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TRANSCRIPT
STEP – Manufacturing Team
Market Development – Romania & Bulgaria
Manufactured Goods Focus April 15-27, 2016
Bucharest, Cluj Napoca; Sofia & Stara Zagora Romania & Bulgaria
TRIP SUMMARY
Overview
As part of Saskatchewan Trade & Export Partnership (STEP)’s mandate to increase and diversify Saskatchewan’s export markets, the Trade Development unit executes a small number of market development trips, to new frontier markets, on an annual basis. The intent of these trips is to understand the economic and business climate of the region, to establish valuable contacts, to profile Saskatchewan industry and to understand what current and future opportunities exist for Saskatchewan exporters. The Manufacturing team carried out one such initiative, early in the 2016/17 fiscal year, with a focus on Romania and Bulgaria. Romania and Bulgaria are two independent countries located in South Eastern Europe. Both countries were communist countries under Soviet Rule until 1989, when democracy and free market movements were born. In the mid nineties, both countries applied for European Union (EU) membership and were officially sworn in, in 2007. Today, and not without their significant challenges, both countries enjoy emerging market status with stable economies, modest to good growth rates and rising incomes of their citizens. Although STEP has had some previous experience in Bulgaria, via a project aimed at transferring trade promotion best practices and technical know how (Bulgarian Invest and Trade Agency), this trip was largely a first-time visit to the region to develop commercial business connections and opportunities.
Agenda
Friday, April 15, 2016 Saskatoon / Germany
13:30 –
14:49
DEPART SASKATOON FOR CALGARY
FLIGHT AC8587
17:45 DEPART CALGARY FOR FRANKFURT
FLIGHT AC844
Saturday, April 16, 2016 Frankfurt / Bucharest
10:55 ARRIVE IN FRANKFURT
14:00 DEPART FRANKFURT FOR BUCHAREST
FLIGHT LH1420
17:15 ARRIVE IN BUCHAREST
18:00 TAXI TO HOTEL
18:30 CHECK INTO HOTEL:
CONFIRMATION #: DGCBXQWC
NOVOTEL BUCHAREST CITY CENTER
CALEA VICTORIEI 37B SECTOR 1
010061 BUCHAREST
ROMANIA
(+40)21/3088500
HOTEL CHOICE AND BOOKING STATUS: CONFIRMED
Sunday, April 17, 2016 Bucharest
All Day
FREE TIME
Monday, April 18, 2016 Bucharest
10:00-12:00
MEETING NEIL SWAIN – STC & CORINA STANESCU EMBASSY OF CANADA TO ROMANIA.
ADDRESS: STR. TUBEROZELOR 1-3, SECTOR 1, BUCHAREST (TEL: +40 21 307 5000)
BUSINESS OVERVIEW OF ROMANIA, SECTOR REVIEW, CANADIAN POSITION IN ROMANIA, KEYS
TO SUCCESS, STEP REVIEW, SK SECTOR OVERVIEW, AGENDA REVIEW
MEETING STATUS: CONFIRMED
02:00 –
03:30
MEETING MS. MARIANA RADU – DIRECTOR INTERNATIONAL RELATIONS &EUROPEAN
AFFAIRES – MINISTRY OF AGRICULTURE & RURAL DEVELOPMENT
ADDRESS: BUCHAREST, BLVD. CAROL I, NO. 2-4, DISTRICT 3, POST CODE 020921, POST OFFICE
37
TEL: 0213078522
UNDERSTAND ROMANIA’S AGRICULTURAL COMPOSITION, AGRICULTURAL POLICY,
GOVERNMENT PROGRAMS AND TARGETS FOR FARM MANAGEMENT & INCREASED
COMPETITIVENESS, INCENTIVES FOR MECHANIZATION & EU FUNDING FOR DEVELOPMENT OF
AGRICULTURAL HOLDINGS
MEETING STATUS: CONFIRMED
4:30 RETURN TO HOTEL
Tuesday, April 19, 2016 Bucharest
09:00 –
10:00
MEETING WITH ROMANIAN ASSOCIATION OF PRODUCERS AND IMPORTERS OF
AGRICULTURAL MACHINERY – APIMAR. MEETING WITH: MICHAEL IVASCU, MARKETING
DIRECTOR (TEL: 0727 739 308 // FAX: 0318 145 041) TEL: +40 0727 739 308
ADDRESS: EMBASSY, TUBEROZELOR 1-3
E-MAIL: [email protected]
UNDERSTAND ROLES OF THE ASSOCIATION TO ITS MEMBERSHIP, MEMBERSHIP LIST AND CONTACT INFORMATION, OVERVIEW OF AG MACHINERY MARKET (LOCAL MFG PLUS IMPORTS), INTERNATIONAL INFLUENCE IN THE REGION. (HTTP://WWW.APIMAR.EU)
MEETING STATUS: CONFIRMED
10:30 –
12:00
MEETING WITH GHE-O MOTORS. CONTACTS: ROBERT OPREA & CRISTIAN VLAD
CALEA VITAN 293, (TARGU VITAN, CHEIUL DANBOVITEI) BGS; T: +40744649215
HTTP://WWW.GHE-O.COM/INDEX.HTML
PARTNERSHIP OPPORTUNITY FOR CRESTLINE COACH TO MANUFACTURER AMBULANCE
BODIES UNDER LICENSE FOR THE MARKET.
MEETING STATUS: CONFIRMED
12:00 –
13:30
LUNCH MEETING WITH FRD CENTER ATTN: JACKIE BOJOR
ADDRESS: LA FINCA BY ALIOLI IN STR. GRIGORE ALEXANDRESCU 77, BUCUREȘTI 011745,
PHONE: +40767 150 500 HTTP://WWW.ALIOLI.RO/LAFINCA.PHP
FRD ADDRESS: CENTER 5 ORZARI STR., BL 46 BIS, BUCHAREST, ROMANIA. JACKIE MOBILE IS
+40723 509027
LUNCH MEETING STATUS: CONFIRMED
14:00 –
15:30
TRADE MG ENGINEERING SRL CONTACT: MR. MIHAI PARASCHIV
ADDRESS: CORNUL CAPREI STREET 59A, SECTOR 3, BUCHAREST, ROMANIA, 031 121
PHONE: 0040 21 323 77 90 FAX: 0040 21 323 26 86 E-MAIL: [email protected]
WWW.MGTRADE.RO
MEETING STATUS: CONFIRMED
16:00 –
17:30
FREE
18:00 RETURN TO HOTEL
Wednesday, April 20, 2016 Bucharest
09:30 –
10:30
MEETING WITH GENERAL LEASING. MEETING WITH: ….. TBC
ADDRESS: BD. FICUSULUI 8, AP. 2, SECTOR 1 BUCUREŞTI 013974
TEL: +40 21 233 10 64/65/66 [email protected]
GENERAL LEASING IS THE AUTHORIZED MASSEY FERGUSON, LAVERDA, KVERNELAND AND
SEVERAL OTHER SHORT LINES. GENERAL LEASING HAS 7 BRANCH OFFICES IN ADDITION TO
HEAD OFFICE IN BUCHAREST. DISCUSS HANDLING OF SK AG EQUIPMENT SHORT LINES.
MEETING STATUS: CONFIRMED
11:00 –
12:00
MEETING WITH ALLIANCE AGRI - AFUMATI MR. FRANCIS DESBONNET – GENERAL DIRECTOR
ADDRESS: EMBASSY OF CANADA, TUBEROZELOR 1-3
CELL: 0746-106-010 WEB: HTTP://AGRIALIANTA.COM/
EMAIL: [email protected]
MEETING STATUS: CONFIRMED
12:30 –
13:30
LUNCH (ON OWN)
14:00 –
15:30
MEETING WITH: MR. GABRIEL PETRISOR, DIRECTOR COMERCIAL, IPSO SRL
ADDRESS: ŞOS. BUCUREŞTI-TÂRGOVIŞTE, NR. 174 D, DN 1A, MOGOŞOAIA, JUD. ILFOV
TEL: +40 021 207-2070 EMAIL: [email protected]
IPSO IS THE AUTHORIZED JOHN DEERE DISTRIBUTOR FOR ALL OF ROMANIA. IN ALL, THEY
HAVE (15) DEALER BRANCHES ACROSS THE COUNTRY. IN 2012, THE FIRM RECORDED A NET
TURNOVER OF 86 MILLION EUR AND OVER 260 EMPLOYEES. DISCUSS HANDLING OF SK AG
EQUIPMENT SHORT LINES.
MEETING STATUS: CONFIRMED
16:00 –
17:30
MEETING WITH: MS. MELANIA UNGUREANU, DEPUTY DIRECTOR, TITAN MACHINERY
AUTOSTRADA BUCURESTI-PITESTI, KM 13.2,
DRAGOMIRESTI DEAL, ALEEA STEFANIA NR.2, 077096 ILFOV
TEL. +40 0374 367600 EMAIL: [email protected]
TITAN MACHINERY IS THE AUTHORIZED CASE IH AND CASE CONSTRUCTION DISTRIBUTOR IN
ROMANIA. TITAN GROUP OWNS 110 DEALERSHIPS IN NORTH AMERICAN, LOCATED IN
COLORADO, IOWA, MINNESOTA, MONTANA, NEBRASKA, NORTH DAKOTA, SOUTH DAKOTA,
WISCONSIN AND WYOMING, AND AN ADDITIONAL SIX OFFICES IN ROMANIA IN BUCHAREST,
CLUJ-NAPOCA , CONSTANTA, ORADEA , ROMAN, TIMISOARA.
MEETING STATUS: CONFIRMED
Thursday, April 21, 2016 Bucharest – Cluj Napoca-Jucu
06:00 DEPART HOTEL NOVOTEL FOR AIRPORT
08:00-9:10
FLY TO CLUJ NAPOCA ON TAROM ROMANIAN AIRWAYS R00641
10:00 TAXI TO HOTEL
CHECK INTO HOTEL:
CONFIRMATION #: 87189651
HAMPTON BY HILTON CLUJ-NAPOCA
B-DUL 21 DECEMBRIE 1989, NR 67, CLUJ-NAPOCA, 400124, RO
T: 40 372556600
HOTEL CHOICE AND BOOKING STATUS: CONFIRMED
11:00 ATTEND AGRARIA TRADE SHOW AT TETAROM III INDUSTRIAL PARK, JUCU, CLUJ COUNTY,
– 18:00
ROMANIA
11:00 –
18:00
MEETINGS AT SHOW WITH:
1) DLG INTERMARKETING. MEETING WITH CORINA MARES, EXECUTIVE DIRECTOR [email protected] / 0722633639
- DLG INTERMARKETING IS THE ROMANIAN MARKETING PARTNER FOR DLG HEADQUARTERED OUT OF GERMANY. CORINA OVERSEES DLG ACTIVITIES AND SHOWS IN ROMANIA AND PRESENTED AT 2015 AGRITECHNICA.
MEETING STATUS: CONFIRMED
2) AGRO TRANSYLVANIA CLUSTER FELIX ARION, MANAGER GENERAL: 0751011228 / [email protected]
- THE MISSION OF THE AGRO-FOOD-IND NAPOCA CLUSTER IS TO PROMOTE COLLABORATION AND COOPERATION BETWEEN BUSINESS ENTITIES IN THE AGRICULTURAL INDUSTRY AND ENCOURAGING COMPETITIVE RESTRUCTURING OF THE SECTOR, AS WELL AS ENSURING PARTICIPATION IN MULTIPLE COMMERCIAL PROJECTS, BOTH NATIONAL AND INTERNATIONAL. IN THIS REGARD, MEMBERS OF THE “AGRO-FOOD-IND NAPOCA CLUSTER” DECIDED TO JOIN FORCES TO SUPPORT THE DEVELOPMENT OF THE AGRO-INDUSTRIAL SECTOR, WITH THE AIM TO BUILD ON THE COMPETITIVENESS OF THE ASSOCIATION – BOTH ON THE NATIONAL AND INTERNATIONAL MARKETS.
MEETING STATUS: CONFIRMED
3) MEETING WITH: VLAD ATANASESCU – AREA SALES MANAGER ILFOV NHR AGROPARTNERS S.R.L. E-MAIL: [email protected] MOBIL: 0733 503 353 –
4) MEETING WITH SELF-IDENTIFIED TRADERS OF MACHINERY
18:00 RETURN TO HOTEL; CHECK-IN
Friday, April 22, 2016 Cluj Napoca-Jucu
08:00 CAR/DRIVER ARRIVES AT HOTEL
08:00 –
09:00
TRAVEL TO BADENI – 44KM FROM CLUJ
09:00 –
14:00
FARM TOUR & VISIT WITH AGROTURDEAN GRAIN FARM OR OTHER LARGE FARMING OPERATION
IN CLUJ COUNTY MEETING WITH MR. TURDEAN
VISITING THE FARM TO GAIN FIRST HAND EXPERIENCE OF GRAIN PRODUCING OPERATIONS, TO UNDERSTAND EQUIPMENT UTILIZED IN PRODUCTION, POST PRODUCTION STORAGE PRACTICES, GRAIN MARKETING, CHALLENGES AND FUTURE DIRECTION OF OPERATION.
MEETING STATUS: CONFIRMED
14:00 –
15:30
LUNCH IN BADENI
16:00 –
17:15
MEETING WITH DELTAMED; MR. OVIDIU BODEA– BUSINESS DEVELOPMENT MANAGER
GSM: +40 726.758.726 WEB: WWW.DELTAMED.RO | E-MAIL: [email protected])
FERMA 8, HALELE 20-21, RO-407310 GILAU, CLUJ COUNTY
HTTP://WWW.DELTAMED.RO/ABOUT-US-2/
THEY ARE AN AMBULANCE MANUFACTURER AND EXISTING SUPPLIER TO ROMANIA HOWEVER BEING THAT THEY ARE IN THE AREA OF CLUJ, WHERE I WILL BE, IT WOULD BE VERY INTERESTING TO MEET WITH THEM TO SEE IF THEY HAVE ANY INTEREST IN ADDITIONAL STRATEGIC PARTNERSHIPS WITH CRESTLINE COACH ON ADDITIONAL AMBULANCE TYPES OR SPECIALTY VEHICLES.
MEETING STATUS: CONFIRMED
17:30 ARRIVE AT AIRPORT
18:50 –
19:45
FLIGHT CLUJ NAPOCA TO BUCHAREST ON TAROM ROMANIAN AIRWAYS R00648
20:30 TAXI TO HOTEL
21:00 CHECK INTO HOTEL:
CONFIRMATION #: # 67427545
INTERCONTINENTAL BUCHAREST
4 BULEVARDUL NICOLAE BĂLCESCU
BUCHAREST, 010051
TEL. 40-21-3102020
HOTEL CHOICE AND BOOKING STATUS: CONFIRMED
Saturday, April 23, 2016 Bucharest
All Day
FREE TIME
Sunday, April 24, 2016 Bucharest-Sofia
6:00 TAXI PICK UP FROM HOTEL AND TRAVEL TO AIRPORT
8:05 DEPART BUCHAREST FOR SOFIA
TAROM-ROMANIAN AIR 293
9:20 ARRIVE SOFIA
10:00 TAXI CAB TO HOTEL
Silvia Max Solution LTD Tel: +359 89 6766452 E-mail: [email protected] Web: www.maxsolutionltd.com
10:30 THE BEST WESTERN THRACIA HOTEL
CONFIRMATION #: 981057266
ADDRESS:
30, SOLUNSKA STR. SOFIA 1000, BULGARIA, 1000 СОФИЯ, BULGARIA
TEL.:+359 2 801 7900
HOTEL CHOICE AND BOOKING STATUS: CONFIRMED
Monday, April 25, 2016 Sofia
7:30 – 8:00
ARRIVAL OF CAR/DRIVER & DEPARTURE TO MEETINGS
Silvia Max Solution LTD Tel: +359 89 6766452 E-mail: [email protected] Web: www.maxsolutionltd.com
CAR/DRIVER BOOKING STATUS: CONFIRMED
09:-10:00
MEETING WITH MEGATRON EAD SOFIA. MEETING WITH MEGATRON’S SALES MANAGER MR.
PHILIP TSVETKOV – [email protected] / +359 88 9902994
ADDRESS: 2A SAMOKOVSKO SHOSE STR. 1138 - SOFIA,BULGARIA
MEGATRON EAD IS THE AUTHORIZED JOHN DEERE DISTRIBUTOR FOR ALL OF BULGARIA.
MEGATRON PLC WAS FOUNDED IN 1998 AND SINCE THEN IS THE OFFICIAL REPRESENTATIVE
OF THE AMERICAN COMPANY JOHN DEERE AND BOBCAT IN BULGARIA. OVER THE YEARS
MEGATRON HAS ESTABLISHED ITSELF AS THE UNDISPUTED LEADER IN THE SALE,
MAINTENANCE AND SERVICE OF HIGH QUALITY AGRICULTURAL, CONSTRUCTION, FORESTRY,
GOLF AND GARDEN EQUIPMENT.
MEETING STATUS: CONFIRMED
10:30- MEETING WITH MOESIA. MEETING WITH: COLM DALY, MANAGING DIRECTOR
12:00 6 NORTHBROOK ROAD
RANELAGH, DUBLIN 6, IRELAND
EMAIL: [email protected]
WEB ADDRESS: WWW.MOESIAOIL.COM
MEETING STATUS: CONFIRMED.
DISCUSS NATURAL GAS AND OIL OPPORTUNITIES FOR BULGARIAN MARKET.
12:30-13:30
LUNCH
14:00-16:00
MEETING WITH ALEX NESTOR
ALEX NESTOR IS ON THE EXECUTIVE OF THE AMERICAN CHAMBER OF COMMERCE IN SOFIA
AND IS A STRONG SUPPORTER OF CANADIAN COMPANIES. HE’S A FORMER MANAGER WITH
THE MINING COMPANY DUNDEE PRECIOUS METALS AND HAS BEEN A STRONG CONTACT FOR
ANY BUSINESSES INTERESTED IN BULGARIA. HE’S GIVEN GOOD INSIGHT AND ADVICE ON THE
MARKET AND IS A RECOMMENDED MEETING FOR YOU.
EMAIL:
VENUE: BEST WESTERN THRACIA
16:30 ARRIVE HOTEL
Tuesday, April 26, 2016 Stara Zagora
8:00 CAR/DRIVER ARRIVES AT HOTEL
10:30 –
12:00
AGROKONSULT LTD. MEET MR. KRASIMIR STANEV – GENERAL MANAGER
6000 STARA ZAGORA (200 KM FROM SOFIA)
STREET. "KOLYO GANCHEV" 33 FL. 7 TEL +359 42 60 40 26 FAX +359 42 60 40 27
EMAIL: [email protected]
WEB: HTTP://WWW.AGROCONSULT.BG/?LANG=EN
MEETING STATUS: CONFIRMED
AKROCOM IS A GRAIN STORAGE CONSULTING & ENGINEERING FIRM WHO ALSO IS THE
MASTER DISTRIBUTOR FOR GSI IN BULGARIA. AGROKONSULT ALSO HAS A TRACTOR AND
IMPLEMENT DIVISION AND MANUFACTURING OPERATIONS
12:00-13:00
LUNCH
13:30 –
15:00
MEETING WITH OPTICOM LTD. ATTN: MR. VESELIN GENEV, GENERAL MANAGER
STARA ZAGORA, P.KOD 6003
BLVD. "TSAR SIMEON VELIKI" 1A
PHONE: 042/600 156; 042/600 792 0887 648 912
FAX: 042/616 640
NATS.TEL .: 0700 20 205
WWW.OPTICOM-BG.COM
MEETING STATUS: CONFIRMED
OPTIMOK IS TRACTOR AND IMPLMENT DISTRIBUTOR FOR ALL OF BULGARIA
15:00 –
17:00
RETURN TO SOFIA
17:00 -
FREE TIME
Wednesday, April 27, 2016 Sofia
4:00 DEPART HOTEL FOR AIRPORT BY TAXI
6:15 DEPART SOFIA FOR MUNICH
LUFTHANSA FLIGHT AC9522
7:10 ARRIVE MUNICH
11:50 DEPART MUNICH FOR TORONTO
AIR CANADA FLIGHT 847
14:25 ARRIVE TORONTO
16:55 DEPART TORONTO TO SASKATOON
AIR CANADA FLIGHT 1125
Market Information
The Market Development Trip allowed STEP to collect first hand primary information and intelligence on both countries, as it did with specific industries of significance, within. About Romania & Bulgaria – Primary As Agriculture was one of the core sectors of importance for this trip, my first glimpse into the country was as the plane descended into Bucharest. The crops were in flowering (Rapeseed) or leaf sheath stages (cereals) showing the large amount of autumn seeded crops. The soil that was bare, appeared to have been worked and planted already indicating a planting season that was approximately 1 month ahead of Saskatchewan. This was later confirmed to be corn and sunflower plantings that were generally wrapped up by 1st – 2nd week of April. Further observation noted the highly fragmented lands with fields of green and yellow alternating often, with most plots looking to be no larger than 15-20 acres. This was something I had read about in pre-trip market studies, which indicated Romania had a high number of farmers with small portions of land, assigned in the post communism era (>1989). I knew this would present a “SK Made” equipment challenge going in, but a situation often realized, in many jurisdictions around the world. Following arrival in Bucharest, the first meeting was with the Trade Commissioners from the Canadian Embassy in Bucharest. This Embassy is very small with only two trade staff manning a region that encompasses Romania, Bulgaria & Moldova. The intent of this meeting was to gain the Canadian perspective of the country and what expectations could be anticipated in the week following. I was told that the country of Romania was currently being governed by emergency ordinance. In November of 2015, the Prime Minister and Cabinet resigned from government after a large public protest (over 20,000) ensued following a massive fire in a nightclub that killed 30 people and injured many more. Unrest was high in Romania, at the time of the fire, as many believed the ruling government was full of corruption. The fire merely served as the impetus for accountability, at the public level, for such a large human tragedy. The club did not meet essential safety and regulatory requirements to host such a concert. Furthermore, Romania utilizes a multi-party democratic governing system whereby the President is elected by popular vote, but then appoints the Prime Minister from another party, whom then appoints the cabinet. President Klaus Lohannis, whom appointed Victor Ponta as Prime Minister, was at odds with him soon after his appointment, utilized the tragedy to demand PM Ponta’s resignation. As such, Ponta eventually accepted, dissolved the standing cabinet and today, Romania governs with an interim cabinet. Official elections are to take place in November of 2016 to form the new term cabinet. As such, currently, only emergency decisions are being made with very little proactive governance occurring.
With public demonstrations crying not only for political accountability, but for large scale bribery and corruption to cease, President Lohannis increased the resources and mandate of a recently established National Anticorruption Directorate called the “DNA”. In the last year, the DNA has successfully prosecuted dozens of mayors, five MPs, two ex-ministers and a former prime minister. While this has led to favorable endearment from the European Union, it has caused short term difficulties in decision making. Decisions are slow and highly scrutinized as officials are extremely cautious and concerned of being implicated in corruption related offences. In the long run, these steps will help Romania move closer to Western standards and provide a much more favorable trade and investment climate. On a positive note, Romania has realized years of stability within its financial and banking sector. The Governor of the National Bank of Romania has been in the role for a long time and has kept the country’s finances and debt levels in a very manageable situation, which has also partially helped to maintain a stable currency. Investment has been on the rise and was evident by the many recognizable international corporate names and billboards, within the city. As it pertains to Bulgaria, the Embassy only has an Honorary Consul placed in the country. Compared to Romania, the Embassy felt that Bulgaria was a much poorer country in terms of incomes and standards of living. Unemployment is high, wages low and many rely on the “grey” informal market to generate disposable income. While some advantages reside in Bulgaria, such as the lowest personal and corporate income taxes in the entire EU, investment has remained low. This is due to very high levels of corruption and a non-existent judicial system. While Romania has high corruption levels, Bulgaria is at a deeper level with only slight attempts to condemn and control it. As such, the two countries can be seen moving in different directions. The EU has publicly demonstrated this by recently breaking the region apart in defining them. Before, all reports would speak about Romania and Bulgaria together, almost as one. Today, Romania is singled out with public appraisal and higher ratings being issued for Romania. This has wrinkled the feathers of Bulgarian politicians but has resulted in little demonstrated change. More information can be ascertained, on the state of Bulgaria, in the link to my meeting notes. Specifically, my meeting in Sofia Bulgaria with Alex Nestor, Vice President of the Canada Bulgaria Business Network captures the perspectives of a Native Bulgarian, whom lived in Canada for many years, and relocated back to Bulgaria in the early 2000’s and has a very keen understanding of the country’s political, economic and judicial systems. In terms of industries, mining, oil and gas, agriculture, tourism, auto & auto parts manufacturing and information technology are all significant contributors to the economy. Current low prices on commodities have stalled investment and capped production levels, like in most resource based economies, as of the last 18 months. Tourism remains strong with a dynamic industry comprised of warm summer vacations on the coastal regions of the Black Sea and winter ski and outdoor vacations based in the Mountainous regions. Both countries have significant mountain ranges. Dacia is a Romanian Automobile manufacturer, purchased by Renault of France in 1999, and now acts as a subsidiary of Renault. These vehicles are very popular in Romania. Both countries are home to several auto parts manufacturers, one of them being Magna International, a Canadian headquartered company. Agriculture suffered badly after communism fell in the region. Land was handed out and in many cases, was portioned to individuals with little to no prior agricultural experience. As a result, production fell steeply as did incorporation of new practices, new equipment or new technology. Only recently has production regained levels of years gone by. While many cereals, oilseeds, fruits, and vegetables are frown, the main cereal crops grown in each country consist of wheat, barley and corn; the main oilseeds being sunflower and rapeseed; the main forage being alfalfa; the main vegetable being potatoes and for fruit, regional grape production for the many vineyards in both countries. Livestock intensification in both countries is low compared to EU measures. Cattle, dairy, pigs and chickens are all very modest industries with some of the lowest livestock head numbers/hectare of land in all of Europe. The exception to this is sheep and goats which have high EU density numbers and can be easily seen across the hilly regions of both countries. Hog production had rebounded, but Russia’s ban on EU imports significantly hampered the hog industry in the last two years and as such, Romania and Bulgaria have had many hog slaughter facilities closed with carcass imports showing up from Netherlands and Germany. Overall, Romania has 13.8 million hectares of Agricultural land, with 8.8 million of that being arable land. Bulgaria is significantly lower on arable land, with just under 5 million hectares, which is about 44% of Bulgaria’s total land mass.
From a practical point of view, Romania was a bit of a unique country from my perspective. The French influence and inspiration were very evident in the city of Bucharest. The former ruler of Romania, Nicolai Ceausescu was in love with Paris and much of the building and architecture of Bucharest was derived from this, even having its own Arc de Triomphe. Street and building names often appeared to be in French or Spanish, which to me, was quite different for the region, being a former communist state of the USSR. Furthermore, and compared to other neighboring countries, such as Hungary, Czech Republic, Poland, Bulgaria and Ukraine, English as a language was very, very strong. In 1 week of meetings, I did not require an interpreter once. Regardless of age, industry or retail outlet, it was very easy to communicate. Airport and vehicular travel was easy and reliable, hotels were abundant and of larger western standards, banking options were on every corner and everyday services were at your fingertips. The same was witnessed in the north of the country, in Cluj Napoca, a city now over 500,000 in population. Cluj had a very young population being home to many universities and technical schools and a burgeoning IT industry. Many international technology companies have software development facilities and call centers in Cluj, including TELUS International. With an abundant and highly educated workforce, the IT industry has found a cost competitive environment in Cluj and is thriving as a result. The country villages were at the complete opposite spectrum. Very old, and without running water or electricity in some cases, it was like stepping back in time 100 years ago. Traveling gypsies were common on the country roads while horse and cart transport was everywhere. Certainly a tale of two spectrums. Bulgaria, on the other hand, seemed to express more of a Slavic or Russian influence. Buildings were dull in either grey or tan colors only, billboards or signage was not overly prevalent and the alphabet was Cyrillic making it more difficult to speak and navigate, versus Romania. English was also quite good in Bulgaria however less than Romania. I did require an interpreter in one of my meetings and some challenges, though not bad by any stretch, were observed in retail environments. You could also recognize the lower disposable incomes as citizens were certainly less fashion oriented than in Romania and appeared to be cautious in spending as witnessed in restaurants, lounges and stores. The landscape of Bulgaria was very beautiful as witnessed during my drive to Stara Zagora, which is approximately 200 km’s east of Sofia. To the north, you had mountains and forests and to the south, you had beautiful farmland. I did not have the opportunity to visit the rural part of Bulgaria, as I did in Romania, but I sensed the gap was far less in Bulgaria (i.e. modern transportation, electricity and water). About my Program & Meetings In total, I conducted 25 meetings over 7 days. A majority of these meetings were with equipment importers / dealers in each country, however I also had meetings with the Ministry of Agriculture, Manufacturer’s (on joint venture/production possibilities), Chamber’s of Commerce and an Oil/Gas developer. To see the profiles and points of discussion, please refer to my meeting notes at: https://www.dropbox.com/s/80un5mqdqjw5v1z/Trip%20Notes%20for%20Trip%20Report.docx?dl=0 Other Market Intelligence Romania Country Machinery Fact Sheet: https://www.dropbox.com/s/q82ag4q8iwwy77d/Factsheet_Romania%20Agritechnica%202015.pdf?dl=0 Romania Agricultural Machinery Market & Contact List: https://www.dropbox.com/s/xq6nquzu5gdlp7h/Romanian_AgMachineryMarket_2011.pdf?dl=0 Bulgaria Agricultural Machinery Market & Contact List: https://www.dropbox.com/s/4utwmoufhz68h9g/Bulgarian_AgMachineryMarket_2011.pdf?dl=0 APIMAR Presentation: https://www.dropbox.com/s/ju0s6iaovqat57p/APIMAR%20Presentation.pdf?dl=0
Titan Machinery Presentation: https://www.dropbox.com/s/6j7cmxl8m66hwks/Titan%20Presentation.pdf?dl=0 Megatron Presentation: https://www.dropbox.com/s/ib8f095q4ffwjeh/MegatronPresentation_ENG_2016.pdf?dl=0
Results
The purpose of this business trip was to gain an understanding of these markets for future export possibility and to establish key contracts for future benefit. To establish this, I worked with the Embassy of Canada to Romania, to establish a dedicated schedule of meetings with key players in the region. It also involved a 1-day attendance at the Agraria trade show in Cluj Napoca that resulted in good intelligence and contacts for the Agricultural industry. All meetings were approached largely in the same fashion. STEP (I) prepared a power point presentation on STEP, Saskatchewan (facts, geography, economy), Industries of Strength, Industry overviews and objectives for the visit. This was delivered in nearly all cases. Following this, I often received a reciprocal presentation, by the meeting candidate. At the end, I presented a large folder that consisted of marketing materials of (13) STEP members I represented, a STEP manufacturing directory that showcased further members, a USB stick with my presentation, a gift and a formal invitation to Saskatchewan, be it at the forthcoming Canada Farm Progress Show (CFPS), our STEP conference or at another convenient time. The format worked well and resulted in good intelligence, feedback and trade leads. All information and leads are captured in the meeting notes listed above. Quantitative Results Trade Leads: 32 New In Market (DIMN): 13* Further in Market (DIME): 5 # of Companies Participating: 1 # of Companies Represented: 31 *Definite interest in products but capitalizing on these will require longer than normal timelines due to certification and a daptability to the market.
Recommendations
During Agritechnica 2015 in Hannover, Germany, STEP participated in a International Business Opportunity session surrounding Romania. It was during this presentation, that some interesting facts and contacts were shared, that piqued STEP’s interest. Further research was conducted thereafter, and in the same context as previous STEP led company missions to Central Europe (i.e Hungary, Czech Republic, Poland, Slovenia), it was felt Romania would be suitable for such a market development trip in 2016/17. Bulgaria was added on due to the proximity, ease of travel, republic covered by Embassy in Romania, emphasis on Agriculture and existing contacts in the market. With each trip into Central and Eastern Europe over the years, STEP has gained additional intelligence and contacts. One can more confidently assess the possibility for success while having the ability to cross compare countries to rank and priortize based on several key indicators. However, one very large issues loom large which absolutely must take priority in terms of not only Romania and Bulgaria, but the entire EU-28: CE Marking (Homologation): Many, if not all, of the value added products that STEP’s Manufacturing team has either directly taken to the market, promoted or represented, all require mandatory CE (Conformité Européenne) Marking. In Europe, this is often called Homologation. CE marking proves that your product had been assessed and meets EU safety, health and environmental protection requirements. It is valid for products manufactured both inside and outside
of the EU, that are then marketed inside the EU. This is a legal requirement and if your product surfaces in the EU, outside of a trade show or special situation, it is assumed that you are in conformity with the requirements laid down in the relevant EU directives applicable to your product. Furthermore, while manufacturers are responsible for ensuring product compliance and affixing the CE marking, importers must make sure that the products they place on the market comply with the applicable requirements and do not present a risk to the European public. The importer has to verify that the manufacturer outside the EU has taken the necessary steps and that the documentation is available upon request. In my visits to importers, and as stated in the last sentence of paragraph above, I was almost always asked about Saskatchewan machinery meeting EU standards and having the CE mark of approval. For machinery, this means meeting Machinery Directive 2006/42/EC. Unfortunately, I could not answer confidently, knowing many do not. Certainly, there are a few who do and some whom are working towards achieving it, but many have yet to embark on the process. It was evident in their comments that few would consider new product lines without this stamp. STEP has preached CE marking for many years and backed this up with probably 3-4 educational sessions over the past 5 years, trying to educate manufacturers on this process. While it is legal to attend trade shows without it, and knowing that many will only engage in it once they see the demand (logically from the trade show participation), STEP has continued to embark on shows and missions into the region in its absence from many company’s product lines. However, it is more clear today that not enough Saskatchewan manufacturers have progressed in this sense. The EU is a market of 500 million people and a very large trading area. To date, Saskatchewan manufacturers have largely relied on “low hanging fruit” markets choosing to sell into regions that do not necessitate any substantially different requirements. While this mentality has worked fine with relatively strong levels of export sales over the years, diversity and growth are capped while global competition and trade increases. As such, one can expect Saskatchewan’s “low hanging fruit” markets to become more challenging in the future to maintain market shares and sales revenues. As it pertains to the decision to move forward on CE marking, the chicken and egg debate typically arises. Will the sales be there to justify the time and expense in obtaining CE marking? Or do we get the CE mark first, so that we’ve reduced any barriers to obtaining sales when we approach the market? I truly believe the demand is there. Numerous exhibitions at Agritechnica, numerous meetings with importers and realizing the success of other Western manufacturers in the eastern region, dictate to me that it does. Hence, my first recommendation is that STEP must exert additional pressure and find more ways to educate our members to embark on this process. I would even be so bold to state that a particular service area could exist for STEP in this regard. As well as certification, STEP also witnessed changes to tractor hitch systems that will impact our implement manufacturers. The drawbar and three point hitches are changing and as such, our shortline manufacturers need to recognize this and make these easy and simple adaptations. For a visual on this, please click here: https://www.dropbox.com/s/v4izlqoruletb26/Tractor%20Drawbar%20and%20Three%20Point%20Hitch%20Systems.docx?dl=0 As it pertains to the market, and as it related to agricultural machinery, I had structured meetings at all levels of the chain including government, manufacturer, association, distributor/dealer and farmer. I believe you need to meet and speak with all levels to try and determine the true position of the market. What I learned in Romania, like most markets, is that the truth lies with the farmer. Not that the others don’t speak it, but they certainly have other interests at heart, that may alter your conversation. Government is government – slow and cumbersome in every aspect that they touch agriculture. They tell you they are efficient and driving the industry ahead, but simply are not. All VAT refund payments and EU subsidies flow through local Romanian branches of government. I heard criticism at every meeting in regards to government processes and timelines which greatly impacts machienry purchases. Some EU payments were more than 2 years outstanding which showed up in the drastic dips and rises in past machinery sales. Manufacturer’s were small and negligible in Romania with only a true handful of players operating in the Ag Equipment Industry. Equipment is low in technology, crude in production and cheap in price. They build for the small masses of farmers and of course, they wish not to see more competition in the market. Associations are created in Romania to push the government. Due to the corruption and the high level of former communists still working in the buerocratic ranks of government, manufacturers, dealers and producers all feel they need someone consistently lobbying and
prodding in Bucharest to help their position. In reality, the associations seems to achieve very little however as a few told me they belong to them but see little benefit. The dealers and distributors are of a mixed variety. The smaller local Romanian ones are sincere and trustworthy, but others are owned by large conglomerates out of Germany, France or Israel. These larger conglomerates make you unsure as to decision making processes little lone their true interest in outside product lines. Some state the obvious on North American challenges as it pertains to cost, logistics challenges, service issues and CE marking, simply trying to get you out the door sooner than later. That leads us to the farmer. In my opinion, he really has no motive to state anything other than the facts. I spent 6.5 hours with a large progressive farm in Northern Romania and came away with a lot of different perspectives and opportunities for success than I did at any other time of the week. I learned that no-till practices are coming into play in markets that have always been traditionally heavily tilled, that there is relevant equipment missing from the marketplace and these large scale progressive farmers are not scared to find and procure anything that can make their operation better. Many bypass local dealers already buying directly from Germany, France or the Netherlands. As such, I think working with a small, local dealer who has a strong service reputation and spending time directly meeting and working with these larger progressive farmers can yield sales results. This farm I met with is connected in a netowrk of about 50 of Romania’s largest farmers and they have periodic meetings together discussing various facets of their operations. It would not be hard to get time in this setting to expose our industry to this small group of the best of the best. We have to remember that these farmers, although living and working in countries that are much, much older than Canada, are basically first generation farmers. Since 1989, they were basically handed land and turned loose into a free market and told to “make a living.” That is only 27 years ago and adoption of new practices and technologies is still young and early developing. I think appetite is high to learn everything they can about different farm practices. I also believe Romania and Bulgaria hold some advantages over the other neighboring markets of Poland, Czech Republic, and Hungary. In Poland, I find it is a much more advanced market. There is a large number of local manufacturers, few importers as the mainlines have set up their own dealer networks and the shortlines are following in the same fashion. Hungary and Czech Republic are more similar to Poland, than Romania, although maybe not to the same degree. Certainly, English is much stronger and prevalent in Romania and the contacts seemed much more genuine in their interest to view North American lines. There are many, many reasons as to why you choose particular markets to chase; however, good communciation, good partners in the market and lower domestic competition certainly lend creedence to these markets, for those wishing to expand their export market base into Europe. STEP extended invitations to Saskatchewan for all relevant meeting candidates. While some indicated it is a poor time to attend a farm show, due to harvesting of fall seeded crops (rapeseed), some did express genuine interest. I believe I can attract 3 to 4 solid candidates providing VISA’s* can be obtained. This would be a natural next step to have them se our equipment up close and personal, plus utilizing them for a round table meeting with our exporting members. Longer term, I think STEP should consider to monitor the region. It would be very easy to organize a program for a return visit to the region with the groundwork that STEP has laid on this trip. If STEP members can work in the background to make progress on meeting homologation standards, I think some base level of success can be obtained in the medium to long term future. *Note: Often heard in meetings that Canada needs to remove VISA requirements for Bulgarians and Romanian’s. I heard same thing in Czech Republic when I was there and Canada removed them shortly after. I fully agree that we need to eliminate these two countries from requirement as well and should lobby feds, when possible, for action.
STEP Staff Person
For further information or questions please contact Rob Ziola, Sr. Director, Trade Development, Manufacturing at [email protected] or 306-933-6557.
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