberg, head of research with the

Euro Health Consumer Index. “Informal payments expected

from patients are still a seriousproblem and an obstacle to achiev-ing an equitable health system.”

The Euro Health Consumer Index is a standardized measure-ment tool of the health systems inEurope, including 33 countries and38 indicators in six sub-chapters:rights and information for patients,E-health, waiting time for regulartreatments, results, variety of of-fered services and access to medica-tion.The index was first publishedin 2005.

Corina Saceanu

Cosmote Romania has launched

Cosmote Private Wire, an integrated

solution of mobile and fixed telepho-

ny voice services for corporate

clients.

“It was conceived as an answer to

demand from our corporate clients

and completes our basic activities and

services in the domain of mobile te-

lephony,” says Isabela Furtuna, post-

paid market development and retail

international offering department

manager in Cosmote Romania

“Market trends show this type of

clients are interested in integrated

communication solutions that

make their costs in this field more ef-

ficient,” Furtuna added.

This new service is available ex-

clusively through the direct sales team

of Cosmote Romania.

In the first eight months of this

year, the firm posted an increase of 59

percent for traffic generated by the

corporate segment, compared to the

same period of last year.

The mobile operator had 6.3 mil-

lion customers after the first half of

this year.

Otilia Haraga

Cosmote launchesfixed telephony forcorporate clients

Cosmote is courting corporate clients

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The board of the National Bankof Romania (BNR) has lowered themonetary policy rate to 8.0 percenta year from 8.5 percent, startingfrom September 30. The move is in-tended to improve liquidity in thebanking sector.

The BNR board also decided tomaintain the existing minimum re-serve requirement ratios for both lo-cal and foreign currency-denomi-nated liabilities for credit institu-tions. The board will meet again on November 3, when a new quar-terly Inflation Report will be ana-lyzed.

Analysis of the latest statistical

data reveals continued disinflation,with the annual inflation rate fallingto 4.96 percent in August from 5.06percent in the previous month amida sharp contraction in demand andmoderate fluctuations of the leu ex-change rate.

Statistical data show a signifi-cant and persistent correction of ex-ternal debt in the context of the fall-out from the international economicand financial crisis.

The monetary policy stance re-mained prudent, with the BNR per-manently calibrating its broad mon-etary conditions with a view tomoving the inflation rate towardsmedium-term objectives and boost-ing lending activity. Interbank lend-ing rates remained close to the mon-etary policy rate level.

Meanwhile, credit institutions’deposit and lending rates for non-bank customers fell further, with thelatter posting a relatively slower de-cline.

The BNR board repeated that afirm and consistent implementationof the macroeconomic policy mix –monetary, fiscal and income – aswell as of the structural reformsagreed under the multilateral exter-nal financing arrangement with theEuropean Union, the InternationalMonetary Fund and other interna-tional financial institutions was es-sential to achieving further sustain-able disinflation.

Anda Dragan

Romania ails in EU health index

The BNR cut the rate by 0.5 percentage points

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N E W S


BNR cuts interest rate to 8 percent

BRIEFSSIVECO WINS JOINT EUR7.8 MLN EUROPEANCONTRACTé Local software producer SivecoRomania will deliver softwaredevelopment and maintenanceservices for the European Union'sCordis portal, along with ItalianReggiani and Luxembourg-basedArtemis. The contract reaches EUR7.8 million, according to Siveco,and will run for four years. Cordisis the main information source forEuropean research programs.Siveco was set up in 1992 byRomanian shareholders. In 2003,its main shareholder was DutchSiveco Netherlands BV.Investment funds EnterpriseInvestors and Intel Capital bought32.5 percent of the firm in 2005,for some $12 million.

KFC OPENS NEW UNITWITH EUR 700,000 é Fast food company KFCRomania has recently opened its14th unit in Bucharest, followingan investment of EUR 700,000. Ithas now reached a 34-branchnetwork across Romania. The fastfood firm targets a EUR 1.5 mil-lion annual turnover. This was thethird outlet opening in Romaniafor KFC this year and other newunits should be added, but not atthe same pace as last year, whenit opened eight new restaurants,according to the company.

CARREFOUR ANDOTTOBROKER SELLINSURANCE POLICIES INHYPERMARKETSé French retailer Carrefour hasrecently partnered OttoBroker inoffering insurance policies underthe Carrefour OttoBroker brand,which will at first be available in10 Carrefour hypermarkets, theretailer has announced. The ven-ture will sell house insurance,travel policies, CASCO and RCAproducts in Carrefour's units inBucharest, Ploiesti, Brasov,Constanta and Iasi.

N E W S


Romania has few venture capital-ists but many business angels, whichis promising, Guillaume Latour, part-ner at AGF Private Equity, told aseminar on IT Start-Ups: How To,organized by law firm Biris Goran.

“However, some years will passbefore legal and accounting harmo-nization since there are inconsisten-cies between Romanian and Euro-pean law,” he added.

Romania has key advantagessuch as low-cost intellectual propertyand a European time zone and cul-ture. The Romanian authoritiesshould offer tax incentives for in-vestors and start-ups, said the part-ner. They should also create a fund

that would invest in high-tech com-panies.

Latour gave the example ofFrance, where associated salary costshave decreased from 45 percent to 10percent. Moreover, the French gov-ernment gives loans, grants and sub-sidies.

Latour also said that an entrepre-neur should be able to describe his orher business in just one minute. “Ifyou can do that, it means you knowyour business well,” he said.

In Romania, AGF Private Equityhas invested around EUR 2 millionin eRepublik Labs, a transaction forwhich Biris Goran offered legal as-sistance. ■

Telecom firm RCS & RDS aimsto expand its mobile internet servic-es nationwide by December, to resi-dential and business clients. Thefirm has extended its Digi Net Mo-bil service, which has speeds of upto 7.2 Mbps, to five cities outsidethe capital: Brasov, Craiova, Con-stanta, Cluj and Iasi. Two weeksago, RCS & RDS announced thelaunch of its mobile internet servic-

es for cellphones and through aUSB modem at transfer speeds ofup to 7.2 Mbps in two counties,Timis and Bihor.

RCS & RDS has over a millionunique internet users. The companyhas more than 6,00 employees andover 200 points of presence aroundthe country.

Otilia Haraga

‘Few VCs but many business angels’ in Romania

RCS & RDS wants nationwide coverage by December

Week in

NUMBERS

The Romanian Central Bank hasseen its foreign exchangereserves reach EUR 28.3 billion,following the second disburse-ment of funds from the IMF

The number of ministers runningthe country since the PSD quit thegovernment last week

28.3

11

In the first nine months of theyear, 27,000 Bucharesteanshave lost their jobs in mass lay-offs

27,000

The Romanian government hassigned a memorandum indicating its

willingness to grant a EUR 330 mil-lion state guarantee to Rafo Onesti,

thereby allowing the refinery to car-ry out its investment plans. According to Prime Minister Emil Boc, the state guarantee will save between 1,500 and 2,000jobs.

President Traian Basescu saidrecently, “The company’s request toreceive state guarantees to raise aloan which will pay itself backseems reasonable. The governmentshould respond positively, consider-ing it did the same for Oltchim and Ford and will do for Renault,too.”

The government has grantedstate guarantees of EUR 400 millionto Ford and EUR 69 million topetrochemical producer OltchimValcea. According to PresidentBasescu, another company that isunder consideration to be given astate guarantee is Mangalia ship-yard.

Dana Ciuraru

The Rafo refinery could join a group of several local entities that have received state guarantees

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IAFA

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Rafo refinery could receive EUR330 million state guarantee

N E W S


Romania’s coalition governmentcollapsed last week, fomenting apolitical crisis weeks before thepresidential elections. The govern-ment fell apart after the Social Dem-ocratic Party (PSD) pulled out of theruling coalition in protest at the fir-ing of Dan Nica as interior minis-ter.Nica, a PSD member, was firedby Prime Minister Emil Boc of theLiberal Democratic Party (PDL) af-ter suggesting the upcoming presi-dential election may be fraudulent,reports said. Traian Basescu is cur-rently favorite to win the presiden-tial election on November 22. Boc strenuously denied the allega-tions.

“The PSD is a cowardly, proudparty, lacking responsibility, but thePDL is ready to govern alone. Forthe moment, we’re focused on con-solidating the temporary govern-

ment. Then we will see what hap-pens,” said Ioan Olteanu, Liberal-Democratic Party vice-president.

President Basescu called for thetwo parties to mediate, but as of lateThursday there was no resolution.Even though Boc’s government nolonger has a majority in Parliament,analysts said he could stay on as PMwhile the parties tried to resolve thecrisis. However, the opposition Na-tional Liberal Party said it wouldcall a vote of no confidence in thecoming days.

Boc announced interim ministe-rial appointments with Catalin Pre-doiu taking charge at Foreign Af-fairs; Adriean Videanu at Health;Radu Berceanu, Agriculture; ElenaUdrea, Environment; George Pogea,Labor; Gabriel Sandu, SMEs; Sori-na Placinta Parliamentary Rela-tions; and Boc, Education. VasileBlaga was previously put in chargeat Internal Affairs.

Dana Ciuraru

Romania ruled by 11 ministers as governmentcollapses following PSD walkout

A&D Pharma is currently negotiat-ing the acquisition of several drug com-panies in five Central and Europeancountries. The local firm is targeting Ar-ishop Pharma AD and its subsidiaries inBulgaria, Ozone Laboratories Polskaand Ozone Laboratories Polska Servicesin Poland, as well as the Ozone Labora-tories subsidiaries in Hungary, Slovakiaand the Czech Republic, the companyhas announced. All the firms subject tonegotiations are currently affiliates ofthe A&D Pharma group.

“A&D Pharma is currently analyz-ing this takeover in order to accelerate itsexpansion outside Romania and the de-velopment of its marketing and sales di-

vision. […] This acquisition is a step for-ward in our strategy to consolidate ourposition,” said Robert Popescu, chief ex-ecutive officer of the company.

The acquisition is dependent on theagreement of the sellers, as well as abanking syndicate which has offeredA&D Pharma a EUR 100 million refi-nancing loan. If the acquisition gets thegreen light, it should be completed bythe end of this year. A&D Pharma runsthe Sensiblu chains of pharmacies in Ro-mania, as well as the Mediplus drug dis-tribution business. The group posted aEUR 503 million turnover last year. Itsshares are traded on the London StockExchange. ■

A&D Pharma negotiates acquisition of regional affiliates

President Traian Basescu has called for the war-ring parties to talk to each other

The pharma firm is expanding outside Romania

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BRIEFSKIABI TARGETS A 30-STORELOCAL CHAIN BY 2014é French fashion retailer Kiabi,which has recently opened its firststore in Romania, is planning toexpand its local chain of stores to30 units by 2014. In Bucharest,apart from the recently openedKiabi store in Grand ArenaBerceni, the retailer plans to openstores in Militari and Titan.Outside the capital, the retailer istargeting the east of Romania,and cities with over 150,000inhabitants each. Kiabi is planingto create 500 jobs in Romania.

PETROM OPENS TWOMORE GAS STATIONS ONBUCHAREST-CERNAVODAHIGHWAYé Oil and gas company Petromhas recently opened two new gasstations on the Bucharest-Cernavoda highway, followinginvestments of EUR 2.7 million.The gas stations are runningunder the Petrom V brand andwill include other retail spaces,such as stores, restaurants andcar service areas. Petrom andOMV Mineraloel won last year’sthe bid to build six gas stationsalong the Bucharest-Cernavodahighway. The first two units wereopened in May this year and arerun under the Petrom brand.Competitor Rompetrol alsoopened two units in August on thesame highway, and is planning tofinish two more gas stations bythe end of October.

W H O ’ S N E W S / C A L E N D A R


WHO’S NEWSVLADIMIR VAVA, operations director of

Metro Cash & CarryRomania and Moldo-va, will become deancorporate house oftraining at Metro Cash& Carry International.

He started his career with the firm in1997. Vava was appointed head of re-gional operations in 2002 before mov-ing to Metro Cash & Carry Russia inMarch 2003 as sales area manager.

RAMONA JURUBITA has been promoted totax partner, head of in-direct taxation servic-es at KPMG Romania.She has worked in tax-ation since 1999, join-ing the company di-

rectly after graduating from the Acade-my of Economic Studies. She returnedto KPMG in 2006, after spending threeyears as tax manager for a multination-al FMCG firm. Jurubita is a member ofthe UK-based Association of CharteredCertified Accountants (ACCA) and the

Romanian Chamber of Fiscal Consult-ants.

CEZAR FURTUNA has been promoted to au-dit partner at KPMG Romania. Hejoined the company directly after grad-uating in 1998 and has extensive expe-rience in providing audit services toclients from banking, leasing, mort-gages, consumer finance, investmentfunds and brokerage companies. He isa Fellow of the UK-based Associationof Chartered Certified Accountants(ACCA) and a member of the Roman-ian Chamber of Auditors.

OANA COSTAN is the new country manag-er of Starkey Laboratories Romania.She previously spent two years as man-aging director of national programs atthe National House of Health Insur-ance and has also occupied the positionof country manager of Nycomed Ro-mania. Costan is a graduate of the med-ical and pharmacy faculty in Timisoaraand practiced medicine for nine yearsbefore starting a business career.

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

EVENTS, BUSINESS AND POLITICAL AGENDAOCTOBER 5 é 12:00 – AmCham Romania, the British Romanian Chamber of Com-

merce, FIC and the Romanian-German Chamber of Commerce organizea press conference on the occasion of the Romanian Economic Forum,which will take place at 9:30 am at Athenee Palace Hilton.

OCTOBER 6é 11:00 – Master House Grup organizes press conference for the launch

of the dairy products line DAR Lactate at Bonton Club. By invitationonly.

OCTOBER 6é 11:00 – UNIQA Asigurari organizes press conference at Howard John-

son.

OCTOBER 7é Business Review organizes Austrian Business Forum at Intercontinental

Hotel. By invitation only.

OCTOBER 7é 11:00 – Soravia organizes press conference for the opening of the Me-

tropolis Center and the first Starlight Suiten hotel in Romania.

OCTOBER 18é The Bucharest Running Club Association organizes the Bucharest City

Marathon.

OCTOBER 22é Business Review organizes Italian Business Forum at Intercontinental

Hotel. By invitation only.

M O N E Y


With a growing number of high-net-

worth individuals combined with

lingering skepticism towards or lack

of awareness about private banking,

Romania has great potential in this

field for the years to come. Lenders

are now seeking to customize

products for their richer customers,

rather than just drum up as much

trade as possible, say bankers.

Local lenders are going in pursuit of the golden crumbs of Romania’s rich through private banking

Anda Dragan

Although the current crisis hasnot spared any industry, the Roman-ian private banking market seemsnot to be suffering as much as most.This period is more of an opportuni-ty for lenders to offer investmentguidance than a touchstone. Be-sides, both 2009 and 2010 are cru-cial years for the development ofprivate banking services. “We willsee a clear differentiation betweenservices and also an increased num-ber of strong competitors. Playerswill develop rapidly on the shortterm,” said the head of private bank-ing at UniCredit Tiriac Bank, Moni-ca Ionescu. At present, the Roman-ian private banking market is carvedup between many players, withBRD-Groupe Societe Generale,BCR, UniCredit Tiriac, Raiffeisen,ING, OTP, Bancpost, RBS Roma-nia, Banca Transilvania and MKBRomexterra being among the mostimportant.

Private banking services havegreat potential, based on the grow-ing numbers of Romanians thatcould afford to use these servicesbut do not yet do so. Reasons for thelow take-up include lack of infor-mation about the benefits, people’spreference to keep more cash in

their possession and loyalty to theircurrent bank. “Many Romanianshave seen their wealth undergo acorrection this year. Besides, the lo-cal private banking market is cur-rently being redefined,” said AndraMihailescu, director of privatebanking at OTP Bank Romania. Sheadded that high-earning Romanianstend not to keep their money in onesingle bank account, and are alsoaware of the importance of saving.

Both lenders and private bank-ing customers have something togain, even in times of crisis, saybankers. Banks can create a long-term relationship with their clients,based on a wide range of services,and also improve their image. Be-sides, private banking is an impor-tant source of banks’ long-term fi-nancing and also a less volatile areathan most. “A satisfied privatebanking customer creates new op-portunities for the lender on otherbusiness lines,” said Mihailescu. Asfor the clients, the decision to takeup private banking instruments is a

long-term one. “Customers needspecialized guidance when financialmarkets are highly volatile, and in-vestment instruments that offeredpositive earnings before the crisisnow have to be carefully scruti-nized,” said Ionescu.

CUSTOMERS TAKE PRIORITYRomanians’ appetite for risk has

changed significantly since the eco-nomic crisis. Currently, bank cus-tomers are being conservative abouttheir investments, rather than reck-less. So, to be closer to their clients,and align themselves with the inter-national scene, traditional privatebanking services now rank amongbanks’ most popular options. “Thelender’s attitude and caution whenchoosing products for its clients arecrucial. In other words, banks mustnot sell any products at any cost,just to make a fast buck. Lendershave to offer the customized prod-ucts that clients really need and thatdo not expose them to excessiverisk,” said Mihailescu. UniCredit

Tiriac Bank’s private banking strat-egy, for example, is focusing moreon offering customized productsthan amassing a higher number ofprivate banking customers.

WHERE NOW FOR PRIVATEBANKING?

As there is no way to go but for-ward, the future is bright for the Ro-manian private banking market. Ac-cording to specialists, these serviceswill increase in the years to come.“Emerging markets will continue tobe the driving force, despite the cur-rent crisis, and it is natural for com-petition to be more focused on thesemarkets. I expect that competitionto be more aggressive in Romaniawith newcomers – directly orthrough representatives,” said Mon-ica Ionescu. Andra Mihailescu ofOTP Bank agrees, saying thatclients are paying more attention tothe tangible advantages and qualityof services. “Lenders with moreflexibility and courage to innovatewill peg their place on the marketthis year,” said Mihailescu.

Private banking services are thetop end of the market, so the costsare also higher. But banks are tryingto balance costs and income to beprofitable both on the short and longterm. To qualify for private bankingservices, a customer must meetsome strict conditions. UniCreditTiriac Bank requires customers tohave at least EUR 190,000 availablefor investment. It currently has1,300 private banking clients, ofwhom 130 were signed up betweenJanuary and June. In total, thelender’s private banking client port-folio is worth about EUR 250 mil-lion. Bank representatives said thatthey are currently working on ad-justing their criteria, which will im-pact both on the number of cus-tomers and on the asset manage-ment.

Elsewhere, OTP Bank requiresEUR 50,000 or minimum monthlyearnings of EUR 5,000 to invest inprivate banking instruments rolledout through its private banking serv-ice. According to Andra Mihailescu,the average investment of a privatebanking client at OTP Bank is aboutEUR 120,000. “OTP private bank-ing has signed up 175 percent of itsaccumulated assets in 2008,” addedMihailescu.

[email protected]

BANKS RACE TO SNAP UP BIG SPENDERS

L I N K S


Demand for software has changed

substantially due to the recession.

What kind of solutions should

smaller companies go for at this

point? Which ones would large

corporations choose and what about

the public sector? BR canvassed

pundits in the field to find answers. Companies’ software needs have changed significantly in the wake of the crisis, say players

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Otilia Haraga

The software and services marketshrank in the first half of the year byapproximately 20 percent, accordingto analysts. “The steepest decreasewas in the public sector, retail and in-dustry while banking and telecomwere not so badly hit. Meanwhile, therecession has led to a stagnation of ITinvestments in production, retail andconstruction as well as projects in thepublic field,” says Anca Crahmaliuc,marketing and communication man-ager at Siveco Romania

“This financial crisis has clearlychanged companies’ perception andattitude to any technique or instru-ment (and here, IT holds by far themost important place) that optimizestheir activity, increases managementcontrol of the business and employ-ees and gives them information in re-al time about everything that happensin the company and on the market,”says George Butunoiu, founder ofKazier. Clients are also increasinglyinterested in integrated solutions.

The market has not shrunk toomuch in volume but the solutions thatare sought by companies have signif-icantly changed. They are now muchmore realistic, with more flexible so-lutions, more adaptable, cheaper andmore reasonable. “I believe Roman-ian companies have much to gainfrom this re-orientation because, of-ten, the ratio of real needs/price (in-cluding maintenance and later devel-opments) is better in local productsthan foreign ones,” says Butunoiu.

“Those who are making profit

and managed a 10-15 percent growthare those with a larger portfolio ofclients and their own products,” saysBogdan Musat, marketing and strate-gy manager at TotalSoft. “Overall,demand for business software solu-tions has dropped a lot. This year thefocus has been on solutions adaptedto the economic situation,” he ex-plains. During the recession, the mostsought-after software solutions havebeen those which facilitate debt-col-lection from clients or the efficiencyof cost control.

There has also been demand forERP, HR and project managementsolutions but not as much as in previ-ous years. “It is a normal step forcompanies to focus more on increas-ing productivity, reducing costs andmaking customer relations more effi-cient, and less on investments,” saysMusat. This year, many companieshave submitted projects to obtain Eu-ropean funds that should help themmake investments in software infra-structure.

“Over the last few months, wehave noticed that the most popularsoftware solutions among companiesare those of management, securityand cost efficiency. The solutions thatwere selling well before the crisis andhave now dropped off areERP/CRM,” says Gabriela Mechea,general manager of Gecad Net.

Large companies are obliged topurchase complex solutions that canbe configured, because there is no“ready made” software for each mod-el of business. “Of course, these areexpensive and the duration of imple-

mentation is pretty high, but there isno other solution,” says Butunoiu.

Small companies usually have toacquire several separate softwareitems, which are either cheap or freeof charge, and assemble them “lo-cally, ad-hoc,” says Butunoiu. Theymust adapt their business model en-tirely to the system that is built inthis way, which is not a bad thing, inmany cases. Butunoiu says that sev-eral years ago, when it was cheap toemploy programmers or even asmall IT firm, many companies pre-ferred to make their more-or-lesssophisticated software in-house.“Maybe then such a choice was jus-tified, but now this has become al-most unconceivable since the mar-ket is flooded by cheaper and saferIT products than any software thatanyone could think about making.Moreover, these systems have start-ed to be a burden for some of theirowners, who became ‘prisoners’ ofthe system,” says Butunoiu.

Small companies do not even rep-resent potential buyers of softwarebusiness solutions, says Musat. “As arule, these companies run their activ-ities using standard programs fromMicrosoft Office and only start think-ing about professional software whenthe business increases significantly,”he explains.

Corporations are the regular pur-chasers for this type of solution,which can range from business intel-ligence systems, management of cus-tomer relations, self-service, debt col-lection from clients and intranets,which serve as an interface between

the user and all the applications usedby that corporation.

As an example, law firm NNDKPrecently acquired from Zitec and im-plemented a software solution basedon OpenSource technology. “Such anapplication primarily offers the ad-vantage that it saves a lot of time thatwas initially eaten up searchingthrough various categories of docu-ments in numerous databases. So thelawyers now save a great deal oftime, which they can use elsewhere,”says Ion Nestor, co-managing partnerat NNDKP.

The firm previously used Mi-crosoft and Novell products for ac-counting and financial administrationand other software specific to the le-gal profession.

The public sector is a totally dif-ferent kettle of fish. Mostly, publicadministration requires solutions forthe management of documents, elec-tronic payment of taxes, administra-tion of internal activities, administra-tion of geographical information andportals, explains Crahmaliuc.

“I saw many task books fromstate companies that left me stunned.I think sometimes not even NASAhas that many demands!” says Bu-tunoiu, adding that in most cases, thedemands of the authorities are ab-solutely out of proportion to their re-al needs since they do not even use atenth of what they have purchased.

CRISIS SHAKES UP SOFTWARE SEARCH

KAZIERProduct: Kazier, only product2009 turnover estimation: EUR 200,000

TOTALSOFTBest sold products: Charisma Enterprise,Charisma HR, Charisma Cost Control,Charisma Collection; product manage-ment product Primavera.Turnover 2008: EUR 18 million2009 estimation; 15 percent growth

SIVECOProduct: integrated package Siveco Ap-plications 2011Public sector solutions: Document Man-agement, Siveco Applications 2011, iTaxCollect, Registrul Agricol, Siveco Portal,Geographic Information System, Info-chiosc.2008 turnover: USD 90 millionPublic sector projects: 14.3 percent of2008 turnover

GECAD NETBest sold services: infrastructure, securi-ty and IT infrastructure maintenance2008 Turnover: EUR 5.3 million 2009 estimations: 25 percent decrease

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To start a new real estate

consultancy venture when the

market is in freefall and similar

firms are suffering may seem odd at

first. But for Horatiu Florescu and

Monica Barbu, who had been

working together for more than ten

years, and for the team they have

assembled this year, this was the

natural next step. It provided the

adrenalin they needed and they bet

on offices, retail, industrial, land,

valuation and investments. If they

make an incentive trip at the

beginning of next year, they will

know they have succeeded.

Corina Saceanu

Leaving Colliers in spring thisyear was the hardest decision Hor-atiu Florescu, now president andCEO of The Advisers/Knight Frankreal estate consultancy company,had ever made. The former head ofthe office department with Colliersleft several months after his col-league, Monica Barbu, who is nowvice-president and head of the retaildivision at the same firm.

“In winter last year I took alonger vacation and evaluated myoptions. When I heard Horatiu had also left, we met and realizedwe worked well together and this was what we wanted to do to-gether,” Barbu tells Business Re-view.

“The hardest moment was when

I left Colliers. It was hard, after somany years with them, to realizethat I wanted to go,” says Florescu.“2007 and 2008 were very goodyears for me: I was number oneworldwide in Colliers based on of-fice transactions, so there was noreason to move on from this point ofview,” he goes on.

He had been working for Col-liers since 1998, a year after Barbuherself had joined the then startupcompany.

So starting a consultancy com-pany from scratch all over againwas not new for them. In fact, it waswhat they needed after so manyyears.

“The market was very quietback then. There were very fewtransactions in 1997-1998, quitesimilar to now. We were at the be-

ginnings, and then people were opti-mistic about the market. It seems welike the adrenalin,” says Barbu. “Welike to build; and this is what we’vedone for the last ten years – built.Now we have moved on to buildingsomething else all over again,” shegoes on.

Very soon after they joinedforces earlier this year, they signed adeal with international real estateconsultancy Knight Frank, whichthey brought to Romania, and thishappened faster than they had ex-pected.

The new company, with a teamof 22 senior consultants, is currentlycovering office, retail, industrial andmore recently land deals. These arethe market segments seeing activitynowadays.

By the end of the year, the firm

wants to add a valuation departmentand one for investments, and the team should increase to 25 peo-ple.

Teamwork and optimism are thebuzzwords for The Advisers/ KnightFrank.

“The investment market willgrow, so we want to prepare forwhen it is back on the up, I hope bythe end of 2010. It is true there aremany companies with investmentsdepartments up and running, whichis why we will try to focus on thisarea too,” says Florescu.

Soon after starting the company,they secured the first deals, whichhappened in summer this year. Thebulk of deals are starting to happenthis fall.

“The first deal was in summer,so it was not a quiet summer as

VETERAN REAL ESTATE AGENTS GO ITALONE ON BRAVE NEW MARKET

The Advisers/Knight Frank representatives keep teamwork and optimism as buzzwords in their work

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Horatiu Florescu, president and CEOC

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many had thought. We had a lot to work, but transactions havejust started to be signed,” says Flo-rescu.

It is still too early to evaluatenumbers, say the two consultants,but if early next year they can affordto go on an incentive trip, thenthings will have worked out well.“We have been on many incentivetrips in recent years, when the mar-ket was going well, so if we go onan incentive trip next year, this willbe a sign that it went as planned,”Horatiu Florescu says.

An incentive trip would beamong the few vestiges left from theboom market of recent years. Thescene is different, and consultantshave had to adapt along the way.“The market has changed. Anyonewho wants the market back to its2007 and 2008 level doesn’t under-stand the business and the currentcontext. It will never be the same,”Florescu goes on.

On the retail side, from the 100shopping center projects which havebeen announced, if five happen inthe next two years, it will be anachievement, says Monica Barbu.“This says a lot about the frenzy onthe market at that time and aboutpeople’s expectations, which had tobe re-adjusted,” she goes on. “Wehave to look more carefully at whathappens on markets abroad and atwhat concepts can be applied to theRomanian market. So far, indeed,we have had many developers com-ing, but they took as their examplewhat happens on more developedmarkets. But not everything whichworks abroad can work in Romania.

We have to be more careful fromnow on,” says Barbu.

Consultancy too has changed.“From what happened in 2007 and2008 we saw that the role of theconsultant is very important. In pre-vious years, one could have afford-ed to make a mistake as an investor,but now having a good consultant ismore important than ever,” Florescubelieves.

It is in times like this when goodconsultants consolidate their posi-tions on the market, he thinks, aslong as they know their productsand the services they need to offer,which should always come withsomething extra compared to whatcompetitors are providing.

“For example, the retail marketis more sophisticated nowadays,and consultancy now needs to gobeyond the surface. In recent years,a broker could have just accompa-nied the client to a shopping mall toshow them a space, and then thecontract was signed. It was basicconsultancy, and we won’t see thatagain,” says Barbu.

She expects the department sheis leading to be busy with VictoriaCity Center, a shopping center proj-ect on Bucurestii Noi Boulevardwhich will be launched later thisfall.

When referring to the pair’s de-cision to go it alone, Barbu saysthey didn’t expect it to be easy orhard. “We knew we wanted to dothis. We are not the kind of peopleto complain and anyway we havenothing to complain about,” sheconcludes.

[email protected]


The second largest source of foreign direct investors in Romania, according to data from the Trade Registry, Austriahas been the provider of capital for some of the largest companies active in various fields locally. While the actualamount of investments coming from Austrian companies to Romania varies with the type of reporting, firms fromthe Central European country keep announcing new projects, despite this year’s economic slowdown.

Austrians advance in defiance of crisisAustrians advance in defiance of crisis

Corina Saceanu

Some of the biggest companiesactive in Romania based onturnover have Austrian sharehold-ers. Petrom, owned by AustrianOMV, is the largest local companyand has recently been ranked as thelargest in South East Europe, basedon its 2008 revenues. BCR, withAustrian Erste Bank as main share-holder, is also among the biggestcompanies in SEE, according to areport from Roland Berger.

In fact, Austria is the secondlargest source of foreign capital forRomania, based on data from theRomanian Trade Registry calculat-ed in June this year. The value ofAustrian investments in Romania,based on subscribed capital, wasEUR 3.2 billion in June this year,which was almost 18 percent of thetotal FDI for Romania at the time.Austria was only outranked by theNetherlands, which is also a favoriteoffshore destination. In June, therewere 5,500 Austrian companies ac-tive in Romania. However, it is notthe number of companies that hasproven to be the most important is-sue, but their position within the lo-cal economy, as Austrian firms con-trol several players ranked top incertain fields.

Austria also comes second in thelist of countries by FDI origin whencalculating the amounts invested be-tween 1991 and the end of last year.EUR 2.6 billion came from Austriancompanies during this interval,which means Romania attractedEUR 600 million from Austrianfirms in the first half of this year. Al-so, around 125 new companies fromthe country have started activity inRomania during the six-month span,

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A U S T R I A N I N V E S T M E N T S R E V I E W


according to Trade Registry statis-tics.

While staying in second positionin the table of foreign investors inRomania, Austrian companies havemanaged to increase their ratio fromthe total FDI in the country from 12percent at the end of last year, to 18percent in June this year, makingthem some of the most active in-vestors here.

Data reported to the Trade Reg-istry and actual data reported by theinvestors may vary, as the TradeRegistry calculates only the sub-scribed capital, while there are otherways of incorporating an invest-ment into a local subsidiary.

AUSTRIAN SHAREHOLDERS AREON THE MONEY WITH TOPBANKING AND FINANCE SLOTS

Where have Austrian companiesset foot? The banking and financesector has been one of the attrac-tions for many foreign investors, butAustrians have managed to fill thetop positions on the local scene bytaking over the biggest firms activelocally or by creating the top playersthrough a series of takeovers.

Austrian Erste Bank owns thebiggest local lender BCR, which ittook over in a privatization processback in 2006. The Austrian lendernow owns 69 percent of BCR, abank which reached EUR 16.2 bil-lion of assets mid this year.

In the first half of this year, thebank made a EUR 144 million netprofit, which was down 20 percenton the same period of last year dueto expenses incurred by increasingprovisions and a decrease of rev-enues fueled by the drop in con-

sumption. “The results mirror theextremely difficult times our clientsare facing. Despite this situation, thebank has managed to increase itsoperational performances by 10 per-cent over the first half of 2008,” saidDominic Bruynseels, executivepresident of BCR.

The poor lending activity in thefirst half of this year has also affect-ed Raiffeisen Bank, another Austri-an lender active in Romania. Raif-feisen saw a drop in its net profit inthe first half of the year. It posted aEUR 52.6 million net profit, com-pared to EUR 74 million in the firsthalf of last year.

“The H1 results are very goodgiven the current economical con-text. We have managed to compen-sate to a large extent for the increasein expenses with provisions, for theslight drop in revenues and for theunfavorable depreciation of theRON/EUR exchange rate throughcareful cost administration,” saidSteven van Groningen, president ofRaiffeisen Bank. The lender holdsEUR 4.6 billion of assets in Roma-nia. So far it has invested EUR 313million in the country, but it has al-so brought its shareholders EUR 60million in dividends last year, ac-cording to data from the company.

Austrian companies dominatethe list of top insurers in Romaniatoo. Vienna Insurance Group con-trols three insurance companies inRomania: Omniasig, which rankedtop in terms of subscribed premiumsin the first half of the year, Asirom,in fourth position, and BCR Asigu-rari, one place below.

VIG took over Omniasig in2005, Asirom joined the group in

2007, while BCR Asigurari andBCR Asigurari de Viata followed in2008. Last year the Austrian insurersold local company Unita to a com-patriot, Uniqa. Uniqa Asigurari isranked sixth on the Romanian gen-eral insurance market with a coun-trywide network of 170 branch of-fices, agencies and points of sales.

PETROM PUTS ITS FOOT ONTHE GAS

Oil and gas giant Petrom, thebiggest company in Romania basedon turnover with EUR 4.85 billionlast year, is 51 percent owned byAustrian OMV. This year the com-pany began the exploration of twonew offshore wells in Marea Nea-gra, while starting a greenfield proj-ect for energy generation at Brazi.The total value of the project reach-es EUR 500 million, which will becovered through loans from the Eu-ropean Investment Bank (EIB) andthe European Bank for Reconstruc-tion and Development (EBRD).

In the last four and a half years,Petrom has invested around EUR4.5 billion in Romania. “Under thedifficult market conditions, Petromwill stay focused on its strategic di-

rection while reviewing the compa-ny’s mid-term investment program.Specific targets might therefore beadjusted in order to ensure our de-velopment is sustainable while fullycapturing the existing potential,”Petrom representatives told Busi-ness Review. Last year, Petrom’sshareholders did not receive anydividends. In what concerns profit,in the second quarter of the year,Petrom made a EUR 50 million con-tribution to OMV’s EUR 237 mil-lion EBIT. The first half of the yearbrought EUR 127 million of profitfor Petrom, out of a total EUR 503million EBIT for OMV.

AUSTRIAN PLAYERS BRANCHOUT INTO WOOD PRODUCTION

Kronospan, an Austrian woodpanel producer, is preparing an in-vestment in a sawmill in Romania,while continuing to invest in itsSebes and Brasov production units.Kronospan has been operating inRomania since 1999. In 2004 Kro-nospan bought the Sebes-basedplant from MD Fratti and has car-ried out additional investmentsamounting to EUR 75 million.

continued on page 17

Austrian-owned BCR is the largest lender in Romania assets wise

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Corina Saceanu

What are the main areas of interestto Austrian investors in Romania, andwhat has changed in this respect com-pared to recent years?

I am very happy to say that Austrianinvestments in Romania have continuedeven in this time of crisis. Since the be-ginning of the year, Austrian companieshave invested more than EUR 1 billion.Most of the money went into the energy,environmental technology and infra-structure sectors.

To what extent do you expect an in-crease in the Austrian presence in Roma-nia? What sort of new investment proj-ects do you expect?

The Romanian market continues tobe of great interest to Austrian investors.I am very confident that we will see afurther increase in the Austrian presencehere. There is a variety of new projectswhich are under consideration, rangingfrom municipal infrastructure, for example clear water and waste watermanagement, to biomass power plants,as well as promising projects in the sec-tors of agriculture, tourism and health-care.

What are the main difficulties Aus-trian investors are facing in Romaniaand how could the Romanian state helpin addressing them?

Austrian companies often complainabout excessive bureaucracy andlengthy administrative procedures whenit comes to necessary permits or tenders.The efforts by the current government to

Austrian companies brave tough timesto pour EUR 1 billion into Romania

With EUR 12 billion invested inRomania since 1990, Austria isamong the top sources of foreigndirect investments for thecountry. Even this year, with the economic slowdown, Austrian companies have invested EUR 1 billion locally, says MARTIN EICHTINGER,the Austrian ambassador toRomania. New investment targets include energy, environmentaltechnology and infrastructure.

make the administration more efficientare most welcome.

Austrian banks and insurance com-panies are among the top investors in theRomanian financial system, and theyhave pledged to continue investing theirprofits in Romania. How do you thinkthis will be reflected in the overallamount of Austrian investment in Ro-mania, as a year-on-year comparison?

Austrian banks and insurance com-panies have re-invested some or most oftheir profits in Romania as have othercompanies. The economic crisis offersgood opportunities to increase marketshare. Many companies have also react-ed to the crisis by making their opera-tions more efficient and competitive.Austrian investments in Romania,which have reached the impressive levelof EUR 12 billion since 1990, will showa further and substantial increase by theend of this year. Sometimes it is difficultto follow and adequately measure the re-al investment flows, as in a globalizedeconomy investments are sometimesmade from different sources and throughintermediary countries.

What sort of incentives do Austrianinvestors find in other European coun-tries in order to help their activity, whichwould also be of help here?

There are a number of measureswhich would be beneficial for foreigninvestors, such as an improvement inRomania’s infrastructure, a simplifica-tion of administrative procedures, trans-parent tendering procedures, the uni-form implementation of laws, shorterdurations of legal procedures in courtand simplified tax laws. The govern-ment is aware of these issues and has al-ready taken steps to remedy them. How-ever, still more needs to be done.

[email protected]

A U S T R I A N I N V E S T M E N T R E V I E W


continued from page 15The last investment in Sebes

was completed this year. The firmput EUR 12 million into environ-mental protection: filters which al-ready comply with the requirementsto be imposed by the EuropeanUnion from 2012. In Brasov it hasinvested EUR 200 million to date,and the production unit there shouldbe commissioned in this autumn. InConstanta, Kronospan has investedEUR 15 million in an operation ter-minal and a warehouse with a sur-face of 8,000 sqm.

Austrian Egger, a producer ofwood based panels, has announcedan investment program of EUR 500million in production units in Ro-mania. The producer will put EUR53 million of this sum into a unit inthe Radauti area, in the north of Ro-mania. A EUR 40 million adhesivesfactory is also on the cards. Eggeropened a production unit in Radautilast year, following an investment ofEUR 210 million. This plant shouldbring the firm sales of EUR 150million in 2010, according to datafrom the company.

AUSTRIANS KEEP IT REALThe local real estate and con-

struction market has attracted Aus-trian investors too. In fact, it wasAustrian investment funds thatstarted making real estate deals inthe country back in 2006. Takefunds such as CA Immo, then Eu-ropolis, and finally Immoeast. Eachhave marked premieres on the Ro-manian market in the last couple ofyears, and each still has an interestin local real estate. After taking overoffice and industrial properties inRomania, Europolis went on to de-

velop office space here. So did CAImmo, although the fund has scaleddown its development until bettertimes. Immoeast was the most ac-tive buyer of Romanian propertiesin 2007 and even 2008, but has de-creased the pace of its activity inRomania and even plans to sell as-sets in the country after the real es-tate downturn forced it to restruc-ture its portfolio across CEE.

Other segments of the real estatemarket have caught the Austrians’eyes as well. Wienerberger spottedthe local demand for bricks and claytiles and has set up production unitsin Romania. It now owns three fac-tories in the country but the recentcontraction of demand for its prod-ucts has prompted it to scale downproduction. It will temporarily closedown two of its factories, in Clujand Dambovita counties, and keeponly the one in Sibiu operational,according to recent media reports.Last year, Wienerberger posted aEUR 73 million turnover, up 13 per-cent on the previous year.

Do-it-yourself retailer BauMaxhas focused on construction materi-als too, but on the selling end.

It came to Romania in 2006, andhas expanded to reach seven storesin the country. Last year, the compa-ny posted a EUR 130 millionturnover, which was double the fig-ure from the previous year. The re-duction in customers’ budgets forDIY products has prompted Bau-Max to delay its planned openingsfor the country. The stores in Con-stanta and Pitesti, which were ini-tially scheduled to open this year,will now be completed in springnext year.

[email protected]

OMV is the majority shareholder of Petrom, the largest Romanian company

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Romanian firm Gabi’s and Pap-pa Reale, owned by local business-man Gabriel Stan, has completedthe first stage of the Bellevue Resi-dence Brasov development. Theresidential project, which required atotal investment of EUR 30 million,should be finished by the end ofnext year.

The developer has covered 33percent of the necessary investmentso far, while the rest was financed

The total project should be finished next year

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Bellevue Residence completes first six blocksof flats in Brasov

P R O P E R T Y

Nordsee opens firsthigh street unit inAmerica House

Dracom Sea Food, the owner of thefast food master franchise Nordsee inRomania, has rented 300 sqm in theAmerica House office building in orderto open its first high street restaurant inRomania, CBRE Eurisko has an-nounced. The restaurant will be locatedon the ground floor of the office block inVictoriei Square and will be the fourthNordsee restaurant in Bucharest. Twoother units are operational in BaneasaShopping City and one is soon to openin AFI Cotroceni Park.

Darcom Sea Food will invest aroundEUR 600,000 in opening the new eatery,according to Cristian Farmache, share-holder in the firm. Nordsee specializes inserving fish and seafood. The franchisein Romania is owned by Liliana Farma-che, Cristian Farmache and Darius Han-drea. Internationally, Nordsee runs 400restaurants in Germany, Austria, theCzech Republic, Bulgaria, Hungary,Turkey and Switzerland, most of whichare under franchise.

Corina Saceanu

Ibis chain expands with EUR 50 mln investment Three-star hotel chain Ibis will

expand in Romania following in-vestments of EUR 50 million in thenext two years, two years later thanpreviously announced. The financ-ing freeze and the lengthy processof receiving construction permitswere behind the delay, said RaduEnache, president of ContinentalHotels, the company which buildsIbis hotels in Romania.

Seven new hotels should be setup in Romania by 2012. The fourthIbis has recently opened in Sibiu,following an investment of EUR 9.4million. The new hotel features 195

rooms and expects an average occu-pancy rate of 53 percent by the endof the year. Continental Hotels willalso re-open the Continental GrandHotel on Calea Victoriei inBucharest, which required an EUR8 million investment in renovations.The 60-room hotel should bring theowner a EUR 3 million turnover bythe end of the first year of activity.

Ibis is a three-star hotel in theportfolio of hospitality group Accor.The group is also present in Roma-nia with the Pullman and Novotelbrands.

Corina Saceanu

Lewis Charles Romania posts EUR 2.7million H1 loss, starts residential project

Only half of planned shoppingcenters to be built by end-2010

British investment fund LewisCharles has started work on a resi-dential project in Mogosoaia, closeto Bucharest, for which it has re-cently received the building permitsand secured a six-month transitionalbank bridge loan, the fund has said.The project, called Evergreen, is ex-pected to be started in the last quar-ter of this year, by when the devel-opers should have received all therequired permits.

The developer is planning tostart marketing the project. The tem-porary lending facility, whichcomes after a previous loan had ma-tured, should cover expenses until alevel of pre-sales is achieved. Thiswould allow the developer to applyfor development financing, accord-ing to the fund. The fund posted aEUR 2.7 million loss in the first half

of this year, higher than the one itposted mid last year, some EUR 1.1million. The loss stemmed from thefurther write down on the disposalof its Magnolia retail project inPloiesti and the effects of theRON/EUR exchange rate volatility.

The fund sold the retail projectin Ploiesti to Blackpearl, but haskept the rights to 50 percent of prof-its from the future performance ofthe project. Blackpearl also man-ages the Evergreen residential proj-ect in Mogosoaia.

The investment fund, which willextend its investment timeline until2014, has recently terminated itsmanagement contract with LewisCharles Securities Limited, with theend of the notice period being putback to February next year.

Corina Saceanu

through an Alpha Bank loan. The fi-nal project will include 148 apart-

ments. At present, 80 percent of theproperties in the first six blocks offlats has already been sold. Theproject will feature nine blocks onfive floors each.

Price for units in Bellevue Resi-dence start from EUR 119,000 plusVAT for a two-room apartment andcan reach EUR 750,000 for a pent-house. Three-room units cost EUR180,000 plus VAT.

Corina Saceanu

There are four Ibis hotels in Romania so far

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R E G I O N A L N E W SCEE INVESTMENT ACTIVITYPICKS UP IN AUGUST,RUSSIA MAKES UP HALF OFDEALS

Property investment in Centraland Eastern Europe totaled someEUR 458 million in July and Au-gust, through 17 mostly off-markettransactions, according to CBRichard Ellis’ CEE Property Invest-ment MarketView. The year-to-dateinvestment turnover for CEE wasEUR 936 million. The July and Au-gust numbers made up 96 percent ofthe total turnover for H1. Much ofthe activity came from Russia, withEUR 239 million in July and Au-gust, half of the CEE total. Else-where in the region, activity haspicked up somewhat, but most mar-kets have remained quiet.

A defining characteristic of theCEE investment market in 2009 hasbeen continued low levels of pur-chase activity by international in-vestors. Occupiers are also influenc-ing the market by trying to take ad-vantage of the current conditions.

Only ten shopping centers are beingbuilt in Romania and only half the previ-ously announced projects will be deliv-ered by the end of next year. “It is clearRomania has been affected by the crisis.We have seen the biggest drop in pur-chasing power and retail sales are downby 20 percent. Perhaps only half of theprojects which were due by the end ofnext year will actually be delivered. Outof 700,000 sqm, only half will be on themarket by December 2010,” RazvanGheorghe, managing director of Cush-man & Wakefield, said at the annual In-ternational Council of Shopping Centersmeeting. The 350,000 sqm which willbe delivered are not evenly spread, as asingle project, AFI Cotroceni Park,makes up 76,000 sqm. It will be ready atthe end of October. The ten shoppingcenters under construction include AFICotroceni Park, Sun Plaza, Atrium Aradand Gold Plaza in Baia Mare.

Corina Saceanu


Studios and two-room apart-ments rose in price by 15 percent inSeptember compared to the periodbefore the launch of the First Houselending program, according to datafrom Colliers International. Three-room apartments have seen a small-

First House program pushes up cheapapartment prices, Colliers says

The program has upped the cost of cheap homes

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er increase in price, between 5 and10 percent.

“September was the first monthwhen the First House lending pro-gram triggered residential transac-tions in Bucharest. The most soughtafter apartments were, obviously,those under the price threshold im-posed by the state,” said Colliers ina recent report.

Compared to August, apartmentprices varied by figures betweenplus five and minus two percent.The biggest increase in Colliers’BREI index, which charts themonthly changes in the cost ofapartments in Bucharest, was 5 per-cent on August, and was found inBucharest’s district 4. In August, theBREI was EUR 1,334 per sqm.Prices grew in the first and seconddistricts as well, by 1 and 4 percentrespectively. In districts 5 and 6,prices dropped by 1 and 2 percentrespectively.

Corina Saceanu

Magheru Boulevard inBucharest has dropped 13 placesthis year in a league table of themost expensive shopping streets inthe world, according to a report byreal estate firm Cushman & Wake-field.

The Bucharest thoroughfarenow ranks 39th among 60 globalshopping streets.

The annual rent on MagheruBoulevard was EUR 960 per sqm inJune this year, down 44 percent onlast year, due to the impact of the economic crisis. Retail streets inPrague, Budapest and Warsaw outranked Bucharest in terms ofrent.

“In Romania, after five years offull occupancy on high streets in thelarger cities of the country, 2009saw a vacancy rate of 20 percent.Unfortunately, one of the mainstreets in Bucharest, Calea Victoriei,

has suffered both because of the cri-sis and the lack of improvements ininfrastructure and parking places,which are necessary for luxury re-tail. The historical center ofBucharest will probably be the firstimprovement project for street re-tail,” said Razvan Gheorghe, headof Cushman & Wakefield in Roma-nia.

Most of the contracts signed inthe first half of 2009 for high streetretail units were actually renegotia-tions of older contracts, with rentsgoing down, said Gheorghe.

The demand for street retailunits has decreased, as most retail-ers have put the brakes on expan-sion. High street retail rents havedropped by 20 to 30 percent sinceSeptember last year.

Rents on Magheru Boulevardand on Calea Victoriei are aroundEUR 70 to EUR 80 per sqm per

High street rents in Bucharestdown 30 percent on last year

Vitan Platinum Towers it is be-ing built in Vitan area ofBucharest, on Penes CurcanulStreet no. 14, near the MihaiBravu subway station and thereare finalized already 75 apart-ments. “The New Vitan” compris-es four blocks of 13, 15 and 17floors with a total of 313 apart-ments.

Because the developer, Plat-inum Group, wants you to haveall the comfort, he offers:

- 300 underground parkingplaces

- Private garden- Gym- Entrance with video

interphone- Commercial spacesVitan is an area which needed

new homes, especially for thepeople who live in the neighbour-hood and want to move in a newand safer apartment, but theydon’t want to leave this area. Liv-ing in Vitan will make you neigh-bours with Unirea Shopping Cen-ter, Bucuresti Mall, Carrefour,Tineretului Park, Palatul Copiilor,Real Hypermarket.

Besides all the facilities, Plat-inum Group, implemented flexi-ble payment modalities, adaptedto different incomes, in direct col-laboration with Banca Romaneas-ca which is financing Vitan Plat-inum Towers residential project.

Sales office: Str. Penes Curcanul Nr. 8 - 14, Sector 3,Bucuresti

Telefon: 021 346 1000

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Vitan Platinum Towers refreshes Vitan area

month, which is down 48 percent onlast year. In other cities such asBrasov, Constanta, Timisoara andIasi, high street rents vary between

EUR 35 and EUR 40 per sqm amonth, while in Cluj the figure is 30percent higher than this.

Corina Saceanu

Many retailers have left Calea Victoriei for shopping center locations

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VISTA

Dana Ciuraru

What challenges will managers facethis year and the next?

Preparing the business plan for thenext few years based on this year’s ex-perience is a challenge in itself, as it isstill unclear what will happen next.Choosing a direction with a limited setof options and changing gear from 8percent growth to 10 percent decline hasrequired solid management skills. Butthe last few years of growth generated abuffer zone for most companies that hassoftened the impact to a certain extent.It has also allowed a focus on survivalthrough cost management, namely thetemporary shutdown of production,price pressure on suppliers, selectiveheadcount alignment and improvementof working capital. With these done, thebusiness plan of 2010 will be driven bythe need to survive the next year of eco-nomic slowdown and maximize partici-pation once the macro climate recovers.

Has the crisis changed the businessmodel employed by companies?

What our clients are saying supportsour observation that in the last 10months a rethinking of the most appro-priate business model for the Romanianmarket has started. It would be too sim-ple to conclude that earlier business

models were wrong – but at the sametime it is crystal clear to most businessleaders in Romanian key industries thatthe “old model” of the last five yearsdoes not suit the crisis, nor will it suitthe time after the crisis. The growthphase has allowed too many companiesto have too similar business models thatwere nurtured as long as domestic de-mand was seeing a double digit growthrate year after year. Even after the crisis,Romania will remain a dynamic marketarena (in a good and bad way) that willoffer business opportunities.

What changes to the business mod-el have you identified?

Mastering the challenges of the newbusiness models will require a moreprofessional model and the leverage ofopportunities within EU markets as apath to non-EU markets in the region.We are currently observing across allmarkets a reshaping of value chains andincreased demand from mature marketsin Western Europe to find the right loca-tion to outsource. This could be a key

growth and wealth drivers for Romania– with enormous efforts from the publicand private sector. It is not only the welldocumented shortcomings in infrastruc-ture and public administration that needto be addressed. Romania must developits industry footprint if it does not wantto be outpaced by markets with evenlower salaries and lower environmentaland work safety standards. There is noneed to highlight Chinese workers in theRomanian construction and textile in-dustry as an example of this trend. Mostopinion makers are calling for a nation-al innovation strategy, more foreign di-rect investment etc – and they are notwrong. To defend its current positionand avoid what we have seen in neigh-boring countries after EU accession,Romania needs to focus on developingan industrial footprint based on moresophisticated technology and processesthan now.

Can you give an example?Although the media is full of the

lessons of the crisis, it still astonishes

Efficient technology can ease crisis painme that most agricultural products donot yet meet international quality stan-dards, because of which internationalfood producers in Romania import andare not able to leverage a local supplychain as they theoretically could if thetraditional industries of agricultureand production had already reachedEU standards.

What are the main mistakes thatmanagers have made?

In Romania three types of man-agement style are damaging compa-nies’ short- and long-term prospects.One is the radical communicators,found at most companies that were thefirst to announce change but thenstopped or slowed down as they didnot know where to get started. Someof them did get started but are mud-dling through the implementation. Thesecond: radical cost cutters, whoachieved impressive cost reductions inthe first stage, but are not sure if thefirm is ready for the recovery of 2011.Some of the cost reductions left bitsand pieces of earlier teams and organ-izations that need to be glued togetheragain. The third category are the foggynavigators, who, driven by a high lev-el of uncertainty, lack a consistent ap-proach to answering the challenges ofthe crisis and making single smallsteps when they are urged to by sup-pliers, banks and shareholders.

What sectors do you think havebeen and will be worst hit by the cri-sis?

We need to distinguish betweenthe sectors directly and indirectly af-fected, as the latter will experience im-pact later. All retail related businessmodels, suppliers, especially in the carindustry, and providers of IT serviceswill definitely be among the criticalindustry sectors for the next 12-18months. But there are several sectorsthat are at a crossroads: either theywill survive or perish.

What should businesses do tolessen the effects of the crisis?

Most business leaders are stillmissing a transparent overview oftheir current status and the optionsthey could choose. After scrutinizingtheir cost structure, benchmarkingwith other players and reviewing their sales efficiency it will be easierto find the right answers and avoidpitfalls.

[email protected]

Business plans for 2010 will focus

on getting through the next year of

economic slowdown while being

able to come out fighting

once the macro climate recovers.

MICHAEL WEISS, vice-president of

A.T. Kearney, told Business Review

that he has identified three

management styles hurting

companies: radical communicators,

cost-cutters and foggy navigators.

According to him, Romania urgently

needs to invest in more efficient

technology.

E N T R E P R E N E U R S


Anda Dragan

Felix Istrate is one of the manyyoung Romanian entrepreneurs whodecided to start a business after justa few years of experience as an em-ployee. He graduated from theEconomy of Tourism Faculty in2002 and found a job as a dispatch-er in an expedition house with 10transfer trucks carrying 20 tonneseach. There he met Dragos Ghitaand together they set up their owncompany, Agnis Trading, in 2003.

“I worked in many departmentsat my first workplace, and in a fewmonths I became executive director,in charge of the management of theentire activity. The firm generatedUSD 25,000 of income a month atthat time,” says Istrate, generalmanager of Agnis Trading expedi-tion house. His first job also gavehim the opportunity to learn manythings about a new industry thatseemed to fit perfectly with his per-sonality.

At present, Agnis Trading is a100 percent Romanian investmentand is among the top five players onits niche by market share. Istratelearned the secrets of the job, be-came a manager, made some busi-ness connections and became hisown boss. But why did the two part-

ners choose to get involved in sucha business? Significant profit mar-gins, underdeveloped internal roadscow transport market and lack ofstrong competition were the mostimportant reasons. Moreover, “likeany ambitious young man, I wantedto earn more money than as an em-ployee,” says Istrate of the drivingforce behind setting up the business.

The two partners rented a studioapartment and bought a PC and afax machine.

The USD 1,000 initial invest-ment was recouped in the firstmonth of activity and Agnis made aprofit after just one year of opera-tions. By the end of 2003 the officewas relocated to a two-room flat.“We started the business with twoclients and a lot of courage. Therewere just two of us, but we knewhow the business worked. We had avery serious approach and were de-termined to succeed,” says Istrate.He added that customers came byword-of-mouth, recommended bymany other satisfied clients. Istratestrongly believes that courage,earnestness, the favorable contextand the state of the domestic roadtransport market were the most im-portant ingredients that broughtthem success.

Furthermore, there is no roomfor regret over any decision that Is-trate and Ghita made, because “abusiness is the result of all assumeddecisions,” as Istrate says. “I havenever thought about how it would

have been if I had made a differentdecision, because at a specific mo-ment that decision was the best forthe business from my perspective,”he adds.

Meanwhile, both the number ofAgnis Trading’s customers andturnover doubled thanks to the eco-nomic boom that Romania had en-joyed in recent years. In 2004 thepair had the idea of extending boththe team and the business. To thisend, they bought a site in southBucharest and started to build a newoffice building for Agnis, with thesupport of their own constructioncompany. Brand promotion wasoverdue since the business hadgrown so fast, so Istrate and Ghitabegan to pay more attention to it.Today, the company has a 50-strongteam, 45 active clients in its portfo-lio and more than 4,000 transportproviders.

Asked about the most difficulttimes that Agnis has faced, Istratereplies that it is hard to single outjust one, because each developmentstage of a business has its own chal-lenges.

“Neither the beginning nor thepresent are quiet times. We are see-ing the shrinkage of all markets. It isalmost impossible to work on oiledwheels in our industry,” says Istrate.He adds that Agnis Trading’sgrowth strategy was a sustainable,prudent one.

“If I started again with anotherbusiness, I probably wouldn’t

change anything, because AgnisTrading has grown on a prudent, se-rious, flexible base,” says Istrate.Currently, no client contributesmore than 10 percent to the compa-ny’s turnover.

The greatest challenge for Is-trate and Ghita since the very begin-ning has been to satisfy customers’needs beyond the terms of their con-tract. “We are assuming to provide ahigh-quality service under the con-tract terms, but sometimes, whencustomers show their gratitude it isthe greatest recognition of our ef-fort,” says Istrate.

As for the competition, the bigplayers are already paying more at-tention to the domestic road trans-port market and have begun to focusmore on this segment. Multination-als active in this industry also haveexpedition activities, rolling stockand logistic centers. Moreover,many of them operate road, sea-borne, river-borne and railroadtransportation. So greater special-ization on the market is needed. “Ihave always believed in the ‘make adifference’ concept to be a success-ful businessman. I think that wemake a difference through a seriousand coherent approach, helped bythe quality of our services. We arevery flexible and treat each cus-tomer in a unique manner,” says Is-trate. According to him, the firm’sfuture plans include a 10 percent in-crease of team experts and theprocess of transforming the compa-ny into a public one. Another targetis to become a leader on the internalcommodity transport market.

Courage. Flexibility. Persistence.

These are the main ingredients

that Felix Istrate and Dragos Ghita

say have helped them become

two young successful

entrepreneurs running a business

with a EUR 10 million turnover.

They are still thinking big for the

future: to be number one on the

domestic road transport market.

Felix Istrate, one of the two entrepreneurs who started Agnis Trading

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NIS TRA

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FROM A STUDIO APARTMENT TO A EUR10 MILLION TURNOVER

é 2008 turnover: EUR 10 million

é 2009 estimated turnover: EUR

11 million

é Number of employees: 50

é Initial investment: USD 1,000

é Total estimated investment:

EUR 3 million (especially in

office building and IT systems)

Agnis Trading

P R O F I L E


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TO BY ISA

BELLE VAU

THIER

Otilia Haraga

Both you and your sister are publicfigures. What did you want to be whenyou grew up?

When I was four, I planned to be-come a garbage truck driver. My sister(Ed. note: Alina Mungiu- Pippidi)wanted to become a writer and wrotefrom an early age, which made mewant to tell stories too. Later, she wentto Medical School and I studied Philol-ogy; she worked in a hospital, I as ateacher. Then I worked for a while inthe mass media, and eventually we bothgot where we are today. But when youare a kid, you have simple plans. Youdon’t want to become a political analystor an evaluator of developing democra-cies. With me, it was easier: I got to dowhat I was dreaming of when I was 16,but it is a bit different than I thought.

A film director is like a companymanager. Are you a dictator on set?

I try to obtain from actors what Ithink necessary. I handle them careful-ly, trying to help them without hurtingtheir egos. I create a working environ-ment on set – people whisper – becauseI understand that actors have the most

difficult task in the film. But I am theone who decides how it should be, andthere is no negotiation. There is a stagein rehearsals when actors make propos-als and I check whether what I tell themto do actually works.

Where did you shoot ? We shot over two years and it took

about a week to ten days for each story.We mostly filmed in Bucharest, and thehardest thing was to find an apartmentto squeeze a live pig into.We alsofilmed in the rest of the country – at achicken farm in Prahova, in Bufteawhere we found some blocks with tinboats in the car park like in the past. Wealso filmed in Predeal and on some hillsin Buzau, in Dambovita in a villagewhere we could place the carousel, andother places.

Was it fun during shooting? It is not much fun shooting with an-

imals, because they are hard to workwith: the pig got tired after the first dayand needed a double; carrying the pigup the stairs to the second floor gavethe actors a hernia. It was an adventureto wake up the sheep at 4am and herdthem into the frame because they, poorthings, slept standing up. All cows nowhave a yellow identification tag in theirear and, to cover it, all our cows wearan inexplicable red bow on their head.

But it contributes to the general comictone.

Are you nostalgic about the past? I do not see moments of my past

from a Communist or post-Communistperspective; biographical landmarks insomeone’s life are more important. Inmy case, those were connected to livingin Iasi vs. living in Bucharest. I have nonostalgia for Communism but I havemany memories from childhood: ob-jects, thoughts, sensations, stories.What do I remember? A lot, provided Ihave the time. Our main problem todayis that we do not have time for anythinganymore – I mean time for yourself; inthat sense it was better then.

Where will the film be distributed? The world premiere was in Cannes

in May, with a very satisfying atten-dance for a collective film made by di-rectors with no feature-length film de-but by then. The film was ranked in thefestival Top 10 and sold for distributionin over 25 countries, including theUSA, Canada, India, Taiwan, Israel andmost European states. In December, itwill premiere in France, where there areplans to invite to the opening formerFrench president Jiscard D’Estaing,who is a character in one of our stories.

“432” grossed a lot (USD 10 mil-

Cristian Mungiu spins sadness into goldlion) for a drama with such a depress-ing subject. How do you think a come-dy will be received?

It will not gross as much as “432,”even though it is a comedy. “432” mademoney also because it was awarded thePalme d’Or and had very good publici-ty. In Romania it is very hard to getviewers, and there are no movie the-aters. A ticket at the mall is very expen-sive for most, multiplex spectatorswant American movies and a lost socialhabit cannot be restored overnight,whatever you do.

You said your next project wouldbe about sheep. Can you be more spe-cific?

I am co-producing a documentaryin which someone had the curiosity tosee what Romania’s European acces-sion looks like from the perspective ofa shepherd, and had the patience tospend two years with him at the sheep-pen.

If you had a proposal for an inde-pendent film in English, with externalfinancing, would you do it?

I have had all kinds of proposals.Probably, at some point, I’ll do a film inEnglish. The problem is not the lan-guage but finding a strong story thathappens naturally in the English lan-guage – unlike The Pianist, for in-stance, where the poor Poles spokeEnglish.

How do you see the gap betweenthe success of Romanian film and thelow attendance and bad state of cine-mas?

The two are not really connected.Movie theaters have gradually deterio-rated, public interest has been in de-cline, piracy has been increasing steadi-ly and the success of Romanian filmneeds much more than internationalrecognition to bring the public back tothe cinema: halls, education, a constantneed for good and public-friendlymovies. You can’t bury two-three goodRomanian movies a year under a heapof inept rubbish. You need public fundsto support decent promotion. You needtime, less bitter and stressed people, anormal country.

Maverick director CRISTIAN

MUNGIU rose to worldwide fame

with the movie 4 Months, 3 Weeks

and 2 Days (or “432”), an intense

drama about abortion in

Communist Romania. He is now

back with a comedy, Tales From

the Golden Age (Part 1), Tales of

Authority, a humorous account of

life under Communism, which he

co-directed with four filmmakers.

Mungiu says he did not have big

dreams growing up: he just

wanted to drive a garbage truck.

Read the ful version of the interview anwww.business-review.ro

B A L A N C E


Otilia Haraga

Let us start with some hard facts.Bucharest is considered the most pollut-ed European capital, due to the slowspeed of traffic and the age of the cars,which are responsible for about 70 per-cent of the air toxins in the city. Everyday Bucharesteans breathe in the gas re-leased by approximately 1.5 millioncars. Green spaces are few and far be-tween as over the last 15 years over 17million sqm of green space has disap-peared. In the capital, there are about 8sqm of green space per inhabitant, com-pared to the European norm of 26 sqm,according to Ana Maria Bogdan, com-munication manager of the Mai-MultVerde Association.

Now, compare it to this: in theNetherlands, about 40 percent of peopleon the road are cyclists and the numberof bicycles surpasses the number of in-habitants – there are over 18 millionbikes for a population of 16.5 million,says Bogdan.

At the moment, in Bucharest thereare approximately 68.5 kilometers of cy-cle lane which are noticeable and wellmarked. Problems arise when cyclistscome across parked cars, pedestrians,kiosks or other constructions blocking

their way. “Ideally, the bicycle laneshould be on the first lane for cars, there-fore leaving pavements free,” adds Bog-dan.

Currently, there is a workgroupmade up of representatives from theBucharest City Hall, NGOs and variousinstitutions in order to draw up a master-plan of non-polluting alternative trans-port for Bucharest. “We hope that fol-lowing efforts from this workgroup, thelegislation in this field and the currentstandards will be adapted to the Euro-pean ones,” says Raluca Fiser, presidentof the Green Revolution Association.

On World Car-Free Day on Septem-ber 22, more than 10,000 cyclists met inBudapest, she says. Bucharest can brag atenth as much, as between 800-1,000 lo-cal cyclists paraded for the event here.

But things are starting to move in theright direction, as more bike rental cen-ters have been opened.

“In 2005 I did a mass media moni-toring project and I discovered that no-body was writing or talking about bicy-cles. Now, I give interviews every week.There are news, articles and informationabout this on a weekly basis,” says GeoCulda, president of the “Bate Saua SaPriceapa Iapa” NGO. He also says thereare already racks for bicycles at the en-trance to hypermarkets and at least fivelarge corporations have placed them infront of their headquarters.

Generally, cycling fans are peopleover 24, who love to exercise and wantto adopt a healthy lifestyle. More andmore people who are pressed for timeride a bike since they prefer a viablemeans of transportation in the Bucharesttraffic, says Mircea Florescu, owner ofAssport bike store.

Among the best routes that a cyclist

can take without undue stress is the onefrom Victoriei Square on AviatorilorBlvd. where the pavement is wide andcyclists and pedestrians can go abouttheir business without disturbing one an-other, while the green space is a deter-rent for illegal parking. Another optionwould be to go out of town. “I’d tell any-one to take a ride in Cernica forest, just8 kilometers from Bucharest, for abreath of fresh air. You can go 40-60kilometers into the woods or, on the con-trary, have a short ride of 2-3 kilometers.You can choose between narrow andwide roads, depending on your prefer-ence or proficiency,” says Florescu.

No-go areas include the cycle pathon Elisabeta Blvd. and the lanes on thepavements along the Dambovita Riverwhere low-hanging tree branches couldcause injury.

The first cycle rental center was Ci-cloteque, which was opened inBucharest in 2008 opposite the Facultyof Law. The newest one is La Pedale, afree bike-sharing system with bases inKiseleff and Herastrau parks. There isalso a center called RaitaBike on IonBrezoianu St., close to Cismigiu Gar-den. Bikes can be rented from theVeloteca store on Levantica St. Just besure you have an ID card on you, asmost of these centers ask for one.

It is always good to have an ideawhat to look for when going bike shop-ping but be aware that there are no hardand fast rules about what model tochoose. For a commuter who uses a bikeevery day to go to work or school, Flo-rescu recommends Kona Dew or KonaWorld Bike, which are simple and effi-cient. For a nature lover, suitable modelswould be Cube Analog Disc (morebudget-friendly) or an AMS Comp (if

Get on your bike in Bucharestyou can afford it). “For a woman who isnot in a hurry and does not want to giveup wearing a skirt and looking elegant, Irecommend an Ideal City Life,” he says,listing as advantages of this model itsgood position, user-friendliness and at-tractive look of the bike. “The basket infront is a very popular accessory withthese models,” he says.

As for the cost, the sky’s the limit.“Price limits range from RON 1,400to… how much did you pay for yourapartment?” Florescu asks jokingly.

You have probably realized bynow that living in Bucharest is nopicnic: bad traffic, stray dogs,noise and pollution are just thetip of the iceberg. But it can’t beall work and no fun – one needsto recharge one’s batteries. Oneway of doing that is to go cycling,but good luck with that! Cyclistsare not a highly respected groupon the streets of Bucharest. Seebelow the best and worst routesfor cyclists, where to rent a bikeand what you should expect topay if you buy one.

Cycling in Bucharest is no easy task, but bike enthusiasts now have a choice of rental outlet shouldthey be brave enough to try it in the Romanian capital Cicloteque

Location: Kogalniceanu Blvd., oppositethe Faculty of LawAge: Over 18Price: annual subscription – RON 100Half-year subscription – RON 60RON 2/hourContact: 0755 236878E-mail: [email protected]

La Pedale bike-sharing centerLocation: Kiseleff and Herastrau parksBikes also for kidsContact: 021 310 63 97E-mail: [email protected] cost

Veloteca Location: 37 Levantica St.24 hours notice necessaryPrice: Normal tariff: 60 RON/day perMTB (mountain bike) Reduced tariff: RON 48/day per MTBContact: 021 3159811; 0722 736 694E-mail: [email protected]

RaitaBikeLocation: 35 Ion Brezoianu St. Price: RON 55/day, RON 200/weekContact: 0731 006005E-mail: [email protected]

MyBikeLocation: 34 Nicolae Caramfil St. 24 hours notice necessaryPrices: RON 40 per bike and protectivehelmet per dayRON 25 per bike and protective hel-met/half a dayContact: 021 232 55 20; 0729 850.310

CarpatBikeLocation: 22 Bucuresti-Targoviste Road,bl. A, ap. A2Prices expressed in EUR: Per day – EUR 15Per weekend (Friday-Sunday) – EUR 35Deposit – EUR 50Contact: 0723 389833; 0074 0166791 Email: [email protected]

Where to rent a bike

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R E S T A U R A N T R E V I E W / F I L M R E V I E W


The near future. Computergames have taken over theworld. In one, Society, the play-er’s on-screen avatar is now areal person, manipulated byspecial brain cells into doingwhatever the player decides –often involving the removal ofclothing. Sinister, you might bethinking. But it gets worse. Inthe latest game, Slayer, the hu-man avatars participate in urbanwarfare, drawn from death rowinmates offered their freedom ifthey survive 30 outings.

Now, the more right-wingamong you might be thinking,what an ingenious way of fund-ing the expensive prison sys-tem. But can’t you see thatthese felons aren’t just con-temptible canon fodder, they’repeople too? Well, okay, most ofthem are just contemptiblecanon fodder, but not hand-some Kable (Gerard Butler),who gives pained looks into thedistance and suffers traumaticflashbacks of his wife (AmberValletta) and daughter. In be-tween blowing people’s headsoff. Kable has won 27 of the 30games required for his pardon,and is looking forward to beingreunited with his wife, who isworking as the avatar of anobese, sweaty pervert in Socie-ty.

But the inventor of thegame, twisted uber-nerd KenCastle (Michael C. Hall), forreasons with which the film-makers do not wish to troubleus, is planning to kill Kable offusing a murderous fellow in-mate Hackman (Terry Crews),who we know is really evil be-cause he snorts a lot. Mean-while, a plucky undergroundband of freedom fighters arebattling to block humanity’s in-exorable drift towards a worldof mind control. Yes, that’sright, viewers, the very future

of the free world is at stake! Areyou not on the edge of yourseats with suspense?

Violence and pornographyare really wrong, see, and thefilmmakers are going to showyou how wrong by serving up95 minutes of unrelenting vio-lence and pornography. Themixed moral messages are ex-acerbated by the sheer level ofsadism and smut throughout.Gamer must dwarf the bodycount in all the Rambos put to-gether. I don’t think I’m spoil-ing it for anyone if I reveal thatin the end Kable must face-offwith Castle (whom the film-makers have doing a fey littlesong and dance routine to un-derline his depravity, in case westill weren’t sure who we weresupposed to be rooting for) tosave his family. And, as ever inHollywood, it comes down to afistfight. Yes, even though thegeeky super-villain is so power-ful he controls the minds of ahundred million people, thingsmust always be resolved by twoguys just slugging it out.

There are two slightly re-deeming features in this Matrixwannabe. One is Gerard Butler.Even though he makes very lit-tle out of the character, playingKable in Russell-Crowe-in-Gladiator mode, at least he iseasy on the eye. The other isthat despite its often objection-able subject matter, the cyber-dystopia is presented with someimagination and élan, recallingthe dumbed down, media-dom-inated, over-sexualised worldof Idiocracy, although withoutthat film’s charm.

Some people’s retreat fromreal life to spend all their timein the cyber-world is a germanetopic, and there is an intelligent,thought-provoking film to bemade on it. But this tiresome,bloodsoaked silliness isn’t it.

Debbie Stowe

Director: Mark Neveldine,Brian TaylorStarring: Gerard Butler,Michael C. HallOn at: : Cityplex,Hollywood Multiplex,Movieplex, The Light

Game for a laugh: risible SF nonsense

FILMREVIEW: GamerTWO GOOD DEALS

Iam standing in Luterana, thelast left turn as you drive upStirbei Voda, before you

cross Calea Victoriei. This tinystreet has three notable features:two chophouses and a church. Ihate religion. When I was a kidI would gatecrash Sunday serv-ices just to guzzle the commun-ion wine and leave. I have notbeen back to a church and Inever will. So you can be surethat I am in Luterana for thefood, and not for the church!

So let’s eat. Directly oppo-site each other are two differenteateries: the tiny Sale E Pepeand the huge Le Bistro. Theyare so different that they com-plement each other. The Sale EPepe is a little boutique restau-rant offering you the usual trat-toria and pizza selection whichyou can find in any ofBucharest’s 582 imitation Ital-ian tratorrias. But there is agood reason to go there. Picturein your mind, if you will, a sce-nario where you have trampeddown the obscenely overpricedCalea Victoriei and purchased anumber which in greedy Roma-nia has cost you 300 percentmore than in REAL Europe,such as Milan, Paris or London.

What do you do with yourchange? Go to ‘Sale’ (parallelto Victoreii) and have a reason-able, well priced pizza. I won’tlist the menu, as it is pre-dictable, but I will say theprices are good, the quality ishigh, the location is great, andthey list daily ‘specials’ on aboard outside, such as a simplechicken schnitzel with vegeta-bles and rice for just RON 14.

It is warm and cozy, but itsbig neighbour opposite is not!By contrast Le Bistro shouts atyou to tell you it is there. And it,too, is well worth a visit. Solet’s check it out. Le Bistro is onthe ground floor (the bar) andthe first floor (the restaurant).The bar is wood paneled in asimilar fashion to the bars in theHilton and Radisson, but is farlarger than them both. Althoughyou can eat from the full menuin the bar, it is more fun upstairsin their bright, white restaurant.

They have the good sense

to have a business lunch at afixed price of RON 40. It is ex-cellent value for two courses,such as a starter you can choosefrom a middle Eastern falafel,the soup of the day an eggplantsalad or a curiously describedIsraeli salad. OK, let’s move onto their main courses, still with-in the fixed price lunch.

You can have a “mini”beefburger, which is actuallyquite large with salad andcoleslaw, together with Frenchfries. The House should notethat the words “French fries”are incongruous with the nameof Le Bistro when they meanthe common, vulgar American,stringy fries which have con-tributed so much to AmericanMacMuck obesity. Surely theHouse should keep a Europeanidentity by substituting thisaberration with CHIPS, whichare thick double fried potatoslices in the Belgian and Eng-lish style. There were two morechoices which change, but suf-fice it to say the business lunchrepresents excellent value.

OK, let us now look at theira la carte. Their star is their Ital-ianate focaccia bread. Theymake it in house and better thanany Italian restaurant in town.For RON 5 you can chew it asa side dish, hot focaccia toppedwith Parmesan and rosemary,soaked in olive oil. But better

still is their huge focacciamains. For around RON 30 youcan have a choice of: mincedlamb with pomegranate sauce,pine nuts, tomato and parsley,or chicken topped with roastpeppers, pesto, parmesan andruccola, or variations on thistheme with alternative toppingsincluding calamari and shrimpand even a veggie version. Itried them all and they weregreat. But greater still weretheir mains which included asmall selection of roasted dish-es served in an iron roastingdish, including sea bream withvegetables, which was moistand fresh We also had a largeportion of pink, fresh tuna.

But one of those “sides”was salsa. I am sick to deathwith boredom in this city whenlocal chefs make salsa as mere-ly a tomato mush. It should beso hot that it is like pouringMount Vesuvious down yourthroat. So I asked our waiter totell the Chef to blow my headoff with the additions ofcrushed garlic (oh, so hot) rawonions and chillies. Without asingle complaint, I received it.Thanks, Chef. The rest of themenu is genuinely Mediter-ranean rather than ethic, single-nation European. And that is agood gastronomic thing.

Michael [email protected]

Salt of the earth: Sale e Pepe is a good value trattoria...

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... while its more grandiose neighbor Le Bistro is also worth a visit

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SALE E PEPE, AND LE BISTRO, BOTH IN STR LUTERANA

C I T Y


Only 1,000 tickets are left for the firstgig that Belgian band VAYA CON DIOSwill play in Bucharest, on October 13 atthe Palace Hall. Soloist Dani Klein willbe joined on stage by Salvatore La Roc-ca, William Lecomte, Thierry VanDurme, Hans van Oosterhout, Red Gjeciand Tim De Jonghe in an acoustic show.The band recently released a new sin-gle, Les Voiliers Sauvages de Nos Vieswhich, at this point, can be acquired oniTunes only in Belgium, the Nether-lands and Luxembourg. The single ispart of a new album in French calledComme on est Venu (The Way weCame). Tickets for the concert are onsale at RON 80, RON 100, RON 140 andRON 180, depending on the category,and can be acquired online from thesites www.ticketpoint.ro

The Viennese Christmas show willreplicate for Bucharest inhabitants thefeel of Vienna during the Christmas hol-idays, with a helping hand fromrenowned international artists such assoprano Judith Halasz and baritone An-dreas Jankowitsch. This special recital,which will take place on December 19at the Palace Hall, will also feature theSpirit of Vienna Ensemble who will playworks by W. A. Mozart, Joseph Haydnand the Strauss composers. One of thespecial guest artists will be top fluteplayer Ionut Stefanescu from theGeorge Enescu Philharmonic. Also, mu-sic and dance will combine as the balletdancers of Volksoper Wien add a dy-namic choreography to complete theshow.

Eighties fans and anyone born too late to witness the fun of that era can get theirfix at a concert from two of the most popular bands of the decade. Alphaville andBAD BOYS BLUE will perform at the Polivalenta Hall in Bucharest on October 13.Fans will have the opportunity to sing and dance to such hits as Big in Japan andForever Young by Alphaville and Bad Boys Blue tracks I Wanna Hear your Heart-beat and You’re a Woman. The concert will start at 7pm with DJ Slapper on thedecks and the best-known 80s hits on the playlist. The opening act will be localband El Negro who will play both their own songs and covers of 80s tunes. Tick-ets can be bought online from the sites www.vreaubilet.ro, www.eventim.ro,www.bilete.ro for between RON 40 and RON 120 as well as from the Carturestinetwork, Germanos stores, the Muzica store, Palace Hall box office and UnireaShopping Center. The concert is being organized by Kompas Events.

Constitutiei Square will be closedto traffic between October 6 and 12,along with parts of Libertatii Boule-vard and Unirii Boulevard when F1comes to town.

On October 10 and 11, Renaultdrivers Romain Grosjean and LucasDi Grassi will parade the Formula 1monopost in the area. On the same oc-casion, the newest Renault model, theFluence, launched recently at the CarSalon in Frankfurt, will be presentedto the public. The event will also in-clude parades, carnival and a raffle.Access is free of charge.

KEY PROGRAM POINTSOCTOBER 10é 10.00 – Opening of exhibition

perimeteré 10.30 – Press conferenceé 13.00-14.30 – Renault Sport Show Ié 14.30-18.00 – Local parade, carni-

val, ride & drive, cart races, auto-graph sessions

é 18.00-19.40 – Renault Sport Show II

OCTOBER 11é 10.00 – Opening of exhibition

perimeteré 11.00-13.00 – Local parade, carni-

val, autograph sessionsé 13.00-14.30 – Renault Sport Show IIIé 14.30-14.45 – Renault F1 Road-

show raffle draw

Renault Formula 1 Roadshow zoomsinto Constitutiei Square

Revving up for Renault’s Romanian roadshow

The Bucharest Running Club as-sociation organized last weekend afirst run as a promotion of the Raif-feisen Bank Bucharest CityMarathon, a sport and social eventset to take place on October 18th.The event was supported by variouslocal sports personalities.

Bucharest City Marathon willdonate the sums raised to twoNGOs: Hospice House of Hope and

Future Plus (The Association forSustainable Development).

Bucharest City Marathon 2009is an international competition in-cluding a marathon, a fun run, achildren’s race, a corporate race, aswell as a race for people with dis-abilities.

Those who wish to run in any ofthe races can enter the competitionuntil October 17. ■

Bucharest limbers up for OctoberMarathon

Start pounding the pavement and get your marathon entry in by October 17

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business review issue 35, oct 5-11, 2009

Documents

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