June
2008
ECONOMIC NEWS
 
Vol. 4 No.5  
 

Prime Minister in hard sell for
Austrian steel deal

 
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Prime Minister Tariceanu visited the headquarters of Austrian steel producer
Voestalpine last month in an attempt to convince the company’s leadership to
choose Romania for its 5.5 to seven billion Euro investment in a new steel factory.
Voestalpine has expressed its intention to build in the Black Sea region. Romania and Bulgaria are favoured, but Ukraine and Turkey are also under consideration as a possible location for the Austrian plant.
“In taking our decision it is very important for us to know how badly a country
wants to attract such an investment,” said the CEO of Voestalpine Wolfgang
Eder. “Prime Minister Tariceanu did his best to persuade us that Romania is a
good location for our investment.”
The Austrian company will take a decision by the end of this summer, say
Romanian Government offi cials.
The possible location in Romania would be near Constanta, southeast Romania, on a 1,000 hectares plot of land, said Radu Mazare, mayor of Constanta.
According to Der Standard, Turkey and Ukraine could be favoured by Voestalpine because the environmental regulations are not as strict as in EU member states Romania and Bulgaria. Meanwhile the Bulgarian Government has promised cheaper electricity to Voestalpine, starting in 2013 when its new nuclear power plant Belene plans to be ready.
Romania is interesting due to the high development of its car industry, especially because of the presence of Renault and Ford’s purchase of car plant Automobile Craiova in southern Romania. Ease of transport is also a crucial issue. Before Tariceanu’s visit to Voestalpine HQ, he agreed with his Austrian counterpart to facilitate Danube river transport route between the two countries.


Deutsche Bank gets wise to local
real estate opportunities

Deutsche Bank has bought three real estate projects in north Bucharest from
various investment funds for 340 million Euro.
RREEF Real Estate, part of a department that manages alternative investments at a global level inside Deutsche Bank, has acquired three real estate projects from several investment funds represented in Romania by businessman Ioannis Papalikas.
The projects include two office buildings and two residential buildings, under development in northern Bucharest, on 9 to 11 Strada Fabrica de Glucoza. RREEF Real Estate acquires and manages investments in retail and residential spaces.


Wind project in Dobrogea
preparing for goahead

Investment fund in renewable energy in Poland and Romania Continental Wind Partners (CWP) is preparing to begin construction on a 0.5 billion Euro deal to build a 345 MW wind farm in Dobrogea.
The company was still looking for further fi nancing for this project as we went to press.
However CWP has all the necessary permits for construction from the authorities to start the works, CEO of CWP Adam de Sola Pool told The Diplomat.
This is part of an agreement CWP has with Romanian state company Transelectrica, consisting of a total energy capacity of 600 MW. But Adam de Sola Pool said the company “plans to build more” than 600 MW in all areas of Romania, including in the centre and west of the country.
Energy giants Enel and Iberdrola have also invested in developing projects
for wind energy in the Dobrogea region.


Mangalia set for solar experiment

Rominservices Therm, a public-private partnership created at the end of 2002
between Rompetrol-owned Rominserv and the Mangalia Local Council, plans
to install 600 solar panels in Mangalia by 2010 in an investment of around 1.2
million Euro.
Set over 720 sqm, the installation is designed to support the supply of hot water and heating to residential properties.
“During the current crude oil evolution, identifi cation and usage of new
renewable energy sources, with a minimum impact over the environment, may
be a viable alternative to fossil fuels,” said Iulian Staicu, general manager of
Rominservices Therm.
The company says the residents of Mangalia will see their energy prices reduce by at least fi ve per cent.


Private pensions: ING has the
most, BCR the wealthiest

From the compulsory private pensions issued between October 2007 and
March 2008, pension fund BCR Fond de Pensii has attracted the richest customers from the market, with an average monthly contribution of 8.52 Euro, according to the National House of Pensions and Other Social Insurance Rights (CNPAS). The Austrian-owned fund is closely followed by AIG Fond de Pensii with an average contribution 8.50 Euro and ING Fond de Pensii with 8.45 Euro per customer.
ING Fond de Pensii remains market leader with a 33.2 per cent market share
and 1.4 million clients, followed by Allianz- Tiriac Fond de Pensii with 1.1 million
clients and Generali Fond de Pensii with about 400,000.


Short News

State bank splashes 50 million Euro
on rebranding

State-owned savings bank CEC spent 45 million Euro on the fi rst stage of rebranding its corporate portfl io as CEC Bank with the revamping of 600 branches and more than fi ve million Euro on promoting the new image. The bank has an additional 800 units and expects to finish the rebranding process by 2011.
The main objective of CEC for 2008 is to increase its market share from 4.2 per
cent to at least fi ve per cent. CEC was planned to be privatised in 2006 but due to the low price offered by the suitors, the Government cancelled the tender.

Timis, Cluj and Poland fi ght for Daimler

While Polish media insists its nation will be the site for the new Daimler factory, the vehicle company is in talks to set up a compact car factory for Mercedes-Benz in Timis county, reported Reuters, quoting county council authorities. The potential site could be between Timisoara and Arad, close to Serbia and Hungary on the fourth European transport corridor.
Daimler was due to make a decision on where in eastern Europe to open the
plant as we went to press. The German company is also interested in Cluj-Napoca and Ujazd, southern Poland.

Unicredit and Ergo team up to sell
life insurance

Unicredit Group and Ergo, part of German financial services company Munich Re, are launching a joint-venture to sell mixed life insurances in Romania. Business operations will start this year with the sales of unit-linked life insurance and credit protection insurance, which complement traditional banking products.

Allen & Overy wins local associaton
with law offi ce RTPR

London law firm Allen & Overy has launched an exclusive association with
local law fi rm Radu Taracila Padurari Retevoescu (RTPR). The associated offi
ce will be part of the UK fi rm’s central and east European regional practice led
by Jane Townsend. The associated office will practise under the name ‘Radu
Taracila Padurari Retevoescu SCA in association with Allen & Overy LLP’.
Founded in 2004, RTPR has fi ve partners and a total of 33 lawyers.

Spanish private equity eyes local property

Spanish private equity company Azora will develop real estate projects worth
500 million Euro, in Bucharest, Brasov, Oradea, Cluj-Napoca and Timisoara.
“We are in due diligence for the take over of 50 per cent of a residential project in sector 1 of Bucharest and we are looking for projects in large province cities such as Timisoara, Brasov, Cluj-Napoca and Oradea,” Simona Gheorghe, Azora Europe’s representative told daily newspaper Ziarul Financiar.

Mining company for sale

Privatisation Authority (AVAS) has put up for sale 100 per cent of shares in Cupru Min in an open auction on 7 August 2008.
Cupru Min extracts limestone and andesite from the mineral deposits at a mine
in Rosia Poeni, Alba county. Three other Romanian companies have the right to
extract and process copper ore until 2017 from the same mine. The minimum price of a share is about ten Euro and the total value of the stock package auctioned by the Privatisation Authority is estimated at 25.6 million Euro.

Dutch gas group takeover interest rumoured

Dutch liquefied petroleum gas group SHV Gas is rumoured to be entering the Romanian market through the acquisition of local gas cylinder business of the Romanian group Crimbo, owned by local businessman Cristi Borcea. When approached by The Diplomat, officials at SHV Gas refused to comment on the transaction speculation.

Serbian supermarket looks to
acquisiton targets

Serbian retail group Delta Maxi, which owns the Piccadilly, Tempo and Maxi
brands, aims to break into the Romanian market through the acquisition of a local chain of supermarkets. “We wanted to enter the Romanian market by purchasing the local Artima chain of supermarkets, but we lost the battle to Carrefour Romania,” says Stefan Kossev, general manager of Piccadilly. “For now we are trying to identify another player that we could takeover.” In Romania, the company will probably initially set up the discount format, Tempo, as the first of its supermarket operations.


 
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