The Business Week in Romania 14.11 - 18.11.2016

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MACRO AND PUBLIC POLICIES NEWS

·     Construction progress in September

In September construction work increased by 0.7% compared with the same month last year, making a recovery after a drastic decrease in August, thanks to a boost in non-residential building in particular. In August, construction work decreased by 5.3% on the same month last year, the biggest decline since October 2014. Over the first nine months of the year, the increased was 1.9% compared with last year. Home building increased by 2.7% and non-residential construction by 7.6% in September compared with the same month last year, but engineering work decreased by 3.1%.

·     Industry grows by 3% in September

Industry, which accounts for almost a quarter of Romania’s economy, grew by 3.3% in September compared with the same month last year, mainly due to increased production in the key processing sector, which offset the continuing decline in the mining industry. In August, industry grew by 5.3% compared with the same month last year. After seasonal adjustment, September’s increase in production was 1.4% on the same month last year.

·     Increased consumption has unexpected effects

Romania’s economy is growing, but increased consumption has created jobs in other countries, given that greater demand has been met mainly by imports, which are increasing more quickly than exports. At a recent conference, Mugur Isărescu, the Governor of the National Bank of Romania, warned that preserve macro-stability and balance must be maintained, and also spoke of the need for this message to percolate down through all the strata of the Romanian economy.

·     Tax Council warns against tax cuts

In 2017, Romania will have the lowest tax revenues for twenty years: 25.4% of G.D.P., way below the European average of forty per cent, due to the tax cuts included in the new Fiscal Code. At a conference on the subject, Ionuț Duitru, chairman of the Tax Council, asked: “How did we end up here?” His answer: “Because of tax cuts in the Fiscal Code.” He went on to explain that all the political parties have promised massive tax cuts, which taxpayers are only too eager to accept, because, for various reasons, they are unwilling to pay their taxes and imposts.

·     G.D.P. up almost five per cent in first three quarters

In the first three quarters, gross G.D.P. increased by 4.9% on the same period last year, with a seasonally adjusted figure of 4.8%. In the third quarter, G.D.P. was up by 0.6% on the second quarter. Compared with the third quarter last year, the increase was 4.4% in gross terms and 4.6% after seasonal adjustment, according to the figures made available by the National Statistics Institute.

·     A.P.I.A.: Romania produces fewer motorcars in the first ten months of the year

In the first ten months of the year, Romania manufactured 301,538 motor vehicles, 8.3% fewer than over the same period last year, given a 16.8% fall in production at Ford B-MAX Craiova. Total exports of motor vehicles fell by 9.4%, according to the data recently released by the Association of Automobile Producers and Importers (A.P.I.A.). In October, 29.142 motor vehicles were produced, ten per cent fewer than in the previous month. Of the total number of motor vehicles manufactured in the first ten months of the year, 88.4% (266,590 units) were produced by Dacia, and the remaining 34,538 units by Ford. 

Sources: Agerpres, News.ro

 

BUSINESS AND INVESTMENT NEWS

·     Foreign companies invest 11% more in Romania

Foreign companies made direct investments of 3.143 billion Euros in Romania over the first three quarters of the year, an increase of 11.2% on the same period last year, of which 2,750 million Euros in shares, including reinvested profits. In September, direct foreign investments amounted to 404 million Euros, according to the monthly figures published by the National Bank of Romania.

·     Pet Star Holding, turnover increases by 8% in the first semester

Pet Star Holding, the Romanian company that owns the biggest plastic bottle factory in the Balkans, has reported a turnover of 11.1 million Euros for the first half of the year, an increase of eight per cent on last year. The Pet Star factory in Slobozia produces plastic bottles for mineral water, soft drinks, beer, and cooking oil. In Romania the company has a 56% share of the market and a portfolio of around two hundred clients, including Pepsi, Expur, Bunge, Bukovina, Albalact, and Covalact.

·     Vodafone Romania revenues up three per cent

Vodafone Romania’s communications services revenues reached 179.2 million Euros in the second quarter, an increase of 3.6% on the same period last year. Vodafone Romania reached 9.36 million clients by 30 September 2016, an increase of 314,794 on last year. Of the total number of clients, 8.68 million are mobile telephone users. The average revenue per Vodafone mobile user was 6.2 Euros in the three months up to 30 September 2016. As of the end of September, forty-one per cent of Vodafone Romania clients were subscribers, and the remaining fifty-nine per cent had pre-paid phone cards.

·     Medicaments distributor Polisano accepts debts of 500 million lei

Medicaments distributor Polisano went into decline in 2014, after the suicide of owner Ilie Vonica and the arrest of his wife as part of an investigation into forged prescriptions. The company has been in insolvency since September and has accepted liabilities of 500 million lei (111.4 million Euros), mainly to Eximbank and insurance company Exim Romania. Two years ago, Polisano was estimated to be worth 160,000,000 Euros.

·     Four per cent of Romania’s companies produce 92% of the country’s business profits

According to a CreditInfo study, just four per cent of the total number of active companies in Romania produce ninety-two per cent of business profits in Romania. Thirty-three per cent of the country’s employees work for the companies in question. CreditInfo used Ministry of Finance and Registry of Commerce public sources to check almost 1,400,000 companies. One in five of Romania’s most profitable companies is located in Bucharest: 14,164 companies. Bucharest also has the highest number of registered companies: 266,635.

·     N.E.P.I. to open Piatra Neamț mall

South African investment fund New Europe Property Investment is to open a mall in Piatra Neamț. The Shopping City mall will feature a 7,500-square-metre Carrefour hypermarket and will provide a total of 27,900 square metres of retail space. Piatra Neamț has 86,000 inhabitants and 245,000 live within a forty-five-minute drive of the new mall.

·     Bucharest Mall and Plaza Mall brought under Turkish umbrella

The Turkish Anchor Group has brought the two companies that operate Bucharest Mall and Plaza Mall under the same umbrella. Plaza Mall, administered by Plaza Mall Development and Management, has been transferred to Bucharest Mall Development and Management, which owns Bucharest Mall. The merger process, which commenced in March, was recently finalised.

·     Wizz Air moves all its flights from Tîrgu Mureș Airport to Cluj Airport

Wizz Air has decided to move all its flights from the Transylvania International Airport in Tîrgu Mureș to the Avram Iancu International Airport in Cluj for a period of two weeks, due to runway repairs.

·     C.N.U layoffs will affect the public budget

National Uranium Company (C.N.U.) layoffs will have an impact on the public budget, given unemployment payments of 12,440,000 lei, of which 161,352 this year, 7,620,000 lei in 2017, and 4,660,000 lei in 2018.

·     New furniture brand launched in Bucharest

TORO Design is a furniture brand created for Central Europe and the Balkans, and brings together a number of designer and producers mainly from Turkey, as well as from Romania, Iran, South Korea, and the European Union. The initial investment is 500,000 Euros, and the investors estimate sales of over one million Euros in the first year. The Bucharest showroom will act as a hub and headquarters for the whole region and will be the first in a chain of showrooms to be opened in Cluj, Constanța, Iași and Timișoara.

 

Sources: Bursa, News.ro, Adevărul Financiar, Profit.ro

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