business review issue 39, nov 2-8, 2009

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Calin Tatomir, GM of Microsoft Romania, is leading the company through a busyperiod: the local roll-out of Windows 7 in early November and a move to newheadquarters in early 2010

See page 12

Calin Tatomir, GM of Microsoft Romania, is leading the company through a busyperiod: the local roll-out of Windows 7 in early November and a move to newheadquarters in early 2010

See page 12

MONEYLending to small and medium-sized en-terprises has dried up this year againstthe overall slowdown of the bankingsector, but banks are coming up withproducts to suit the new climate

See pages 10-11

FOCUSCar sales have stalled because of the re-

cession, with the government’s car re-

placement program remaining one of

the few aids to auto businesses

See page 16

FRENCH INVESTMENTFrench outsourcing and auditing com-panies have had a good year workingto consolidate and even expand, whilethose active in the energy sector havestarted new projects

See pages 18-21

WINDOWSRELOADEDWINDOWSRELOADED

PETROM PUMPS EUR 90 MLN INTO NEW MIDIA PLANT; SEE NEWS ON PAGE 5

BUSINESS REVIEWROMANIA’S PREMIERE BUSINESS WEEKLY NOVEMBER 2 - 8, 2009 / VOLUME 14, NUMBER 39

www.business-review.ro

BUSINESS REVIEW / November 2 - 8, 2009 3

I N T O U C H

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

Founding EditorBILL 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

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

B USINESS REVIEW

Week in

NUMBERS

Erste Bank will launch a capital

increase with an estimated out-

come of EUR 1.6 billion in rev-

enues from IPOs in Romania,

Austria and the Czech Republic

The Romanian lottery prize has

reached EUR 5.6 million this

week

1.6

5.6

The recently opened AFI Palace

Cotroceni shopping mall covers

76,000 sqm, the largest such

project in Romania

76,000

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Brainless bonuses

As an infrequent visitor to Bucharest for business, my interest

was piqued by your article on salaries in the banking sector

(Banker pay backslides after bonfire of bonuses, issue 38).

Bonuses are still a hot topic in the UK, where many people are

angered that the obscene amounts paid out in recent years are

making a comeback – just a couple of weeks ago Goldman

Sachs announced an enormous bonus pot which works out at

an eye-popping USD 172,581 per employee for the quarter. It

is well known that these huge sums played a big part in caus-

ing the credit crunch, and such news particularly grates when

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

Romanian partners tell me that here banks have generally de-

manded high deposits for mortgages and the like. Good. I hope

that Romania avoids the reckless banking practices (125 per-

cent mortgages etc) that have caused such chaos around the

world.

David Kennedy, London

On a wing and a prayer

Your feature on airlines (Profits no longer falling from the

skies, issue 36) raised an important issue for many Romanians.

While we might welcome the fare promotions designed to get

us back flying again, if more carriers go the way of MyAir and

SkyEurope, ultimately it will lead to less competition, which

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

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

therefore the possibility to visit foreign countries (outside the

Balkans and Eastern Europe) within the reach of many Roma-

nians for the first time. A return flight to Western Europe used

to cost more than the average monthly salary. I hope that the

industry bounces back from its current economic problems.

Ioana Ancuta, Bucharest

I N T O U C H

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

cluding your name and location. For consideration for inclu-

sion in the next edition, letters must be received by noon on

Thursday. Letters may be edited for length, clarity and accu-

racy.

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AFI Palace Cotroceni opened in Bucharest last week, the 10th mall in thecapital. Located at the intersection of Vasile Milea Street and TimisoaraBoulevard, the mall features 250 stores, around 3,000 parking places, a Re-al hypermarket, the first IMAX cinema in Romania, a karting ring, two casi-nos and an artificial lake. AFI Palace Cotroceni is owned by AFI Europe, oneof the largest developers in Central and South East Europe.

BRIEFSFITCH FORECASTS 7.5PERCENT ECONOMIC DROPIN ROMANIA THIS YEARé Romania's economy will fall by7.5 percent this year, while itsbudget deficit will reach 7 percentof the GDP, according to a recentforecast from Fitch Ratings. TheNational Prognosis Commissionhad previously predicted a 7.7percent economic drop inRomania in 2009, while theInternational Monetary Fund putthe GDP decline between 8 and8.5 percent for this year. Thelatter revised its forecast in Augustfrom the 4.1 percent forecast itmade earlier in March. Fitchpredicts a 2 percent economicincrease in Romania next yearand a budget deficit of 4.5percent of the GDP, while theincrease in the country’s economyshould reach 4 percent in 2011,according to the ratings agency.

CME SEES REVENUES ANDPROFITS DOWN IN FIRSTNINE MONTHSé Central European MediaEnterprises (CME), owner ofseveral TV stations in Romania,posted net revenues of USD 120million in the first three quartersof the year in Romania, down onthe USD 197 million posted lastyear, due to the decline of theadvertising market in Romania. Itsnine-month local income was onlyexceeded by its revenues from theCzech Republic, at USD 181million. CME made only an USD18 million operating profit in thefirst nine months of the year inRomania, down from USD 70million in the same period of lastyear. It posted falls in its revenuesand profits on all the markets onwhich it is active, except Bulgaria,where activity started in Augustlast year. CME owns PRO TV,PRO TV International, Acasa,PRO Cinema, Sport.ro and MTVRomania.

N E W S

BUSINESS REVIEW / November 2 - 8, 20094

Hilton will affiliate its first DoubleTree unit in Romania, in Oradea, to addto Hilton-branded hotels in Bucharestand Sibiu. Hotel Calipso is owned bySIF Banat-Crisana, which invested EUR10 million in the 147-room property. Itwill open next autumn. The other two lo-cal Hilton-affiliated hotels are owned bybusinessman George Copos (the Athe-nee Palace Hilton in Bucharest) andNicolae Minea (Hilton Sibiu, the formerPalace Resort and Spa Sibiu). The latestfacility, a five-star unit, has 115 rooms,while the hotel in Bucharest has 242.

Staff

BCR Group’s net profit, after taxesand minority interest, has fallen to RON699.5 million (EUR 166.1 million),down 43.9 percent on end-September2008, mainly due to higher provision ex-pense and lower fee income due to low-er consumer expenditure, the group hasannounced. It posted an increased oper-ating result of RON 2,223.4 million

(EUR 528 million) in the first threequarters of 2009, up 24.9 percent on thesame period of 2008. The main driverwas the operating income growth (up byRON 387.4 million or 12.5 percent onthe first nine months 2008) while operat-ing expenses decreased moderately, byRON 55.3 million or 4.2 percent on thethird quarter of 2008, in the context of

continuing branch network expansionand RON depreciation. The cost-incomeratio improved to 36.3 percent at the endof the period, from 42.7 percent at end-September 2008).

Meanwhile, BCR Bank’s marketshare passed 22 percent on overall lend-ing since the end of September 2008,driven by corporate loan growth. Thebank says it is enjoying strong liquidityand has adapted its range of products tothe current economic context. Retaillending had a stable overall market shareon 2008. “While the operating resultcontinues to be positively managed, thisis not sufficient to outweigh the growthin risk costs, where we are taking a pru-dent approach as the economic condi-tions remain difficult,” said DominicBruynseels, BCR CEO. The group is ac-tive on the local market through BCR,BCR Banca pentru Locuinte, BCR Ad-ministrare Fond de Pensii, BCR Leas-ing, BCR Asset Management, BCR Se-curities, Anglo Romanian Bank Limitedand BCR Chisinau.

Anda Dragan

BCR Group profit falls by almost 44 percent

Hilton signs with SIF Banat-Crisana to run Double Treehotel in Oradea

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

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Hilton will add a new name to its network

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Banca Transilvania (BT) has post-ed an increase of 83 percent in its op-erational profit in the first ninemonths compared to the same periodof 2008, according to its financial re-port. “We focused on efficiency andcaution in those nine months. We in-tend to reach all our objectives for thisyear, including estimated gross profit.The next quarter will be as difficult asthe current one in terms of the busi-ness environment,” said RobertRekkers, general manager of BT.

According to the lender’s finan-cial report, operational incomes sawan increase of 23 percent on Septem-ber 2008, to over RON 930 million.

The bank’s loan-deposit ratio was0.84, with BT continuing to keep anappropriate balance, better than the0.93 posted at the end of 2008. Thelender also posted a solvability rate of13.53 percent and balance sheet assetsof RON 18,246 million.

According to the same financialreport, BT’s loans portfolio is a stableone, with the local currency beingpredominant and with less than 4 per-cent exposure to real estate develop-ers. BT’s total volume of loans in-creased to RON 11,659 million at theend of September, of which 57.53 per-cent were corporate loans and 42.47percent individual ones.

One of the lender’s priorities wasthe strict controlling of costs. BT’scost/income ratio was 55 percent atthe end of September, better than the70 percent in September 2008 and 62percent in the first half of 2009. Oper-ational costs fell from RON 527 mil-lion (September 2008) to RON 512million (September 2009). The bank’scustomer portfolio includes over 1.35million active clients, both companiesand individuals.

BT also owns 100 percent ofCompania de Factoring IFN, as a re-sult of a 50 percent stake acquisitionfrom Intermarket Bank

Anda Dragan

BT foresees another tough quarter

BT posts higher results in first nine months


Orange Romania revenues in thethird quarter of the year amountedto EUR 269 million, a 22.9 percentdecrease on the same period lastyear, when the company postedEUR 349 million. Average revenueper user was EUR 100.

“Although indicators such asnetwork traffic and the number ofclients have started to increaseagain, revenues continue to comeunder the pressure generated by thedeterioration of the economic con-text, regulations and the reductionof tariffs, as a measure to answer the

needs of residential and businessclients in the period of economic re-cession,” said Thierry Millet, thefirm’s CEO.

In the first nine months of theyear the mobile operator’s revenueswere EUR 800 million, an 18.1 per-cent drop on the same period lastyear. “Revenues fell 5.4 percent inEurope, mainly due to the 18.1 per-cent decline in Romania and to reg-ulatory measures,” said France Tele-com officials. Romania was “heavi-ly impacted by the economic down-turn and strong competitive pres-sures,” added the sources.

Nevertheless, Orange Romaniaposted a 4.8 percent increase in itsnumber of customers at the end ofQ3, 2009. On September 30, Or-ange Romania had 10,694,000users. The company attracted340,000 more customers in Q3,from Q2, 2009. Of the total number,2,236,000 are broadband internetcustomers, a 95 percent growth onthe same period of 2008. Among themost significant projects that thecompany has carried out recently inRomania was to reposition its port-folio of postpay offers for residen-tial customers.

Otilia Haraga

Orange Romania revenues fall by22.9 percent in Q3

Oil and gas producer Petrom hascompleted a EUR 90 million invest-ment in a new gas-processing plant inMidia, near Constanta. The plant wasdesigned and built by German LindeGroup with the support of subcontrac-tors from Romania, Germany, Ukraineand Hungary. With more than twice asmuch capacity as the old installation,the plant can process the firm’s entireoffshore gas production.

“The new gas-processing plant ismuch more efficient than the old instal-lation and is compliant with all applica-ble EU norms explicitly regardingemissions,” said Johann Pleininger,Petrom executive board member, re-sponsible for exploration and produc-tion.

The Midia plant can process up to3.8 million cubic meters of natural gasper day with a 99 percent recovery ofheavy components, allowing for an im-proved recovery of 340 tonnes per day

of liquid natural gas products, reportedPetrom. In comparison, the former gasplant was able to recover only 100tonnes per day. In addition, the new sitehas its own gas-fired power generationunit with a capacity of 10 MW includ-ing a redundant 200 tonne per daysteam generation capacity. This allowsthe factory to operate independently ofany external electric power supply.

Petrom is the largest Romanian oiland gas company. It exploits an esti-mated proven oil and gas reserves of a0.9 billion barrel oil equivalent (boe),has an annual refining capacity of 8million tonnes and around 550 gas sta-tions in Romania. The company alsohas an international network of 269 fill-ing stations located in Moldova, Bul-garia and Serbia. Last year, its turnoverwas EUR 4,552 million, and EBITDAEUR 969 million. Energy group OMVholds a 51.01 percent share in Petrom.

Dana Ciuraru

Petrom invests EUR 90 million in new gas-processing plant in Midia

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Orange has increased its customer base

N E W S


Pharmaceutical products distrib-utor Farmexpert expects to generateEUR 20 million in the next twoyears from its newly establishedcollaborations. The company has re-cently formed a partnership withAustrian producer Kwizda Pharmain order to launch a portfolio of 14products by 2011. “The plans havebeen made until 2015. In the nexttwo years we want to have 10,000active products compared to the cur-rent 8,000,” said Octavian Iacob,executive director of Farmexpert.

The alliance is part of Kwizda'sexpansion strategy in Central andEastern Europe. It involves EUR400,000 of investments in medicalmarketing and promotion, with atarget to reach a EUR 2 million

turnover from the partnership in thenext three years.

Farmexpert made a EUR 109million turnover in the first sixmonths of this year. The distributioncompany ranked second amongpharma distributors in Romania,with an 11 percent market share, ac-cording to its own data. It is 60 per-cent owned by Andreae Noris ZahnAG (Anzag), with the rest of theshares in the hands of Dr EugenBanciu. Farmexpert employees 720people.

Kwizda Pharma, part of Austri-an group Kwizda, is an OTC pro-ducer which posted EUR 50 millionin turnover last year, with two pro-duction units and 140 employees. InRomania, it is present through Buss-cher & Hoffmann GmbH.

Corina Saceanu

Farmexpert signs partnership with KwizdaPharma, aims to make EUR 20 million

Pharmaceutical producer SanofiAventis, which bought producerZentiva this year, will start produc-ing a new medicine in Romania in2010, to be sold only on the Germanmarket.

The company said it might startmaking new products in Romania,using its 30 percent production ca-pacity from the former Sicomed fac-tory. Sanofi Aventis has also said itis planning to start exporting theGerovital brand. The company hasfinished integrating Zentiva and hasstructured the business into four di-visions, original RX, generic RX,OTC and vaccines. It has reported a10 percent market share by valueand 16 percent by sales volume,based on information from Ceged-im.

“The group had totals sales ofRON 730 million between August2008 and August 2009,” said com-pany officials. Although the busi-nesses have been integrated, SanofiAventis and Zentiva will continue tooperate as distinct firms, as well ascorporate brands within the SanofiAventis group, said Dan Ivan, coun-try manager of Sanofi Aventis Ro-mania and president of the adminis-tration board at Zentiva.

Corina Saceanu

Sanofi Aventis starts localproduction of new medicinefor German market

CO

URTESY O

F FARM

EXPERT

Octavian Iacob, executive director of Farmexpert

Oil and gas company LukOilRomania posted a USD 939 millionturnover in the first nine months ofthe year, almost half the figure forthe same period of last year. The re-sults were influenced by the currenteconomic situation and by thefalling price of oil on internationalmarkets. The company posted aUSD 47 million pre-tax profit(EBITDA), down 23 percent on thesame period of last year.

According to ConstantinTampiza, LukOil Romania’s GM,

the company’s investments on thelocal market next year will rise toUSD 45 million and will go into thePetrotel refinery and local fillingstation network.

The refinery was acquired by theRussian oil company in 1998. In thepast 11 years, the company has in-vested more than half a billion dol-lars in Romania.

LukOil Romania has a fillingnetwork of 310 units and ten oilproduct storage facilities.

Dana Ciuraru

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LukOil is planning to increase its local investments next year

LukOil Romania sees nine-month turnover halve

BRIEFSREAL OPENS EUR 23 MLN

HYPERMARKET IN

SHOPPING MALL

é Real,- Hypermarket has opened

a hypermarket within the AFI

Palace Cotroceni shopping mall,

following an investment of EUR

23.4 million. The new store,

Real's 22nd unit in Romania,

covers 7,500 sqm of retail area

and is also the first of the

retailer's units to be located in a

shopping mall. Real, which is part

of German Metro group, posted a

EUR 638 million turnover last

year in Romania, almost double

on the previous year. AFI Palace

Cotroceni was developed by AFI

Europe, part of Africa Israel

group. The shopping mall is

opening for the public today.

SALE OF BT AEGON

PARTICIPATION FUELS

HIGH Q3 PROFIT FOR

BANCA TRANSILVANIA

é Banca Transilvania posted a

EUR 8.7 million profit in the third

quarter of the year, four times

higher than its result in the first

half of the year. The increase was

mainly due to the sale of the

bank's stake in pensions fund BT

Aegon, which resulted in an

exceptional profit. The lender

posted another record profit in

the third quarter of last year,

when it sold its participation in

insurer Asiban. BT made a profit

of EUR 11.3 million in the first

nine months of the year. Its assets

grew by 7 percent during this

period, but its loans were up by

only 1 percent.

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Cinema City International, thelargest chain of multiplex cinemasin Central and Eastern Europe, willinaugurate this month its new Sam-sung IMAX cinema. The movie the-ater is part of the megaplex CinemaCity Cotroceni, which will beopened on November 20 inside AFIPalace Cotroceni. In addition to theSamsung IMAX, the movieplexcomprises another 17 movie screensand three VIP screening rooms. The

IMAX screen is 26 meters high and37 meters wide, equivalent to al-most half a soccer pitch. The capac-ity of the theater is 398, while in to-tal the Cotroceni megaplex hasnearly 4,300 seats.

In Romania, Cinema City hasopened three new cinemas since Oc-tober 2008, and aims to open be-tween 20 and 25 more by the end of2012. The next project that it willcomplete will be Cinema City Sun

Plaza in Bucharest, a multiplex con-taining 15 screening rooms. “Themarket is far from saturated. At themoment even Bucharest, which hasthe biggest appetite for film in thecountry, is at the ratio of approxi-mately 1-1.2 cinema visits per capi-ta per year, compared to other Euro-pean countries where the annual av-erage is from 2-3.5,” CorinaGonteanu, marketing manager atCinema City Romania, told Busi-ness Review.

In September 2009, CinemaCity International had a chain of 66multiplexes and a total of 609 movietheaters in six countries: Poland, theCzech Republic, Hungary, Roma-nia, Bulgaria and Israel. Poland rep-resents the biggest market for Cine-ma City, providing the firm with 45percent of its total revenues in thefirst half of 2009.

By contrast, Romania only con-tributes 2 percent, up from 1 percentin the same period last year, accord-ing to company data. In Romaniathe firm’s revenues in H1 amountedto EUR 2.6 million.

Otilia Haraga

Cinema City’s IMAX movie theater premieres this month

The IMAX screen is the world’s largest

BRIEFSGE HEALTHCARE TARGETSLOCAL INVESTMENTSé General Electric (GE) haslaunched a new investment fund,Healthymagination GE, which willinvest in medical technologysuppliers, with Romania beingone of the investment targets. Theavailable financial assistance cancover research and development,as well as expertise in theinvestment activity.

STUDY: THREE IN FIVEROMANIANS BEHIND WITHMONTHLY BILLSé Around 60 percent ofRomanians can't keep up withtheir bills and 90 percent of theRomanian population believespoverty is widespread inRomania, according to recentresearch published by theEuropean Commission. Only 9percent of Romanians say theyfind it easy to pay their bills anddebts.

N E W S


Stefan Gheorghiu joins developer Willbrook

Unilever leases 30,000 sqm ofwarehouse space in Ploiesti West Park

Romanian real estate profession-

al Stefan Gheorghiu is the new com-mercial director of developer Will-brook and will take charge of thecompany’s entire portfolio of prod-ucts in Romania. Gheorghiu, whohas previously worked as countrymanager for investment fund Eu-ropolis and for American developerPolimeni, had started his own con-sultancy company, Tegron Consult-ing.

Willbrook is working on severalprojects in Romania, including of-fice scheme Cathedral Plaza, whichhas stalled due to a legal wranglewith the Roman-Catholic archbish-opry, residential venture OxfordGardens, Logimax industrial projectin Timisoara and mixed develop-ment Willbrook Grand in Pipera,Bucharest.

Corina Saceanu

Unilever manufactures detergents, deodorants and food products

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BRIEFSBANEASA AIRPORTCANCELS DISCOUNTS FORAIRLINESé Airlines operating out ofBaneasa airport in Bucharest willhave to pay higher airport taxesthan those that use Otopeniairport and could even decamp toOtopeni, leaving Baneasa toserve only SMURD and Policeflights, said George Mihalcea,general manager of Baneasaairport. This would impact theprofits of airlines that useBaneasa, all of which are low-cost carriers. In other Europeanstates, airports located in the citycharge two to four times morethan those outside, Mihalceaadded. He said that Baneasa hadcanceled the discounts it used tooffer carriers, of between 4 and30 percent.

DEUTSCHE BANK TOLAUNCH LOCALOPERATIONS NEXT YEARé Deutsche Bank will launchservices for companies inRomania next year, according toa recent announcement byJuergen Fitschen, CEO of thebank's German operations,quoted by international media.The bank had previously tried toenter the Romanian market whenit took part in the bid to take overthe largest local lender BCR.

ROMANIA RANKS 48THOUT OF 104 INPROSPERITY LEAGUE é Romania has come 48th out of104 states in a league table ofglobal population prosperity,between the United Arab Emiratesin 47th and Jamaica in 49th.Other Eastern European countriesrank higher: Slovenia in 20thposition, the Czech Republic in25th, Hungary 27th and Poland29th. The table was compiled bythe Legatum Institute, based oneconomic fundamentals,entrepreneurship and innovation,democratic institutions, education,healthcare, safety, governance,personal freedom and socialcapital. Romania receivedaverage scores for most of these,expect for personal freedom andsocial capital, where itunderscored. Finland topped thetable.

Consumer goods producerUnilever has leased 30,400 sqm inPloiesti West Park, in one of thebiggest industrial leases in Romaniathis year. The first industrial hall ofPloiesti West Park, some 11,000sqm, has already been completed.Works on the next two industrialhalls in the project have recentlystarted.

Expanding on a 220 ha surface,Ploiesti West Park is expected to re-quire over EUR 750 million andcreate nearly 16,000 jobs. The proj-ect is being developed by Alinso

Group in a joint venture with Petri-ca Usurelu, founder of Piritexgroup.

Unilever owns a factory inPloiesti, where it has been transfer-ring production lines from otherunits in the Central and Eastern Eu-ropean region, which have beenclosed in the meantime. Unileverproduces detergents, deodorants andfood products. Among its brands areDero, Rexona, Dove for detergentsand deodorants, and Rama, Delma,Knorr and Algida on the food side.

Corina Saceanu

Competition body wantsnotary law changed tobring down fees

Notaries have attracted criticism for their heftycharges and anti-competitive practices

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The Romanian CompetitionCouncil is planning to proposechanges in the legislation governingnotary services in the country,which would remove restrictions onthe number of notaries, tariffs andadvertising.

The new rules should reduce thecost of notary services, which arenow 14 times higher in Romaniathan in Germany, and four timesmore expensive than the EuropeanUnion average, according to a studyreleased by the council.

On a EUR 100,000 real estatetransaction, a Romanian buyerwould pay EUR 5,000 to the estateagent and EUR 1,070 for the notaryservices.

The fees for real estate agentsput Romania fifth in the EU, whilethose for notary services place thecountry seventh among 21 EUcountries which were analyzed forthe report. The average real estateagent’s fee for such a deal in the EUis EUR 3,764, while for notary fees,the average is EUR 916. Such highfees indicate anti-competitive prac-tices, believes the council.

“The notary services market isone of the most crowded in Roma-nia. The situation in our country isfar worse than in the EuropeanUnion,” said Bogdan Chiritoiu,president of the Competition Coun-cil.

Corina Saceanu

Stefan Gheorghiu, now of Willbrook

X

C A L E N D A R / W H O ’ S N E W S


WHO’S NEWSANDREAS HADJIDAMIANOU has been appointed

partner within the as-surance practice ofErnst & Young Ro-mania. He has 13years of experience inassurance. Hadji-

damianou has been involved in IPOsfor the admission of companies to theAthens, London and New York StockExchanges, and has participated innumerous conversion projects of fi-nancial statements from local stan-dards to IFRS for large groups ofcompanies. He has experience in spe-cial transaction projects for mergersand acquisitions and has been incharge of numerous auditing teams.Hadjidamianou is a member of the In-stitute of Chartered Accountants inEngland and Wales and also the Insti-tute of Certified Public Accountantsof Cyprus.

CHRISTIANA PANAYIDOU has been appointedpartner within the as-surance practice ofErnst & Young Ro-mania. She has 13years of professionalexperience having

worked as an executive in charge ofaudit teams serving large multination-al corporations in the utilities,telecommunications and manufactur-ing industries. Panyidou has a special-ized focus on International FinancialReporting Standards (IFRS). Sheholds a BSc in accounting and finan-cial analysis from the University ofWarwick and is a chartered account-ant with the Institute of Chartered Ac-countants in England and Wales.

CHRIS COLLINS has been appointed chiefoperating officer of Wizz Air. He has

extensive professionalexperience in the airtransportation indus-try, having held differ-ent management posi-tions at People Ex-

press, Continental Airlines and theirsubsidiaries for 15 years. AmericanCollins joined JetBlue in 1998 as sen-ior operations manager, a position heheld for seven years, being one of thecompany’s first employees. He laterworked for Frontier Airlines as chiefoperating officer for four years.

RINO TIZZANINI is the new general manag-er of CDE R Interex. He has takenover this position from StanislasMainfroy, whose term came to an endthis summer and who has decided todedicate himself to other professionalprojects. Tizzanini has previouslyworked in the Romanian retail indus-try for nine years, serving as generalmanager at companies such as Sparand Profi. His main responsibilities inthis position will cover the manage-ment and development of the compa-ny’s national retail network.

SERGIU GANSCA is the new sales and mar-keting manager forRomania at Mio Tech-nology. Over the lastten years he hasamassed extensiveprofessional experi-

ence in sales, having previously heldthe position of sales director at AroBSTransilvania Software. In his new roleGansca will be directly involved infurther increasing the company’sbrand awareness and developing thelocal market for car navigation sys-tems. He holds a bachelor’s degree inEconomic Sciences.

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

EVENTS, BUSINESS AND POLITICAL AGENDANOVEMBER 3

é Soros Foundation Romania and Habitat for Humanity organize the

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

NOVEMBER 3 – NOVEMBER 4

é Finance Trainer International organizes the Romanian Finance Sympo-

sium at the JW Marriott Hotel. By invitation only.

NOVEMBER 4

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

tinental Hotel. For more details go to www.brforum.ro

NOVEMBER 4 – NOVEMBER 6

é The European Forum on Intermodal Passenger Travel (ILS) and the Ro-

manian Union of Public Transport (URTP) organize the second Euro-

pean LINK conference on passenger intermodality in Europe at Howard

Johnson Grand Plaza. By invitation only.

NOVEMBER 5

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

Marchesi Antinori SRL, organize a press conference on the Romanian

and Italian wine industry.

NOVEMBER 10

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

partnership with Tuca Zbarcea & Asociatii and Ernst & Young at the In-

terContinental Hotel. For more information go to www.brforum.ro.

NOVEMBER 10

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

Hotel Radisson SAS.

Telecommunications companyAlcatel-Lucent will transfer some ofits employees from Romania to oth-er companies it has set up with part-ner firms, and will not fire any of itslocal staff, international media saidlast week.

The move will be part of a pro-gram of outsourcing services, such

as marketing and IT. Alcatel-Lucentsaid last week it would let go of 564employees in Romania.

The firm was planning to giveup or outsource 4,500 jobs in Europe this year and in 2010, out of a total of 26,000. Alcatel-Lucentcurrently employs 1,600 people inRomania. ■

Alcatel says it will transfer Romanian employeesto partner firms, not fire them

M O N E Y


Lending to small and medium-sized

enterprises (SMEs) has dried up

somewhat this year, as it has across

the rest of the Romanian banking

scene. Lenders have continued to

grant loans to small borrowers, but

at lower levels than in recent years.

To meet the challenge, banks are

tailoring their products to the

gloomy climate and exercising more

caution over whom they lend their

cash to.SMEs find it harder to secure financing due to the volatility of their operations

STOC

KEXCH

AN

GE

Anda Dragan

All companies active on the lo-cal market have felt intensely themanifest and dramatic conse-quences of the global credit crunchand subsequent recession. A signifi-cant shrinking of turnovers, higherlevels of temporary or final unem-ployment, difficulties in collectingmoney and the drying up of cash-flows are some of the negative ef-fects that SMEs are feeling at themoment. After many years of highgrowth rates, these companies haveseen their outlets take a hit, andhave been forced to adapt their busi-ness strategies to the current cli-mate. SME managers have also hadto adjust their planned investmentprojects, to go back to the drawingboard with their strategies and totake cost-cutting measures.

Moreover, cash-flow difficultieshave had another negative impact:lenders have seen their customers’late payments increasing frommonth to month. With many invest-

ment projects having been canceledor postponed, lending activity hasdecreased too. “Many SMEs didn’thave enough money at the begin-ning of the crisis, and they didn’tmanage to impose new paymentsterms and collections for their cus-tomers,” said Roxana Hidan, deputymanager of the SME product man-agement division at OTP Bank Ro-mania.

The future isn’t much brighter,at least for SMEs. According to astudy conducted by the NationalUnion of Romanian Employers(UNPR), Romanian businesspeopleare pessimistic about the possiblerecovery of the local economy in2010. Some 37 percent of respon-dents told the researchers that theirturnover had dropped by over 20percent this year on 2008, while 27percent reported that this financialindicator was down by around 20percent. Some 19 percent said thattheir turnover had fallen by 10 per-cent this year on 2008 while 17 per-

cent of them declared a 5 percentdecrease.

In this context, cost-cuttingmeasures are one of the main objec-tives for SMEs. According to astudy conducted by Ka&Te Associ-ates, an IT consulting and servicesfirm, 60 percent of small and medi-um companies in Bucharest nowoutsource their IT infrastructure andadministration to another firm, inorder to cut costs. The study wasconducted on 200 SMEs.

The significant reduction ofSME activity this year has also in-fluenced their capacity to securebank financing. At the same time,lenders have become more cautiouswhen granting loans, whether to acompany or an individual borrower.“Fewer entrepreneurs have been in-terested in signing a new loan con-tract this year, and lenders have alsobeen more prudent over their fi-nancing requests,” confirmed repre-sentatives of Banca Transilvania(BT).

Elsewhere, Dragos Cabat, man-aging partner at financial consultan-cy firm Financial View, admittedthat lending to SMEs was blockedin the first part of this year. “We no-ticed a little revival in the last fewmonths, but now SMEs are able toaccess lower financing than in thepast, at the same level of guaranteesrequested by the banks,” said Cabat.SMEs are among the most high-riskborrowers, based on their weak fi-nancial structure, reduced access tofinancing and strong competition onsome of their markets.

As for the total value of newloan contracts signed by SMEs thisyear, Cabat said that it had been atleast 85 percent lower than in 2008,while the loan balance had shrunkby about 50-70 percent. Accordingto Cabat, the local credit crunch wasdown to banks’ more limited accessto refinancing sources and the in-creased importance of the state as abanking customer: lenders have be-come more interested in financingthe state due to its higher profitabil-ity. “Besides, banks have been morecautious over lending to small com-panies with volatile incomes andlower real estate guarantees,” addedCabat.

Meanwhile, BT representativessaid that the bank’s volume of loancontracts signed in 2009 was com-parable to that posted in 2008. “Thisyear we registered a marginal in-crease in our lending volume toSMEs. Our annual increase rate hasbeen about 60-70 percent in recentyears, except 2008,” they added. Asfor OTP’s loans evolution in 2009,Huidan also said that it was compa-rable to last year. According to Lucian Cojocaru, executive manag-er of the network’s commercial areaat BRD-Groupe Societe Generale,the SME sector is currently suffer-ing from both the economic down-turn and its inherent structuralweaknesses. “Generally we are trying to adapt our offer to eachcompany, which means payingmore attention to details and analy-sis. No SME customer is rejectedfor financing by default,” said Cojo-caru.

DIFFERENT STRATEGIES FORDIFFERENT LENDERS

Lenders’ strategies for SME cus-tomers are different from one playerto another, but they all have some-

Credit crunch bites into small businesses

M O N E Y


Dragos Cabat, managing partner at Financial View

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Raiffeisen Bank is launching new products for its SME customers

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thing in common: caution and adap-tation to the current economic con-ditions. BT for example chose tobring onto the market its ReadyGuaranteed Loan (“Creditul GataGarantat”), in partnership with theNational SME Credit GuaranteeFund (FNGCIMM). Bank represen-tatives said they expected to doublethe number of this type of loan toover 3,500 by the end of the year.“We have signed almost 2,000 loancontracts so far. The launch of theReady Guaranteed Loan has led toan increase in other credits from ourportfolio,” they added.

As part of the lender’s strategyfor this year, Huidan said that OTPhad set up a restructuring plan for itsloans but continued to lend to thoseSMEs that were able to adapt to thecurrent market conditions and comeup with valid projects. “We havesigned loan contracts with both ex-isting customers and the new ones,”added Huidan.

Some banks are counting onlaunching new products for SMEs,with Raiffeisen Bank being one of

them. The lender recently launchedits nano overdraft, a credit line ded-icated to SMEs with less than EUR1 million in turnover (RON equiva-lent) that have not previously bor-rowed from the bank. Would-beborrowers must have had an averageof over EUR 5,000 pass throughtheir account each month through-out this year. The nano overdraft is asmall credit line that doesn’t requirereal guarantees and has no interestor fixed monthly fee charged in re-lation to the value of the credit.“This product is dedicated to thosehighly dynamic SMEs which haveput significant sums through our ac-counts,” said Monica Udrescu,manager of the SME division atRaiffeisen Bank.

GREAT EXPECTATIONSThings are getting better for

SMEs in terms of lending, bankerssay. The first signs of recovery havebeen visible since September. “I justhope this trend will be a sustainableone on the medium term,” said Ca-bat. According to him, SMEs will

é 54 percent have no delays in loans payment

é 26 percent will restructure their staff in 2010

é 29 percent will halt their investments next year

é 10 percent will cut their marketing budgets

é 28 percent will not take negative measures in 2010

é 19 percent will hire people next year

é 30 percent will make investments in 2010

SMEs in figures

Data extracted from a study conducted by National Union of Romanian Employers (UNPR) between October 19 and October 23, on 2,000 managers of SMEs with fewer than 100 employees

remain the main driving force forcapitalist economies, so a recoveryin their financing is expected. Buthe hopes that the market will not seefinancing for speculative purposessooner, and that lenders will bemore responsible regarding their ex-posure to risk.

The current crisis will distin-guish the sound SMEs from the oth-ers and will force the survivors tobecome more professional in the fi-

nancial, marketing and sales areas.“Lending will bounce back alongwith the economy’s recovery, but itwill be a gradual recovery,” predict-ed Cojocaru. As for the evolution oflending to SMEs, representatives ofBT expect the next quarter to be adifficult one and predict an increaseonly after that period. The lender in-tends to launch some loans adaptedto the new conditions on the marketnext year. ■

L I N K S


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Otilia Haraga

Tell me about your hiring process.Microsoft Romania has 313 em-

ployees, split into three teams: sales andmarketing, the global support center, andthe company Ciao from Timisoarawhich Microsoft acquired. The biggestone is at the global support center, wherethere are probably around 160-170 em-ployees. I think over the last 12 monthswe have increased the number of em-ployees at the center by 20-25 percent.Our estimations for the next 12 monthsare along the same lines, between 10 and20, maybe even a 30 percent growth inthe number of employees. The center of-fers technical expertise and support to allFrench- and German-speaking coun-tries. Around 20-30 percent of the em-ployees at this center are not Romanian.They are from Africa, the United Statesand Western Europe. We recruit them invarious ways, starting from the HR de-partment to certain personnel recruit-ment partner-companies. We participatein many job fairs and also work withsites who suggest candidates to us.

What are the trends on the marketand how has it been hit by the crisis?

From our point of view, the IT mar-ket in Romania was one of the worst af-fected. Statistics showed that the de-mand for labor, which was traditionally

very high in Romania in IT, had de-creased by 60 percent. But it is clear theIT market has been hit in CEE. As far asRomania is concerned (and I would alsoadd Poland), it is on the list of countriesthat have very good prospects for 2010.All the statistics that I’ve seen so farshow that Romania and Poland are theonly two countries with a chance togrow slightly in 2010. Firstly, because ofthe size of the population, they representrather good markets for those who wishto invest in this region. The forecastsshow something like 0.5 percent growthin 2010, maybe a little more.

Are you tempted to work on publicprojects during this unstable period?

Microsoft Romania does not bid di-rectly for projects with the state; we arerepresented by our partners. During thelast fiscal year (ended on June 30, 2009),the results were somewhat disappointingin the public sector, precisely becausethese projects that we were counting ondid not happen. I think no more than 20percent of our total revenues come fromthe public sector. I would say that 30-35percent of the turnover comes from theresidential sector and 25 percent fromSMEs. But it is a rather hazy apprecia-tion, since these sectors can overlap.

Are you moving to a new HQ?Some time at the end of January or

the beginning of February, we will moveto a new headquarters in one of the tow-ers in Free Press Square (ed. note: CityGate). We have a telesales team which isin a third location in Bucharest and weare trying to channel our energy into onesingle area. The telesales center will re-main where it is for now because it cov-ers three stories and has a dedicated pur-pose. But in the new building there willprobably be some space left and, if wecan, we will try to make this move. Thespace is rented.

How do you expect Windows 7 toperform in comparison with Vista?

In Romania alone, over the last fewmonths, over 100,000 Windows 7 havebeen downloaded pre-launch. I thinkthat here, Vista makes up 20 percent ofthe operating systems market. I stillmaintain my aim that, in at most ninemonths, the market share of Windows 7will surpass that of Windows Vista. It’san aggressive vision. We hope that at theend of the fiscal year (in June 2010), atleast 70-80 percent of computers willhave pre-installed Windows.

How does Romania rank in terms ofthe adoption rate of Windows 7?

Statistics say that in first place forthe degree of adoption of Windows 7 isone of the Baltic countries, and that Ro-mania is second. Romania is very visible

Microsoft goes in hard with Windows 7 target in IT at world level. Here, there are theMicrosoft competence center, Oracle,IBM, Hewlett Packard, Alcatel andSiemens. Nearly all large companieshave competence support centers or callcenters here. Let us not forget that 10percent of the country’s GDP goes intoIT&C. Consequently, of course, theadoption of Windows 7 is also due to thematurity of the IT community in Roma-nia which is highly appreciated, matureand technically savvy.

What are the most popular operatingsystems on the local market now?

At this moment, XP is definitelyabove Vista for the degree of use. If weconsider reported use (and we know thepiracy rate is 66 percent in Romania),XP is probably equal to Vista. But takingthe real numbers, XP by far surpassesVista. So, I am only speculating, but ifVista makes up around 20 percent, XP isprobably somewhere around 75 percent.The remaining 5 percent is representedby other operating systems which are ei-ther very old Microsoft systems or onesnot created by Microsoft. Anyway, eventhough we do not have clear statistics,we think our market share is definitelyabove 90 percent here.

Your 2008 turnover was reported asEUR 30 million. Can you confirm it?

We cannot disclose the local resultsbut the real figure is actually much high-er and includes the sums made by allMicrosoft partners who make orders andpay directly in Ireland. Microsoft’s re-sults at global level amounted to USD12.9 billion in the first quarter. Many ofthe investments that are made are costsfor the Microsoft Corporation but themoney comes from abroad, not from theRomanian branch, which is why it ishard to give such a precise answer.

How was this year for Microsoft Ro-mania, compared to 2008?

We will probably not reach the levelof 2008 any time soon. We already saidat the end of the fiscal year (June 2009),we had had a 12 percent decrease in the2009 turnover compared to the 2008 fig-ure. The evolution that Microsoft Roma-nia will have in the next fiscal year (July1, 2009-June 30, 2010) will probablynot compensate for the 12 percent de-crease. So 2010 will probably not returnto the level of 2008. We would like to getthere but I think we have a realisticbudget and fiscal plan and at this pointwe are on target.

CALIN TATOMIR, GM of MicrosoftRomania, says his hardest task atthe company has been changingdeep-rooted mentalities, sustainedby Romania’s economic growth, intoadaptable and flexible outlooks.Microsoft is in a busy period locally:it will launch Windows 7 onNovember 5 and move to a new HQat the beginning of 2010. The firmworks with over 3,500 partners inRomania, and the GM says he hasno information about Microsoft’smooted software lab in Craiova.

T A L E N T


With many years of experience as a

lawyer at multinationals, IULIAN

PATRASCANU, managing partner at

Fine Law – Patrascanu and

Associates, decided to stop working

for somebody else in 2007. Since

then he has set up his own business:

a law firm. He is expecting a

turnover of over EUR 400,000 this

year from his enterprise and intends

to buck the trend by keeping it

highly specialized.

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

Anda Dragan

Iulian Patrascanu is an entre-prenuerially-minded professional whodecided to set up his own business in-stead of being an employee. In 2007 heleft the associate law firm of Ernst &Young, where he held a senior manag-er position. He also declined to work asa legal manager at one of the multina-tionals active in Romania at that time,although he was close to signing awork contract. But he gave up all ofthat to take a big step forward: becom-ing his own boss.

Although he admits that he neverdreamed of running his own law firm,Patrascanu decided to set up just such abusiness: Fine Law – Patrascanu andAssociates. The firm is specialized inlegal and financial consulting servicessuch as employment, mergers & acqui-sitions, all forms of liquidation, duediligence, regulatory and compliancelaw, plus intellectual property for mi-crofirms and medium-sized Romanianenterprises. But its portfolio also in-cludes multinationals active in the softdrink segment, business-process out-sourcing companies and investmentfunds. Fine Law is also a member ofthe Law Firm Network, an internation-al network that includes the legal firmsof the Magic Circle.

“2007 was the beginning of my en-trepreneurial experience. Although Iwas very close to becoming the legalmanager of a multinational, I decided

to start a business, as the result of aproposal from one of the large cus-tomers of Ernst & Young I worked for.He asked me to help him in a signifi-cant project,” remembers Patrascanu.After mulling the two proposals over,he decided that entrepreneurship wasjust a matter of hard work and tenacityand it was worth taking a chance.

The entrepreneur adds that both hisself-esteem and an objective evalua-tion of his experience combined withthe favourable context and being theideal age persuaded him to take theplunge. Patrascanu faced someteething troubles, as many entrepre-neurs do. Despite this, his motto was toset up a business in the most responsi-ble way. “I can’t blame the craziness ofthe beginning, because I truly believethat entrepreneurship is a question ofresponsibility, both to your customersand your team,” says the managingpartner. He adds that his first months asentrepreneur were very difficult, as hebore the burden by himself. “I had todo everything for the business to makesure it worked out well.” But one of the

key factors in his success was to payattention to his customers’ feedback onthe company’s services.

Although professional expertise isone of the most important aspects insetting up a business, it doesn’t guaran-tee success. “You can communicatebetter if you are helped by marketingtools. But it is all about years of expe-rience and managed projects, in theend,” says Patrascanu. In his opinion,one of the things that give a consultan-cy business the edge is the unique sell-ing point that distinguishes the firmfrom other consultants. “I am a com-mitted supporter of customized servic-es. The high quality of work and serv-ices, added value and customized serv-ices are the main ingredients of a suc-cessful consultancy business,” says thelawyer. He says that consultants areselling services whose added value isvisible on the medium and long term.

Entrepreneurship is a unique expe-rience that teaches many business les-sons. As Patrascanu says, he learned toexplain to his customers exactly wheretheir business would be at the end of

the consultancy project. “You can losea customer if you don’t show themwhat you have achieved in a simpleand objective manner.”

When it comes to the importanceof personal branding for a businessconsultant, Patrascanu says that itcounts for 100 percent at the begin-ning. “When you start a business thebrand means professionalism, serious-ness and awareness of your potentialcustomers,” adds the entrepreneur. Interms of strategy, Patrascanu doesn’tintend to grow the turnover in the firststage of development. He sees poten-tial rather than a tough time in the cur-rent economic turbulence. “The crisisis a big opportunity for us becausethere is no segmentation on the legalservices market in small, medium andlarge law firms. The quality of consult-ing services and the flexibility of feesare primary now,” says Patrascanu.

According to the lawyer, the quali-ty of its services combined with thevalue of its fees are the main competi-tive advantages that Fine Law has overlarger law firms. “These firms havegrown a great deal in a short time sothey have needed to recruit manyweaker consultants. Besides, they havehigh operational costs so they can’t af-ford to charge low fees at present,”says Patrascanu. He adds that bothSMEs and Romanian and multination-al companies could not afford to payhigher fees to their consultants thisyear. And the situation will stay thesame in the months to come. “In such acontext, middle-sized players, with ahigher level of expertise, will also beable to target customers such as invest-ment funds or multinational compa-nies.” As for the future, Patrascanu in-tends to keep his firm as a specializedbusiness, despite the current trend oflaw firms offering complete and gener-al services.

ENTREPRENEUR TAKES SPECIALIZED ROUTE

é 2008 turnover: EUR 295,000

é 2009 estimated turnover:

EUR 425,000

é Number of employees: 6

é Initial investment: EUR 75,000

é Total estimated investment for future

developments: EUR 175,000

Fine Law – Patrascanuand Associates


Taking the market pulse at Realty

P R O P E R T Y

According to property profession-als at Business Review’s Realty fo-rum, real estate brokers are used toclients requesting a certain valuationfigure to match their financing needs,because the valuations are essential tosecure bank loans. But the frequencyhas started to increase in the last cou-ple of years. “We have always hadclients asking for a higher or a lowervaluation figure. Three years ago,there was a clear distinction betweensuch clients and the rest,” said MihaiGrigore, chief operating officer atColliers International.

But now brokers are seeing moreclients looking to cut costs at the ex-pense of quality. “We lost a valuationproject to a company that not long agoused to do transactions with old resi-dential units, which had no experiencein valuation,” said Grigore.

“Too many people have got a paton the back from valuers in the past,but the valuer must criticize the proj-ect if necessary, and say if the valuehas gone down. Many valuers havebeen told by their clients that theyneed a certain figure to get their loan,which shouldn’t happen anymore,”commented Andrew Pierson, MRICSand country manager with KingSturge in Bulgaria.

When it comes to ethics in localreal estate, Tim Wilkinson, joint man-

aging director of DTZ Echinox, saidthere were few opportunities to learnsuch a moral code in Romania. “Themain problem of unethical behavior inthe local market has stemmed from acombination of the lack of availablereal estate education and short-termgreed to close transactions in any waypossible. Such behavior tends to comefrom a minority but impacts the ma-jority by dragging the property indus-try’s image down,” Wilkinson re-marked.

Despite the competition betweenreal estate agencies on the market,they should share certain informationand even research on occasions.“Much about ethics is based ongreater transparency,” said Wilkinson.Sometimes agencies give differentmarket values, which confuses theclient, who will choose to do what hethinks best, said Radu Lucianu, man-aging director of CBRE Eurisko Ro-mania. As for the phenomenon ofdouble fees (where the agency gets afee both from the seller or landlordand from the buyer or tenant), whichstill goes on in Romania, real estatebrokers say this practice was commonin the first days of real estate activityin the country. “We also did it in theearly years, but CBRE doesn’t do it,”confirmed Lucianu.

Staff

Correct valuation, transparency and double feescome under real estate professional scrutiny

Banks’ distressed asset sell-off would becatastrophic for market, say consultants

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The local real estate market hasyet to see developers and owners re-structuring their products or any dis-tressed sales – for the time being. “Wehaven’t seen any distressed assets onthe Romanian market yet, nor foreclo-sures from banks,” said Victor Con-stantinescu, partner at Biris Goran lawfirm. The foreclosure process can lastbetween four and six months, if notmore, he added. “Some companiesmight consider the option of insolven-cy to get the bank off their back. Thisbuys the developer time to restructurethe project,” Constantinescu said.Those who hold distressed assets arenot doing anything for now, just wait-ing to get a value for their property,and this will have damaging repercus-sions next year, commented RalucaNastase, partner at Biris Goran. “We

will see a dramatic fall next year. Onthe residential side, if the banks lowertheir interest rates, there may still behope for the sector,” she added. Banksare reluctant to disclose how manynow distressed assets they have fi-nanced for fear of harming their repu-tations. A massive sale of these assetsfrom banks’ portfolios would be arecipe for disaster for the market, ifnot well handled, agreed participantsat Business Review’s Realty eventlast week.

Local bankers are keen to startselling distressed assets, but regionalor headquarter heads of those lenders,many of whom have just been ap-pointed to their positions, are afraid tomake the decisions yet, added UlrikRasmussen of Pedersen & Partners.

Corina Saceanu

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

1

2

3

4


P R O P E R T Y

Industrial developer CTP Invest hasstarted to work on a project installing so-lar panels on its industrial facilitiesacross Central and Eastern Europe. Theproject was financed with a EUR 400million loan from the European Bank ofReconstruction and Development(EBRD), said Catalin Hanu, businessdevelopment manager at the firm.

“The project began this year with anindustrial park in the Czech Republicand will continue to 18 of CTP Invest’s36 parks in the region,” said Hanu atBusiness Review’s Realty forum last

week. The developer had previouslyplanned to start an initial public offering(IPO) in order to finance its expansion,but has now postponed its plans due tothe unfavorable situation on the financialmarkets, said the manager. “We havehad cash-flow difficulties and delays inpayments to contractors, so the situationwas delicate towards the end of lastyear,” added Hanu.

But as the developer had previouslyborrowed EUR 200 million from vari-ous banks, it went back to get anotherloan, which it secured from Erste Bank,for around EUR 146 million, in Januarythis year. “This was the turning point forus. We then started to deliver our proj-ects and managed to get new financingwhich was not possible before, whenprojects were not yet completed,” saidHanu. “We haven’t drawn all the avail-able money yet.”CTP Invest owns plotsof land in several Romanian cities,where it intends to build a chain of logis-tics projects. One of the projects will bein Bors, in Bihor county, another one inMadaras, another is planned for Pitesti,and a fourth for Turda.

Corina Saceanu

CTP Invest starts solar panelproject, draws on new financing

Retailers seek rent reductions insteadof better marketing, consultant says

Catalin Hanu, business development manager atCTP Invest

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Institutional investor ING RealEstate, which owns a retail propertyin Iasi, has realized that secondarycities have smaller pools of potentialcustomers and is currently looking atretail projects in Bucharest alone. “Inretail it is still pretty bad, but we ex-

Gisj Klomp, managing director of ING RE

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Retailers that have opened unitsin existing retail projects are puttingpressure on developers to offer themlower rents and other types of bene-fits, despite some of them not facingfinancial difficulties. “Some retail-ers really have problems, while oth-ers are just trying to take advantageof the situation and press for betterconditions,” said Andrei Vacaru, re-tail consultant at JLL Romania. Re-tailers are pushing for benefits suchas a year rent-free, but only devel-opers in a distressed situation them-selves would offer such benefits, hewent on. While most owners areopen to helping retailers, those in abetter market position are reluctantto give big rent reductions.

“Without stable rents, it is diffi-cult for developers to continue theiractivity,” said the consultant. “Re-tailers are rushing to ask for rent re-ductions, although sometimes theyshould instead seek better market-

ing for their project, which wouldhelp them improve their sales.”

Retailers are nowadays less will-ing to provide the same guaranteesto developers as they did before.“Tenants are asking for turnoverrents nowadays,” said Vacaru. Thisimpacts developers, as the retailers’sales are at lows. However, a devel-oper needs a much higher level ofpre-leases in order to secure bank fi-nancing nowadays than in the past,he added.

Although companies have an-nounced that around 100 retail proj-ects will be constructed across Ro-mania in the next couple of years,only a few of them are actually be-ing built. Moreover, “this year al-most no new development projectshave been announced. We have seendevelopers leaving the country orsimply stopping investments,”Vacaru observed.

Corina Saceanu

pect it to bottom out next year. Wehave learned the lesson that second-ary cities have small catchment ar-eas, so we’re looking at Bucharestfor retail investments,” said GisjKlomp, managing director of INGReal Estate.

“It is difficult to sell Romania toour shareholders nowadays. Thecountry has an unattractive risk pro-file. Our investors don’t know whatthe right price for properties here is,and if they decide on a certain price,they are not sure whether they willget it or not,” added Klomp.

As for existing projects whichwill need to be restructured, Klompcommented, “It is difficult to turnaround a project. If the bank forcesyou to change a project, it will hap-pen; otherwise, it’s hard.”

ING Real Estate owns FeliciaShopping Center in Iasi, a projectwhich it bought in 2007 for aroundEUR 40 million.

Corina Saceanu

ING RE homes in on Bucharest, hastrouble selling Romania to shareholders

F O C U S


The government’s car replacementprogram was intended to boost thesales of importers and producers ofmid-range models, but ended upserving as a life vest for a marketthat fell to 102,000 sold units – lessthan half last year’s results over thesame period. It is clear that marketplayers were losing the sales battleas they strove to deal with therecession and implement cost-cuttingmeasures. For next year, importersand producers told Business Reviewthat they have already set their salesstrategies: to adapt their ranges tocustomers’ needs and purchasingpower, to make advantageousfinancing available and to launchnew models.

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

Dana Ciuraru

The government’s car replace-ment program has been a breath offresh air for the major players on thelocal auto market in a period duringwhich the recession has suffocatedsales in this sector. Proof that localcar sales are in freefall comes fromthe Association of Automobile Pro-ducers and Importers (APIA),which reveals that 102,000 unitswere sold in the first nine months ofthis year, less than half last year’sfigure for the same period.

But car market representativessay that the car replacement schemehas boosted this year’s business.“About 25 percent of our sales inthe first nine months of the yearwere made through the renewal pro-gram. We sold 20,144 cars duringthis period, compared with 20,042units sold in January-September2008,” Vlad Rusu, Skoda brand

manager at Porsche Romania, toldBusiness Review.

Similarly, Dacia officials toldBR that the government program hasserved as a stimulus for local sales.“The company is the only player onthe local car market which has usedup its entire quota allocated throughthe car replacement scheme. Thisprogram played an important role inunderpinning Dacia’s sales in Roma-nia,” said Silviu Sepciu, head of me-dia relations at Dacia.

In this poor economic climate,Dacia remains top of the list of com-panies by car sales, having shifted33,509 vehicles in the first ninemonths of this year, although thenumber represents less than half thecarmaker’s sales during the sameperiod of last year. Dacia’s positiveresults have been heavily influencedby the car replacement programsrolled out in France and Germanythis year, the main export marketsfor Dacia.

Whether the new administrationcontinues the local car replacementscheme is of concern to all marketplayers. “If the government decidesnot to run this program next year,the local car market will definitelyfeel the effects. All importers would

report ongoing falls in sales,” Her-bert Stein, AutoItalia Group presi-dent, told BR.

DRIVERS STEER TOWARDSCHEAPER CARS

During these tough times, im-ported car sales have held up best onthe more affordable segments. “ForAutoItalia Group, sales have beenconcentrated around the price ofEUR 11,000 including VAT,” saidStein. The group sold 5,528 cars inthe first nine months of this year,down 60 percent on the same periodof 2008. Skoda’s brand manageradded, “For the small class, saleshave clustered around EUR 10,000including VAT, rising to EUR13,000-16,000 including VAT forcompact cars.”

Importers have had to makesome big changes to deal with therecession. “We have rapidly‘cleaned’ the car stocks since the be-ginning of the year, in order to bringto the market offers adjusted to thecurrent economic climate. Thismeans car models configured withless equipment, focusing more onsafety, coupled with accessible fi-nancing offers,” said Rusu. “Wehaven’t cut costs, but we have spent

more efficiently, from using mediachannels with higher success ratesto a more sensible use of companycars.”

Meanwhile, the Dacia represen-tative told BR that the main measurethe carmaker had taken was to adjustto commercial demand, implementtechnical lay-off periods from No-vember 2008 to January of this year,maintain stocks at an appropriatelevel and freeze wages. “At the sametime, some Dacia investments thatwere not priorities for the currentyear have been halted and expenseswere also limited,” said Sepciu.

FURTHER DOWN THE ROADIn order to attract new customers

next year, AutoItalia is betting onproduct variety. “For Fiat alone wehave ten models we’ll offer to po-tential buyers. We will also launchthe new Punto Evo and a new en-gine series. Furthermore, we recent-ly opened a new integrated autocomplex in Bucharest in order tohave broader coverage in the capi-tal,” said the AutoItalia Group pres-ident. According to him, the compa-ny has invested about EUR 13 mil-lion in expanding its dealership net-work this year.

Skoda, meanwhile, is planning acompany first: to increase its cus-tomer base in 2010 by providingsimpler financing products. “Wewill attract customers next year bycontinuing to sell car models withequipment appropriate to our cus-tomers’ demands and to ensure theavailability of financing. Regardingnew models, we will launch theCombi version of our Superb modeland also Fabia and Roomster re-designs,” said Rusu. “We have ex-panded the dealership network withthree new partners this year, whilenext year we plan to open two newdealerships in the country.”

Dacia is also bringing out newproducts. “Next year we are launch-ing our brand’s first SUV. At thesame time we shall continue to ap-ply the pricing policy which makesDacia the most accessible brand onthe market,” said Sepciu. The mostoptimistic market players expect thecar market to stay at the same levelregistered so far this year, far fromthe sky-rocking results enjoyed be-fore the recession hit.

[email protected]

Recession drives car sales into the ground

I N T E R V I E W


Anda Dragan

How has the Romanian publicaffairs market changed since youentered it?

The Romanian public affairsmarket, as a self-contained one, hasslowly evolved since 1995. Compa-nies, NGOs, civil society and socialpartners have rolled out more or lesspublic affairs and lobby activitiesduring this time, but without usingthose terms. Specialized public af-fairs agencies came into existencelater on.

I started my career in public af-fairs in a specialized agency thatwas the first player on the marketand, for a long time, the only one.But the local public affairs markethas really begun to emerge in thelast three-four years and more sig-nificantly since Romania’s EU ac-cession. Romanian institutions’need to interact with European onesand other players’ intention to enteronto the local market were amongthe main reasons for the develop-ment of the local sector.

How would you characterize themarket?

There is no doubt that it is anemerging one, and there is plenty ofspace for future development.Poland, Hungary and the Czech Re-public have more developed mar-

kets than ours. There are only five-six specialized public affairs agen-cies in Romania, and they are stillsmall. But I think that the gap be-tween Romania and other countrieswill be closed in the next five-sevenyears, owing to Europe’s tangibleand significant interest in Romaniaand the country’s size (it is rankedseventh in Europe for populationand area).

What is the value of the localpublic affairs market?

The Romanian lobbying andpublic affairs market was worthabout EUR 50-70 million last year,according to our estimations. Thisfigure includes public affairs andlobby agencies’ turnovers, sums re-sulting from public affairs activitiesconducted by some PR agencies,companies’ costs for public affairsactivities and lawyers’ returns gen-erated by such projects. Turnoversof specialized agencies representjust a small percentage of this total.Besides, we also took into consider-ation the 50 biggest companies inRomania that carried out public af-fairs activities and budgeted forthem in their financial reports.

What kind of customers do youhave?

Our customer portfolio includescompanies, business and profes-sional associations, and NGOs – all

those stakeholders that need or in-tend to lobby for public policies andwant to intervene with public au-thorities or to promote their cause tothem.

How would you characterizepublic affairs as a business model?Do companies need more help frompublic affairs agencies now thanever?

Companies need lobbying ratherthan public affairs services. As abusiness, I haven’t seen a larger de-velopment this year than in 2008.Besides, our agency has only beenactive on the market for two years,so it is to be expected that we wouldpost a growth in activity in 2009.

Is a public affairs company moredifficult to run than other businessesthat focus on providing professionalservices?

I think that a public affairs busi-ness is the most difficult one in theprofessional services businessescategory, because it is multidiscipli-nary. We need expertise in commu-nication, law, political analysis andsociology. It is hard to find all ofthese skills and put them together.Plus, we have to be creative no mat-ter how arid this field is.

How profitable is such a compa-ny on the local market?

As long as you are good and get

Local market learns to love lobbying customers, your business will beprofitable. But it is hard to attractnew customers in such a context.The market is underdeveloped; peo-ple are wary of this activity andthink they have expertise in every-thing. Besides, not all multination-als active in Romania have theirown public affairs corporate culture.But the services sector is more prof-itable than other ones, such as man-ufacturing, for example.

What added value do public af-fairs agencies bring to a company?

Analysis and research are the es-sential base of our activity. We mon-itor in a specialized way the draftlaws and conduct political analyses,which is the first added value. As forlobbying, it is evident that it is hardfor a company to makes it voiceheard in the business community.Lobbying refers to a whole industryinterest rather than to a single com-pany one and it is conductedthrough business organizations andprofessional associations. Theagency’s role is to lobby, supportedby professional and specific mecha-nisms. Companies may run publicaffairs activities internally, but it ismore expensive than to outsource itto a specialized agency.

What is the difference betweenpublic affairs and lobbying?

Public affairs is about promotingan industry to the public authorities,while lobbying is more specializedand refers both to influencing publicpolicies and legislative changes.

What are the most common mis-takes in lobbying?

The first and most common mis-take is not to monitor the legislativeactivity of state authorities such asparliament, government, ministriesand European institutions. If lobby-ists don’t do this, companies areover a barrel and have no idea whathappened. Many people think thatdaily monitoring is a waste of time.Another frequent mistake is if an or-ganization says from the very begin-ning: “No! We don’t want this, wedon’t agree with it and we’re kick-ing up a row!” No one will succeedthat way. You have to come up witha solution instead. Last but not least,many people currently don’t boneup on an issue.

LAURA FLOREA, managing partner

at Point Public Affairs, took her first

foray into the world of public affairs

in 1995. At that time, the concept

was just beginning to become

established. Fourteen years later,

the Romanian public affairs market

is still emerging and needs five-

seven years to close the gap with

other more developed markets,

predicts the partner.

F R E N C H I N V E S T M E N T R E V I E W


Real estate, construction,

consumption and banking haven’t

had their best year in Romania, and

French firms working in these areas

have taken various measures to keep

up with developments on a market

in a downturn. But while some have

delayed investment plans, others

have in fact started new projects in

sectors like energy. It was also a

good time for companies working in

outsourcing and auditing to

consolidate their business and gain

some market share. Business Review

looks at how 2009 has been for the

main French investors in Romania. France ranks third among the main sources of foreign capital to Romania

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Corina Saceanu

Romania’s EUR 6,300 GDP perinhabitant places the country at theother end of the spectrum fromFrance, with its figure of EUR30,400. But the analysis of severaleconomic development indicatorssuch as the GDP per capita hasshown French companies that thereis plenty of room for growth for Ro-mania, which translates into busi-ness opportunities.

At the end of last year, Frenchinvestments in Romania reached atotal stock of more than EUR 7 bil-lion, putting France third amongcountries of origin for foreign in-vestments in Romania, according todata from the Economic Mission of

the French Embassy in Romania.Last year alone, Romania had aEUR 9.2 billion flow of foreign di-rect investments, while this year theamount is likely to be around a mereEUR 3.5 billion. So a steep decreasein FDI will be reported by year-end,and although French companies areamong the largest foreign investorsin Romania, their investments in thecountry are following the generaldownwards trend.

The economic slowdown hasbeen also visible in the trade vol-umes between Romania and Francethis year. While bilateral trade hadbeen increasing constantly year-on-year in the last three years, with arecent 8.8 percent increase in Ro-manian-French trade in 2008 on the

previous year, 2009 brought an ex-pected change. The first fourmonths of the year saw a 22 percentdrop in bilateral trade.

Among the exported Romanianproducts which were not excessive-ly affected by the crisis is the DaciaLogan, produced by French investorDacia-Renault. In fact, one of themain challenges for Dacia this yearhas been “to adjust its productionactivity to the commercial demand,”says Liviu Ion, the company’s com-munication director. “Dacia is ontrack to end 2009 with a higher vol-ume of sales than in 2008, mostlydue to the rise in our exports. Atpresent, exports account for morethan 85 percent of total sales.” Thisyear, the carmaker has invested

around EUR 100 million, which in-cludes its investment in the futureSUV Dacia, a new model rangescheduled for launch in 2010.

The dramatic decline of the Ro-manian car market was one of themajor obstacles for Dacia this year,but it has managed to partly over-come the situation “through its suc-cess on export markets, especiallyon the Western European markets,”adds Ion.

Another problem which thistime would require some statespending is that of infrastructure.“One of the most important thingsthat would help the activity of alarge exporter like Dacia is the de-velopment of the transport infra-structure – roads, motorways andthe development of the Constantaport facilities,” says the director.

REAL ESTATE, CONSUMPTIONSUFFER MALAISE, INFRASTRUC-TURE THE NEW RAISON D’ETRE

Infrastructure requires builders,on one hand, and construction mate-rials, on the other, so French compa-nies have taken these opportunitiestoo. Constructors like Vinci andBoygues benefited from the boomon the local construction market in previous years, and while private developments have given construction companies less work lately, state-funded infrastructuremay be an important source of rev-enues.

Construction materials produc-ers have been equally hit by the realestate slump and some have had topostpone the investments they hadplanned to increase their productioncapacities. Lafarge’s investmentprogram, amounting to EUR 90 mil-lion, was extended to 2011, insteadof 2010 as was initially announced.Its cement production subsidiary inRomania saw sales drop by 36 per-cent in the first half of the year. Thecompany has been focusing on thelocal market to generate its sales,with products coming from two ce-ment factories in the country and agrinding station.

French bon appetit for Romaniacontinues despite crisis



Elsewhere in the constructionarea, do-it-yourself stores are notmaking as much money as they usedto. But DIY retailers have kept onopening new stores, although at aslower pace than in the past. Brico-store, which invested EUR 50 mil-lion in opening five new stores inRomania last year, has only twoplanned for this year, and a thirdunit for next year. Each of its storesrequires around EUR 10 million ininvestment. The bright side of storeopenings these days is that landcomes cheaper than two or threeyears ago, while construction mate-rials and the cost of labor are alsolower.

But when it comes to openingnew stores, a name to look out for isFrench retailer Carrefour, which hasbeen expanding in Romania since2001. The retailer owns 22 hyper-markets and 24 supermarkets acrossthe country. Its most recent storeopenings were supermarkets in sixRomanian cities and two hypermar-kets in Bucharest and Oradea. Car-refour, which reported EUR 1.9 bil-lion in sales in Romania last year,has seen its nine-month sales in eu-ro in the country shrinking by 1.2percent compared to the same peri-od of last year.

Falling sales have hit Frenchproducers of goods as much as theyhave retailers. For dairy producerDanone, the first quarter of the yearbrought 10 percent lower sales inRomania than in the same period of2008, but it expected to post similarsales by the end of this year as it didin 2008. Another dairy firm, Lactal-is, is also one of the new Frenchnames on the Romanian market, af-ter the company bought local brandLaDorna last year.

Judging by the so-called lipstickindex, one could say that cosmeticscompanies should have had at leastsome types of products selling welleven during these tough times.French L’Oreal saw its Romaniansubsidiary grow at a slower pacethis year in terms of business vol-umes than last year, and expects topost a 10 percent turnover growthby the end of this year. Last year, thecompany made a EUR 65 millionturnover.

NO VIE EN ROSE FOR BANKSBUT INVESTMENTS CONTINUE

The shrinking consumer spend-ing of this year came after severalyears in which banks have been fu-eling consumption in Romania.That was no longer the case thisyear. Lending froze and so did bankinvestments in the country. In thepast, much of lenders’ investmentswent into opening new units, but ex-pansion plans have been postponeduntil better times. But BRD hasmanaged to keep its investmentsthis year at a similar level to lastyear.

“By the end of 2009, we willhave invested approximately EUR60 million. This level of investmentdoes not differ much from 2008 and2007, when we invested EUR 64and 68 million respectively,”Patrick Gelin, chairman and CEO ofBRD-Groupe Societe Generale, toldBusiness Review.

So far, 2009 has been a difficultyear for the banking sector, “and theperspective is not going to changefor the better until this year-end,”says Gelin. He adds that the bankhas been focusing on helping itsclients get through the crisis usingits consulting capacity, and, on the

other hand, on a close supervisionof its parameters, especially thoselinked to costs. But what was worsethis year was that the bank had toface the depreciation of the financialsituation of individuals, SMEs andsome large companies. “The cost ofrisk has strongly increased in spiteof the fact that we remain at a levelsignificantly lower than the bankingsystem,” says Gelin. The second

problem was the fall of credit de-mand and the freeze of the real es-tate market.

What does BRD hope for in Ro-mania? “We expect first of all a sta-ble government able to put in placea coherent medium-term plan defin-ing the top priorities. The secondexpectation is the capacity to mobi-lize the European funds availablefor Romania,” adds Gelin.

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

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Jean-Pierre Vigroux, managing partner of Mazars in Romania

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TAKING ADROIT MEASURESFunding, or to be precise, the

lack of it, was the main problemseen this year by Jean-Pierre Vi-groux, managing partner of Mazarsin Romania.

“Funding was made difficult bythe shortage of bank facilities andthe problems incurred by our clientswith their own debtors. We wentthrough a form of financial block-ade, as Romania experienced from1990-1997, though not so harsh. Wehave set cash collection as our ab-solute priority. The situation on thisfront is far better now,” says Vi-groux.

Mazars’ initial budget for thisyear was optimistic. “The revisedversion of the budget has beenadapted to what is actually happen-ing. We have seen a very significantdecrease of what we call the ‘ex-pert’ work, like due diligence andinternational taxation. We havecompensated for this shortage ofvalue-added jobs with the develop-ment of our assurance, outsourcingand compliance departments, so thatwe eventually achieve the same to-tal fees as last year,” adds the man-aging partner.

The firm says it has adopted areasonable attitude when negotiat-ing its fees for next year and hasavoided taking unpleasant measureswith its staff, like lay-offs, fixedsalary reductions or mandatory un-paid leave.

Vigroux’s hopes in terms of thestate’s contribution to the local busi-

ness environment are the same asevery year for the last 20, he says.They include fewer legislation andtaxation changes, better infrastruc-ture, more transparency in dealingswith the public authorities and bet-ter public services.

Making an effort to be promi-nent in the public awareness isFrench insurer Groupama’s target inRomania, since it has launched itsconsolidated operations in the coun-try.

The insurer has started a market-ing and communication campaignand has signed distribution agree-ments with several banks on the Ro-manian market.

The marketing and promotioncampaign alone requires an invest-ment of EUR 2.5 million, accordingto estimates. Groupama has putEUR 600 million into Romania sofar, in acquiring BT Asigurari, Asi-ban and OTP Garancia, which havebeen consolidated under the sameGroupama brand.

FIRMS SHOW SANGFROID TOKEEP THEIR PIECE OF THE PIE

While one company tries to pusha new brand on the market, others,with already established names onthe scene, are trying to hold on totheir market share.

Mobile phone operator Orange,which has faced increasing competi-tion in Romania this year, has re-cently started a large marketingcampaign, pushing several newproducts and services.

Despite an increasing number ofcustomers, the company reportedEUR 800 million in revenues in thefirst nine months of the year, down18.1 percent on the same period oflast year.

It had 4.7 percent more clientsduring this period, reaching 10.6million at the end of September.

Orange’s revenues were affectedby the difficult economic environ-ment, by the strong competition on the market, as well as by the volatility of the leu-euro exchangerate.

Construction materials producerSaint Gobain group, which has in-vested EUR 230 million in produc-tion units in Romania in the last fouryears, has postponed its investmentsin several new production units inthe country.

It has instead only increasedproduction capacities in existingunits in Romania.

The biggest Saint Gobain invest-ment in Romania was its float glassfactory in Calarasi, a EUR 130 mil-lion investment.

Gas de France Suez was one ofthe few firms to have committed tonew investments this year.

The company has started agreenfield energy production proj-ect, in partnership with Termoelec-trica.

The project should require EUR400 million in investment and willbe one of the many investments inthe production of energy that GdFhas promised for Romania.

The energy sector is rare in stillattracting investments nowadays.Alstom is another French investoractive in this area, and the firm toohas started greenfield investmentsin the country. The company has de-cided to invest in a EUR 20 millionproduction unit for equipment des-tined for thermo power plants. Itwill be located south of Bucharest.

Tire producer Michelin alreadyowns three factories in Romania,and because of the slump in the carmarket, with its impact on tire sales,might not need more productionunits for the time being. Earlier thisyear, Michelin stopped productionin some of its local units for twoweeks, but has since restarted it.

While some are slowing downactivity, others are finding it timelyto speed up and gain market share,as growth can be achieved even dur-ing the low points of the economiccycle. “We have multiplied ourturnover fourfold in one year, fromEUR 300,000 in 2008 to EUR 1.2million this year. In order to reachour target for 2010, which is EUR 5million, we will reinforce our busi-ness development measures in Q12010, with more energy and newideas,” says Gregoire Vigroux, di-rector in charge of business devel-opment with CallPoint Europe. “Wehave been investing more in 2009than the year before. Since the be-ginning of the year, we have spent atotal of EUR 400,000 to sustain ourgrowth. Our main investments are anew technical call center infrastruc-

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

AG

ERPRES

Carrefour has slowed down the pace of opening new stores and started focusing on the supermar-ket segment

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é Accoré Air Franceé Air Liquideé Alcatel- Lucenté Alstomé Atisrealé Auchané BNP Paribasé Bouyguesé BRDé Bricostoreé CallPoint

é Carrefouré Credissoné Credit Agricoleé Dacia-Renaulté Danoneé Decathloné Dexiaé Eurocopteré Gas de France Suezé Groupamaé Intermarcheé L'Oreal

é Lactalis

é Lafarge

é Lagardere Group

é Mazars

é Michelin

é Orange

é Saint-Gobain

é Unbisoft

é Veolia

é Vinci

French companies with activities in Romania

ture and a brand new 1,500-sqmclass-A location in Bucharest,” saysthe director. For the outsourcingbusiness, the recession has actuallyhelped. “The crisis has had a rela-tively good effect on our businesson offshore markets. SeveralFrench, Italian, Spanish and USclients, who were previously work-ing with call center vendors in theirown countries, came to us for com-petitive prices as they wanted to re-duce costs. To a client based in aWestern country, working with aRomanian-based call center repre-sents a cost reduction of about 50percent,” says Vigroux.

But here, too, obstacles presentthemselves. “The main problem wehad to face in 2009 was clients notpaying their invoices. Fortunately,these were minor accounts. We de-cided to stop working with them.Now that we work for multination-als mostly, the risk of having baddebtors has decreased,” says theCallPoint representative.

NEW NAMES EN ROUTE TOROMANIA…

With so many of the largeFrench companies already active inRomania, the chances are low thatmany new, big names have yet tocome to the country. But there areexceptions. French insurer Axa hasannounced its plans to enter the Ro-manian market either through astart-up company or through an ac-quisition. There are still largeFrench companies out there whichhaven’t included Romania on theirexpansion list, like Dassault Group,Ales Groupe, Pierre Fabre Groupand Sopra Group, for example.

[email protected]

Groupama has invested over EUR 600 million inRomania so far

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C I T Y / F I L M R E V I E W


Put a team of greeting card poetsin a room with James Blunt, JulioIglesias, Barry Manilow and sometelenovela scriptwriters, and theamount of schmaltz their combinedefforts would produce would stillpale in comparison with the slushfest that is Love Happens. It is diffi-cult to imagine a more mawkish,maudlin movie.

Consider the dramatis personae.Our hero is Burke Ryan (Aaron Eck-hart), a tragic but handsome widow-er still mourning his wife’s death in acar crash three years earlier. Despitebeing utterly devastated, he has man-aged to parlay his grief into a lucra-tive career as a self-help guru and au-thor. Burke spends his time touringthe US, delivering inspirational sem-inars to the grateful grief-stricken.

But the huge irony is that he can’tapply his advice (all extraordinarilyperceptive and original revelationslike the importance of moving onand taking the first step) to himself.

What can help him escape thepast and embrace life once again?Could it be the love of a goodwoman, perhaps? Step forwardEloise (Jennifer Aniston). We knowshe’s got soul, because she’s a florist,wears sensible woolly hats andwrites bizarre words like quidnuncon hotel walls under pictures. Oh, thekookiness!

In between leading the sorrowfulmasses back into the light, Burke isin negotiations with some cold-heart-ed corporate types over taking hisbrand global, getting his chiselledjawline on every network in thecountry and flogging his followers arange of gloriously tasteless productslike diet pills (because if there’s onething the newly bereaved just don’tneed it’s to pile on those peskypounds through comfort eating).

Momentarily forgetting both hisambition to be the nation’s chief grief

guru and his deep-seated anguish,Burke manages to rapidly fall for andthen pursue Eloise, who slowly helpsthe melancholy self-help mogul con-front his loss and love again.

Although he’s the lesser star ofthe two, Eckhart is the main focus ofthe film, with the romance almost asecondary thought. There’s more ten-sion in Burke’s fraught relationshipwith his father-in-law (a brief ap-pearance from Martin Sheen, whosepresence invests the film with somegravitas it doesn’t deserve, and in-vites the question what on earth washe thinking of when he signed up).Another game-raising, pathos-induc-ing turn comes from John CarollLynch as a small-town blue-collarworker mourning the loss of his son.The comic part of the proceedings,what there is of it, comes mainlyfrom Burke’s smarmy manager (DanFogler), and Eloise’s quirky assistant(Judy Greer).

Post-Pitt, Jennifer Aniston, neverexactly associated with gritty real-ism, seems to have become the go-toactress when you need a valiant 40-something singleton who hasn’t giv-en up on love, and she could havemade this movie in her sleep. Eck-hart combines the slick professionalwith the tortured widower, and whilethe leads don’t have huge chemistrythey make a likeable enough couple.The main problem is that the filmcan’t seem to decide whetherBurke’s self-help empire is cynicalhokum or uplifting miracle cure.How can we root for someone whowants to sell weight-loss productswith his face on to the grief-stricken?

Leaving that incongruity aside,Love Happens is a glossy, effective-ly made movie, and more sensitiveviewers may feel a tear welling de-spite themselves. It has its charms,though in limited servings. But ex-pect them to come coated in syrup.

Debbie Stowe

Director: Brandon CampStarring: Aaron Eckhart, JenniferAniston, Dan Fogler, John CarrollLynch, Martin Sheen, Judy GreerOn at: : Baneasa Drive in Cinema,Cityplex, Hollywood Multiplex,Movieplex Cinema, Starplex, TheLight

FILMREVIEW:Love Happens

Italian artist Alessandro Safina willperform a recital at the Palace Hall inBucharest, on November 2. He will beaccompanied by an instrumental bandfrom Italy and by the Bucharest Metro-politan Orchestra, which is made up of

30 musicians. Safina will play severalclassics such as Time to Say Goodbye(Con Te Partiro), Vivo per Lei and Ariae Memoria in a duet with young singerIanna. The stage of the Palace Hall willbe decorated with hundreds of whiteroses and Thai orchids, Safina’s fa-vorite flowers, which will be broughtin from the Netherlands on the day ofthe concert. Safina is being put up inBucharest at the Radisson SAS Hotel,in one of the most luxurious suites onthe top floor.

He is known as an admirer of theRomanian wine Feteasca Neagra,which he sampled on a previous visit toRomania last year. The remaining tick-ets for the show are on sale at thePalace Hall, in Germanos, Carturesti,Vodafone and Diverta stores or onlinefrom the sites www.eventim.ro,www.bilete.ro and www.myticket.ro.

Italian operatic tenor Alessandro Safina

Alessandro Safina to play the Palace Hall

British actress Rachel Weisz, whohas starred in films such as The Con-stant Gardener, Constantine and TheFountain, came to Romania last weekto work on a movie called TheWhistleblower. It is based on the truestory of Kathryn Bolkovac, a US po-licewoman who goes on a peace-keeping mission to Bosnia in 1999.She is played by Weisz, who won anOscar for her role in The ConstantGardener.

The film also features other fa-mous actresses such as Monica Bel-lucci and Vanessa Redgrave. The castwill include Romanian actors such asFlorin Busuioc, Vlad Ivanov and Co-

ca Bloos. The Whistleblower, directedby Larysa Kondracki, will be shot atthe MediaPro studios in Buftea.

British actress Rachel Weisz films in Romania

A new Starbucks café, the first open-space one in Romania, has openedon the ground floor of AFI PalaceCotroceni. The new outlet has a sur-face area of 165 sqm and a capacityof 65 seats. The first Starbucks caféin Central and Eastern Europe wasopened in Bucharest’s Plaza Mall inApril 2007, as a result of the jointventure between Starbucks CoffeeCompany and its European partnerMarinopoulos Group.

Twenty years have passed since the fall of theIron Curtain. To commemorate the far-reachingevents that changed the face of Europe, the of-fice of the European Commission in Romaniahas opened an exhibition called A Story aboutFreedom, in the presence of historian AndreaVarga and the European Commissioner for Mul-tilingualism, Leonard Orban. The exhibition isbeing held at the Information Center on theground floor of the office of the commission. Itwill be open to the public between Monday andFriday, until February 2010.

Flower power: Aniston and Eckhart pair up

Rachel Weisz plays a policewoman

business review issue 39, nov 2-8, 2009

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