The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia.

The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia.
The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia, Lithuania.

Wednesday, 28 October 2015

Industrial manufacturing and imports of machine tools in Romania




Romanian industrial manufacturing sector continues to grow in 2015 with main productive industries such as metal working, automotive, oil equipment, naval and shipbuilding, agricultural equipment and machinery etc. In the first 8 months of 2015, industrial production in Romania has grown with 3.2% compared to the same period of 2014, mainly thanks to the industrial manufacturing which registered a 3.5% growth compared to Jan - Aug 2014. In August 2015 vs. August 2014, industrial manufacturing in Romania advanced with 7%.

Industrial manufacturing in Romania represents one of the main sectors of opportunity in the region due to low cost labour market, availability of resources and facilities, as well as of proximity to end-user / buyer.

According to FRD Center analysis, in 2014, the imports of machine tools in Romania have recorded over 187 million EUR, some 3% more than in 2013.

The imports of machining centres, unit construction machines (single station) and multi-station transfer machines, for working metal registered over 33 million EUR, while imports of lathes (including turning centres) for removing metal: approximately 39 million EUR, up by some 21% compared to 2013.

In 2014, the imports of machine tools (including way-type unit head machines) for drilling, boring, milling, threading or tapping by removing metal, other than lathes was of over 21 million EUR, which according to FRD Center analysis, is up by around 22% compared to 2013.

In the same year, the imports of machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching, presses for working metal or metal carbides recorded almost 62 million EUR, which according to FRD Center analysis, is up by approximately 49% compared to 2013.

Other values registered by imports of various types of machine tools in Romania in 2014 are:

  • imports of machine tools for deburring, sharpening, grinding, honing, lapping, polishing or otherwise finishing metal or cermets by means of grinding stones, abrasives or polishing products, other than gear cutting, gear grinding or gear finishing machines: almost 17 million EUR 
  • imports of machine tools for planing, shaping, slotting, broaching, gear cutting, gear grinding or gear finishing, sawing, cutting-off and other machine tools working by removing metal or cermets: over 15 million EUR
For tailor-made sector data and B2B matchmaking with players in the industrial manufacturing sector in Romania, feel free to contact the FRD Center team at: 
email: europa@frdcenter.ro
tel: +4021 411 1459/60/61
FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE, in the Emerging Markets in Europe.

Tuesday, 27 October 2015

M&A in Romanian agri-business sector

Irish Agri-services group Origin Enterprises has acquired Romanian–based providers of agronomy services Redoxim, for EUR 35 million, and Comfert, for EUR 19.4 million.

The acquisitions are being funded from existing bank facilities and are expected to be earnings enhancing from the 2016 financial year onwards.

Redoxim, headquartered in Timisoara and founded in 1991, is a leading provider of agronomy services, macro and micro inputs to arable, vegetable and horticulture growers. The company employs over 190 people and it services approximately 2,000 customers through a distribution network of 55 retail outlets, and a team of 50 agronomists and product specialists.

Under the terms of the deal, Origin is to acquire a 100% interest in Redoxim for a total cash consideration of €35 million.

Redoxim announced revenue and operating profit before non-recurring items for the year ended December 31st, 2014 of €53.6 million and €5.6 million, respectively.

Comfert, headquartered in Bacau and founded in 1998, is a similar business which employs over 180 people and operates through a distribution network servicing approximately 1,900 farming customers via a team of 32 agronomists and product specialists.

Origin is to acquire 100 per cent of Comfert based upon an enterprise value of €19.4 million. Comfert reported revenue and operating profit before non-recurring items for the year ended December 31st, 2014 of €100.6 million €3.2 million, respectively.

“Redoxim and Comfert represent an excellent strategic fit for Origin providing complementary expertise, meaningful geographic extension and strong brand reputation on-farm,” said Mr O’Mahony according to Irish Times.

Sources: the companies, Irish Times, ZF

For tailor-made market research and opportunity analysis, acqusition target search, as well as B2B matchmaking with players in Romania and the emerging markets in Europe, feel free to contact FRD Center team at: 
email: europa@frdcenter.ro or tel: +4021 411 1459/ 60/ 61

FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE


Tuesday, 20 October 2015

Romanian GDP grows 3.7%, FDI 39%, ITC sector 13.8% and consumption 5.2% in H1 2015

The National Institute of Statistics (NIS) has published provisional data on the evolution of the Romanian economy in the second quarter and first half of 2015 as follows:
  • GDP increase by 0.1% in Q2 2015 compared to Q1 2015 (seasonally adjusted series)
  • GDP increase in Q2 2015 compared to Q2 2014 by 3.3% (unadjusted series) and by 3.7% (seasonally adjusted series)
  • GDP increase in H1 2015 compared to H1 2014 by 3.7% (unadjusted series) and by 3.8% (seasonally adjusted series)

The increase reported for Q2 2015 ranks Romania 3rd in the EU-28, taking into account the GDP evolution compared to Q2 2014, with 3.7%, after Malta (+ 4.8%) and the Czech Republic (+ 4.4%), but ahead of Poland (+3.6%), Spain (+3.1%), Slovakia (+3.1%), the EU-28 average being +1.9%.

The domestic economy has increased by 3.7% in H1 2015 compared to H1 2014, the growth of the domestic demand (contribution of 5.2%) counterbalancing the negative contribution of the net external demand (1.5%). The private consumption (the main GDP component) has increased by 5.4% in H1 2015 vs H1 2014 (contribution of 3.5% to GDP dynamics), supported by the VAT reduction for food, the rising wages and the lending revival in RON.

According to NIS, the following sectors have contributed to GDP growth in H1 2015 compared to H1 2014:
  • wholesale and retail (+1.0%), with a contribution of 17.7% to the nominal GDP value and by 5.6% in the activity volume increase
  • information and communication (+0.9%), with a contribution of 7.2% to the nominal GDP value and by 13.8% in the activity volume increase
  • industry (+0.5%), with a contribution of 22% to the nominal GDP value
  • net taxes on products (+0.5%), with a contribution of 13.6% in the nominal GDP value. 
In terms of the GDP use, the increase has been influenced by:
  •         final consumption expenditure of households (+5.4%), with a contribution of 3.5% in the GDP growth
  •         gross fixed capital formation, with a contribution of +1.5% as a result of the activity volume increase by 8.1%

The net export has had a negative contribution (-1.5%), due to the increase of exports of goods and services by 6.3% correlated with increase of imports of goods and services by 9.6%.

The Romanian imports in H1 2015 have recorded 30.3 billion EUR and a growth of 6.9% compared to H1 2014, mainly due to the increase of imports from EU countries by 8.4%, while imports from non-member EU states have registered an increase of 2.1%. The share of EU member states in the Romanian imports is higher with 76.9% (+1.1% compared to H1 2014).

Romania’s main ten trading partners in the first five months of 2015, taking into account the trade volume (exports and imports) are: Germany (19.66% of Romania's foreign trade), Italy (11.18%) Hungary (6.56%), France (6.34%), Turkey (3.87%), Poland (3.83%), UK (3.27%), Austria (3.13%) the Netherlands (3.10%) and Bulgaria (3.08%).

In H1 2015 compared to H1 2014, the following dynamics have been recorded:

  • construction (+3.6%)
  • trade / transport / HoReCa (+5.6%)
  • IT&C (+13.8%)
  • agriculture (+2.2%)
  • industry (+2.2%)
For tailor-made market research and opportunity analysis, acqusition target search, as well as B2B matchmaking with players in Romania and the emerging markets in Europe, feel free to contact FRD Center team at: 
email: europa@frdcenter.ro or tel: +4021 411 1459/ 60/ 61

FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE

Monday, 19 October 2015

Modern retail and domestic consumption continue to grow in Romania in 2015

Overall, in the first half of 2015, the Romanian economy grew by 3.7% y / y, the advance of domestic demand (contribution 5.2 pp) counterbalancing the negative contribution of net external demand (1.5 percentage points). Private consumption (the main component of GDP) increased by 5.4% y / y (contribution 3.5 percentage points to annual GDP growth), supported by the VAT reduction for food products and services, rising wages and relaxation of lending in local currency (RON).

According to the Romanian Association of Major Retailers (AMRCR), the retail trade output accounted for 15.8% of Romania's GDP last year, having good grounds for grows in the short to medium term. At the same time, 22.17% of total employment in 2013 in Romania is in trade activities.

According to the latest data available (2013), there were a total of 126,771 stores in Romania. Most of these, namely 118 581, are stores small area of ​​less than 120 square meters.

Modern trade accounted for about 25% of the sales surface in Romania in 2013, while 44.5% of the sales surface is covered by traditional trade and 30.5% by HoReCa.

Modern trade will increase this year and will reach 55% of total turnover, compared with 45% generated by traditional trade, while in 2014 the ratio stood at 54% for large retailers and 46% for those in the traditional trade.

Among major retailers, Kaufland (23.68%), Carrefour (13.5%) and Metro (13.29%) have the highest share in the cumulated turnover of more than 9 billion registered in 2014 by the AMRCR members. The association brings together major retailers in Romania, with a combined turnover of 9.06 billion euros last year, and over 75,000 employees.

Modern retail will continue the positive trend of recent years and will grow in 2015 at the expense of traditional trade, rising to 55% of total business.

89% of the Romanians have a good and very good opinion about modern retail stores (56.6% good and 32.4% very good), which is are a favorite place for shopping for 83.6% of those surveyed, while 65.2% of the Romanians prefer to shop in convenience stores and 45.2% prefer the markets.

Price continues to be the key element in choosing the shopping location(75.2%), while for a significant percentage, while for 65.1% of the Romanians, the main criterion is the quality of the products and for 58% is the store's distance from home.

According to FRD Center analysis, the major modern retail supermarket and hypermarket chains operating in Romania that also sell food products are:

Auchan
Chain: 33 Auchan hypermarkets
Net turnover: 848 million EUR in 2014
No of employees: 9,344 in 2014
Ownership: Auchan Group France

Billa
Chain: 86 Billa supermarkets
Net turnover: 317 million EUR in 2014
No of employees: 3,168 in 2014
Ownership: REWE Group Germany

Carrefour
Chain: 28 Carrefour hypermarkets, 98 Market supermarkets, 43 Express proximity stores and 10 Contact proximity stores
Net turnover: 1 billion EUR in 2014
No of employees: 7,284 in 2014
Ownership: Carrefour Group France

Cora (Romania Hypermarche)
Chain: 12 Cora hypermarkets
Net turnover: 385 million EUR in 2014
No of employees: 4,818 in 2014
Ownership: Louis Delhaize Group

Kaufland
Chain: 103 Kaufland hypermarkets
Net turnover: 1.8 billion EUR in 2014
No of employees: 12,180 in 2014
Ownership: Schwarz Group Germany

Lidl
Chain: 188 Lidl stores
Net turnover: over 750,000,000 EUR in 2014 (estimate)
No of employees: n/a
Ownership: Schwarz Group Germany

Mega Image
Chain: approximately 420 stores (under the brands Mega Image, Shop&Go, AB Cool Food, Mega Drive)
Net turnover: 634 million EUR in 2014
No of employees: 7,161 in 2014
Ownership: Delhaize Group Belgium

Metro Cash & Carry
Chain: 32 Metro stores
Net turnover: 1 billion EUR in 2014
No of employees: 5,125 in 2014
Ownership: Metro Group Germany

REWE Romania
Chain: over 170 discount stores, under the brands Penny Market and XXL Mega Discount
Net turnover: 525 million EUR in 2014
No of employees: 3,079 in 2014
Ownership: REWE Group Germany

Profi Rom Food
Chain: 347 Profi stores
Net turnover: 415 million in 2014
No of employees: 5,672 in 2014
Ownership: Enterprise Investors

Selgros Cash & Carry
Chain: 19 Selgros stores
Net turnover: 637 million EUR in 2014
No of employees: 3,882 in 2014
Ownership: Coop Switzerland

For tailor-made market research and opportunity analysis, acqusition target search, as well as B2B matchmaking with players in Romania and the emerging markets in Europe, feel free to contact FRD Center team at: 
email: europa@frdcenter.ro or tel: +4021 411 1459/ 60/ 61

FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE

Tuesday, 6 October 2015

Video games development in Romania - the five biggest players register TO growth of 27%


French video game developer Ubisoft reached EUR 30 million turnover and a EUR 1.2 million net profit in Romania in 2014, with a team of over 1,300 employees. By the end of 2015, it plans to hire 300 people in Romania this year. Its local team will thus pass 1,500 employees.

More than 3,000 people worked last year for the five biggest video games producers in Romania, some 400 more compared to 2013. The five companies - Ubisoft, Electronic Arts, Gameloft, King Digital Entertainment and MavenHut - had cumulated revenues of EUR 84 million, up by 27% year-on-year.
Ten of the biggest American technology companies made EUR 585 million revenues in Romania, in 2014, 25% higher than in the previous year. 

Their cumulated net profits increased by 14%, to EUR 37 million. 

For most of these companies the revenues in Romania come from their service centers (call-centers) which serve the groups’ international customers. Oracle, IBM, Xerox, HP, and Dell have such centers in Romania. Others have software development centers in Romania, such as Intel, Amazon, and electronic games producer Electronic Arts.

Are you interested in the video games sector in Romania?

For tailor-made market research and opportunity analysis, acqusition target search, as well as B2B matchmaking with players in Romania and the emerging markets in Europe, feel free to contact FRD Center team at: 
email: europa@frdcenter.ro or tel: +4021 411 1459/ 60/ 61

FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE



The Romanian BPO sector - excellent potential for further development


The Romanian BPM industry (including BPO and SSC sectors) is a fast growing and attractive investment destination. The country offers a competitive business environment and highly skilled multi-lingual workforce at low cost.

The costs efficiency with the employees, the country’s geographical location, the size of the domestic market, the adequate quality of the education system and the solid knowledge of foreign languages make Romania one of the best destinations for companies operating in the BPO and SSC sectors.

In regards to the ITO potential, Romania is one of the best countries in the CEE for near-shore outsourcing, taking into account the low costs and the IT resources to be involved in sophisticated projects requiring access to innovative skills and technologies.

Due to the remarkable performance of its IT&C sector, Romania has consolidated its position as an outsourcing hub in the CEE, the region becoming the new competitor of India. Romania's highly skilled workforce has a better understanding of the Western European culture than their Asian competitor.

Romania ranks 9th globally and 2nd in the CEE, as a preferred destination for companies operating in the business services sector.  The business services sector is expected to register fast growth on the Romanian market, as various companies target to reduce the operational costs and to improve the working capital.

The Shared Service Center market in Romania started to develop in 2004 when companies such as Oracle, HP, Microsoft, Endava, EON, Office Depot, Temenos, Deutche Telecom, Stefanini etc set up their service centers on the domestic market in Bucharest, Cluj, Timisoara, Iasi, Brasov and Sibiu.

The average rates on the ITO market in Romania in 2011 was 26.76 USD / hour:
-          Project Manager: 38.24 USD / hour
-          Senior Developer: 31.70 USD / hour
-          Middle Developer: 25.32 USD / hour
-          Junior Developer: 19.67 USD / hour

The salary levels in the BPO and SSC sectors depend on the foreign language capabilities, the rare and required languages being generally better paid.

Examples of monthly net salaries in Bucharest are:
-          English (300 – 550 EUR)
-          French (325 – 600 EUR)
-          German (350 – 700 EUR)
-          Dutch (up to 700 – 1,000 EUR)

Bucharest is the main outsourcing location in Romania, having the widest range of skills and languages, the biggest workforce and the proximity to the headquarters of many companies. Cluj Napoca and Timisoara, both important university and business centres, have rapidly developed over the last three years. Bucharest ranked 44th in Tholons’ top 100 outsourcing sites, while Cluj Napoca ranked 96th in 2012. Iasi (NE Romania), also an important university centre, offers lower operational and labour costs than Bucharest, Cluj and Timisoara.

The Romanian BPM industry employs approximately 20,000 persons and the number is expected to increase. Despite the financial crisis, the industry’s average annual growth rate during the last three years recorded over 20% and a growth of over 30% is forecasted for the next three years.

The investment incentives offered by the Romanian Government in the past years in order to attract foreign direct investments, including real estate tax exemptions and preferential tax deductions for acquiring new technology and R&D centres continue to be attractive for potential investors.


MAIN INTERNATIONAL PLAYERS
Big multinational companies opened at least one centre in Romania during the past years and some of these centres have over 1,000 employees. 80% of the employees have university degrees.

The cumulated turnover of the players in the BPM industry in Romania is estimated at 500 million EUR in 2012.

The most frequent services provided by the BPO centres in Romania are finance & accounting, customer support, procurement and HR, followed by IT, logistics, order administration, call center, research & analytics and legal process outsourcing.

The players active in the Romanian BPM industry are characterised by continuous business process improvement, high quality of services, technological and process innovation and ability to meet the market new requirements.

The main BPO centres are located in Bucharest and other large cities, such as Cluj Napoca and Timisoara.

Many investors in Shared Service Centers, for example Microsoft and Oracle, announced the expansion of their investment in Romania due to the fact that they applied and accessed EU funds with the purpose to create more jobs on the domestic market.

Are you interested in the BPO and call center sector in Romania?

For tailor-made market research and opportunity analysis, acqusition target search, as well as B2B matchmaking with players in Romania and the emerging markets in Europe, feel free to contact FRD Center team at: 
email: europa@frdcenter.ro or tel: +4021 411 1459/ 60/ 61

FRD Center provides market research in Eastern Europe and the region, B2B matchmaking in the CE Europe and SEE, M&A assistance in Romania, in CEE and SEE