The Business Week in Romania 27.06 - 01.07.2016



·       Isărescu foresees a reduction in negative inflation

Annual inflation has remained in negative territory for longer than predicted in the National Bank of Romania’s previous forecasts, but with lower figures thanks to the exhaustion of the impact of V.A.T. reduction on foodstuffs in June 2015, because of uncertainties and low prices for imported products, according to Mugur Isărescu, the Bank’s governor. In the detailed communiqué presented by the governor after the monetary policy session on Thursday, it is stated: “The short-term forecasts point to continuing negative annual rates of inflation, albeit with significantly lower values due to the exhaustion of the direct impact of the extension in June 2015 of the reduced rate of V.A.T. on all foodstuffs.” At the same time, the prospect of a gradual return to positive inflation is marked by the risks generated by the foreign and domestic settings, in the context of heightened uncertainty, according to the communiqué.

·       National Bank maintains interest rate at 1.75% per annum

The Administrative Board of the National Bank of Romania has decided to maintain its monetary policy interest rate at 1.75% per annum and to preserve the current levels of obligatory minimum reserves rates applicable to lei and foreign currency loans payable to lenders. “The National Bank of Romania vigilantly monitors the evolutions of the international and domestic medium, and is ready to use all the tools at its disposal in this period of heightened uncertainty, with a view to fulfilling the fundamental objective of medium-term price stability and to maintain financial stability,” says the National Bank in a communiqué. The interest rate has remained unchanged since May last year.

·       A.R.B.: mortgages the sole driver of non-governmental credit

Mortgages were the sole driver of non-governmental credit in the post-crisis period, with growth of 134% from 2008 to 2016, and it has been precisely this driver that has slowed down due to the adoption of the Commissioning Payments Law, according to the chairman of the Romanian Banking Association (A.R.B.), Sergiu Oprescu. “Let’s picture non-governmental credit as an aeroplane with four engines: mortgage credit, consumer credit, short-term credit for companies, and medium- and long-term credit for companies. What happened in 2008-2016? Mortgage credit is the only engine that had any traction and power in the period. It increased from 5.2 billion Euros to 12.2 billion Euros: plus seven billion Euros. And what did we do? We passed a law that could only reduce this single engine of non-governmental credit. On the other hand, consumer credit fell from 18.5 billion Euros to 11.5 billion Euros, and so minus seven billion Euros,” explained Oprescu at a conference. The A.R.B. representative also pointed out that in 2016 for the first time mortgage credit exceeded consumer credit, as a result of changes in the structure of the population’s borrowing. At the same time, short-term company loans decreased from 10.4 billion Euros to 7.9 billion Euros.

·       A.N.R.E. passes price reduction for supply of natural gas to domestic consumers

The A.N.R.E. Regulatory Committee has passed an average three-per-cent price reduction for the supply of natural gas to domestic consumers for the period from 1 July 2016 to 31 March 2017, an average calculated according to the market share of each licenced operator. The reduction is aimed at maintaining the current domestic production price at 60.00 lei/MWh, at ensuring that domestic consumers use one hundred per cent of domestic production (current production and stockpiles), and at reducing the estimated unit cost of transportation.

Sources: Agerpres,, Bursa



·       Asirom will provide R.C.A. for Bucharest Police vehicles

Asirom has won the tender to supply R.C.A. insurance services for Bucharest Police vehicles and will earn 3.9 million lei over a period of two years for 2,066 vehicles, including 176 motorcycles. The policy has been estimated at 4.1 million lei. Omniasig also made an offer at the tender. Hitherto, Bucharest Police vehicles have been insured by Carpatica Asig Sibiu. Part of the Austrian Vienna Insurance Group, Asirom was the fourth largest insurer in 2015. V.I.G. also owns Omniasig and B.C.R. Life Insurance.

·       CEZ to become digital company

CEZ Romania, part of the Czech CEZ group, is set for a transformation. Having been a classic electrical production, distribution and supply company, CEZ aims to become a digital, customer-centred company. The company is also getting ready to launch its own charging stations for electric cars, which it sees as the future. “Last year, one phase was completed, but another has begun, in which we wish to absorb all the changes happening in the industry. There are a lot of new technologies. We have begun to build a flexible company, centred on the customer, but which will be completely digital,” declared Martin Zmelik, the C.E.O. of CEZ Romania at a press conference. The year 2015 was the tenth anniversary of the Czech group’s entry onto the electricity distribution and supply market. In 2005 the Czechs bough Electrica Oltenia from the state-owned Electrica S.A. CEZ has two charging stations in Pitești and Craiova, where electric car owners can recharge free of charge. In 2016 the company will build another two or three such stations and aims to expand to every major city in the region.

·       Turkish investor to build 1,000 flats in Popești-Leordeni

Local S.R.L., a company controlled by Turkish investors, received a 1.3 million lei injection of capital in May, according to the Registry of Commerce, a sum that will be used to support planned investments in two residential projects in Bucharest. The company says that it plans to build 1,000 homes in Popești-Leordeni, with 160 flat in the first phase, which will be ready in a year and a half after the commencement of construction, programmed for February-March 2017. Another project is located on Șoseaua Fundeni and will comprise 260 flats, work which will also begin next year. “The total investment is seventeen million Euros (including just the first phase of the Popești-Leordeni project). Half the money will come from the Turkish sole associate, and the other half from loans and sales” says Ibrahim Bozkurt, the Local S.R.L. administrator. The company is also developing around 250 flats next to Pantelimon Park and another residential project in Bucharest’s Plumbuita area.

·       EximBank to guarantee 6.5 million Euros of Pehart Tec exports

EximBank will guarantee future Pehart Tec Group exports to the value of 6.5 million Euros, according to Trajan Halalai, Executive President of EximBank, in attendance yesterday at the inauguration of the company’s new tissue paper production plant in Dej. The project has created 100 new jobs and is worth a total of ninety million lei, half of which was supplied by the Ministry of Public Finances as part of its State Aid Scheme. The Pehart Tec Group was created as a result of tissue paper investments finalised in 2015 by businessman Ioan Tecar in partnership with the Abris Capital Partners Investment Fund.

·       Competition Board authorises takeover of Noriel, Intertoy and Toys & Games Industry by Jonagold

The Competition Board has authorised the takeover of Noriel, Intertoy and Toys & Games Industry by Jonagold C.E.E. Holding, a company controlled by Polish Enterprise Fund, whose portfolio includes companies in various sectors. Toys & Games produces toys and games, Noriel distributes toys and games, and Intertoy is a retailer of toys and games in its own chain of shops and online. The Competition Board has ruled that the takeover presents no significant obstacle to competition on the Romanian market.

·       American giant Carlyle recruits 800 Romanians

In July the company will be opening a call centre in Brăila, where it will hire 400 staff by the end of the year. Comdata Service will recruit 800 speakers of foreign languages in the coming period. The company is part of an international group based in Milan, whose majority shareholder has been the Carlyle Group. Comdata Service reached 2,800 employees by May this year and has ended last year with a turnover of 133 million lei, an increase of 28% compared with 2014, and more than nine times the figure for five years ago. The company’s profitability also improved last year, with the call centre making a profit of 26.6 million lei, which is to say, a profit margin of twenty per cent.

·       Blidar begins electric bus and trolleybus production in Arad

Industrialist Valer Blidar, who controls the Astra Vagoane Călători factory in Arad, with a turnover of 96 million lei (22 million Euros), will start production of electric buses and trolleybuses, a new division, which will contribute to an increase in turnover, after revenues decreased threefold last year. Blidar recently signed an agreement with a major French producer of components for electric buses and trolleybuses. The businessman expects profit to double by the end of this year, after its disastrous 1.4 million lei (320,000 Euros) figure for last year, compared with 41 million lei (9.4 million Euros) for the year before that, and turnover of 96 million lei compared with 290 million lei.

·       Romgaz finds hydrocarbons potentially worth six billion dollars

Romgaz Mediaș (stock exchange symbol SNG), Romania’s largest producer and main supplier of natural gas, has discovered a seam of hydrocarbons in the Caragele structural complex (in Buzău) estimated to be equivalent to between 150 and 170 million barrels of petrol. At a price of 50 dollars a barrel, and at an average technical merchantability of 25% (i.e. only a quarter of the quantity can be extracted), the seam is worth six billion dollars. Romgaz cannot receive this money directly inasmuch as the find comes with extraction, landscaping, and plant maintenance costs. The find is in the north-east sector of the Moesic Platform within the Caragele structural complex, is 35km long, and has been explored for geological targets at depths of between 1,500 and 5,000 metres. Production tests completed at two exploration boreholes confirm a major accumulation of hydrocarbons in Jurassic limestone reservoirs at an interval of around 120 metres at a depth of more than 4,000 metres.

·       Carrefour set for eight billion lei turnover after absorbing Billa Romania chain

The French Carrefour group is to absorb the Billa chain of eighty supermarkets, which made a turnover of 1.5 billion lei last year. The deal was signed in December 2015, but only recently received the go-ahead from the Competition Board. Carrefour officials have not yet divulged any timetable for integrating the Billa brand. Carrefour owns more than 190 shops in the hypermarket, supermarket, online and proximity categories. Shops in the Billa chain have surface areas of between 500 and 2,000 square metres, and therefore could be converted into Carrefour Markets or Express shops. Carrefour announced it would be taking over Billa Romania’s operations in a transaction worth around 100 million Euros at the end of last year. It is the third largest Romanian retail transaction after Auchan—Real (250 million Euros) and Lidl—Plus Discount (200 million Euros). Thanks to the deal, Carrefour looks set to achieve a turnover of around eight billion lei and a chain of 275 shops.

·       Oracle Romania officially opens Iași office

The Iași office is part of the company’s national expansion plan. Sorin Mîndruțescu, Country Leader and C.E.E. Cloud Director, and Hans Klemm, the U.S. Ambassador, were present at the opening ceremony. Currently more than fifty staff work in the Oracle Software Support department, and the plan is to hire a further twenty by the end of the 2017 tax year. Iași was chosen for the high quality of both its educational system and workforce. “The opening of our new office in Iași is an important step for Oracle in Romania and proves yet again our commitment to expansion at the national level and on-going recruitment of top talent” declared Sorin Mîndruțescu.


Sources: Curierul Național,, Ziarul Financiar, Bursa, Wall-Street,


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