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.

Monday, 3 July 2017

Expand your operations in Eastern Europe - Romania



Why should you choose Romania as a location for your operations? Is is advisable to acquire a company or make a greenfield investment in Romania?

Romania is the most dynamic large market in Europe, a strong democracy, a NATO and EU member. After a GDP growth of 4.8% in 2016, in Q1 2017 Romania registered the highest GDP rate in the EU: 5.6%. With unemployment average of 5.5%, the purchasing power of the Romanian population increased with 12% in 2016 and the consumption with 9%. In the first four months of 2017, Romanian industrial manufacturing went up 8.5% y-t-y.

The turnover of the Romanian automotive industry rose by 10% in 2016 to EUR 22 billion, reaching 13% of the gross domestic product (GDP).

Some of the most recent foreign investments and crossborder mergers&acquisitions in Romania include:
OMV Petrom, the largest oil and gas producer in Southeastern Europe, invested EUR 5m in a modern laboratory test center for fuel quality control at its Romanian refinery, Petrobrazi.

Mytaxi, the e-hailing app owned by German carmaker Daimler, has entered the Romanian market through the acquisition of the local company Clever Tech, the owner of the Clever Taxi app.

Austrian firm, EGGER, invested EUR 23.9m in a recycling installation at its plant in Radauti (NE Romania) and in the EGGER Timberpark platforms of collecting the recycled wood in Romania.

Coca-Cola HBC Romania, the biggest beverage producer on the local market, has invested EUR 7m in a new production line at its local plant in Timisoara (W Romania). The company had a turnover of EUR 495 million and a net profit of EUR 62 million in 2016, and over 1,400 employees, according to official data from the Finance Ministry.

Prysmian Group, Italian world leader in the energy and telecom cables and systems industry, has opened the second fiber optic cable factory in Slatina, southern Romania. This investment, estimated at EUR 22m, is its biggest in Europe for this category.

Swedish group Autoliv, a world leader in the production of automotive safety systems, will open an engineering center in Iasi, NE Romania. According to the company, the engineers in Iasi will mainly be developing software for state of the art Active Safety products, as well as for Passive Safety systems. Autoliv Romania plans to have a team of over 200 employees in the Iasi center.

Kronospan, the Austrian wood-based panels manufacturer, inaugurated a fully automated EUR 10m melamination line at its factory in Sebes, central Romania. According to company sources, the Kronospan Sebes factory has the largest production capacity in the world.

Amazon, the largest online retailer in the world, wants to lease 10,000 sq m of offices in Bucharest, an area needed to recruit at least 1,000 employees, according to sources close to the company quoted by ‘Ziarul Financiar’. The need for expansion comes less than a year since the US company signed a lease for an area of 13,500 sq m in Iasi (NE Romania).

US company 3Pillar Global, which provides IT services, will open its third R&D center in Romania, in Iasi (NE Romania). The company already has R&D centers in Romania, in Cluj-Napoca and Timisoara. They expect the office in Iasi to grow exponentially in the coming years, as did the other two so far.

British American Tobacco (BAT), the biggest cigarette manufacturer in Romania, announces the tripling of investments in the Ploiesti plant in 2017 compared to the estimates announced last year. Thus, according to a press release, the company will invest around EUR 60 million in the construction of a new production hall, as well as plant’s upgrading.

Romania’s new Government discussed the project of the Sovereign Investment Fund, and will launch it into public debate in the following period. „This fund is an instrument for stimulating the economy. It will help raise local and international financing for profitable investment projects that will help develop the economy and increase budget revenues,” said the new economy minister Mihai Fifor.

Dutch aluminium producer, Prolyte Products, opens third factory in Romania. The company has used a EUR 3.4m loan from Romanian state-owned bank EximBank.

In 2016, Romania recorded one of the highest economic growths in the European Union, due to fiscal relaxation measures, which boosted the trade and transport sector by 11% compared to the previous year, according to the Garanti Bank report. The GDP growth was also boosted by the services sector, which rose by 6% in 2016, and in particular by the IT sector, which grew by 14% last year compared to 2015.

According to the European Commission, Romania will continue to be the most dynamic market in the region also in 2017 and 2018.

More details at http://market-entry-romania.blogspot.ro/2017/04/what-is-going-on-in-romania-these-days.html

Romania is a gateway to the EU and Eastern Europe and numerous crossborder investments and acquisitions are registering double-digit profits. Why acquire a player in Romania? More details at http://market-entry-romania.blogspot.ro/2016/11/why-choose-to-acquire-player-in-romania.html

Sectors of interest for crossborder acquisitions in Romania include: healthcare, private medical services, plastic packaging, automotive, food processing, agribusiness, chemicals production and distribution, furniture manufacturing, IT, BPO, logistics and transport, retail and distribution.

More details about successful crossborder acquisitions in Romania at http://market-entry-romania.blogspot.ro/2017/01/successful-crossborder-acquisitions-in.html

Since 2000, FRD Center offers market research and M&A consulting services to foreign buyers and investment funds interested to enter Romania and the emerging markets in Europe as investors or joint-ventures.

More details about our Deal Origination services are available at: http://market-entry-romania.blogspot.ro/2017/02/deal-origination-in-romania-and-region.html

For tailor-made sector data, B2B matchmaking with players in the Emerging Markets in Europe, for M&A assistance and target origination feel free to contact the FRD Center team at: email: europa@frdcenter.ro or tel: +4021 411 1459/60/61


Info sources: Romania Insider, Invest Romania, Romania Journal, Business review, the companies, INS, ZF

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