Transcript Slide 1

romanian agency for foreign investment
Romania – Top Destination for
Investment
by Sorin VASILESCU
Director
Luxembourg, February 27, 2008
Structure of the Presentation
1.Geo-strategic position
2.Macroeconomic outlook
3.Valuable human potential
4.FDI performance
5.Infrastructure development
6.Investment legal framework
7.Potential sectors for development
8.ARIS – one stop shop
2
1. Geo-strategic position
Romania’s Geo-strategic Position
Area
Population
238,391 km2
92,043 sq mi.
the 9th in EU
21.6 mill
inhabitants
the 7th in EU
Capital city
Our friend the wind
Member of
Bucharest
1.9 mill inh
EU, WTO,
IMF, WB,
NATO
4
Romania’s Strategic Location
IV
VII
IX
Pan European
Transport Corridors
Dresden/Nuremberg Bucharest
Constanta/Thessaloniki/
Istanbul
The Danube river
2,300 km long
Helsinki – Kiev Bucharest –
Odessa/Alexandropoulos
The Eastern border of the
inland European Union
Strategic position at the
turning point where EU meets
the Balkans and CIS countries
5
2. Macroeconomic outlook
Significant Potential for Growth
Q3 2007
Slovakia
9.4%
Slovenia
6.3%
Czech Republic*
6.1%
Poland
5.8%
Romania
5.7%
Bulgaria
4.5%
Hungary
1.1%
Source: EUROSTAT, *forecast
GDP Growth Rate
8.4%
5.7%
7.7%
6.1%
5.1% 5.2%
4.1%
2.1%
2000
2001
2002
2003
2004
2005
2006
2007e
Source: National Institute of Statistics
Rapid & sustainable GDP growth; 6.5% forecast for 2008;
5.7% in Q3 2007, based on increases in final consumption by
7.7% and decrease in net export by 8.6%;
EU27 GDP growth rate of 3% in Q3 2007.
7
Inflation Rate
Annual Inflation Rate
Dec'07/Dec'06
Bulgaria
11.6%
Hungary
7.4%
Romania
6.7%
Slovenia
5.7%
Czech Rep
5.5%
Poland
4.2%
Slovakia
2.5%
Source: EUROSTAT
Inflation Rate
40.7%
30.3%
17.8%
14.1%
2000
2001
2002
2003
9.3%
8.6%
2004
2005
4.86%
2006
6.7%
5.9%
2007
2008e
Source: National Bank of Romania
EU annual inflation was 3.2% in December 2007;
Sustainable disinflation since 2000 to continue in the following years;
Higher rate in 2007 due to drought, wage raising and significant
increased of oil, technical plants and cereals prices.
8
3. Valuable Human Potential
Availability of Human Capital
Demographics
Young population (more than
55% is under the age of 40 and
37% is between 25 and 49 years
old)
Almost 21.7 million people
Talent pool
Cities with more than 100,000 inhabitants
more than 1,000,000 inhabitants
300,000 – 400,000 inhabitants
200,000 – 300,000 inhabitants
100,000 – 200,000 inhabitants
Source: National Institute of Statistics
104 higher education institutions
112 thou university graduates
Availability of technical engineers
High industrial experience
Flexibility
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Valuable Human Potential
high performances in international
competitions
high percentage of technically
competent professionals (23% are
engineering graduates out of 720
students enrolled)
highest growth rate of IT specialists
in the region (Annually 7000
university graduates in the software
field & More then 3.000 students in
105 local Cisco academies)
University graduates in Romania
(by education field)
Education
31%
Arts
2%
Law
9%
Engineering
23%
Economy
30%
Medicine
5%
Source: National Institute of Statistics
strong language skills (English, French, German, Italian, Spanish,
Russian, etc.)
large skilled labor force at comparatively low wage rates
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Labor Cost – A debated topic
Regional Comparison
Gross monthly wages
2006 - EUR
EUR
1213
713
Slovenia Czech Rep
648
Ungaria
637
Poland
428
504
Slovakia
326
Romania
181
174
179
204
Bulgaria
2002
2003
2004
267
2005
326
2006
2007
Source: Vienna Institute of International Economic Studies; National Institutes of Statistics
Significant discrepancies in terms of sectors (1120 euro in banking and
186 euro in wood processing) and different regions of Romania
It was expected to grow by 12.3% in 2008, and to reach 580 by 2010
Productivity in industrial sector increased by more than 10%
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4. FDI Performance
Inward FDI Flows
Q3 2007
5721
2 Romania
5138
3 Bulgaria
4117
4 Czech Republic
3547
5 Hungary
1828
6 Slovakia
1315
7 Slovenia
665
Annual Inward FDI
EUR million
1 Poland
Source: Vienna Institute of International Economic Studies
9060
7076
BCR privatization
2200
5183 5213
1946
1147 1294 1212
2000
2001
2002
2003
2004
2005
2006
2007
Source: National Bank of Romania
FDI Stock over EUR 41 bill (1990 –2007);
The forecast for 2008 refers to over 7 bill euro;
14
FDI by Field of Activity
(1990-2006)
Main Activities – 21.9
8.9%
4.5%
bill EUR
6.7%
24.2%
Manufacturing – 8.2 bill EUR
4.0%
1.1%
19%
14%
10
37.3%
13.3%
28%
8%
4%
Manufacturing
Trade
Financial services
Communication
Services
Mining
Utilities
Others
Source: National Bank of Romania
4%
6%
7%
Methalurgy
Food processing
Transport means
Chemicals
Wood processing
Textile
IT&C
Machinery
Others
15
Major Investing Countries
(1990-2006)
Austria
the Netherlands
Germany
France
Greece
7.94
5.89
3.47
2.77
2.68
bill EUR
1
bill EUR
2
bill EUR
3
bill EUR
4
bill EUR
Switzerland
Italy
Cyprus
Hungary
USA
2.37
2.32
1.67
0.66
0.63
bill EUR
bill EUR
bill EUR
bill EUR
bill EUR
6
7
8
Source: National Bank of Romania
9
5
10
16
Luxembourg Investment in Romania
Nr of companies
% of the total no. of companies
Ranking by no. of companies
Social capital subscribed in
companies with German
participation
% of the total value of capital
Ranking
521
0.35%
31
251 mill
EUR
1.44%
16
Source: National Trade Register Office; 1990 – November 2007
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5. Infrastructure Development
Highway Infrastructure Development - 2013
IASI
ORADEA
PIATRA NEAMT
BORS
SABAOANI
MIHAILESTI
SOVATA
CLUJ NAPOCA
CAMPIA
TURZII
BICAZ
TARGU
MURES
ALBITA
GHEORGHIENI
PRAID
NADLAC
SIGHISOARA
ARAD
DEVA
SEBES
ORASTIE
TIMISOARA
FAGARAS
SIBIU
CRISTIAN
GHIMBAV
LUGOJ
BRASOV
FOCSANI
PREDEAL
COMARNIC
DROBETA TR. SEVERIN
BUZAU
PLOIESTI
PITESTI
DRAJNA
CERNAVODA
BUCURESTI
CRAIOVA
CALAFAT
FETESTI
CONSTANTA
GIURGIU
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Ports and Airports
SATU MARE
International
flights
BAIA MARE
SUCEAVA
IASI
Domestic
flights
ORADEA
CLUJ NAPOCA
TARGU MURES
BACAU
ARAD
SIBIU
TIMISOARA
GALATI
BRAILA
CARAS-SEVERIN
SULINA
TULCEA
ORSOVA
OTOPENI
BANEASA
DROBETA TR. SEVERIN
M. KOGALNICEANU
CONSTANTA
CRAIOVA
CORABIA
OLTENITA
GIURGIU
CALARASI
MANGALIA
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Map of Industrial Parks
More than 40 Industrial
Parks
Both private & public
Greenfield & Brownfield
Access to utilities
Package of services
offered by the park
administration
Wide variety of activities
to be developed
Some created for hightech activities
21
6. Investment Legal Framework
Competitive Taxation
Corporate Tax
VAT
Bulgaria
10%
Romania
Social Contributions
Employee
Employer
20%
12.43%
24-24.7%
16%
19%
17%
29.34%
Hungary
16%
20%
13.5%
33.5%
Poland
19%
22%
18.71%
17.23-20.12%
Slovakia
19%
19%
13.4%
34.4%
Czech Rep.
24%
19%
12.5%
35%
Slovenia
25%
20%
22.1%
16.10%
Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers
Many Central and Eastern European countries reduced considerably
their corporate tax in order to diminish the fiscal burden
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Structural funds channeled by
Operational Programmes
Operational Programme
Increasing
Competitiveness
Regional
 Tourism
Managing Authority
Ministry of Economy and
Finance
Ministry of Development,
Public Works and Dwellings
Ministry of SMEs, Trade,
Tourism and Self-Employed
Development of Human
Resources
Transport
 Inter-modal transport
Ministry of Labour, Family and
Equal Opportunities
Ministry of Transport
Operational Programmes of interest to business
24
State Aid
1. State Aid granted for stimulating investments;
 granted to enterprises for achieving an initial
investment of more than Euro 30 million,
 creating at least 300 new jobs
2. Regional state aid schemes
investments in industrial parks;
granted
for
3. “de minimis” state aid for developing and
modernizing enterprises and developing activities
in the SMS sector
25
7. Potential Sectors for
Development
Potential Sectors for Investment
Manufacturing
Wood processing
Automotive components
Construction materials
IT & Communication
Textile industry
Energy (non-conventional)
Food processing
Electric & Electronics
Pharmaceuticals
Real Estate
Infrastructure
27
Automotive Industry Opportunities
Experience in the field of car makers
Automotive component parts – rapidly growing sector:
currently over 175 major manufacturers
Availability of labor force
– Labor cost: monthly average salary approx. Euro 250;
– Total number employed: 600.000;
Trained work force
– 7 colleges in vehicle technology – 500 graduates each year;
– 25 colleges in mechanical engineering – 1.000 graduates / year;
Availability of suppliers and subcontractors
Presence of R&D centers
Successful investment stories in the field
28
Automotive top-tier investors
2006
New projects
1 bill € investment
A gear boxes facility 217 mill € of
1.6 bill € turnover
12 thou employees Renault-Nissan Alliance
A R&D Centre "Renault Tehnologie
2007
230.500 cars sold Roumanie" – 456 mill € - 2012
Ford took over the state-owned shares of Automobile
Craiova (72.4 %) for €57 million, and pledged to invest €675
mill to modernize the factory and increase the number of
employees
Ford is awaiting for the results of the EC investigation on
the Romanian government helping the takeover
Automotive component parts sector
the fastest growing sector in Romania;
5.8 bill € investment inflows to increase up to 9-10 bill until 2010;
Huge presence of international top-tier players: TYRES (Michelin, Pirelli,
Continental); WIRES (Yazaki, SEWS, Leoni, Lear, Valeo, Delphi); BEARINGS (SNR,
Ina Schaeffler, Koyo), SOFTWARE (Siemens VDO); SEATS (Johnson Controls), etc.
29
Major Foreign Investment
In Automotive Industry
Germany
CONTINENTAL AUTOMOTIVE PRODUCTS
– (Timisoara, Sibiu)
CONTINENTAL AUTOMOTIVE SYSTEM
tyres, software
CONTI TECH
LISA DRAXLMAIER – (Pitesti, Satu-Mare, Timisoara) cable and wires
PHOENIX AG - (Carei) - rubber car parts
KROMBERG & SCHUBERT - (Timisoara)-car cables
DAIMLER-CHRYSLER – (Cugir) gear boxes
INA SCHEAFFER – (Brasov) – bearings;
LEONI WIRING SYSTEMS - (Arad, Bistrita) – wires&cables
BAUMEISTER & OSTLER - (Arad) – aluminium and plastic car parts
SIEMENS AUTOMOTIVE – (Timisoara, Iasi ) – software
SCHLEMMER – (Satu Mare)
MARQUARD SCHALTSYSTEME – (Sibiu)
HELLA – (Timisoara) electronics
30
Major Foreign Investment
In Automotive Industry
FRANCE
MICHELIN - (Floresti, Zalau, Bucharest) - tires
VALEO - (Pitesti) - electric wiring systems
SNR ROULEMENTS - (Sibiu) - bearings
FAURECIA - (Sibiu) - seats covers
AUTO CHASSIS INTL. – (Mioveni) - auto chassis
RENAULT-NISSAN – (Pitesti) – gear boxes
JAPAN
SUMITOMO ELECTRIC WIRING SYST. - (Hunedoara, Deva, Orastie) wiring systems
YAZAKI CORP. - (Ploiesti, Arad) - wiring systems
KOYO SEIKO - (Alexandria) - ball bearings
TAKATA CORP. - (Arad) - airbags and steering wheels
CALSONIC KANSEI – (Poiesti) - air condition and cooling units
31
Major Foreign Investment
In Automotive Industry
USA
JOHNSON CONTROLS - (Mioveni, Ploiesti) - seats
HONEYWELL GARETT - (Bucharest)- spare parts for turbochargers
ALCOA FUJIKURA INC. - (Chisineu-Cris and Caransebes) - wire harnesses
DOW AUTOMOTIVE - (Pitesti) - chemical compounds
BORLA ROMCAT - (Curtea de Arges) - mufflers, catalizers
LEAR CORPORATION - (Pitesti) - wiring systems
DELPHI PACKARD - (Sannicolau) - wiring systems
TRW – (Timisoara) – steering wheels
DURA AUTOMOTIVE - (Timisoara)
ITALY
MAGNETTO GROUP - (Dragasani) - wheels
MOMO - (Brad) - steering wheels
PIRELLI - (Slatina) – steel cord and tires
32
Major Foreign Investment
In Automotive Industry
OTHER COUNTRIES:
EYBL INTL. - Austria (Timisoara) - steering wheels
SOLVAY INERGI - Belgium (Pitesti) - plastic components
AUTOLIV INC. - Sweden (Brasov) - seat belts
COFICAB – Tunis (Arad) – wire harnesses
COINDU – Portugal (Arad)
CAUCHO METAL PRODUCTOS – Spain (Sibiu)
MANUFACTURA MODERNA DE METALES – Spain (Turda)
BAMESA-ARCELOR – Spain (Topoloveni)
33
Romanian ITC Industry Trends
High density of Romanian IT specialists (five times higher
than in Russia, and seven times than in India).
Romanian Olympic students are usually placed in top 4
with China, US and Russia.
In Microsoft the second spoken language is Romanian;
Low brain drain phenomenon in Romania;
IT sector is constantly growing;
Major multinational IT companies such as Microsoft, HP,
Oracle, Cisco, Intel and Motorola are present in Romania
- many of them use Romania as regional headquarters.
34
A Top European Location for
product R&D, outsourcing,
customer service and BPO
In 2006 Microsoft opened
a Global Technical
Support Center creating
around 700 jobs
One GE group
companies established
an IT outsourcing,
financial services and
supply chain BPO
HP set up a BPO in
Bucharest for financial
and administrative
services, dedicated to
EMEA region - up to
1200 employees
In 2006 WIPRO decided to
set up a BPO center in
Bucharest for IT services
covering the East
European market - 700
employees
Ericsson will open in
Romania, in July this
year, a New Global
Service Delivery Center 70% of the employees
will be young graduates
BPO aiming to offer
outsourcing services
in HR, finance and
procurement to work
35
8. ARIS – one stop shop for
foreign investors
Inis A.R.I.S?
Who
Interfa
charge
Gove
rnme
ntal
body
unde
r the
auth
ority Search
and
of
advice
Prim on the
e
best
Minislocation
in
ter Romani
a to
fulfill
the
compan
y'
needs
includin
g site
with
attract
ing
and
retaini
ng
foreig
n
direct
SERVICES
invest
Value
added
ment
informatio
n on
incentives
and other
administra
tive
procedure
s
ce
betwe
en
invest
ors
and
centra
l&
local
author
ities
Providi
ng free
of
charge
SERVIC
ES for
foreign
invest
ors in
Roman
ia
Search
for
industria
l
and
service
suppliers
37
Thank you
for your attention!
tel: +40 21 233.91.03
fax: +40 21 233.91.04
email: [email protected]
website: www.arisinvest.ro