Business in Romania blog
The business in Romania blog writes about the Romanian business landscape, doing business in Romania, investing in Romania business and debating on business issues in Romania. Check this Blog's Policy here.

Monday, January 31, 2005
Business in Romania blog
U.S.-based New Century Holdings (NCH) Capital Inc., the manager of close-end investment fund Broadhurst, plans to invest $275 million (211 million euro) to buy stakes in Romanian companies.

Broadhurst, which manages investments worth more than $200 million in Romanian companies, is the biggest investor on the Romanian capital market.

Posted by Mihai : 1/31/2005 08:59:00 pm
Business in Romania blog
Business in Romania blog
Apple has recently been nominated as winner in the Global Brands contest for the brand with the most impact in 2004.

The title was recently held by Google since 2002. Google is now ranked second, both on a global level and in the US market.

Apple had a great year in 2004 with iMacs, iPods and iTunes and the readers' vote certifies the success Apple had with its innovations.

Third in the top comes Sweedish-based IKEA who opened 10 new stores in 2004 and plans to open 20 more this year. On fourth place there is another retail chain, Starbucks, who opened 1,344 new spaces in 2004.

You can find more details about the awards HERE.

Posted by Mihai : 1/31/2005 11:48:00 am
Business in Romania blog
Business in Romania blog
U.S.-based General Electric said it would supply maintenance services worth $9.5 million to the Unit I of the Romanian nuclear power plant Nuclearelectrica, according to the Economy and Trade Ministry.

GE chairman John Rice last Friday met with the Economy Minister Codrut Seres to discuss the U.S.'s company involvement in power projects in Romania.

Posted by Iulia Rasoiu : 1/31/2005 09:31:00 am
Business in Romania blog
Business in Romania blog
Financial Investment Company (SIF) Moldova reported a net profit of 11.4 million euros in 2004.

Shareholders will receive 600 ROL in gross dividends per share, which is a 21.5% growth compared to 2003, according to the company's preliminary figures.

Gross dividend forecasts for last year were set at 555 ROL per share.

For 2003, SIF Moldova reported 9.8 million euros in net profit and gave its shareholders 494 ROL in gross dividends per share.

Posted by Iulia Rasoiu : 1/31/2005 09:30:00 am
Business in Romania blog
Business in Romania blog
A Ministry of Economy and Commerce (MEC) release said that an E.ON Energie delegation came to the ministry's headquarters last Thursday where representatives of the German company introduced Henning Probst, who has been nominated to direct Electrica Moldova.

The privatization contract could be signed in February.

According to the release, Romanian government will do its best to complete the privatization contracts of the gas distribution companies, taking into account that E.ON Ruhrgas, the gas division of the German group, was selected to take over gas company Distrigaz Nord.

Electrica Moldova last September reported 103.4 million euros in equity. It provides energy to several counties: Suceava, Iasi, Botosani, Bacsu, Vaslui and Neamt.

Posted by Iulia Rasoiu : 1/31/2005 09:21:00 am
Business in Romania blog
Saturday, January 29, 2005
Business in Romania blog
For most foreign investors that are considering comming to Romania, the answer to this question can make the difference between a possitive or a negative decision.

Let's take a look at the process, based on data from World Bank's latest report.

Presuming you have everything clear in you business plan, these are the procedures you need to go through in Romania:

1. Reserve company name. This should only take a day and the associated cost should be no more than 10 USD.

2. Obtain proof of funds. This should also take a day and it has no associated costs.

3. In order to obtain the certificate of fiscal record, you need to wait for about 5 days. Also, you will need about 6 USD for this procedure.

4. The longest step is register your company at the Unique Office. This method has been implemented for quite a short time and it is much faster than the previous procedure. You should plan about 20 days for this step and an associated cost of about 190 USD.

5. The final step is registering with the labor authorities. This is also a short step which you should complete in one day with no associated cost.

This brings us to a total of 28 working days and a total cost little over 200 USD. Of course, you should keep in mind that this procedure has been calculated for a simple start-up, limited liability company (SRL in Romanian) with no more than 50 employees, leases the commercial plant and offices and is not a proprietor of real estate. Additional costs (time & money) may occur in case your business deals with special authorization requirements or you need to have more financial regulations satisfied.

The procedure is now one of the fastest in Europe. As a comparison, it takes 32 days and over 230 USD to register a company in Bulgaria, as you have to go through 11 steps. In Poland, it should take you about 31 days and a cost of over 1.100 USD. In Germany is even more complicated, as you have to wait 45 days and pay over 1.500 USD.

The fastest procedure happens in Australia, where you only need 2 days and 600. Second comes Canada with 3 a days long procedure. The USA is on third place. You need 5 days and 210 USD to registed an LTD in Uncle Sam's land.

Other indicators.

Some other indicators that are calculated for Romania are:

- Difficulty of Hiring Index is 78 while the OECD average is 26.

- Difficulty of Firing Index is 50 while the OECD average is 28.

- In order to transfer a property title from the seller to the buyer you need 170 days in Romania, while the OECD average is at 34.

- Romania protects its investors pretty well, as the Disclosure index is 2, while the OECD average is 5.6 (on a 0 to 7 scale).

- Bankrupcies are still a big problem in Romania, as you need 4.6 years to close a company through bankrupcy procedure. The recovery rate is 6.9 cents / 1 invested USD. In OECD the average time is 1.7 years with a recovery rate of more than 70 cents / dollar.

Posted by Mihai : 1/29/2005 01:18:00 pm
Business in Romania blog
Friday, January 28, 2005
Business in Romania blog
Blogs have a strong connection with the major players in the Internet industry and those are quite often associated with names like Google and Yahoo. Therefore, I believe blogs of Yahoo and Google employees (or people who are connected to those companies) enjoy a great success.

For those of you passionate about SEO, blogging, Search Engines and simmilar, here is a list of Google and Yahoo bloggers. The list has been compiled on 9th December 2004 and all the credits go to GOOGLE ANSWERS for making it available.

UPDATE: Here is another blog from a Google employee (actually, from Blogger), that is not features on the list below:

Here is the list:

Jason Shellen
Program Manager

Doe Mountain

Douwe Osinga
Search Engineer
Google's European Engineering Office


Paul Haahr
Software Engineer

Mark Ayzenshtat

Adwords Representative

Alma Whitten

Oliver Deighton

Will McNair

Biz Stone
Blogger Senior Specialist

Wesley Chan
Product Manager/Staff photographer


Greg Stein
Engineering Manager

Bo Cowgill
Product Manager

Colin Smith

Bret Taylor

Eric Case

Josh MacDonald

Chris DiBona
Open Source Program Manager

Dave Barr

Graham Waldon

Greg Rae
Log Analyzer

Jeremy Lilley
Software Engineer

John Hawkins

Kenny Smith

Kevin Fox
User Interface Designer

Natala Menezes
Account Manager

Nelson Minar
Web API Engineer

Sanjay G. Mavinkurve

Tan Chade-Meng
Software Engineer


Not a Google employee, but an independant contract Researcher for Google Answers.
Philipp Lenssen

Jeremy Zawodny
Yahoo Search

Naveen Jamal

Bill Turner

Ravi Dronamraju

Eric Burke

Michael J. Radwin
Software Engineer

JR Conlin


Posted by Mihai : 1/28/2005 07:49:00 pm
Business in Romania blog
Business in Romania blog

The Procter & Gamble Company (NYSE: PG) announced it has signed a deal to acquire 100% of The Gillette Company (NYSE: G).

Or, the legendary Warren E. Buffett from Berkshire Hathaway Inc. (Gillette's largest shareholder) joins hands with the legendary A.G. Lafley (Chiarman, President and CEO at P&G)

While some of us are buying appartments, cars, food, health care products, vacations...etc, the multinational giant P&G buys the multinational giant Gillette for the small amount of (57 billions US Dollars)...

Gillette, founded in 1901 and headquartered in Boston, Mass., markets a number of category-leading consumer products such as Gillette(R) razors and blades including the Mach3(R) and Venus(R) brands, Duracell(R) CopperTop(R) batteries, Oral-B(R) manual and power toothbrushes, and Braun shavers and small appliances. The transaction is valued at approximately $57 billion (USD) making it the largest acquisition in P&G history.

Terms of the Deal
Under terms of the agreement, unanimously approved by the board of directors of both companies on January 27, P&G has agreed to issue 0.975 shares of its common stock for each share of Gillette common stock. Based on the closing share price of P&G and Gillette stock on January 27, 2005, this represents an 18% premium to Gillette shareholders.

P&G will acquire all of Gillette's business, including manufacturing, technical and other facilities. The transaction, which is subject to certain conditions including approval by Gillette's and P&G's shareholders and regulatory clearance, is expected to close in fall 2005.

In addition, P&G and its subsidiaries plan to buy back $18 to $22 billion of P&G's common stock during the next 12 to 18 months. Over time, this will essentially result in a total financial impact on the company as if the deal were structured with approximately 60% stock and 40% cash.

Unique Opportunity
"This combination of two best-in-class consumer products companies, at a time when they are both operating from a position of strength, is a unique opportunity," said A.G. Lafley, chairman, president and chief executive of Procter & Gamble. "Gillette and P&G have similar cultures and complementary core strengths in branding, innovation, scale and go-to-market capabilities, making it a terrific fit. We are pleased James M. Kilts, Gillette's chairman of the board, chief executive officer, and president will join P&G's Board of Directors and serve as P&G vice chairman - Gillette," Lafley continued.

"This deal creates value for P&G shareholders and provides upside for P&G's sustainable growth prospects," said Clayton C. Daley, P&G's chief financial officer. "Gillette and P&G are well-positioned to manage the integration, deliver revenue and cost synergies and retain strong leadership."

"This marks the realization of an historic next phase of great opportunity for Gillette and also for P&G," said Kilts. "It brings together two companies that are complementary in their strengths, cultures and vision to create the potential for superior sustainable growth."

"This merger is going to create the greatest consumer products company in the world," said Warren E. Buffett, chairman and CEO of Berkshire Hathaway Inc., Gillette's largest shareholder. "It's a dream deal. To quantify that, I intend to purchase enough shares so that by the time the deal is closed, we will have 100 million shares of P&G." Berkshire Hathaway currently holds 96 million shares of Gillette stock which represents the equivalent of 93.6 million shares of P&G.

Strong Combination

• Both companies are built on leadership brands. P&G has 16 billion- dollar brands. Gillette brings five more, creating a portfolio of 21 billion-dollar brands. The combined company will have the #1 global market position in categories representing about two-thirds of total sales.
• Both companies have a strong heritage of innovation to delight consumers. In recent years, P&G and Gillette have accelerated their portfolio shift to faster-growing, higher margin, more asset efficient businesses providing greater value for their shareholders.
• Both companies have global scale with their products being marketed around the world. Also, both companies have placed a high priority on growth in developing markets. P&G plans to leverage its go-to-market capabilities and strong existing businesses to accelerate the penetration of Gillette brands in developing markets such as China, Russia, Mexico, Turkey and others.
• Both companies have complementary expertise in health and personal care. Historically, P&G has had strength in women's personal care with brands such as Olay(R), Always(R), Tampax(R), Cover Girl(R) and Max Factor(R). Gillette has deep knowledge in the men's grooming category with the entire lineup of Gillette and Braun products. The companies also share complementary technology platforms in skin care and particularly in oral care with the Crest(R) and Oral-B franchises.

Raising Sales Growth
This combination of two best-in-class consumer products companies creates a stronger brand portfolio, opportunities for even more innovation, faster sales growth and cost savings synergies. As a result, P&G has raised its annual sales growth target from 4%-6% to 5%-7%. Also, P&G stated the combination provides future upside potential to its double-digit annual earnings growth target.

Financial Background of the Deal
The transaction is valued at approximately $57 billion (USD) based on closing NYSE stock prices of Jan. 27, 2005.

P&G expects to achieve revenue and cost synergies at a present value of about $14 to $16 billion (USD), mainly through the scale of the combined company applied to leveraging P&G's unique organization structure, removing duplicate costs and driving further efficiencies. P&G said it anticipates enrollment reductions of approximately 6,000 employees, or about four percent of the combined work force of 140,000. Most of these reductions should come from eliminating management overlaps and consolidation of business support functions.

"We will field the best team possible to lead these new businesses, drawing from both Gillette and P&G management," said Lafley. Specifics related to employee separations will be announced in due course. The company plans to maintain a strong presence in the Boston area.

Forward-Looking Statement

All statements, other than statements of historical fact included in this release, are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the risks and uncertainties noted in this release, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) the ability to achieve business plans, including with respect to lower income consumers and growing existing sales and volume profitably despite high levels of competitive activity, especially with respect to the product categories and geographical markets (including developing markets) in which the Company has chosen to focus; (2) successfully executing, managing and integrating key acquisitions, including (i) the Domination and Profit Transfer Agreement with Wella, and (ii) the Company's agreement to acquire The Gillette Company, including obtaining the related required shareholder and regulatory approvals; (3) the ability to manage and maintain key customer relationships; (4) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (5) the ability to successfully manage regulatory, tax and legal matters (including product liability, patent, and other intellectual property matters), and to resolve pending matters within current estimates; (6) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing and overhead areas, including the success of the Company's outsourcing projects; (7) the ability to successfully manage currency (including currency issues in volatile countries), debt (including debt related to the Company's announced plan to repurchase shares of the Company's stock in connection with the Company's pending acquisition of The Gillette Company), interest rate and certain commodity cost exposures; (8) the ability to manage the continued global political and/or economic uncertainty and disruptions, especially in the Company's significant geographical markets, as well as any political and/or economic uncertainty and disruptions due to terrorist activities; (9) the ability to successfully manage increases in the prices of raw materials used to make the Company's products; (10) the ability to stay close to consumers in an era of increased media fragmentation; and (11) the ability to stay on the leading edge of innovation. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.

Additional Information and Where to Find It
In connection with the proposed merger, The Procter & Gamble Company ("P&G") and The Gillette Company ("Gillette") will file a joint proxy statement/prospectus with the Securities and Exchange Commission.

INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when available) and other documents filed by P&G and Gillette with the Commission at the Commission's web site at Free copies of the joint proxy statement/prospectus, once available, and each company's other filings with the Commission may also be obtained from the respective companies. Free copies of P&G's filings may be obtained by directing a request to The Procter & Gamble Company, Investor Relations, P.O. Box 599, Cincinnati, Ohio 45201-0599. Free copies of Gillette's filings may be obtained by directing a request to The Gillette Company, Investor Relations, Prudential Tower, Boston, Massachusetts, 02199- 8004.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there by any sale of securities in any jurisdiction in which such solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Participants in the Solicitation

P&G, Gillette and their respective directors, executive officers and other members of their management and employees may be soliciting proxies from their respective stockholders in favor of the merger. Information concerning persons who may be considered participants in the solicitation of P&G's stockholders under the rules of the Commission is set forth in the Proxy Statement filed by P&G with the Commission on August 27, 2004, and information concerning persons who may be considered participants in the solicitation of Gillette's stockholders under the rules of the Commission is set forth in the Proxy Statement filed by Gillette with the Commission on April 12, 2004.

About Gillette
For more than 100 years, The Gillette Company has transformed innovative ideas into consumer products that engender strong and enduring consumer brand loyalty around the world. Gillette is a leader in male grooming, a category that includes blades, razors and shaving preparations. Gillette also holds a strong position worldwide in selected female grooming products, such as wet shaving products and hair epilation devices. In addition, the Company is the world leader in alkaline batteries and is recognized for its Oral-B in manual and power toothbrushes. The Company employs nearly 30,000 people globally and operates 31 manufacturing plants in 14 countries.

About Procter & Gamble
Two billion times a day, P&G brands touch the lives of people around the world. The company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R), Whisper(R), Pantene(R), Bounty(R), Pringles(R), Folgers(R), Charmin(R), Downy(R), Lenor(R), Iams(R), Crest(R), Actonel(R), Olay(R), Clairol Nice 'n Easy(R), Head & Shoulders(R), and Wella. The P&G community consists of almost 110,000 employees working in over 80 countries worldwide. Please visit for the latest news and in-depth information about P&G and its brands.

Merrill Lynch & Co. acted as financial advisor and Cadwalader, Wickersham & Taft, LLP acted as legal counsel to P&G. UBS and Goldman Sachs acted as financial advisor and Davis, Polk & Wardwell acted as legal counsel to Gillette.

Posted by Cristian C. Francu : 1/28/2005 03:58:00 pm
Business in Romania blog
Business in Romania blog
Just had my exam in Capital Markets today, so this fits in perfectly...

Alro, the Romanian aluminium smelter, raised just 161.7 billion lei ($5.6 million/4.3 million euro) in a capital hike initially designed to boost its capital by 234.5 billion lei to 2.18 trillion.

Shareholders subscribed for 32,347,504 shares at their nominal value of 5,000 lei each, the company said in a statement to the Bucharest Stock Exchange (BVB), where it is listed.

The 14.5 million shares that were not subscribed for were cancelled.

On one hand, I am happy to see ALRO manages to raise some money. On the other hand, even if I am not THE expert in romanian Stock Markets, I know ALRO is doing pretty well...I believe they deserved more.

Hopefully they're gonna make good use of the money.

Posted by Mihai : 1/28/2005 03:48:00 pm
Business in Romania blog
Business in Romania blog
The minister of Public Finance, Ionut Popescu, was appointed governor for Romania at the European Bank for Reconstruction and Development and at the Bank for Trade and Development of the Black Sea (BCDMN), through a government decision taken yesterday.

The governor of the National Bank of Romania will be vice governor at EBRD.

Posted by Iulia Rasoiu : 1/28/2005 11:27:00 am
Business in Romania blog
Business in Romania blog
Communications group, Telekom Austria, intends to expand in the Balkans and targets the Romanian mobile telephone operator Mobifon, Boris Nemsic, executive director of the Mobilkom Austria division, said in an interview with the Austrian magazine News.

According to News, several sources have stated that the British group Vodafone, currently a Mobifon shareholder, could cede Telekom Austria its option to take over the Romanian operator for approximately 3 billion euros.

At the end of 2004, Telekom Austria signed an agreement with the Bulgarian authorities to buy the operator Mobiltel for 1.6 billion euros.

Telekom also wants to expand into Serbia and Bosnia in 2005, and subsequently into Macedonia and Montenegro.

News said the next phases of the Austrian group's expansion include Kosovo and also Slovakia, where Telekom Austria is preparing to take an Orange division for almost 1.2 billion euros by 2006.

Other markets targeted by Telekom Austria are the Republic of Moldova and Ukraine, but Nemsic said that these are long-term goals.

Mobifon is a branch of Telesystem International Wireless (TIW), a Canadian mobile telephone company which operates in Central and Eastern Europe. Its main shareholder is the Dutch company Mobifon Holdings BV, with a 63.45% participation in Mobifon's equity.
Other important shareholders are two other Dutch companies: Vodafone Europe BV, owning 20.15 of the shares and Deraso Holding BV, with a 14.4% participation.

Posted by Iulia Rasoiu : 1/28/2005 11:23:00 am
Business in Romania blog
Business in Romania blog
The indices of the Bucharest Stock Exchange (BVB) yesterday maintained their downward trend witnessed earlier this week, both in terms of prices and liquidity.

The fall followed brokers' expectations of a correction after stock indices surged by 30% in the first two weeks of this year.

The BET index, representing the first 10 most liquid companies, dropped by 0.67%, while the BET-C index - reflecting the stocks general trend- fell by 0.72%.

Posted by Iulia Rasoiu : 1/28/2005 11:15:00 am
Business in Romania blog
Wednesday, January 26, 2005
Business in Romania blog
NH Hoteles will open its second hotel of Romania in Timisoara. With this establishment, the hotel chain continues with the development of its expansion in Eastern Europe after its entrance in Hungary a year ago and in Romania, with the NH Bucarest, in October 2004. The new establishment, under a leasing contract, will count with 83 rooms and will open in summer of 2005. NH Hoteles continues its expansion in a country with a great growth potential. NH Hoteles is already present in 18 countries, after its recent entrance in Italy.

The establishment will have a privileged situation in the university zone of Timisoara, industrial capital of Romania, next to the historical center and 15 minutes away from the airport.

The hotel of new construction will count with two assembly rooms totally equipped for business reunions, with a capacity for 120 people. It will also have a "fitness center" with a gym and sauna, a restaurant with a capacity for 90 people, a lobby
bar and an exterior parking with 40 parking spaces.

More about NH Hoteles at

Posted by Mihai : 1/26/2005 05:56:00 pm
Business in Romania blog
Business in Romania blog
The Romanian Ministry of EU Integration and the European Commission have will soon launch the PHARE CES 2003 program for financing the human resources development programs.

This way, companies operating in human resources training and development can benefit from non-refundable grants up to 17.000 Euro.

With a HR market that is continuously developing, specially in the training sector, I believe many companies can have a good benefit from this program.

Posted by Mihai : 1/26/2005 01:06:00 pm
Business in Romania blog
Business in Romania blog
Bit Software is the first Romanian ISV to become Microsoft Gold Certified Partner. Their competences are ISV and Business Intelligence.

Bit Software offers enterprise solutions (Socrate) and knowledge management solutions (CC Assistant).

More about BIT Software here.

Posted by Mihai : 1/26/2005 11:51:00 am
Business in Romania blog
Business in Romania blog
The former president of the Authority for State Assets Recovery (AVAS) Mircea Ursache was yesterday removed from his executive position in the privatization institution.

His replacement is Gabriel Zbircea, former state counselor of Prime Minister Calin Popescu Tariceanu.

Zbircea, 32, previously acted as jurist and state counselor for Tariceanu after the new government was installed last December.

Prior to this Zbircea worked for the law firm Musat & Associates.

The new AVAS chairman is not a member of any political party. (F.C.)

Posted by Iulia Rasoiu : 1/26/2005 09:56:00 am
Business in Romania blog
Business in Romania blog
The British Broadcasting Corporation selected, in December, Bucharest-based Softwin SRL as one of the 25 IT suppliers to come up with a project worth 215 million euros to bring an alternative to the existing educational resources in the UK, according to Softwin's public relations director, Cosmin Mares.

The Romanian company thus became the only firm outside the UK to be involved in the four-year program called Digital Curriculum.

According to Mares, over 300 companies took part in the auction.

Posted by Iulia Rasoiu : 1/26/2005 09:49:00 am
Business in Romania blog
Tuesday, January 25, 2005
Business in Romania blog
The Romanian Football Federation have announced they will enter the race to host the European Championships in 2012.

"We have already sent a letter to UEFA," said Cristian Bivolaru, general secretary of the Romanian Federation.

The Romanian Federation discarded the initial idea of a joint candidature with Hungary and will face stiff competition from Italy, Greece, Russia and the Czech Republic, who have already put their names forward.

The deadline given by UEFA, European football's governing body, for nations to present their bids for the tournament is January 31.

The announcement of the host nation will be made public in December 2006.

Posted by Mihai : 1/25/2005 06:38:00 pm
Business in Romania blog
Business in Romania blog
Romania ranks the fourth in Central and Eastern Europe in terms of sales of new cars, the number traded in 2004 being 143,876 units. Turkey ranked the first with 430,000 cars sold, followed by Poland with 315,000 units, and the third position belongs to Hungary with 205,000 cars traded.

As against the number of inhabitants that these countries have, Romania and Turkey rank on the last positions in terms of new car acquisition, each with 0.006 cars per inhabitant. In Czech Republic, an inhabitant is reported with 0,01 cars sold last year and for a Pole, the level is 0,008 cars sold.

In Romania, a higher number of cars was sold, but at low values. According to the experts in the field, due to the prices registered for the domestic production, around 5,000 euros, the purchasing power is higher than in other countries and this is the explanation for more cars being sold. For 2005, estimations indicate a 10 per cent growth for the sales of cars in Romania as against 2004.

The rise in number of sales is also greatly influenced by the great success of Dacia Logan.

Last week, Renault Romania launched Nissan Patrol on the Romanian market.

Posted by Mihai : 1/25/2005 10:05:00 am
Business in Romania blog
Business in Romania blog
Conditions of the contract will be available from March for investors interested in taking it over.

The chairman of the County Council in Arad, Gheorghe Seculici, said yesterday that the airport privatization would be a national premier and will also lead to efficiency improvements.

The airport is currently controlled by local authorities who will become minor shareholders following the sale.

Posted by Iulia Rasoiu : 1/25/2005 09:56:00 am
Business in Romania blog
Business in Romania blog
National Securities Commission (CNVM) officials yesterday said it would be "inopportune" to list park shares on the stock exchanges before the company resolves the issue of its main asset, a 450 hectare land in Snagov.

The Securities Commission officials made the statement in response to information received from Liberal senators Nicolae Vlad Popa and Eugen Nicolaescu regarding Dracula Park's owners' intentions.

The company's shares have not been accepted for trading neither by the electronic stock exchange RASDAQ nor by the Bucharest Stock Exchange (BVB).

Posted by Iulia Rasoiu : 1/25/2005 09:40:00 am
Business in Romania blog
Business in Romania blog
The National Securities Commission (CNVM) managed late last week to set the capital market players on fire when it asked for the account receipts from the share registers for all share sale operations.

Yesterday, the Commission said it would delay this request until February 1.

CNVM spokesman Ciprian Ene yesterday said the commission would postpone until next week any final decision regarding the order that requires all share sale operations to have the account receipts from the share registers.

The CNVM official added that representatives of the capital market will also be consulted as far as the final order is concerned. Although no meeting has been established yet, Ene said an agreement would be reached by next Tuesday.

Brokers said the measure would block most of the share sale transactions, citing investors are not ready for these conditions, as obtaining an account receipt could take up to 5 days.

Until now, only the trading orders coming from coupon owners had to be accompanied with the account receipts, so the seller could know exactly the number of shares that were to be sold. Coupon owners became minor shareholders in several companies following the mass privatization process.

The CNVM is now at a crossroads as the incumbent government plans to re-organize the structure of the institutions controlling the financial markets. The project would create a single financial supervision institution, which would unite the Insurance Supervisory Commission, the banking supervision unit of the National Bank of Romania and CNVM.

Posted by Iulia Rasoiu : 1/25/2005 09:25:00 am
Business in Romania blog
Monday, January 24, 2005
Business in Romania blog
Businessman and former tennis figure Ion Tiriac has opened a hunting area near the Bihor County town of Balc with a hunting party in which many foreign businessmen and political personalities participated this weekend.

Thirty-two visitors from Western Europe, USA and Australia joined the Romanian guests.

Among them were Klaus Mangold, the president of the German Economic Commission for the East, Wolfgang Porsche, owner of the famous automobile producer, Julius Meinl, the owner of a well-known food chain, Bavarian Prince Max Emanuel von Thurn und Taxis, Burchard Bergmann, president of the German oil company Ruhrgas, Siegfried Wolf, head of the Magna Europa company, bankers Jose Merino Jimenez, Gonzalo Merino Nieto and Jose Luis Zanetti Duenas from Spain.

Former PM Adrian Nastase, now the president of the Chamber of Deputies and Ilie Sarbu, the former Minister of Agriculture also attended the hunting party.

Almost 200 people took part in organizing the event in which 185 wild boars were killed, some of which were valued as top specimens in their class.

Tiriac said he was happy with the first hunting session on his land. He added the guests were "knocked out" by the organization, scenery and the high quality of the hunted specimens.

Tiriac announced he will organize such events only once a year, for two days, so that the game evolves properly.

The11,500 hectare property was often used for hunting by Dictator Nicolae Ceausescu before 1989.

It was leased to Tiriac two years ago by the Bucharest association Zimbrul and the Wild Boar company.

The total investment of 1.2 million euros was entirely covered by Tiriac.

He paid for building the fences, the arrangements, populating the area with animals, and rebuilding and modernizing the lodge, its annexes and the access roads.

The area had 550 wild boars, 80 stags, some of which were brought from abroad, to increase the number of animals in the hunting area.

"In time, the investment will rise to 2 million euros, because it's better to make things right, if you want to have people of this caliber come over," said Tiriac.

Posted by Iulia Rasoiu : 1/24/2005 04:14:00 pm
Business in Romania blog
Business in Romania blog
A high liquidity level and the anticipation of the local currency's appreciation this year could turn Romania into one of the most appealing markets in the Central and Eastern European region.

Investors looking to gain substantial profits in the emerging markets prefer buying bonds in the national currency rather than investing in treasury bills, said Jonathan Bayliss, an analyst at JP Morgan.

Investors are becoming more interested in the Romanian capital market as state control is gradually eliminated, as required by the European Union.

As of April this year, when the liberalization of the capital account is expected, foreigners will be allowed to open ROL deposits.

The main advantages, but also the great risks of investing in the bonds in the national currency come from the local currencies' evolution.

That is why investors are chiefly looking for those markets where the national currencies are likely to strengthen during this year.

Posted by Iulia Rasoiu : 1/24/2005 03:41:00 pm
Business in Romania blog
Business in Romania blog
Petrom was the first to announce lower fuel prices Saturday, after the Competition Council two weeks ago asked oil companies in Romania to justify recent oil price increases.

The Council will be asking a list of Romanian oil companies to clarify the reasons behind the rises. The companies involved are Petrom, Lukoil Downstream, Rompetrol, OMV Mineraloel, Agip, MOL Romania Petroleum Products and Shell Romania.

Petrom decided late last week to decrease prices seen at the gas stations and apply a new commercial policy to update prices every week, depending on quota swings in the international oil markets and the local competition field.

According to company officials, the price for Euro Premium gasoline dropped from 32,550 ROL (0.87 euros) per liter to 29,900 ROL.
Eco Premium gasoline liter now costs 30,400 ROL, 350 ROL less than it did before the price decrease.

However, unleaded premium gasoline and liquefied petroleum gas (LPG) will stay unchanged at 29,900 ROL, and 16,500 ROL, respectively, per liter.

Petrom's weekly price updates will depend on how the Romanian and South Eastern European markets fluctuate.

Up until now, Petrom only periodically changed its prices.

For the next several weeks, the new Petrom prices will be the same across the entire distribution network.
Once a new marketing strategy is implemented, price differences will depend on local circumstances.

Before, Petrom's branches could establish oil prices at plus or minus 5% the benchmark imposed by the group.

Posted by Iulia Rasoiu : 1/24/2005 03:30:00 pm
Business in Romania blog
Business in Romania blog
The National Securities' Commission (CNVM) on Friday issued a regulation under which all share sales in the capital market can be made only after delivery of the account receipt from the share registers.

Brokers say that investors are not ready for this, as obtaining an account receipt can take up to 5 days.

The measure also delays transactions and prevents the buying and selling of shares within the same day.

Posted by Iulia Rasoiu : 1/24/2005 03:28:00 pm
Business in Romania blog
Business in Romania blog
German company Weidmueller will build a 5 million euro electric connectors plant in Romania this year.

The green-field investment will be deployed in Maramures County.

The plant is expected to generate 200 new jobs.

Weidmueller reported 330 million euros in turnover last year and employs 2,300 people across the world.

Posted by Iulia Rasoiu : 1/24/2005 03:26:00 pm
Business in Romania blog
Business in Romania blog
The Social Democrat Party (PSD) has accused PM Calin Popescu Tariceanu of entering an conflict of interest after signing an emergency ordinance regarding the stimulation of car renewal throughout the country, said the Party's Friday release.

PSD believes that car importers' entering the newly stipulated car park expansion program could lead Tariceanu to conflict of interest as he owns shares at a company dealing in such a business.

The original ordinance refers to car makers in general, while the revies ordinance approved on Friday refers to car makers, importers and suppliers.

The party asked Tariceanu to resolve this conflict of interest. They added that the ordinance was modified on the request of the Car Makers' and Importers' Association, where the current prime minister is on the Board of Managers.

According to the ordinance, an owner of a care over 12 years old can claim 30 million ROL (750 euros) to scrap the car and buy a new one.

Posted by Iulia Rasoiu : 1/24/2005 03:24:00 pm
Business in Romania blog
Business in Romania blog
The Romanian Agency for Foreign Investors (ARIS) revised its forecast regarding the volume of Foreign Direct Investments (FDI) for this year from an initial estimate of 2.6 billion euros to 3.1 billion euros.

The investors are attacted by flat tax of 16%.

The agency expects green-field and brown-field investments to pump 875 million euros into the country over the next 2 years.

For 2004, ARIS forecasts the FDI would double from 2003 to 3.7 billion euros.

Posted by Iulia Rasoiu : 1/24/2005 03:19:00 pm
Business in Romania blog
Business in Romania blog
There are about 6 million cards in Romania, out of which 5% are credit cards. Seems that Romanians are mostly attracted to Debit cards. One of the reasons for this might be the complex documentation and beaurocratic procedures around credit cards.

Out of the total number of the cards, 2.576.115 are VISA and 2.872.719 are MasterCard.

On such a market, ING Romania comes with a very attractive offer, giving you 1.5 * net salary credit when issuing an ING card. Also, the procedure is quite simple. Even more, after about three months there is a good chance that they increase your credit range to 3 times the net income. Too bad their website, is not very information-rich.

Posted by Mihai : 1/24/2005 01:27:00 pm
Business in Romania blog
Friday, January 21, 2005
Business in Romania blog
Well, they did it again. After the remarcable success of, Mihai, Liviu and Dani launched, a portal focusing only on the business sector in Romania.

I have been waiting this for the moment I heard about the project and as I see it today I believe it's going to be a great website. Featuring news from Economy, Finance & Banking, IT&C, Media & Marketing, Industry, Travel and also International issues, the is a great resource for business people that want to be up-to-date with the latest news.

Right now, it is available only in Romanian, but hopefully an English version will follow soon.

Keep up the good work !

Posted by Mihai : 1/21/2005 05:56:00 pm
Business in Romania blog
Business in Romania blog
In Short:
Flat tax is all the talk in the new member states these days, and calls for tax cuts and simplification are also coming from elsewhere in Europe. Meanwhile, divisions remain on its merits.

Simply put, flat tax means that everyone is taxed at just one rate. In such a system, in place of a complex set of income tax brackets, the state declares a threshold above which all parties pay a fixed rate on all their income. This threshold is normally low enough to provide an incentive for the citizens to prefer paying to dodging their taxes. Such a system taxes all income once and once only, on its inception. As regards corporate taxes, the idea is similar: one bracket should fit all.

Analysts are inclined to point out that while in the first half of the 19th century the flat tax rate was the norm in the industrialising states, the first loud calls for a heavy progressive or graduated income tax came from Karl Marx in his 1848 Communist Manifesto. Eventually, however, it was the capitalist part of the world that adopted Marxs call.

Since then, the idea has been resurrected a number of times, with quite a number of countries adopting one version or another of the flat tax regime. And yet, for all the recurring debates, to date no major Western economy has switched over (or back) to a flat-rate income tax regime.
According to popular belief, taxpayers all over the world take some eight billion man-hours each year to fill out their tax returns.

The modern-day renaissance of the flat-rate income tax was initiated by Estonia in 1991, followed by Latvia (1994), Lithuania (1994), Russia (2001), Serbia (2003), Ukraine (2003), Slovakia (2003), Georgia (2004) and Romania (2005). Hungary is reportedly considering introducing a version of the flat tax regime soon.

Although flat tax is not touted as a panacea to all economic ills, an increasing number of European countries (among them a few new EU member states) have introduced or are developing one-size-fits-all tax regimes. Most of these countries are confronted with sizeable budget deficits, and several face the need to align their economic status with the eurozone's requirements.

Flat tax is believed to:
- help reduce red tape and associated difficulties and confusion
- reduce inequity (same rate for all)
- counterbalance tax dodging and cheating
- provide incentives to work, save and invest
- generate increased tax revenue, and thus
- spark off a 'mini economic boom'

At the same time, a flat tax regime is understood to
- eliminate practically all forms of tax exemptions and allowances
- be non-progressive (at least as far as the 'marginal' rates are concerned)
- favour the wealthy at the expense of the poor
- favour share and dividend-holders since profits are taxed only once, at source (ie 'flat tax' is a consumption-based tax)

Whether the seemingly popular switch over to a flat tax system is driven by sound fiscal policy strategies or rather by a desire to somehow make the citizens pay more into the states coffers is a moot point. One key conclusion cited by several researchers is that the efficiency and success of a flat rate regime is inherently dependent on the actual level of the tax rate: the lower it is, the more efficient it tends to become.

Experts also call attention to the fact that a countrys competitiveness is determined by a number of other factors besides its tax system or the type of support the country gives to new investments. While it is generally true that lower taxes leave more money to circulate (and thus to be invested) in an economy, and that flat rates generally increase the citizens willingness to pay their taxes, lower taxes may also mean lower tax revenues, which in turn may be detrimental to the given states budgetary status.

Furthermore, some leaders of Europes stronger economies, among them German Chancellor Gerhard Schroder and Swedens Prime Minister Goran Persson have said that the Eastern transition economies can afford to cut taxes not least because any lost revenue is more than compensated by hefty subsidies from the EU. This argument has repeatedly been refuted by those transition states affected. Meanwhile, Germany, as well as Italy, Austria, Finland, Denmark and Greece have also decided to introduce tax cuts in various forms and brackets in order to boost investment and spending and spur growth.

NGOs and Think-Tanks
Centre for European Reform: Is tax competition bad?
Adam Smith Institute: Flat tax the British case (by Andrei Grecu)
Hoover Institution: The flat tax idea gains momentum (by Alvin Rabushka)
Economics.UK: Fools gold or economic miracle?
Progress Foundation: The flat tax An introduction (by Alvin Rabushka)
The Fraser Institute: Flat tax Principles and issues
National Center for Policy Analysis: Flat tax and alternative tax systems
The Brookings Institution: Flat tax (by William G. Gale)
Tax Foundation: Fundamental tax reform in Central Europe (by Martin Chren)


Posted by Cristian C. Francu : 1/21/2005 02:24:00 pm
Business in Romania blog
Thursday, January 20, 2005
Business in Romania blog
French retail giant Carrefour has announced that retail group Hyparlo is taking control of 100% of its Romanian subsidiary, previously held in a 50/50 joint venture with Carrefour.

At the same time, Carrefour is reinforcing its partnership with the Arlaud family by taking a 50% stake in the holding company which controls Hyperlo. Carrefour also retains its 20% direct stake in Hyparlo.

The move comes in a point when Carrefour enjoys a great success with the four hypermarkets it has in Romania. Business in Romania Blog has learned that Hyparlo plans to double the number of hypermarkets in Romania by the end of 2006.

Posted by Mihai : 1/20/2005 02:00:00 pm
Business in Romania blog
Wednesday, January 19, 2005
Business in Romania blog
Connex, the leading wireless operator in Romania, has selected Ericsson as equipment and services supplier to roll out its WCDMA network. The network will be the first to offer advanced 3G services to mobile users in the country.

Under the agreement, Ericsson will deliver and implement 3G core and radio network equipment as well as system integration and optimization services, including multi-vendor integration. Ericsson will also provide competence development and technical support services for the supplied solutions.

Connex is the leader of mobile telecommunication market and one of the strongest companies in Romania. Sony-Ericsson has a market share of about 24% in Romania.

Posted by Mihai : 1/19/2005 06:44:00 pm
Business in Romania blog
Business in Romania blog
As the Business in Romania Blog deeply supports the cause of those affected by the Tsunami, we would like to express our deep sympathy for them and to try to help them.

This is why we are going to publish the official CITIBANK Romania accounts where you can make donations for the Tsunami victims.

The accounts are:

UNICEF: RO86CITI0000000120024019

WORLDVISION: RO30CITI0000000825024034

Posted by Mihai : 1/19/2005 03:29:00 pm
Business in Romania blog
Business in Romania blog
As of 1 July 2005, the leu (ROL), Romania's legal tender, will be subject to redenomination so that 10,000 old lei, in circulation on that date, shall be exchanged for 1 new leu (RON).

The existing banknotes and coins, i.e. the old lei, shall be legal tender until end-December 2006.

By 31 December 2006, the existing banknotes and coins, i.e. the old lei, are to be replaced gradually by the new banknotes and coins.

Starting 1 January 2007, the exchange shall be made only at the NBR branches carrying out payments and at the offices of the credit institutions authorised by the NBR Governor's order to perform the exchange, during a three-year period, at most, until 31 December 2009.

More about this:
The law on the redenomination of domestic currency.

Posted by Mihai : 1/19/2005 02:42:00 pm
Business in Romania blog
Business in Romania blog
Fiscal Code application rules approved by the government at the end of 2004 will be established by January 31, said Finance Minister Ionut Popescu.

The main changes in the Fiscal Code are the reduction to 16% of individuals' revenue tax from 28-40% and the profit tax from 25%.

Popescu added that the Ministry of Finance will collaborate with other ministries to change several laws regarding bankruptcy and fiscal evasion.

Posted by Iulia Rasoiu : 1/19/2005 11:17:00 am
Business in Romania blog
Business in Romania blog
The privatization of the chemical plant, Oltchim, in Rimnicu-Valcea, will start when the litigation regarding the increase of the company's equity and the number of shares owned by the Ministry of Economy and Commerce (MEC) has been cleared up, yesterday stated the minister of the Economy, Codrut Seres.

On November 28, 2003, the Shareholders' Extraordinary General Assembly decided to convert the debt Oltchim had to the Authority for Banking Assets' Recovery (AVAB), which later became known as the Authority for State Assets' Recovery (AVAS).

According to this decision, Oltchim's equity was expected to rise from 323.5 billion ROL (8.1 million euros) to 3,549 billion ROL (88.72 million euros).

At that time, the privatization authority owned 53.25% of Oltchim's shares, while the remaining shares were owned by the investment funds Lindsell Enterprises Limited (12.03%), Financial Investment Company (SIF) Oltenia (7.2%) and other shareholders (8.97%).

Afterwards, the shares owned by the privatization authority were taken over by the MEC.
At the end of 2004, MEC controlled 53.2% of Oltchim's equity, while the latest mention at the Trade Register Office shows that MEC currently owns 95.7% of the shares.

Posted by Iulia Rasoiu : 1/19/2005 11:15:00 am
Business in Romania blog
Business in Romania blog
Gloria Jean's, a coffee shop operator in US malls, yesterday opened its first outlet in Bucharest in the Plaza Romania Mall.

The company plans to open other coffee shops in City Mall and University Square in Bucharest, with other outlets being planned for Timisoara in September, said Ismali Isik, vice president of Gourmet Products Services, the company the master franchise for Romania, Hungary and Bulgaria.

About 100,000 euros will be invested in each store. The company plans to open 30-40 outlets over the next years in the three countries

Posted by Iulia Rasoiu : 1/19/2005 10:35:00 am
Business in Romania blog
Business in Romania blog
The government will debate on Thursday the privatization of two local power branches Electrica Moldova and Electrica Oltenia, which are to be taken over by Germany's E.ON and the Czech group CEZ, the Economy Minister Codrut Seres said.

Although Seres did not disclose the sale price, Reuters analysts forecast the Czech group would pay up to 201 million euros ($255.6 million) to control the main stake in Electrica Oltenia.

Posted by Iulia Rasoiu : 1/19/2005 10:18:00 am
Business in Romania blog
Business in Romania blog
The Romanian government might consider selling as much as 15% of state-owned savings bank Casa de Economii si Consemnatiuni SA through an initial public offering, Finance Minister Ionut Popescu said Tuesday, private news agency Mediafax reported.

The IPO would precede the sale of a majority stake in CEC to a strategic investor, Popescu said. The decision on the potential IPO will be made after consulting JP Morgan Chase & Co, which is advising the government on CEC's privatization, he added.

The government, together with JP Morgan, is expected to set by March 2005 a privatization strategy and invite interested investors to bid.
Romania has pledged to privatize its savings bank this year, as it prepares its financial sector for the country's planned European Union membership in 2007.

CEC is the last bank in which the government still holds a majority stake, and the only bank in which deposits are fully guaranteed by the state. After privatization, CEC would lose the state guarantee.

CEC has a network of about 1,400 branches and offices, the largest in Romania. At the end of July 2004, CEC assets totaled 46.05 trillion lei ($1=ROL28,759).

Press reports also said earlier that Bank Austria Creditanstalt (BACA.VI) and Erste Bank (EBS.VI), together with Raiffeisen Zentralbank Oesterreich AG ( RZO.YY) and Dutch Rabobank Nederland (RBK.YY) are interested in buying CEC.

Posted by Iulia Rasoiu : 1/19/2005 10:07:00 am
Business in Romania blog
Business in Romania blog
Changing the telephone company without necessarily changing the number will become possible in Romania, too, sometime next year.

In a first phase, only fixed telephony numbers will be portable.

Costs related to keeping the number upon moving to another service provider will be billed to the user.

In Europe, costs range between 10 and 31 EUR for a fixed telephony number and between 0 and 47 EUR for a mobile number.

One foreseeable problem is that a caller will no longer know which company services the number he/she is calling, and this raises the matter of whether the respective call is within the caller's network or not.

Apparently, the call recipient will pay for the difference between the two types of call.

One option is to use a billing method similar to that used for roaming calls: if the called number appears to be serviced by the same company as that of the caller, but it is actually not, the caller pays the price for a call within the network and the call recipient pays for the difference.

Posted by Iulia Rasoiu : 1/19/2005 10:04:00 am
Business in Romania blog
Business in Romania blog
About half of Romanian homes are connected to one of the country's 1,500 TV cable networks.

According to statistics from the Romanian Cable Communications Association, there are about 3.5 million cable customers. Some receive only 10 to 15 channels, while others have 50 to 55 channels, as well as Internet and phone services.

In the last few months, two of the three main players in the cable market -- Romanian Cable System (RCS) and UPC Romania, as well as three smaller companies --announced they would launch a revolutionary technology.

Direct To Home (DTH) television will offer 25 to 40 TV channels to any house in Romania.

Instead of using cable, the signal will be sent by satellite and received by a small dish. It will be possible to rent the receiving kit for a small tax, while the monthly price for the service will be an average of 6.8 euros.

"Some people living in the villages have higher incomes, and would like cable TV. There are mayors, priests, policemen, teachers or doctors. There are also thousands of holiday houses in remote areas," said Cristinel Popa, general manager of Focus Sat.

The group is also counting on attracting customers from areas that have cable, but where customers are not happy with the services being offered.

Taking into account all these categories of customers, more than half a million Romanians are thought likely to subscribe to DTH in the next few years.

RCS has ordered 150,000 digital receivers from Hyundai, costing 8m euros. UPC, meanwhile, is investing 15m euros over the next three to four years, in hopes of attracting 150,000 to 200,000 new clients.

Posted by Iulia Rasoiu : 1/19/2005 10:00:00 am
Business in Romania blog
Tuesday, January 18, 2005
Business in Romania blog
After the great success of Dacia Logan in Romania, the Renault-owned company has recalled over 15,000 of its new Logan vehicles due to various technical problems.

"We recalled around 11,000 Logans, 2,300 to have the engine cable systems checked and 2,500 to see if the computer needs to be reprogrammed," Dacia spokesman Silviu Sepciu told Reuters.

This could be a mistake that might have a big impact on Dacia's image, especially outside Romania.

The (not so) funny thing is that even the Romanian Police now drive Dacia Logan... I wonder if they recalled some of those, too.

Posted by Mihai : 1/18/2005 04:45:00 pm
Business in Romania blog
Business in Romania blog
Romania said Monday it would send an extra 100 troops to Iraq to help security in the run up to January's elections.

Romania already has 730 troops in Iraq, the ninth largest deployment among the 29 countries which are currently members of the U.S. led coalition and have troops on the ground in the country.

This is quite something for G. Bush, as Romania remains one of the few countries that stick to his view on Iraq. Poland, for example, which has about 2.400 troups, has announced it intends to cut this number.

Posted by Mihai : 1/18/2005 04:41:00 pm
Business in Romania blog
Business in Romania blog
French hotel chain Accor this year began construction of the Novotel Hotel located close to Telephone Palace - RomTelecom's corporate headquarters - following a year of delays. The investment is worth 33 million euros, and the French company Bouygues was selected as constructor.

The Telephone Palace in Bucharest has been under construction for....a looong time now, it's really the case that they start doing something.

Posted by Mihai : 1/18/2005 04:38:00 pm
Business in Romania blog
Business in Romania blog
SAI KD Investments Romania, part of the Slovenian group KD Group will launch by the end of June a mutual fund which will invest the money coming from bonds, state securities or banking deposits, said the investment fund's president, Ion Mincu yesterday.

KD Investments Romania was founded in 2004 and oversees the open investment fund KD Maximus, which mostly invests in listed shares.

This is the only Romanian open investment fund managed by a company with entirely foreign equity.
The funds's assets amount to 8.32 billion ROL (208, 000 euros).

Posted by Iulia Rasoiu : 1/18/2005 09:43:00 am
Business in Romania blog
Business in Romania blog
The first such meeting will be held in the autumn to discuss long-term development projects, Hungarian Prime Minister Ferenc Gyurcsany and his Romanian counterpart Calin Tariceanu a joint news conference.

Tariceanu, who formed his coalition cabinet late last month, was in Budapest on his first foreign visit since taking office, and the two prime ministers said the gesture underlined Romania's pledge to prepare for accession in 2007.

Gyurcsany, whose country joined the EU in May, said integration must replace the historic problems in their bilateral relations which have been put to the test over Romania's nearly 2 million strong ethnic Hungarian minority.

Much of the friction and suspicion between Hungary and its neighbour was caused by the break up of Hungary following World War One, in which the country lost much of its land.
A failed referendum in Hungary in December to give citizenship to ethnic Hungarians abroad also strained ties.

Despite those tensions, Romania's UDMR party of ethnic Hungarians has become part of Romania's new government coalition, which Tariceanu said was a stabilising factor.

Gyurcsany said his Socialist cabinet felt responsibility for ethnic kin abroad but it only supported those UDMR calls for cultural autonomy which were also backed by Romania's government.
However, the right-wing Hungarian opposition -- which has a narrow lead in opinion polls ahead of elections in 2006 -- has called for more radical measures to help ethnic Hungarians abroad, he added.

Nevertheless, Hungary will not foster calls for an autonomous region by Hungarians within Romania, he added.

Tariceanu meanwhile promised to consult Hungary and abide by the EU's environmental rules over a plan by Canada's Gabriel Resources to set up Europe's biggest open-cast gold mine, which Hungary fears could contaminate its rivers.

Posted by Iulia Rasoiu : 1/18/2005 09:34:00 am
Business in Romania blog
Monday, January 17, 2005
Business in Romania blog
Tulcea-based shipyard Aker is expected to build the bodies of five gas powered ferries by the end of 2006.
According to a release from Aker Yards, the ship bodies will be assembled by Aker Brattvaag, a subsidiary of the Norwegian group Aker. The ships will be 129.5 meters in length and 19.2 in width.

The Aker group was the first in the world to build a ferry using gases instead of oil in 2000.

Aker is one of the leading ship builders worldwide. The Fjord 1 group is controlled by two local councils in Norway.

Posted by Iulia Rasoiu : 1/17/2005 03:31:00 pm
Business in Romania blog
Business in Romania blog
Greek company Ethniki, one of the most important players in the Greek insurance market, bought the 19% stake from Banc Post, which acted as a minor shareholder in Garanta, which is largely controlled by its competitor.

Ethniki increased its participation in Romanian insurer Garanta from 72.62% to 91.62%.

Posted by Iulia Rasoiu : 1/17/2005 03:25:00 pm
Business in Romania blog
Business in Romania blog
U.S. troops could start moving from Cold War-era posts in Germany to new bases in Romania and Bulgaria this year as part of American efforts to create a more mobile overseas force, the top U.S. commander in Europe said Friday.

Romania and Bulgaria, which joined NATO in April, are considered particularly suited to new U.S. bases because of their proximity to volatile regions in the Balkans, Caucasus and Middle East. They also have Soviet-era facilities that could be adapted for American use, and both countries are keen to host U.S. troops.

Marine General James L. Jones spoke to reporters at NATO military headquarters in southern Belgium after a trip to Romania and Bulgaria to assess possible base locations.

"This is part and parcel of the transformation of our footprint in Europe, which has been in need of surgery for some time," he said.

Plans for the bases are expected to be drawn up soon, and if approved by the U.S. Congress and governments in both countries, Jones said the move could start quickly.

The move east is part of an overhaul announced by President George W. Bush last year in which 70,000 troops and 100,000 family members withdrawn from bases in Germany and South Korea.

Under the plans, the United States would move away from many of its big, permanent bases where troops are stationed long-term with families and large back-up infrastructures.

Instead, it would use smaller, more austere facilities where troops would rotate in for shorter deployments.
The Pentagon says such a network of smaller bases spread around the world will provide more flexibility in dealing with terrorism, regional crises and other emerging threats.

Posted by Iulia Rasoiu : 1/17/2005 03:05:00 pm
Business in Romania blog
Business in Romania blog
M. Calin Popescu Tariceanu, Prime Minister of Romania, announced recently on Realitatea TV that Romania is to stay close to IMF for two more years.

During this period, Romania is to follow IMF suggestions for managing the reform process and IMF will back up Romania for this period. One of the things that are agreed between Romania and IMF is the economical growth of 5 - 5.5 percents / year.

I notice a tendencies lately against IMF...all countries want to be managed by their own and it seems that (1) IMF policies are not very much adapted to each countries case, being more like templates that IMF suggests to their "clients" and (2) even though they are going through a bad period, countries want to be managed by their own and not feel an external intrusion in their affairs.

Also, some of IMF Failures have fueld this feeling. Let's remember that IMF had some pretty bad results in Mexico, Nicaraua, Argentina, Brazil, Russia and more. IMF also admitted having some failures, but I wonder if an organization like IMF can be so flexible in order to shift its views and prevent other failures from hapenning.

Posted by Mihai : 1/17/2005 01:47:00 pm
Business in Romania blog
Sunday, January 16, 2005
Business in Romania blog
Anita was very kind to include a review of the Business in Romania blog in her weekly Power Blog Reviews. You can read Anita's words HERE.

Anita has a very good expertise in start-ups, general management, new market development. She has worked for MotorcycleWorld, Bell & Howell and also in the banking sector. She uses her experience to share precious information through her blogs, Small Business Trends and Trend Tracker.

Small Business Trends brings you daily updates on trends that influence the global small business market. Trend Tracker uses input from the online community to track the major trends affecting the small business market.

We would like to thank Anita for the very kind words about this blog and we also look forward to hearing your opinion, as readers of the Business in Romania Blog.

Thanks, Anita !

Posted by Mihai : 1/16/2005 06:00:00 pm
Business in Romania blog
Business in Romania blog
This was stunning. I went to to see the specs of the new iPod shuffle and guess what.... I found out that I have to be careful not to eat iPod.

Where did this came from? Well, Apple advertises the new iPod to be "smaller than a pack of gum and much more fun". I also noticed that there was a (2) right after those words, so I decided to look at the end of the page for the details...and there it was, the great line: "do not eat iPod shuffle"


What I don't know is why they put that line over there...are they obliged by advertising law to do this? Or did they just wanted the Ad to be funnier? It is quite hard for me to imagine that someone would like to eat the iPod but will suddently change his mind when seeing the explanation on the web...

Looking forward for your thoughts on this.

Posted by Mihai : 1/16/2005 02:15:00 pm
Business in Romania blog
Saturday, January 15, 2005
Business in Romania blog
Romanian young adults will now find on newsstands a hip new magazine called YOUNG MONEY(R) Romania. Published monthly, this personal finance and lifestyles magazine is the sister publication to its popular U.S. counterpart, YOUNG MONEY, covering topics such as credit and debt, entrepreneurship, investing, money management, and other lifestyle subjects of interest to young adults.

YOUNG MONEY Romania, published by Junior Achievement's Romanian chapter, has an initial 30,000 copy circulation available via mail subscriptions and on newsstands in Romania. It will include some of the same articles from the U.S. magazine, but the remainder of the 48-page publication is original content. Junior Achievement received the licensing rights from YOUNG MONEY's publisher InCharge(R) Education Foundation, Inc., a national non-profit organization specializing in personal finance education and research.

I am looking forward for the website to become available. Meanwhile, you can see the website to see how the magazine looks in US.

Posted by Mihai : 1/15/2005 06:49:00 pm
Business in Romania blog
Friday, January 14, 2005
Business in Romania blog
Belgian beer giant InBev SA said Friday that its sales volumes for 2004 rose 60 per cent, mostly due to the merger between Interbrew and AmBev that created the world's biggest beer producer, as well as improvements in central and eastern Europe.

Discounting the effect of acquisitions, volume growth was much more modest at 3.3 per cent.

Even though in in western Europe InBev was underperforming, with volume declining by 2.3 per cent, In Central and Eastern Europe, particularly in Romania and Bulgaria, InBev was outperforming.

Seems that Romanians like Stella Artois and Becks.

Cheers !

Posted by Mihai : 1/14/2005 06:37:00 pm
Business in Romania blog
Business in Romania blog
Finaly, it came clear. The spot that we all have seen on TV about Altex, where you can get a credit line using only your ID card, is nothing but pure fiction.

The Romanian Consumer Protection Association (APC) made some investigations and they found out that the advertisment was actualy hiding a lot of things. Let's do a recap. The commercial said you can get a credit line using only your ID and that this credit line was up to 20.000.0000 lei.

Actualy, what the guys from APC found out is this:
- Altex performs a checkout on all its potential customers and check if they have a place where they work for more than 6 months and if they have a minimum income of at least 2.250.000 / month. This is something they do, but the potential customer knows nothing about it.

- The 20 milion lei limit is only applicable if you have a 30-days credit. For a 6 months credit the limit is 18 milion and for a 5 years credit the limit is 12 milion. The difference goes in some taxes you have to pay about which, again, you know nothing about.

According to Romanian Law nr. 148/2000 about advertisements, they have to ensure the information is correct, that the information is not misleading and that the information is complete. This is exactly what didn't happen with Altex.

For me, it's a big shame this happened, specially with a company that has as main values offering good satisfaction and comfort for its clients.

Posted by Mihai : 1/14/2005 10:36:00 am
Business in Romania blog
Business in Romania blog
Prime Minister Calin Popescu Tariceanu yesterday said he does not want to have different levels of Value Added Tax (VAT) for different products. Tariceanu also declared that he was against imposing a higher tax rate.

He also said no other products will be added to the category attracting lower rates of VAT. Currently, the VAT percentage is 19%.

The reduced VAT rate of 5% applies to products such as medical prostheses, drugs, book publishing, magazines, school books and tourism housing.

Posted by Iulia Rasoiu : 1/14/2005 09:46:00 am
Business in Romania blog
Business in Romania blog
Three contracts worth several billions of dollars (euros) signed by the former government are to be reevaluated, Romania's Prime Minister said Thursday.

Calin Popescu Tariceanu said there are questions about the financial terms of the contracts. He added, however, that the projects themselves are not in doubt.

The biggest contract to be reanalyzed is with U.S.-based Bechtel Group Inc., worth over US$2.2 billion (euro1.7 billion) to build a 415-kilometer (260-mile) highway connecting the central city of Brasov to the Hungarian border.

The European Union criticized the contract, saying there had been no bidding process and that it violated accepted EU procedures.

Other contracts that would come under scrutiny include one worth more than euro1 billion (US$1.3 billion), signed with the European Aeronautic Defence and Space Co. consortium to help Romania secure its borders and a euro480 million (US$624 million) contract with French company Vinci SA for the construction of a highway.

Posted by Iulia Rasoiu : 1/14/2005 09:24:00 am
Business in Romania blog
Business in Romania blog
Investment Bank JP Morgan will provide consulting for the Romanian Savings Bank (CEC), announced the Finance Ministry yesterday.

The decision was made after the CEC privatization commission completed talks with JP Morgan, which will begin developing the privatization offer for the sale of the local credit institution.

Another two companies entered the consulting race, namely Citigroup Global Markets and Credit Suisse First Boston.

According to the privatization schedule, the consultant is to be appointed this month to develop the CEC privatization strategy by February 2005.

The government plans to approve the strategy by the end of March 2005, while the entire process is to be completed by the end of 2005.

The bank has undergone a restructuring process in recent years, cutting its network of branches - the largest in Romania - by 325 from its peak of 1,749 in 2000 and reducing the work force to 9,270 from 12,000 people four years ago.

Among investors interested in taking over the bank, Austria's Erste Bank and Raiffeisen Bank have already expressed their intent and are expected to make an offer of around 300-400 million euros.The Finance Ministry is currently CEC's sole shareholder and the bank is ranked fourth amongst domestic banks in terms of assets.

Posted by Iulia Rasoiu : 1/14/2005 09:15:00 am
Business in Romania blog
Business in Romania blog
According to a release from the Ministry of Transport, Constructions and Tourism (MTCT), the control teams of the Romanian Highway and National Road Company (CNADNR) and the road police will not fine drivers who have not paid the road tax.

The tax can be paid in 350 Petrom gas stations, 70 Rompetrol stations and 74 MOL stations, as well as in 433 post offices and 76 CNADNR stations along national roads.

Car owners can now pay the road tax at six Bucharest agencies and forty county branches of the Romanian Savings Bank (CEC) starting January 17.

Posted by Iulia Rasoiu : 1/14/2005 09:10:00 am
Business in Romania blog
Thursday, January 13, 2005
Business in Romania blog
Now this is not related to business, but I was stuned to find it out.

Seems that search and the web have really entered Romania as well...A Romanian couple has named their son Yahoo as a sign of gratitude for meeting over the Internet.

Cornelia and Nonu Dragoman, both from Transylvania, met and decided they were meant for each other following a three-month relationship over the net. It must have been through Yahoo's dating service, otherwise they probably would have named him mIRC, ICQ or Dolce :).

"We named him Lucian Yahoo after my father and the net, the main beacon of my life," Cornelia Dragoman was quoted as saying.

I wonder if him and Google will be friends in school and if he will mary Altavista in the end.

Posted by Mihai : 1/13/2005 05:13:00 pm
Business in Romania blog
Business in Romania blog
I appologies for this off-topic post, but I believe it is something that some of the readers of the Business in Romania Blog that are passionate about search engines and web marketing might find very interesting.

Danish security company Secunia has announced an extremely critical vulnerability in Microsoft's Internet Explorer, and one of the main fixes blocks AdSense from displaying.

Mainly, after installing the fix you will see none of the web space occupied by the Google AdSense, on any website.

This is quite a hit for Google, who relies on a very broad range of websites across the world for carrying its ads.

The same problem happens if you go to Internet Options, Security, Custom Level and set it on high. Or if you just change the Active Scripting option to disable.

I am wondering if the guys that released the IE fix didn't know about this problem. I figure they carry out some testing before releasing something that will affect 89% of the web users throughout the world. I hope they are going to release a patch to fix this bug as soon as possible, otherwise Google might be in trouble.

Thanks to Jenstar for letting me know about this.

Posted by Mihai : 1/13/2005 01:56:00 pm
Business in Romania blog
Business in Romania blog
Reuters just published some excerpts of an interview with Romania's Prime Minister, Mr. Calin Popescu Tariceanu.

In the interview, Mr. Tariceanu discusses about early elections, joining the EU, the flat tax rate, international issues and more.

Some interesting point of views are:
"We will probably have to examine the possibility of organising early elections after 2007 when Romania will become (a European Union) member. But not before 2007."

"The budget deficit will probably be kept between 1.0 and 1.5 percent. This is the target."

"We need a strong and independent media."

You can find the full Reuters article here.

Posted by Mihai : 1/13/2005 10:41:00 am
Business in Romania blog
Business in Romania blog
PatentCafe published its annual top 200 companies ranked by the number of patents they own. The top 10 looks like this:

1. International Business Machines Corporation - 3,254
2. Matsushita Electric Industrial Co., Ltd. - 2,174
3. Hitachi, Ltd. - 2,041
4. Samsung - 1,934
5. Canon Kabushiki Kaisha - 1,875
6. Hewlett-Packard Company - 1,836
7. Micron Technology, Inc. - 1,764
8. Sony Corporation - 1,686
9. Intel Corporation - 1,604
10.Fujitsu Limited - 1,465

IBM leads the top for the last 11 years, but Samsung is a company that is currently innovating and could reach the second place in 2005.

Find more about the top 200 on PatentCafe's website. Thanks for the news to the Fast Company Blog.

Posted by Mihai : 1/13/2005 10:23:00 am
Business in Romania blog
Business in Romania blog
Vice Prime Minister Adriean Videanu yesterday said that all Romanians must declare their assets, while Prime Minister Calin Popescu Tariceanu announced penalities for tax evasion.

Videanu explained that the government is currently analyzing the possibility that every citizen will be forced to make asset statements, to erable these declarations become "monitoring instruments" for the payment of all taxes paid both by companies and individuals.

The confidential asset statements will be handed in to fiscal administration offices to be checked in surveys.

Adriean Videanu said that "asset statements will be made every year, and the fiscal authority will have a comparison basis when a survey evaluation is required'.

He also said that at present, if someone wants to evaluate someone else's assets, it can not be done because there is no reference element.

The modification of the fiscal legislation to treat fiscal evasion as a fiscal crime is also currently being analyzed.

Posted by Iulia Rasoiu : 1/13/2005 10:14:00 am
Business in Romania blog
Business in Romania blog
MobiFon, operator of the mobile telephony service Connex, yesterday announced the launching of a new community assistance program "Connex for the future."

The company estimates allocating approximately $7 million by the end of 2007.

Beginning yesterday, Connex started to use one cent out of every ten Connex network calls in order to finance programs in education, culture and environment which research identified as being important for local communities.

They are called "Romanian Education", "Restoring Romanian Monuments" and "A Cleaner Romania."

Connex will be asking customers for their opinions regarding the three targeted areas by making free calls to *111 or visiting the Connex Web site.
After reviewing customer responses, Connex will begin allocating funds to specific regional and national projects. The mobile telephony operator will also continue to support charitable programs for people in need through the Connex Foundation, formerly known as the Sirois Foundation.

This program provides financial contributions to support children, young mothers and the elderly.

Connex had 4,369,745 customers at the end of the first nine months of 2004.

Posted by Iulia Rasoiu : 1/13/2005 10:07:00 am
Business in Romania blog
Wednesday, January 12, 2005
Business in Romania blog
Some of you are students. Romanian students. This is why I am going to tell you about the Students Events Blog.

Oana Brasoveanu launched this Blog with the intention to help all of you that are interested in International Projects, Summer Schools and other similar events and I know she will do a great job with it.

I wish her all the best and I invite you all to visit her site regularly at

Posted by Mihai : 1/12/2005 06:07:00 pm
Business in Romania blog
Business in Romania blog
Hungarian OTP Bank, AIG Consumer Finance of America and BNP Paribas from France are in talks to buy Credisson, a company specialised in consumer finance.

Credisson has been mainly founded by Oresa Ventures, having Cornel Marian as architect (the guy that also created La Fantana). He is one of the guys with best investments in Romania in my opinion and almost all the companies he founded turned-out in success-stories.

Two other powerful strategic investors that are interested in Credisson - Sofinco (part of Credit Agricole Group of France) and GE Capital (a division of General Electric, the world's biggest company in terms of market value). The sale of Credisson could be completed by this spring, with the deal worth tens of millions of euros.

Posted by Mihai : 1/12/2005 05:58:00 pm
Business in Romania blog
Business in Romania blog
The Romanian government plans to speed up the privatization of the energy sector by launching new sales this year and by pledging a swift completion of the deals already agreed, the new Economy Minister Codrut Seres said Tuesday.

Energy sector privatization is seen by investors as a key element of the country's efforts to win European Union membership in 2007, and a proof of the government commitment to market reforms.

The new government, sworn in last month, hopes to conclude by February the talks for the sale of regional power distributors Electrica Oltenia and Electrica Moldova, Seres said.

Last fall, the previous government selected German utility E.On AG for exclusive talks in the sale of Electrica Moldova, and the Czech Republic's CEZ AS (BAACEZ.PR) for talks on Electrica Oltenia.

Another regional power distributor, Electrica Muntenia Sud SA, which supplies electricity to the capital Bucharest, will be offered for sale this spring, Seres said. The government will also launch the sale of three coal and gas-based power producers, he added.

The government will also speed up the completion of privatization for gas suppliers Distrigaz Sud and Distrigaz Nord.

Romanian authorities already signed privatization contracts last year with Ruhrgas, a unit of E.On, for Distrigaz Nord and with Gaz de France (4774.FR) for Distrigaz Sud. However, to complete the transactions the government must pass legislation setting the way gas tariffs are computed in Romania.

Seres said the government will also begin selling a part of the state-owned stake in oil and gas company Petrom SA (SNP.RO) to the company's employees association.

Initially, the government was planning to sell an 8% stake, but Seres said that the association might not be able to afford to buy as much for the moment, and it might buy just an initial 2% stake.

Posted by Iulia Rasoiu : 1/12/2005 10:00:00 am
Business in Romania blog
Business in Romania blog
Israeli companies Elran Holdings and NewPharm will invest 4 million euros in a new network of drugstores in Romania.

The network will be administrated by a mixed company in which the two companies will share their participation equally, said an article in the Israeli daily, Globes online edition.

NewPharm will provide management and consultancy services.

Both companies are family-owned businesses held by the Dankner and Borovich families.
Last year, NewPharm opened 12 drugstores in Israel. The company estimated 105 million euros in turnover for 2004, 8% above the 2003 turnover.

Posted by Iulia Rasoiu : 1/12/2005 09:36:00 am
Business in Romania blog
Business in Romania blog
Banks and public institutions will release their financial situations after July 1 only in the new national currency, RON, according to a draft law that was discussed yesterday by the Commission for Social Dialogue of Public Finances Ministry.

The draft law modifies legislation dealing with the denomination of the national currency. The current law stipulates that institutions should release their financial situations for the period July 1 to December 31 in both the new and old currencies.

The modification was proposed in order to simplify book-keeping for the types of institutions that release annual and quarterly financial situations.

Posted by Iulia Rasoiu : 1/12/2005 09:32:00 am
Business in Romania blog
Business in Romania blog
Sofitel hotel yesterday evening hosted a cocktail to welcome the hotel's new general director.

Luc Gesvret, general director of Sofitel for three years, was replaced by Bruno Vinette, former director of Novotel Sheremetyevo hotel in Moscow.

The new general director graduated from the management and commerce school of ESSEC in the French town of Cergy.
He is a fluent English speaker and also graduated from Human Resources.
He entered hotel group Accor in 1981. Since then, he developed his management skills through international experience in the various brands of the group such as Sphinx, Novotel Bogor in Indonesia, Sofitel Palm Resort & Golf in Malaysia, Pullman hotels in France and Marine Diamant in Martinica.

Posted by Iulia Rasoiu : 1/12/2005 09:22:00 am
Business in Romania blog
Business in Romania blog
Petrom shareholders yesterday elected a new board of directors.

Petrom's new board of directors consists of four OMV members, two Romanian government representatives and one member of European Bank for Reconstruction and Development (EBRD).

The newly elected board replaces the interim directors who resigned today and were released from their duties by the general meeting of shareholders.

The newly appointed board of directors consists of seven members:
  • four of which are the OMV Executive Board: Wolfgang Ruttenstorfer, Gerhard Roiss, David C. Davies, Helmut Langanger.
  • the two Board members appointed by the Romanian Government are Dorin Mucea and Sebastian Vladescu.
  • one member, jointly nominated by EBRD and the Romanian government, will be Mariana Gheorge.

OMV's CEO Wolfgang Ruttenstorfer will act as President of the Board of Directors.

The Managing Committee of Petrom has already been appointed by the Interim Directors and will remain unchanged.

Posted by Iulia Rasoiu : 1/12/2005 09:17:00 am
Business in Romania blog
Tuesday, January 11, 2005
Business in Romania blog
Ana Hotels, the hotelier owned by George Copos, will be managed by Simona Constantinescu, while Copos occupies the position of Vice Prime Minister. Constantinescu was previously president and general manager of BCR Securities, Banca Comerciala Romana's brokerage division.

"In 2005, Ana Hotels will focus on promoting the units in its chain after the major investments completed so far. Our target is to reach the financial parameters which will lead to a fast return of investments," said Constantinescu. Ana Hotels holds six hotels: Poiana, Bradul and Sportul at Poiana Brasov, Europa and Astoria at Eforie Nord and the Crowne Plaza hotel in Bucharest.

Posted by Mihai : 1/11/2005 04:49:00 pm
Business in Romania blog
Business in Romania blog
Elran Holdings controlling shareholders, the Dankner family, and NewPharm controlling shareholders, the Borovich family, are collaborating again. Elran and NewPharm have signed an agreement to set up and operate a chain of pharmacies in Romania, through a joint venture owned in equal shares by the two companies.

Elran and NewPharm will provide EUR4 million in financing to set up and operate the venture, in accordance with a ready business plan. Later, depending on the venture's progress, Elran and NewPharm will provide addition financing, unless one of the companies decides to suspend financing. If that happens, that partner's stake in the venture will be diluted. Under the pending agreement, NewPharm will provide the venture with management and consulting services, in exchange for a monthly management fee.

Posted by Mihai : 1/11/2005 03:09:00 pm
Business in Romania blog
Business in Romania blog
The government will consider raising excise duties, though there will be no increase in value added tax (VAT) as suggested by the International Monetary Fund (IMF), state minister Adriean Videanu told Reuters in an interview.

Videanu explained that the decline in the budget revenues, caused by the introduction of the flat tax, would be largely offset by postponing the reduction of certain social security contributions and increasing dividend tax and micro enterprise profit tax.

Revenues derived from tax are expected to drop by 1% of GDP following the tax cuts.

The statement by the state minister comes after that by the IMF resident representative in Romania, Graeme Justice, at the end of last week, in which he said the expected IMF mission to Bucharest on January 26 would propose increasing VAT and speeding up the programme of aligning excise levels with those in the EU.

The IMF sees this as the only solution to compensate for the loss of revenue that will be caused by introduction of the flat tax and to prevent outbursts of inflation

Posted by Iulia Rasoiu : 1/11/2005 09:29:00 am
Business in Romania blog
Business in Romania blog
The Austrian do-it-yourself store chain Baumax has expansion plans for the Romanian market and opened a local office branch, Baumax Romania.

Baumax plans to build 30 centers in Romania in the medium term and another 15 in Bulgaria.

According to the firm's official, Romania and Bulgaria have a total population of 30 million people compared to 40 million inhabitants in the markets in which it is already operating.

The Austrian group controls 121 stores in six countries.

Posted by Iulia Rasoiu : 1/11/2005 09:27:00 am
Business in Romania blog
Business in Romania blog
The Romanian subsidiary of the Canadian company European Goldfields Limited won a public auction for the right to extract gold from the Cainel mine in the Western Carpathians.

The National Agency for Mineral Resources organized an auction attended by three companies.

European Goldfields Romania SRL obtained a three-year license which may be extended by an additional three years. The license permits gold extraction from an area of around 31 square kilometers, ten kilometers outside the Certej area, where European Goldfields Romania owns 80% of the rights.

European Goldfields Limited will cede the rights for the Zlatna area, where work started in 1999 did not prove to be profitable. However, the company will focus on the Certej and Cainel gold mining areas.

European Goldfields has five mineral extraction areas in Romania. The Canadian company was founded in 2000 by the reorganization of Gabriel Resources Ltd., a Canadian company involved in work on the largest gold and silver mines in Rosia Montana, Western Romania.

Posted by Iulia Rasoiu : 1/11/2005 09:23:00 am
Business in Romania blog
Business in Romania blog
The Romanian subsidiary of the Canadian company European Goldfields Limited won a public auction for the right to extract gold from the Cainel mine in the Western Carpathians.

The National Agency for Mineral Resources organized an auction attended by three companies.

European Goldfields Romania SRL obtained a three-year license which may be extended by an additional three years. The license permits gold extraction from an area of around 31 square kilometers, ten kilometers outside the Certej area, where European Goldfields Romania owns 80% of the rights.

European Goldfields Limited will cede the rights for the Zlatna area, where work started in 1999 did not prove to be profitable. However, the company will focus on the Certej and Cainel gold mining areas.

European Goldfields has five mineral extraction areas in Romania. The Canadian company was founded in 2000 by the reorganization of Gabriel Resources Ltd., a Canadian company involved in work on the largest gold and silver mines in Rosia Montana, Western Romania.

Posted by Iulia Rasoiu : 1/11/2005 09:23:00 am
Business in Romania blog
Business in Romania blog

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