business review, issue 23

F E A T U R ELocal cinema operators could get additional rev-enues from renting their theater halls for corpo-rate events

S e e page 20

BUSINESS REVIEWROMANIA’S PREMIERE BUSINESS WEEKLY JUNE 22 - 28, 2009 / VOLUME 14, NUMBER 23

www.business-review.ro

ITALIAN INVESTMENT REVIEWDespite financial pressure, Italian firms plan tomaintain their presence in Romania, taking advan-tage of the fiscal relaxation and new labor costs

S e e pages 12-16

Romgaz and Marine Resources Exploration International havestarted screening the Black Sea for mineral resources, joiningPetrom and Sterling Resources in the race for deep waterr e s o u r c e s

See pages 10-11

Romgaz and Marine Resources Exploration International havestarted screening the Black Sea for mineral resources, joiningPetrom and Sterling Resources in the race for deep waterr e s o u r c e s

See pages 10-11

N E W SOnline game eRepublik, created by RomanianGeorge Lemnaru and French Alexis Bonte, hasreceived a EUR 2 million financing

S e e page 4

THE BLACK SEA RACETHE BLACK SEA RACE

GAP OPENS I TS SECOND STORE IN ROMANIA IN PLAZA SHOPP ING MALL ; S EE PAGE 6

Register at:

BUSINESS REVIEW / June 22 - 28, 2009 3

Audited 1H 2007

BMG is a founding member of the Romanian Audit Bureau

for Circulation (BRAT )

BUSINESS REVIEW

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

ROMANIA’S PREMIERE BUSINESS WEEKLY JUNE 22 - 28, 2009 / VOLUME 14, NUMBER 23

Founding Editor

BILL AVERY

E d i t o r - i n - C h i e f

SIMONA FODOR

Senior Journalist

CORINA S~CEANU

J o u r n a l i s t s

DANA CIURARU

OTILIA HARAGA

MAGDA PURICE

Copy Editor

DEBBIE STOWE

C o n t r i b u t o r

MICHAEL BARCLAY

P h o t o g r a p h e r

LAURENTIU OBAE

Executive Director

GEORGE MOISE

Sales & Events Director

OANA MOLODOI

Sales Consultant

GIUSEPPINA BURLUI

L a y o u t

B E A T R I C E G H E O R G H I U

P r o d u c t i o n

DAN MITROI

D i s t r i b u t i o n

EUGEN MU{AT

Subscription & Research

ANDREEA NUNU

Office Asistance

ALEXANDRA TOADER

N E W S

BUSINESS REVIEW / June 22 - 28, 20094

BRIEFSBNR MIGHT LICENSE A BANKWITH 100 PERCENT BYROMANIAN CAPITALé Romania's National Central Bank(BNR) will most likely license a bankset up by Romanian capital only, saidNicolae Cinteza, a BNR rep. Heexplained that BNR's AdministrationCouncil is currently tackling this issue.There are currently 43 banks on theRomanian market, including foreignbanks and Creditcoop. Among those,six have a majority of Romaniancapital - CEC Bank, Transilvania,EximBank, Banca ComercialaCarpatica, Libra Bank andCredicoop.

ROMANIA'S FINANCEMINISTRY SELLS 3-YEAR STATEBONDSé The Finance Ministry (MFP) soldbenchmark bonds maturing in threeyears and four months for a total ofRON 570.2 million (EUR 134.7million), at an average annual yieldof 11.18 percent, higher than the oneaccepted in the previous bid. In thefifth state securities bid this month,MFP collected one fourth less than theRON 750 million initially announced,and the maximum accepted yield was11.25 percent per year. The FinanceMinistry plans to collect a total ofRON 7.5 billion this month aftercashing in RON 32.8 billion in thefirst five months of the year to financeand refinance the public debt. Afterthe first four bids in June, MFPcollected RON 6.1 billion.

AVIOANE CRAIOVA COULD BEBOUGHT BY AN ITALIANCOMPANYé Romanian plane company AvioaneCraiova could be bought by Italiancompany Alenia Aeronautics Italia,according to Mircea Ursache,president of the Authority for StateAssets Recovery (AVAS). The Italianoffer expires June 30. The legendarydebt Avioane Craiova has can nolonger be erased or assumed byAVAS. Alenia Aeronauticsannounced they were continuing thenegotiations with AVAS during thesecond half of June, after thecompletion of a new analysisregarding the necessary investments.The privatization of Avioane Craiovawas resumed in October 2008. TheItalian company is the only one tohave made AVAS an offer onAvioane Craiova.

Online strategy gaming platformeRepublik, created by RomanianG e o rge Lemnaru and financiallysupported by French – born busi-nessmen Alexis Bonte has recentlyagreed for a EUR 2 million financ-ing from French investment fundAGF Private Equity, which will beused for further developing thegame.

“We had a first round of meet-ings in the Silicon Valley and Eu-rope in April right after we an-nounced our angel round. This wasjust to get some feedback, makesome contacts and see if there wassome appetite for a project such asours with investors. The good newsis that there was, the bad news isthat in the case of American Venturecapitalists, the condition was always that we move the all compa-ny to San Francisco,” Alexis Bonte, the executive manager ofeRepublik Labs told Business Re-view.

“We then accelerated things in

October last year as we felt thatthings were going to be a lot moredifficult with the crisis and had afew term sheets (non binding offers)from several investors but it wasvery hard since some then backedout because of the crisis,” Bontegoes on.

In total, the two have seen closeto 40 venture capital firms in theSilicon Va l l e y, France, the UK,Switzerland, Northern Europe andSpain and managed to get new of-fers of investments among whichthe one from AGF Private Equitywas our favorite in particular be-cause we knew them well by thenand were happy with our existingexperience with them,” Bonte alsosaid.

As for possibility of future in-vestments, the French says he'sprobably going to pause his person-al investments for a while now so hecan concentrate more on developingeRepublik. “I truly believe it has thepotential to become a major compa-ny and this demands a lot of atten-tion,” he concludes.

The online game eRepublik has120,000 users. So far, the investorsin the project have put around EUR2.7 million in it, according to itsrepresentatives.

Corina Saceanu

Online game eRepublik gets EUR 2million financing from French fund

The private banking division ofRBS Romania is currently manag-ing assets of EUR 100 million fromaround 1,100 clients with high rev-enues, according to the bank's repre-sentatives.

The service offered by RBS onthis segment, called preferred bank-ing, targets individuals with at leastEUR 50,000 in liquidities or con-stant monthly revenues of over EUR5,000.

The bank is also looking at thosecustomers with increasing revenues,who now either have EUR 35,000 inliquidities or monthly revenues ofEUR 3,500.

RBS estimates that this marketsegment of personalized bankingservices is made of 100,000 suchclients in Romania, according toRBS, which has tapped into this market by opening the bank'sfirst unit for preferred banking within RBS' headquarters inBucharest.

Marijana Vasilescu, head of thepreferred banking division withRBS says she expects the number ofclients on this segment, as well astheir managed assets with the bankto grow this year but not to a signif-icant level, as the Romanian clients'

profile is rather conservative. Over 60 percent of the bank's

wealthy customers come fromBucharest, the rest being fromBrasov, Cluj and Constanta. Thebank is offering these personalizedservices in Timisoara, Arad andSibiu as well.

The preferred banking servicesinclude a savings component, aswell as an investment one, based onthe risk profile of each customer.Wealthy customers also have a per-sonal banker.

Due to the current financial cri-sis, customers are currently mainlytargeting the savings services, ratherthan investments.

British bank RBS, which hasbeen recently re-capitalized by theBritish state, is now looking to sellsome of its subsidiaries in variouscountries in the world,including theone in Romania, in an attempt togive up on its non-core assets.

Corina Saceanu

RBS manages EUR 100 million fromwealthy individuals

The online game already has 120,000 users

RBS has 1,100 customers for prefered bankingservices

N E W S


The Austrian utilities group Ver-bund will develop a 200 MW windfarm in Casimcea, Tulcea county,through the local subsidiary Austri-an Renewable Power (ARP). Ac-cording to Birgit Cserny, ARP GMthe wind power plant will be fullyoperational by 2011.

“The project is in the developingstage. We have part of the necessaryauthorizations. According to the ini-tial plans, the wind farm would havehad a capacity of 150 MW, but wehave extended it to 200 MW. Theproject is developed together with aRomanian partner,” said Birg i tCserny.

The ARP GM declared that thetotal investment will not overpasswith much EUR 300 million, be-cause the investment per 1 MW ofwind energy has decreased, com-pared with last year’s tariffs when 1MW of wind energy was about EUR1.7 million.

Verbund is the leasing energyproducer in Austria, one of the mostimportant energy producers fromhydro sources in Europe and counts2,500 employees. Verbund gener-ates annually more than EUR 3 bil-lion sales.

Dana Ciuraru

Verbund announces a windfarm investment in Romania

ArcelorMittal Galati has recent-ly commissioned new equipments,following a EUR 8 million invest-ment. According to company data,with this new technology in place,the plate mill will achieve a thick-ness quality two times better thanthe current European norm, while

the metal consumption is expectedto decrease.

“This investment demonstratesour commitment to continue pro-ducing high quality plates in Galatiand to growing our business in Ro-mania. This investment brings usone step closer to our goal of be-coming a center of excellence forplates,” said Thierry Le Gall,ArcelorMittal Galati GM.

The heavy plates mill capacityin Galati is the largest productionfacility for plates at the group level,followed by Burns Harbor from theUnited States, and in Europe by Gi-jon, Spain. This year, ArcelorMittalGalati also commissioned the de-dusting installations for steel sopno. 1.

As a result of this investment,the general dust emissions of thisunit decreased by about 95 percent.ArcelorMittal is the world’s leadingsteel company, with operations inmore than 60 countries.

Dana Ciuraru

The firm has part of the needed authorisations This is the largest factory for plates in the group

ArcelorMittal Galati finalizes EUR 8 million investments

N E W S


BRIEFSROMANIAN CAR MAKERDACIA INVESTS EUR 2.5MILLION IN THE NEW MODELLAUNCHEDé Romanian car maker Dacialaunched the sixth model of theLogan range, Stepway, havinginvested EUR 2.5 million in itsproduction. About EUR 1.5 millionwere used for pre-production studiesand the rest went into adapting theline. The producer plans to turn thenew model into the leader of the city-dedicated cars segment. DaciaStepway will cost EUR 9,200 or EUR10,400, depending on the desiredconfiguration.

CARREFOUR TO OPEN 2-3HYPERMARKETS THIS YEARé French hypermarket retailerCarrefour will reach 25-26 operatingstores by the end of the year, in thewake of overall investments put atEUR 60-80 million, half the value ofexpansion projects completed lastyear. The cities which could seeCarrefour hypermarkets inauguratedin 2009 include Satu Mare andDeva, according to marketinformation. The French companycurrently operates 23 hypermarketson the Romanian market, with theonly opening this year taking place inBucharest, in the Grand Arenashopping centre. The retailer has alsoannounced it had rented three spacesin Winmarkt shopping centres, forexpanding the Carrefour Expresssupermarket network.

ROMANIA SEES FDI DECREASEBY 44.4 PERCENT IN THE FIRSTFOUR MONTHSé Foreign direct investments (FDI) inRomania dropped by 44.4 percentfrom January to April versus thesame period in 2008, to EUR 2.055billion, almost doubling the currentaccount deficit, shows the CentralBank (BNR) data. Of the investmentsregistered in the first four months,capital participations accounted for51.2 percent, the reinvested profit for8.8 percent and intra-group creditsfor 40 percent. The loans granted bymother-companies to their localbranches can widen the currentaccount deficit as they will bereturned at maturity. Romania'sbalance of payments gap dropped by78.9 percent, to EUR 1.18 billion.

Several months after both inter-national and local financial bodieshave warned about the recession,the Romanian president Tr a i a nBasescu has recently said that theRomanian economy will soon enterrecession, and that the optimismdisplayed by the Romanian CentralBank in the previous months wasnot based on actual data from themarket. “In my opinion, although Idon't have final data, the optimismdisplayed by the BNR in April this

year is not based on data connectedto future economic evolutions andwe will have economic decreases inthe second quarter as well, whichmeans we will go into recessionbased on all standards,” said thepresident at a recent Governmentmeeting.

The Central Bank has repliedsaying it included an economic dropfor the first quarter of the year whenit made its forecast, and its hopeswere for the last part of the year,

with estimations to reach a 0.1 to0.2 percent economic growth by theend of the year.

On the other hand, Romania'scurrent account deficit will reach 5percent this year and not 8 percentas initial estimates has pointed out,according to an official forecastpublished by the Merrill Ly n c hBank of America Securities report.For 2010 analysts expect a currentaccount deficit of 4.1 percent of theGDP, a 6.5 percent drop comparedto initial forecasts. However, theRomanian economy will drop sig-nificantly this year and next year, by6.4 percent and 2.5 percent due tofiscal adjustments in the IMF agree-ment, the report goes on.

Merrill Lynch analysts believethat inflation rates will exceed theRomanian Central Bank's 3.5 per-cent estimation this year, due to ex-ternal pressures and the depreciationof the national currency. The infla-tion could reach 5.2 percent thisyear and 4 percent in 2010 com-pared to 6.3 percent at the end oflast year. The Romanian currencywill depreciate to 4.5 RON/EUR bythe end of the year and afterwardswill register a slight comeback toreach 4 RON/EUR in 2010.

Staff

Romanian president warns about recessionblaming BNR for over-optimism

Romanian president Traian Basescu has warned about Romania’s imminent recession

Greek group Marinopoulos,which runs the Gap franchise in Ro-mania, has stepped to a second unitin Romania, due for opening in Plazashopping center in Bucharest, the

company has announced. The storein Plaza covers 800 sqm. The firstGap store was opened in BaneasaShopping City earlier this year, whenthe retailer also announced this sec-

ond opening in 2009. Besides Gap, the Marinopoulos

Group also operates the Romanianfranchises of Beauty Shop / Sephora,Starbucks and Marks & Spencer. T h egroup has signed a franchise agree-ment with Gap Inc for introducingthe brand in Greece, Bulgaria,Cyprus and Croatia too. Gap Inc. isan international clothing retailer run-ning stores under the Gap, BananaRepublic, Old Navy and Piperlimeb r a n d s .

Greek Marinopoulos group haspreviously expressed its plans tobring Banana republic brand to Ro-mania, as part of its expansion planin the region. American retailer Gapruns a network of 3,100 stores in theUS, UK, Canada, France, Japan andIreland, as well as units run underfranchise.

S t a f f

Gap opens second store in Romania in Plaza shopping center

Gap has recenlty opened its first store in Romania within Baneasa Shopping City

N E W S


AB InBev beer producer to sell factories, Romania included, media says

WBS puts onsale some of itsBVB shares

Several investment funds such asUS – based Kohlberg Kravis Robertsand TPG, as well as Capital Partners inEurope are interested in buying theCentral and Eastern European opera-tions of beer producer AB InBev, ac-cording to market sources quoted bythe Wall Street Journal. The publica-tion evaluates a possible deal at some$2.5 billion. Several beer producers,among which SABMiller, have alsoshown interest in AB InBev's opera-

tions. International media has recentlyannounced AB InBev's intention tosell 11 factories in Romania, Bulgaria,H u n g a r y, Croatia, the Czech Republic,Serbia and Muntenegro.

The first rounds of the bid for thefactories on sale will be held in aroundtwo weeks, according to sources quot-ed by Reuters.

AB InBev sold its Oriental divi-sion in South Korea to investmentfund Kohlberg Kravis Roberts for $

1.8 billion. It has also sold its 20 per-cent participation in Chinese beer pro-ducer Tsingtao, for $700 million, toAsahi firm.

In Romania, InBev produces beerbrands Stella Artois, Beck’s, Berg e n-b i e r, Lowenbrau and Noroc and it im-ports beer brands Leffe and Hoegaar-den. InBev Romania was created in2007 through the merger of InterbrewRomania to Interbrew Efes Brewery.

S t a f fThe company has sold several units so far

WBS offers BVB shares at RON 27 per share

Stock market brokerage firm W B SRomania is planning to sell its 10,000ordinary shares in the Bucharest StockExchange (BVB), targeting revenues ofRON 270,000 (the equivalent of someEUR 58,000), according to informationfrom the company. The offer comes witha low pricing off e r, of around RON 27per share, while other sales offers forBVB shares from other brokerage com-panies are priced between RON 45 andRON 52, according to the media.

WBS's shares in the BVB make 0.71percent of its capital, and the currentshare offer covers 0.13 percents of itsstake in the local stock exchange opera-t o r.

WBS Romania is headed and major-ity owned by Romanian businessmenCristian Sima, who has 36.1 of the com-pany's share capital, while WBS Hold-ing holds 18.1 percent of the shares. Pri-vate individuals Lionello Codognottoand Georges Robert Madevat each own14.3 percent of the company's share,along with Robciuc Orest, with 10 per-cent.

S t a f f

N E W S


BRIEFSECONOMY MINISTRY OKS EUR100 MLN FOR INVESTMENTSé The Economy Ministry approvedmore than EUR 100 million from theprivatization of some units belongingto state-owned electricity supplierElectrica for making investments inthe power network, said AdrieanVideanu, the Economy Minister. Headded that the ministry targets toconsolidate the energy infrastructure.Electrica SA recorded a gross profitof RON 1.5 billion last year, overseven times higher than the onereached in 2007, on funds cashed inthrough the privatizing of theMuntenia Sud unit.

ENEL TO PUMP EUR 300 MLNIN INFRASTRUCTUREé The Italian power group Enel willinvest EUR 300 million in Romania'spower distribution infrastructure bynext year. According to Fulvio Conti,the company's CEO, the money willbe used to revamp the electric wiresand the network control system andto buy new equipment. Enel plans tokeep the investments at EUR 150million a year for the next five years.The group had previously announcedthat it would invest about EUR 700million by 2014.

PROPRIETATEA FUND OFFICIALS DO NOT APPROVENEW ADMINISTRATORé The head of the surveillance boardof the Proprietatea Fund, MirceaUrsache, will ask the government torefuse to ink a contract with FranklinTempleton, as expenses would jumpfrom EUR 1.5 million last year to EUR19.6 million per year. The head ofthe commission for the selection of anadministrator, Enache Jiru declaredon June 9 that Franklin TempletonInvestment Management Ltd won therace for administering the assets ofthe Proprietatea Fund, saying thecompany had presented the cheapestoffer. Eight candidates initially filedoffers for the administration of theProprietatea Fund and five of themqualified for a second round. Out ofthese, only two offers were kept,those of Franklin Templeton and ofMorgan Stanley. Ursache said thatthe Proprietatea Fund will be listed bythe end of the year, as the single stepleft to take is to select anintermediary.

The United States president,Barack Obama, has nominatedMark Henry Gitenstein as ambassa-dor of the USA in Romania, the Ro-manian Foreign Affairs Ministry hasannounced. He was part of the staffwhich oversaw the transition ofpresidential duties from George W.Bush to Obama.

Gitenstein, a lawyer, has worked

for Mayer Brown law firm since1989. He has represented corpora-tions and associations before the USCongress and federal agencies, pre-pared legislative strategies andanalyses of pending and potentiallegislation and monitored and draft-ed legislation on behalf of corporateclients.

According to company informa-

tion, prior to joining Mayer Brown,Gitenstein was the executive direc-tor for the Foundation for Change,Inc., in Washington, DC.

Previously, he served in several senior-level government positions,including chief counsel to the US Senate’s Judiciary Committee, from1987-1989.

Dana Ciuraru

Mark Henry Gitenstein appointed new US ambassador

Canadian firm Gabriel Resources,the main shareholder in Rosia MontanaGold Corporation (RMCG) mining proj-ect in Romania, has recently finalized itsprivate placement and public off e r i n gwhich resulted in gross funds of around117 million Canadian dollars, the com-pany has announced. The companyplans to use the net proceeds of the pub-lic offering and the private placement to-wards developing the Company’s 80percent owned Rosia Montana goldproject. The money will be mainly usedto buy properties in Rosia Montana vil-lage, which need to be relocated in orderto start the project. The company hassold 29.7 million shares of $2.25 each.Two of Gabriel Resources major share-holders, Electrum Strategies and Paul-son have acquired shares with some 50million Canadian dollars.

Gabriel is a Canadian-based re-source company currently engaged inthe exploration and development ofmineral properties in Romania, specifi-

cally in the development of the RosiaMontana gold project.

RMCG was set up in 1999 in A l b ac o u n t y, with main shareholders GabrielResources, with 80 percent of the shares,the state mining company Minvest De-va, with 19.3 percent, and other minori-ty shareholders with the rest.

The company is currently awaitingthe evaluation procedure for the envi-ronment approval to be re-started by theRomanian ministry of environment. T h eproject has been stalled since September2007. RMCG has recently reshuffled itslocal management, bringing DragosTanase, formerly of UPC, to be its gen-eral manager.

RMCG says the Romanian statecould cash in $4 billion in taxes from theproject.

S t a f f

Gabriel Resources raises more money for RosiaMontana, awaits environment approval

FDI investments in Romania slowed down by recession

The Rosia Montana project has been stalledsince 2007 awaiting environmental approval

Romania ranks sixth place con-sidering the number of foreign directinvestments (FDI) projects and newworkplaces create last year, showsthe most recent annual study of in-vestment attractiveness conducted byErnst & Young.

According to the study, the FDIprojects on the local market haven’thad a spectacular evolution, theirnumber falling from 150 projects in2007 to 145 last year. This representsa 3 percent decrease. A negative evo-lution was registered in Hungary witha 26 percent decrease of FDI projects.Belgium saw a 19 percent cut, whileat the opposite pole stood Italy, whichrecorded an increase of 39 percent ofFDI projects, Ireland with a 35 per-cent hike and Germany with a 28 per-cent increase.

The number of new workplacescreated decreased with 9 percent last

year from 12,464 in 2007 to 11 , 4 0 3last year. Bulgaria had a positive evo-lution, with an increase of 117 per-cent of new workplaces and Germanywith a 91 percent hike.

According to the study, the FDIinvestments across Europe have stag-nated last year, when there were an-nounced 3,718 investment projects,

six projects more than the previousy e a r.

The FDI trends were relativelystable in Germany, Switzerland, Swe-den, Italy and Ireland, the studyshows. The 28 percent increase inGermany was fuelled by the new re-gional headquarters of different com-panies and also by the increase in thesoftware and business services in theindustrial sector. On the other hand,the recession impact on the numberof new workplaces created was a ma-jor one, the number of workplacesdropping by 16 percent, to 148,333units.

Regarding this year’s forecast thestudy shows that the recession willhave a greater impact on Europe thisy e a r. The first preliminary data re-veals the fact that the number of proj-ects has decreased by 8 percent y-o-y.

Dana Ciuraru

Romania was the sixth most attractive countryfor FDI, the study found


C A L E N D A R / W H O ’ S N E W S

W H O ’ SEVENTS, BUSINESS AND POLITICAL AGENDA N E W SCRISTIAN SECOSAN is the new CEO of

Siemens SRL. Heled the company’sPower Generation-Power Tr a n s m i s-sion and Distribu-tion division from

2005-2007. He has been workingin the energy sector for the past 20years for various multinationalcompanies in Romania.

JAMES GRAY-CHEAPE has been appointedgeneral advisor tothe Board of DPD(Pegasus) Roma-nia. He has over 15years experiencein the Courier Ex-

press Parcel and Logistics sectorsin Romania, Great Britain andCzech Republic. He founded Pega-sus Courier in 1997, which was ac-quired by La Poste (DPD - Geo-Post Yurtici Kargo) in 2008. Previ-ously he served as an Officer in theBritish Army and as Operations Di-rector of a Precious Minerals Com-pany in West Africa.

LUCIAN ALDESCU has been appointedChief ExecutiveO fficer of DPD(Pegasus) Roma-nia. He has exten-sive experience inthe Courier Ex-

press Parcel industry having previ-ously been Chief Operations Off i-cer of Pegasus. In March 2009, hewas appointed President ofA.O.C.R. (The Romanian A s s o c i a-tion of Courier Operators). A l d e s c uhas a MBAdegree from Ti ffin Uni-versity at Bucharest and is fluent inEnglish.

CATALIN DICU has been appointed Op-erations Directorof DPD (Pegasus)Romania. Previ-ously he was Ex-ecutive Director ofthe Postal Service

Division of TCE. Prior to this heheld various management posi-tions, including Commodities andRelief Manager at World Vision In-

ternational Romania. Dicu studiedEngineering and Management ofTechnological Systems at the Poly-technic University in Bucharestand has a MBA from Ti ffin Uni-versity at Bucharest. He is fluent inEnglish and French.

ALIN - VALENTIN GHERMAN has been ap-pointed Commer-cial Director ofDPD (Pegasus)Romania. Previ-ously he was Gen-eral Manager of

Babel Communications and Sales& Purchasing Coordinator of Hold-mann. Prior to this he held man-agement positions in Procter &Gamble. He started his commercialcareer at DHL. Gherman graduatedfrom Doctoral School of Finance &Banking post university studies atASE and has an EMBA from A s e-buss & Kenessaw State University.He is fluent in English and Hungar-i a n .

GIORGIO MODESTI, 43, is the new CEOof Te l e p e r f o r-mance Romania.Before joiningTe l e p e r f o r m a n c e ,he co-founded ONTelecoms, the first

triple-play provider on the Greekmarket. He also worked for fiveyears for Vodafone Italy, and hasheld various management positionsin top companies in telecommuni-cations and CRM.

SHACHAR SHAINE, president of the Unit-ed RomanianB r e w e r i e s - Tu b o rgRomania, has beenelected presidentof the Foreign In-vestors Council

(FIC). Shaine has suggested theFIC board focus, among other is-sues, on immediate measures to getthrough the economic crisis, con-solidating and expanding the FICmembership and advocating spe-cific legislation to increase labormarket flexibility.

JUNE 22é 10.30 OTP Asset Management Romania, Intercapital Invest and OTP

Bank Romania, together with the Bucharest Stock Exchange organize

press conference on the launch of a new investment fund; at the

Bucharest Stock Exchange HQ, Millenium hall.

JUNE 24é 9.00 Business Review organizes American Business forum at the Inter-

continental Hotel Bucharest. For more details please visit www.brfo-

rum.ro

JUNE 25é 11.00 World Class Romania organizes press conference on the launch

of the competition “World’s Strongest Man Super Series Bucharest

2009” at the Radisson.

JUNE 29é 18.30 BPP Professional Education organizes cocktail at BPP Premises.

By invitation only.

JULY 8é 9.00 Business Review organizes French Business Forum at the Inter-

continental Hotel Bucharest. For more details please visit www.brfo-

rum.ro.

Business Review welcomes information for Who’s News from readers.Feel free to contact us on 206 0680 (10 lines), by fax at 335 3474 or e-mail: [email protected] send your CV together with a letter of intent to [email protected].

BU S I N E S S RE P O R T E RR e q u i r e m e n t s :

• At least one year of relevant experience in journalism

(news reporting and editorial features)

• Journalism or business degree, good knowledge of the

business/economic environment

• Strong English-language skills (speaking and writing)

• Strong ability to analyse and communicate

• Personal integrity

• Good PC use

Job description:

• Prepares editorial coverage of foreign investments, covers

events and press conferences, conducts interviews.


A N A L Y S I S

Joining Petrom and Sterling Resources, two other companies have linked their names to theexploration activity in the Black Sea continental plateau. Romgaz and Marine ResourcesExploration International, controlled by Romanian businessman Dinu Patriciu, have startedscreening the Black Sea's deep waters for natural resources. Interest rose after the InternationalCourt of Justice established once and for all the boundaries of Romania’s continental plateau. Newnames are also likely to enter the fray, as British Petroleum told Business Review that thecompany was keeping an eye on the potential of any new area for exploration.

New names enter chase forBlack Sea deep water resources

Interest in Black Sea exploration rose after the International Court of Justice established the boundaries of Romania’s continental plateau

By Dana Ciuraru

The International Court of Justice(ICJ) decision at the beginning of thisyear made crystal clear the status ofthe Black Sea continental plateau.The ICJ judges ruled that Romaniashould receive 9,700 sqkm of the off-shore surface area disputed withUkraine, 79.3 percent of what Roma-nia was claiming. Experts estimatethat this area conceals 70 billion cu-bic meters of natural gas, equal to Ro-m a n i a ’s gas consumption for fouryears and about 12 million tons ofcrude oil, the country's annual con-sumption.

So, at stake are lasting resources,which has not escaped the notice ofthe companies which have jumped atthe opportunity to put their name on aslice of the Black Sea continentalplateau. One of them is the state-owned natural gas producer Romgaz.The company received from the Na-tional Agency for Mineral resources(ANRM) a prospecting permit for theBlack Sea continental shelf, at Muri-dava Est, Adjud, Rimnicu Sarat andM i z i l . Romgaz also signed an agree-ment for oil exploration and develop-ment in the E VII-8 DepresiuneaPanonica perimeter, giving it thechance of discovering new oil de-posits in the Black Sea.

“Romgaz has received the A N-R M ’s permission to prospect 5,850sqkm of the Black Sea plateau forthree years, with no possibility of ex-tension. After the prospecting data iscollected, Romgaz will analyze theinformation obtained and will con-duct a study of the Black Sea basin.Depending on the results, we will de-cide if Romgaz will participate or notin the bid which will be organized bythe ANRM for those perimeters,”Romgaz officials told Business Re-v i e w. Another name linked to thecontinental plateau resources is thatof businessman Dinu Patriciu. Hisc o m p a n y, Marine Resources Explo-ration International SRL, a subsidiaryof the Marine Resources ExplorationInternational BV, a company inwhich Rompetrol Holding contolls a95 percent stake, has obtained an ex-ploration license for sapropel in a9,000-sqkm area of the Delta block inthe Black Sea.

According to company informa-tion, the license was granted in Julylast year, under a public tender proce-dure organized by the ANRM. T h emedia reported that 3,800 sqkm ofthis area was in the zone disputed


A N A L Y S I S

with Ukraine. The Delta block is lo-cated in the deep-sea waters of theexclusive economic zone, whichcomes under Romanian jurisdiction.

“This project presents a potentialnew opportunity to access naturalmarine resources on the seabed in adeep sea environment. At this stage,the project requires the deploymentof leading edge exploration technolo-gy to obtain accurate data that will al-low further analysis to be conducted.All projects of this kind require acomprehensive program of explo-ration and analysis to be concludedbefore any estimate of the quantity ofresources can be determined and theviability of the project established,”said Peter Hamilton, Marine Re-sources Exploration InternationalS R L CEO. According to him, the ex-ploration activities are still inprogress and no conclusions can bemade at this stage. “The target of ourexploration as defined by the licenseis a substance known as sapropel, adark-colored sediment rich in org a n i cm a t t e r, which has the potential to pro-duce a variety of useful products, in-cluding but not limited to a form ofalternative energ y. To be clear, we arenot exploring for oil, gas, hydrogensulphide, methane hydrates or other

forms of hydrocarbon,” said Hamil-t o n .

Marine Resources ExplorationInternational SRL data show that ex-plorations have already been con-ducted and will continue in order tocomplete the planned program.“Deepwater exploration of the seabedis a time-consuming and demandingactivity and as such we have allotteda substantial part of the total USD 20million investment to date to thistask. We are using best-in-class inter-national companies in the overallproject development, including tech-nology studies. It is too early to saywhether the project will be developedalone or in partnership,” said Hamil-ton.

He added that the company’s im-mediate focus is the project in Roma-nia and it was dedicating its full ca-pacities to its development. For thislicense the company pays an explo-ration tax set by the legislation inforce. The company has a team ofaround 40 people.

Media reports stated that interna-tional names like Total, Royal DutchShell and British Petroleum (BP)could be or become connected to theBlack Sea continental plateau explo-rations. BP o fficials told BR, “In gen-

eral, BP keeps a watch on the poten-tial of any new area for exploration orfor new markets, and makes deci-sions based on many factors includ-ing geology, commercial terms andproximity to existing markets or in-f r a s t r u c t u r e . ”

ON G O I N G O F F S H O R EO P E R A T I O N S

C u r r e n t l y, Petrom manages twoo ffshore perimeters on the Black Seacontinental platform, Istria X V I I Iand Neptun XIX, representing anarea of 13,880 sqkm. In the Istriap e r i m e t e r, Petrom operates four com-mercial deposits (Lebada Est, LebadaVest, Sinoe and Pescarus) while thefifth deposit (Delta) is in the develop-ment stage. The annual production inthis perimeter reaches about 31,000barrels of oil equivalent/day, whichrepresents approximately 16 percentof Petrom's oil and gas production inRomania. In the Neptun zone, Petromcurrently has exploration operations.

“Last year, Petrom inked a part-nership with ExxonMobil for the ex-ploration of this block. We believethat the region is very promising re-garding the natural resources we canfind here, but we also have to take in-to consideration the very high costs

of deep water exploration,” Petromo fficials told BR. “These reserveswill not be of any use if hundreds ofmillions of euros are not invested inexploration and production. For in-stance, for E&P activities alone,Petrom has invested some EUR 2.5billion in the past four years.”

Another company which hasinked its name on a slice of the BlackSea continental plateau is SterlingResources. An ANRM documentgives Sterling the right to exploit XI-II Pelican and XV Midia perimeters.Romanian officials have questionedthe conditions in which Sterling Re-sources received the license for theseareas. Moreover, ANRM off i c i a l shave declared that there are no docu-ments attesting to the hundreds ofmillions of dollars which StephenBirrell, Sterling Resources vice-pres-ident, said the company had investedin those perimeters since 1992, whenfirst obtained documents for these ar-eas. The list of companies interestedin the deep waters resources is notlikely to stop here. In times of crisisinvestment opportunities such asthese, although expensive, are popu-lar because of their long term bene-fits.

d a n a . c i u r a ru @ b u s i n e s s - re v i e w. ro


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

There are 28,000 Italian firms in Romania which employ

800,000 local workers, and their contribution to the local

GDP is 10 percent. Adding the money sent home by

Romanian workers in Italy, the percentage doubles. There

are almost 700,000 Romanians working legally in Italy,

around 20,000 of whom have started their own small and

medium companies there.

Italian firms plan toincrease Romanianpresence despite crisis

Italian firms employ around 800,000 workers in Romania

By Corina Saceanu

Italian companies are now look-ing at the infrastructure segment forbusiness opportunities and at the pro-duction and distribution of energ y,with some already working on thissegment in Romania and more inter-ested in doing so, according to A d o l-fo Urso, the Italian ministry of for-eign affairs.

“ We hope that the large Italianfirms present in Romania will in-crease their presence here and wewould like to start joint ventures withRomanian firms and together expandin the region,” said Adolfo Urso. “Inthe last couple of months I have metmany Italians who want to invest inthe energy sector here in Romania,mainly in renewable energ y, but alsoin infrastructure and the food sector, ”he added. Italian firms are also inter-ested in participating in projects fi-nanced by EU funds.

Despite 2009 being a diff i c u l tyear for firms irrespective of theirownership, in the first three monthsthe level of investments coming fromItalian companies in Romania hasn'tdiminished, said the Italian minister.The level of Italian investments inRomania was EUR 140 million inthe first quarter of the year, accord-ing to Urso. “The level of invest-ments will depend on the projectsItalian firms will take part in,” saidthe minister. He cited a few projectsinvolving Italian firms, like A n s a l d iE n e rgia in the project for the 3 and 4Cernavoda reactors, the involvementof Finmecanica in the modernizationof the Romanian defense system, andthe interest of Italian firms in build-ing the Bucharest metro.

“Our 7.8 percent contribution tothe Romanian GDP may increase byenforcing the strategic partnership,despite critics and the recession. A tthis point we need an instrument tobring value, stabilize, monitor andguide the experience of bilateral rela-tions,” said Stefano Albarosa, headof Unimpresa and also of Cefin Ro-mania, at a seminar held in Rome.

IT A L I A N F I R M S H A N D L E L O C A LF I N A N C I N G B U S I N E S S E S

The local subsidiary of Italian In-tesa Sanpaolo Bank contributesaround EUR 5 million in taxes to theRomanian state each year, havingbeen in the top three foreign in-vestors in Romania last year by theamount invested in the social capitalof all the local companies, according

to Nicola Calabro, CEO of IntesaSanpaolo Bank. “Only last year Inte-sa Sanpaolo Bank received a signifi-cant investment of EUR 100 millionfrom the mother bank to sustain theo rganic development strategy of ourbank,” Calabro told BR.

The rebranding and the first im-age campaigns, development ofcommercial business structure andproducts and services portfolio, net-work doubling and tripling the capi-tal are just some of the bank'sachievements in 2008, he added.

Following the significant growthin 2008, this year it will about con-solidation for the bank. “Our busi-ness priorities are to extend our port-folio of products and services and toposition our bank as a leader in termsof the quality of service,” says Cal-abro. The bank was established in1996 as a regional lender in the westof the country, and it spread to na-tional coverage after the merger be-tween two of the top three banks inI t a l y. The bank's representative saysits objective is to challenge top 10 lo-cal banks in the near future. The bankhas 900 employees, having grown itss t a ff by 40 percent last year.

As for the future, “It’s rather hardto make estimations and predictionsin the current situation of the interna-tional markets and global economy,but we are convinced that our evolu-tion will be a positive one and onceagain we intend to further growabove the average trend of the mar-ket,” Calabro concluded.

In the first quarter of this year,the bank posted an 84 percent growthin operational profit compared to thesame period of last year, reachingRON 12.5 million.

Banca Italo Romena, a subsidiaryof Banca Italo Romena Spa ItaliaTreviso, plans to develop its territori-al coverage, open new agencies inTimisoara and Bucharest and alsoopen new headquarters in Bucharest.“2009 will be a challenge for mostcompanies, for the economy as awhole and for the Romanian bankingsystem,” said Antonio Bianchin, gen-eral manager of Banca Italo Romena.

Last year, the bank doubled itsprofit to EUR 20.4 million versus2007. In the first three months of thisyear the bank posted a EUR 7.7 mil-lion profit, up almost 30 percent onthe same period of last year. Its port-folio of granted loans increased by25 percent during this period.

Also in 2008 the bank increasedits staff from 196 to 280 people. T h ebank was set up in 1980 as a joint



venture between Italy and Romaniain the banking sector, and it was ac-quired by Veneto Banca in 2000. InRomania, it runs 19 branches and has total assets of EUR 1.2 bil-lion.

Italian UniCredit is present inRomania through UniCredit Ti r i a cBank, along with several other firmssuch as UniCredit Leasing, UniCred-it CAIB Securities, UniCredit Insur-ance Broker, Pioneer Asset Manage-

ment, UniCredit Consumer Financeand UniCredit Processes and A d m i n-istration. The bank opened 101 newbranches in Romania last year, over30 units above the initial plans. T h etotal investment in 2008 reachedsome EUR 32.2 million, most ofwhich went on increasing the net-work. The bank has also put EUR 1million into sponsoring and startingup several corporate social responsi-bility projects, such as environment

protection, support for disabled peo-ple and cultural projects. “We havethe strong support of the UniCreditGroup, we have the resources, the re-quired knowledge and an operationalplatform for our clients during thisd i fficult financial time. We will ex-plore any profitable growth opportu-nity once the situation stabilizes,”said Rasvan Radu, executive presi-dent of UniCredit Tiriac Bank.

The bank's net profit last year

was around EUR 97.2 million lasty e a r, up 37 percent on 2007. Its op-erational profit grew by 48 percentcompared to the end of 2007, reach-ing EUR 163.5 million at the end oflast year.

At the end of 2008, the bank hadassets of EUR 4.75 billion, while theconsolidated assets in the groupwhere the bank holds participationslocally were of EUR 5.5 billion.

continued on page 15

Alenia Aeronautica has signed a EUR 219 million contract to deliver aircraft in Romania Pirelli has so far invested EUR 250 million in its industrial hub in Romania


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

The Italian business presence in Romania will not shrink due to the crisis; on the contrary, Italiancompanies doing business here will take advantage of the new fiscal measures and competitive laborcosts, while asking for further relaxation of fiscal and commercial rules, the Italian ambassador toRomania, MARIO COSPITO, tells Business Review.

Italian investors take advantage of relaxedfiscal measures and cheaper labor costs

By Corina Saceanu

How has the level of Italian in -vestments in Romania evolved inthe first half of the year, and whatare the signals you are getting fromItalian companies?

In line with a more general inter-national trend, even Italian compa-nies are expected to be affected bythe recent economic crisis, facing aconsequent but limited downsize oftheir activities. However, having hada well-structured and strategic pres-

ence in Romania for many yearsthere are strong signals that our firmswill not leave the country. In linewith this view, it should be noted thatin this country there are around28,000 small, medium and big enter-prises that have been making strate-gic investments here in the mediumand long term.

What measures has the Italiangovernment taken to fight the finan -cial crisis that would be advisablefor Romania too?

The global economic crisis had a

serious impact on all the EuropeanUnion member states. There is any-way a huge structural difference be-tween the different economies andbetween Italy and Romania as well.Some general suggestion to deal, inthe best possible way, with the cur-rent market downturn would be: tokeep under control the public deficit,to adopt fiscal policies to avoid se-vere currency depreciation, to main-tain and increase the initiatives to at-tract foreign investors, to improvethe infrastructure network and finallyto enhance the absorption of Euro-

pean funds available for this country.

How has the crisis affected Ro -manian workers in Italy? Manyhave returned home – how manyRomanians have returned fromItaly since the beginning of they e a r ?

We have no evidence of a size-able migration of Romanian citizenscoming back home from our countrydue to the economic crisis or for oth-er reasons. A c t u a l l y, as they havebeen in Italy for years and they arevery well integrated in our country,I’m confident that they will continueto work and live there. A signal thatsupports this view is the increasingnumber of Romanian firms workingin Italy, around 20,000.

From your contact with Italianfirms, what do they believe the gov -ernment should do to help foreigninvestors in Romania?

The Romanian economic contextis a fertile background for Italian in-vestments. This is due to several fac-tors, such as the low taxation, com-petitive labor costs and the great op-portunities offered by the Romaniandomestic market, which has beengrowing fast in the last few years. Inorder to further improve the econom-ic activity in Romania, it would begood to have not only a further sim-plification of the fiscal and commer-cial rules but also an additional eff o r taimed at keeping a business-friendlyenvironment in the Romanian mar-ket, especially in the current eco-nomic situation.

To what extent do you think theRomanians' image problem in Italyis still an issue, and has it been ad -dressed?

For sure the bilateral perceptionhas been improving in the lastmonths thanks to the various eff o r t sand initiatives undertaken by the twocountries on the institutional side andin the media, in order to avoid somemisunderstandings that belong to thepast.

In that context, I would argue thatthe large Romanian community inI t a l y, which numbers about one mil-lion people and is the biggest in ourc o u n t r y, is particularly appreciatedby Italian institutions and citizens,who welcome warmly Romanian cit-izens and make a sharp distinctionbetween the vast majority of seriousand friendly Romanian workers andthe few individuals that have beenperpetrating criminal off e n s e s .

c o r i n a . s a c e a n u @ b u s i n e s s - re v i e w. ro



continued from page 13

Italian financial group Generalihas a longer history in Romania thanone would expect – the first unit herewas opened 1835 in Braila. In themid 1900s, the group withdrew fromthe market only to make a comebackin 1993. Now Generali PPF Holdingis present in the country with Gener-ali Asigurari, Ardaf, RAI and Gener-ali Pension Funds. Generali A s i g u-rari, the insurance company, grew itsgross subscribed premiums of BY?TO? around EUR 5.6 million, up 17.5percent on the same period in 2007.

“This year we will focus on lifeinsurance and non-auto insurancesegments, on general retail and cor-porate insurances. […],” said MarieKovarova, general manager of Gen-erali Asigurari and coordinator ofGenerali PPF group in Romania.

PI R E L L I M A K E S I N D U S T R I A L H U BI N RO M A N I A

Italian group Pirelli has investedaround EUR 250 million to create anindustrial hub in Romania, whichnow includes a tire factory in Slatina,a metallic cord factory, and an anti-pollution filters factory for diesel carsin Bumbesti Gorj. The entire Pirellliproduction in Romania employs2,000 people, with 95 percent of theproduction going to export, the restbeing sold on the domestic market.“So far Pirelli has invested in the tirefactory in Slatina alone around EUR170 million. The financial crisis is ex-tremely powerful and it continues toa ffect the car industry,” EnricoMalerba, CEO of Pirelli in Romania,tells BR. “According to our previ-sions, the tire factory in Slatina willachieve an annual production capaci-ty of 4 million tires this year, taking

into account the market demandthroughout the year,” he adds. “Forthe second half of the year our esti-mations are optimistic. The crisis willcontinue but we have to underline wehave seen the first optimistic signs,”says Malerba.

The factory in Slatina has com-pleted the start-up phase and now ef-forts are focused on consolidating theproduction and continuing to increasethe efficiency indexes. “To date ourfactory in Slatina is one of the moste fficient in the Pirelli group,” said thecompany's representative.

The core of the Pirelli presence inRomania is the Slatina factory whichproduces tires for cars and SUVs. T h efactory was opened in 2006 and in thefirst year of production made 2 mil-lion tires, which increased to 3 millionin 2008. “The crisis is felt in the Pirelligroup too, but not so badly as to hin-der our investment plans,” saidMalerba.

Italian energy group Enel runsbusinesses in the energy supply anddistribution in Romania, throughEnel Energie and Enel Energ i eMuntenia for the energy supply sideand through Enel Distributie Banat,Dobrogea and Muntenia, the threecompanies which distribute energy inthese areas of Romania. The firm em-ploys 5,500 people in total in Roma-nia and has 2.5 million clients.

Enel said it would invest EUR700 million in the next five years inrevamping the Romanian energy net-work in Muntenia, Banat and Dobro-gea regions. The firm has 30 percentof the Romanian-based energy mar-ket and the investment sum is part ofthe operator’s investments strategyalready announced in 2008.

The Italian company is also in-volved in the nuclear units 3 and 4

project at Cernavoda, being part ofthe winning EnergoNuclear consor-tium which will build the units. Enelhas a 9.15 percent stake in the projectcompany which will build the esti-mated EUR 4 billion project. T h eproject should be completed in sixyears, according to previous data.The project agreement was signed inautumn last year, and is currently inthe investment assessment phase.

In 2007, Alenia A e r o n a u t i c asigned a EUR 219 million contractwith Romtechnica, the NationalCompany for Foreign Trade of theRomanian Ministry of Defense. T h econtract covered the delivery of sev-en air planes, with the first plane to bedelivered at the end of 2008. Howev-e r, the delivery has been delayed sev-eral times, with the latest deadline setfor July this year.

The Italian firm also signed amore recent deal, a $37 million con-tract sealed last year for the deliveryof aircrafts to Romanian airline oper-ator Tarom. ATR aircraft manufactur-er is an equal partnership betweenAlenia Aeronautica and EADS.

The local division of Italian hold-ing Cefin, Cefin Romania, started in1995 as a dealer of Iveco trucks, andhas expanded meanwhile both onother market segments and regional-l y, in Hungary and Bulgaria. Now theholding includes the Iveco franchise,Cefin Automotive, Eurobody, 4Busand Cefin Real Estate Asset manage-ment. In 2007, the group posted a to-tal turnover of EUR 270 million anda 3 percent pre-tax profit. The firmhas been running real estate projectsin Romania since 2001, with totalvalue of managed projects reachingEUR 800 million, according to previ-ous data from Cefin. The holding em-ploys 1,400 staff in Romania.

R e c e n t l y, the firm's representa-tives estimated a decreasing turnoverfor this year, down almost 20 percenton the previous, when it made aroundEUR 300 million. The Cefin Holdingis controlled by the Albarosa andOrecchia families.

GE O X S E L L S F A C T O R Y I NRO M A N I A B U T K E E P S R E T A I LP R E S E N C E

Italian footwear producer Geox,which used to run a factory in Roma-nia in Timisoara but has recently soldit, is planning to increase its Roman-ian presence after this sale by open-ing new stores through franchise. Forthis year another store opening isplanned, adding to the existing five.Prior to the sale, Geox had investedaround $70 million in the Ti m i s o a r af a c t o r y, which was sold to V T M a n u-facturing after Geox decided toamend its production strategy. T h efactory in Timisoara was only meet-ing 5 percent of the group's produc-tion, the rest being covered throughoutsourcing. The new owners of theTimisoara factory will work withGeox and continue producing for thefirm.

Real Estate Advisory GroupREAG, member of American A p-praisal, entered the Romanian marketin 2006 by opening an office inBucharest. The American group is in-volved in real estate transactions, ac-quisitions, sales, fusions and feasibil-ity studies, along with real estatemanagement and technical consultan-c y. REAG was created in 1992, to of-fer independent specialized consul-tancy services in real estate. Locally,REAG has evaluated together withRegatta, the properties on investmentfund Lewis Charles Romania.

c o r i n a . s a c e a n u @ b u s i n e s s - re v i e w. ro

Enrico Malerbo, chief executive officer of Pirelli in Romania Nicola Calabro, CEO of Intesa Sanpaolo Bank in Romania


I T A L I A N C O M P A N I E S A C T I V E I N R O M A N I A

Companies are listed in alphabetical order. The information in the list was provided by companies. Only those companies answering our questionnaire were included. © 2009 Business Review. The list may not be reprinted or reproduced in wholeor in part without permission from the publishers. Corrections or additions to the list should be send to [email protected] or by fax 021-335-3474.

*Agip Romania SRL is affiliated to Italian Eni Group; **Zoppas Industries Romania SRL is part of the concern Zoppas International

JUNE 22 - 28, 2009 / VOLUME 14, NUMBER 23

BUSINESS REVIEW FORUM Manage your business environment !

Estates&ConstructionM A R K E T

Intesa Sanpaolo Bank pre-leasesoffice space in Brasov Business Park

Italian bank Intesa SanPaolo haspre-leased 9,500 sqm of office spacein Brasov Business Park compound,according to CBRE Eurisko, the com-pany which intermediated the lease.

The office building in Brasov of-fers 28,000 sqm of offices in a total infour office buildings. The project, de-

veloped by Ravensdale Investments,also includes a 3,600-sqm conferencecenter and 5,600 sqm of retail spaces.The first phase of the project will bedelivered in autumn this year, some14,000 sqm of space.

The local real estate market hasseen fewer office leases this year, due

to the financial uncertainties. Howev-er, several leasing deals have beensealed this year, although for decreas-ing office areas and at slightly lowerrents. The Intesa SanPaolo pre-leaseis one of the biggest such deals signedin 2009 so far.

Corina Saceanu

The office compound, some 28,000 sqm in total, was developed by Ravensdale Investments


E S T A T E S & C O N S T R U C T I O N M A R K E T

Rents were also down by 10 to 25 percent during the first part of this year compared to 2008

Mediterranean restaurant with ter-race, coffee-shop and lounge bar rightin the center of Contanta city

Positioned into a historical buildingfrom the center of Constanta, Café CaféRestaurant became, for a while, theplace of meeting for decorous persons;spectacular architecture, bio-food, tra-ditional recipes, exotic spices transformit in a perfect place, whether we talkabout holiday or business meeting.

Why we shouldn’t miss the restau-rant? Not because the VIPs meet oftenhere or because the lovely atmosphere,but first of all for the healthy food,Mediterranean specialties, unusualrecipes, particular for the area.

In the Menu you can find seasonalfood, the fresh smell of a real garden,Black Sea fish relished with the chef’s

inspiration. Also you can find the well-known Dobrogean sheep with rose-mary, Mediterranean Dorada withpimiento, goose roast with strawber-ries, ice cream with fresh cherry orMadagascar vanilla baton, marinatedbell-pepper or apple.

The Mediterranean specific fill thebeauty of the location by the varietyand freshness of the menu. It is wantedto resuscitate the tastes of grandma`cooks by virtue of fresh ingredients andthe perfect recipes. The Bar Menu andthe Wine Book complete the offer withcoffee recipes from all the Mediter-ranean Coast, with a spectacular list ofcocktails and wines.

Details: www.cafecafe.ro; tele-phone: 0732 190 991

Cafe Cafe Constanta: a good reason tovisit the city, even during the holiday

Shapir freezes apartment projects inBucharest and Sibiu

Israeli real estate developer ShapirProject Europe has stalled two real estateprojects in Bucharest and Sibiu, whichwould have totaled 2,400 apartments,because of lack of buyers, according to alocal newswire. “We have the construc-tion permits for both of the projects andwe should have started developmentsthis year. The market is unstable, there isno demand, there are no buyers andthese are not circumstances to start de-veloping projects, so work on both com-pounds have been stopped until the situ-ation will improve,” said Avi Morg e n-stern, head of international operationswith Shapir. He added that when themarket conditions will be favorable, thecompany will have no problem in fi-

nancing construction works from itsown resources and from banking loans.

One of the developer's project inBucharest was supposed to deliver 1,600apartments in a Pipera location, whilethe Sibiu project was in plan with 800apartments. Several other residential de-velopments in Bucharest and in otherRomanian countries have been stalledsince the beginning of the year, eitherdue to the lack of buyers or the develop-ers' cashflow problems. Most of the de-velopers in this situation said they wouldre-start projects when the real estatemarket conditions improve, which somereal estate professionals believe to hap-pen next year.

S t a f f

The office segment of the local realestate market has seen a drop in demandfor spaces of 10 to 15 percent from smalland medium companies and of 25 to 30percent from the corporate segment inthe first half of the year, informationfrom real estate brokerage companyEsop shows. Relocation budgets haveshrunk in line with turnover, which havefallen by around 20 to 50 percent duringthis period. Rents are also down by 10 to25 percent compared to 2008.

“The companies' relocation budgetshave shrunk proportionally with theirprofits during this period. For small andmedium enterprises, but also for medi-um corporations, budgets have shrunkby around 30 percent. For 100 to 150sqm most budgets don't exceed EUR1,800 to EUR 2,000,” said Esop repre-sentatives. Larger companies are look-ing for B and C office buildings and vil-las, of 200 to 300 sqm, with average

budgets between EUR 8 and EUR 12per sqm. For larger corporates, B and Cbuildings are preferred, with asking ar-eas between 800 and 1,200 sqm and av-erage budgets between EUR 10 andEUR 12 per sqm, according to Esop'ss t u d y.

Owners of empty buildings saw aslight movement on the market in thefirst part of the year, but it soon turnedout that those who were asking for newo ffices were testing the market to findbetter leases and were ultimately stick-ing with their old landlords.

Besides the pre-leasing diff i c u l t i e s ,2009 also came with a surplus of off i c e son all segments. Another new trend onthe market was sub-letting, as manycompanies had pre-leased more spacethan needed, hoping to expand next year,but have delayed expansion in the mean-time.

Corina Saceanu

Demand for offices shrinks, rents dropby 10 to 25 percent, Esop finds


F E A T U R E

Some of the companies that run cinema halls, either because they own themor they have administration rights over them, can make a pretty profit fromrenting their movie theaters for various events, other than film screeningsattended by the general public. Given that the cost of renting a hall in ahighly reputed hotel can be anything between EUR 2,500 and 5,000, rentinga movie theater can be a less expensive option for corporations that wish toorganize events without being left with a considerable hole in their budget.

renting a movie theater can be a less expensive option for corporate events

Cinemas make profit frommore than just movies

By Otilia Haraga

Most movie theaters that can berented fall under the authority of theautonomous self-financed entityRADEF RomaniaFilm, which inturn comes under the authority ofthe Ministry of Culture. Half of thetotal profit of this entity comes fromrenting the halls for events other

than movie projections. Last year,RADEF posted revenues in excessof RON 11 million. “The sumswhich are raised are used for currentexpenses such as salaries, utilitiesand maintenance, says Elena Incros-natu, manager of the entity.

C u r r e n t l y, RADEF is in theprocess of applying new legislationwhich stipulates that it should trans-

fer movie theaters under its admin-istration to the administration of thelocal councils. At the moment whenthese stipulations appeared, RADEFRomaniaFilm was in charge of 279rooms and open - air cinemas , ofwhich 48 were turned over to the lo-cal authorities. Therefore, in the ad-ministration of RADEF Romani-afilm there are 231 halls and cinemagardens.

The entity started renting thecinema halls in 1992 when cinemagoing was in decline and it had tosupport itself financially. Therefore,some of the movie theaters wererented to host other activities suchas discos, gaming rooms and othercommercial activities. Up to now,96 of these movie theaters wererented for other purposes.

In Bucharest, the cinemas thatare rented are Patria, Scala, Corso,Europa and Gloria. The renting pro-posals that RADEF RomaniaFilmhas received up to the moment con-cern events, concerts, generally ac-tivities that do not interfere withmovie projections.

Prices are established dependingon several criteria such as the typeof event, duration, and the hours atwhich it is programmed to takeplace.

So far, RADEF RomaniaFilmcinemas have hosted high schooland faculty graduation events, the-ater plays, concerts, religious and electoral meetings. Peak times of demand are electoral campaignsand when the school semester ends.

However, given the fact that it issubject to surrendering cinema the-aters to local authorities, the direc-tion is not making any investmentsin restoration or modernization,which may cause clients to opt forthe services of private chains whichrun multiplex cinemas.

The British company The Light,which has seven screens at LibertyCenter in Bucharest and will openeight screens in Tiago Malls inOradea in October this year, is an-other competitor on this market.The price of renting its theaters de-pends on the event and time of daybut starts from EUR 200. “We havehosted several launch presentations,premieres, private screenings, liveopera from New York and livesports,” says Keith Pullinger, ownerof the cinema. The revenues fromthese activities represent 5 percentof total revenues of the company,with three-four events hosted permonth. Pullinger says the company

will post a turnover in excess ofEUR 1 million this year on the localmarket.

“Our all digital facilities allowu s to show anything on screen(DVDs, Powerpoint presentationsetc) and our luxury bar is very pop-ular for hosting pre and post cater-ing activity,” says the owner.

“This kind of activity takesplace only where it does not inter-fere with the smooth running of thecinema, namely movie watching,and has as its main purpose a signif-icant growth in the public’s interestin cinema going,” says Raluca Mo-roianu, marketing director of the en-tertainment division of Media Pro,owner of Hollywood Multiplex. Theevents that have taken place in themovie theaters at the HollywoodMultiplex include children’s parties, surprise anniversary parties,private screenings, meetings on various topics and events that companies organize for their em-ployees.

Another competitor on this mar-ket is Movieplex Cinema SRL.Prices for renting a cinema hall varydepending on the event (more exact-ly on the support offered byMovieplex besides placing the hallat one’s disposal), the capacity ofthe theater (the firm has 11 theaterswith different capacities, from 44 to503 seats) and the length of theevent. “As a rule, the standard offeris to rent a theater for two and a halfhours and the price varies depend-ing on the capacity and the equip-ment,” said Movieplex representa-tives. Movieplex has hosted birth-day parties, private screenings, con-ferences, company meetings, prod-uct launches and exclusive movielaunches. There are times whenthere are 10-15 such events permonth, but other periods with only6-9.

“There has not been any de-crease in the demand for renting themovie theaters in this period. De-mand is not constant but summertime sees the lowest demand,” saycompany representatives.

In 2008, the turnover posted byMovieplex amounted to above EUR5.7 million (RON 24 million) andthe profit was approximately EUR714,000 (RON 3 million). “The val-ue of our main activities such as cin-ema ticket sales and the sale of ad-vertising space is very high in com-parison with revenues from rentingthe movie theaters,” say companyrepresentatives.

o t i l i a . h a r a g a @ b u s i n e s s - re v i e w. ro


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

China CrisisN A N J I N G A T T H E M I N E R V A H O T E L A N D O B A K I T C H E N A T C A S A V E R N E S C U

Six weeks ago I wrote in thisnewspaper that the ChineseGarden in Pipera was the best

Chinese chophouse in town. But I included the caveat that thisaccolade means little as they had no real competition. So let’sadd a mix of new competition with two significant Chinese restau-rants.

First, lets look at Nan Jing. Itsdécor is modern and comfortable,but why, oh why did they have to doit in red and black? When willrestaurateurs outside the Orient real-ize that it is not necessary to remindthe customer that they are eatingChinese by having red, black andgold décor? That said, they haveomitted the paper lanterns (thankGod) and the overall effect is pleas-ing.

A vast menu arrived listing wellover 100 dishes. This did not im-press me one bit, as it is an old trickto take the same dish, and then addone extra vegetable, or omit a fewvegetables, or add a bit of soy, ornot… and so on. That is how youmake up a vast menu. I find it irri-tating.

But what was more irritatingwas the House’s practice of listingeverything by weight. If ever youneed proof that Romania is not real-ly in Europe (and culturally and gas-tronomically it is not), it is the Third World practice of weight list-ing the food in the menu. Can youimagine anything more absurd thantheir listing the weight of each soup at 200 grams? Who the hellgives a flying toss about the weightof the water in my soup? Stupid orwhat?

A further perusal of the menu re-vealed that there is nothing authen-tically Chinese about it whatsoever.Paradoxically, this fact alone maywell make it successful, for unlessthe local clientele have eaten Chinese in Asia or Europe, theyknow nothing, absolutely nothing,about Chinese cuisine. So it isdumbed down to suit Romaniantastes.

This means that there is no at-tempt to supply the authentic re-

gional cuisines of Cantonese,Szechuan, Huaiyang and Peking.Nope – this is tourist tat made forRomania!

It is also expensive. The cheap-est bottle of wine cost RON 50, agreedy mark up of 500 percent. Wepassed on their seafood section, be-cause at a price of around RON 80-90 for simple prawn and octopusdishes, we considered it a greedy in-sult.

I defy you to reverse engineerthe low cost price of the ingredientsbought from your local supermar-ket, and then try to justify the Houseprices. Each dish was comprised ofa variation of: tinned bambooshoots, spring onions, ginger, garlic,rice wine, sesame oil… and every-thing else you can buy off the shelf

in Mega Image. Shame on them forcharging more than RON 80 fortheir humble 160 gram dishes!

So we ordered a sliced duckwith a sauce made from tinned bam-boo slices, spring onions, pepper,soy sauce and rice wine. Simple butperfectly acceptable. But like every-thing else we tried, it was so blandand lacking in flavor. All the Housedishes cried out for MSG(Monosodium Glutomate) – a non-chemical, harmless, natural sub-stance used as seasoning in Asiancooking worldwide.

I shall refrain from listing thehuge menu which was sectioned offinto beef, duck, pork and chickendishes. There were no great gastro-nomic surprises as it was all thesame dishes prepared with the same

or similar ingredients (onion, garlic,soy cabbage, celery, ginger, oystersauce and so on) all in differingamounts. Cook it yourself at home,but not at the House prices rangingbetween RON 26-35!

We went through a selection ofpork and chicken dishes, all ofwhich were also acceptable. Wecould not find one dish which weconsidered to be bad. Everythingwas OK, but bland and expensive.

OBA KITCHENNow this is Chinese with a dif-

ference. The difference is that it isnot really Chinese. The House ex-perimented with their Chinesechefs, and came up with a selectionof dishes which were borrowedfrom Asia, rather than trying toreplicate pure Chinese dishes.

It works very well.It is also charmingly eccentric,

for there is no menu. The waiter willtell you what the dishes of the dayare. I shall not dwell for too long onthe food I had, as there is no reasonto expect it to be on the list whenyou go there. It changes all the time.

But I will tease you by statingthat I had a traditional sliced duckwith pancakes, onions and hoi sinsauce, but with the welcome Euro-pean addition of a slab of foie gras.Clever trick, Chef.

Familiar Cantonese stir- f r i e ddishes were enhanced with helpfrom Thailand with the addition ofcoconut and Thai spices such asfresh coriander and hot chillies.

Unlike the overpriced Nan Jing,the prices here are a bargain. Howcould they not be, because it is allfree. That’s right – gratis. Howeverthe proviso is that you should playat their gaming tables upstairs, ei-ther as a “high-roller” or as a regu-lar gamer playing for “reasonable”stakes.

So the moral is that if you are acasino gambler, consider changingyour venue to Casa Vernescu andcry all night at your losses with thecomfort of fabulous Chinese/Asiancuisine.

Michael Barc l a ym i c h a e l . . b a rc l a y @ i n t e re u ro l o g i s t i c s . ro

The Nan Jing restaurant is located within the Minerva restaurant


E V E N T S

The Release the Trees campaign, aimed at removing illegal adverts from Bucharest’s trees, has end-

ed in the city’s sixth district. Around 141 ads posted illegally were removed by the 18 volunteers of

Agent Green. Most of the ads were for candidates for the June 7 elections for the European Parlia-

ment.

Novotel Bucarest City Centre has recently opened Terrace 37. The terrace has 54 seats and aims to

recreate the French terrace experience. The venue is an extension of Bar 37 which is located on the

hotel’s ground floor.

On Carbon Neutral Day, employees of TBWA/Merlin cleaned parts of the Baneasea woods, one the

main green areas of Bucharest. The activity was entirely eco-friendly, starting with the bags used,

which were made of re-used outdoor materials, to the wooden signage of a cleaned area. According

to representatives of the Bucharest Woods Authority, who coordinated the volunteers, around 2 ha

was cleaned up and the waste that was removed weighed around one ton.

Ovidiu Rom and Asociatia Te l e-fonul Copilului officially launched lastweek the Scoala te face mare (Schoolhelps you to grow up) campaignedaimed at increasing the school atten-dance of impoverished children andmaking education a top priority on thepublic agenda. The campaign, devel-oped by Saatchi & Saatchi, is endorsedby the Ministry of Education, the Na-tional Authority for Child Protection,and is supported by UNICEF and Sal-vati Copiii.

The campaign is a collaboration be-tween public figures, ad agencies, me-dia networks and Romania’s leadingproduction companies. T V adverts withhosts Andreea Marin, Cabral, musi-cians Damian Draghici, and DanBittman and the public broadcaster’sfirst channel TVR director Dana Deacstarted airing on June 6 on the major

T V channels. Award-winning filmmak-ers Cristian Mungiu and Radu Munteandirected the ads.

The campaign offers citizens andparents a way to request informationand report problems they face in send-ing their children to school through thechild helpline 116 111. Data collectedthrough the child helpline 116 111, mayalso be used to influence public policyto make it easier for poor children tograduate from school.

As school drop-out rates continueto rise, the campaign aims to spread themessage that all children in Romaniahave the right to education, and that allparents have the obligation to keeptheir children in school for at least 10years of study.

Between 2001 and 2008 the schoolabandonment rate almost tripled forprimary school, and quadrupled forgrades five to eight. This alarmingtrend is not well known by the generalpublic and has been getting little atten-tion in the press. The main reasons forschool drop-outs are severe poverty,p a r e n t s ’ low levels of schooling, lack ofinformation regarding their legal rightsand obligations, and lack of teachert r a i n i n g .

This campaign was conceived asthe beginning of a long-term initiativeto draw the attention of both the publicand the government to the increasingeducation gap between the ultra-poorand the middle class – and to provideassistance to poor people for whom theschool system often presents dauntingfinancial and social challenges. ■

Andreea Marin Banica, Damian Draghici andDana Deac took part in the official launch ofcampaign

Massive campaign for right toeducation kicks off

Bucharest will add a megaplexto its existing cinema network withthe opening of operator CinemaCity Romania, the local branch ofCinema City International. T h e

opening is scheduled for Octoberthis year in AFI Palace Cotrocenimall. The complex will have 21screens and around 4,300 seats, andwill also host an IMAX hall.

Cinema City Cotroceni is thesixth project inaugurated by thecompany in Romania, after open-ings in Iasi, Timisoara, Cluj and Ba-cau between 2007 and 2009 and theupcoming one in July, in Pitesti. Asecond location is planned forBucharest in Sun Plaza Mall, due toopen shortly after the Cotrocenione. With this, the company willconsolidate its position as thelargest cinema operator active local-ly with 72 halls. For the next threeto five years the company plans toadd 20-25 further projects all overRomania. ■

The cinema will open in AFI Palace Cotroceni

Cinema City to open in Bucharest

business review, issue 23

Documents