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Sister telcos Romtelecom and Cosmote will now come under the Telekom brand, reshaping the local market. DT board member Claudia Nemat says building the brand could take five years.
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ROMANIA’S PREMIER BUSINESS WEEKLY SEPTEMBER 22 - 28, 2014 / VOLUME 18, NUMBER 31
PHARMA: The authorities have not specified when the claw back tax will be axed, despite numerous requests by producers of genericdrugs, says Laurentiu Mihai, APMGR executive director, who will attend this week’s Focus on Pharma event organized by BR »page 6
NEWS
German angstGerman investors areworried by the im-proper administrationof EU funds in Roma-nia, which dents thegrowth potential of thelocal economy» page 4
NEWS
Raising doughTax evasion in the bakery industry isdown by about EUR 68 million one year after the VAT cut on flour and bread» page 5
INTERVIEW
NOLAN TOWNSEND, COUNTRY MANAGER AT PFIZER ROMANIA, SAYS THAT THE US DRUGS MAKER IS GOING TO INVEST USD 5.4 MILLION IN EXPANDING THE PACKAGING OF MEDICINES AT ITS PLANT IN CLUJ» PAGE 8
Sister telcos Romtelecom
and Cosmote will now
come under the Telekom
brand, reshaping the local
market. DT board
member Claudia Nemat
says building the brand
could take five years
» page 10
RINGING THE
CHANGES
NEW S 3www.business-review.eu Business Review | September 22 - 28, 2014
NEWS in briefNEW S 3
ECONOMYEY study: local businesspeoplegetting more pessimisticRomanian businesspeople have becomemore pessimistic in the last eightmonths about business growth this year,according to an Ernst & Young study.Turnover growth perspectives havedropped over the last six-seven months,with a larger number of firms expectingcontraction (12 percent in August against2 percent in February). Companies’ ex-pectations regarding profit growth large-ly stayed the same – at the beginningof the year 84 percent of respondentbusinesses were expecting an increasein profits while by August the sharehad dropped to 81 percent.
ENERGYHidroelectrica’s 8-month grossprofit up 12 pct State-owned hydroelectricity producerHidroelectrica increased its gross profitby 12 percent to RON 719 million (EUR162.4 million) in the first eight monthsof 2014 y-o-y, following a 14.5 percenthike in electricity sales and falling op-erational costs, according to Mediafax.The company delivered 12.4 TWh ofelectricity in the first eight months, andaims to reach 17 TWh by year-end. Itinitially predicted it would generate13.9 TWh this year.
OMV Petrom completes EUR600 mln Petrobrazi refinerymodernizationAustrian oil company OMV Petrom lastweek completed the modernization ofits Petrobrazi refinery in Ploiesti afterfour years of work and a EUR 600 mil-lion investment. As a result, the refinerywill now be able to produce more diesel,which should allow Romania to reduceits imports of this product to the benefitof the country’s current account, ac-cording to Mariana Gheorghe, CEO ofOMV Petrom.
FINANCE
Soufflet raises EUR 20 mlnfrom EBRD for investments in Romania, Poland and UkraineThe European Bank for Reconstructionand Development (EBRD) has approveda EUR 20 million loan to French groupSoufflet, which it will use to financeinvestments in grain storage and seedproduction facilities in Romania, Poland
and Ukraine. Soufflet is looking to setup a new company called InternationalGrain Silos, which will consolidate itsbusiness in the three countries. TheEBRD will own a 35 percent stake inthe new firm.
Only 70 pct of Romanians pay invoices on time, says EOS KSI surveyRomanians and Bulgarians are the leastpunctual bill payers in Europe, withonly 70 percent of invoices dealt withon time, according to an EOS KSI surveyconducted in 12 European countriesthis year. Overall, the share of invoicessettled on time in Romania fell for asecond consecutive year in 2014, thesurvey revealed. Romania comes belowthe Eastern European average of 72percent and the pan-European averageof 75 percent.
ITIT distributors post lower revenues, higher profits – Coface surveyIT distributors last year posted revenuesthat were 22 percent lower than whenthe financial crisis struck in 2008, butnet profit stood at 2.4 percent ofturnover, the highest level of the pastten years, according to a Coface surveyquoted by Mediafax newswire. Thesurvey looked at the 2013 financialstatements of 1,263 companies in theIT and software distribution industry.
MANUFACTURINGGermany’s SGB-SMIT makesEUR 7.7 mln bid for RetrasibGerman transformer manufacturer SGB-SMIT International will launch a RON34.14 million (EUR 7.7 million) takeoveroffer for local engine producer RetrasibSibiu, according to Mediafax. Thetakeover price is RON 3.414 (EUR 0.0772)per share, according to the preliminaryannouncement. Retrasib’s share priceincreased by 3.5 percent to RON 0.3390following the announcement. The com-pany, which is controlled by Octavianand Calin Buzoianu, posted a RON 43.57million turnover and a profit of RON2.1 million last year.
PROPERTYCarrefour buys 12,000 sqm ParkLake PlazaParkLake, the EUR 180 million shopping
mall developed by Sonae Sierra and Caelum Development inBucharest’s District 3, has just signed a contract with retailer Carrefour Romania for the ownershipand operation of a 12,000 sqm hypermarket on its grounds. With aleasable area of 70,000 sqm, ParkLakewill open in 2016. Expected to host some 200 stores, about 65 percent of its surface area has been pre-leased, according to companyrepresentatives.
Artemis Real Estate to develop five projects nearTimisoaraSwiss group Artemis Real Estate, thelocal division of Artemis Holding, hasannounced it is developing five projects near Timisoara. The projectsinclude industrial and residential build-ings. The surface for the real estatedevelopment reaches 128 ha and in-cludes the Sanandrei Industrial Park, Swiss Park Giarmata, Swiss Village Giarmata, Timisoara AirportIndustrial Park and Dudestii Noi Industrial Park.
RETAILDedeman opens EUR 12 million store in Targu JiuRomanian DIY retailer Dedeman hasincreased its local network to 40 storescountrywide after opening a branchin Targu Jiu last week. The new outletcovers 12,000 sqm and required a EUR12 million investment. This is thefourth store opening for Dedeman in2014 and is part of the retailer’s two-year expansion strategy, the target ofwhich is to reach 50 stores by 2016.Dedeman is the leader of the localDIY market.
STOCK EXCHANGEProperty Fund 8-month profitgrows to EUR 227 mlnThe Property Fund (FP), the EUR 3.4billion closed-end fund managed byFranklin Templeton, registered a profitof EUR 226.6 million in the first eightmonths of this year, almost doublecompared to the same period of lastyear. The net asset value (NAV) of thefund grew slightly to EUR 3.39 billion,with listed equities accounting for50.37 percent. The FP’s biggest share-holder is US-based hedge fund ElliottAssociates, which has 15.2 percent ofthe share capital.
MOST READ www.business-review.eu
1 Romtelecom and Cosmote re-brand as Telekom Romania withEUR15 mln investment
2 Romania takes charge ofUkraine’s cybernetic defense
3 World Tourism Organisation: Thefuture of tourism is in Romania
4 Vodafone might consider acquir-ing UPC Romania’s mother com-pany, “for the right price”
5 Several Tarom flights cancelledas employees stage protest with-out warning
WEEK AHEAD
September 24 – 25
SEM Days Keynote speakers will offer partici-pants a complex perspective on theevolution of online media in the lastyear. The event schedule includestwo panel conferences, nine presen-tations and 15 workshops. BR read-ers are entitled to a 20 percentdiscount on registration ([email protected] for de-tails) and find out more about theevent at www.semdays.ro.Willbrook Platinum Business & Con-vention Center
September 25
Focus on PharmaThe third edition of Focus on Pharmaorganized by Business Review ex-plores the fiscal and legal implica-tions of the current claw back tax forthe pharmaceutical sector. The in-dustry is set to post only slightgrowth in Romania, given the re-duced availability of medical servicesfor patients and the negative impactof the claw back tax. Find out aboutupcoming legislative changes andhow they will affect the pharma in-dustry at the third Focus on Pharmaevent.9.00, Ramada Plaza Hotel, EuropaHall
September 25 – 28
ModexpoModexpo is a contracting and salesexhibition, for both specialists and thegeneral public. This year’s event, the21st run, will include clothing,footwear, leather goods and fur itemsfrom the fall-winter 2014 and spring-summer 2015 collections, fabrics andaccessories in autumn trends andalso equipment used in the industry.Hall C5, Romexpo Exhibition Centre
4 NEWSwww.business-review.eu
Business Review | September 22 - 28, 2014
ENERGY
Syscom 18 hit by Iraq woesSyscom 18, a system integrator for
the oil and gas sector, is grapplingwith the ongoing conflict in Iraq,
which is threatening several energyprojects in the country and could havea negative impact on the Romaniancompany’s turnover.
General manager Ion Andronachesaid the projects are worth “severalmillions of euros annually”, a signifi-cant figure. He added that businessties with war-torn Syria had long beencut, while the ongoing conflict inUkraine was not impacting operations,because the company has never fo-cused on Russia and the Communityof Independent States (CIS).
Over the last eight years, Syscom18 has been working extensively inthe Middle East and North Africa, es-pecially with national oil companies.
“We have a project in Abu Dhabithat should have been finished thisyear, but it has been significantly de-layed and will be continued next year.We are waiting for confirmation ofother orders in the Gulf region,” An-dronache told BR.
He added that the company has
also signed a contract with the Euro-pean Space Agency (ESA), and is ne-gotiating a second one. The GM com-mented that these contracts are smaller
,“but have an exceptional technicalvalue.”
In Romania, Syscom 18 has a keycontract with Romgaz, the state-owned
gas producer, for the measurement ofwell gas flow. The company will meas-ure around 70 percent of the gas pro-duction of Romgaz.
It also worked on the Iasi-Unghenigas pipeline project, which was fin-ished in August following a EUR 26.5million investment. Syscom 18 com-pleted a fiscal measurement and au-tomatization system in Ungheni. The43 km pipeline linking Romania andthe Republic of Moldova has an annualtransport capacity of 1.5 to 2 billioncubic meters of gas.
Romania will initially export 50million cbm to its eastern neighbor,according to the local authorities. TheRepublic of Moldova is also seekingto expand the pipeline to its capitalChisinau, and the European Commis-sion, the executive arm of the EU, hassaid it will allocate EUR 10 million tothe extension project.
This year, Syscom 18 aims to reacha turnover of around EUR 12 million,with profit expected to remain low.Ongoing international contractsamount to EUR 2.5 million. ∫
Ovidiu Posirca
Gas measurement system set up by Syscom 18 in Ungheni, Republic of Moldova
INVESTMENTS
Romania’s faulty management ofEuropean Union money is dam-aging the economy’s growth po-
tential, according to the Romanian-Ger-man Chamber of Commerce and Indus-try (AHK Romania).
The biggest bilateral chamber of com-merce in the country, it currently hasaround 530 members.
“For the construction and adaptationof economic structures at the level ofthe European Union, the EU funds thatare available to Romania offer importantfinancial support. A lot of fields rangingfrom infrastructure to IT could benefitfrom them. But due to faulty adminis-tration, they are not being used ade-quately and the growth potential is beinglost, so the country’s economic growthis below the necessary level,” the cham-ber of commerce said in a statement toBR. “These funds are an important fi-nancing source, which if adequately andcorrectly used, could become one of themain support sources in the develop-ment of various economic fields.”
In the AHK Investment Climate Cen-tral and Eastern Europe survey publishedin August, German investors in Romania
said that the absorption of EU funds inthe transport sector was developingsluggishly. The report pointed out thatRomania currently has 645 km of mo-torway, lagging behind the EU.
“This is a great disadvantage for theplacement of investments, becauseamong many things it leads to an increase
in transport costs, which cancels out asignificant advantage, that of lower laborcosts,” said the report.
The country had used only EUR 1.4billion for transport investments by Au-gust, out of the EUR 4.4 billion allottedto this operational program.
Romania’s absorption has slowed
down this year, with Eugen Teodorovici,minister of EU funds, acknowledgingthat the sum attracted by Romania was
“below expectations”, especially on thetransport and environment operationalprograms.
In June, Teodorovici blamed the poorabsorption rate on the fact that somecompanies that placed winning bids todevelop projects financed by EU moneyhad undervalued their bids and couldnot finish the projects. He added thatsome firms had vanished and subcon-tractors had to be used to complete thecontracts.
For this year, Teodorovici has set thetarget of attracting EUR 3.5 billion fromthe European Commission, the executivearm of the EU, so that the country doesnot lose its money. Romania has twomore years to spend its EU funds underthe 2007-2013 EU budgetary framework.
The country’s absorption of EU fundsamounted to 36.93 percent at the endof August, including reimbursement re-quests submitted to the EC. This meansthat Romania has developed EU-fundedprojects worth EUR 7 billion to date. ∫
Ovidiu Posirca
Romania’s absorption of EU funds reached 36.39 percent at the end of August
Improper administration of EU fundsworries German investors
Courtesy of Syscom
18
NEWS 5www.business-review.eu Business Review | September 22 - 28, 2014
TAX
Tax evasion in bread industry down byEUR 68 mln due to VAT cut, says minister
One year after the government cut VATon flour and bread from 24 to 9 percent,the first results show that tax evasionin the industry has dropped by RON300 million (approximately EUR 68 mil-lion), finance ministry Ioana Petrescutold a press conference last week. Taxevasion in the industry presently standsat 70 percent, added Petrescu, withoutspecifying how much of this figure theEUR 68 million represents. After pro-viding a set of data, the minister left thepress conference without answeringjournalists’ additional questions.
Data from Rompan, the associationof local milling companies and bakeries,indicate a lower reduction in tax evasion– RON 200 million – but a drop in theoverall level from 70 percent to 50 per-cent.
While the cut has brought more ofthe black market into the light, it costthe budget EUR 281.4 million (approxi-
mately EUR 64 million), added the fi-nance minister. Overall, the measurehas proved beneficial for both consumersand producers despite “the initial re-luctance”, she said. For consumers, breadprices fell by 10.25 percent between Sep-tember 2013 and July this year, whilethe industry saw gross profits increasefrom RON 169 million in 2012 to RON250 million last year. Taxed quantitiesof flour and bread were up by 16 percentand 18 percent respectively and no moreinsolvencies and bankruptcies were re-ported.
Present during the press conference,PM Victor Ponta said that cutting VATon bread had proved a successful moveand that he hoped the future governmentwould extend the measure to new prod-ucts such as fruit and vegetables andmeat. However, no actual timetable wasput forward for this. ∫
Simona Bazavan
TELECOM
Orange rolls out 4G+ services in six cities
Telecom operator Orange Romaniahas announced it has launched4G + services providing internet
speeds of up to 300 Mbps in Romania,starting in Bucharest, Brasov, Cluj-Napoca, Galati, Iasi and Timisoara.
The service is compatible with smart-phone models currently in the operator’srange: the Samsung Galaxy S5 4G+, Sam-sung Galaxy Alpha 4G+ and HuaweiE5786. From September 22, the 4G +service will be available in all the com-pany’s Pantera bundles as well as itsBusiness Open subscriptions.
Over the past year, mobile internettraffic in the network has doubled. “Or-ange customers are adopting 4G servicesat a faster rate than 3G services,” saidJean-Francois Fallacher, CEO of OrangeRomania.
The telco also announced the launchof 4G internet in the subway system. Itsaid the approximately 650,000Bucharesters who commute daily by
metro will now have access to speedsof up to 150 Mbps. Company represen-tatives did not reveal the exact invest-ment in deploying 4G in the subway,only that it had cost “millions of euro.”
“We are planning to have our entireurban network on optic fiber backbone,”said officials. “This technology we arebringing is not only beneficial for ourcustomers but also for us because it al-lows energy savings and network opti-mization.”
The Orange 4G network has expand-ed to 200 new locations. The operatornow covers over 1,300 Romanian townsand cities with 4G, representing 48 per-cent of the total population and 78 per-cent of the urban population.
Loyal customers will also receive 1GBof 4G traffic a month for every year theyhave spent as customers of the operator.
The company also has in place a buy-back scheme, offering a EUR 30 discountto anyone who buys a 4G compatibledevice and surrenders their old phone,according to Orange Romania’s chiefcommercial officer, Julien Ducarroz.
Last week, the operator received theapproval of the National Audio-visualCouncil to launch Orange Info, whichwill provide information on its rangeand services as well as a TV news showbroadcast by Antena 1, according to Me-diafax newswire. The service will broad-cast around the clock and will mainlyoffer Orange programs (80 percent)alongside productions by other contentproviders (20 percent). The schedulewill comprise news (45 percent), edu-cation and cultural programs (30 percent),entertainment (13 percent), advertisingand teleshopping (12 percent). ∫
Otilia Haraga
Orange Romania CCO Julien Ducarroz
Photo: Silviu P
al
Scrapping of claw back remains in limbo
pharmaceuticals industry, which is ex-clusively made up of generic drugsmakers.”
According to Cegedim Romania, aprovider of data for the pharmaceuti-cals sector, the local market grewslightly by 0.3 percent to EUR 1.3 billionin the first half of this year, helped bygrowth in the over-the counter segment.
Dan Zaharescu, executive director ofthe Romanian Association of Interna-tional Medicine Manufacturers (ARPIM),has pointed out that in the last year, twoout of ten patients have been treated ex-clusively through the claw back.
Mihai of the APMGR said that man-ufacturers of generic drugs had been hitthe hardest since the roll out of the clawback in 2011. Consumption of generics,which are cheaper drugs with expiredpatents, has fallen from 36 percent to 28percent, while investments in local pro-duction facilities worth tens of millionsof euros have been put on hold since theadoption of the tax.
“Maintaining it will only see this trendcontinue and in time it will lead to thebankruptcy of the Romanian pharma-ceuticals industry, with negative conse-quences for patients, who will be forced
to pay more in co-payment, and thestate, which will have subsidize drugsthat are twice as expensive,” warned theAPMGR head.
Data from Cegedim show thatgeneric drugs accounted for 63.3 per-cent of all drugs sold in Romania and29.1 percent of the value of pharmaceu-ticals sold in the first quarter of this year.
Amended claw back or new agreements?
Health authorities are currently lookingto enforce a differentiated claw back forproducers of generics and innovativedrugs, but have also been open to con-fidential deals between producers andauthorities, known as cost-volumeagreements.
An amendment to the claw backwould see the tax computation reflect aprice limit on generic drugs of up to 65percent of the cost of their innovativeequivalents.
This measure has been approved bythe Ministry of Health, the healthcareinsurance body (CNAS), the Ministry ofFinance and international lenders asneutral from a budgetary perspective,but its implementation has been “un-justifiably delayed”, according to Mihaiof the APMGR.
He cautioned, “The correction of thecomputation mechanism of the tax,which would reflect both the price lim-itation imposed on generic drugs andthe greater impact that the current taxhas on the producers of generic drugs, isabsolutely necessary for the survival ofthe local pharmaceutical industry.”
The authorities are now lookingmore carefully into price-volume agree-ments, which experts believe could intheory replace the claw back. Playerssay these confidential agreements be-tween authorities and producers on thesale of drugs could work, and are al-ready being used in the EU.
Petru Craciun, general manager ofCegedim Romania, commented that,theoretically, price-volume agreementscould successfully replace the currentclaw back, which is too high, unpre-dictable, and sometimes discriminatory.
“In practice, however, I am afraid ofseveral matters, because our mentalityhas not advanced too much. First of all,price-volume agreements could be in-troduced without giving up the clawback, as an expression of immaturitythat aims to bring the price of drugsbelow a sustainable level,” Craciun toldBR.
He added that these agreements,
∫ OVIDIU POSIRCA
Producers of innovative drugs, mean-while, are pinning growth hopes on theupdate of the reimbursed drugs list thatshould be carried out by the end of thisyear.
Pharma executives have complainedthat the claw back tax is unpredictableand unsustainable. Experts say thismechanism has been adopted by otherEU member states to prevent the con-sumption of medicines from spiralingout of control, while in Romania it isused simply to cover the public budgetdeficit for subsidized drugs.
Romanian policy needs EUimpetus
“Since 2008, the entire pharma industryhas been under pressure, on one handbecause of the introduction of new mol-ecules onto the list of free and reim-bursed medicines, and on the otherbecause regulated drugs prices are thelowest of 12 EU countries (HMOno.75.2009) and because of the clawback tax (EGO no. 77/2011),” MihaelaScarlatescu, senior external associate atD&B Davis si Baias, the law firm affili-ated to professional services firm PwCRomania, told BR.
She argued that the claw back taxshould be fairly regulated, consideringthat this year the allocated budget forcompensated medicines was based onthe real consumption of drugs in thefourth quarter of 2011. In addition, thetax is levied on the shelf price of thedrug, which also includes the profitmargins of the distributor and pharma-cists – in theory borne solely by pro-ducer. VAT was removed from thecomputation of the claw back after itwas declared unconstitutional.
Laurentiu Mihai, executive directorof the Generic Drug Manufacturers As-sociation in Romania (APMGR), com-mented that the authorities have notclearly stated when they will scrap thecontroversial tax, despite requests bythe association.
“The claw back should have beentreated as an interim measure, andscrapped when the economic situationstabilized, as was stipulated in the billsthat introduced it,” Mihai told BR. “In-stead it has become a permanent contri-bution towards financing the publichealthcare system, but which seriouslyimpacts patients’ access to drugs, aswell as the sustainability of the local
Pharmaceuticals producers are grappling with a claw back tax that absorbs around 20 percent of their sales, on amarket worth EUR 2.6 billion last year, and there are no signs it will go away soon. Experts say that price-volumeagreements could be the first step towards removing the claw back, which was initially billed as a temporary measure.
6 www.business-review.euBusiness Review | September 22 - 28, 2014
Mihaela Scarlatescu, senior externalassociate, D&B David si Baias
Laurentiu Mihai, executive director,APMGR
Dan Zaharescu, executive director,ARPIM
Petru Craciun, general manager,Cegedim Romania
Courtesy of D
&B
David si B
aias
Courtesy of AP
MG
R
Courtesy of AR
PIM
Photo: M
ihai Constantineanu
FOCUS ON PHARMA 7www.business-review.ro Business Review | September 22 - 28, 2014
which are mainly based on financial fig-ures, may not “pursue strongly enoughthe interests of Romanian patients”, ormay not have an optimum outcomeand could further constrain the alreadyreduced options in Romania’s thera-peutic package.
Zaharescu of ARPIM commentedthat price-volume agreements are cur-rently under discussion, but that theycould not replace the claw back.
“These agreements are a long wayfrom implementation because the Ro-manian legislation does not provide alegal framework for companies and au-thorities to sign such agreements,” saidZaharescu. He suggested that drugs soldunder such agreements should not beaffected by the claw back, and the reg-ulated prices of these drugs should notchange.
Mihai of the APMGR added that theprice-volume agreements that are cur-rently under discussion could be bene-ficial if additional funds were allocatedto this area.According to media reports,price-volume agreements are alreadybeing used in countries such as France,based on a stable and agreed budgetthat allows the launch of innovativedrugs as long as there is a limit on over-all spending.
Some industry executives argue thatthese agreements could be used for theupdate of the reimbursed drugs list,which has long been awaited by pro-ducers and is slated to be rolled out in2015.
Spiking costs feared from reimbursed drugs list updateThe question raised by the update of thelist centers on the mechanism by whichit will be financed. Players say that theauthorities may opt to finance itthrough the claw back, while some aresuggesting that price-volume agree-ments would be enough.
“Because the list has not been up-dated in the past six years, a large num-ber of molecules and products could geton it, and the decision-makers’ fear isthat the insurance budget deficit willgrow significantly,” said Craciun.
He added that producers haveenough innovative drugs pending ap-proval on the list to see their businessesgrow “significantly”, while the rest ofthe producers, mainly makers of gener-ics, would have to pay more in clawback with no concomitant hike in sales.
Craciun suggested that the updatewould have had a limited impact on themarket and the public coffers had itbeen carried out on a regular basis (an-nually, each semester) and would havebeen balanced by the introduction orelimination of some products.
The government approved 17 neworphan drugs this summer, which arebeing used for the treatment of rare dis-eases and cancer. The major updateshould take place by the end of this year,giving patients access to the new drugsfrom 2015, according to pharma execu-tives.
According to Zaharescu, there are
now 130 medicine files waiting to beevaluated.
“We can only hope that the authori-ties will keep their promise and the listwill be updated according to the estab-lished calendar, or else Romania willkeep its last place in Europe as far as ac-cess to innovative therapies is con-cerned, with a waiting period of morethan 2,500 days since the last update,”said Zaharescu.
He suggested the update of the listwould generate “moderate costs”, sincesome of the innovative medicines willreplace others that are in current use.
“These costs could partially be cov-ered through the claw back tax,” saidZaharescu.
The executive director pointed outthat the authorities have proposed atougher Health Technical Assessmentframework, meaning that few medi-cines will be introduced onto the reim-bursement list. The update should takeplace on October 29, according to thehealth authorities’ plans.
“However, we would like to underlinethat the authorities collected RON 350million more from the claw back taxthan they had anticipated and that themedicine budget needs an increase ofRON 175 million in order to cover allpublic treatment needs. A budget re-sponding to these needs would allowthe constant update of the reimburse-ment list, thereby increasing patients’access to innovative treatment, andwould provide space for a sustainable
claw back tax,” said Zaharescu.
Romania’s healthcare financing woesPlayers say that the root cause of the heavy taxation of the pharma sector is the lack of public funds forhealthcare. Mihai of the APMGR saidthere were no signs yet of any increasein the budget for reimbursed drugs in2015, adding that the current budgetdoes not meet the real needs of Roman-ian patients.
“Taking into account the constantgrowth of medicine consumption, itwill become unsustainable for produc-ers to bear this financing deficit,” saidMihai.
The government has allotted RON6.7 billion to the reimbursed drugsbudget this year, while RON 1.3 billiontakes the form of receivables throughthe claw back, said Local AmericanWorking Group (LAWG) consultantRadu Comsa this summer, speaking at aconference.
The ARPIM executive pointed outthat healthcare financing is currently 20percent below the real needs of patients.
Scarlatescu of D&B Davis si Baiaswarned that the continuation of lastyear’s measures, which lacked pre-dictability, pushed up costs and pre-vented the roll out of new drugs, couldpersuade some producers to withdrawfrom the local market.
8 www.business-review.ro Business Review | September 22 - 28, 2014
Cost-volume agreements could‘in theory’ replace claw back
expiration just a couple of years away,and while waiting for reimbursementthe patent life has gotten quite closeto expiry. We have a couple withslightly longer patent lives, but this isan issue. The industry has been wait-ing for quite some time to get theseproducts on the market, and to somedegree the costs of R&D are recoupedthrough selling these products overthe course of the patent life. So, whenwe limit the time a product is on themarket, we also limit the degree of re-turn versus the R&D investment wemade.
With the products where loss of
exclusivity is close, I still expect wewill launch them on the market be-cause we feel strongly that these areproducts that patients need, and Ithink there is still a lot to be done interms of meeting certain healthcaregoals in Romania.
Do you hope the government will scrap
the claw back tax at some point?
There are two things that the healthauthorities are looking at: the cost ofhealthcare per capita and budget pre-dictability. We see the claw back as amechanism employed to ensurebudget predictability, basically with
the pharma companies bearing thecosts of consumption above a certainbudgetary limit.
Other mechanisms exist to createbudget predictability, and cost-vol-ume agreements are one such. In the-ory, they could replace the claw backtax as a means to control and managethe healthcare budget.
How do cost-volume agreements work
in other countries?
There are a lot of different structuresfor cost-volume agreements, but ineffect they are typically a confidentialagreement between a company andthe health authorities to set a level ofconsumption and certain prices atwhich products would be sold. It isbeneficial for both parties because thehealth authorities are able to meettheir goal of allocating a certainbudget to a product, and pharmacompanies are often able to reachtheir goals as well.
Are the health authorities looking at
these agreements?
I think this is being seriously consid-ered as a mechanism and I hope thatover time it is employed more broadlyto make sure healthcare spending issustainable.
Do you think this could replace the
claw back altogether?
I think ultimately it’s one of the fewmechanisms that could allow for thephasing out of the claw back tax. Inconcept it has a very similar goal in
∫ OVIDIU POSIRCA
What is your take on the current claw
back tax mechanism in Romania?
I would like to start with a broaderconcept, which is healthcare spend-ing in Romania, because the clawback tax actually underlines somewider issues. Romania spends about5 percent of GDP on healthcare, wellbelow the European Union average of8 percent.
Where this manifests in terms ofimpact on the industry is in the formof the claw back tax, which, in a way,maintains healthcare spending at acertain level, despite consumption inthe marketplace.
This is a very challenging issue forpharma companies to deal with, inthat it is to some degree unsustain-able. When we say it’s unsustainable,we mean that healthcare spending asa percentage of GDP per capita –whatever metric you look at – mustincrease.
With the current claw back tax inplace, healthcare spending – orpharma spending, let’s say – is actu-ally remaining flat. So, what we haveis, year after year, the pharma indus-try absorbing a lot of the increases inthe consumption of pharmaceuticalproducts in the market.Pfizer is pay-ing the claw back tax in line with therest of the industry (roughly 20 per-cent of sales) and it is quite a consid-erable amount, with a significantimpact on sales. We hope as an indus-try to come to some sort of a solutionthat can, over time, phase out theclaw back tax as a mechanism formanaging healthcare spending.
When do you expect new drugs to be
included on the reimbursed list, and
does Pfizer Romania have innovative
drugs pending approval?
We have six products that we havesubmitted for reimbursement on thelist. These come from various thera-peutic areas. Based on the latest up-dates that we’ve had, we expect thereto be some outcome by the end of thisyear, and we hope that by the begin-ning of next year there will be a newlyissued reimbursement list.
Will the patents for Pfizer’s six innova-
tive drugs expire soon?
We have one product with patent
Nolan Townsend, country manager at American drugs maker Pfizer Romania, which has a local staff of 374 and a plant in Cluj, says that confidential agreements signed between the authorities and pharmaceuticalcompanies governing the sale of drugs could “in theory” replace the claw back tax altogether.
He became country manager of PfizerRomania in April 2014. Prior to thisappointment, he was country managerof Pfizer Ukraine. Townsend startedhis career at Pfizer in 2003.
He has an MBA from Harvard Busi-ness School and a Bachelor of Arts inEconomics from the University ofPennsylvania.
CV NolanTownsend
Photo: M
ihai Constantineanu
FOCUS ON PHARMA 9www.business-review.ro Business Review | September 22 - 28, 2014
terms of maintaining a consistentlevel of healthcare expenditure, butrelying on agreements betweenpharma companies and health au-thorities, it is a bit more tailored to theneeds of patients, the state andpharma companies.
Who is going to pay for the opening of
the reimbursed drugs list?
I think it could be a bit challenging, ason one hand the reimbursement listcould be re-opened at the beginningof 2015 and on the other hand pharmaspending will be flat versus the cur-rent year.
It’s my hope that we can establisha cost-volume arrangement that willallow for mutually beneficial agree-ments between the authorities andthe industry to avoid the claw backbeing the mechanism through whichthis reimbursement list opening isfunded.
What is Pfizer Romania’s strategy for
the nutritional supplements plant it
owns in Cluj?
Our intention is to increase our in-vestment in the plant in Cluj. We willbe bringing products that are manu-factured or packaged in other coun-tries in Europe to this site in Cluj.
Romania has the makings of a verycompelling market for pharmaceuti-cals packaging, in terms of labor costsand a few other advantages, if youcompare EU countries.
For us, Romania represents a veryattractive investment for pharmaceu-tical packaging and we want to in-crease our presence in that area.
Where do you export the products
packaged in Romania?
We export them globally, to variouscountries in Asia and the Middle East.The products being packaged do notjust go back to the EU, but reallyacross the world.
How much do you plan to invest in your
Cluj plant?
We plan to invest another USD 5.4
million in expanding the plant, raisingits capacity, and allowing us to bringproducts from other countries withinEurope.
How many employees does Pfizer have
in Romania?
We have 374 employees, many ofwhom are either located in the mainfactory in Cluj (124) or in the field.
What turnover do you expect this year?
The way we look at it is that we need to effectively communicate thevalue of our products, the value ofPfizer medicines in the market, whichallows us to grow our sales. If we do this effectively I think we canexpect to continue to grow our presence in the market. So we expectlow single-digit growth this year andin the coming years, which would see us slightly outpace the market,but this would be based on our workin terms of communicating the valueof our medicines to patients and topayers.
How do you expect the pharma market
to perform this year?
The expectation was originally thatthe reimbursement list would open in2014, and I think what has becomeclear is that this will probably not bethe case and it will open in a futureyear. So I think we will see very simi-lar dynamics driving this year’s sales to previous years. I therefore ex-pect the market this year to be flat or to slightly decline, because itwill not benefit from the increase that will come from the new con-sumption of products on the reim-bursement list.
The expectation is that in futureyears we will see an increased budgetfor pharma, to fund the higher con-sumption associated with bringingnew innovative products and also anuptick in the market of over-the-counter drugs, of which patients arevery much in need.
“Our intention is to increase our investment in
the plant in Cluj. We will be bringing products
that are manufactured or packaged in other
countries in Europe to this site in Cluj. Romania
has the makings of a very compelling market
for pharmaceuticals packaging, in terms of la-
bor costs and a few other advantages, if you
compare EU countries. For us, Romania repre-
sents a very attractive investment for pharma-
ceutical packaging and we want to increase our
presence in that area.”
Nolan Townsend, country manager of Pfizer Romania
10 ANALYSISwww.business-review.eu
Business Review | September 22 - 28, 2014
Beckers, CEO of Telekom Romania.The second day was dedicated to in-
teractive events in three major cities:Bucharest, Iasi and Cluj-Napoca.
While Romtelecom and Cosmotewill be active on the market as TelekomRomania, the companies under theirwing will keep their appellations. “Thenames and identities of Germanos Tele-com Romania, Sunlight Romania (theBucharest subsidiary), NextGen Com-munications and Telemobil, as well asthe names of the services, will not besubject to the rebranding,” company of-ficials told Business Review.
Dialing it up a notchLeaving the EUR 15 million rebrandingeffort aside, the question is how wellRomanians will react to the Germanbrand, which replaces two householdnames?
“Romanians have always receivedthe introduction of global brands ontothe local market well, regardless of theindustry – be it in banking, telecom orfashion,” Dinu Bumbacea, partner,management consulting, and CiprianNegura, senior manager, managementconsulting, both of KPMG, tell BR.
They add that the two operators are currently addressing slightly different customer segments. “While Romtelecom is the undeniable leadingprovider of high-quality integratedservices for the enterprise market and the most significant player in some of the fixed residential markets,Cosmote is still perceived as affordablemobile option primarily for the
residential segment,” they say. Telekom officials told BR the re-
branding was a long-term process thatwould take years to complete.
“We had a similar experience in thisfield in the Republic of Macedonia,where we also started to build the Tbrand from scratch. Building the brandand creating something customers con-sider valuable and are willing to pay forare things we cannot manage in one ortwo quarters – I believe it will take a pe-riod of five years. Five years is neededto move the market because it is notonly about us; it’s about understandingthat if you spend nothing, in the endyou get nothing,” Nemat told BR. Sheadded that while Romania is, popula-tion-wise, the third largest market afterGermany and Poland where theDeutsche Telekom group has T in Eu-rope, the brand is fighting a harsh pricebattle locally.
“The level of investment in a coun-try’s networks varies because countriesare competing against each other forthe best capex, and from my perspec-tive it has of course to do with themacroeconomic situation. (…) Romaniais a very tough market for us. The aver-age revenue per user is only EUR 5, sofrom a ROI perspective, Romania is apretty difficult market,” Nemat said.
On the short term, the impact on themigration of customers will be negligi-ble, Adrian Ciobanu, managing directorof Reimens Group, told BR.
“The consumer’s perception willchange on the medium and long termonly if the quality of customer service
improves significantly. In the case ofVodafone and Orange, the companiesthey took over, Connex and Dialog, hada culture of customer care services,with the quality of services having aspecial status in the commercial policy.T Mobile took over two companies thatcome with big challenges in this field.We will find out in a year or two whattargets the Germans have,” saidCiobanu.
According to the KPMG experts can-vassed by BR, “The Romanian telecommarket has gone through a shy consol-idation in the last few years, but thecurrent large number of electroniccommunications operators – approxi-mately 1,500 at the end of 2013, accord-ing to an ANCOM annual report –invites further consolidation, be it inthe TV, internet or fixed/mobile voicemarkets.”
They describe Romania as “one ofthe most competitive markets in the EUwith still different competitive land-scapes in each of its sub-markets: a mo-bile service penetration of more than120 percent and ARPUs as low as EUR6.5. Also, a somehow constant numberof fixed telephony lines, 4.75 million,and a fixed broadband access penetra-tion rate significantly lower than the EUaverages, 46 percent of Romanianhouseholds, despite fairly good broad-band coverage, especially in urbanareas.”
Moreover, the Romanian market – inline with the EU and international mar-kets – is also facing other types of chal-lenges that bring into discussion theentire design of the telecom ecosystemfor the future, the experts comment,such as the tightening regulatory envi-ronment, the pressure of OTT andother ICT service providers. “Therefore,Telekom will need to adapt quickly tothe challenges that lie ahead for this in-dustry,” conclude the KPMG represen-tatives.
With this change of identity,Telekom Romania announced it aimsto offer a new customer experience,built around the one-stop-shop philos-ophy, which delivers simplified, inte-grated and customized fixed andmobile solutions.
“I think the typical Romanian house-hold is between three and four people.Our offer is really designed with theconsumer in mind, with the family inmind, to give them state-of-the art-ser-vices at good value for money. I am notsaying it’s cheap but you get something
With a EUR 15 million budget, a coordinated international effort and ample dedicated resources, the new identityof Cosmote and Romtelecom –Telekom Romania – is the rebranding of the year. BR investigates how easy it willbe for the German brand to stick in the minds of Romanian consumers and what clout it will have on the market.
T for two: Romtelecom and Cosmoteundergo German regeneration
Hans-Christian Schwingen, chief brand officer, Claudia Nemat, board member,DT; CEO Nikolai Beckers, comms director Ruxandra Voda, Telekom Romania
∫ OTILIA HARAGA
Brand and deliver“The whole rebranding exercise in-
volved an international team which in-cluded Romanians, Dutch, French,Greeks, Germans.... There was a lot oftop talent resource allocation to get itdone,” Claudia Nemat, member of theboard of management DeutscheTelekom AG, Europe and Technology,tells BR. More than 2.000 people worked onover 100 complex projects in marketing,sales, IT, HR and real estate. The ITteams dedicated 68,000 working hoursto implement the changes, includingthe joint website and the single contactcenter, which the companies calculatedwas the equivalent of 35 years of workconcentrated in just four months.
By the end of the year, more than500 workshops will have been run forall Romtelecom and Cosmote Romaniaemployees – a total of 1,855 traininghours – introducing the new brand,with its values and philosophy, andboosting employee commitment inorder to deliver on the promise of thenew Telekom Romania brand.
The rebranding cost EUR 15 million.When questioned by Business Review,Telekom Romania officials did not pro-vide a breakdown of the investments.
The creative part of the campaignwas implemented by GMP and Web-styler, while Media Investment, part ofThe Group, is in charge of the mediaplanning. The agencies signed a twoyear contract.
Thus, Media Investment is manag-ing the Telekom account, after winninga pitch that took place at the end of2013- the beginning of 2014. Anotherfour media agencies participated. Apart from the media pitch, there wasa pitch for the creation part, which waswon by GMP. Another three creationagencies participated, according to thecompany.
The rebranding was announced overtwo days, on the first of which the com-pany made the official announcementat a press conference attended by Ro-manian PM Victor Ponta, ANCOM pres-ident Catalin Marinescu, as well as localand regional officials of OTE andDeutsche Telekom, such as ClaudiaNemat, Deutsche Telekom board mem-ber for Europe and Technology, Hans-Christian Schwingen, chief brand officerat Deutsche Telekom AG, and Nikolai
Courtesy of Telekom
Rom
ania
ANALYSIS 11www.business-review.eu Business Review | September 22 - 28, 2014
that is reliable,” said Beckers. “We clearly have a focus to roll out
the fiber network, especially in urbanareas, and also to strengthen the LTE,”Beckers told BR.
This translates into integrated fixedand mobile services shops, with 43 cor-porate stores undergoing a completemakeover, in line with the new brandidentity. Out of these, seven conceptstores will offer a hi-tech, interactivecustomer experience, according toDeutsche Telekom standards.
The two companies now operatingunder the same brand have come upwith a new IPTV platform and all-inclu-sive communication packages.
“If we are talking about fixed voice,mobile voice and data, there is nothingnew. If we are talking about bundlesthat comprise IT solutions that are ac-cessible to a large pool of customers,then we may have surprises, especiallyin the IT services area, such as cloudservices, virtualization and outsourc-ing,” comments Ciobanu. “The com-petitors’ reaction will be first of all towait. And they will react, as slowly asthey do now, until they feel they arelosing revenue or market share.”
Prices for the all-inclusive packagesrange from RON 91 to RON 444, and in-clude smartphones and tablets, de-pending on the offer.
“There is always room for one opera-tor who is just centered on price inevery kind of industry. The only thing
that we find unacceptable is that not alloperators will play according to thesame rules,” Beckers told BR.
Telekom Romania is entering themarket with a one-stop-shop philoso-phy. On a single bill, customers willhave unlimited communication formobile and fixed broadband, mobileand fixed voice and also TV entertain-ment. In addition, all packages fromTelekom Romania will include accessto the new interactive Telekom TV, weband mobile services, according to com-pany officials.
“The strategy is simple: boostingprofit, stopping losses, maybe laying offsome staff in the next six months, andmaybe a reengineering process thatother companies have also gonethrough, with the aim of becomingmore efficient. How they will do it is an-other matter, but I don’t believe anyonecan ‘rip the market apart’ with an offer.Perhaps in prepaid we can talk about a
‘wow!’ solution, but in the case of post-paid services, it is highly unlikely,”Ciobanu told BR.
The ball is in the state’s courtMeanwhile, a decision on the privatiza-tion of the remaining Romtelecomshares and the merger between Romt-elecom and Cosmote has stalled. Cur-rently, the Romanian state has a 46percent stake in Romtelecom. The ma-jority stake in the operator is owned byGreek Group OTE and Deutsche
Telekom, which owns a 40 percentstake in OTE. Romtelecom also has a 30percent stake in Cosmote.
The ball is clearly in the state’s court.“Our target for Romania is to have a full
merger and this means not only amerger from the legal point of view butintegrated operations and networks,”Nemat told Hotnews.ro.
In terms of the stake that the Ro-manian state owns in Romtelecom,Beckers said the government has yet tomake a move on the matter, since it hasnot completed its evaluation of howthe privatization should be conducted.
On February 28, the state signed acontract for consultancy services withrepresentatives of a consortium headedby SSIF Swiss Capital, which also in-cludes UBS Limited, Musat si AsociatiiSPARL and BT Securities. HoganLovells, Banca Transilvania, and KPMGAdvisory are subcontractors.
“The government should completethe evaluation and tell us what its de-mands are, we will come back to them,and I think eventually we will all agreethat the merger is a good process. If andwhen – we will see how this goes. Canit be completed in 2014? I believe it is arather ambitious deadline, but we arehere and we will offer all our assistanceto the Romanian authorities,” Beckerstold HotNews.
In April, Alexandru-Razvan Cotove-lea, minister for the information society,told the media that the privatization of
Romtelecom was among the govern-ment’s priorities.
The minister added that the Roman-ian state will ask for “a fair price.” “Thereal value is between EUR 300 millionand EUR 600 million and the negotia-tion will be very tough, because we be-lieve this operator has an extraordinarymarket potential,” he said at the time.
Cotovelea also told the media thathe did not rule out the option of sellingthe shares to Deutsche Telekom. “Wedon’t have anything against DT buyingour shares. It is one of the world leadersin the field and, as long as it plans to in-vest seriously and doesn’t limit itself toshort-term business plans, selling offwould be an objective for us,” said theminister.
“By the end of the semester, we willhave a very precise report from theteam of consultants, and the presidentof the privatization committee willcome up with an analysis to see whatthe best method from the financial andtiming point of view is. It could be anIPO, a direct negotiation. I tend to be-lieve that if the figures, the strategy ofthe consultants, pay off for the govern-ment, then direct negotiation is thebest,” said Cotovelea at the time.
So far, even though the first semes-ter has long ended, no informationabout any progress in this matter hascome through the official channels.
12 CITYwww.business-review.eu
Business Review | September 15 - 21, 2014
Multinational musical ensemble celebratesMaria Tanase
∫ OANA VASILIU
One of the nation’s greatest voices,Maria Tanase has been described as Ro-mania’s Edith Piaf, enchanting theworld with her voice for 50 years. Sep-tember 25 marks 101 years since herbirth, an event that will be celebratednationwide with a special tour – Colorsof Maria.
Artists from seven countries haveembraced the voice and music of thegreat Romanian chanteuse, transform-ing her most famous songs into uniqueand colorful interpretations. The eventwill bring together jazz improvisation,folk themes from the musicians’ coun-tries of origin and original compositions,all in a journey between East and West.Traditional instruments such as the ney,duduk and oud will complete the at-mosphere, accompanied by the excep-tional local voices of Monica Madas andMaria Casandra Hausi.
Behind the project is Mehdi Aminian,who plays the ney, a traditional Middle
Eastern instrument. The Iranian artistdiscovered Romanian folklore in 2011,when he participated in the GeorgeEnescu International Festival. Aminianwas so impressed with the local folklorethat he went to Maramures, in northernRomania, to find out more about the re-gional music. Later, the Iranian discov-ered Tanase, and came up with the ideaof giving her songs an oriental and con-temporary makeover. Aminian subse-quently brought onto the same stageartists from Romania, Bulgaria, Turkey,Spain, France and Armenia to interpretTanase’s most famous songs.
The tour will run from September 23until October 12, taking place in ten cities:Craiova, Timisoara, Oradea, Cluj-Napoca,Sibiu, Brasov, Iasi, Galati, Constanta andfinally Bucharest, with two concerts, onOctober 11 and 12, at Sala Radio. Ticketscan be bought from the Eventim networkand online from www.eventim.ro. Pricesrange from RON 40 to RON 80, depend-ing on the category and city.
With friends like this: Jennifer Aniston and John Hawkes
CONCERT
∫ DEBBIE STOWE
Director: Daniel SchechterStarring:Jennifer Aniston, Mos Def,Isla, Fisher, Will Forte, Mark Boone Jr,Tim Robbins, John HawkesOn at: Cinema City Cotroceni, CinemaCity Sun Plaza, Grand Cinema Digiplex,Hollywood Multiplex, Movieplex, TheLight Cinema
Hapless ex-cons. A doomed criminalscheme. A barnstorming 1970ssoundtrack. Jaunty banter. It could bethe latest super-cool Quentin Taran-tino flick. But instead it’s an amiablerepackaging of familiar crime-caperelements lent some élan by a qualitycast.
Mickey Dawson (Jennifer Aniston)is the long-suffering trophy wife ofFrank (Tim Robbins), a dodgy Detroitreal estate developer with a finger inevery pie in the city. His murky deal-ings have brought him to the atten-tion of felonious losers Ordell Robbie(Mos Def) and Louis Gara (JohnHawkes), who see him as ripe forblackmail. The pair hatch a get-rich-quick scheme involving poor Mickey,for which they enlist a mentally un-balanced Nazi memorabilia collector(Mark Boone Jr.) to provide weaponryand back-up.
Guess what! It doesn’t go accord-ing to plan. Into the mix come stum-bling the Dawsons’ extramaritalinterests, Marshall (Will Forte), acountry club drinking buddy ofFrank’s with designs on the lonelyMickey, and Melanie (Isla Fisher), theyounger model for whom Frank wasabout to trade in his wife. The crooksprove inept at their task and start ar-guing, and the ruse soon spirals out ofcontrol.
Based on an Elmore Leonard novel, Life of Crime is nicely plotted
with some deft twists, which helpmake up for the feeling that you’veseen it all before. The movie is satis-fyingly cynical about human nature:spineless Marshall and hard-facedMelanie both prove more interestedin safeguarding their own positionsthan in the welfare of an innocentwomen who’s fallen into the hands ofdangerous criminals, and Frank’sconcern for the mother of his son ispathetically half-hearted. Happily,proceedings are not overly violent,given the subject matter (thoughthere are a few wince-inducing mo-ments).
All the stars make the most of theirroles, in particular Aniston, whofleshes out her trophy wife into arounded character that is the film’sheart. Robbins is suitably loathsomeas the philandering crook, who getsplayed like a violin by Fisher’s self-serving mistress.
While its debt to Tarantino andother black comedies is manifest –some of the characters appeared in1997’s Jackie Brown, also based on aLeonard book – Life of Crime isnowhere near as memorable as themovies it invokes. There are manyiconic entries in the darkly funnycrime capers and wife-kidnap genre –from Pulp Fiction and The BigLebowski to Ruthless People (towhich the plot here bears close simi-larities) and more recently the Oscar-winning American Hustle – andDaniel Schechter’s film does not ap-proach that caliber.
But its vivid characters and im-pressive cast do some justice to thestory, and Life of Crime is a re-spectable tribute to the recently de-ceased Leonard, credited as executiveproducer, and an advert for the rest ofhis work.
FILM REVIEW
Life of Crime
CITY 13www.business-review.euBusiness Review | September 15 - 21, 2014
Bucharest from Cityof Joy to Little Paris
∫ OANA VASILIU
Once upon a time …The official Bucharest City Hall docu-mentation presented for the capital’s555th anniversary indicates rivalclaims to have founded the city fromBucur the Shepherd, the traditionalcandidate, and Vlad the Impaler, citedin the first documented mention,which dates the capital to September20, 1459.
Historical research brought to lightthe vestiges of a fortress dating backto the second half of the 14th century.The town of Bucharest was born, andthe Court of the Prince, MirceaCiobanu’s church (1558-1559), plusthe small alleys of the merchants andcraftsmen sprang up around this earlyfortress.
Flowing through the town, theDambovita river became a link withthe north of the city and its lakes.Memories of the old villages live on inthe familiar names of Berceni, Flore-asca, Colentina and Pantelimon, allmodern-day neighborhoods.
In 1659, Bucharest was made thepermanent capital of Wallachia. Thecity continued to develop, numerouschurches were erected, better forti-fied inns appeared and the city got itsfirst street paved with wooden beams,Mogosoaia Bridge (1692), subse-quently renamed Victoriei Street in1878, the research found.
In the 19th century, the city beganto modernize, and was made capitalof Romania after the union betweenMoldavia and Wallachia in 1862. Back
In the Middle Ages, the Greeks called Bucharest Hilariopolis, which translates to the City of Joy. In the1800s, its charm and elegance earned it the nicknameLe Petit Paris. As the capital marks its 555th anniversary, BR takes a look at its history.
Bucharest in the early 18th century, in a 1717 woodcut from Leipzig
then, Bucharest was the largest city inSouth-Eastern Europe, after Istanbul.
Most of the flagship buildings ofBucur’s town date back to the reign ofCarol I (1866-1914): the RomanianAthenaeum (1888), Carol I RoyalFoundation Palace (1891), the Min-istry of Agriculture, the Palace of Jus-tice, the Post Palace, Sturdza Palace,CEC Palace, the Patriarchy Palace, theMilitary Circle, Athenee Palace Hoteland many other impressive edificesall emerged in this period.
At the end of the World War I,Bucharest was considered one of themost beautiful European capitals,with its glamorous cultural and sociallife, elegant atmosphere and architec-ture earning it the moniker Little Paris.But things changed radically in thecommunist period, largely because ofindustrialization: thousands of peo-ple were moved to the capital andhoused in charmless blocks of flats,which came to dominate thecityscape.
… after 555 yearsToday’s Bucharest is a mix of tradi-tional and modern, and is comingunder the spotlight on its anniversarythanks to the Bucharest Cultural Cen-ter, ArCuB. The organizers have comeup with a diverse program, fromvideo mapping on the Palace of Par-liament to alternative sounds, danc-ing in the Old City, concerts featuringRomanian artists and a gastronomicand cultural fair hosted in CismigiuGardens.
Moving on up! Twochoices for fun fitness
by Delia Iliasa, General Managerof Club Moving RomaniaWith over 30 years of experience
in fitness and wellness, Club
Moving is undergoing fast growth
in Romania and slowly becoming
one of the top players in the
industry.
Club Moving has promoted the im-portance of a healthier lifestylethrough sports activities in over 60clubs around the world under theslogan “Moving is life”. In the springof 2010, the French franchise madea bold decision to come into the Ro-manian market, and since adaptinga model to better suit local needs,it has started to become one of thetop fitness options for Romanians.
Today Club Moving Romania oper-ates two different concepts: ClubMoving in Bucharest, Otopeni, Clujand Iasi and Moving Express inPloiesti and Bacau. Although bothtypes of clubs have top fitnessequipment and an array of dynamictraining programs, the differencebetween the two lies in the types offacilities and the market segmentthat each targets. “Whether you area sports enthusiast or entering agym for the first time, Club Movingallows you to find activities that youwill enjoy. You can choose to per-sonalize your workouts, if you wantto see fast results, or to opt forgroup activities for a daily boost ofenergy and fun. If you want to relaxyour body and revive your senses,Club Moving has the perfect settingfor you: with a semi-Olympic swim-ming pool, saltern, sauna and mas-sages, your daily wellbeing can beimproved,” said Alina Erbiceanu,Marketing Manager at Club MovingRomania. “Moving Express, mean-while, targets a younger, more dy-namic, socially active crowd, so ourfocus is more on fitness activitiesthan leisure and the price is very at-tractive.”
What’s in store for the future?“Our plan is to open two more clubsby the end of this year and nine
more in the year to come. Our focusis equally divided between addingmore locations to our network andmaking sure that our promise tocustomers stays true in terms of theservice we offer, ensuring that withevery visit each of our members hasa pleasurable experience. Whatmakes us unique on the market isthe emphasis we put on the humanfactor, from customers to employ-ees, to all stakeholders involved. Wetry to understand, satisfy our mem-bers’ needs and always come upwith fresh approaches in helpingthem in their efforts to have health-ier and well lived lives. To accom-plish this we make sure not onlythat we hire really passionate anddriven individuals, but also that weinvest continuously in training anddeveloping our employees,” saidDelia Iliasa General Manager ofClub Moving Romania.
Contact:Club Moving Bucuresti
Hotel Caro, Bd. Barbu Vacarescu Nr. 164ASector 2, Bucureşti 010065, Româniatel: 0744771144fix: 0314253249 fax 0314253250
PARTNER CONTENT
14 CITYwww.business-review.eu
Business Review | September 22 - 28, 2014
FOUNDING EDITOR Bill AveryPUBLISHER Anca IonitaEDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - seniorjournalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai ConstantineanuLAYOUT Beatric e Gheorghiu ART DIRECTOR Alexandru Oriean
EXECUTIVE DIRECTOR George MoiseSALES & EVENTS DIRECTOROana MolodoiSALES & EVENTS
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Ana-Maria Stanca, Ana Maria Andrei,Iulia MizganPRODUCTION Dan MitroiDISTRI BUTION Eugen Musat
PUBLISHERBloc Notes Media ADDRESSNo. 10 Italiana St., 2nd floor, ap. 3Bucharest, Romania LANDLINEEditorial: 031.040.09.32Office: [email protected]@[email protected]
ISSN No. 1453 - 729X
September 26 – October 4
The first Bucharest Art Week will rununder the theme “cities, borders and at-titudes”, structured around the need forexperiment and cultural exchange be-tween artists from European countries,especially from Central and Eastern Eu-rope.
It will involve a series of artistic eventsorganized in public spaces, interspersedwith art expos, open workshops, talks,tours and auxiliary happenings in gal-leries, alternative spaces and culturalcenters.
Proceedings open at Foisorul de Foc
/ The Fire Tower (33 Ferdinand Blvd.)with a collective exhibition by 29 artists,Inner Fire, a Matter of Limits / Ardereainterioara, o chestiune de limite. Musicalact Fierbinteanu will perform live at thelaunch.
Carol 53 (53 Carol I Blvd.) will hostanother collective exhibition by a groupof young artists presenting graphics,paintings and installations, a manifestonamed BITUM by Razvan Anghelache,Alexandra Baciu, Bianca Ionita andDaniela Virlan.
Japanese artist Tomoaki Minoda willhave a photography exhibition,Bucharest Today at Galeria IX (9 Avia-torilor Blvd.). Another space that will begiven over to contemporary arts is Home
Matasari (17 Matasari St.), which hoststhe first personal painting exhibition ofAdrian Dica, who presents to the publicThe Big Trash Can / Marele Tomberon,around the idea of trash and damage tothe personal values under pressure toobtain social validation. Fifteen artistsfrom Cluj Napoca will also reveal a jointcanvas.
Gara de Nord (1-3 Gara de NordSquare) will host five days of video con-tent courtesy of the artists Petru Ionescu– The Line, Maia Stefana Oprea – Lining,Dijana Tomik Radevska – Drama of Ges-ture and Insomnia, Dimitris Palade –Fringe Dance, plus others.
The National Library of Romania (22Unirii Blvd.) plays host to two exhibitionsduring Bucharest Art Week, one in col-laboration with The Elie Wiesel NationalInstitute for Studying the Holocaust inRomania, called Witnesses and testimo-nials, as well as an international exhibi-
tion, Balkan Mood: Focus Macedonia,which brings under the spotlights Mace-donian artists Srdjan Micic, OrhanKamilov, Dijana Tomik Radevska, MarinaLeskova, Stefan Jakimovski and SotirHadji Nikolov along with their Romaniancounterparts, Alexandra Baciu, AncaBranzas, Alexandra Pasca, RazvanAnghelache and Florina Nita.
Solitar Urban / Lonely Urban is an-other group exhibition due to take placeat the Curtea Veche Museum (21Franceza St.), featuring Cristi Gaspar,Raluca Ghideanu, Grupul Foc(AR) (AlinaTudor and Razvan Neagoe), Lucian
Muntean, Christian Paraschiv, JustinianScarlatescu and Maria Pop Timaru.
A double event will be hosted by Galeria Occidentului (11 OccidentuluiSt.): The Reconstruction of the Fragment/ Refacerea fragmentului, a painting ex-hibition by Matei Enric and Musicals, acontemporary jewelry design show byAlexandru Burlacu.
The week ends at Dianei 4
(4 Dianei St.) with a closing party that will follow Alex Baciu’s Ghost Host ex-hibition.
Business Review readers are recom-mended to pay attention as they pass
through the center of the city, whereBucharest Art Week will present a seriesof art manifestos by the artists EGG NOEGO (Valentina Chirita, Ana Barbu, MinaBarbu), Delia Maxim, Paul Popa, MateiUlmeanu, Julien Britnic, Roxana Gatej,Sabin Garea and Adrian Dica, whoseworks of art are to be found dottedaround Bucharest.
The full program of the events willbe constantly updated on the BusinessReview website.
DON’T MISS
BUCHAREST ART WEEK
Hot ticket: artist Otilia Cadar will exhibit her Hominiade series at the Fire Tower
Courtesy of B
ucharest Art Week
