Local banks turn on to Republic of Moldova
Romania’s third
largest bank, Raiffeisen
Bank Romania, last
month opened a
representative office in
Chisinau, Republic of
Moldova, continuing
its expansion strategy
across south and eastern
Europe.
At present the only
local bank with a
presence in the Republic
of Moldova is Banca
Comerciala Romana.
Meanwhile the second largest bank
in Romania, BRD - Groupe Societe
Generale’s chairman and CEO Patrick
Gelin, told The Diplomat the idea of
BRD going to Moldova is currently “under
examination.” Greek-owned Piraeus Bank is also looking at investments in
the country.
Contacted by this magazine, executive
director of wholesale banking with
ING Romania, Misu Negritoiu, said the
Republic as not a priority for the Dutchowned
bank, which has a universal bank
presence in the Benelux
countries, Poland and
Romania. “We don’t
have to go to the Republic
of Moldova too
soon,” he said. “We
don’t want to have an
office there just because
it’s nice to have one.”
Raiffeisen Romania
president and CEO Steven
van Groningen said,
on the announcement: “Considering the positive
trend the Republic
of Moldova has witnessed
lately and the increased interest
from our existing clients, we believed it
is the right moment to open a rep office
in Chisinau.”
In Ukraine, Raiffeisen Bank, with its
recent purchase of Bank Aval, is now the
nation’s local leader with around 12 per
cent of the market.
Orange leaders aim to exploit Black Sea
At a time when controversy looms
over the sale of natural gas in the
Community of Independent States
and west and central Europe, Ukraine
and Romania intend to set up a joint
venture to survey and produce oil and
natural gas on the Black Sea’s continental
shelf, stated the presidents of
the two countries, according to news
agency Novosti.
Viktor Yushchenko and Traian
Basescu discussed energy security
and cooperation on oil and natural
gas production over 12,000 sq km
of the Black Sea shelf. A Ukrainian-Romanian commission, due to be set up after the talks between the presidents,
could consider the issue. There
was no word on its progress from the
Romanian President’s office, as we
went to press. President Basescu said
Romania does not depend entirely on
Russian fuels and would be interested
in participating in a joint venture for
gas and oil extraction in the region,
which could become an alternative
fuel source in Europe.
Yushchenko said renewable sources
must also be investigated as well
as nuclear power, which would be a
controversial move due to Ukraine’s
history of nuclear tragedy.
EU rules see end to local GMO boom
Despite the fact that it is Europe’s
largest genetically modified (GM) soy
grower, Romania will ban GM soy production
starting 2007, in a move that will
throw tens of thousands of farmland into
turmoil.
The measure is meant to comply with
the EU anti-GM norms, as the country
gears up for EU integration at the beginning of next year. Romanian Greenpeace
officials say that the decision should apply
from 2006 already, because of “the
problems caused by massive uncontrolled
crops, the GM soy seeds black
market and the lack of an infrastructure
meant to trace and label GMO.”
According to a recent report of the International
Service for the Acquisition
of Agri-Biotech Applications, Romania
cultivates GM soy on around 100,000
hectares of land.
Caspian pipeline closer to reality
Construction could soon begin
on the Constanta to Trieste oil pipeline,
following the approval, by the
Interstate Committee for the Pan
European Oil Pipeline (PEOP), of the
Memorandum of Understanding allowing
development.
Romania is involved in the construction
along with Serbia-Montenegro,
Croatia, Italy and Slovenia, countries
through which the pipeline will also
pass.
The pipeline mainly targets oil distribution
from the Caspian region to
the European Union and is considered
an alternative to Russian Federation
gas resources and European dependency
on Middle East oil.
From a regional facility, it should
turn into a project that is significant
for entire Europe, linking the oil-rich
Caspian and former Soviet Republics
with the countries of the European
Union.
The 1,319-kilometre long oil pipeline
will relieve the dense tanker
traffic in the Adriatic Sea, Bosporus
and Dardanelles.
Talks started in 1994, but the political
framework and the wars of the
ex-Yugoslavia prevented their speedy
advance. Now a feasibility study exists
and a company to manage the
project is due to be formed. But problems
are just starting to appear.
Many other oil transportation options
seem more logical and viable
commercially, said Ian Woollen, analyst
for Wood Mackenzie, quoted by
the Financial Times recently.
And there is a lack of consensus
among the five states interested in the
pipeline when it comes to negotiating
the tariffs for transportation, an issue
which has not been discussed.
Meanwhile, the project will cost in
the region of two billion Euro, supported
in part by the European Union,
while the parties have yet again to decide
who brings what to the table.
For Romania, the costs would vary
between 0.8 to 1.8 billion Euro, depending
on the quantity of crude due
to be transported.
The gains would be substantial.
This would mean between around
1.9 billion Euro for 40 million tonnes
of oil per year and 3.7 billion Euro
for 90 million tonnes per year for
Romania alone.
Turkey-Romania undersea cable deal signed
Romania’s Minister of Economy and
Trade Ioan Codrut Seres and his Turkish
counterpart Hilmi Guler last month
signed a joint statement regarding the
building of an undersea cable to transport
energy between Romania and Turkey.
The 300 million Euro project will be
run between the two countries’ power
grid companies, Romania’s Transelectrica
and Teias from Turkey and could
be ready in 2009. The cable will be 400
kilometres in length and will connect the
two energy systems through the 400 kv
stations in Constanta and Pasakoy respectively.
Stelian Gal, Transelectrica’s general
manager, said Romania will invest about
150 million Euro to build the cable, at
a depth of 1,000 metres. He added the
proposed tension level for the cable will
be 400 kV, but the final decision will be
taken once the feasibility study is completed.
News briefs
Rompetrol sues secret service
over phone taps
Romania’s second biggest oil company
Rompetrol said it will sue the
country’s main secret service (SRI)
for tapping phone lines of its CEO and
majority owner, Dinu Patriciu. Seeking
initial damages of one million USD, the
company said it would seek more if it
establishes the tapping led to commercial
losses.
Presidential visit to Qatar
foregrounds energy links
On a visit to Qatar, President Basescu
discussed with the Emir Sheikh Hamad
Bin Khalifa Al Thani the possible development
of a liquefied petroleum gas
(LPG) terminal at Constanta harbour.
Siemens VDO production
goes to Iasi
Vehicle technology manufacturer
Siemens VDO Automotive is to invest
about 20 million Euro in a new production
centre in Iasi, company officials
told The Diplomat. The company last
year rented 2,000 sqm in Tehnopolis,
the technologic park in Iasi, and plans
to hire 500 hi-tech experts.
Siveco looks abroad to invest
IT company Siveco will invest around
10.5 million Euro in research and
development and expansion and promotion
into new markets. Irina Socol,
the firm’s general manager, sees Bulgaria,
Ukraine and Croatia as targets,
where Siveco will either open its own
offices or take over local companies.
Financing will come from Polish Enterprise
Investors and Intel Capital. The
company has also budgeted for the
takeover of at least one local firm by
the end of 2006.
Orange Romania first past
seven million mark
Mobile telephone operator Orange
Romania has announced it exceeded
the seven million-client threshold. The
Romanian mobile telephony market
reached a 62 per cent telephony service
penetration rate at the end of last
year, up from June 2005, when some
50 per cent of Romanians had a mobile
phone, according to Orange estimates.
Altex continues local retail blitz
Electrowares retailer Altex said it will
invest about 25 million Euro this year in
opening 20 more Altex Megastore units
and four Media Galaxy complexes,
while still holding ambitions for opening
in neighbouring countries. Last year
the company posted a turnover of 275
million Euro and net profit of 7.5 million
Euro.
Dutch business support
for Cluj-Napoca
Netherlands Business Support Office
(NBSO) will open in Cluj-Napoca this
Spring to strengthen economic ties
between Holland and Romania. The
Netherlands has 16 such rep offices
globally, four of which are in Europe.
Petrom cashes in
on mineral water
Romania’s largest integrated oil and
gas producer, Petrom, last month sold
82.9 per cent stake it held in mineral water
company Carpatina to Arad-based
mineral water company Lipomin, in order
to focus on its core activities.
Ursus brews up
grand expansion plan
SAB Miller-owned Ursus Breweries
has a 25 million Euro investment plan
in the pipeline, including increasing the
weekly production capacity of its Buzau
beer plant by 75 per cent. Investments
will also be made in implementing a
new bottling line and expanding the filtering
and storing capacities.
Moldova gets a chance
to exhibit itself
Financing of about six million Euro
has been approved by the EU-funded
Phare programme officials for a project
to erect the ‘Iasi-Moldova Exhibition
Centre’ in the city’s Tehnopolis technological
park. 8,000 sqm will be available
for exhibition area spaces.
Petrom improves IT infrastructure
Oil and gas company Petrom will
invest around 35 million Euro in 2006
modernising its IT infrastructure to meet
western European standards. The rollout
started in Bucharest and Ploiesti
and is ongoing in refineries in Arpechim
and Petrobrazi.
Rivers to see long-term treatment
Bucharest City Hall is aiming to reduce
pollution in the Arges and Dambovita rivers
with help from a ten million Euro loan from
the European Bank for Reconstruction and
Development to build a wastewater treatment
plant. French water company Apa Nova will
manage and operate the plant, under construction
in the eastern suburb of Glina. The
European Investment Bank has also lent 25
million Euro, along with 70 million Euro in EU
grants.
Cluj-Napoca gets Audi showroom
Autoworld will open a new Audi showroom
in Cluj-Napoca this month, following a three
million Euro investment, part-financed by
Porsche Bank. Located in the south of the
city, the showroom will have eight presentation
points, a service area and a car wash.
German water firm lands giant
rehabilitation project
German-based Aqua Engineering, a subsidiary
of Christ Water Technology, was
awarded a reported 31 million Euro order for
the complete rehabilitation of three drinking
water plants from the Central Office of the
Romanian Ministry of Finance. The drinking
water plants are located in the cities of Satu
Mare, Brasov and Sibiu and will be co-financed
by EU-funds and should be completed
by 2009.
Motoractive lands
small business cash
Leasing company Motoractive has signed a
ten million Euro loan agreement with Germanbased
KfW, part of an EU-sponsored package
to help the firm support small and medium enterprises
(SMEs).
European bank support
for Private - Public Partnerships
Support is available from the European
Bank for Reconstruction and Development
(EBRD) for the Government’s efforts to use
Private - Public Partnerships (PPP) to help
investment in infrastructure, says the bank’s
latest strategy report. However some business
leaders believe the country does not yet
have the management expertise to carry out
the complexities of PPP funding. Infrastructure
and energy development remain priorities for
the bank, including the creation of a Regional
Energy Market in south eastern Europe,
which the bank is ready to help finance. This
year the EBRD aims to give special attention
to agribusiness, in particular to food and food
processing companies.
Naf-Naf strikes back
French clothes retailer Naf-Naf is looking
at franchising its brand locally, with a store in
Bucharest this year and expansion to other
cities with at least 150,000 inhabitants in the
near future, according to Emilia Gheorghiu,
executive officer at CHR Consulting, the franchise
consulting company. Naf-Naf closed its
Bucharest branch last year.
FDI in steady increase
Last year’s total foreign direct investments
(FDI) were 5.2 billion Euro, up 26.8 per cent
from the previous year, according to the
Romanian Agency for Foreign Investments
(ARIS), which predicts six billion Euro in FDI
for 2006. 2004’s total investment stood at
4.1 billion Euro, including the amount paid
by OMV for the majority stake in Petrom, according
to the central bank.