News about the Economy in Romania, member of the European Union
Michelin: regional market sales bring 30% of revenuesThe domestic branch of Michelin group, the world's biggest tyre producer, estimates its turnover will amount to about 325 million euros this year, 25% higher than the 260 million euros turnover it made last year.
The regional retail market last year accounted for around one third of the company's turnover, according to company data. "Our sales in the region (i.e. Romania and the Balkans) account for 30% of our turnover, with exports making up the remaining 70%," stated Jean-Marc Gebhart, CEO of Michelin Romania.
In terms of market share, the Michelin group estimates it holds around 20% of the market of car, van and truck tyres in Romania and the Balkans.
IKEA to open first store in Romania on March 21The first IKEA store in Romania will be inaugurated in the Baneasa area just north of Bucharest on March 21, a company press release says. Situated in the Baneasa Commercial Area, it will provide over 7,000 articles of furniture and accessories to Romanian clients. The total investment in the 26,000 square meter, 2-storey project stands at about 25 million euro.
It will be operated in franchise system by Moaro Trading, according to a deal with IKEA System BV, the owner of the concept.
According to August 2006 data, IKEA holds 237 stores in 34 countries on four continents with a worldwide consumer base of 500 million.
The Baneasa Commercial Areas includes the cash&carry network Metro, the Feeria commercial gallery, a Carrefour hypermarket, Bricostore and Mobexpert stores.
The Economist: Romania's Political Class Outscored BulgariaBulgaria's small size may be an advantage for its EU integration, but Romania's political class has recently outscored Bulgaria's, the Economist commented the accession of the two countries in its first issue for the new year.
The article points out that Romania, under its president, Traian Basescu, is a bastion of Atlanticism in the Black Sea region. Bulgaria, on the other hand, is "largely passive in foreign policy, though it has good relations with Russia."
"Bulgaria's prime minister, Sergei Stanishev, studied in Moscow; past Romanian leaders did so too, but to admit it now would spell political doom. Mr Basescu decries communism as criminal, but Bulgarian leaders only mumble."
The Economist says that the European Union's two newest members are both economically and politically backward.
Foreign investment in Romania reaches 8.5 billion euros in 2006Foreign investment in Romania reached 8.5 billion euros last year, 2.5 - 3 billion euros representing investment in BCR, secretary general of Romanian Businessmen Cristian Parvulescu told the Romanian Rompres.
Foreign companies that made investments here developed due to the profits gained. Yet it is difficult to say exactly which sums in which fields were invested, the official said.
He mentioned that some of the profit made here is deposited in foreign banks and not used in Romania.
Enel to invest 3.5 bln euro in Romania, BulgariaItalian company Enel will invest over 1.5 billion euro until 2015 in the modernization of electricity distribution systems in Romania and 2 billion for the construction of a nuclear plant in Bulgaria, Enel head Piero Gnudi said in Sofia, quoted by Forbes magazine.
The investment program for Romania eyes power distribution companies where Enel holds the majority stake.
It controls 51% of Electrica Banat and Electrica Dobrogea and bought 67.5% at Electrica Muntenia Sud last year.
BRD value speeds up past 4 billion eurosThe shares of BRD-Groupe Societe Generale, the largest bank listed on the Bucharest Stock Exchange reached a new all time high of 20.7 RON on Friday. This is what the investors had been waiting for for almost one year, namely those investors who had been uninspired enough to buy BRD shares at the previous all time high of 20 RON in February 2006.
BRD's market capitalisation exceeded 4 billion euros for the first time last week, reaching 4.2 billion euros, an about 450 million-euro increase since the beginning of the year.
BRD thus contributed to the increase in the market capitalisation by more than 2 billion euros in this year's three trading sessions on the Bucharest Stock Exchange thus far.
Turk Telecom plans to invest in Romania, BulgariaTurk Telecom, Turkey's only fixed-line telecommunications provider, is planning to acquire mobile and fixed telephone operators in Romania and Bulgaria.
According to Ziarul Financiar, a Romanian financial news site, officials from the Turkish operator say that the aim of the possible acquisitions is to raise the companys market value company before the midpoint of this year.
"We are examining fixed and mobile telephone business in Central and Eastern Europe, especially in Romania and Bulgaria, as well as in Central Asia," stated Paul Doany, CEO of Turk Telecom.
Salary Hike 14% Tops After Romanias Accession To EUSalaries must be correlated with the Gross Domestic Product, or GDP, to maintain macro-economic balance, thus after Romanias accession, salaries can not be hiked 30% or 50% but a maximum of 14%, President Traian Basescu said Tuesday.
He added this level of salary hikes covers inflation and adds to venues in concordance with the economic growth, of 6-7%.
USD 180 mln. loan for improvement of Romania infrastructureThe International Bank for Reconstruction and Development will provide a loan amounting to 180 million US dollars to Romania to cut costs in the transportation sector by improving the general quality of national roads and railway networks in the first several years of EU membership.
Romanian Finance minister Sebastian Vladescu and the World Bank manager for Romania Benoit Blarel signed the deal in this regard on Monday.
The loan is aimed at supporting the funding of rail and road maintenance programs amounting to 225 million USD.
The World Bank has delivered loans totalling five billion US dollars to Romania since 1990.
Auchan To Open Four OutletsFrench hypermarket operator Auchan plans to invest E160m to open four outlets in Romania in 2007, in the cities of Cluj-Napoca, Targu Mures, Bucharest, and Pitesti.
Auchan opened its first Romanian outlet in November in Bucharest, with an investment of E40m.
Roche Romania, 71m-euro turnover in nine monthsRoche Romania, the domestic branch of La Roche Swiss giant, in the first nine months of this year generated turnover worth more than 71 million euros, about 30 percent higher than the figure reported in the corresponding period of last year.
"During this period, Roche Romania launched new oncology and osteoporosis product. These products had a solid contribution to the sales growth. Q3 figures are in line with the increase registered during this year," stated Dan Zamonea, Roche Romania general manager.
Vodafone Romania reports 31% growth in revenuesVodafone Romania's service revenue increased by 31% to 630.5 million US dollars, over the first half of the 2006-2007 fiscal year, which concluded on September 30.
The company has also reported that the number of its customers rose by 29% over the period, to 7.15 million.
Railway in Romania: EUR 180m loan from World BankThe World Bank's Board of Executive Directors approved a new loan to Romania of USD 180m for a Transport Sector Support Project.
This loan will contribute to financing a USD 225m Infrastructure Maintenance Program for roads and railways, the World Bank reports in a press release.
Romania has the strongest textile industry in EuropeMany of the big cloting brands are choosing Romania to produce their clothes because of the very well qualified hand work, Romania will continue to be also for the next years an oportunity for the textile industry.
Romania is third after China and Turkey in terms of export of clothes towards EU, being first in Europe.
Pirelli begins manufacturing high performance tires in RomaniaPirelli Tyre SpA has officially started manufacturing consumer tires in at its new facility in Slatina (Olt Province), Romania. The plant will produce "top-of-the-range" tires for cars and SUVs.
The new Slatina plant, located close to the joint venture steel-cord facility operated by Pirelli and Continental AG, applies leading-edge, non-robotised production technologies. It is designed to produce a broad range of high performance tires, including winter, ultra-high performance and SUV tires.
Romania expects bid for CEC to total at least EUR 500 mA fair bid for Romania's fifth-largest bank, Casa de Economii si Consemnatiuni (CEC) would total at least EUR 500 million euros, CEC President Eugen Radulescu.
Romania has been putting off the sale of CEC, one of the last chances for investors to get a major foothold in the fast-growing emerging European market, in hopes of getting a higher price for its oldest bank.
According to a report by Reuters, Radulescu told the newspaper he did not completely rule out the possibility that the CEC sale would not be completed, echoing doubts expressed by one of the bidding banks last month.
Last month, Romania picked the National Bank of Greece (NBG) Hungary's OTP as frontrunners to purchase CEC, turning down a bid by Austria's Raiffeisen, which analysts said might depress the sale price.
Smithfield targets Romania for expansion into EuropeSmithfield Foods has targeted massive expansion into Romania as the lynchpin of its plans to muscle further into the European market.
In a presentation to shareholders yesterday Smithfield Foods' president and chief operating officer, Larry Pope, said the company's strategy is to develop low cost meat production in Eastern Europe and export into Western Europe.
Romania is well suited to become part of the company's strategic growth, due to the relatively low costs of setting up plants there.
Romania seals deal with Daewoo, aims new saleRomania signed a deal on Wednesday to buy back shares in carmaker Daewoo Automobile Romania from its joint-venture partner, South Koreas Daewoo Motor, opening the door for a new sale, economy minister Codrut Seres said.
The government has been fighting for months to take over the 51% stake held by the bankrupt Daewoo Motor to free its hands in finding a new strategic partner for the plant.
Starwood Hotels to enter the Romanian marketStarwood Hotels & Resorts US company, which holds the Sheraton brand in its portfolio, one of the world's most luxurious ones, is set to enter the Romanian hotel market over the next 3 years, Karl Biebirach, the company's vice-president for acquisitions and development in Europe, Africa and the Middle East, told ZF.
"We will initially enter with Sheraton or Le Meridien and then, depending on the trend of the market, we will bring other brands," says Biebirach.
The company's portfolio includes brands such as Sheraton, Le Meridien, W Hotel, St. Regis or The Luxury Collection.
"We have recently received about five or six offers, mostly in Bucharest, but we haven't finalised any project," explains the representative of Starwood Hotels.
Romania to sell majority in Nitramonia chemicalsRomania plans to sell its 79.05 percent stake in chemicals maker Nitramonia Fagaras, the privatisation agency (AVAS) said.
The Black Sea country, which hopes to join the European Union next year, has already launched the sale of a majority stake in Oltchim, one of its largest chemical plants.
Romania's retail market becomes more dynamicRomania's retail market is becoming more and more dynamic, given that new hypermarkets are to be opened in the capital Bucharest and other cities, the Romanian Rompres news agency reported on Tuesday.
According to Rompres, the growth pace of Carrefour will speed up since the company will open at least three shops per year. Carrefour will inaugurate this autumn the 7th hypermarket in Romania, in the coastal city Constanta.
Louis Delhaize Group, owner of Cora hypermarket chain, will inaugurate in the north-western city Cluj-Napoca a hypermarket in which it invested 21 million euros (about 27.9 million U.S. dollars).
Kaufland, with a network of 11 stores, will open a new store next week in north-eastern city Suceava on an investment of 8 million euros (10.34 million dollars). Kaufland has planned to have some 15 stores by end-2006, according to Gunter Grieb, director general of Kaufland Romania.
This year, French group Auchan will open its first store in Bucharest. The shopping center, with an investment of 40 million euros (51.2 million dollars), will have 70 stores. According to the company's officials, as of 2007, two hypermarkets will be opened yearly both in Bucharest and other important cities.
A new retailer brand will appear this month in the north- western city Arad. It is about Dutch Spar, which will inaugurate afterwards other six supermarkets and hypermarkets in central and western Romania.
The real brand Real will become ever more visible, too. It is to open five units in the coming months of this year and by the end of 2007, the company will have a chain of 15 stores.
Spar To Open Supermarket in ConstantaSpar announced that it will open a supermarket in the southeastern city of Constantsa. It also plans to invest E350m to open a 200-supermarket network in Romania, aiming to lead the supermarket segment in the country. Spars rivals in the country include Billa, Penny Market, Kaufland and Plus.
Spar runs a network of over 15,000 outlets in more than 34 countries, mostly on a franchise basis. In 2005, the company had a turnover of E27.9bn.
Raiffeisen Bank Romania profit up 28 per cent in H1Raiffeisen Bank Romania registered a profit before tax of EUR 21 million as of 30 June 2006 (according to IFRS), representing a 28 per cent increase compared to the same period of the previous year when the Bank posted a profit of EUR 16.4 million, Raiffeisen announced in a press release.
Profit after tax amounted to EUR 17.5 million. Balance sheet total increased by approximately 25 per cent compared to the same reporting period of 2005, reaching EUR 3.2 billion. Loans to customers went up to EUR 1,558 million, registering an increase of 12 per cent compared to the same period of 2005. The Bank also recorded a growth in deposits from customers of 33 per cent up to EUR 2,231 million.
Finnair to launch scheduled service to BucharestFinnair will launch a scheduled service between Helsinki and the Romanian capital of Bucharest on 10 April 2007.
The route will operated with Embraer aircraft four days a week.
Both business and leisure travel between Finland and Romania has been increasing significantly and will continue to grow as the country joins the EU, says Christer Haglund-Finnair SVP Corporate Communications .
103% net income growth for UniCredit Romania in H1UniCredit Romania posted a net profit worth 17.4 million RON in the first six months of the year, a 103% increase against the same period last year, with assets at the end of this period standing at 2.5 billion RON (some 700 million euros), a 64% increase against June 2005.
The number of individual clients doubled in the first six months of the year against the same period of 2005, reaching 63,000, while in the corporate sector, the number of clients grew by over 50%, reaching 16,000.
Romania promotes Internet useThe Romanian government has launched the country's first national campaign to promote Internet use.
According to Minister of Communications Zsolt Nagy, the goal is to boost the number of Internet users by 5 per cent next year.
Activities include an IT caravan equipped with a mobile computer lab, as well as public centres offering free web access. Currently some 28 per cent of Romanians are estimated to use the Internet on a daily basis.
Railway Industry in Romania: Astra Arad - A Real Estate Business for BurciThe takeover of Astra Vagoane Arad is also a real estate business for Cristian Burci, which could bring the businessman a profit worth several million euros, sources close to the transaction told Ziarul Financiar newspaper.
In addition to the wagon factory, Burci also took over a plot of land in a central location of that city and an office building, as assets of the plant that are currently not used.
Accenture to employ 1,000 in RomaniaAccenture is to employ 1,000 people in a new business process outsourcing (BPO) centre in Romania.
Over the next three months the company is recruiting people with skills in HR, finance and procurement to work in Bucharest, initially engaged on projects for Unilever.
Millennium BCP to enter RomaniaMillennium BCP bank plans to submit to the National Bank of Romania (BNR) an authorization request for the creation of a credit institution in Romania, according to Paulo Texeira Pinto, the president of the bank's Executive Director's Council.
"Regarding Romania, we reaffirm our interest in launching a greenfield investment and we are presently preparing the necessary documents that will be submitted to the local authorities for obtaining the licenses and authorizations," said Texeira Pinto.
Lagardere opens TV stations in RomaniaFrench group Lagardere, which operates two radio stations in Romania, Europa FM and Radio 21, intends to launch in the summer of 2007 two TV stations - Europa 1 TV and Europa 2 TV.
The group received yesterday from the National Broadcasting Council (CNA) the licenses for the two satellite television stations.
One of the channels will be for general audiences and the other for children and teenagers.
2006 Retail Sales Expected To RiseRetail sales in Romania are expected to touch $41.9bn (E33bn) in 2006, up by 16% from the $35.9bn (E28.3bn) in 2005, according to a study by Deloitte.
Food products accounted for 60% of the total retail sales in 2005. The hypermarket segment gained a market share of 18.8% in 2004 in terms of sales, up from 5% in 2001, and is expected to increase further as hypermarket operators continue to expand.
The retail market in the region including the Czech Republic, Poland, Romania, Hungary, Slovakia and Bulgaria reached a combined $263bn (E207.2bn) in 2005, up 7.8% from 2004. Retail sales in Romania, Bulgaria and Slovakia will register the highest growth rate over the next years, the study predicted.
Bosch Romania expects 100m-euro sales this yearGerman group Bosch, whose business involves electrical tools, automotive parts and accessories, and heating substations, plans to double its business in Romania in 2006.
"We want to have 100 million-euro sales on the Romanian market in 2006," Wolfgang Chur, a member of Bosch's Board of Directors said in Bucharest at the end of last week.
The company is present on the Romanian market with a three-department sales structure: electrical tools, which account for 54% of its turnover, automotive parts and accessories, and heating substations, each accounting for 23% of the sales. The company's electrical tool division has a 48% share of the market in Romania.
Bunge increases capital by 11.5m eurosBunge Romania, owned by the American group Bunge, will increase its share capital by 41.2 million RON (11.5 million euros) through a cash contribution by the sole shareholder, Koninklijke Bunge BV (KBBV) from the Netherlands.
Company representatives had not made any comment on the subject by the time this issue was ready for print.
Bunge Romania supplies sunflower seeds to the factories the American group owns in Oradea and Iasi.
Halfway through last year, Bunge decided to close the Muntenia Bucharest oil factory, justifying this decision by the fact that it intended to improve operational efficiency.
Romania : Lasitex targets turnover of 20m eurosLasitex is the biggest textile distributor for the Swedish giant Ikea, with production facilities and retail outlets throughout South-Eastern Europe.
Company exports 85 percent of its production to countries in Western Europe, the United States and even Asia.
It is one of the top ten producers in the textile industry and is counting on the expansion of production facilities and personnel growth.
Citibank wants to expand organicallyCitibank believes it is not worth paying the high prices on the Romanian banking market to expand by an acquisition , so that, at least for now, it will continue to invest in organic growth of its domestic operations, Shahmir Khaliq, 36, Citibank Romania president, told ZIARUL FINANCIAR.
"In the absence of valid targets in terms of price compared against the economic value of the entities in question, we believe it is more efficient to invest in organic growth. We don't like minority interests, either," Khaliq says.
Present on the market for ten years, Citibank is trying to adapt to the changes induced by the move of the banks specialising in retail.
EBRD supports solid waste management programme in RomaniaThe EBRD is lending the County of Arges, in southern Romania, 6.2 million to support a solid waste management programme covering the main municipalities in the county. This is the second such EBRD deal following the Bacau County project this week, and will be coupled with 18.3 million in grant finance from the European Union under ISPA, a programme supporting infrastructure projects in Accession countries, that will finance a new EU-compliant landfill.
The EBRD loan will support a county programme to create a new regional landfill, improve solid waste collection facilities, and help close illegal dumpsites and landfills incompliant with the EU. The loan will specifically finance waste collection and transportation trucks, waste collection containers, and containers that will support waste segregation, recycling and composting. The Bank will also work with the county to integrate private companies to boost private public partnerships in the sector.
The EBRD is one of the largest investors in Romania having committed more than 3.1 billion in projects.
Smithfield Expands in RomaniaU.S. pork-processing giant Smithfield Foods, Smithfield, Va., will invest more than $75 million in 2006 to retool Comtim, its pork processing complex in Timisoara, Romania.
Smithfield first entered the Romanian market by buying Comtim, which is in the Vest region, Timis county, in 2004.
Smithfield plans to invest more than $850 million in Romania in the coming years. So far Smithfield invested more than $ 250 million. In January this year the company said that it intended to reinvest 100 percent of the profits derived by its Romanian operations over the next 10 years. Smithfield intends to have 1,800 employees in the Romanian operation by 2011. It already employs 989 people and the latest investment is expected to create another 811 jobs, according to the European Restructuring Monitor.
The plant will process 16,000 pigs per day -- 4 million pigs annually. Smithfield said it wants to turn Romania from a pork importer into a major pork exporter.
Finmeccanica: Partnership in Romania for Alenia AeronauticaAlenia Aeronautica a company of the Finmeccanica group has announced a new partnership in Romania.
It said at the Farnborough Air Show that it signed an agreement with Romaero for the production of some parts of the fuselage of the Atr planes in Romania.
The agreement announced today by Alenia Aeronautica follows the deal sealed by Agusta Westland with Romaero for the assemblage of some part of the A109 helicopter.