Romania

December 2008

ECONOMIC GROWTH - Romanian GDP is forecasted to drop 0.6% next year.

BANKING - Lending growth is forecasted to slow down to 5% in 2009, which will lead to a decline in consumption. Constructions and retail will be the fields hardest hit areas. With a non-governmental credit of around 40% of GDP, companies and the population's dependence on banking loans is significantly lower than in other CEE countries.

CONSTRUCTION - Romanian real estate developer Flavus Investitii will begin the first stage of 1.5 bn EUR its Brasov Coresi project next year.

MACHINERY INDUSTRY - German bearing producer Ina Schaeffler will invest 95 M EUR in 2009 into expanding its factory in Brasov.

PACKAGING - Belgian packaging producer VPK invested 15 M EUR into a 25 000 m2 corrugated cardboard factory in Bihor County.

WASTE MANAGEMENT - Swedish waste recycling company Usitall will invest an estimated 100 M EUR in the next 3-4 years in the development of a waste incinerator, which will also produce thermo and electric power for the 91 000 inhabitant Tulcea.

WASTE MANAGEMENT - American alternative energy producer Energy Quest and Italian garbage sorting systems manufacturer COFAMM will invest 73 M EUR in the development of a power gasification plant using municipal solid waste. The unit will convert daily 500 tons of household waste into 20 MW of power.

CAR PRODUCTION - Ford will most likely start production at the Craiova plant at the end of 2008 and intends to reach 300 000 cars annual production.

RETAIL - Plus discount stores plans to invest 30-38 M EUR annually for the next four years to expand its 70 store countrywide network by 20-25 stores annually. Although the chain has entered also cities with below 15 000 inhabitants, Bucharest has priority on its expansion list due to 3-4 times higher than the average customer flow than small localities.

FOOD INDUSTRY - South-African SABmiller will invest 50 M EUR to triple its beer production capacity. At the same time Heineken Romania is investing 22 M EUR into increasing the production capacity of its five Romanian plants.

HEALTH CARE - Romanian businessman Florin Andronescu will invest 50 M EUR in the development of a 14 000 m2 private hospital in central Bucharest.

PRINTING - German printing services provider Euro-Druckservice invested an estimated 20 M EUR in the development of a typography unit in Brasov County.

PRODUCTION - American Polaris will invest 50 M EUR into its first European production unit in Giurgiu. The factory will build up to 60 000 snow-mobiles, ATVs, Victory motorcycles and ranger cars per year. At this production capacity, the factory could generate some 120 M EUR in turnover.

MACHINERY INDUSTRY - American company Universal Alloy Corporation, operating in the aircraft industry, will invest 24 M EUR into a aluminum profile extrusion factory to be opened during 1H/2009.

CONTRUCTION MATERIALS - Romanian construction materials producer Adeplast invested 28 M EUR in expanding the production capacity of its factory in Oradea, Bihor County.

CONSTRUCTION MATERIALS - French construction materials supplier Lafarge will invest 100 M EUR in the development of a gypsum-board factory in Turceni, Gorj County.

CONSTRUCTION MATERIALS - Austrian aluminum profiles manufacturer HAI Aluminium will invest 40 M EUR in the development of a production unit in Santana, Arad County.

ENERGY - Romanian-English company Bio Fuel Energy, operating in the chemistry industry, invested 65 M EUR in the development of a bioethanol factory. The unit will be open for business from February 2009 and will have a production capacity of 80 000 tons annually.

FOOD INDUSTRY - Swiss canned meat producer Scandia Romana invested 30 M EUR in the development of a 20 000 m2 can factory in Sibiu. With a 36 000 tons annual production, the unit will be open for business in 2009.

FORESTRY - Finnish company Tornator, specialized in forest exploitation, invested an estimated 50 M EUR in the acquisition of 10 000 ha of forest in Eastern Romania


October 2008

PC SALES - The overall PC market is expected to increase by 60-70% in the fourth quarter, compared to Q3.

ALUMINIUM INDUSTRY - Vimetco, a Russian aluminium company, will invest over 1.5 Bn EUR in the development of a 1 320 MW thermo-electric power plant in Turnu Magurele, Teleorman County.

REAL ESTATE - Y.H. Dimri International, an Israeli real estate developer, will invest 500 M EUR into developing two real estate projects in Bucharest and Ploiesti, comprising 5,300 dwellings and a shopping centre.

CEMENT PRODUCTION - Holcim Group, a Swiss cement producer, will invest 400-500 M EUR into opening a cement factory in Cluj County.

COSMETICS - Procter & Gamble will invest an estimated 68 M EUR into the development of a shampoo and hair care products factory near Ploiesti, Prahova County.

METAL PARTS PRODUCTION - Rautaruukki, Finnish metal-based components and system manufacturer, will invest 35 M EUR by the end of 2008 into a metal profiles production unit.

INVESTMENTS - Iem Top Investment and Shandong Ninjiang Construction Group, Chinese investment and construction companies, Romanian air transport company Atlas Airlines and Romanian authorities will invest close to 1 Bn EUR in the development of a 350 ha industrial park in Slobozia, Ialomita County. The park is to be completed by 2011.


August 2008

ECONOMY - Romania's real GDP growth accelerated to 8.2% y-o-y in Q1/08 from 6.6% in Q4/07. Domestic investment rose even sharper by 35.2% y-o-y in Q1/08 fueling concerns over overheating and high inflationary.

FDI - The FDI for the first 5 months of 2008 almost doubled compared to the same period last year, reaching 4.11 Bn EUR.

FDI - foreign investors from automotive, food and construction materials industries have committed to 2 Bn EUR worth of projects, which are to be completed by 2012. Once up and running the projects will employ 16 000 people.

ONLINE SALES - The online booking of air and rail tickets is becoming increasingly popular among Romanians, the sales growth y-o-y was 225%.

TRANSPORT - The Transport Ministry has asked to be awarded around 600 M EUR at the next budget adjustment in order to speed up road and railway infrastructure projects.

CONSTRUCTION - The booming construction sector increased the investment into new construction worksby 33.1% y-o-y and the investment into construction equipment rose by 35.4% y-o-y in Q1/08.

RETAIL - Romanian retail market, worth 31.2 Bn EUR in 2007, is forecasted to grow by 130% by 2017. Romania and Bulgaria are one of the markets with the biggest growth potential in the field.

RETAIL - Belgian developer Belrom will invest 800 M EUR in 40 commercial centers in smaller Romanian cities. French retailer Carrefour will invest 450 M EUR in the next 4 years to extend its network with 40 units by the end of 2012. French retailer Auchan will open 10 additional hypermarkets in Romania by the end of 2009, with total investments more than 300 M EUR.

REAL ESTATE - The prices of apartments in Bucharest fell by 5% during 01-07/2008. The drop has been the sharpest during the last two months.

REAL ESTATE - Greek real estate investment fund Global Emerging Property Fund will invest 200 M EUR in a project consisting of residential units and A-class business buildings on a 22 000 m2 plot in Bucharest. The project will be finished in 2010. British developer Atrium started construction works of a 85 M EUR commercial center in Cluj-Napoca. Works will be finished by the end of 2009. The real estate division of Deutsche Bank bought with 340 M EUR 3 projects in Northern Bucharest consisting of 600 residential apartments and 100 000 m2 of office space.

PRIVATE MEDICAL SERVICES - The private medical services market could reach 890 M EUR by 2011, more than double the 350 M EUR forecasted for 2008. 70% of the market is expected to be outside Bucharest.

MEDICAL CARE - Centrul Medical Unirea, a private medical services supplier owned by 3i investment fund, invested 7.4 M EUR in a diagnostic and treatment center. The company posted a 5.5 M EUR turnover for the 1H/08, up 74% against the same time the year before. Romanian medical service provider Gral Medical will invest 10 M EUR in a private hospital. Swedish medical service provider Medicover will invest 10 M EUR in building a regional laboratory in Western Bucharest. Romanian medical services provider Medlife invested 0,4 M EUR in a Physiokynetotherapy and Medical Recovery Centre.

AUTOMOTIVES - German engine components producer Kolbenschmidt invests 80 M EUR into 150 000 m2 of factory space in Cluj county.

TYRE PRODUCTION - Italian tyre maker Pirelli, will invest 68 M EUR this year to develop it activities in Romania making the company's total investments in Romania worth 235 M EUR by the end of 2008.

LOGISTICS - American GE Real Estate and Greek Helios Phoenix will invest in 2008 87.5 M EUR in building 6 logistics parks across Romania, with total floor space of 315 000 m2. French group FM Logistic, operating in logistic management, will invest 42 M EUR in the next three years to finance two warehousing projects with floor space of 200 000 m2.

AVIATION- Czech military aircrafts company Aero Vodochody become the main shareholder of Avioane Craiova aircraft works as a result of a 16.3 M EUR transaction.

MEAT INDUSTRY - American meat company Smithfield will invest 100 M EUR in doubling the number of the farms and in developing a combined animal feed factory. The project is part of an investment plan of 600 M EUR. Romanian meat producer CrisTim invested 1.4 M EUR in new packaging equipment. Spanish company specialized in meat products Campofrio will invest 20 M EUR in a ready meals factory.

MEAT INDUSTRY - Romanian agricultural company Agroli Group will make a total investment of 11.6 M EUR in increasing its production capacity, modernising its slaughter house and expanding its logistics and distribution capacity.

CEMENT PRODUCTION - Swiss cement and aggregates producer Holcim will invest an additional
75 M EUR to increase its factory?s bulk cement loading facilities and grinding clinker by 30%. Prior investments to the factory have been 120 M EUR. Also French giant Lafarge, the largest player on the Romanian cement market, will invest 54 M EUR to expand its production capacity.

IT - The IT market in Romania is forecasted to grow 30% and reach 1.9 Bn EUR this year. The hardware segment will advance the most (37%), followed by services (20%), and software (14%).

CONSTRUCTION MATERIALS - American producer of industrial construction materials, electronics and telecommunications Emerson will invest over 125 M EUR in five factories and two administrative buildings, with total floor space of 110 000 m2, in the industrial park in Cluj. Austrian company Wienerberger, the largest brick producer in the world, will invest EUR 100 million directed towards production units and potential acquisitions of local players.

FOOD RETAIL - Major food retail networks have expanded by 10% since the beginning of the year. The fastest growth is boasted by discounter networks with a growth rate of 14% from the end of 2007.

ENERGY - Czech company CEZ, plans to invest 800 M EUR if it wins the tender for the biggest wind farm in Europe.

PAINT AND VARNISH - Last year, the paint market, worth 200 M EUR, grew 20%, a rate that will fall to 12-15% over the next three years but will still appeal to global giants.

COSMETICS - Romanian cosmetics producer Farmec will invest 10.5 M EUR in the next 3 years in upgrading its production lines to EU standards.


May 2008

AUTOMOTIVE - Ford will start production at the Craiova plant most likely at the end of 2008 and intends to reach 300 000 cars annual capacity.

RETAIL - 500 M EUR are invested in hypermarkets this year. The French company Carrefour is planning to invest 120 M EUR to open 6 new units. Metro plans to open 7 new hypermarkets by year end, costing 140 M EUR. Auchan has budgeted around 80 M EUR to open 4 new stores.

RETAIL - German Tengelmann Group will invest 310 M EUR in extending the Plus discount stores network from current 52 to 175 - 200. The retailer plans to expand at a pace of 25-30 stores per year, targeting cities with over 15 000 inhabitants.

RETAIL - Romanian group Pic will invest in retail parks in Calarasi and might also invest in one in Ploiesti (total value for both locations EUR120 million). The retail parks will both include a Pic Hypermarket. The hypermarket in Calarasi will be one third of the EUR 60 million investment.

RETAIL - Selgros Cash & Carry retailer, part of the German group Rewe, opened its 17th store in Braila, as a result of a 20 M EUR investment. The unit has a selling surface of 10 000 m2.

AGRICULTURE - The prices of agricultural products have doubled or tripled over the last year and are driving up the price of agricultural land in Romania. Today, the average price per hectare is 1 500 EUR and it is forecasted to triple during the next 3 years. Foreign investors have already boosted land prices as buying is possible through Romanian registered companies, although the law bans foreign investors from buying land until 2014.

FOOD INDUSTRY - Meat products producer Caroli Foods started the construction of a logistics center in Pitesti, in which the company will invest up to 5 M EUR. The center will ensure a daily flow of 80-130 tons of merchandise. The works will be finished this year.

BEVERAGES - Dutch beer manufacturer Heineken NV acquired Bere Mures, the second-largest independent domestic beer brewer, at 150 M EUR. With this investment, Heineken secures its leading position on the market with a 31% market share.

CONSTRUCTION MATERIALS - French group Lafarge plans an investment of 35 M EUR for 2008 for developing its aggregates and concrete division both through acquisitions and through new units.

CONSTRUCTION MATERIALS - Romanian manufacturer of aluminum and PVC trim Gecsat will invest around 6 M EUR this year to expand production of glass mineral wool.

CONSTRUCTION MATERIALS - Polish wooden floors and parquet producer Barlinek will invest 20 M EUR in modernizing and extending Romanian company Diana Forest , recently acquired from Spanish real estate group Martinsa - Fadesa, for 23 M EUR.

HEALTHCARE - MedLife, a private medical service provider, will invest 30 M EUR by 2010 to open four hospitals in Romania. The company plans to widen its medical services portfolio by providing doctors from the US, UK and Israel.

CHEMICAL INDUSTRY - Dutch company Den Braven, which is the worldwide leader in professional sealants, has invested over 10 M EUR to a 10 000 m2 polyurethane foam production unit, warehouses and offices in Bucharest.

FURNITURE - Romanian furniture producer Staer will invest 7 M EUR this year to extend its shops network to 30 locations and to upgrade the related warehousing and logistics.

PACKAGING - Austrian group Greiner, packages producer, budgeted 3.5 M EUR this year for the acquisition of equipment, increasing the degree of automation and doubling production and warehousing capacity.


March 2008

EUROZONE - Romanian government and Central Bank of Romania (BNR) have set 2014 as the target for country's joining to Eurozone. The parties trust that by this time they will have had enough time to take all the fiscal and monetary measures needed.

CONSTRUCTION - Romania was the fastest growing contruction market in the EU during the period 11/06-11/07, states Eurostat.

COMMUNICATIONS INDUSTRY - Nokia, the world's largest mobile phone producer, opens its first assembly line in Romania at the Jucu factory in Cluj County. The investment in the factory amounted to EUR 60 mln and it will operate at full capacity as of 09/08.

BANKING - The 40 players in the Romanian banking industry earned EUR 825 mln net profit in 2007, which is record high. In percent terms the net profit grew 32% y-o-y which is three times faster than the 10.2% net profit growth recorded a year earlier.

OUTSOURCING - Major Indian outsourcing companies consider Romania as one of the best locations for developing their business due to employees' language skills and low salaries. WNS Global Services recently opened its first center, which will employ 150 people, in Bucharest. The center provides outsourcing services to EU clients in French, German, Italian and Spanish.

AUTOMOTIVE INDUSTRY - Romcar, the importer of Ford, will invest EUR 30mln to open 14 showrooms across the country in cities such as Targoviste, Slatina, Deva, Caransebes, Bistrita and Oradea.

CONSTRUCTION MATERIALS - Austrian group Holzindustrie Schweighofer will invest EUR 90mln to its lumber mill and attached electrical plant with capacity of 9 MW in Radauti. The factory is to start production in 2H/08.

RETAIL - German retailer Kaufland will invest EUR 75 mln to open 10 new hypermarkets in 2008. A typical Kaufland hypermarket stretches on 20,000m2, has a selling surface of 4,000 m2 and 200 parking spaces.

CONSTRUCTION - Italian Cefin Holding group and British investment fund Teesland will invest EUR 200 mln to construct 5-6 industrial parks in the Romania's main cities this year. Each park will cover 6-10 ha and worth around 40 million euros.


January 2008

FOREIGN INVESTMENTS - Non-resident buyers doubled their stock market investments in 2007. Nonresident investors spent over EUR226.4 million on the stock market in 2007, 33.8% more year-on-year. Foreign investments on the Bucharest Stock Exchange (BVB) reached EUR 1.66 billion, compared to last year's EUR 845 mln.

LEASING MARKET - The domestic leasing market has reached approximately 3.31 billion euros after the first nine months of this year. The companies belonging to the two professional associations in the sector, ALB and ASLR, which control almost 97% of the market, had released financing worth almost 3.19 billion euros by late September. During this period, the companies that are part of ALB (The Leasing and Non-banking Financial Services Association) financed the acquisition of goods worth more than 2.46 billion euros, while the members of ASLR (Association of Romanian Leasing Companies) granted financing standing at 725 million euros. From the similar period of last year, the market has expanded by 42 percent.

RETAIL - Bucharest remains the most attractive market for retailers in Eastern Europe in 2008. Bucharest is currently the most attractive retail market in Romania and the offer is estimated to keep growing this year by adding some 750,000 square meters of commercial space, however the level is still low compared to other Eastern European cities, Coldwell Banker Romania analysts said.

TYRE INDUSTRY - Japanese tire producer Yokohama Rubber is considering establishing a production facility in Romania. Representatives of the company have so far asked for details on the possible location and other facilities in the area. The targeted region is in the southeastern part of Romania in Calarasi. The value of the investment has not been established but the vicepresident of the local city council on economic matters, Marian Dinulescu, said the tire producer could invest between EUR 40 and 100 million in the local facility production.

CAR INDUSTRY - Ford will start production in Craiova by end-2008. John Fleming, president of Ford Europe, said that Ford would start production at the Craiova plant most likely at the end of 2008 and intends to reach 300,000 cars annually for a total 2.2 million cars capacity throughout Europe. "We established from the beginning of this process that we wanted a business to develop the industrial area in Craiova. The fact is that the car maker from Craiova was dying; that is why we wanted to bring a strategic investor here", said Theodor Atanasiu, president of AVAS. PM Calin Popescu-Tariceanu said, "The acquisition of Automobile Craiova by Ford will put Romania top of the list of car makers in South East Europe, which will attract more spare parts suppliers to Romania."

CAR INDUSTRY - American all-terrain vehicle producer Polaris will build its first production unit in Europe in Romania.The necessary investment will reach around EUR 50 million, said Bogdan Gheorghiu, regional director at Polaris for Romania, Bulgaria and the Republic of Moldova. The exact location of the factory, for the moment said to be located in Giurgiu, will be decided in November this year. Initial talks also included the option to build the factory in Bulgaria. The factory could be functional by the end of 2008. Gheorghiu hopes the Polaris factory will build up to 60,000 snow-mobiles, ATVs, Victory motorcycles and ranger cars per year. At this production capacity, the factory could generate some EUR 120 million in turnover.