March
2008

COUNTRY FOCUS - GREECE

Expansion mode

Retail, banks and property are where the Greeks are taking their chances in Romania, while renewable energy is a fresh target

State-owned Greek companies are now showing an interest in investing in Romanian energy – particularly in the renewable sector.
“Most probably wind energy and hydro power are the most attractive areas for national Greek companies which intend to become very active in the Balkans and especially in Romania,” says commercial counsellor in the Greek Embassy in Bucharest, Ioannis Paschalis.
This followed the visit of the Greek Prime Minister Kostas Karamanlis to Bucharest where he signed an agreement on energy with his Romanian counterpart Calin Popescu Tariceanu. During the trip, he tried to convince the local authorities to continue supplying Greece with electricity.
Real estate, telecom, retail, banking and construction continue to be the main sectors where Greek companies are active. Piraeus Bank, Bancpost and Alpha Bank are continuing to expand their branch presence in Romania, with Alpha Bank moving up the rankings to take fourth place among Romanians banks in assets last September.
Greek retailers and restaurant chains such as Sprider and Gregory’s are expanding their number of outlets, but the high prices for rents in Bucharest are putting off some new investors.
“People working for small and medium sized businesses come to Romania with a lot of enthusiasm,” says Paschalis. “But after they see the exaggerated rent prices in the malls they either go back to Greece or re-orientate to cheaper areas in Bucharest.”
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One exception is in land and property deals. “The real estate players are a lot smarter and move around the country finding good business opportunities,” the diplomat adds.
However this is also a sector where opportunists hope to make a quick buck. “There are many people who are not very serious in this sector and are trying to earn some money fast by attracting naive clients,” warns Paschalis.
But he gives the Re/Max franchise and More as examples of hard working Greek real estate companies. Greek companies in Romania are often interconnected and a developer, construction company, real estate agency and bank can all be divisions of the same investor. This joined up approach can often work when trying to deal with Romania’s labyrinthine bureaucracy.
Greek construction companies active in Romania are interested in big infrastructure projects, particularly motorways. Greek firms Pantechniniki, Aktor, Terna and J&P Avax are in the pre-selection phase for building the Arad-Timisoara and Deva-Orastie sectors of the Constanta-Nadlac motorway and by-passes for Arad and Constanta. A new-entry on the Romanian market is Egnatia Odos, recently hired by the National Company for National Roads and Motorways to regulate the construction of motorways.
Another common practice is for the Greek subsidiaries of the multinational companies, like Toyota, Subaru or Yamaha, to open branches in Romania, which are considered Greek investments.
Two different Romanian authorities – the Central Bank and the National Trade Register Office – place Greece fifth and ninth, respectively, in the rankings of the top foreign investor.
Romania says there are 4,000 companies with Greek capital in Romania with a direct investment of 2.68 billion Euro in the last 18 years. But Paschalis argues the figure is higher because the authorities do not count investments made through other countries, such as Cyprus, which is a springboard for many investors because of its status as a fiscal paradise. “For example, Romtelecom is officially a Cypriot investment in Romania and not a Greek company,” the counsellor adds.
Paschalis believes that the Greek FDI is around three billion Euro.

Greece

Around 4,000 companies with Greek capital are active in Romania, employing 30,000 people
■ FDI for 2007 (Greek statistics): Three billion Euro
■ Bilateral trade volume in 2007: 1.2 billion Euro (an increase
pf 22 per cent since 2006)

Greece: buys animals and minerals
Greece’s top imports from Romania include zinc, bovines, sheep and goats, electric cables, processed mineral oils, iron, steel products, timber, lead and aluminium.

Romania: buys metal parts, fruit and vegetables
Romania’s top imports from Greece include aluminium constructions, nitric acid, copper pipelines, fresh fruit, plastic materials, air-conditioning machines, conserved vegetables, freezing equipment and plastic packaging.

Romtelecom: closer ties with
Cosmote for 2008

As the fashion for convergence in electronic communication continues, this year landline leader and satellite TV provider Romtelecom will continue to cooperate with mobile telephone operator Cosmote to offer packages of services. Both companies’ majority shareholder is Greek telecom giant OTE.
“We will focus on giving more consistency to the partnership with Cosmote to provide also mobile telephony services,” CEO of Romtelecom, Yorgos Ioannidis tells The Diplomat.
Despite the growing culture migrating to mobile telephony, the landline company plans to increase its clients in fixed telephony. For 2008, the company also aims to double the number of customers in broadband and users of its satellite TV service, Dolce.
Dropping the headcount at the former state-owned monopoly is also happening. This year the company announced it will sack 2,500 employees from a workforce of around 12,000. For the future, the CEO said that the company does not plan similar rationalisations.
“We are interested in the long term development of the company, including the employees and their jobs,” says Ioannidis. “All these changes are the result of a dynamic evolution in the communications market and of the need to decrease costs and improve efficiency.”

Romtelecom
Communications provider

■ ‘Dolce’ Satellite TV service: market share 20 per cent
■ Fixed broadband: market share 20 per cent
■ Fixed telephony: market share 70 per cent
■ Employees end 2007: About 12,000

Panhol: half a billion Euro budgeted for investment

Greek real estate developer Panhol Developments will deliver two residential complexes in east Bucharest in 2009 and 2010.
The first project, the construction works on which started last April, comprises 1,000 apartments on a 4.4 hectare land plot and will be delivered in 2010. The second includes 80 apartments and is due for completion by 2009.
“We have acquired land plots of 150 hectares in ten locations in Bucharest, where we are planning to develop residential projects,” says Ioannis Panagiotidis, vice-president of Panhol.

Panhol Developments
Real estate

■ Budgeted investments: 500 million Euro
■ Projects: residential complex near Cernica Lake including 500 living units, two residential complexes in east Bucharest comprising 1,000
and 80 living units respectively,
logistics centre in south Bucharest

Last September the company started to build a 30 million Euro residential project with 500 villas and apartments near Cernica Lake, Bucharest.
Panhol is also targeting industrial real estate with a plan to deliver warehouses. “We have acquired an 18 ha plot land outside Bucharest, on the ring road and we are looking for three more plots in the same area,” says Panagiotidis.
The company will start building year a logistics park this year in south Bucharest. Panhol has budgeted 500 million Euro for investments in residential and industrial projects throughout the country in the next five years. “We are looking for land in cities such as Constanta, Iasi, Timisoara, Brasov and Cluj-Napoca,” adds Panagiotidis.

Cosmote: planning net profit by 2009

Last October mobile operator Cosmote clocked up three million active customers in Romania and now has a 14 per cent market share among mobile phone users. Finally, profit is now within the grasp of the company, argues the new CEO Stefanos Theocharopoulos.
“The company is on track to reach its target of becoming EBITDA positive in 2008 and net income positive in 2009,” he adds.
Between 2005-2007 Cosmote has invested 450 million Euro in infrastructure and network expansion in Romania and now Cosmote has over 850 outlets across the country including branded stores, Germanos, Romtelecom, Internity and independent dealers.

Cosmote
■ Customers: three million
■ Market share: 14 per cent
■ Revenues first three quarters 2007: 100 million Euro [300 per cent increase on same period 2006]
■ Ranking: third
■ Coverage: 98 per cent of the
population
This year’s plan is to give “special emphasis” to the post-paid segment for business and personal use. “Cosmote Romania has been the fastest developing company among the Cosmote Group, in terms of client base, and it is likely that this trend will continue during 2008,” adds Theocharopoulos.

Global finance: 90 million Euro to target office market

Investment group Global Finance’s real estate division will carry on this year the development works on two residential complexes in Bucharest.
‘Global Gardens’ will be located in Pipera, near the American School and will include 300 apartments developed in two phases over an area of 65,000 sqm.
‘Global Plaza Floreasca’ will be a mixed project with 100 to 120 living units, office and shopping space close to Parcul Floreasca.
Global Finance is targeting both residential and office real estate market and plans to invest 90 million Euro in office buildings in the near future in the capital city. “We will either develop these or purchase them from other developers,” says Ivana Bozjak, head of the real estate division.
The first ongoing project of the company, ‘Global City Business Park’, covers 60,000 sqm on Soseaua Petricani, which will include 380 apartments and A class office buildings. The company will develop this in three phases due for completion at the end of 2010.
This complex will include shopping units, restaurants and service spaces. The company is also considering the possibility of raising a second investment fund in the city of Iasi.

Global Finance
Real estate developers

■ Projects in Bucharest:
‘Global City’ on Soseaua Petricani
‘Global Gardens’ in Pipera
‘Global Plaza Floreasca’

More: moving into countrywide
development

Real estate agency More International Invest will enter this year on the development market with two residential projects outside Bucharest.
The company has purchased land in Braila and Craiova, Dolj county where it will start the construction of two residential projects, each with 40 apartments. “Although these two projects may seem small, our aim is, for the time being to enter the market and have a constant growth,” says Ilias P Papageorgiadis, managing director of More International Invest.
Since arriving in Romania, the company has so far offered real estate consultancy in land and property. “After finding land we come up with ideas and suggest to our customers possibilities for their land plot,” says Papageorgiadis.
The managing director argues that Cluj-Napoca has the biggest growth potential of all provincial cities in Romania because land is not too expensive and there is a need for new developments in all its real estate segments.

More International Invest
Real estate agency and developer

■ Developments: 40 apartments in Braila and Craiova
■ Year established: 2004
■ Offices: in 15 cities of Romania

Alpha Bank: moving up the rankings

Last September Alpha Bank became the fourth largest bank in Romania based on assets, with an almost six per cent market share.
Although 2007 was not a spectacular year in terms of profit for the bank - at the end of the third quarter this was only 25 million Euro - the bank intends to increase its profit by 15 to 20 per cent in 2008.
Sergiu Oprescu, executive president of Alpha Bank Romania says that the bank will continue an aggressive strategy. “Our evolution stems from innovative and courageous strategies and for 2008 we plan to maintain this trend,” he says.
Alpha Bank has also predicted the rise in popularity for e-banking – now over one third of its transactions take place through its Alpha Click service. The executive president says this compares to only a maximum of ten per cent for the other banks.
“In 2008 the banking sector will not skyrocket as it did in 2006 to 2007,” says Oprescu. “This is due to the international crisis, the growing current account deficit and [rising] inflation.”
The global financial crisis targeted sophisticated segments of the market and high-risk investment instruments, many of which are not active in Romania’s emerging banking market. “Because of globalisation, Romania felt some of the effects of this crisis,” says Oprescu. “But this has not been too large because people in Romania do not have access to sophisticated products.”

Alpha Bank (Sep 2007)
■ Market ranking: fourth
■ Market share (assets): 5.8 per cent
■ Total loans: 2.28 billion Euro
■ Total assets: 3.7 billion Euro (75 per cent increase compared to Dec 2007)
■ End Q3 2007 profit: 23.45 million Euro
■ Employees:1,600
■ Branches: 125

Bancpost: taking branches
to over 300

EFG Eurobank-owned Romanian financial services company Bancpost plans to expand in 2008 by opening 73 more branches, says CEO Manuela Plapcianu. The firm also forecasts a profits increase by 50 per cent on this year’s figure of 29 million Euro and ended 2007 with a 60 per cent rise in assets to 3.7 billion Euro. “The increased development of the banking sector will continue in 2008, but at a slower rhythm,” says Plapcianu.
The CEO believes real-estate loans will see a deceleration. In 2007 these loans witnessed an increase of 60 per cent, but for 2008 the bank estimates this will rise by 43 per cent.
“In consumer loans, last year the market saw a 74 per cent increase,” she says. “But for this year I think that the growth will be more moderate, around 48 per cent.”

Bancpost
Bought by EFG Eurobank

in 2005
■ Ranking in sector (assets and loans): fifth
■ Total assets 2007: 3.7 billion Euro
■ Employees: 3,400
■ Market share: 5.2 per cent
■ Profit 2007: 29 million Euro
■ Forecast profit 2008: 43.5 million Euro
■ Branches: 237
■ Branches to open in 2008: 73

There will also be pressure on profits in the banking sector in 2008. This will be triggered, argues Plapcianu, by factors such as the increase in the banking competition, the dynamic of the international economy, Romania’s reduced risk ratings by international agencies and the need for up-to-date IT investment.

Egnatia Bank: year for rebranding

For Egnatia Bank 2008 begins with a rebranding process into Marfin Bank Romania and a plan to open 11 more branches. Since April 2006 the bank became part of the Marfin Financial Group, which has a presence in 14 countries.

Egnatia Bank
■ Ranking in sector: 22nd
■ Market share: 0.65 per cent
■ 2007 Assets: 428.5 million Euro
■ Net profit: 4.35 million
■ Net profit forecast 2008: 8.3 million Euro
■ Branches: 20
■ Branch forecast [end 2008]: 31
■ Employees: 221
■ Employee forecast 2008: 388

“Romania is very important for us, it has a lot of potential, in the next years the country will see healthy growth and good development,” says Sofianos Stylianos, general manager of Egnatia Bank.
In 2008, the bank will open branches in cities such as Satu Mare, Baia Mare and Piatra Neamt in addition to its estate of 20. If the opportunity arises, Marfin Bank will not rule out the takeover of another bank, but is continuing to focus on organic growth, with a plan to almost double its profit and turnover in 2008.

Ate Bank: planning branch drive

Ate Bank Romania will open 17 more branches in 2008 in cities such as Ploiesti, Sibiu, Arad, Buzau, Focsani and Suceava in addition to its estate of 13 branches.
The Greek-based Ate Financial Group bought a small bank in Romania, Mindbank, in 2006 and now has 74 per cent of its shares.
In Romania Ate Bank, which provides both consumer and corporate services, has a market share of 0.22 per cent. For 2008 the bank’s objective is to reach one per cent.
The bank’s strongest advantages, according to general manager Sergiu Ioan Manea, are the financial products for farming customers and the low prices on commissions.
The main problem in the Romanian financial sector is the lack of experienced and quality staff. Manea believes the next generation are primed to fill this gap. “We have great trust in new graduates,” he says. “We train them before giving them a position with great responsibility and we promote them very fast. Our hopes do not lie with the existing mass of specialists, but on the new generation.”

Ate Bank
Owned by Ate Financial Group and International Finance
Corporation (15 per cent)
■ Assets: 175.8 million Euro
■ Profit 2007: 1.6 million Euro
■ Employees: 260
■ Branches in 2007: 13
■ Branches to open in 2008: 17

Garanta Asigurari:
consolidating merger

For insurance firm Garanta Asigurari 2008 is a year to consolidate its merger with National Bank of Greece (NBG)’s insurance division. The company expects only a conservative growth and does not plan to expand its network for the moment.
“Last year was a year of adjustment,” says Marian Baches, deputy general manager of Garanta Insurance. “Every merger is an interesting and painful process. Fortunately this one has not brought a reduction of personnel.” Although the rebranding of Garanta Asigurari into branches belonging to the NBG Group is expected, the group’s general shareholder meeting in April will make the decision on when.

Garanta Asigurari
■ Turnover 2007: 24.5 million euro
■ Forecast turnover 2008: 27.3 million euro
■ Profit 2007: 2.75 million euro
■ Forecast profit 2008: three million euro
■ Employees: 108
■ Branches: ten
■ Ranking in the market: 14

This year the deputy general manager estimates that the insurance market will see growth of at least 25 per cent. “This is not a bad percentage, but we are still far away below the EU’s parameters for this market,” he adds. In 2008, Baches predicts the insurance market will see some more mergers and acquisitions because there are too many small companies for a maturing market.

EFG Leasing: new
branches need quality staff

EFG Eurobank Leasing has a branch expansion strategy, but this could be affected by a shortage in qualified and experienced personnel in the financial services sector.
“In 2008 we plan to open five more branches, but it depends on whether we can find the right people to run them,” says CEO EFG Eurobank Leasing Romania Sorin Manolescu. “Now there is a much bigger demand for qualified employees than supply. The massive migration of staff between companies also raises the costs of human resources.”
This constant fluctuation means personnel do not have a full grasp of how one individual firm functions, says the CEO. They do not understand the psychology of a business. “Many people reach 35 years old and find themselves in the middle or top management,” says Manolescu.
“But they have spent only one year at most in a company and don’t know how to solve a specific problem because they have not had the time to learn anything from where they have been.”
After doubling the size of its business last year, EFG Leasing plans to increase its portfolio to at least 300 million Euro and its profit to three million Euro in 2008. The firm currently has a 3.5 per cent market share.
“To have a comfortable profit we need to achieve a minimum market share of five per cent,” adds the CEO. EFG does not rule out purchasing or merging with another leasing company.
At present the company has not found the correct target because the competition is either too large or too small, says Manolescu.
Real estate leasing is the most dynamic offering from the business, while commercial vehicles and industrial equipments see a large growth swung, but vehicle leasing remains the bulk of business.

EFG Eurobank Leasing
Operational in
Romania since 2006
■ Market share: 3.5 per cent
■ Employees: 60
■ Branches: five

Piraeus Leasing:
spanning nation with five new branches

Piraeus Leasing aims to accelerate its expansion this year, but has also met a major obstacle in the lack of qualified personnel to carry out its activities to a consistent standard. “Although our best asset is our human resources and the efficiency per employee is very high when it comes to opening new branches, especially in other cities, it is very hard to find people that can fulfil our requirements,” says Anca Petcu, general manager Piraeus Leasing. Now Piraeus Leasing has six branches and, by the end of 2008, plans to open in Craiova, Galati, Sibiu, Oradea and Suceava.
The company is looking to hire personnel from the graduate pool and from outside the financial markets.

Piraeus Leasing
■ Value of signed contracts 2007: 200 million Euro
■ Forecast value of signed contracts 2008: 250 to 270 million Euro
■ Employees: 65
■ Branches: six
■ Branch forecast 2008: 11
■ Market share: five per cent
■ Ranking: seventh

“We prefer to train young graduates and to build a strong relationship with them rather than hiring people that have a year and a half in the financial sector, have changed jobs five times and know nothing about the leasing business,” argues Petcu.
Piraeus Leasing is now the seventh largest hire-purchase company in Romania. Petcu says many other players in the Romanian leasing market have taken risks to gain a bigger market share, such as lending to less dependable clients.
“Many players chose a higher risk just to gain a percentage point more of market share and I hope there will be not unfortunate consequences,” she says. “Many times we lost big financial transactions because we chose to be more conservative concerning risks - but at least we are able to sleep at night.”

Piraeus bank: only marginal effects due from US downturn

“The devil is not as black as he is painted,’’ says Stavros Lekkakos, CEO and president of Piraeus bank Romania. This is in reference to the antagonism felt in the Romanian financial market concerning a possible recession in USA.
“Even if Romania’s short term outlook doesn’t look too bright, the opportunities offered in the medium and long run by the Romanian economy must not to be ignored,” says Lekkakos. “Romania is now a member of the EU club that offers a safety net that cannot be ignored by foreign investors. A possible US recession will only marginally affect Romania through high volatility in the exchange rates and changes of mood from foreign investors.”
By the end of 2008, Piraeus Bank aims to be in the top ten banks in Romania.
The bank plans to increase its branches from 90 to around 180 by the end of 2008 and develop a 24-hour banking service. This network development will require an investment of about 15 to 20 million Euro.

Piraeus Bank
■ Total value of loans: 1.8 million Euro
■ Clients: 166,000
■ Assets: 2.2 billion Euro [up 213 per cent compared to 2006]
■ Branches: 90
■ Branch forecast 2008: 170-180

Egnatia Leasing: planning for fleet and operational markets

Now a part of the Marfin Group, Egnatia Leasing is at the cusp of a rebranding into Marfin Leasing and this year plans to enter the market of fleet management and operational leasing.
The leasing market grew by 62 per cent in 2006 and only by 32 per cent in 2007 which, according to John Stamatoudis, general manager of Egnatia Leasing Romania, indicates that the market will reach a saturation point in the mid-term.
“[This year] we forecast an increase of a maximum of 25 per cent, we are strategically focused on new products, better flow of work, thus resulting in a higher level of service to our clients,” he adds. The leasing company also plans to strengthen its sales force by opening a further nine branches from is current 13.

Egnatia Leasing
■ Market share: four per cent
■ Contract value: 192 million Euro
■ Profit 2007: 193,000 Euro
■ Forecast profit 2008: 800,000 Euro
■ Employees: 67
■ Branches open: 13
■ Branches to open in 2008: nine

Hertz Lease: planning to triple fleet numbers

For 2008 operational leasing firm Hertz Lease, which hires out vehicles for the long-term, plans to triple its fleet to around 1,500 vehicles and reach a turnover of about 20 million Euro.
“In Greece we are the market leader with a car fleet of 25,000,” says Theofilos Romaios, CEO of Hertz Lease Romania. “Our target is to be in first position on the Romanian market. Maybe we will achieve this in two years’ time, but this depends on the competition and the development of the market.”
The operational leasing market, Romaios believes, will see a 15 per cent growth this year. “This is a good year for the companies that operate in this country,” says the CEO. “It is a good year to gain a good market share.”
The market will reach saturation in Romania at some point between 2013 and 2015, argues Romaios.

Hertz Lease Romania
Part of Autohellas ATEE
Operational leasing company
■ Turnover 2007: 1.45 million Euro
■ Forecast turnover 2008: 5.34 million Euro
■ Employees: 15
■ Car fleet 2007: 500 cars

DiRent: aims to quadruple
turnover for 2008

Entering on the Romanian market two years ago, long-term car rental firm DiRent is now set to boost its car fleet.
With a turnover of two million Euro for 2007 and a car fleet of more than 400, DiRent now has a market share of ten per cent in hiring out vehicles and fleets for the long-term.
For now, DiRent does not plan to expand outside Bucharest. “We plan to increase our car fleet by 200 per cent and estimate a turnover of about eight million Euro for 2008,” says Effie Valsamaki, international business manager for DiRent.
DiRent has been on the market in Greece for around ten years, where the company is one of the largest in its sector with an annual turnover of over 50 million Euro.
The ease of renting is one of the most compelling sales points, which is popular among foreigners not in tune with Romania’s unique bureaucratic traditions. DiRent customers include Cosmote, Nestle, Olympic Airways and the central bank (BNR).

DiRent
Long term car rental

■ Market share: seven to ten per cent
■ Turnover 2007: two million Euro
■ Forecast turnover 2008: eight million Euro
■ Employees: ten

Germanos: planning 80 more stores

This year Germanos will expand its network by another 80 stores following a similar drive for branch openings in 2007. The current estate of stores is 205 and includes towns with fewer than 50,000 inhabitants.
Romanians are adulterous consumers when it comes to mobile phones, with one quarter of the urban population now in possession of two handsets.
“In these conditions we expect to see an increase of the sales for dual sim mobile phones,” says Dimitris Blatsios, General Manager Germanos Telecom Romania.
Germanos entered Romania in 1996 and, at the beginning of 2006, was bought by Cosmote Group.

Germanos
Telecom and phone accessory retailer

Part of the Cosmote Group
■ Stores open: 205
■ Stores to open in 2008: 80

Sprider: planning 40 stores by 2010

Greek clothing and footwear retailer Sprider will open this year 12 more stores countrywide, another 20 next year and aims to reach 40 stores by 2010.
The lack of pedestrianised shopping streets in provincial Romanian cities makes malls the best location for Sprider stores for the moment, argues the firm’s general manager Georgios Dionysatos.
However the company has budgeted between 12 and 15 million Euro for the opening of four or five standalone stores in Bucharest including in Titan, 1 Mai and Pipera.
The average size of the stores will stretch over 500 to 600 sqm and retail units will appear in shopping malls in Buzau, Iasi, Suceava, Piatra Neamt, Oradea (Bihor county), Arad and Pitesti (Arges county). In Greece most of the stores are larger - with areas of 1,500 sqm, while Sprider aims to make Titan a site for a 1,200 sqm store.
In 2008 the company plans to reach a 20 million Euro turnover, four times larger than last year. Sales for last year were 43.5 per cent each for men and women’s clothes, but only 13 per cent for children’s clothing. “We could not understand the low sales in children’s clothes,” adds Dionysatos.

Sprider Stores
Clothes and footwear retailer

■ Year established in Romania: 2007
■ 2007 turnover: five million Euro
■ 2008 forecast turnover: 20 million Euro
■ Number of stores: five (City Mall, Bucharest, Timisoara, Cluj-Napoca, Targu Mures, Bacau)

Alexandrion: stepping up production

Alcoholic beverage producer Alexandrion Grup Romania will invest 12 million Euro by 2011 in a new production facility near the existing plant in Ploiesti, Prahova county and a new headquarters in Otopeni, north of Bucharest, says Salameh Nawaf, president of Alexandrion Grup Romania.
Last year digestif Fernet Branca was the best selling product of the company, reaching a volume ten times higher in sales than in 2006. Other popular brands include brandies Alexandrion and Brancoveanu, spirit Cava d’oro and vodka Kreskova.

Alexandrion Grup Romania
Manufacturer of alcoholic beverages, importer of vehicles

■ 2007 turnover: 73 million Euro
■ 2008 forecast turnover: 95 million Euro
■ 2007 profit: 11 million Euro

The group aims to launch in the wine category in partnership with producers from Latin America and Italy and is “close to finalising discussions” with partners from the UK and Poland to bring more products on the domestic market, says Nawaf.
This year the group’s automotive division, Alexandros Motors, will bring the China-based Great Wall Motors’ city car models on the market. This follows the opening of a showroom in Otopeni which sells the SUV model. Alexandros Motors is planning to open more showrooms countrywide.

Subaru Motor Trading: set to
open after-sales centre

Subaru Motors Trading, importer of the namesake Japanese car brand, will build an after-sales centre consisting of service, body and paint and a spare parts warehouse near Bucharest in an investment of six million Euro on 13,000 sqm of land.
“This will be the central warehouse for the Balkan countries and some east European countries,” says Stavros Kanonopoulos, general manager of Subaru Motors Trading. “As a second step we plan to build in the same location one of the most modern Subaru showrooms in Europe.”
The car importer has nine dealerships in Romania, but intends to open a further seven in large cities and another in Bucharest by the end of 2008.
In 2007, SUVs Forester and Tribeca were the best sold models and Kanonopoulos believes this trend will continue in 2008.
“We believe that the Forester is ideal for the Romanian roads and weather conditions,” says Kanonopoulos.
The company has just launched the Impreza STI and the new Tribeca with improved features. Soon to be launched in Romania will be the mid-sized Legacy and cross-over Outback, the first passenger car to be equipped with a Boxer Diesel engine.

Subaru Motors Trading
Importer of Subaru

■ Cars sold in 2007: 415
■ Turnover 2007: ten million Euro
■ Employees: 30

Hondos Center: due to open this year

Greek cosmetics, lingerie and accessories retailer Hondos Center will open its first store in Romania this year, says Angie Vasiliou, the company’s development director for Romania.
The company has 700 sqm on the ground floor of City Mall for a store showcasing brands such as Chanel, Dior, Lancome and Clinique, as well as a further 500 sqm in the basement for a second unit.
In 2009 Hondos Center will launch another store located inside AFI Cotroceni Mall and is planning to expand in other cities of Romania, such as Iasi, Cluj and Timisoara.
Hondos Center was set up in Greece in 1967 and has now 73 stores selling cosmetics, clothes, underwear, accessories, gifts, souvenirs and mobile phones.

Hondos Center
Cosmetics, lingerie and
accessories retailer

■ Year established in Romania: 2008
■ Number of stores: planned for City Mall and AFI Cotroceni Mall
Employees: 60

Stirom: raw materials ten times
price in Greece

Glass producer Stirom is critical of the high price of raw materials for production, which can cost up to ten times the figure in the west.
“Our philosophy is to work with local suppliers and with local people but they do not want to cooperate,” says Nikolaos Barlagiannis, general manager of Stirom. “There are huge differences in the prices of raw material here but the quality of products and services are not as good as they should be. In France and Greece a tonne of limestone is three Euro, but in Romania the same amount is 35 Euro. In Bulgaria a tonne of sand is nine Euro but in Romania it is 30 Euro.”
However for 2008 Stirom plans to invest 12 million Euro in a new oven and a further 32 million Euro in 2009 to build three production lines with a capacity of more than 350 tonnes of glass per day.
With these investments Barlagiannis hopes to achieve a market share of at least 65 per cent.
He is also optimistic about the prospect of consumers reverting back to purchasing mineral water from glass bottles – especially due to the perceived environmental benefits of glass over plastic.
“For ecological and hygienic reasons in the next two to three years water will be found only in glass bottles,” argues the general manager.
This year Stirom is focusing on clients such as Pepsi, Coca-Cola, Parmalat, Alexandrion and wine producers Murfatlar and Jidvei. For now, Stirom does not have the capability to produce bottles for beer, but its new oven planned for 2009 will cover this sector.

Stirom
Bottle producer

■ Turnover 2007: 46 million Euro
■ Profit 2007: 4.4 million Euro
■ Forecast turnover 2008: 50 million Euro
■ Forecast profit 2008: six million Euro
■ Employees: 506
■ Market share: 45 per cent

Atlas Corporation:
boosting production

Producer and distributor of paint brand Apla, Atlas Corporation, will invest this year 4.2 million Euro in its production and distribution facilities.
“One of our plans is to penetrate the special paints segment where competition is weak,” says general manager Ioannis Anagnostou.
The company reported a turnover of 47 million Euro in 2007 and is planning to exceed the profit registered last year by investing in the latest high technology paints and powders such as Apla Fill and Apla Joint Filler.
“We expect the same level of profit as last year,” he adds. “We intend to fulfill this aim by bringing new products on the market and opening new sales offices.”
Atlas Corporation was set up in Romania in 1994 as an importer, exporter and distributor of construction materials. In 2000, the company built a production facility in Bucharest. Atlas Corporation exports the Apla brand to Serbia, Bulgaria, Ukraine and the Republic of Moldova.

Atlas Corporation
Construction materials producer and distributor

■ Year established in Romania: 1994
■ 2007 turnover: 47 million Euro
■ Employees: 200

IKRP Rokas: Romania remains
production relocation target

Greek firms are still interested in moving production to Romania, says Nikolaos K Oikonomou, manager IKRP Rokas & Partners Romania.
Despite the increases in wages and fears of the shortage of personnel in Romania, Oikonomou still sees a strong interest from relocating manufacture from Greece.
These sectors include in textiles, glass, plastics, aluminium, food and agriculture.

IKRP
Corporate law firm

■ Established in Romania: 1995
■ Lawyer to partner ratio: 14: two
■ Clients include: Alpha Bank, Bancpost, Diekat, MJ Maillis

Wages in Romania are still lower than in Greece for manufacturing jobs, while Romania’s large market and its closer proximity to new markets remain attractive factors for Greek firms.
In Romania, 60 per cent of IKRP Rokas and Partners’ business is with Greek companies including EFG Eurobank and Alpha Bank, but the firm also works with Cypriots, Italians, Dutch and Romanians.
Real estate also remains a sector of great activity. “We see lots of interest in agricultural land not too far from Bucharest,” says Oikonomou. “Investors are buying this and transforming this into mainly residential land.”
Due to the growing price of land, the law firm is seeing fewer individuals buying up property and more interest from funds and large companies buying larger plots. Land around the capital is in a process of consolidation.

Aegean: seeking to increase traffic

Greek carrier Aegean Airlines has concluded contracts with travel agencies for the operation of 200 charter flights this summer from Bucharest to Greek islands such as Heraklion, Rhodes and Corfu.
“In 2008 we want to increase the traffic from Greece to Romania,” says Nikolaos Bompos, area manager for Romania. “We have many Greek passengers who travel from Romania to Greece and back.”
Much of this is travel for Greek business people who work in Romania and return home for the weekend. “There are also Cypriots who chose our company to flight back to Nicosia, because we offer better prices than our competitors,” adds Bompos. “Although we do not have direct flights, they prefer to spend one hour in Athens and travel with Aegean Airlines for 66 Euro, than pay 150 Euro for a direct flight with another airline.”

Aegean Airlines
■ Established in Romania: 2006
■ Number of round flights Bucharest - Athens - Bucharest per week: 12

Elmec: giant store planned for 2009

By the end of 2008 clothes and footwear distributor Elmec Romania will finish work on its standalone Famous Brands Gallery on the corner of Blvd Magheru and Strada Ion Campineanu in Bucharest, which will be open in 2009.
The clothing and footwear store will be partitioned over six floors with a total area of 6,000 sqm.
Elmec Romania was set up in 1999 and started its activity as a distributor of Nike products. The retailer is operating now 20 sportswear shops under the brand name “exclusive sports” and 21 casualwear stores in cities such as Bucharest, Timisoara, Arad, Constanta, and Iasi.
The company distributes the apparel and the footwear collections of Nike, Converse, Calvin Klein, Miss Sixty, Calvin Klein, Energie, Ralph Lauren, Polo, Killah, Camper and Marlboro Classics.
Last year Elmec Romania sold its 40 per cent participation in Romanian real estate company MicroCom Doi, the developer of Craiova Mall, Dolj county to Portuguese shopping mall operator Sonae Sierra.

Elmec Romania
Retail

■ Established in Romania: 1999
2007 first nine months:
■ Turnover: 29.7 million Euro
■ Profit: 14.9 million Euro

Interviews by Corina Ilie,
Alexandra Pehlivan. Ana-Maria Nitoi
and Michael Bird


Source : http://www.thediplomat.ro/features_0308_2.php