Newsletter December 2009


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Newsletter December 2009

  1. 1. Consulate General of Romania in Los Angeles 11766 Wilshire Blvd, #560, Los Angeles, CA 90025. Tel: 310-477-0197 Fax: 310-445-0043, production structure, technological processes Email:, Website: for the production of high complexity . products, a qualified labor force, the company having now 380 employees. ECONOMIC OFFICE’S NEWS NEWSLETTER December Avioane Craiova has fast access to the 2009 Airport in Craiova (0.6 miles) with company's own runway linking to it, a center for flight tests in its compound, as well as Ministry of Economy plans to sell the operational authorizations issued by the majority stake in Avioane Craiova Romanian military and civil air control authorities. Ministry of Economy (ME) announced its In the situation potential investors are plans to offer for sale the share package, interested in finding more about Avioane accounting for 80.9778 percent of the share Craiova Co., they can pay a technical visit to capital of Avioane Craiova (south) Co. the company headquarters, with the prior signature of a confidentiality engagement at As well, ME says it is open to attraction of OPSPI headquarters, exempt of taxes investments to this company by conclusion (source: Agerpres). of partnerships/association for the participation in/the creation of a joint capital company, as well as through some other As many as 300 trucks with means provided by the law in the aim to re- banknotes to be brought to Romania launch its activity. for the adoption of euro To this end, potentially interested investors Switching to euro is going to be a difficult are invited to forward their interest options process, more difficult than merely meeting to ME headquarters - the Bureau for the criteria established by the Treaty of Privatization and State Participations Maastricht, say authorized sources, who also (OPSPI), proposing one or several means to appreciated this measure needs more time to approach this issue. be prepared. Avioane Craiova is a commercial company 'As many as 300 trucks laden with euro specialized in producing specific products banknotes and the same many with coins are for the aeronautical industry, respectively going to be brought to Romania by 2012, to aircraft construction, other aircraft products, prepare the switching to euro. After that, the collection models, metallic components, old currency, which is now circulating in specific structure elements for the horizontal quite huge quantities, needs to be pulled industry. At the same time, it provides from the market. This is a very difficult services, especially for military and civil process', the abovesaid sources specified. avionics industry. The current schedule for the adoption seems Avioane Craiov Co. is the sole producer of to be 'a little too ambitious', according to military type aircraft in Romania. officials of the National Bank. 'In the context of meeting the switching criteria established Among the advantages offered by the by the ERM II, which is the pre-adoption company to potential investors are: a flexible stage, Romania may be able to adopt the
  2. 2. euro after minimum two years, most probably late in 2014 or on January 1, 2005', and the economic situation have led to a they underlined, in the first quarter of 2009. notable decrease of the area of office space announced in Central and Eastern Europe The criteria of convergence, established by since the beginning of last year. The number the Treaty of Maastricht, estimate an of announced projects was reduced because inflation not to exceed by more than 1.5 developers postponed or put on hold most of percent the level reached in the best-placed their investments in a planning stage and countries from the viewpoint of the stability even cancelled some of those already under of prices, an annual budget deficit below 3 construction’ reads the report. The total percent of the GDP and a public debt below office space scheduled to be completed in 60 percent of the GDP. Moreover, the the next 18-24 months in CEE decreased by criteria refer to the stability of the exchange 30 per cent starting with Q 4 2008. The most rate (the observation of the normal important drop – 45 percent – was registered fluctuation bands within the exchange rate in Central Europe – The Czech Republic, mechanisms for two years, without Hungary, Poland and Slovakia, while in SE devaluing the currency, compared with the Europe – Bulgaria, Croatia, Romania and currency of another EU member state in the Serbia – the reduction was by 30 percent. same interval) and with a long term interest Real estate consultancy DTZ Echinox shows rate not to exceed by more than two percent that, at the end of Q3, the stock of office those in the three EU member states with the space in Bucharest slightly exceeded 1.42 bn lowest inflation level (source: Agerpres). sq m, 14 percent of which was not rented. DTZ analysts estimate that the non- Bucharest - city with largest office occupancy rate would reach 18 – 20 percent space under construction by the end of the year because of the lesser demand and further deliveries (source: Nine The number of office buildings in Bucharest O’Clock). is on the rise. At the beginning of October, developers were building almost 600,000 sq m of office space, the largest area of Central Exports in October rose over the and Eastern Europe except Russia, of which previous month’s level only 4 percent were pre-leased, according to a CB Richard Ellis (CBRE) survey cited by According to the National Institute of Mediafax. For comparison, in Prague there Statistics (INS), in October 2009 Romanian are 137,000 sq m of office space under exports rose by 5.2 pc from the previous construction, in Budapest 327,000 sq m and month, when expressed in RON (4.3 pc if in Warsaw 231,000 sq m, with 20 percent, converted in EUR), while imports dwindled 10 percent and 22 percent pre-leased, by 0.8 pc in RON (1.7 pc in EUR). The respectively. However, in Bucharest, the decrease rate of Romanian exports was much area of office space under construction lower than that of imports, which resulted in would have been even bigger if a total of curbing the trade deficit. Thus, in October 200,000 sq m had not been postponed in Q1, 2009, FOB exports topped RON 11,568.4 M according to the author’s estimations. In that (EUR 2,707.7 M) and CIF imports amounted department, too, Romania is ranked first in to RON 15,429.3 M (EUR 3,612.5 M). The the region, as postponements were a lot less FOB-CIF trade deficit in October 2009 stood significant in The Czech Republic, Slovakia, at RON 3,860.9 M (EUR 904.8 M), less by Hungary and Poland. ‘The financial crisis RON 4,346.0 M (EUR 1,284.6 M) than in
  3. 3. October 2008). During January-October this During January-October 2009, an important year, exports declined by 18.1 pc in EUR, share of exports and imports went to transport from the same interval of 2008. vehicles and equipment (42.3 pc of exports and 33.3 pc of imports) and various MFG Compared to October 2008, exports lost 5.4 (34.6 pc of exports and 31.8 pc of imports) pc in RON (17.1 pc in EUR), while imports (source: Nine O’Clock). declined by 24.5 pc in RON (33.8 pc in EUR). Romania spent 90 pc of SAPARD funds Exports to the European Union, in October 2009, decreased by 9.6 pc in EUR year-on- Romania has spent 90 percent of the funding year, while imports from the EU went down allocated under the SAPARD Programme – 28.9 pc, also expressed in EUR. Also in EUR 1.34 bn – according to data issued by October, exports outside the EU fell by 35.4 the Agency for Payments for Rural pc (EUR equivalent) and imports diminished Development and Fisheries (APDRP) on by 45.2 pc. Thursday, Agerpres informs. Yesterday, APDRP made the last payments within the FOB exports during January-October 2009 programme, amounting to EUR 10.38 M. amounted to RON 101,242.5 M (EUR ‘With this last instalment, the SAPARD 23,905.0 M), with CIF imports at RON Programme is closed, Romania being one of 134,505.7 M (EUR 31,764.4 M). Compared the few beneficiary countries that have to a year ago, exports fell by 5 pc (RON recorded almost a complete absorption of the equivalent) and by 18.1 pc when converted in money’, reads the APDRP press release. EUR, while imports were also on the decrease, by 25.3 pc in RON and 35.7 pc in In 2000 – 2006, the SAPARD Programme EUR. received a financial allocation of EUR 1.52 bn, the money having to be actually paid The FOB-CIF trade deficit during January- before the end of 2009. ‘We have proven to October 2009 topped RON 33,263.2 M (EUR everyone that Romania is perfectly capable of 7,859.4 M), which means RON 40,298.0 M spending European allocated funds but, in (EUR 12,309.7 M) less than a year ago. addition, the SAPARD Programme marked the beginning of the modernization of During the same interval of 2009, in the trade Romanian agriculture and of the Romanian relation with the European Union, exports village. It has not been easy, but the benefits amounted to RON 75,442.9 M (EUR 17,815.4 the programme has brought to the Romanian M) and imports to RON 98,756.2 M (EUR rural communities are unchallengeable. 23,321.2 M), accounting for 74.5 pc of SAPARD is most certainly a major success of Romania’s total exports and 73.4 pc of Romania and also of its beneficiaries’, said imports. Mihai Gavril Vadan, the Director General of APDRP. According to INS, the difference between the dynamics of values in RON and that The 10 percent balance is money that has not calculated in EUR resulted from the been committed within projects or money devaluation of the national currency during from rescinded agreements. According to January-October 2009, with values ranging APDRP, the new EU members’ absorption between 13.9 pc - 19.6 pc, compared to the rate in the programme averages 50 percent, same interval of 2008. with Ireland being the only country with a
  4. 4. better performance than Romania’s (source: works will optimize the own supply chain, in Nine O’Clock). agreement with the highest storage and distribution standards. Thus, we shall have the Companies & opportunities possibility to better use a manufacturing portfolio in over 20 forms of presentation, Romstrade holding plans to invest in Iraq from innovative and generic medicines, to products without medical prescription (OTC), Romstrade Holding, owned by businessman and nourishing supplements addressed to Nelu Iordache, plans to invest in Iraq, in various conditions from the sphere of the infrastructure, transport and agriculture cardiovascular, digestive, locomotion and projects and, to this end, the holding central nervous systems,” Terapia Ranbaxy management paid a visit to this Middle East director, Dragos Damian declared. country, announced on Wednesday general manager of the holding Gheorghe Racaru, Google awards Romanian-German Agerpres informs. ‘We paid a visit to get company iQuest informed and we gathered projects in which we are interested in investing, projects Google has awarded the Romanian-German starting from motorway and road company iQuest with USD 100,000 for a construction, air transport, capacities for software application to be integrated into the bitumen production, as well as investments in Android operating system the US giant is infrastructure. The first projects we are to developing for mobile phones, Mediafax invest in will be launched in the spring next informs. ‘iQuest has received the trophy in year’, said Gheorghe Racaru.He stressed that the category as well as a reward of USD in order to implement these planned 100,000 within the Google-initiated world investments the holding is to open in the competition. The annual Android Developer upcoming days an office in Erbil city, Challenge contest is in its second edition and Kurdistan, a zone in northern Iraq, where is designed to encourage software developer Romstrade investments will be to create applications for Google’s Android focused.’Everybody asks why we chose to OS that will be installed on the latest mobile invest in Iraq. The answer is simple:’ The devices’ reads a press release issued by the crisis reached Germany, but not Iraq’, said Romanian-German company on Thursday. Racaru. Romstrade construction company has The winner in the category – the Trip Journal an integral Romanian capital and it was set up application developed by iQuest in this way in 1994. becomes one of the world’s ten best applications developed for telephones with Terapia Ranbaxy invests close to Cluj the Android OS in 2009. The software was created in about five months and includes The company Terapia Ranbaxy, the biggest GPS route tracking, position viewing on producer of generic medicines in Romania, a Google Maps, learning of co-ordinates and member of the Japanese group Daiichi annotated photographs, with all entries being Sankyo, finalized the works at a big exportable into Google Earth for viewing and storehouse for finished products, located at with photographs uploadable onto Picasa web Apahida, a press release informs. The new albums. investment is made in a modern industrial building, some 10 km away from the central Romanians – big users of Ristretto offices of the company from Cluj, which has a storage capacity of 1,900 pallets on a Nestle Nespresso launched a new Grand Cru surface of 1,600 sq m. “The finalization of the product, Ristretto Origin India, a mix
  5. 5. consisting of 100 percent coffee coming from the Bucharest Stock Exchange (BVB) - the only one country of origin. “The Romanians difference between their selling and buying - are great users of Ristretto, especially in stood at RON 12.329 million (2.87 million autumn and winter, and this product will be euros), according to data with the BVB. enjoyed by everybody,” declared Mihaela Scaunaru-Andrei, marketing manager. In Total trade in shares on the BVB this Romania, the new assortment of Nespresso November reached 98.777 million euros. coffee is available through the importer and distributor Brands International. The new Foreign investors' investment in the stocks coffee, with an intense content of Ristretto, traded on the BVB stood at 15.74 million contains scents of cocoa, clove, pepper and euros, with sales totaling 18.61 million nutmeg. Nestle Nespresso has traded products euros. in over 50 countries and is the company with the fastest economic growth in Nestle Group. Non-resident individual investors bought shares to the tune of 1.56 million euros in Microsoft Romania estimates a growth of November and sold shares worth 2.41 business in December million euros, while non-resident legal persons reported stock acquisitions of 14.18 Microsoft Romania expects an advance of million euros and sales of 16.2 million euros. business in December vs. the same period of 2008, being the first month of growth of the Also in November, local investors bought current financial year, which began on July 1, shares worth 80.07 million euros and sold the general manager of the local stocks worth 76.92 million euros (source: representation of the US software producer, Agerpres). Calin Tatomir, declared yesterday, according to Mediafax. He added that since its launching, Windows 7 registered in Romania sales of patents through the retail segment 15 times bigger than those registered in 2008 for the operation system Windows Vista. Tatomir pointed out that the main priority of Microsoft Romania is the increase of the market shares for the related segments, both for the operation systems and the business applications. The US concern launched on October 22, at global level, the operation system Windows 7 in 12 languages. According to Microsoft data, the Windows 7 test variant was downloaded by almost 100,000 users from Romania (source: Nine O’Clock). Foreign investors pull out 2.87 million euros in November Net outflows of foreign investors trading on