Business Review Issue June 22, 2010

CO

URTESY O

F PETROM

Oil giant Petrom is planning to cover its risk, focus on new exploration capacities at

home at in Kazakhstan, invest EUR 1.6 billion and decide whether to exit Russia

See page 12-13

Oil giant Petrom is planning to cover its risk, focus on new exploration capacities at

home at in Kazakhstan, invest EUR 1.6 billion and decide whether to exit Russia

See page 12-13

ENTREPRENEURIoana Bucin has gone online to sell edu-

cational and creative toys to Romanian

parents through her website www.mag-

azinulpiticilor.ro

See page 10

MONEYBanks are turning to their corporate

customers and getting busy launching

new products to help them through the

ongoing lending freeze

See page 14

BALANCECulture, creativity and a campaign to

turn an area of central Bucharest into a

haven for pedestrians are at the heart

of the Street Delivery initiative

See page 20

AS THE AX FALLS ON MORE WORKERS, JOB WEBSITES ARE IN DEMAND, P15

OILING THEINVESTMENT

WHEELS

OILING THEINVESTMENT

WHEELS

BUSINESS REVIEWROMANIA’S PREMIERE BUSINESS WEEKLY JUNE 14 - 20, 2010 / VOLUME 14, NUMBER 22

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OTILIA HARAGAJournalists

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Please send your letters to [email protected], including your name and location. For consideration

for inclusion in the nex t edition, letter s m ust be r eceived by noon on T hursday. L etters m ay be edited f or

length, clarity and accuracy.

Caring corporationsI am glad to see that Ro-

manian companies haven’ ttotally quit their CSR activi-ties ( Businesses put a bitback, issue 21 ), despitefalling revenues due to theeconomic recession. Concernfor the environment andcommunity should be corevalues of a company, not justa drum to beat from time totime when the firms needgood publicity. In the past Ithink that some Romaniancompanies have not under-

stood that CSR is not just agimmick, a luxury or a formof advertising. I hope that isnow changing.

Ion Petculescu, Bucharest

Small town, big ideasI must confess that as a

foreigner here I had neverheard of Avrig. But bravo tothe City Hall for its forwardthinking attitude to ener gy(Romanian city bets on ener-gy independence trend, issue21). While the economic cri-sis is now dominating the

headlines and attention ofgovernments across Europe,in time the problem of ener-gy supply will reassert itselfas probably the most press-ing issue of our age, feedingas it does into environmentaland security concerns. Withfewer than 15,000 inhabi-tants, Avrig is obviously notthe biggest energy consumer,but it is through small stepslike this that we will best ad-dress the problem.

Alice Wells, UK and Romania

HOT TOWN, SUMMER IN THE CITY…

The Ministry of Health has put public health services, ambulance crews and hospitals on alert as meteorologists pre-

dicted the year’s first heat wave would hit Romania this weekend. Maximum temperatures are set to reach 37 degrees

Celsius. The ministry advised the public to stay out of the sun between 11.00 and 18.00, to drink a lot of liquid, eat

plenty of fruit and vegetables and avoid consuming alcohol and caffeine.

STOC

KEXCH

AN

GE

N E W S

BUSINESS REVIEW / June 14 - 20, 2010

The Romanian government hasused an emergency ordinance to re-move the commission for anticipat-ed payments for fluctuating interestcredit, with lenders being compelledto change any such contracts thatare in effect through additional doc-

uments within 90 days of the emer-gency ordinance coming into force.It further limits commission onfixed interest credit to 1 percent ifthe period between payment and thedate set for the termination of thecontract is more than a year , and to0.5 percent if it is less than a year .The ordinance also gives the cus-tomer the right to get out of the con-tract without providing a reasonwithin 14 calendar days. Banks mayno longer char ge commission forfile analysis if the credit is notgranted.

Lenders will also be compelledto provide the borrower with a stan-dard document, including commis-sion, interest and other costs, beforethe contract is signed, to allow thecustomer to compare the deal withthe terms offered by other banks.

Anda Sebesi

The Constanta Court of Law lastweek declared IT&C retailer K TechUltra Pro bankrupt. The company willbe formally dissolved by October , ac-cording to Mediafax newswire. Thedebts run up by the firm total EUR 28million, to 84 creditors. At the momentwhen the stores were closed, K TechUltra Pro’s stocks amounted to approx-imately EUR 4.1 million in value.

The next steps are the sale of assetsand distribution of the obtained sumsto the creditors, although funds raisedfrom the asset sale will fall short of the

outstanding liabilities. The firm’ slargest creditor is Banca Romaneasca,to which K Tech owes EUR 3.5 mil-lion, and the sum generated from thesale will go mainly to the lender. Othercreditors include financial institutionsBRD and Bancpost.

K Tech was founded by spousesAlina and Cristian Fughina in 1997. Itis controlled integrally by MilenaTrading Company Ltd from the USA,administered by Cristian Fughina.Some years back it was Romania’ sbiggest IT&C retailer but the company

was hard hit by the economic crisis. Atthe end of 2008, K Tech posted aturnover of EUR 68.7 million but haddebts of EUR 44.7 million. In the firsthalf of 2009, its business has decreasedto approximately EUR 13.2 million.

In March 2009, UniCredit Tiriacseized the warehouse of the companyin Key Logistic Center and the compa-ny’s assets in its headquarters atAPACA. In May 2009, K Tech closedits stores and made all its employeesredundant.

Otilia Haraga

K Tech Ultra Pro goes bankrupt with debts of EUR 28 million

Banks will have to deal with a new set of rules

What’s your opinion on Roma-nia’s economic re-launch?

There is a need for a clear plan tomove towards a lower deficit-to-GDPratio, which must be credible to in-vestors. Some of the measures pro-posed in Romania are among the mostdrastic in Europe. The tradeoff is diffi-cult. You would hope governmentscould eliminate inef ficiencies andachieve a similar reduction in expendi-tures as with the reduction in publicsector wages and pensions, so the mostpainful measures could be avoided, butthe policy might not be credible.

How should a country look at theIMF: salvation or damnation?

There is no doubt that the role ofthe IMF has been controversial formany years. Opponents of the IMFclaim that by forcing countries to dras-tically reduce expenditures and/or in-crease taxes, it is applying a very re-strictive fiscal policy that forces theeconomy into a recession. Some yearsago, in other countries, this was alsocombined with a very restrictive mon-etary policy in order to control infla-tion, an issue that is secondary thesedays. With this combination of policiesit is not strange that countries face re-cessions.

What's the future of the euro?The euro is going through a period

of weakness and currency markets tendto overreact sometimes. So we shouldnot expect a strengthening of the euroin the short and medium term, in partic-ular as long as there continues to bemany doubts about the fiscal adjust-ments after the expansionary fiscalpolicies of the last few years, but I thinkthat there is a strong political commit-ment in Europe to maintaining the eu-ro.

[email protected]

3Q

vice-president fordevelopment, IE BusinessSchool

Prof. Gonzalo Garland

4

Financial consultancy companyOVB and Signal Iduna closed a partner-ship in April through which the twofirms aim to of fer high-quality financialconsultancy on life, accident and healthinsurance, company representativeshave announced. Along with OVB, Sig-nal Iduna launched an accident insur-ance policy that offers 24/7 protection.

Anda Sebesi

OVB partners Signal Iduna

GTS Central Europe buys local company Datek

Recordati Group acquiresArtMed International,enters Romanian market

Telecom player GTS Central Europehas announced that it has acquired theRomanian firm Datek, marking thecompletion of a contract signed in De-cember. Datek provides telecom, datatransfer, infrastructure development andsystem integration services. GTS CEwill add Datek to its existing Romanianoperations, creating a combined busi-ness with total annual revenues exceed-ing EUR 25 million. The two firms didnot reveal the value of the transaction.

Last year, GTS posted a turnover ofEUR 19.8 million and an EBITDA ofEUR 5.2 million. The takeover will seeit double its number of employees. Cur-rently Datek has a staf f of 106 whileGTS employs 1 15 people in Romania.The move puts GTS in the top three al-ternative telecom operators on the localmarket. “If we look at the level of rev-enues, we are the third biggest alterna-

tive operator. At a safe distance behindus are another three operators,” said DanMihaescu, CEO of GTS Telecom.

“Datek brings to GTS CE significantnetwork and operational benefits, in-cluding over 400 route kilometers offiber and professional expertise in sys-tems integration” said Adam Sawicki,group CEO at GTS CE.

Among the criteria that led to thetakeover was “Datek’s focus on businesscustomers and the way the company wasmanaged. Also, the infrastructure theyhave is absolutely complementary toours,” added Sawicki. The acquisition ispart of a series of takeovers over the pastfew years. In 2004, GTS CE acquiredAliatel in the Czech Republic, in 2005 ittook over Energis in Poland, Telenor andNextra in Slovakia and the Czech com-panies Contactel, Telenor and Nextra.

Otilia Haraga

Government brings in new rules for lenders

European pharmaceutical groupRecordati Group has acquired ArtMedInternational, in a transaction mediat-ed by Capital Mind. Recordati had aturnover of over EUR 747.5 million in2009, employs over 2,800 people, andhas a growing presence in Eastern Eu-rope.

ArtMed was established in 2005as a provider of specialized marketingservices for companies such as Bris-tol-Myers Squibb and Pfizer . Thecompany employs 30 people and willoperate as a development platform forRecordati in Romania.

Staff

Asirom posts EUR 1.2million profit

Insurance company Asirom hasposted a EUR 1.2 million profit last year.The company launched last week a newproduct, RCA + CASCO Partener , anRCA insurance policy that has CASCOfacilities attached, company representa-tives have announced. The beneficiarywill receive compensation for damagescaused by a third party directly fromAsirom.

Asirom will also be in charge of col-lecting the money from the insurer of thecauser of the accident. ■

N E W S


National carrier Tarom has set its in-come increase plan for this year and2011. According to company informa-tion, the airline is aiming to lift onlineticket sales by 20 percent, from the 1 1percent rise registered last year . Taromalso has plans to develop its business-to-business services which might lead to a10 percent hike in the number of clients.And the airline aims to boost total salesby 30 percent by investing in a newbrand image.T arom reported a EUR191.4 million turnover and a 20 percentmarket share in 2009, a year in whichmarket specialists said airlines had regis-tered the largest losses in history.

“Last year we succeeded in cuttingthe cost of raw materials and other mate-rials by some 42 percent at operationallevel and 17 percent in total. Also, we re-duced the company’ s debts by 19 per-cent,” said Ruxandra Brutaru, TaromGM. Airline officials added that T1 in-comes rose compared with T1 2009,based on a traffic increase of 31 percentdespite the instable economic climate,oil price increase, exchange rate volatil-ity and bad meteorological conditions.

Dana Ciuraru

Credics Technologies, internation-al supplier of software for payment in-struments and transaction processing,estimates it will double its turnover onthe Romanian market to EUR 4 mil-lion this year . The company enteredthe local market in 2009 when it post-ed EUR 2 million. “This year we planto enlar ge our portfolio with eightclients in Romania as well as enternew markets in the region,” said Di-ana Munteanu, CEO of Credics Ro-mania.

In the sector of software forlenders that want to migrate to theEMV standard (a global standard forcredit and debit payment cards basedon chip card technology), Credicsaims to gain three new clients by theend of this year . “Our statistics showthat only 50 percent of banks in Ro-mania have already or are implement-ing the EMV standard, although bythe end of 2010 all financial-bankinginstitutions must align to these newnorms,” said Munteanu.

Credics also aims to attract threenew clients for loyalty solutions thisyear. “We think the most attractivecustomer loyalty scheme will be acash back type program through

which card owners will accumulatemoney as a percentage of the purchas-es they make, which they can use inmany other ways, such as on new pur-chases, insurance, or even recoveringthat percentage in cash,” added theCEO.

Credics also will launch prepaidcards on the local market. “We intendto of fer prepaid card solutions andservices to several sectors such asbanking, retail, oil companies and em-ployers but also any business thatneeds such functionality ,” saidMunteanu.

The company plans to expand onnew markets in the region and in thefourth quarter of the year will open upin Hungary and Bulgaria. “W e havebuilt the platform PSH (PaymentService Hub) in Bucharest and weaim to become the leader in financialservices in Central and Eastern Eu-rope, supplying innovative solutionsand services to neighboring countrieswith the help of specialists in Roma-nia,” said the businesswoman.

Credics also plans to enter mar-kets in Africa and the United States ofAmerica through strategic alliances.

Otilia Haraga

Credics foresees turnover of EUR 4 mln in 2010Tarom targets 30percent hike in sales

National ener gy market transporterTranselectrica needs solid investmentsin network expansion as a result of theincreasing interest in wind farms. DanPreotescu, network planning managerwith Transelectrica, said during the Fo-cus on Renewable Ener gy event or gan-ized by Business Review that the com-pany required a total of EUR 200 mil-lion in order to expand the network to re-flect market demand. “The current trans-portation tariff doesn’t allow us to makethese investments very quickly . More-over, it would help us a lot if the new ex-propriation law were approved by Par-liament much faster,” said Preotescu.

Transelectrica is in negotiations withthe European Investment Bank (EIB)over a EUR 65 million loan to financethis year ’s necessary investments.Preotescu said his optimistic view wasthat by the end of the year Romaniawould have some 400 MW from windpower. In his opinion, the price of ener-gy will rise when total installed capacityfrom wind farms reaches 1500 MW, asthe cost of green energy is higher.

Dana Ciuraru

Transelectrica needs EUR200 mln investment innetwork expansion

N E W S


Italian utility company Enel has notmade the investments required by theprivatization contract in ElectricaMuntenia Sud, despite the fact that thedistribution tariff covers the announcedinvestments. This is one of the main con-clusions of a recent report on how Enelhas respected the privatization agree-ment, drawn up by the Senate commis-sion for privatization.

Other criticisms made by the MPsinclude the allegation of possible profittransferring between companies in theEnel group in which the Romanian stateis not a shareholder , and lack of trans-parency regarding the destination of themoney meant for investments.

The serious accusations by the par-liamentary commission come shortly af-ter President Basescu congratulated Ful-vio Conti, Enel CEO, for his company’sinvestments plans in Romania. Accord-ing to Conti, Enel will inaugurate its firstwind parks in Dobrogea within a coupleof weeks. Enel’s approximate 200 MWwind farm in Dobrogea will requirearound EUR 300 million.

Moreover, Conti said that his com-pany was interested in seeing a revivalof privatizations in the ener gy sector inRomania, adding that Enel has plans toinvest EUR 700 million to modernizethe electrical network . According tocompany information, about EUR 210million will be allocated to such invest-ments this year.

Dana Ciuraru

Fulvio Conti, CEO of Enel

Enel slammed for not complying withprivatization contract obligations

Actavis, the manufacturer ofgeneric drugs headquartered in Ice-land, is estimating a 15-20 percentgrowth in exports this year . It ownsa plant in Romania after acquiringlocal manufacturer of oncology

drugs Sindan in 2006. The company exports to all over

the European Union, the US, Japan,Australia and South Africa. Lastyear it posted a turnover of EUR107 million turnover , with EUR 28million representing exports.

For this year, Actavis is lookingto launch 13 new products in theOTC and cardio-vascular areas, aswell as to consolidate its Decuballine of dermato-cosmetics, forwhich it is planning a re-launch. Theproduction of three oncology drugsActavis currently manufactures inRomania has been transferred to asecond plant the group owns inItaly.

The production of the drugs inRomania is still ongoing, but theItalian site of fers the extra capacityoption. say representatives. ■

Alina Culcea, general manager of Actavis

Actavis predicts 15-20 percentexport growth this year

Another 70 kilometers of theNet City under ground metropolitanfiber optic backbone will be in useby the end of June, according to thegeneral manager of Netcity Tele-com, Nico lae Ghioca, quo ted byMediafax newswire. Currently ,there are 11 kilometers of function-al network for cables in the areas ofUnirii, Decebal, Burebista and Uni-versitate.

The project stipulates that 300kilometers of backbone on the mainstreets in central areas of the capitalshould be ready between now andMay 2011.

Throughout 2010 and 201 1Bucharest will be split into centraland adjacent areas, depending oncardinal points and other infrastruc-ture works carried out by the CityHall.

In July works will start in north-west Bucharest, in Victoriei Squareand the Basarab passage. The sec-ond stage will start in Novemberand will cover east Bucharest wherethe City Hall will be carrying out in-frastructure works, allowing the un-derground network to be done si-multaneously.

This year Netcity Telecom hasinvested EUR 30 million. The con-tract for the fiber optic metropolitanbackbone was signed in June 2008for a period of 49 years. The signa-tories were the Bucharest City Hall,on one side, and UTI Systems andNetcity Telecom, on the other.

The backbone will be installedin three stages with a final deadlineof 2012. The total value of theworks was estimated to reach EUR200 million.

Otilia Haraga

LAU

RENTIU

OBA

E

The backbone will be installed in three stages

70 km of Net City fiber optics tobe available this month

N E W S


Wine p roducer H alewood e nded2009 with a similar turnover to the fig-ure it posted the previous year , aroundEUR 10 million. In spite of the econom-ic crisis, demand for wine has not suf-fered a major drop. “W e sold cheaperthan before as consumers chose more af-fordable wine varieties. We didn’ t sellless in terms of volume but we soldcheaper and less profitably than in thepast. However, this is something that weexpected,” Dan Muntean, managing di-rector of Halewood Romania, told BR.

Halewood has an average produc-tion of 42,000 hl in Romania, about 35percent of which is exported. “Exportshave gone down in the past few years assome of our clients have been hit by the

economic crisis much harder than Ro-mania,” Muntean added. The producerexports to about 40 countries. About 15percent of its exports go to Asia butMuntean says that now the US has thepotential to become the lar gest winemarket. “Along with other wine produc-ers we have set up an association to ac-cess European funds for the promotionof Romanian wine in the US,” the MDsaid. The project is estimated at a valueof around EUR 2.5 million and will fea-ture a three-year promotional campaign.

The company is not planning anymajor investment projects on the medi-um term but rather to consolidate its cur-rent position on the market.

Simona Bazavan

The Ministry of Justice is organizinga rapid and limited public auction to cre-ate an integrated informatics system forthe audio recording of court sessions.The estimated value of the contract ex-ceeds EUR 6.2 million, which will comefrom the state budget, according to anannouncement by the Electronic Systemof Public Acquisitions. According to theministry, a limited and quick public auc-tion is being held due to the “legal obli-gation and the need to implement theproject by the end of 2010.” The finalterm specified for meeting the contract isfive months from the date it is awarded.

The audio system should of fer digi-tal support for recording sessions fromall law courts in Romania. These willsubsequently be transcribed, an anti-cor-ruption measure intended to increasetransparency in the legal system. The in-tegrated digital recording system will beinstalled in 672 courts of law and 241council rooms. The criteria for takingpart in the public auction include the re-quirement that the participant’ s averageturnover during the past three years –2007, 2008 and 2009 – be at least RON11.05 million (in excess of EUR 2.6 mil-lion).The task book also stipulates thatbidders should take into account the factthat the Ministry of Justice uses Mi-crosoft technology . “The project willneed to interface with Microsoft techno-logical platforms (operation systems,Office and database administration sys-tem) so participants must consider thisparticularity in formulating the solu-tion,” states the document. The deadlinefor receiving offers and participation ap-plications is June 26. Of fers will beopened on June 30.

Otilia Haraga

Ministry of Justice to hold EUR 6.2million public auction

The auction is being arranged quickly

Halewood toasts constant turnover, hopesto uncork US market

CEC Bank will open Europeanfunds bureaus in Constanta, Sucea-va, Botosani, Braila, Galati and Tul-cea through which the lender willoffer consultancy, promote and sellcredit products to access Europeanfunds.

Bank representatives said that

all CEC branches nationwide willcontain such bureaus in the monthsto come. Between June 1 and 3 thelender launched bureaus in Neamt,Bacau and Iasi counties. CEC Bankhas financed over 2,250 projects toobtain European funds to date.

Anda Sebesi

CEC Bank opens European funds bureaus

N E W S


by Sandy Vaci

Your Secret to SalesSuccess: The "NeedsHorizon Paradox"

Have you ever noticed howsmall children seem to live in themoment? Whatever they want, theywant it NOW. Their Mother leavesthe room and they cry - they haveno concept of the future, whenMommy will return.

Have you also noticed how oldpeople seem to live in the past?They have a long-long memory.They also know what they shouldhave done differently, decades ago.

This simple observation can be apowerful sales tool. I call it the"Needs Horizon Paradox". Peopledo not plan for their long termneeds when they have the time.They realize they should have doneso when they have already run outof time. It is my duty, as a sales per-son professional in a certain needsarea, to help them plan for their fu-ture. Of course, this presents manyhidden sales opportunities which Ican now address.

For example, if I am sellinghomes, I should understand if theyplan to have children soon. Shouldthey consider something closer to aschool and accommodating morepeople? By not having to move laterthey end up saving money over thelong run. And I just sold a biggerhouse, for more commission.

Or, if I work at a bank, I shouldtalk to my clients early about theirretirement needs when they areyoung. They have time and money.Later on they have less time and, ifno longer working, less money too.

I can use this tool in just aboutany area. I help my clients - and helpmyself!

Business Review is organizing twofull day seminars on global best practices

in sales management with Sandy Vaci:

Beat the recession, Beat the competition!Best Sales Management Practices. June 16, 2010- JW Marriott Hotel

The Latest in Channel Innovation. A Practical Guide September 2010

More details onwww.business-review.ro/events

Standard & Poor’s has affirmed its‘B’ long-term corporate credit rating on

Romania-headquartered quadruple-play telecommunications and pay-TVservices provider RCS & RDS. “We re-moved t he r ating f rom C reditWatch,where it was placed with positive impli-cations on February 5, 2010. The out-look is stable,” commented the agency.

It also withdrew the ‘B+’ debt ratingon the firm’s proposed USD 200 millionsenior unsecured bond, as issuance hasnot taken place. “In our view , RCS &

RDS’s liquidity is still weak despite thesuccessful arrangement of a USD 100million bank facility due 2013,” itadded. “This is because the maturityprofile of the company’ s debt becomesquite steep when balanced against itsfree cash flow generation profile; in par-ticular, about USD 375 million is to berepaid in 2012,” said Standard & Poor ’scredit analyst Michael O’Brien. “Ourcurrent view of the company’ s positivefree cash flow generation profile and ex-isting liquidity sources indicates that a

portion of additional refinancing will benecessary to make the 2012 repayments,absent any exceptional emer gency re-duction of network investments to pre-serve liquidity.” RCS & RDS generatedUSD 24.7 million in positive free oper-ating cash flow (FOCF) in 2009. “Weanticipate that this will improve signifi-cantly over the next two years, on theback of EBITDA growth and lower cap-ital expenditures following earlier net-work investments,” said O’Brien.

Otilia Haraga

S&P: RCS& RDS will need additional refinancing

More and more Romanians are start-ing their own businesses and what theyseem to be lacking is better visibility to-wards investors. The first edition of Ven-tureConnect brought together investorsand entrepreneurs, allowing the latter topitch ideas and network with those whocould help take their projects to the nextlevel.According to Dan Visoiu, partnerat Biris Goran law firm, the or ganizersof VentureConnect, around 20 investorsattended the event, plus some 30 entre-preneurs, of whom nine were selectedby the advisory board to pitch their proj-ects. Participation for both sides was freeof charge.

The advisory board members for thefirst edition of VentureConnect includedlong established successful players onthe Romanian online/IT market, such asMarius Ghenea, a well-known local se-

rial entrepreneur and business angel;Radu Geor gescu, a serial entrepreneurand president of Gecad; OrlandoNicoara, general manager of ApropoMedia and online entrepreneur; and Dra-gos Roua, a serial online entrepreneurand location independent business mav-erick; as well as Biris Goran attorneyDaniel Visoiu and Ana Maria Andronic.

Visoiu also sees the event as an op-portunity for entrepreneurs to developtheir legal and corporate governanceknowledge, thanks to the presence of le-gal consultants at VentureConnect. Ghe-nea pronounced the event “a valuableinitiative enabling many Romanianstart-up entrepreneurs to connect withvarious types of investors from abroadas well as Romania in a structured way ,for the first time.”

Corina Dumitrescu

VentureConnect bridges gap betweeninvestors and entrepreneurs

BSE goes public

Fraud, bribery and corruption are themain personal liability concerns of some61 percent of respondents to the Ernst &Young (E&Y) Global Fraud Survey .Consistent with the indicated level ofconcern by Romanian boards for their li-ability arising from fraud, only 62 per-cent of or ganizations surveyed locallyhad conducted a fraud risk assessment inthe last two years, and only 29 percent inthe last six months.

“Given the pressure on corporate re-sources, prioritizing anti-fraud and anti-corruption efforts is essential. Regularlyscheduled assessments of risks, in par-ticular businesses and markets, are pru-dent and help those in risk managementfunctions to triage the most pressing sit-uations,” said David Stulb, E&Y’s glob-al fraud investigation & dispute servicesleader.

Considering the mechanisms

through which organizations can seek tomitigate their risk of fraud occurring,Romanian respondents indicated educa-tion and communication on anti-fraudpolicy as the most ef fective step, fol-

lowed by internal inspections, internalaudit and management reviews.

Switching to ef forts to detect fraud,Romanian organizations appear to placesignificant trust in internal audit.

“Anti-fraud activities can reduce thefinancial cost of fraud to an organizationthrough helping to detect existing or re-ducing the risk of future fraudulent ac-tivities occurring. Savings to an or gani-zation by reducing the cost of fraud usu-ally far outweigh the cost of undertakinganti-fraud activities,” said Stulb.

The survey was taken between No-vember 2009 and February 2010. In Ro-mania, 28 interviews out of a total of1,409 were conducted with of ficers inthe roles of CFO, head of legal, head ofinternal audit or chief compliance officerwithin medium to larger Romanian busi-nesses.

Staff

LAU

RENTIU

OBA

E

Fraud is a big worry for local businesspeople

Fraud concerns keep managers awake at night

Shares in the Bucharest Stock Ex-change (BSE) started to be traded on itsown regulated market last week, repre-sentative have announced. “The trans-formation of the BSE into a publically-held company is a decision that camenaturally. It is part of an institutionalmodernization process that started withthe adoption of legislation for the stockmarket in 2004 and continued with thechanging of the legal status of the BSEto a shareholder company , its mer gerwith the RASDAQ electronic stock ex-change and making a structure aroundthe BSE formed by a group of institu-tions that participate in an efficient trans-action process,” said president Stere Far-mache. He added that this process wasnot completed with the floating of BSEstocks. “It must be seen as an objectiveof a stage that opens the way for the fu-ture development of the BSE,” he said.

Anda Sebesi

C A L E N D A R / N E W S


EVENTS, BUSINESS AND POLITICAL AGENDAJUNE 15é ICAP Romania and CYCLE European organize the first Credit Risk

Management Conference at Athenee Palace Hilton. By invitation only.

JUNE 16é Business Review organizes the Beat the Recession, Beat the Competi-

tion – Global Best Practices in Sales Management seminar with SandyVaci, adjunct senior professor at Central European University’ s Busi-ness School (MBA Studies). By invitation only.

é 19:00 Cinema City organizes the official opening of the new megaplexin Sun Plaza. By invitation only.

JUNE 16 – JUNE 17é The first edition of Inventis Forum 2010 will take place at Novotel Ho-

tel.

JUNE 17 – JUNE 20é The EU-Transporta 2010 ‘The crisis’s impact on the future of European

transportation’ seminar will take place at Club Aqvila in Rucar. By invi-tation only.

JUNE 21é Mamaia Resort Hotels organizes a seminar about the hotel investments

at Golden Tulip Mamaia. By invitation only.

JUNE 23é Business Review organizes the second edition of the Dutch Business

Forum at InterContinental Bucharest. By invitation only.é Lafferty Group organizes the Lafferty World Series of Retail Banking

and Consumer Finance one-day conference in Bucharest. By invitationonly.

JUNE 26é The ‘Run Romania’ Sports Association organizes the ‘Run Romania’

project.

WHO’S NEWSDANIEL APOSTOL is the new executive

director of TheMoney Channel asof this month. Heis taking overfrom Sorin Freciuwho was appoint-

ed president of the board of direc-tors at Realitatea-Catavencu. In thelast 17 years Apostol has amassedextensive experience in journal-ism. He started his career as a re-porter and radio correspondent andhas been with The Money Channelsince 2006. Before being appoint-ed executive director Apostol heldthe position of editor -in-chief atthe station.

ANAMARIA LEMBRAU has been appoint-ed editorial director of The MoneyChannel. She has over 16 years ofexperience in journalism and hasbeen with Realitatea-Catavencu

since 2004. Lem-brau has held thepositions of editor-in-chief, news di-rector and news-desk manager at

Realitatea TV.

DANA CUCOS has joined the clientservice team ofSenior Interactive.She has profes-sional experiencein the fields of PR,online publishing,

media buying and communication,project management as well as me-dia management. As account man-ager Cucos will manage theWrigley account. She holds a BAin communication and PR from theNational School of Political andAdministrative Studies inBucharest.

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

The second year of the economiccrisis has made the advertising industryeven more apprehensive over the finan-cial insecurity ahead. The general gloomlay heavily on both agencies and theirclients, in spite of the cheer with whichorganizers welcomed industry represen-tatives. The winning trend saw a returnto traditional Romanian products andvalues.The 2010 edition of the EFFIEAwards gathered a total of 48 nomina-tions, with only 18 campaigns ultimate-ly being awarded in the bronze, silver orgold categories. Graffiti BBDO took themost awards on the night, winning threebronze prizes and a silver , the latter forthe social campaign by React, the AChance for Life campaign. Propagandaclaimed three golds, including two forthe Napolact Campaign, Reason to Rest/ As It Used to Be.

The jury , formed of 83 specialistsfrom either agency or client back-grounds, elected as Grand Effie laureatethe T imisoreana campaign, The StoryGoes On, devised by the GMP agency.

Timisoreana symbolized the theme ofthe evening of national and tradition-ori-ented winning campaigns. Timisoareanaand Napolact both focused their com-munication on nostalgia and the qualityconferred by tradition on original Ro-manian products. Other winning brands,such as BRD and Petrom, centered theirmessages on Romanian values or theirpotential improvement, while Savana,the paint manufacturer , ironically pre-sented local clichés.

The conclusion suggested by the re-sults of the EFFIEs can be easily extrap-olated to the Romanian economy ,which, in this period of crisis, seems tohave returned to homegrown brands, notonly due to their lower prices, but to thehigher level of trust that the end-user hasin them. Nostalgia is, however, a naturalphenomenon in times of socio-econom-ical insecurity, say industry players, andis expected to remain in vogue for aslong as the recession continues to leaveits mark on people.

Corina Dumitrescu

EFFIEs go back to Romanian roots

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


With extensive experience in the

consultancy field, IOANA BUCIN

intends to extend the range of

products and services provided by

her online toy store

www.magazinulpiticilor.ro and to

reach an estimated turnover of

about EUR 50,000 this year.

Anda Sebesi

Ioana Bucin, managing partnerof online store www .magazinulpiti-cilor.ro, had worked in the consul-tancy field since the beginning ofher career , with consultancy andmarket research for the software in-dustry and IT services and projectmanagement consultancy for someof the largest companies in Romaniabeing her bread and butter. “It was avery important period when Ilearned a lot of things about manymarkets and how to organize a busi-ness and optimize its processes.This gave me the opportunity tomanage the two companies I own,which are active in toy commerce,”says Bucin. She adds that one of herfirms is exclusively in charge ofwww.magazinulpiticilor.ro – an on-line store specialized in toys andcreative-educational games – whilethe other one distributes the sametype of toys produced by someprominent international manufac-turers.

The idea to set up the onlinestore came in December 2008 andreached fruition in March 2009when the distribution of toys began.Bucin seems to have hit upon an un-tapped market niche and had thecourage to establish a start-up, witha relatively small investment. “Basi-cally the idea came from the scarci-ty of educational-creative toys onthe market at that time. As a parent Ifelt their absence even more keenly,

especially when I compared the lo-cal offer with more developed mar-kets. So I noticed the opportunity toset up a business,” remembers theyoung entrepreneur . She adds thatshe chose to establish an onlinebusiness because the internet is anemerging field in Romania and hasa significant potential for growth inthe future. “In fact the whole con-cept of our business is based onnovelty and innovation – the toyswe select and promote on the mar-ket are a premiere for Romania, asthey are manufactured from ground-breaking materials and are of highquality,” says the managing partner.edushape, Orchard Toys, JohnAdams &Toy Brokers and LearningResources are among the website’ smain suppliers. Bucin adds that be-fore her products go on sale in lar g-er stores, chains and other onlinestores, they are tested for a periodon her site and in some smaller spe-cialized shops.

On the question of the toughestmoment her business has faced, theyoung entrepreneur cites difficultiessuch as operational problems and

strategic decisions. “Despite this Iprefer to think about the positivemoments such as obtaining thestatute of exclusive distributor forRomania of edushape products orthe introduction of the latest toy forthe educational sector, Learning Re-sources.”

If she started another businessshe would choose standard solu-tions, verified and optimized inmany years of experience at a lar genumber of international companies.“I am referring especially to thetechnical platform for an onlineshop and to logistics solutions andoperations,” adds the managingpartner.

According to Bucin there aresome big challenges in her industry,with toy commerce being relativelyunder-developed. “There are stillless specialized chains and few in-dependent stores, especially on themedium-high segment. As a distrib-utor I would say it is a barrier ratherthan a challenge, but as an onlinestore it is an advantage. In my opin-ion this is the reason why there areplenty of online toy and product

shops for children,” says Bucin. An-other hurdle relates to the acquisi-tion of toys and the lack of business-to-business fairs on the local mar-ket. “I think that the existence of atleast one annual trade fair or a fo-rum where all producers and distrib-utors of products for kids couldmeet with both small and lar ger re-tailers would be a significant step indeveloping the industry ,” says theentrepreneur. She adds that herniche, educational-creative toys, isnot yet as crowded as the rest of themarket. “Generally there are fewtop international manufacturers andretailers, so there is plenty of spaceto conquer ,” says Bucin. In heropinion the high quality of productsand services – guidance whenchoosing toys and games onwww.magazinulpiticilor.ro and con-sultancy on the stages in children’spersonal development – are amongthe things that set her business apartfrom the crowd. “W e have a psy-chologist with vast experienceworking with kids and also remark-able educators,” says Bucin. Thequick delivery (within maximum 48hours nationwide) is another strongpoint for magazinulpiticilor .ro, sheventures.

As for future plans, the manag-ing partner wants to develop her on-line store in terms of its range – es-pecially in the creative and manualwork domain and toys for 8- to 12-year-olds. “We also intend to rollout some new online services forour customers from September ,”says Bucin. In the distribution do-main, her company has been work-ing to extend its reach and developthe products it sells for almost ayear. “We mean to introduce anoth-er new well known brand for the2010 winter holiday season,” con-cludes Bucin.

Online player finds educational toy sales a lucrative game

é 2009 turnover: EUR 40,000é 2010 estimated turnover: EUR

50-60,000é Number of employees: 5é Initial investment in online store:

EUR 10,000é Total estimated investment in the

business: EUR 100,000 by 2011

www.magazinulpiticilor.ro

F O C U S


Petrom seeks external financing topour oil on troubled watersWith investment plans worth RON 7billion (EUR 1.6 billion), OMVPetrom, majority controlled byAustrian oil company OMV, hasoutlined its strategy for the comingyears: to focus on new explorationcapacities in Romania andKazakhstan and exit Russia, playsafe using risk covering instrumentsand continue investing in energyprojects.

Dana Ciuraru

OMV Petrom seems to have a bul-let-proof cost-efficiency plan: optimizedcash flow management, ensuring exter-nal financing and accessing risk cover-ing instruments in view of the volatile oilprice, activity restructuring and projectprioritization. Going even further , thecompany is looking to adjust its refiningcapacity in Romania and to exit thepetrochemical market by selling thepetrochemical division of Arpechim.

Moreover, in April this year thecompany’s general assembly approvedthe delegation, for a period of one year,of the competences regarding a sharecapital increase of up to 50 percent of thesubscribed capital, or a maximum RON2.8 billion. This means that the Econo-my Ministry, which controls a 20.64 per-cent stake, will have to come up with acouple of hundreds of millions euro. TheOMV Petrom decision has started vehe-ment reactions among Romanian au-thorities. Tudor Serban, state secretarywith the E conomy Ministry advisedPetrom to consult the state on the topicof capital increase. Furthermore, MihaiDavid, Hidroelectrica GM stated that“Petrom could help even more the localeconomy by increasing the royalty , notby keeping 100-120 jobs. Let’ s nottransform Romania in an OMV repub-lic.” Considering the current economicsituation in Romania, authorities take in-to account selling part of its packageshare in Petrom on the Stock Exchange.

OMV Petrom has an-nounced that exploration andproduction (E&P) activitywill focus on securing long-term oil and gas supply anddeveloping activities in theCaspian Region. Accordingto OMV Petrom information,the company plans to investin E&P RON 3.5 billion,about 50 percent of the totalinvestment budget.

In Romania, the optimiza-tion of oil and gas productionwill be achieved throughpartnerships with other oper-ators in selected fields.

The key projects aim to re-develop six-eight majorfields, to finalize infrastruc-ture modernization projectsin three-five fields, and to de-bottleneck the gas sys-tem and install gas compres-sors. Also, following the first

deepwater explorationdrilling scheduled for 2012,the company wants to com-plete the deepwater of fshoreappraisal and start develop-ment by 2015.

In Kazakhstan, the focuswill be on increasing produc-tion from the Komsomolskoefield (this year) and startingproduction at the Kultukfield. In Russia OMV Petromcontrols 74.9 percent in RingOil Holding & Trading whichexplores eight perimeters inthe Saratov region and two inthe Komi zone.

“In August 2009 we reg-istered our first explorationsuccess in Russia. However ,we are currently consideringthe possibility of selling ourexploration portfolio here,through the evalua tion of

the future costs in the con-text of current priorities,”OMV Petrom officials toldBR.

E&P: Facts and figuresé Proven oil and gas re-

serves of Petrom Group ofapproximately 0.85 billionboe

é Replacement reserves ratein Romania of 70 percent(73 percent at group level)

é Crude oil and condensateproduction in 2009: 4.39million tons

é Gas production in 2009:5.27 billion cm

é Exploration of Neptunbloc, Romania, in partner-ship with ExxonMobil

é New gas processing unit atMidia, Romania

é Production started at Kom-somolskoe, Kazakhstan

OMV Petrom considers Russian exit

F O C U S


In the gas business, one ofthe main objectives concernsthe domestic gas price conver-gence to imported gas prices.The company also aims to ex-pand gas marketing into neigh-boring countries. However, thisrelies on connecting the Ro-manian transport system to theEuropean one. Petrom is alsoconsidering the appraisal of lo-cations in order to enter the gasstorage business, which shouldalso support the Nabucco proj-ect.

In order to position itself asan important power supplier ,Petrom aims to reach a marketshare of up to 10 percentthrough the enlar gement of itsportfolio in this activity . Thecompany has already taken thefirst steps in this market withthe start of construction of theBrazi power plant. In the con-text of growing electricity de-mand, Petrom is investing in amodern power plant – a green-field project.

G&P: Facts and figuresé In 2009, Petrom’ s consoli-

dated gas sales amounted to4.8 billion cm, 37 percent ofRomania’s gas consumptionvolume in 2009; Petrom’ sgas p roduction r epresentsaround 50 percent of Roma-nia’s domestic production

é The most important powerproject: construction of agas fired power plant (860MW) at Brazi, an invest-ment of around EUR 500million

é Electrical power delivery inthe national grid by the endof 2011

é Important player in the pow-er sector in Romania (8 per-cent of the power producedin Romania in 2011)

The oil and gas companyplans to modernize the Petro-brazi refinery in order to be ableto process 100 percent domesticcrude. The modernizationprocess is aimed at reducing theenergy loss to 10 percent (from14 percent in 2004), increasingthe yield structure of diesel andaviation fuel to approximately45 percent (from 30 percent in2004) and reducing heavy fuelto approximately 7 percent(from 15 percent in 2004).Moreover, the company intendsto increase annual throughputper filling station to approxi-mately 5.2 million liters (from4.9 million in 2009). It will fo-cus on the Petrom and OMVbrands, with the PetromV fill-ing stations being re-branded,some of them as OMV and oth-ers as Petrom.

“The level of sales andmargins in marketing activityis expected to remain under

pressure. We will continue tofocus on optimizing opera-tions, increasing ef ficiencyand adapting the portfolio tomarket conditions,” OMVPetrom representatives toldBR.

R&M: Facts and figuresé Petrobrazi refinery capacity

to be adjusted to 4.2 milliontons/year

é Investments of EUR 750million (2010-2014)

é Crude processed in 2009:5,161 million tons

é Refinery utilization rate: 65percent

é No. of filling stations in Ro-mania: 546

é Petrom networks abroad:Moldova – 1 13 filling sta-tions (Petrom), Bulgaria –96 and Serbia – 59 (OMV)

é Total marketing sales in2009: 4,823 thousand tons

Fuel sales under pressure Gas exports targeted

M O N E Y


With the corporate segment a means

for many lenders in Romania to

boost their activity, banks are

launching new products and services

intended to ease their customers’

relationship with their bank.

Focusing on their customers seems

to be another important plank in

lenders’ strategies.

Anda Sebesi

Many institutions active on thelocal banking market are trying torevive lending activity , with one ofthe m ain t argets b eing c orporatecustomers. Banks have launched –and continue to launch – new prod-ucts and services for this sector inorder to boost their corporate activi-ty. But they are also focusing on ad-ditional products and auxiliary serv-ices intended to ease their cus-tomers’ relationship with their bank.The most recent move in this direc-tion was made by UniCredit TiriacBank, which last month launchedfour new packages of products forcorporate customers with more thanEUR 3 million in turnover. They in-clude all necessary products for theusers to manage their operations.The much lower unique price (forsubscription) c ompared w ith t hecost of the products if acquired sep-arately and the BusinessNet applica-tion offered to customers in order tohelp them carry out current opera-tions are among the selling points.“We continue to innovate in order tocontinue to be one of the preferredbanking partners for entrepreneursin Romania. We are permanentlytrying to be closer to our customers,

offering them products and servicesadapted to the current environment,meant to of fer them tangible bene-fits through saving money, time andeffort,” said Antoaneta Cur teanu,executive director of the corporatedivision at UniCredit.

But what lies behind the trend,apart from the chance for banks toget closer to their customers? AsLaszlo Diosi, general manager atOTP Bank Romania put it – and thelender has also launched productsand services for corporate cus-tomers – the explanation lies in thefact that product development is vi-tal for all banks during the currentcrisis. “In this new environment,everything is different than it was inthe past and both customers andlenders have to adapt to the new sit-uation,” he says.

An interesting slant comes fromFlorian Neagu, department head ofthe financial stability division at theNational Bank of Romania (BNR),who said in March that the lar gecompanies in Romania that have a

systemic role in the economy wouldnot play a significant part in reviv-ing lending activity . The reason isthat they get their financial re-sources mainly on external marketsand less from the domestic marketcompared with the rest of the econ-omy.

According to a study conductedby BNR on 100 top Romanian com-panies, the weight of domestic bankfinancing was very low becausethey typically preferred to attractfunds from foreign markets. “Com-panies with a systemic role in theeconomy are not so important interms of domestic credit for ourlenders. Most of the signs are thatthe recovery in demand for creditcan’t come from such firms,” saidNeagu. He added that the degree ofdomestic financing was in their caseabout 6 percent last year. Besides,larger companies that have foreignshareholders can access cross-bor-der credit.

On top of that Neagu said thatsuch companies have managed to

get through the current crisis betterthan the rest of the economy, despitetheir degree of procyclicity to thecrisis being higher than that of othereconomic players. “Their turnoverdropped more than across the wholeeconomy. Companies with a sys-temic role are more procyclical thanthe rest of the economy ,” saidNeagu. As for the Romania’ s com-mercial deficit, this type of firm hada positive impact last year , of aboutEUR 100 million, compared with anegative gap of EUR 8.2 billionposted by the rest of the economy.

According to Diosi, all customersegments have been hard hit. “Theleast af fected segments are thosemedium and lar ge companies thatused a multi-pillar business modeland the companies and or ganiza-tions who have maintained a low in-debtedness ratio,” he says. As forOTP, he believes the figures are en-couraging with both corporate andSMEs sectors seeing a steady in-crease in the last few months.

Meanwhile, Steven van Gronin-gen, executive director of RaiffeisenBank Romania, said at the end ofMay that Romania would post aneconomic growth above the Euro-pean Union average on the longterm because of the conver genceprocess. But there is also bad news:the local economy will no longer besupported by lending, as it was inthe past. “The long-term perspectiveis still there. It hasn’ t changed andinvestors realize this,” said Gronin-gen. He pointed out that lending ac-tivity has significantly dropped,with plummeting demand and trustamong the main causes. “The solu-tion is not to tell the banks to lendmoney. Many things on all the lev-els of the economy must be changedto really give impetus to the econo-my,” he added. According to spe-cialists, consumer trust is muchlower in Romania than in othercountries, with this being one of thereasons individuals avoid spendingmoney.

As for the future, Diosi says thatmid-sized companies and the SMEsector will continue to grow , whichmeans that there are healthy compa-nies, as a result of which economicgrowth will resume. “But for thePFA, micro and small segments, thegovernment should consider spe-cialized support programs,” he sug-gested.

Lenders bank on corporate customers

STOCKEXC

HANGE

Neither a borrower nor a lender be: lending activity continues to be minimal on the local market

L I N K S


The pool of applicants is everenlarging as redundancies are madeboth in the private and public sector.For recruitment sites, this meanshigher traffic as individuals whowere made redundant will belooking for a job while companiesprospect the market. Most firms willresort to recruitment sites first,especially for entry-level positions.

Otilia Haraga

This year alone, the number of re-dundancies in the public sector will ex-ceed 70,000. In all likelihood, the lay-offs will continue next year: it is possi-ble that up to 125,000 positions will becut in 2011 in the public sector, said An-dreea Vass-Paul, advisor to the PrimeMinister.

Meanwhile, in the private sectorcompanies are desperately rolling outtheir cost-ef ficiency plans in order toweather the financial storm. Four out often or ganizations implemented a re-structuring plan in the first quarter of theyear which has seen individual layof fs(69.8 percent), retirements (60.3 per-cent), voluntary departures (21.1 per-cent) and collective redundancies (27.2percent), according to the Barometer ofthe Human Resources Market in Roma-nia, launched by HR Management Clubwith the support of Daedalus MillwardBrown. The study was carried out fromApril-May on a sample of over 200GMs and HR managers in Romania andrepresents an X-ray of the human re-sources market in the first quarter of2010 in comparison with the last quarterof 2009. This wave of layof fs in boththe private and public sectors can onlymean one thing: the pool of potentialemployees is greater than ever.

The HR Club study found that in thefirst quarter of the year, companies weremostly looking for specialists (66.2 per-cent), entry-level (42.5 percent) andmid-level positions (40.4 percent). Ofthe responding companies, 21.4 percentwere seeking seniors in Q1, 2010.

External recruitment is the mainmeans of attracting new employees forentry-level positions. Most companies –

an overwhelming 86.9 percent – use on-line recruitment sites to hire employees,especially for entry-level positions.Middle management positions are alsoscouted for mainly from external pools,the study shows. Only when seeking topmanagement will most companies re-sort to headhunters.However , middleand top management positions are alsoadvertised on recruitment sites. “Overthe last 30 days, the site has received3,341 adverts for mid-level positionsand 1,600 for senior -level roles. Hiringcompanies also use the database searchservice when they headhunt for thesepositions,” says Carmen Hadarau, mar-keting specialist at BestJobs.ro

At the moment, recruiter Myjob.rois advertising 341 positions in middleand top management – approximately10 percent of its total jobs. The maxi-mum proportion – 12 percent – was inMarch, both in 2009 and 2009, and ithas stayed at a level similar to that in thepre-crisis period. “We must also take in-to account that the majority of employ-ees only mention the domain/depart-ment where they want a manager –sales, marketing, IT for instance – with-out specifying that the respective posi-tion is a management one. This is whythe ratio is slightly higher than that reg-istered by the system,” says Adela Ra-peanu, communication expert at Net-bridge Services.

Hunting for potential employees onan online employment site has its ad-vantages. Companies can create an ac-count rapidly and the ad is publishedright away. Within several hours of theannouncement being posted, the firmcan already start scheduling interviews.Also, the CVs of applicants are auto-matically stored in the company’s data-base, explains Laura Chilom, HR con-sultant at eJobs.ro

Candidates can also draw up theirCV in a short time by filling in the infor-mation in the corresponding sections.Also, they can apply for an unlimitednumber of jobs and can be called for in-terview within hours of an application,says Chilom.

“The costs of hiring through an on-line recruitment site involve only post-ing the announcement or looking forCVs in the database. By comparison,using r ecruitment a gencies i nvolvessupplementary costs for the selectionprocess as well,” says Hadarau.

For online recruitment sites, thelarger pool of applicants means in-creased traffic.

From January-May, the traffic regis-tered on BestJobs.ro was 20,450,815

visits, 81 percent more than during thesame period of the previous year. At themoment, more than 70,000 companiesare clients of the BestJobs site, also upon the previous year . BestJobs, aNeogen site, is present in Moldova, Ser-bia and Bulgaria, and is the most visitedrecruitment service in South EasternEurope. Neogen posted last year aturnover of approximately EUR 2 mil-lion, of which BestJobs contributed rev-enues of approximately EUR 1.3 mil-lion. “This year we estimate we willcash in excess of EUR 2 million,” saysHadarau. R ecently, N eogen a cquiredCeeVee.com, a rapid CV managementservice, from web development compa-ny Lateral Romania for an undisclosedsum. As a result, BestJobs is taking itsoperations from regional level, where itis present with BestJobs.bg, BestJobs.rsand BestJobs.md, international. Thenumber of registered users onCeeVee.com is over 34,000 all over theworld.

eJobs.ro appeared in 1999 and wasthe first online recruitment service inRomania. Currently, the site has approx-imately 5 million visitors per month andover 40 million pages that are visitedper month, according to Trafic.ro. Some140,000 companies use eJobs servicesto place job ads and for personnel selec-tion. eJobs.ro is currently the top onlinerecruitment site in Romania, with amarket share of over 60 percent andmore than 1.9 million active CVs in itsdatabase, according to Trafic.ro. At themoment, there are 14.102 available po-sitions in various domains posted on thesite. Of these, 2,191 are based abroad.

On Myjob.ro, a Netbridge Servicessite, the greatest competition – as manyas 5,000 applications for a single job –comes from candidates without experi-ence for posts that do not require studiesor specific knowledge. These are entry-level jobs in domains such as sales orcustomer service, says Rapeanu.

MyJob.ro currently works with over10,000 companies in Romania but alsowith recruitment companies such asLugera&Makler, ABC Human Capital,Manpower and Adecco. “This showsthat even during a crisis, companieshave not given up outsourcing theseservices and still set a budget for the in-termediation of recruitment and person-nel selection,” says Rapeanu. The mostactive companies on Myjob.ro in thelast two months were Continental Cor-poration’s Automotive Divisions, TipTop Food Industry Romania, UniCreditTiriac Bank, UPC Romania andArabesque.

Increasing layoffs send jobless flocking to recruitment sitesTOP 5 CITIES FOR JOB VACAN-CIES – BESTJOBS.ROé Bucharest – 2,743 é Timisoara – 519é Cluj-Napoca – 463é Iasi – 330é Brasov – 311TOP 5 CITIES FOR JOB VACAN-CIES – EJOBSé Bucharest – 7,560é Cluj-Napoca – 2,170é Constanta – 1,864é Timisoara – 1,804é Iasi – 1,605BY DOMAIN – EJOBS.ROé Sales, Trade – 5,292 é Customer, Client Service –

2,394é IT (software and hardware)

–2,111é Marketing, Research, Surveys –

1,794é Transportation, Distribution,

Storage – 1,386é Restaurant, Food Service, Cater-

ing – 1,325é Tourism, Hotel Staff – 1,137SALARY DISCLOSURE IN ROMA-NIA AND ABROAD – MYJOB.ROé Only in 12 percent of cases do

employers choose to specify thesalary they are offering in Ro-mania. By contrast, for jobsabroad the salary is stated.

TOP-EARNING JOBS IN ROMANIAé A financial manager makes

EUR 4,000-7,000 net/permonth

é A commercial managermakes EUR 2,000-2,500net/per month

é An entry-level sales candi-date now asks for EUR 200-300 compared to EUR 400-450 in 2008

SALARIES ABROADé Specialist doctors – between

EUR 3,000 and EUR4,000/month in Belgium andFrance

é Specialist doctors – betweenEUR 40,000 and 75,000yearly in Germany

é Workers in the maritime in-dustry – light boat construc-tions – over EUR 2,000 inNorway

é Receptionists, bartenders andwaitresses – between EUR800 and 1,200 in Greece andCyprus


P R O P E R T Y

Athenee Palace Hilton in Bucharestis getting a EUR 2 million facelift whichinvolves the refurbishment of various fa-cilities inside the hotel.

ANA hotels, the owner of the prop-erty, has finished the renovation worksfor Roberto’s on La Strada terrace andwill start the refurbishment of its publicareas on the hotel’s ground floor in June.The restaurants Brasserie and Le Bistrot,the hotel lobby and Le Collonnade willbe renovated in different stages betweenJune and August. Roberto’ s restaurantwill follow towards the end of the year.

Friedrich Niemann, general manag-er of Athenee Palace Hilton, said: ‘Therepositioning of the hotel’s restaurants with more fashionable concepts, match-

ing the modern classic interior design,will offer Bucharest residents and theirguests exciting alternatives to enjoyHilton hospitality in Bucharest.”

The hotel will remain fully opera-tional d uring t he r efurbishment a ndguests can choose between Roberto’srestaurant, Roberto’s on La Strada, theEnglish Bar and Le Collonnade.

The B rasserie r estaurant w ill b eclosed permanently and the space con-verted into a luxurious retail shop by theend of 2010, while Le Bistrot restaurantwill reopen with a new concept in Au-gust. During July and August Le Collon-nade and the hotel lobby will also beoverhauled. ■

Retail rents continued to fall in Q1,especially in decentralized shoppingcenters, new research by DTZ Echinozhas found. Prices fell 10-15 percent inprime locations and 15-20 percent in pe-ripheral premises from 2009, while ask-ing rents plummeted 30-50 percent fromthe peak of 2007. Rents for premiumproperties on the main thoroughfares ofBucharest declined by up to 15 percentquarter-on-quarter, varying betweenEUR 70 and 90 per sqm per month forMagheru-Balcescu Boulevards, fol-lowed by Calea Victoriei where askingrents range between EUR 55 and 75.

Industry players hope rents will sta-bilize from 2011. The volume of modernretail stock (retail schemes in the form ofurban malls, retail parks, commercialgalleries, outlet stores and strip malls)

rose by 106,500 sqm gross lettable area(GLA) during Q1, a 29 percent increasein new supply quarter -on-quarter and a91 percent increase year -on-year. Atend-March Romania’ s modern retailstock reached 1.34 million sqm.

At the beginning of 2010 two shop-ping centers were delivered on the mar-ket – f irstly, S un P laza ( Bucharest)which totals 76,500 sqm of GLA, andwhich is anchored by Cora, Baumax andMobexpert. The second delivery, AtriumCenter Arad, a 30,000-sqm shoppingmall anchored by a Billa supermarket, isthe first modern retail scheme in thewestern city . At the opening date themall was 92 percent leased.

According to developers’ plans, fourprojects should open by end-2010,mainly in secondary cities (with around

300,000 inhabitants). However , ad-vanced construction works are being un-dertaken only at Gold Plaza, in BaiaMare. Most of the schemes announcedfor this year are actually projects initial-ly planned for 2009, but postponed dueto the economic instability and likely toremain shelved for even longer.

In March the volume of retailturnover sales rose to 3.7 percent month-on-month and decreased by 4.8 percentyear-on-year, whereas for the wholequarter turnover sales sank by 8.3 per-cent year -on-year. Vacancies rose inBucharest, mostly in decentralized loca-tions and with a major impact on newlydelivered shopping premises. The avail-ability of prime units in long establishedshopping centers in Bucharest still re-mains limited. ■

Athenee Palace Hilton gets EUR 2 million facelift,closes Brasserie restaurant

LAU

RENTIU

OBA

E

Out with the old: the Hilton is getting a facelift

Private equity firm GED willopen its first Cellulem Block beautysalon in Bucharest. Cellulem Blockis a Spanish salon network. It plansto open both its own outlets andfranchises in Romania.

“With the master CellulemBlock franchise we are bringing toRomania a solid business opportu-nity. With a minimum investment ofEUR 20,000 per year, a potential in-vestor might be able to recover itsinitial investment within a year , ayear and a half. The franchise offeris flexible and structured in threedifferent modules,” said RobertLuke, managing director of GED. Depending on the salon size and

the treatments offered the initial in-vestment varies between EUR20,000 and EUR 70,000.

Cellulem Block was establishedin 1993 in Malaga and now has over180 centers in Spain, Portugal, Italy,France, Morocco, Andorra and Ro-mania.

GED is a European private equi-ty firm active on the small buyoutand growth capital segments. Itssecond fund in Romania, GED East-ern Fund II, has invested in eightcompanies: Rosegur, RED Projects,Fonomat, Fama, Happy Tour, Di-amedix, Total Euro Business and In-fopress. ■

GED brings Cellulem Block franchise to Romania

Cushman & Wakefieldlaunches local officespace portal

Sitting pretty: beauty salon chain Cellulem Block

Real news: the portal provides property info

Retail rents slump in Q1 as available space increases

Cushman & Wakefield haslaunched a portal to provide informa-tion on the property market and trans-actions involving of fice space in Ro-mania. www .spatii-de-birouri.ro willoffer solutions for property strategydevelopment, including informationfor potential tenants and landlords. ■

Senso Ambiente aimsfor EUR 2 millionturnover in 2010

Senso Ambiente, the bathroomfurniture and equipment distributor,has announced that it estimates aEUR 2 million turnover this year .The company also plans to keep its11 percent share of the local brand-ed sanitary equipment market,which is estimated to have droppedby 40 percent.

To achieve this, the firm has in-creased its number of distributorsthroughout the country. While at thebeginning of the year it had 38 dis-tributors, it now owns 70, and plansto increase the number to 90throughout the country by year-end.

As part of its strategy to main-tain its market share, the firmbrought to Romania the Ideal Stan-dard brand at the beginning of thisyear.

According to Senso representa-tives, it has been the best-sellingbrand in the company’ s portfolio inthe first trimester of this year. ■


P R O P E R T Y

Cinema City will open its sec-ond Romanian megaplex in SunPlaza shopping center . The firmthereby becomes the only operatorto own two multiplex facilities inBucharest totaling over 7,000 seats.

Cinema City Sun Plaza includesthe largest digital cinema hall in thecapital, with a total of 404 seats.The new multiplex consists of 15screens, has over 2,800 seats and isthe second largest cinema in Roma-

nia, after Cinema City Cotroceni. This latest outlet, the seventh in

the operator ’s local network, is lo-cated in Sun Plaza Shopping Center,in southern Bucharest, close to Pia-ta Sudului subway station. Thechain has so far opened six locationsacross the country, in Bucharest,Pitesti, Iasi, Timisoara, Cluj and Ba-cau, totaling 57 halls, with over10,000 seats.

Cinema City International is thelargest multiplex cinema operator inIsrael and Central and Eastern Eu-rope. The company is continuouslydeveloping i ts n etwork i n I srael,Poland, the Czech Republic, Hun-gary, Bulgaria and Romania.

Besides the money raised fromselling t ickets a nd s ervices, t hecompany generates other revenuefrom film distribution. It owns theexclusive distribution license forDisney productions in Israel,Poland, Hungary , and Romaniathrough its subsidiary Forum Film.It also attracts income from DVDand VHS sales, advertising and var-ious real estate projects related tothe cinemas it operates. ■

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The long view: Cinema City has outlets in CEE

Cinema City rises again in Sun Plaza

B R E V E N T S


With renewable energy project demands of some 23,000 MW, consultants, lawyers and company officials debated at the Focus onRenewable Energy event organized by Business Review the predictability issues in this field and Transelectrica’s difficulties in makinginvestments to expand the electricity network.

Wind farm projects blocked by market unpredictability

1 2 3

4 5 6

7

8

■ 1. Silvia Vlasceanu, counselor in the Roman-

ian Parliament and executive director of the As-

sociation of Companies for Energy Utilities in

Romania ■ 2. Valeriu Binig, director financial

advisory services, energy and resources at De-

loitte ■ 3. Dana Duica, executive director at the

Romanian Wind Energy Association ■ 4. Nico-

lae Olariu, SunE president ■ 5. Mirela Petrar,

project coordinator local energy at Avrig City

Hall ■ 6. Dan Preotescu, network planning

manger at Transelectrica ■ 7. First session pan-

elists debating renewable energy legislation is-

sues ■ 8. Some 80 company officials participat-

ed in the BR event

Dana Ciuraru

One of the mains topics was thechanges to Law 220. According toSilvia Vlasceanu, counselor in theRomanian Parliament and executivedirector of the Association of Com-panies for Energy Utilities in Roma-nia, most of the discussions about thelaw related to the number of greencertificates allotted to each renew-able energy source.

The modified law stipulates thathydro power plants of up to 10 MWwill get three certificates if a green-field project and two if a modernizedhydro power plant. Wind farms willreceive two certificates per MW by2017, falling to one in subsequentyears. Three green certificates pergeothermal MW and six for solar en-ergy projects are the other modifica-tions of Law 220. Moreover ,Vlasceanu said that the law also laidout regulations for individuals withenergy production capacities of up to100 kW.

Dana Duica, executive directorof Romanian Wind Energy Associa-tion, told the audience that the newmeasures included in Law 220 makerenewable ener gy projects morebankable. In her opinion, Romaniawill register some 3,500 MW in-stalled capacity in three years. Duicaadded that a very important aspect isthat the government assumes respon-sibility for the green certificates ex-cess. She said it was expected that in90 days from the Law being pub-lished in the Of ficial Registry thegovernment w ill is sue a d ecisionspecifying the procedure throughwhich it will buy green certificatesabove a minimum price.

The event, which gathered about80 company officials, was sponsoredby Gamesa, Schneider Electric andSchonherr. More information can befound at www.business-review.ro.

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9 10 11

13 14 15 ■ 9. David Nicholl, country president at

Schneider Electric ■ 10. Simona Chirica, sen-

ior associate at Schoenherr ■ 11. Aurelian

Trifa, from the Kerten Investment Fund ■ 12.

Nicky Mads Larsen, acting general manager

at Global Wind Power ■ 13. Otilia Frolu, co-

ordinating head public sector, corporate

banking at Bancpost ■ 14. David Guiu, sales

engineer at Gamesa ■ 15. Monica Constan-

tin, senior associate at Schoenherr.

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C I T Y


Recent years have shown Bucharest’s

enthusiasm for alternative forms of

artistic and cultural manifestation.

Street Delivery is just one such

initiative, aiming to return the city to

its rightful owners, the people,

through a three-day marathon of

music, street theater, dance, open-air

movie projections, water fights,

sight-seeing, charitable events and

NGO presentations, story-telling,

cooking and socializing, among

many other activities.

Corina Dumitrescu

Already on its fifth edition, StreetDelivery is a lobby initiative aimed atthe Bucharest City Hall, calling for thewidening of sidewalks acrossBucharest, the creation of a pedestrianunderground passage to crossMagheru Boulevard and the construc-tion of multi-storey car parks. Theevent’s wide array of artistic activitiestakes place annually on Arthur VeronaStreet, which is closed to motor vehi-cles, allowing access only to pedestri-ans and cyclists. In 2009, Street Deliv-ery attracted between 20,000 and30,000 visitors and is expected to do atleast the same in 2010.

Although simply described as alobbying occasion, the event can becharacterized as anything but simple.Street Delivery has over the years de-veloped into one of the most versatileand alternative cultural events inBucharest, gathering artists from arange of disciplines, both novice s andbig names, along with well-knownpromoters of social causes. Due to theongoing financial crisis, Romanianartists have agreed to perform at Street

Delivery this year on a pro bono basis.Iulian Vacarean is one of the par-

ticipants who have been inspired byStreet Delivery. It was here that “Pasicatre viata” (“Steps towards life”) wasborn, an initiative consisting of a seriesof cultural-urban events taking placein unconventional spaces, all for thebenefit of child cancer sufferers at theMarie Curie hospital. At Street Deliv-ery, Iulian calls himself a professionallemonade maker , and the lemonadethat he and his colleagues make is soldfor RON 7 (around EUR 1.5), withproceeds donated to the children at thehospital. In 2009, EUR 2,400 was col-lected for Iulian’ s cause – building asterile room for the pediatric oncologydepartment at Marie Curie hospital – asmall, yet significant part of the neces-sary sum of EUR 20,000. This year,the lemonade makers have diversifiedtheir range with home-made cookiesand other natural products, encourag-ing passers-by not simply to make do-nations, but to receive something inexchange for their kindness.

Street Delivery not only brings the

streets back to pedestrians, revivingthe public space’s original purpose, italso reminds work-addicted adults andchildren who have been raised indoorsof the importance of outdoor activitiesand forgotten childhood games. Chil-dren learn to play the interactivegames that their parents grew up with,with adults joining them and recreat-ing their childhood fun without em-barrassment.

The projects that form part ofStreet Delivery are selected by eventrepresentatives through an open com-petition that usually takes place at theend o f M ay. According t o C odinOraseanu, one of the event’ s organiz-ers, this year 250 projects were sub-mitted for the event, which took placebetween 11 and 13 June. For the firsttime, Street Delivery was held simul-taneously in Bucharest and Timisoara,where the event is already on its fourthedition. Timisoara is the only othercity in Romania in which Street Deliv-ery is held, and there is currently no in-tention to take it elsewhere. At the mo-ment, the project’s goal is to reach its

targets in Bucharest.All the Street Delivery activities

have rediscovering Bucharest’s attrac-tions as their main purpose. Oraseanusays that the project was originally aninitiative of the Architects’ Order, nowco-organizers of the event, with a totalinvestment of around EUR 10,000 in2010, to which was added EUR 6,000from the Ministry of Culture and theresources invested by the Carturestifoundation. What’s more, Street De-livery has now reached a level of fameand independence that frees it from re-lying on sponsors whose ethos runscontradictory to the event’s values.

Although the urban area plandrawn up by the Architects’ Order thatwould transform the area delineatedby Ciflmigiu Garden, the RomanianAtheneum, Gradina Icoanei and theCentral School into a pedestrian routewas approved by the City Hall in2006, very little has been done to-wards the implementation of the proj-ect. So far , only a pedestrian squarehas been created at the AnglicanChurch, a space which, according toCodin, local terraces have taken ad-vantage of in order to increase theirspace, thus reducing the area thatpedestrians fought for so long in orderto regain.

As soon as these objectives arereached, the event will cease, havingachieved its initial purpose. Street De-livery is a demonstrational event thatcan happen only if a street is closed tocars and a pedestrian passage created,Codin says. Once the City Hall imple-ments the urban area plan and the cul-tural route is created, Street Deliverywill no longer be necessary.

Codin thanked his colleagues –Mirela Duculescu, Ioana Rusu, Moni-ca Grigore, Anca Danila, Ana Nicules-cu, Valentin Salageanu, Cristian Nea-goe and Daniel Voinea – who, drawingon their dif ferent backgrounds, havemanaged to turn the event in a 360-de-gree experience of Bucharest culture.These individuals, along with theevent participants, visitors and sup-porters in general, are giving back tothe capital city its long-lost colors andlife, helping to build an identity for aplace once known as the Little Paris.

Street Delivery can also be visitedonline, at www.streetdelivery.ro.

Street Delivery sees culture, creativity andcivil responsibility pound the pavement

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Pedestrian power: Bucharest’s citizens reclaim the street from traffic in a three-day event

C I T Y


After the success of Mozart Fest in2006 and the subsequent Vienna MusicFilm Festival, ArCuB, the Center of Cul-tural Projects for Bucharest City Hall, isorganizing the Bucharest Music FilmFestival. For nine days, Geor ge EnescuSquare will become a vibrant hub ofclassical European music, dance andopera.

The strains of Johann Strauss, Jo-hannes Brahms, Antonín Dvofiák, Jo-hann Sebastian Bach and Antonio Vival-di, among many others, will echo in the

vicinity of the Romanian Atheneum,Bucharest’s most prestigious concerthall and seat of the George Enescu inter-national festival.

Every evening at 21.00, projectionsof the main concerts and operas will beshowcased in Geor ge Enescu Square.The closing event will be a concert bythe Radio Big Band and will featuresome of the best known Romanianartists, including Paula Seling and Ovi,who reached the heights of third positionat this year’s Eurovision Song Contest.

The fourth edition of Bucharest Mu-sic Film Festival will take place betweenJune 12 and June 20. Access to thesquare during the festival will be free ofcharge with events taking place between11.00 and 23.00. The closest subway sta-tions to the location are Piata Romanaand Universitate.

The event’s program is available atwww.arcub.ro.

Corina Dumitrescu

Photography Orchard discovers Bucharestthrough the eyes of its people

The subway station at Unirii 1 wastransformed into an exhibition venuefrom June 9-11, displaying snapshots ofBucharest taken by amateurs, capturingthe everyday life of the capital and itspeople.

The mosaic-like images are part ofan initiative by the cultural associationBucurestiul Meu Drag (My DearBucharest).

The exhibit comprises stills that cap-ture fortuitous and lesser known aspectsof Bucharest, from intimate family mo-ments to unconventional city manifesta-tions and events.

At the end of the exhibition, all thephotos will be donated to the BucharestCity Museum, with the purpose of creat-

ing an image of Bucharest at the dawn ofthe 21st century.

Corina Dumitrescu

Film fans to flock to ShortsUP movie marathonShortsUP, now on its second run, in-

vites short film enthusiasts across Ro-mania to the ArtExpo galleries, on June19. The event will showcase nine hoursof acclaimed films from renownedawards galas in 2010, such as the Os-cars, Berlin Golden and Silver Bear ,BAFTAs, European Film Academy andClermont Ferrand.

This year the ShortsUP film festivalwill be extended for the first time tothree other Romanian locations, Cluj,Iasi and Timisoara, along with

Bucharest, which hosted the first edition.The event is expected to attract

3,000 movie lovers across the countryand will commence simultaneously inall four locations.

Tickets for the nine-hour short filmmarathon can be purchased from theEventim network (www .eventim.ro),Carturesti book stores and Vodafonestores.

More information about the event isavailable at www.shortsup.ro.

Corina Dumitrescu

PwC research tips Brazil to win World CupThere is no significant link between

average income levels and a nation’ ssuccess on the football field, accordingto a PricewaterhouseCoopers Romaniareport, released to coincide with theWorld Cup which kicked of f last week.The research tips Brazil as the statisticalfavorite, with Germany as runner-up andEngland as a potential quarter-finalist.

The report ranks home advantageand the strength of historical football tra-ditions as the most important factors in

participating countries’ World Cup suc-cess. The host nation has won six out of18 World Cups and, even when they didnot win, the home countries have gener-ally had strong campaigns, found thePwC Romania report. Low income andpopulation size are of no relevance toWorld Cup performance, with an exam-ple being the poor showing by the Unit-ed Stated team, in contrast with the re-sults achieved by Uruguay.

Corina Dumitrescu

Local luxury market falls by 25 percent The local luxury market fell 25 per-

cent in Q1 and is not expected to bounceback this year, according to CPP LuxuryIndustry Management Consultants Ltd.The worst hit high-end industries arecars, boats, jewelry , fashion and traveland the least hotels, accessories, per-fumes, watches, spas and gourmet/orga-

nic food. The credit freeze and dif ficultaccess to financing is considered to bethe main cause. Romanians are mainlybuying luxury goods abroad as domesticprices are higher than the European av-erage, and the cost of staying in citieslike Milan and Paris has fallen.

Simona Bazavan

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Snap happy: the photos are taken by amateurs

MARIUS TUDOSIEI began hisprofessional career in 1996 as ajournalist, and after four yearsswitched sides for marketing. At theend of last year he quit his job asmarketing manager at JurnalulNational and, at a time when otherbusinesses were going bust, decidedto start his own grocery store.

Simona Bazavan

Next month, following a EUR15,000-18,000 investment, Tudosiei willopen Bacania Veche, a grocery store of-fering food with a story. “Bacania Vecheis a place where I will bring healthyfood, not dietetic food, not necessarilybio food, not food for diabetics, buthealthy Romanian food and more,” Tu-dosiei says. His motto is “no preserva-tives, no colorings or other chemical ad-ditives”. He got the idea when he real-ized that he was spending too much timesearching for the food he wanted. “I dosomething that I’m passionate about andothers enjoy and appreciate, and so I’mconfident about the outcome,” he says.

Bacania Veche on Barbu Vacarescu

Boulevard will offer a range of tradition-al products from all Romania’ s regionsas well as international products. “Forgeneric grocery products I will workwith importing companies, but the sup-pliers which are dearest to me are the in-dividual, l ocal t raditional p roducers.There are thousands of such small busi-nesses and all have incredible stories.They just need to be discovered,” Tu-dosiei adds.

Bacania Veche will feature tradition-al meat and dairy products, wines, pre-serves, in-season fruit and vegetables,kitchen implements and a bakery wherehe intends to work himself. There willalso be products under the BacaniaVeche brand, and from fall Tudosieiplans to launch an in-house product line.

Foodie entrepreneur is hungry fora healthy profit

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Food for thought: Tudosiei is selling healthy fare

Hitting the right notes: a celebration of classical

Bucharest Music Film Festival putsclassical music center stage

Business Review Issue June 22, 2010

Documents

Transcript of Business Review Issue June 22, 2010