Business Review

Gone are the performances achieved by Bucharest’s luxury hotel industry prior to the economic crisis. Strongly affected by the collapse of business travel, the capital’s four- and five-star hotels have seen their business shrink dramatically in the past two years. While continuing a price war begun in 2009, hotels redistributed market share among themselves and in many cases saw revenues decline. So far, 2011 has seen no concrete signs of an upturn and no new major international operators announcing plans to enter the local market.

Simona Bazavan

2010 was a tough year for all companies active in Romania and Swiss investors were no exception. Cost control strategies were implemented across every industry and investment plans put on hold. Nevertheless, the worst of the crisis is behind us, claimed Swiss investors present at the second Swiss Business Forum organized by Business Review last week, adding that there are signs of recovery.

Simona Bazavan

From the cement industry to pharmaceuticals and FMCG, Swiss investors have been a strong presence in Romania in recent years. In 2010, the lingering recession and gloomy economic context brought a significant downturn in the overall volume of foreign direct investments to Romania. Swiss companies were no exception, but after a grim 2010, they are now cautiously hoping for better prospects.

Simona Bazavan

In 2010 the local chocolate market was anything but a box of chocolates. Although a world-renowned comfort food in depressing times, Romanians proved less inclined to indulge their sweet tooth and the market fell by as much as 24 percent, according to some reports. This year, manufacturers are preparing themselves to take the bitter with the sweet yet again, as the market is expected to continue falling, albeit at a slower pace.

Simona Bazavan

Despite more than EUR 25 million of investments in the Sfantu Gheorghe and Sulina miniports and beach improvements and another EUR 2 million spent on events promoting the Danube Delta – part of the “Explore the Carpathian Garden” brand – Sfantu Gheorghe does not have 24/7 healthcare services. With new national boat registrations constantly falling, the Romanian authorities are hoping that millions of euro worth of leaflets, workshops, conferences, congresses, seminars and photo exhibitions will bring tourist boats and cruise ships flooding to the rustic fishing villages of the Danube.   

Dana Verdes

Tax experts, lawyers and representatives of the authorities discussed the latest fiscal changes in 2010 and 2011 and their impact on doing business locally at the ninth edition of the Romanian Tax, Law & Lobby event organized by Business Review last week. 2010 was a busy year for fiscal authorities, albeit not a very productive one, tax experts argued. This year has begun with more changes, some of which promise long awaited fiscal improvements.

Staff

Gold has brought consistent gains for those who bet on the precious metal for the long run. The Property Fund and SIFs are also seen as keepers by specialists while the stock exchange is tipped to generate higher yields this year. Sectors like retail, healthcare and energy are also popular. But it’s not all roses in the investment garden. Retail specialists say the field has little room for newcomers, a completely different landscape from a few years ago. Healthcare remains fragmented, but takeovers are still expected, while the energy companies which have looked towards wind are hoping for improvements to the law which often stymies hundreds of millions euro worth of projects.

Dana Verdes, Otilia Haraga, Simona Bazavan

After a tough 2009, 2010 also proved to be as hard as nails for local DIY (do-it-yourself) retailers. Gone are the times when ambitious expansion plans were being announced and the market still seemed large enough for any newcomer. Like elsewhere in the retail sector, companies have tooled themselves with discounts and promotions in order to survive while hoping that the worst of the crisis is over.

Simona Bazavan

The telecom & IT industry has had a lively year in spite of general reduced consumption woes. But the healthcare sector struggled. Starved of funds from the GDP, the system was plagued by malpractice scandals, lack of predictability and the migration of medics abroad or to the private sector. Retail fared little better. In the first half of 2010 the local retail market was estimated to have dropped by about 10 to 12 percent. Less consumption by cost-conscious shoppers translated into lower sales and forced retailers to scale back their expansion plans. On the car market, Dacia and Ford were saved by exports, while oil producers Petrom and Rompetrol have seen their results go into freefall. All this against a backdrop of fiscal volatility and unpredictability that mired players in all sectors in a pit of uncertainty. But does 2011 promise to be a happier new year?

Dana Verdes, Otilia Haraga, Simona Bazavan

Elis Pavaje has a 19-year history on the Romanian market and is currently leader of the paving industry. General manager Emil Gota talks to Business Review about the company’s current results and steps for the future.

Corina Dumitrescu