business review, issue 7, may 11-17

ANALYSISInterest in outdoor advertising is as keen as everbut slashed ad budgets and rules about msh dis-plays challenge firms active on this segment

See page 20

BUSINESS REVIEWROMANIA’S PREMIERE BUSINESS WEEKLY MAY 11 - 17, 2009 / VOLUME 14, NUMBER 17

www.business-review.ro

GREEK INVESTMENTSRomania has been a favorite destination of Greekinvestors but the recent economic downturnbrought down the number of investing firms

See pages 10 - 14

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Real estate developer Avrig 35 is working on severalresidential, office and retail projects, and is looking forstrategic partners for its future projects. CFO EdwinWarmerdam says this is the time for joint ventures

See page 9

Real estate developer Avrig 35 is working on severalresidential, office and retail projects, and is looking forstrategic partners for its future projects. CFO EdwinWarmerdam says this is the time for joint ventures

See page 9

NEWSCentral Bank governor Mugur Isarescu says thisyear’s inflation target set together with the IMFis achievable

See page 4

JOINT VENTURES TIMEJOINT VENTURES TIME

PETROM GETS EUR 400 MILL ION LOAN FOR NEW POWER PLANT; SEE NEWS ON PAGE 5

BUSINESS REVIEW / May 11 - 17, 2009 3

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BUSINESS REVIEW / May 11 - 17, 20094

BRIEFSBPV GRIGORESCU ADVISESON EUR 1.5 BILLION PUBLICACQUISITIONS DEALS SINCE2007é Local law firm bpv Grigorescu saidit advised on1.5 billion publicacquisitions deals in the last 2 years.The largest contracts involved publictransportation deals, the RoEduNetproject, or acquisitions performed byministries of Finance, of Health andJustice in Romania. bpvGRIGORESCU has a team of 29legal advisers and ended 2008 withEUR 3 million in turnover, a 30percent increase over the previousyear.

INSOLVENCY FILES MIGHTGROW BY 40 PERCENT IN2009 é The number of insolvency filesmight grow by 40 percent in 2009 toreach over 20,000 companies,according to risk managementagency Coface Romania. In the first 3months of 2009, insolvency files grewby 58 percent compared with thesame period of last year to reach anumber of 5,173 companies. At theend of 2008, there were 14,483registered companies involved indifferent insolvency files’ stages, themost affected segments being retailcommerce (811), bulk commerce(2,932), constructions (1,666),transport (811), wood-basedproducts companies (793) andrestaurants (782). The least affectedindustries were energy,telecommunication and financialbrokerage.

LOCAL MANAGERS CAN OPTFOR CHINA TRAININGé European managers have beenselected for professional training inChina, on a ten-month programfinanced by the European Union. Asmany as 48 managers from 19European member states have takenpart in the program, with severalRomanians included too. The EUcovers the entire cost of training andgive a monthly allowance. The fourthseries of this program starts in Maythis year.

The Romanian Central Bank has cutthe key interest rate from 10 percent to9.5 percent and has kept the same levelsof mandatory minimum reserves forbanks. Analysts expect the BNR to fur-ther slash the interest rate to 8.75 percentby the end of the year.

The decision to reduce the interestrate was intended to ensure adequatemonetary conditions and to revive thelending process, the BNR has said.Banks will first reduce interest rates ondeposits and only after that interest rateson loans, following the BNR's decisionto slash the key interest rate, said AdrianVasilescu, counselor of the BNR gover-nor. The move came in the week thatboth the International Monetary Fundand the European Commission ap-proved financing for Romania. Follow-ing the news, the Romanian currencyslightly appreciated, after having depre-ciated continuously since the beginningof the year.

The annual rate of inflation slightlydropped to 6.7 percent in March from6.8 percent in February on a slower in-crease in prices of services.

Citi bank analysts estimate Romaniawill see an inflation of 5.5 percent thisyear, higher than the previous forecast of5 percent. BNR targets a rate between2.5 and 4.5 percent for this year, and thesame for 2010. The inflation target wasestablished together with the IMF. “It isa realistic and achievable target withinthe current uncertain economic context,”said the BNR governor Mugur Isarescu.

The IMF expects Romania to see adifficult 2009 and 2010, even with the fi-nancial support from the fund. Econom-ic growth will be negative this year andzero in 2010, following a drop in world-wide economic activity, said JeffreyFranks, the head of the IMF missionwhich negotiated the agreement for Ro-mania. Romania's policies should allowthe country to avoid the negative effectsof the crisis and emerge as a more com-petitive economy, he added. The Ro-manian government should take meas-ures to ensure the banking system stayshealthy. “Banks agreed to allot some ad-ditional capital to cover for future losses,and foreign banks in Romania agreed tokeep capital in the country,” Franksadded. He mentioned the current ac-count deficit and the budget deficitamong Romania's major problems.“This program addresses these difficul-ties. As for the fiscal deficit, the govern-ment has already taken measures to de-crease the imbalance, which will bewithin the Maastricht criteria by 2011,”said the IMF representative.

Corina Saceanu

BNR cuts key interest rate to 9.5 percent

Local lender BRD SocieteGenerale saw its net profitdropping by 19 percent to EUR49 million in the first quarter ofthis year on the similar periodof the last, mainly due to the in-crease in the cost of risk, thebank has announced. BRD isthe second largest lender on theRomanian market asset wise.

“We have seen a large dropin demand for loans and a sig-nificant increase in the cost ofrisk. These two factors were themain reasons which have trig-gered the reduction in econom-ic activity and the very high in-

terest on deposits, especially onlocal currency. […] Althoughsignificantly higher than lastyear, the net cost of risk shouldbe well below the average inthe banking system,” saidPatrick Gelin, president andgeneral manager of BRD Soci-ete Generale. Its costs for pro-visions grew three-fold com-pared to the first quarter of2008, reaching EUR 47 mil-lion.

The banks net revenuesreached EUR 191 million, up18 percent on the first quarterof 2008, and its gross profit

from banking activities reachedEUR 108 million, up 20 per-cent. The total volume of loansgranted to its customers grewby 19.5 percent, to some EUR7.8 billion, and was equallysplit between individuals andfirms. Deposits grew by 9.4percent, and their total volumewas slightly below the volumeof loans.

BRD Groupe Societe Gen-erale has 2.6 million customers.Its assets were of EUR 11.9 bil-lion at the end of March thisyear.

Corina Saceanu

BRD sees increasing cost of risk biting into its Q1 profit

The number of companies thatsuspended their activity surged 13times to 14,035 last month comparedto April 2008, as voluntary liquida-tions advanced significantly accord-ing to data from the Trade RegistryOffice (ONRC).

Most firms were from Bucharest(3,152), followed by companies inBrasov (958) and Galati (701).Theyoperated in retail and wholesale, ve-hicle repair, real-estate transactions

or rentals. Also, the numbers of bankrupt-

cies in Romania advanced by 55 per-cent y-o-y in the first three months,to 4,948 cases, while the number ofnewly-registered firms decreased by34.4 percent.

The most affected companieswere those with Romanian capital,meaning 4,247 units. Companies inthe retail industry, the car and motor-cycle repairing and in the processing

industry and real estate topped thelist of bankruptcies. The most cases were registered in Bucharest,557.

According to ONRC, 34.4 per-cent fewer companies were set up inthe first quarter this year, over thesimilar period last year. The numberslipped to 18,738, out of which morethan 9,900 in the retail and grosssales.

Dana Ciuraru

Economic crisis brings down the number of registered firms

Mugur Isarescu, governor of the Romanian Cen-tral Bank BNR

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Petrom, oil and gas producer in SEEurope announced that it had bor-rowed EUR 400 million from interna-tional financial institutions to build apower plant. Petrom, majority ownedby Austria’s OMV borrowed EUR 200million from the European InvestmentBank (EIB) and another EUR 200 mil-lion from the European Bank for Re-construction and Development(EBRD). Both loans have a 12 yearmaturity.

The total value of the investmentstands at EUR 500 million. The powerplant, which Petrom plans to build by2012 in the southern town of Brazi,will have an 860 MW capacity. Around20 percent of its capacity will be usedby Petrom. Earlier in the day, Petromposted a 48 percent fall in its first-quar-ter net profit to USD 163.5 million,mainly due to lower oil prices.

“For the two loans, we are practi-cally completing the funding processagreed last year, which together withthe loan from OMV and the cash flowgenerated by the company will securethe required resource to meet out ob-jectives for 2009-2010. The two loansfrom EIB and EBRD will serve as

long-term financing for the Greenfieldpower plant in Brazi of 860 MW whichcosts over 500 million euros and whichwill provide 9% of the country’s pow-er production”, said Mariana Gheo-rghe, Petrom CEO.

Petrom has borrowed another EUR1.175 billion since October both frombanks and from its majority sharehold-er, OMV. Petrom contracted a EUR300 million corporate unsecured loanon March 31 from the EBRD. The loanwill be used to establish new environ-mental, health and safety standards.Moreover, in January Petrom an-nounced that it had obtained a five-year revolving credit line from its ma-jority shareholder, OMV.

Petrom has 940 million boe oil andgas reserves, a maximum refining ca-pacity of 8 million metric tons per year,approximately 550 filling stations inRomania and other 269 filling stationsin Moldova, Bulgaria and Serbia.

Austria’s OMV Group owns a ma-jority equity position of 51.01 percentin Petrom. The Ministry of Economyholds 20.64 percent, while Fondul Pro-prietatea has a 20.11 percen t stake.

Dana Ciuraru

Petrom gets EUR 400 mln loan from EIB and EBRD

Telecom company Cosmote Ro-mania, part of the Greek groupOTE, posted a positive EBITDA ofEUR 13 million in the first quarterof 2009.

The revenues of Cosmote Ro-mania reached EUR 98 million inQ1, 2009, having increased with84.2 percent com pared to Q1, 2008.

In the first three months of thisyear, Cosmote Romania added212,000 new customers to its cus-tomer base. Thus, the number ofcustomers of Cosmote Romania in-creased in the first quarter of 2009with 44.1 percent compared to Q1,2008.

The total number of customersof the company exceeds 6.1 millionwhich corresponds to a market shareof 23 percent.

The number of postpay cus-tomers now represents 20 percent ofthe total customer base, having in-creased with 62 percent in Q1,2009, compared to the similar peri-od last year.

The company announced it

would focus on expanding and mod-ernizing infrastructure, the networkof sales and customer relations services, according to KonstantinosApostolou, CFO Cosmote Romania.

Romtelecom Romania, thelargest landline telephony operatoron the market, also part of the OTEgroup, posted an operational profitof EUR 13.7 million compared tooperational losses of EUR 14.2 mil-lion in the first three months of2008.

However, the revenues of Romt-elecom Romania dropped to EUR201.4 million, which represents an8.1 percent decrease in the firstquarter of this year compared to thesimilar period last year.

The telecom operator also lost2.9 percent of its landline customerbase that it had in Q1, 2008. However, the number of clients increased on the segments of inter-net broadband and satellite televi-sion.

Otilia Haraga

Cosmote revenues increase by 84.2 percent, Romtelecomrevenues drop with 8.1 percent in Q1, 2009

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Businesspeople Samantha andCharlie Crocker, owners of BarnettMcCall Recruitment (BMR) com-pany, have sold 60 percent of theirshares in the company to Italian HRgroup Gi Group, marking the Italian

firm’s entry on the Romanian mar-ket. “We started discussions in Au-gust last year and finalized the dealin February this year. We needed aninternational strategic partner totake us to the next development

stage,” Charlie Crocker tells Busi-ness Review. The firm started tolook for buyers at the beginning oflast year, having hired a consultancycompany to organize the process.“We ended up selecting Gi Group.

Italian Gi Group buys Barnet McCall, planslocal temporary staffing division

We had similar values to them andfeel they can accelerate the growthprocess,” says Crocker, who willstay with the company, along withhis wife. Previously, the Britishowners wanted to expand the com-pany regionally, but the new strate-gy will include the growth of thebusiness’s temporary staffing divi-sion locally. “This is where thegrowth of the HR business is in Ro-mania,” says Charlie Crocker.

The new Italian owner will keepthe Barnett McCall Recruitmentbrand as a legal entity and create anew company under the Gi Groupbrand to cover the temporarystaffing business, with both entitiescoming under the Gi Group umbrella. It is Gi Group's strategyto keep local brands for specialtyservices.

Barnett McCall posted a EUR2.5 million turnover last year andhopes to achieve a similar result forthis year. “Considering the 60 to 70percent drop in the HR servicesmarket, I will be happy if we man-age to achieve what we did lastyear,” says Crocker. On the longerterm, the company wants to becomeone of the top three recruitmentcompanies in Romania in the nextfive years, says Crocker.

BMR employs 50 staff inBucharest, Timisoara, Cluj-Napocaand Oradea offices. Gi Group is al-so present in France, Germany,Poland, Spain, Brazil, China, HongKong and India.

Corina Saceanu

Charlie Crocker says the deal will aid in thefirm’s development

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Law firm Wolf Theiss, whichhas advised on EUR 1 billion ofdeals last year in Romania, in-creased the turnover of its Roman-ian office by 15 percent in 2008 onthe previous year, the firm has an-nounced. This has placed the Ro-manian office second after WolfTheiss' biggest office in Vienna,turnover wise.

In total, the group posted a EUR50 million turnover in 2007 andgrew that number by 50 percent lastyear.

In the first quarter of the year,its turnover growth in Romania wasof 5 percent. For the entire year, thefirm expects to at least maintain thesame level of revenues as last year.It plans to develop its intellectualproperty, labor law, restructuringand insolvency practices and to con-tinue increasing its team of lawyers,to reach close to 60 lawyers in twoor three years. Now the Bucharestoffice runs with 32 lawyers, in total52 staff. The firm has three partnerslocally and eight senior lawyers.

Wolf Theiss has recently advisedon the Deutsche Bahn acquisition ofRomtrans. The firm has also workedon the acquisition of Rompetrol byKazMunaiGaz. It has advised in-vestment fund DEGI in its acquisi-tion of a EUR 110 million officeportfolio in Bucharest and Raif-feisen Evolution in acquiring a landplot from Petrom.

Staff

Wolf Theiss sees Q1 revenues up 5 percent

Bryan Jardine, managing partner of theBucharest office of Wolf Theiss

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Law firms Badea & Asociatiiand Clifford Chance merged at thebeginning of May, after havingworked in association since 2006,when Clifford Chance entered theRomanian market. Daniel and Na-dia Badea, partners in the firm, willbe the first Romanians to becomeglobal equity partners in a MagicCircle law firm. The Romanian of-fice will work under the Badea Clif-ford Chance name and will be head-ed by managing partner DanielBadea. He is also heading the bank-ing and capital market practice,while Nadia Badea, the real estateand M&A practices. “The mergerconsolidates seven years of collabo-ration [...] and offers the firm a plat-form to continue the development inthe South East of Europe,” saidDaniel Badea.

Badea & Asociatii was createdin 2002 by Daniel and Nadia Badea.The Bucharest office has four part-ners and employs 50 lawyers.

Clifford Chance is present in

Central and Eastern Europe since1991, when it opened its Moscowoffice. It has expanded to currently36 partners and over 320 lawyers inits offices in Bucharest, Budapest,Moscow, Prague, Warsaw and Kiev.Worldwide, the firm runs offices in21 countries and employs over3,200 lawyers. Badea CliffordChance has been ranked first amonglaw firms in Romania on Bankingand Finance and Real Estate by Le-gal 500 and Chambers & PartnersGlobal for 2009.

Of the five magic Circle lawfirms, Allen & Overy and BadeaClifford Chance are the only oneswho still have an office in Romania.Linklaters has closed down its localoffice in a wider restructuring moveacross the region. Some of itslawyers went on to create regionallaw firm Kinstellar. FreshfieldsBruckhaus Deringer is working onRomanian projects without havingan office locally.

Corina Saceanu

Nadia and Daniel Badea become first Romanianequity partners in a Magic Circle firm


C A L E N D A R / W H O ’ S N E W S

WHO’SEVENTS, BUSINESS AND POLITICAL AGENDA NEWSMICHAEL KRAHN, 48, is the new gener-al manager of Praktiker Roma-nia. He has 19 years of experi-ence in the Praktiker group. Before taking up this position, heworked as sales manager forPraktiker Poland. Krahn was pre-viously a member in the adminis-tration board of Praktiker Roma-nia from 2002 until the end of2007 as sales manager.

EUGEN LASCU, former executive man-ager of Raiffeisen Bank Roma-nia, was appointed vice-presidentin UTI group. He will be incharge with coordinating all thefinancial activities of the compa-nies in the group. Previously, Ur-dareanu coordinated all corpo-rate loan- related activities inRaiffeisen Romania.

CRISTIAN MOANTA, 47, is the new Mar-keting Managerof Altex Roma-nia. He has over15 years of expe-rience in distribu-tion, promotion

and sale of electronic productslocally. Before taking up this position, he was branch man-ager of Sony Romania. He coor-dinated local operations of Sony developing the presence of the brand in Romania but alsoin the Moldova Republic and Is-rael.

MIHAI DUDOIU, 33, was appointedManaging Asso-ciate with TucaZbarcea & Asoci-atii and Co-ordi-nator of the firm’sBanking & Fi-

nance practice group. Previously,he was Senior Associate and Co-coordinator of the Banking andInternational Finance Depart-ment of CMS Cameron McKen-na for 3 years. He worked for 10years as a corporate and interna-tional finance lawyer inBucharest, having acted on nu-merous secured financing syndi-cated transactions with an aggre-gate value in excess of EUR 1

billion, as well as real estate fi-nance, acquisition finance andgreenfield investments in the en-ergy sector.

TIBERIUS ISTOCESCU has been appointedManaging Partnerof Istocescu&Vintila Attorneysat Law. Istocescuspecializes inM&A advisory,

EU Funds and restructuring. Healso holds academic qualifica-tions in business engineering andEU Law. The firm he runs com-prises a team of 12 lawyers spe-cialized in M&A, restructuring,corporate&commercial, capitalmarkets, regulatory complianceand dispute resolution.

IRINA PENCEA was appointed execu-tive manager inOdyssey but willcontinue to tem-porarily coordi-nate directly theClient Service de-

partment until a new Client Serv-ice Director is appointed. Penceahas 10 years of experience in ad-vertising and has been a part ofthe Odyssey team and manage-ment since the agency wasfounded in January 2004. SinceJune 2006 she became ClientService Director. Previously, shewas part of the team D’Arcy Ro-mania, being Account Director incharge of the Mobifon account.

CAMELIA PANAIT, Group Brand Man-ager for Mainstream and Value

brands at UrsusBreweries, isjoining the EffieJury for the firsttime. She came toUrsus Breweries

in April 2008 as Group BrandManager for Worthmore Brands.Before that, she worked at Per-nod Ricard as Marketing Manag-er. Panait also attended the Inter-national MBA program of Insti-tuto de Empresa, Madrid, Spain,where she graduated in Decem-ber 2007.

MAY 12é 09.00- Wolf Theiss organizes debate on distressed assets and debt re-

covery at Hilton Hotel, Regina Maria room.

é 11.30- Save the Children organizes event as part of the global campaign

for education at the University of Bucharest.

MAY 13é Business Review organizes Greek Business Forum at Intercontinental

Hotel Bucharest, 0900 hours. Contact Business Review Sales Director

Oana Molodoi at 0720 222 247 for more information.

é 11.00- CMU Baneasa launches Stem Health Unirea, the first stem cell

bank with a deposit in Romania.

é 11.00- Regus Group inaugurates third location in Bucharest at Calea

Floreasca 169A, Corp A, sector 1.

é 13.00- Beautik Haute Parfumerie launches Caron perfume collection at

Brown Sugar club (5 Primaverii Blvd.)

MAY 14é 16.00- Flamingo announces financial results at Pullman Hotel, Seoul

room.

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]

The American Chamber of Com-merce in Romania (AmCham Roma-nia) is lobbying for several urgentadjustments to be made to the newfiscal code, some of them related tothe introduction of a holdings law,the repayment of VAT and othercharges within the legal period oftime.

Some of these suggestions weremade by Ionut Simion, tax partner atPricewaterhouseCoopers and amember of AmCham’s board. “Witha holdings law, companies would op-erate on the local market instead ofgoing to other countries where thereis suitable legislation for this. And, asin any other economic process, com-panies should recover the repayabletaxes and other charges within the le-gal period, otherwise, they shouldget paid interest for the sums whichare blocked in the state budget,”Simion said. He also pointed out thediscrepancy between the applied leg-islative measures from the NationalAgency for Fiscal Administration(ANAF) and the previous agree-ments.

Marius Pesinaru, country manag-er of Xerox Romania and member ofAmCham’s board, suggested a moreflexible scheme regarding the laborlegislation included in the new FiscalCode. “We submitted with the Min-istry of Labor over 70 suggestionsregarding the existing legislative out-line, the unions’ law and the groupwork contracts,” said Pesinaru. Therepresentative said that, for example,the current legislative framworkmakes dismissal procedures verycomplicated.

On energy, AmCham’s boardplans to lobby for a stable and firmlaw regarding energy efficiency andpreservation both for the public andprivate sector. Sorin Mandrutescu,the AmCham president, also calledfor consultation and involvement ofthe business community in the deci-sion-making affecting the economicand social environment and pointedout that sustainable, transparent andpredictable measures should beadopted, aimed at economic profi-ciency and effectiveness.

Magda Purice

AmCham Romania brings suggestions forbusiness-friendly fiscal code


F E A T U R E

Real estate developer Avrig 35 is working on several residential,office and retail projects, and plans some more retail andresidential for the future. With available equity from previoussales and banking financing in place, the developer is lookingfor strategic partners for some of its projects, and, although notin a hurry, plans to eventually sell its properties.

Avrig 35 goes residential withplans for affordable housing

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Edwin Warmerdam, CFO with Avrig 35, is looking for potential strategic partners for several projects

By Corina Saceanu

When asked whether the compa-ny had lost any money in the real es-tate down spiral, Edwin Warmer-dam, the chief financial officer ofdeveloper Avrig 35, knocks onwood while saying no. The compa-ny has three projects under con-struction and a few others in ad-vanced stages of planning. It has eq-uity from previous sales, bank fi-nancing in place for most of its on-going projects and a 5 million sqmland bank. It seems to be recessionproof, but it still wants to share risk

and is looking for strategic partnersfor some of its projects.

“This is the right moment to takejoint venture partners on board, tomanage to develop all the pipeline.There is only so much one can bearon one’s shoulders,” says Warmer-dam.

Using partners is not a new ap-proach for Avrig 35. The Iris com-mercial center in Titan was devel-oped in partnership with Aerium,while Charles de Gaulle Plaza, theoffice building Warmerdam over-looks from the firm’s rented officesacross the street, was a developmentin partnership with CA Immo. Both

projects were eventually sold tothird parties, which is what Avrig 35intends to do with the ones it stillholds. But at the moment “wehaven't asked for any offers, we arenot exactly looking. There is no-body knocking on the door in thecurrent market, just opportunisticbuyers looking for distressed as-sets,” says Warmerdam.

Meanwhile, the firm is workingon its first residential project, a 60-unit building on Mihai EminescuStreet, and is planning some moreresidential properties. The biggestof them will be a planned 3,000-unitproject in the Baneasa area ofBucharest, where the developerowns 35 hectares of land. “TheBaneasa project will deliver afford-able housing. We want to sell it foraround EUR 1,000 per sqm. You getthe volume of sales on the afford-able market. Most people are look-ing for EUR 60,000-70,000 apart-ments, not for EUR 200,000 apart-ments,” Warmerdam explains. Thefirst phase of the project should de-liver 750 apartments, but “this is notthe kind of project which we willstart this year, I hope we will do itnext year,” the CFO goes on. Twoother residential project, but smallerand more upmarket, are alsoplanned for Bucharest.

A 30,000-sqm office complex isalso under construction on AvrigStreet, close to the developer's for-mer headquarters, the Avrig 35building. The developer has ownedthe land for six years, but started theproject last year, and hope to com-plete it in 2010. A third project soonto go under construction is the thirdphase of its retail project in Titan,which will add some big box retail-ers like World Class, Kiabi and GoSport, expected for delivery in 12months. The first two phases of theproject were bought by investmentfund DEGI, which has an option tobuy this third phase too.

For the ongoing projects, Avrig35 says it has attracted funding fromseveral banks on the Romanian mar-ket, and is currently negotiatingwith BCR over a loan for the thirdphase of the Titan project. For thelarger residential project inBaneasa, the developer is talking toa syndication of banks led by Uni-Credit. “We have been negotiatingfor a long period of time, becausethis is not the right moment to put amassive affordable residential proj-ect in the pipeline,” says Warmer-dam.

A partnership with Cascade

Group is ongoing for a mixed proj-ect in Theodor Pallady area, wherethe developer owns 30 hectares ofland. The project is planned to de-liver 100,000 sqm of retail, residen-tial and some offices. “But it iswishful thinking that under thesemarket circumstances we would beable to attract financing at reason-able commercial terms,” saysWarmerdam, so this is a project tobegin later on within a two-yeartime frame.

A partnership with Industrialex-port was used for Bucharest TowerCenter office building too, but theproject, which was completed in au-tumn last year, is yet to be leased.“We have agreed with our partnerson the leasing strategy and we areready to accept leases […] Thebuilding was originally in a pre-saleagreement for 40 percent of it to Alpha Bank, and our partners arestill negotiating with them over thecontractual terms,” Warmerdamadds.

Countrywide, Avrig 35 is assetmanager for the office portfolio ithas sold to NEPI and in charge ofleasing some of the space there, andis refurbishing an office building inBrasov, also sold to the same fund.It has similar plans for an officebuilding in Constanta, which couldalso be acquired by NEPI.

Its plans for the future include achain of commercial centers withadditional office and residentialspaces in several cities such as Foc-sani, Buzau, Piatra Neamt, Suceavaand Timisoara. “In the past we felt itwas an unacceptable risk to start on-ly with the food anchors and the do-it-yourself stores, so at this stage wewould like to obtain a much higherpre-lease percentage. If we have 50percent of the galleria leased out,then we think we should put it underconstruction, and we can finance it,”Warmerdam explains. A standardinvestment in such a project, some30-40,000 sqm of space, would costaround EUR 50 million.

The group of investors who ownAvrig 35, including Alexander Her-gan, have not only looked at real es-tate in Romania. Its non-real estate activities, managed throughan investment fund, include compa-nies like glass facade producerFlexxelf, TV station Pratech TV andPratech Production. It also ownsseveral master franchises, like re-tailers Cache-Cache and Go Sport,and is looking at adding several oth-ers.

[email protected]


G R E E K I N V E S T M E N T S R E V I E W

In an agitated economic climate and an unstable fiscal environment, Greekinvestors keep investing in the telecommunication, food, health andbanking sectors. Meanwhile, green energy and distribution are attractingfurther Greek cash. What might dent their enthusiasm is the continuouschanges in legislation and tax and the lack of good infrastructure.

Greek investors sail towardsRomania’s hotspots

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Greek investments in Romania are estimated to reach half of last year’s level

By Dana Ciuraru

Greek businesspeople are amongthe most long-standing foreign directinvestors in Romania. Many of themstarted operations on the local marketas long as 15 years ago, a period inwhich most of them adapted to thecolorful local economic climate. TheRomanian market has seen consider-able expansion in the past four years,making it a favorable one amongEastern European countries. Greekinvestors cite the continuous changesin legislation and fiscal policies, lackof predictability for future businessdevelopments and the lack of a goodinfrastructure as Romania’s weakpoints.

However, these challenges, alongwith the current economic and finan-cial turmoil which Romania is cur-rently facing, haven’t become ascarecrow for foreigners.

“On the long term, Romania re-mains an attractive country for for-eign investors. Its Central Europeanposition and the particularities of thelocal market offer an important com-mercial advantage for the businessenvironment. Romania is one of thebiggest markets in terms of popula-tion among CEE countries with sig-nificant natural resources. Romaniaalso offers opportunities for develop-ment in alternative energies, tourism,infrastructure, agriculture and otherfields,” Andreas Maragkoudakis,CEO of Banca Romaneasca, toldBusiness Review.

GREEK BANKS BET ONSTABILITY

The National Bank of Greece(NBG), one of the largest financialgroups in South-Eastern and CentralEurope, became the main shareholderof Banca Romaneasca in 2003. Cur-rently, NBG holds 89.07 percent, andthe EBRD also joined the bank in2005, presently owning a 10.21 per-cent stake. When it was acquired in2003, the bank reported EUR 166million in assets, EUR 267,015 in netprofit and had 652 employees. Bycomparison, last year, it reported as-sets of EUR 2.3 billion, and a netprofit of EUR 26.4 million, represent-ing a 100 fold increase, while thenumber of personnel has almosttripled, reaching 1,680 in 150 branch-es.

“Banca Romaneasca increased itsshare capital between 2003 and 2008more than fifteen times, in order tosustain the bank’s strategy and devel-



When did you decide to set up a presence in Romania and why?The law firm operates since 2003, initially under a different name, and it was

initially created as the affiliated law firm of Baker Tilly Klitou for business ven-tures seeking professional legal, audit and accounting services.

How big is the local firm? What are the main practice areas? What areyour main clients?

We have a total staff of twelve people, out of which nine lawyers. Our practice focuses on corporate and commercial, real estate, tax, mergers

and acquisitions, labour issues, and litigation.The typical profile of our client is an international corporation, often listed on

the stock exchange, who has entrusted us to deal with the legal affairs of its sub-sidiary in Romania. This corporation may act in the heavy industry, FMCG, bank-ing or construction sector, it may be one of the main distributors of appliances,an international soft-drinks producer or the world’s leading chain of coffee

shops, or it may be on the list of the biggest tax payers in Romania.Among the things we are proud of, the most important is that in time we be-

came to be perceived by our clients as ‘part of the team’, and not the externallegal adviser.

What are the main issues you clients need advising on right now? Hasanything changed because of the economic crisis?

Indeed, things have changed because of the current economic climate. Onone hand, in real estate we have noticed an abrupt halt of transactions in fall lastyear, followed by a slight improvement, due to acquisition of distressed assets.On the other hand, we are facing a continuous growth of enquires related tolabour issues, and of the number of litigation cases. Clients are also paying nowmore attention to their tax exposure and consequently we are lately working ex-tensively on such assignments. I am also surprised of the large number of casesof voluntary liquidations, even before the recent change of the fiscal legislationwhich imposed a forfeiting tax.

How are you adapting your strategy to the present economic climate?There are two things that have changed in our strategy because of this: we

have reallocated resources to serve the additional amount of work in litigation,labour and tax, and we are now dedicating more time to client development andconsolidation of the identity of our office, something that we did not feel theneed to do during the last years when we were too busy serving our clients.

However, the fundamentals have not changed: we still offer legal services inthe same areas and we did not become overnight specialists in other areas, westill offer the same profitable pricing policy that our clients are already used to,and we are still careful with the professional development of our staff.

What would you advise Greek investors interested in doing business inRomania?

I’d rather restrain myself from giving them any advice in this respect. I amsure that they know better than me their line of business and the opportunitiesin Romania. Instead, I would like to share with them the best piece of advice Ihave received lately, which came from a very dear client, a British-Cypriot de-veloper that has lived through similar times in early nineties, in London: the les-son he learned was that there is nothing one can do to change the general en-vironment; however, what one should do is to literally mind his business.

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Marian Lucu, Managing Partner - Lucu Tsignopoulou Associates

opment. The most significant in-crease of EUR 100 million took placelast year, when the investment levelreached around EUR 200 million.There were other substantial funds at-tracted from NBG, so that the marketshare in terms of assets increasedfrom less than 1 percent to 3 percent,”said Andreas Maragkoudakis, CEOof Banca Romaneasca.

He added: “The main focus inlending will be on the SME and cor-porate segments, but we will alsocontinue to support retail loans. Be-

sides the support we are receivingfrom the mother company, we will al-so continue to encourage savings byoffering competitive products and in-terest rates.”

The Banca Romaneasca officialsays that the financial institutionplans to have a calculated growth andto reach a 10 percent increase in as-sets this year. “Strategically, the bankwants to maintain an appropriate liq-uidity position to sustain moderategrowth this year, improve the level ofproductivity and effectiveness focus-

ing on deposits and collection, en-hance the range of liabilities productsin order to sustain the fund-raisingactivity and maintain a good qualityand structure of assets,” said theCEO.

A qualified and inexpensive laborforce is one of the advantages offeredby Romania, the Banca RomaneascaCEO added.

Another Greek bank with opera-tions in Romania is Alpha Bank. Thelender reported a 20.8 percent in-crease in pre-tax profit to EUR 45.8

million last year. The Greek investorincreased its number of employees by796 to 2,651 last year, in the contextof opening 75 new branches to reacha network of 200.

GREEK CONSOLIDATION INTELECOM

Telecommunication has attractedthree major Greek players: OTE pres-ent locally with landline operatorRomtelecom and mobile telephonyoperator Cosmote, and GermanosGroup Greece. The Romanian sub-sidiary of OTE group, OTE Interna-tional Investments Ltd, became aRomtelecom shareholder in 1998, ac-quiring a 35 percent stake and takingover the company. In 2003, OTE be-came Romtelecom’s majority share-holder. Since 1999, Romtelecom hasinvested about EUR 1.7 billion, EUR100 million of which was spend lastyear alone.

“The investments went particu-larly into modernizing the telecom-munication infrastructure, introduc-ing new technologies, improving thecustomer service system as well asdiversifying the products and servic-es portfolio,” Yorgos Ioannidis, CEOof Romtelecom, told BR.

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Vassilis Chaniotis, Medsana general manager

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G R E E K I N V E S T M E N T S R E V I E W / I N T E R V I E W

The current economic crisis has put a foot on the brakefor the investments of Greek-owned companies inRomania. IOANNIS PASCHALIS, minister and counselorof economic and commercial affairs with the Embassyof Greece in Romania, told Business Review that thisyear the investments level will be between EUR 200million and EUR 300 million, down 50 percent from lastyear’s level. However, Greek investors continue to showinterest in renewable energy and agriculture.

Economic crisis leaves Greekinvestments on downturn

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By Dana Ciuraru

What impact is the current eco-nomic environment having on for-eign direct investments on the localmarket?

I came to Romania in November2006. I encountered here somethingthat I had never had to deal with in30 years of experience in sevencountries: thousands of Greek in-vestors. In fact, Romania is the topdestination for Greek investorsworldwide, with more than EUR 3.5billion invested since 1992. Thebiggest wave of Greek investors inRomania came around the year2000, when financial institutionslike Alpha Bank set up here. Ourstatistics show that 4,500 Greek-owned companies had been regis-tered in Romania by the end of Jan-uary 2009, of which I estimate thataround 1,000 firms are active. Thisdiscrepancy is because most ofthese companies were formed justso the owners could buy a piece ofland. Comparing the data from De-cember last year to the end of Janu-ary this year, 26 new Greek firmshave registered in Romania, despitethe crisis. This is encouraging.

How much did Greek-ownedcompanies invest in Romania lastyear?

Additional investment in 2008compared to 2007 is around EUR500 million, according to data fromthe Romanian Central Bank. Bankshave increased their share capital tobe able to face the crisis. Thetelecommunication company Cos-mote also invested a lot last year.Greek-owned banks and Cosmotealone invested EUR 400 million lastyear. My estimation is that the in-vestments of Greek-owned compa-nies in Romania will be at half oflast year’s level. Cosmote andRomtelecom will continue to devel-op their products. Cosmote willcontinue to improve its network toreach every corner of the countrythis year.

And Romtelecom keeps expand-ing in rural areas and bringing outnew products.

The investments announced bythese two multinational companiesalone exceed some EUR 200 mil-lion.

Which sectors are attractive forFDI in Romania?

One sector that has already

caught the attention of Greek in-vestors is energy, and in fact every-body expects that investments inthis sector will be higher than inprevious years.

The Public Power Corporation,a Greek state-owed companythrough its division PPC Renew-able, and Greek firm Terna are in-terested in investing in the renew-able energy sector. State companyAstrofos, which is specialized in en-gineering in oil and gas, GP andAvax are also keen to invest in Ro-mania and participate in differenttenders.

And the Greek company Mytili-neos has started a hydro-electricproject in partnership with GeneralElectric.

Another sector which has piquedGreek investors’ interest is agricul-ture. I know that there are severalinvestors looking to buy biggerpieces of land to cultivate wheat.One such is Jean Valvis – after hesold his business he shifted his fo-cus towards the vineyard business.Other Greek-owned companies withoperations in Romania are investingin pig and sheep farms or have shift-ed towards the logistic and distribu-tion sector.

What are the ups and downs of the local economic environ-ment?

It is true that a few Greek-ownedcompanies have had problems withtenders: they complain that theyhave been unfairly excluded, andwhen they seek remedy in court, thedecision is not an objective one.Furthermore, there are problemswith local authorities. For instance,one company receives a permit tobuild a building and then anothercentral authority withdraws the per-mission.

One example is when OSIM, theorganization for patents, granted apatent to a Greek-owned firm andthen the same organization almostwithdrew it.

The list goes on. Other Greek-owned companies invest in a facto-ry and want to have 300 meters ofnearby road asphalted, but becauseit is situated on the boundary of twodifferent counties, neither authorityconsiders itself responsible, so thestreet remains without asphalt fortwo or three years. Moreover, thereare some cases of taxation problemstoo, especially when it comes to ex-cess duties.

[email protected]



continued from page 11

Cosmote Romania, member ofCosmote Group, launched commer-cial operations in December 2005.The company has also developed at-tractive solutions for the corporatecustomers, while in May 2007 it in-troduced i-mode exclusively in theRomanian market. Cosmote exceed-ed 3.6 million customers on Decem-ber 2007. Cosmote Romania has cur-rently 850 stores across the country,counts more than 1,000 employeesand has a strategic partnership agree-ment with the Internity stores. More-over, since November 2006, Ger-manos Romania represents and dis-tributes exclusively Cosmote prod-ucts and services. Since it entered theRomanian market, Cosmote investedover EUR 600 million.

At the end of 1998, when OTEtook over Romtelecom, the localcompany reported EUR 1.12 billionin revenues, about EUR 386 millionin EBITDA and 48,441 employees.

By comparison, last year revenuereached EUR 869.8 million, whilethe reported EBITDA was EUR291.6 million. Over this period,Romtelecom has reduced the numberof its employees to 10,344.

The operator’s strategic plans forlast year involved improving internalprocedures, offering competitiveservices in order to increase the clientdatabase and intensify the company’spresence on the market segmentswhich post growth, meaning internetand digital television, along with astrong cost control. This strategy willbe implemented this year as well.Most of the company’s investmentsgo into infrastructure development inorder to provide broadband internet,both fixed and mobile.

The current economic climatehas left a mark even on the telecom-munication sector, but the Romtele-com CEO is more optimistic. “Weexpect the telecommunication indus-try to be less affected by the worldeconomic crisis than other industriessuch as the automotive industry andreal estate. Of course, we will suffera decrease in consumption and a newapproach to spending. This is whywe estimate a slowdown on somesegments as internet or television,compared with previous years,” saidIoannidis.

Germanos is similarly optimistic.“The Q1 results are in line with ourplanned objectives. Obviously, weare attentively following the marketevolution and, if made necessary bythe evolution of the economic con-

text, we will adjust our strategy. Nev-ertheless a long-term forecast is risky,because of market unpredictability,”Germanos officials told BR.

Germanos Group Greece enteredthe local market in 1996, by openinga battery store in the Unirea shoppingcenter in the middle of Bucharest. In2000 Germanos Telecom Romaniawas set up, and the firm began towork with mobile phone operators. InJanuary 2006, Germanos opened its100th store, and in 2006 the companywas acquired by Cosmote Group. In2007, Germanos acquired the tele-com retailer Telsim GSM and Febru-ary of last year saw the opening ofstore number 200. Currently, Ger-manos Telecom Romania has a net-work of 260 shops and a large serviceportfolio. According to company rep-resentatives, this year the companywill focus on improving its store vis-ibility on the market and the qualityof its services.

A HEALTHY MARKETGreek investors have not shied

away from the health sector. “In themedical sector, growth has been moreor less constant in the past years, andit was the only sector that was not sig-nificantly affected during the expan-sion years, nor during the crisis,” Vas-silis Chaniotis, Medsana GM, toldBR. The company has been presenton the local market as an investmentof Athens Medical Center group fromGreece since 1996. The total value ofinvestments to date surpasses EUR14 million, and went into developingthe clinic network.

The company reported a USD800,000 turnover and a gross profit ofUSD 22,500 with 25 employees in1998. Last year, turnover reachedEUR 6.5 million and the gross profithiked to EUR 500,000. Its staff hadalso grown to 165 employees. Thestrategy of Athens Medical Center, ofwhich Medsana is a part, is to devel-op greenfield investments. “We plan to open two new clinics inBucharest this year and to initiate ahospital project. The hospital will of-fer multidisciplinary medical serviceswith a built surface of 15,000 sqmand a 150-200 bed capacity. For thetwo medical centers we plan to openthis year the total investments willreach EUR 2 million,” said Chanio-tis.

RETAIL GOES GREEKOn the retail side, the name of

Greek company Elmec Romania isstrongly linked with the Romanianmarket. Elmec Romania was estab-

lished in 1999 as a subsidiary ofElmec Sports, one of the leadingcommercial companies in Greece,and started its operations here as aNike product distributor.

The first Nike store was openedin the center of Bucharest in Decem-ber 1999. Currently, the company has23 Nike stores, three Nike outletstores and two Nike shop-in-shopsnationwide.

“Three years later, with the sameenthusiasm, we made our first movein creating an innovative and uniqueretail concept in Romania by launch-ing the Famous Brands store model.The company kept on growing by en-larging its brand portfolio and ex-panding the retail networks for bothNike and Famous Brands. Theturnover figures recorded double dig-it increases year after year and ElmecRomania always maintained its posi-tion as one of the leading players inthe industry,” Cristian Beznoska,CEO Elmec Romania, told BR.

In 2007, the two Famous Brandsgalleries in Bucharest Mall and PlazaRomania opened under the shop-in-shop retail concept. More than EUR 2million was invested in 2007 in retailnetwork development, personneltraining and permanent improvementof the services offered to clients. Atthe end of 2007, Elmec Romania be-came part of the Greek group FolliFollie, which has over 300 jewelryand accessories stores in cities aroundthe world. “Our turnover increased tomore than EUR 50 million last year.We now have 40 stores all over thecountry, more than 40 wholesale part-ners and our expansion plans contin-ue. This year, even though it is a tur-bulent business year for everyone, weare very optimistic regarding ourplans for new store openings, extend-ing our portfolio with additional topbrands and investments in new proj-ects in Romania and Moldova,” saidBeznoska.

Another Greek retail companyactive on the Romanian market isSprider. Company officials say that

they plan to reach 30 stores by 2010,from the current 14 units, through thefranchise system. Georgios Dyon-isatos, Sprider Stores GM in Roma-nia, says the average investment thefirm has put into its local stores so faris about EUR 500,000, clothing stockincluded. The Greek retailer, whichalso runs stores in Croatia and Bul-garia, wants to add home products toits stores, under the Sprider Homebrand, which will be launched in Ro-mania in autumn. “We will start byadding Sprider Home in four existingstores, two in Bucharest, one inTimisoara and one in Cluj-Napoca,”says Dyonisatos.

GREEK INVESTMENTS SPICE UPFOOD SECTOR

This year, the Greek toast breadproducer Karamolegos Bakery start-ed its first investment on the localmarket. The company announced aEUR 10 million investment in abread factory in the Popesti Leordeniarea. Meanwhile, Greek companyEpitome, established in Romania lastyear, is also making its first invest-ment on the Romanian market: Illu-sions restaurant. Illusions GM ArisTsouros is one of the three Greek pri-vate investors who control the facili-ty. The Greek investors have putEUR 1.4 million into modernizationworks and the interior design of therestaurant. The hosting building, for-merly home to the Hungarian Em-bassy in Bucharest, was rentedthrough a 10-year leasing contractsigned in June last year.

“We want to position ourselves inthe market as an exclusive luxuryrestaurant, and therefore we havepartnerships with luxury brands onthe local market. Epitome is a privatecompany but, currently, we want tocreate and consolidate market aware-ness,” said Tsouros. Some of thebrands involved in partnerships withIllusion restaurant are Maserati,Longines, and other names displayedin a small shopping gallery located inthe building. ■

2006 2007 2008 Change07-08 (%)

Greek exports 595.82 774.65 772.42 -0.28to RomaniaGreek imports 505.26 535.96 525.25 -1.99from RomaniaVolume 1,101.08 1,310.61 1,297.67 -0.94Balance 90.56 238.69 247.17 3.55

Trade balance between Greece and Romania

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

CompanyAddressE-mailWeb page

Year establishedEmployees

Investor company - Country - Stake

Capital stockTurnover (RON)

20082007

Gross profit / loss ((RON)

20082007

ActivityTop local executive

Phone Fax

AEGEK SA ATENA SUCURSALA LIPSCANIStr. Lipscani 102, et. 5Bucure[ti, cod [email protected]

200213 Aegek SA - Greece - 100%

WND0

7,105,511

- 4,333,609 - 543,901 construction

Fotiadis MiltiadisLegal Representative

021-312-8916021-312-8736

ALPHA BANK ROMANIACalea Doroban]ilor nr. 237BBucure[ti, cod [email protected]

19942,500 Alpha Bank Group - Greece - 100%

593,618,274WNDWND

45,800,000 EUR37,900,000 EUR banking

Sergiu OprescuExecutive President

021-209-2100021-231-6570

ALPHA LEASING ROMANIA IFN SACalea Buze[ti nr. 14-18, et. 1-2Bucure[ti, cod [email protected]

199871

Alpha Bank AE - 62,9412%Alpha Bank Romania SA 15% Alpha Leasing AE - 16,3606%

Alpha Finance Romania SA - 5,6912% Alpha Advisory Romania SRL - 0,0070%

4,695,000 WNDWND

WND financial leasing

Aris GogosManaging Director

021-264-9000021-264-9009021-314-9024

ALUMIL ROM INDUSTRY SACalea Rahovei nr. 286ABucure[ti, cod [email protected]

1997300

Alumil Milonas SA - Greece - 55.9%Michail Sotiriou - Greece - 24%

60,000,000113,620,804111,643,948

9,567,40114,103,716

production & distribution of aluminium profiles for architectural applications, system accessories,

aluminium composite panels, polycarbonate sheets, tools for processing aluminium profiles, interior,

security & fireproof doors, automatic doors

Michail SotiriouPresident & CEO021-424-3456021-424-3459021-423-3932

BANCA ROMÂNEASC~ SA - member of The National Bank of Greece GroupBd. Unirii nr. 35, Bucure[ti, cod [email protected]

19921,679

(december 2008)

National Bank of Greece - Greece - 89.07%European Bank for Reconstruction and

Development - 10.21%

748,648,220 874,891,331 515,608,247

18,971,2988,348,897 banking

Andreas Theodoros MaragkoudakisGeneral Manager

021-305-9000021-305-9300021-305-9191

COSMOTE ROMÅNIABd. Nicolae Titulescu nr. 4 -8, Cladirea America House, Aripa Vest, et. 5-6Bucure[ti, cod [email protected] www.cosmote.ro

2005> 1,000

Cosmote Mobile Telecommunications SA - Greece - 70%

Romtelecom SA - Romania - 30%

WND311,000,000 EUR155,600,000 EUR

WND mobile telecommunications

Stefanos Theocharopoulos

CEO021-404-1234

WND

ELGEKA FERFELIS ROMÅNIA SADrumul \ntre tarlale nr.150-158Bucure[ti, cod [email protected]

2002480

Elgeka Cyprus LTD - Cyprus - 50.02% Illian Services LTD - Cyprus - 49.98%

22,581,500285,193,622193,582,670

WND national distribution of FMCG products & lubricants

Ferfelis IoannisGeneral Manager

021-204-6600021-204-6627

FRIGOGLASS ROMÅNIA SRLDN 59 Timi[oara-Moravi]a, Km 16Sat Par]a, jud. Timi[, cod [email protected] www.frigoglass.com

1994483 Coolinvest Holding LTD. - Cyprus - 100%

1,723,810329,101,332294,487,028

62,892,68148,583,453

manufacturer of Ice Cold Merchandisers products & provider of services

Elias KoutsogiannisPlant Manager0256-407-5300256-395-258

GECA SA Str. Vasile Lucaciu nr. 78Bucure[ti, cod [email protected]

199615

General Cables Ofranidis Bross SA - Creece 100%

618,3106,442,8686,592,082

- 165,921474,495 trade with cables, electric materials & lighting bodies

Panagiotis TrapalisDirector

021-323-5097021-223-3859021-323-4819

GENCO TRADE SRLStr. Biharia nr. 67-77, Complex MetavBucure[ti, cod [email protected] / www.intersport.ro

1996aprox. 350 WND

3,790,500 489,654,153378,571,779

2,480,87319,341,933 distribution & retail

Ionas IgnatiosAdministrator

021-201-1180021-201-1187

IFANTIS ROMÅNIA SACalea Bucure[tilor nr. 301BOtopeni, jud. Ilfov, cod [email protected]

2001WND

Yfantis Axch Industrial and Commercial SA - Greece - 79.75%

Luncheon Meat Evrou SA - Greece - 19.95%

32,858,19020,288,17423,798,760

WND meat preparations manufacturing

Zafeiris GeorgiosGeneral Manager

021-300-7984021-300-7989021-350-1934

INTERSTAR CHIM SABd. Basarabia nr. 256Bucure[ti, cod [email protected]

1994283 (end of

2008)

Zoulama Holdings Limited - Cyprus - 99,9852%

Physical Persons - Cyprus - 0,0148%

94,846.577,679,771 63,872,997

- 3,542,3042,164,523

soaps, detergents & household cleaning products manufacturing

Chrysis NikolaouCFO

021-256-4636021-256-4626

INTRAROMStr. Fabrica de Glucoz` nr. 17Bucure[ti, cod [email protected] www.intrarom.ro

1993588

INTRACOM SA Telecom Solutions - Greece - 66,7%

others - 33,3%

37,014,894498,133,041188,509,390

24,582,60315,055,921 IT & C

Nikolaos DoukakisCEO

021-204-0906021-204-0902

MEDSANA BUCHAREST MEDICAL CENTER SRLStr. Dr. Nanu Muscel nr. 12Bucure[ti, cod [email protected]

1996165

Athens Medical Center Group of Companies - Greece - 100%

WND25,910,00019,000,000

2,000,0002,660,553

medical services, multifunctional diagnosis medical centers

Vassilis ChaniotisGeneral Manager

021-9607021-408-7800021-402-8076

PIRAEUS BANK ROMÅNIABd. Carol I nr. 34-36Bucure[ti, cod [email protected]

19951,846

Piraeus Bank Greece - Greece - 99.99 %Romanian Individuals - Romania - 0.01%

916,587,213617,565,567317,036,418

158,920,40073,362,034 banking

C`t`lin PârvuExecutive General Manager

021-303-6969021-317-3116

ROMTELECOMStr. Gârlei nr. 1BBucure[ti, cod [email protected]

199710,344 (end of

2008)

OTE International Investments Ltd. - Greece - 54,01%

318,464,490869,800,000871,900,000

WND telecommunications

Yorgos IoannidisCEO

021-1930WND

SYSWARE SYSTEMS INTEGRATION SRLStr. Mihail Sebastian nr. 72Bucure[ti, cod [email protected]

199935 Altec SA - Greece - 100%

553,45034,364,00450,364,465

125,955307,793

computers, peripheral equipment & software wholesale trade

Ioannou VasileiosGeneral Manger021-410-1211021-410-2036

UNISOFT ROMÅNIA SA Str. Mihail Sebastian nr. 72Bucure[ti, cod [email protected]

199615

Altec SA - Greece - 99.6%Ioannou Vasileios - Greece - 0.1%Kzpros Christofi - Czprus - 0.1%Nikitas Katsaras - Greece - 0.1%Evanggelos Poris - Greece - 0.1%

90,0001,627,2281,373,263

164,570- 548,275 make soft on demand

Ioannou VasileiosAdministrator

021-410-2047021-410-2820

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.

MAY 11 - 17, 2009 / VOLUME 14, NUMBER 17

BUSINESS REVIEW FORUM Manage your business environment !

Estates&ConstructionMARKET

Immoeast buys out participation in localprojects from partner Eyemaxx

Austrian investment fund Im-moeast has went on buying yet anoth-er set of projects on the Romanianmarket, despite having given up onsome of its planned local pipelineprojects. Immoeast has bought itspartner Eyemaxx’ participation in twologistics projects in Timisoara andPloiesti and land plots in three othercities, Sibiu, Brasov and Targu Jiu.Both logistics projects have alreadybeen finalized.

Eyemaxx has announced plans fora network of logistic centers under theLog Center brand in Sibiu and Brasovtoo. It had also announced plans to

build a shopping mall in Targu Jiu,the 23,300 sqm Jiu Mall, to be final-ized in 2011, according to the compa-ny.

Contacted by Business Review,Eyemaxx would not offer further de-tails on its updated plans in Romania.

Immoeast had previously sold itsparticipation in seven projects locallyto its partner S+B Gruppe, and boughtEuropean Future Group's shares infour other projects.

Immoeast started to sell some ofits assets across the region, and re-ported at the end of last year a portfo-lio of 80 projects in Romania worth

some EUR 1 billion, compared to 135properties of EUR 3.4 billion in totalmid last year. Regionally, Immoeastcanceled 51 projects and delayed 29.The fund, listed on the Vienna andWarsaw stock exchanges, saw itsshare value drop by as much as 90percent last year. The Austrian invest-ment fund was one of the most activebuyers on the Romanian market in2006 and 2007. The fund owns prop-erties such as Polus Center Cluj, S-Park, Euromall Pitesti, Gold Plaza,Victoria Park and Armonia Arad,among others.

Corina Saceanu

Immoeast bought Eyemaxx’ participation in two industrial projects in Timisoara and Ploiesti

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Israeli firm AFI Europe's plannedmall in Bucharest AFI Cotroceni Parkwill open its gates earlier than sched-uled, as the developer has decided tospeed up the works and launch the ven-ue at the end of September this year. Sofar, the mall’s tenants occupy 85 percentof the total 76,000 sqm GLA, compris-ing brands such as Inditex, C&A, Man-go, Bestseller Group, Deichmann,Marks & Spencer, Nordsee, Hondos,Nike, Converse, Miss Sixty, CalvinKlein, Champion, Benetton and SMYCwithin a shopping gallery of 300 shops.On top, the project delivers 2,500 park-ing spaces, a Real supermarket, 20-room3D Imax cinema complex and a go-kart-ing ring in the mall’s entertainment area.

Last year, developer AFI Europe an-nounced it had obtained financing ofEUR 234 million from Hypo Real Estate

Bank for the Cotroceni Park develop-ment, launched in 2007. The loan isgranted for eight years and will cover 80percent of the entire investment, whichis estimated at almost EUR 300 million.The commercial center and one officebuilding to be launched this year are partof the project’s first development stage,while the second stage will deliver fouroffice buildings of 12,000 sqm in totaland a five-star hotel.

Besides this large project, AFI Eu-rope has announced that it would starttwo retail projects located in Ploiesti andthe Bucurestii Noi area of Bucharest, un-der the brand AFI Palace. The companyis awaiting the construction permits.

Magda Purice

Cotroceni mall to open in September, ahead of schedule

Portuguese commercial center de-veloper Sonae Sierra has announced thatit is proceeding with the three projectsthe company previously announced itwould deliver in Romania, Bucharest-based Parklake Plaza and two projects inCraiova and Ploiesti. According to astatement, “Sonae Sierra is continuousworking on all projects by intensifyingthe technical and design optimization,the lease activities and bank financingresearch.”

The firm has decided to write off thelosses caused by various land price fluc-tuations between end-2007 and end-2008 on its 2008 accounts, assuring ahealthier start to the financial year 2009.

Overall, the developer’s financialstatement, published last month, reportsthat total direct profits in 2008 increasedby 13 percent over 2007’s result. The de-veloper made an overall profit of EUR315.2 million in 2008, EUR 35.3 millionhigher than the EUR 279.9 million gainsmade in 2007. The results come from the

growth of the firm’s portfolio throughacquisitions made in 2007 – the Roman-ian-based project River Plaza, amongothers in Portugal and Germany – alongwith openings made in countries likeItaly, Spain and Greece.

The Portuguese group’s operational

profit was calculated at EUR 179.9 mil-lion in 2008, a rise of 16 percent over2007, according to the company’s offi-cial financial data. The net profit result-ing from direct operations reached EUR67.8 million in 2008, while the value ofoperational net assets hit EUR 1.416 bil-lion in 2008.

Locally, Sonae Sierra acquired Riv-er Mall in Ramnicu Valcea and has man-aged Arena Plaza in Bacau since 2007.In 2008, Sonae Sierra and Warsaw-headquartered retail developer CaelumDevelopment joint-ventured for theEUR 591 million development of Park-lake Plaza, scheduled to open in April2011, according to a company statementlast year. The Parklake Plaza project, in-cluding ParkLake Towers, is located ineastern Bucharest, and will be devel-oped on an 8.2-hectare plot. The projectsin Craiova and Ploiesti will be devel-oped at an estimated cost of EUR 293million, the company said last year.

Magda Purice

Sonae Sierra still pursues three local projects, posts gains over last year

UBM, the Austrian real estate de-veloper, has finished the second phaseof its center for logistics and light in-dustry in Chitila. Located on the north-west Bucharest ring road, close to theDN1 and A1 (Pitesti) motorway, ChitilaLogistics Park (CLP) is situated withinthe Bucharest zoning region for logis-tics, distribution and industrial compa-nies. The EUR 35 million project totals45,000 sqm of industrial and officespace.

CLP is a joint development with theRomanian real estate partner Metropola

Imobiliar. The first phase was launchedlast summer and comprises 16,000 sqm,which has been 100 percent let. So far,the retail park has leased space to ten-ants such as Schenker, RTC’s divisionBe Proffice and Montero. The secondphase of the project was opened in Apriland comprises more than 22,000 sqm,out of which 75 percent is already rent-ed, the company said. Spaces in thissecond stage are occupied by tenantssuch as Hiparion and Ringier Print. Thefinal phase of the park will deliver ap-proximately 7,000 sqm of warehouse

and office space, which could also bedeveloped as built to suit, and will becompleted in the second half of 2009.

The Austrian developer focuses oncountries in Central and Eastern Eu-rope, where it invests and develops awide range of schemes from industrialprojects to four- and five-star businesshotels. It has offices in 11 countriesaround Europe. In 2008, UBM regis-tered a total annual development andconstruction output of more than EUR300 million.

Magda Purice

UBM unrolls second phase of CLP logistic park in Bucharest

The mall is 85 percent leased

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The developer owns River Plaza mall in RamnicuValcea

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BRIEFSLAFARGE AND HOLCIM CE-MENT SIGNIFICANT PROFITDAMAGE IN Q1 OF 2009…é Cement giants Lafarge and Holcimsaw a tough year after the globalconstruction slowdown eroded theirprofits in the first quarter, accordingto Reuters. Lafarge posted a 35percent drop in its current operatingprofit, while Holcim saw its operatingprofit fall 54 percent. Lafarge posteda USD 22.77 million net loss, whileHolcim's bottom line tumbled to USD65.54 million.

… WHILE WIENERBERGERPOSTS OPERATIONAL LOSS OFEUR 29 MILLION GLOBALLY INQ1 OF 2009é Austrian brick producerWienerberger has also been hit bythe general economic downturn andposted EUR 29 million of operationallosses in 2009’s first three months,with the lowest results beingregistered in Eastern Europe incountries like Romania, Poland, theCzech Republic and Slovakia. In Q1of 2008, the producer posted profitsof EUR 42.6 million. This year, thecompany’s EBITDA value dropped 82percent to EUR 16.2 million. InFebruary, the company lost 65percent of the profit registered in2008, to reach EUR 103.3 million

REAL ROMANIA TO PUT EUR60 MILLION INTO THREE NEWSUPERMARKETS é Retail chain Real Romania, part ofGermany’s Metro Group, plans toassign some EUR 60 million toopening three new supermarketsduring 2009, according to thecompany. Last year the networkopened four new hypermarkets in fiveweeks towards the end of the year.Currently, the supermarket chainoperates 21 stores in Romania.

IMPACT TARGETS 11 PERCENTMARKET SHARE INBUCHAREST é Romanian real estate developerImpact Developer & Contractor’smain objective in 2009 is increasingthe company’s market share inBucharest to 11 percent, according tothe company. Currently, the companyholds a market share of 9.5 percentin Bucharest.



At the real estate exhibition TNI,

from Palatul Parlamentului, the new

organization Be Igloo came with 800

apartments in seven residential pro-

jects from Bucharest and with the

smallest prices possible: euro 98 000

for 2 rooms apartment and 64 000

for one room; in the same residential

projects, it seems like if you are buy-

ing directly from the developer the

price is bigger.

They are confident in the Roman-

ian market and still knowing very well

the market’s conditions and that is

why, in the last two months, they sold

exactly how they planned: 4 apart-

ments/month.

„If we are giving the appropriate

solutions for the people, they are

buying. If we are going to supervise

the work at their homes, to offer

them financing possibilities according

to their needs, they will buy. That is

why we are trying to sell only

finalized apartments, so that the trust

of the end user to be complete.” ex-

plained Nimrod Zvik, the marketing

director of Be Igloo.

Be Igloo is the sales organization

for the Norwegian investment fund

Romania Invest.

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Be Igloo at the National Real EstateExhibition (TNI)

Israeli real estate developer OcifGroup has developed a new schemeto atract potential buyers and in-crease awareness of the VivandoUnirii project, which it will launchat this year’s edition of the real es-tate trade fair at the ParliamentPalace in Bucharest.

The firm is one of the severalresidential developers that havestarted to step up and vary theirsales promotions, since sales on thereal estate market, and the residen-tial segment in particular, ground toa halt,

“Recently, we have witnessedincreasing interest from potentialbuyers in under-construction resi-dential projects. During the real es-tate national trade fair (TNL), wewill make a promotional offerwhich grants a EUR 300 per monthallowance to buyers of a residentialunit in Vivando Unirii. The al-lowance will be granted for threeyears and will start once the apart-ment is delivered to the owner,” saidCristina Danila, marketing director

of Ocif Group. So far, according to the develop-

er, Vivando Unirii has sold 30 per-cent of a total of 110 apartments,with the highest demand for apart-ments of two and three rooms pricedat an average of EUR 2,100-2,200per sqm, without VAT. VivandoUnirii comprises six blocks of 110apartments built on an 8,000-sqmplot near Unirii Square, acquired in2006.

In February this year, OcifGroup assigned Libby Weizman asthe company's new general manag-er. Last year, the developer an-nounced EUR 200 million of invest-ment in Romania until 2010, fol-lowing a partnership with invest-ment bank LCF Rothschild Group.The two companies have partneredso far for two residential projects inBucharest: Vivando Unirii, whichwill require a EUR 20 million in-vestment, and a second residentialproject, to be located on 90,000 sqmland in Pipera.

Magda Purice

Ocif Group tries to buck market withsales scheme for Vivando Unirii project

A Cyprus-registered companyhas submitted to the Bucharest may-oralty’s town planning commissiona proposal for the development of a200-meter high, 58-level tower tobe erected in Romana Square. If ap-proved, the tower will be built on5,000 sqm, on a plot owned by Ru-bin Gold company.

The developer has proposed fordiscussion three alternative projectsfor a development on this land,comprising either the tower, a 55-level building designed by the Israeli architecture companyBergman, Walls & Associates, or a

90-level building designed by theRomanian architect Dorin Stefan.

The tower project would host afive-star hotel, luxury apartments,casino and commercial spaces.However, the Bucharest town plan-ning commission has some reserva-tions regarding the project due to itspotential location within an area thatis home to patrimonial houses andmonuments. So far, the commissionmembers seem to be siding with theRomanian architect’s design appli-cation for the 90-level tower, but nodecision has yet been made.

Magda Purice

Cyprus-based company proposes 58-level towerin Bucharest’s Romana Square

Israeli developer Eagle Develop-ment, a subsidiary of the Israeli LandDevelopment Company (ILDC),said it had contracted a EUR 21 mil-lion loan from the Romanian Com-mercial Bank (BCR) to be used forfinancing the first development stageof the residential project JackobPark. The project is located on 5.4hectares in the Pantelimon area ofBucharest. The company acquiredthe land two and a half years ago.

“The bank loan has been takenout in order to finance the first devel-opment stage of the project, whilethe land and the pre-developmentworks were carried out using ourown funds. The first sum from thebank loan will be cashed after threemonths, when the foundation worksare completed,” said Eli Cohen, vice-president of ILDC.

This is the company’s first proj-ect to be developed on the Romanianmarket. The complex’s first stagewill deliver 250 residential units, fol-lowing an investment of EUR 30million. Overall, the project willcomprise around 1,500 apartmentslocated in 12 buildings, according tothe developer. It delivers a built areaof 160,000 sqm and will require a to-tal investment of EUR 170 million.

According to Cohen, the projectwill be developed in several stagesover a six- to eight-year period. “Theapartments will be finished accord-ing to the market evolution. The firstdevelopment stage will be completedwithin two years, and we will startbuilding the second stage when 50percent of the first stage’s units are

sold,” said Cohen. The prices of thefirst 10 apartments from the complexare estimated at EUR 1,200-1,300per sqm, and the developer is plan-ning price increases for the otherunits to be built.

So far, Eagle Development hasacquired five hectares of land inBucharest, Ploiesti and Giurgiu, forwhich it paid EUR 50 million fromthe company’s funds. Besides theBucharest residential project, Eaglewill develop two commercial centersin Ploiesti and Giurgiu, under thebrand of “7 Star Malls”. “We willbuild 35,000 sqm of rentable area inPloiesti’s commercial project whichwill require EUR 55 million of in-vestment. The mall will be complet-ed at the end of 2010 or the begin-ning of 2011. So far we have rented77 percent of the spaces. ILDC ac-quired in 2007 50 percent of theshares in a company set up in Roma-nia. The acquired company is theowner of the real estate site inPloiesti. Regarding the Giurgiu de-velopment, we are planning arentable area of 22,000 sqm of com-mercial project, under a EUR 18 mil-lion investment,” said Cohen.

Israel Land Development, whichoperates on the media and real estatesegments, has been listed on the TelAviv stock exchange since 1953. Ithas operations in Israel, Poland,Canada, the Republic of Moldova,Kazakhstan and Georgia, comprisinga portfolio of logistic projects, hotels,malls and 2,000 under-constructionresidential units.

Magda Purice

Eagle Development secures EUR 21 million BCRloan for EUR 170 million Jackob Park project



German DIY operator Praktiker hasincreased its Romanian presence with anew store in Focsani, following an in-vestment of EUR 11.1 million, the com-pany has announced. As a result, the re-tailer now operates a chain of 26 outletsin 22 cities in Romania, serving townswith populations of over 100,000. Witha unit opened in every such city, Praktik-er has consolidated its metropolitan DIYweb with three stores in Bucharest andtwo in Timisoara and Iasi.

The new Foscani store delivers

4,300 sqm and a parking area with 250spaces. It has a staff of 100. “The unit inFoscani is the sixth one we have openedin the Moldavian region of Romania,”said Michael Krahn, general manager ofPraktiker Romania. Following this in-vestment, the German group has nowput EUR 257 million of investment intoRomania and delivers through its coun-trywide retail spaces a total of 170,000sqm of sales area, employing 3,000 peo-ple.

Praktiker Romania registered salesof EUR 88.52 million in Q3 of 2008,representing a growth of 20.6 percentcompared with the same period of 2007,according to the company. At ninemonths, the group posted net sales ofEUR 217 million and expanded withthree units in Deva, Pitesti and Iasi.

In Europe, it owns over 400 units innine countries including Germany, Bul-garia, Poland, Hungary, Turkey, Luxem-bourg, Ukraine and Romania, and em-ploys over 23,000 people, half of whomwork in Praktiker’s units opened outsideGermany.

Magda Purice

Praktiker consolidates Romanian DIYchain with new unit in Foscani

The retailer runs 26 units in Romania

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American fashion retailer Gap hasopened its store in Baneasa ShoppingCity in Bucharest, through the GreekMarinopoulos Group, the franchiseowner for the South-Eastern Europe re-gion. The shop in Baneasa mall delivers720 sqm.

“Because we have complete confi-dence in the Romanian market, we areplanning a second Gap opening in Ro-mania for 2009,” said Stelios Sko-rdalakis, marketing manager ofMarinopoulos Romania.

Besides Gap, the MarinopoulosGroup also operates the Romanian fran-

chises of Beauty Shop / Sephora, Star-bucks and Marks & Spencer. The grouphas signed a franchise agreement withGap Inc for introducing the brand inGreece, Bulgaria, Cyprus and Croatiatoo. Gap Inc. is an international clothingretailer running stores under the Gap,Banana Republic, Old Navy and Piper-lime brands.

The company operates directly3,100 stores in the US, UK, Canada,France, Japan and Ireland, and underfranchise agreements in Asia, the Mid-dle East and Europe.

Magda Purice

Gap opens gates to Baneasa Shopping Citystore, plans second Romanian opening in 2009

Gap is run in Romania by Marinopoulous group, the franchise owner for the SEE

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A N A L Y S I S

This year, outdoor companies have had to deal with clientsreining in their advertising budgets, although customers are askeen as they were last year. That means tougher negotiationsbetween parties this year. New rules by City Hall limiting meshadvertising on historical buildings will also affect marketstrategies.

New rules and low budgets posechallenges for outdoor industry

Magda Purice

OUTDOOR CHANNEL DEALSWITH COST-CONSCIOUS BUTSTILL INTERESTED CLIENTS

Recently, ad company managerssay, firms have been frequently revis-ing their budgets for outdoor-type ad-vertising. Raluca Pop, sales managerof Clear Channel Romania, said thatbudgets have been considerably cut in2009, even though interest in this kindof advertising has remained stable.

“While in recent years, real estateand financial companies have repre-sented an important percentage of the

overall amounts, these companieshave now cut their outdoor budgets.But outdoor continues to make up thesame 9 percent portion in the overalladvertising mix budget of a company,”Pop explains. Outdoor has kept itsslice of the budgeted advertising andmarketing mix due to its advantages,say players, which Pop cites as prox-imity and the public’s geographicalsegmentation. “For example, an out-door tool can be placed in the vicinityof sales points and, as a result, repre-sents the final incentive before the ac-quisition decision,” said Pop.

Part of the worldwide outdoorgroup Clear Channel Outdoor, Clear

Channel Romania has a consolidatedmarket presence in 30 Romaniancities, and operates over 700 outdoorlocations countrywide. The group hasover 1 million panels in more than 50countries worldwide, with a presencein 49 industry segments of a total of50. In the United States, the group isrepresented by its Spectacular divi-sion, while the group’s internationaldivision is DEFI. Last year, the com-pany improved on the previous year’sturnover by 50 percent to reach EUR9.2 million, which ranked its Roman-ian outdoor operations in third placeafter Turkey and China within thegroup’s overall results, Pop told Busi-ness Review.

Adriana Mujdei, sales director ofVision Media Plus, another player onthe Romanian outdoor market, saysthe company holds a market share of45 percent on the OOH TV screensegment in Romania. Vision MediaPlus operates outdoor web displayingstreet TV screens of 20 sqm, which isthe most suitable area for LED-lightscreens.

WHAT WRITING IS ON THEWALL THIS YEAR?

The Clear Channel Romania rep-resentative finds it hard to make aprognosis on operations in 2009, dueto the general economic situation andthe ongoing discussions on outdoormarket stipulations. The effect of thenew rules, which restrict the display ofadvertising panels in some areas ofBucharest, including the city’s histori-cal center, is currently difficult to gage.“We are ready to sacrifice our profitmargins in 2009 in order to get an out-door regulatory structure. As far as weare concerned, even if the company’sturnover is limited for a short time, theadded value provided by this policywill start to pay off on the medium andlong term,” Pop told Business Review.

The recently approved set of lawsregarding the location and operation ofoutdoor displays, set out in a docu-ment released by Bucharest City Hallofficials, reveals some interdictions.For example, advertising prints, mesh-es, screens and so on may no longer bedisplayed on buildings hosting publicauthorities and social institutions, pub-lic gardens, trees, monuments and pat-rimonial buildings, as well as in the ar-eas of Universitatii, Romana,Magheru, Charles de Gaulle, Aviato-rilor, Victoriei and some other places,most of them central locations.

Regarding sales for this year, Vi-sion Media Plus’s management re-ports steady assigned budgets for thistype of advertising from customers

operating on the FMCG, telecommu-nications and services industries. “Inthe first four months of 2009, we no-ticed that some of these companiesslashed budgets by as much as 35 per-cent, but the companies ruled by toughmanagement fought to maintain theprevious budgets to develop theirstrategy of reaching potential cus-tomers,” Mujdei told BR. The manag-er considers outdoor to be a mediachannel which justifies its cost in theadvertising strategy for reaching thetarget. Vision Media Plus operates 20locations countrywide, with eight inBucharest and one each in large Ro-manian cities such as Brasov, Cluj,Constanta, Timisoara, Iasi, Craiova,Sibiu, Pitesti, Ploiesti and Galati. Thisyear, the outdoor operator forecasts asimilar turnover to 2008 and is evenhoping for a market share increase de-spite the current economic back-ground.

Regarding costs as compared withthe other advertising channels, out-door is ranked third after TV and printmedia, which are far more expensive,Raluca Pop told BR. However, pricesdiffer depending on several factors,such as dimension, location and sup-port, and are in direct proportion withthe estimated generated effect. “Con-cerning the efficiency calculated interms of cost-quality, the rankingchanges drastically. TV is the cheap-est, followed by outdoor,” Pop added.

According to a recent study by ATKearney, the Romanian media markethad an annual growth rate of 27 per-cent between 2003 and 2008, but thefigure is expected to slow to an annualgrowth of 5-8 percent until 2013 inline with developed markets.

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The new policies coming into play on the outdoor market will generate further discussions

é Internet/online advertising wasthe most attractive segment ofthe media market for investorswith an increase of 50 percent bycomparison with 2006

é With almost 66 percent of themarket in 2008 due to good na-tional coverage and affordability,TV remains the most popular ad-vertising medium and is expectedto grow to 67 percent in 2009

é Though in 2008 print press hadhalf the market share it had in2003, it had an annual growthrate of 12 percent and will groweven more due to the elections

é The radio market increased by 26percent in 2008, even though theannual number of listeners is de-creasing

Advertising Channels Lowdown

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The European Film Fest started last week under the

slogan “Movies of all kinds”. Overall, the festival will

run until May 31 in four cities: Bucharest, Brasov,

Timisoara and Iasi. In Bucharest, the event will contin-

ue until May 17. The festival opened with “Gomorra”

by Italian director Matteo Garrone, and will close with

the Turkish movie “Three Monkeys” by Nuri Bilge Cey-

lan. It will also include some Romanian productions

such as “Gruber’s Journey” by Radu Gabrea, which will

be shown at Studio cinema on May 14 in the presence

of the director and his crew. The successful experi-

mental production “Elevator” by director George

Dorobantu will also be screened during the event.

The fourth edition of the Ro-manian Boat Show took place be-tween May 6 and 10 in the Baneasacommercial area. Organizers ex-pected to sell boats totalling a valueof EUR 13 million, which is ap-proximately 13-15 percent lowerthan the total value of the boats dis-played in 2008. Last year, boatsworth EUR 15 million were soldduring the show. The event was or-ganized with a budget of EUR350,000.

Otilia Haraga

Romanian Boat Showopens new edition

Organizers expects EUR 13 mln in sales

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Pictures taken by surrealist painter Rene

Magritte are displayed in an exhibition opened

at the National Museum of Art with the help of

the Valonia- Brussels Delegation in Bucharest.

The exhibition is entitled “The Fidelity of Im-

ages. Rene Magritte and Photography,” an innu-

endo to a painting that Magritte did in 1929 en-

titled “The Treason of Images.” The photo ex-

hibit contains 59 pictures taken by the artist of

his family and friends among whom writers like

Louis Scutenaire, Paul Nougé, Marcel Mariën,

Paul Colinet, Irène Hamoir and his wife Geor-

gette Magritte and brother Paul.


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Poet and singer LEONARD COHEN will return to Romania for another concert on September 4 in Con-stitutiei Square in Bucharest. The huge demand for the prolific artist’s previous concert last yearprompted organizing company Events to bring the singer back for yet another performance inBucharest. Cohen, well known for classics such as “Dance Me to the End of Love,” “In My Secret Life,”“Tower of Song,” “Suzanne” and “Waiting for the Miracle” is also an acclaimed novelist and poet.Tickets for the concert cost RON 124, RON 248 or RON 399, depending on their position in relationto the stage. Tickets are on sale on the sites www. ticketpoint.ro, www.eventim.ro, www.bilete.ro,www.blt.ro as well as from the Palace Hall box office, the Diverta chain store and Eventim salepoints.

Electro-goth pioneers DEPECHE MODE’s concert in Bucharest is just a week away. The event will takeplace in Izvor Park on May 16. Tickets for the concert have sold out, except for those in the VIP areaand C area, which is farthest from the stage. Anyone who still wants to see the British band can pur-chase tickets from www.myticket.ro or in any of the stores in the Diverta network. The price of a VIPticket is RON 360 while a ticket in C area costs RON 100. The British trio – David Gahan, Martin LeeGore and Andrew Fletcher – have just released a new album entitled “Sounds of the Universe” whichthey are promoting with the “Tour of the Universe” that brings them to Romania. The band has itsroots in the 80s new wave period, but the Depeche Mode style has evolved from light synth-pop todark electro beats, and the band has acquired a faithful following during their nearly 30 years ofmaking music.

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Romanian photographer Cosmin Bumbut willopen an exhibition on Cuba on May 14 entitled“Cuba Goes On”, hosted by the Karousel gallery(Dorobanti Square). The exhibition will run untilMay 28. The pictures by Bumbut, one of themost celebrated contemporary local photogra-phers, are an attempt to go beyond labels andappearances and see how people in that countrylive their lives, in other words a story of Cuba“as it has never been told.” The pictures will al-so be displayed in Cluj-Napoca at the NationalArt Museum between May 29 and June 7 as partof the Transylvania International Film Festival.Afterwards, the exhibition will return toKarousel in Bucharest where it can be again vis-ited until the end of June.

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The InterContinental Hotel inBucharest treated its guests to a sur-prise last week as receptionists andwaiters could be seen working in pa-jamas and slippers, encouragingguests to jump and pillow-fight on agiant bed located in the hotel lobby.The scene was part of a wide-reach-ing initiative that marked the launchof a special offer from InterConti-nental Hotels Group. In total, 20,000people were expected to jump on gi-ant beds located in large capitalsthroughout the world. Participantsincluded Olympic champions whojumped on the beds at the same timeall over the world.

Bucharest celebrated EuropeDay this year through shows, exhi-bitions and military ceremonies

around the Arch of Triumph inBucharest between May 8 and 10.Europe Day is celebrated every yearon May 9th to mark the anniversaryof the day in 1950 when the Euro-pean Union was founded.

The Arch of Triumph wasopened by the authorities for publicvisitation. Inside, Bucharesterscould view four exhibitions aboutimportant moments in Europeanand Romanian history. Outsidethere were special military cere-monies. On May 9, the exhibition“Europe in the Cartography Mir-ror,” a journey into the old cartogra-phy of the XV- XVIII centuries wasopened at the National CotroceniMuseum.

Otilia Haraga

Bucharest marks Europe Day withspecial ceremonies

The Arch of Triumph is opened for public

The Stradivarius tour of young

violinist Alexandru Tomescu and pi-anist Horia Mihail will this yearraise funds for the Association ofBlind People in Romania. The tourwhich offers the public the opportu-nity to hear live the unique sound ofthe Stradivarius violin played byTomescu is underway. It includes 15cities in Romania and will last untilMay 16. The organizer of this eventis Accendo Cultural Association,founded by the two soloists whohope they will be able to raise EUR500,000 by the end of the event.Several companies from the privatesector have also joined this initia-tive.

Otilia Haraga

Stradivarius tour raises fundsfor the blind

The tour includes 15 Romanian cities

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business review, issue 7, may 11-17

Documents

joint venturessee page

retail projects

future projects

insolvency files grewby

insolvency files mightgrow

percent in2009

percent increase

imfis achievablesee