Published on April 24, 2008
Slide1: Romania – Top Destination for Investment March, 2008 romanian agency for foreign investment Slide2: 2 Structure of the Presentation Geo-strategic position Macroeconomic outlook Valuable human potential FDI performance Infrastructure development Investment legal framework Potential sectors for development ARIS – one stop shop Slide3: 1. Geo-strategic position Slide4: 4 Romania’s Geo-strategic Position Our friend the wind Slide5: 5 Romania’s Strategic Location The Eastern border of the inland European Union Strategic position at the turning point where EU meets the Balkans and CIS countries Slide6: 2. Macroeconomic outlook Slide7: 7 Significant Potential for Growth Q3 2007 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. Source: EUROSTAT, *forecast Source: National Institute of Statistics Slide8: 8 Inflation Rate 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. Source: EUROSTAT Source: National Bank of Romania Slide9: 3. Valuable Human Potential Slide10: 10 Availability of Human Capital 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 104 higher education institutions 112 thou university graduates Availability of technical engineers High industrial experience Flexibility Slide11: 11 University graduates in Romania (by education field) 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) Source: National Institute of Statistics strong language skills (English, French, German, Italian, Spanish, Russian, etc.) large skilled labor force at comparatively low wage rates Slide12: 12 BUCURESTI CLUJ-NAPOCA SIBIU TIMISOARA BRASOV IASI CRAIOVA GALATI 70 thou S: 93% P: 7% 67 thou S: 90% P: 10% 51 thou S: 89% P: 11% 46 thou S: 69% P: 31% 34 thou S: 89% P: 11% 24 thou S: 92% P: 8% 21 thou S: 87% P: 13% 20 thou S: 86% P: 14% PITESTI TARGU - MURES BUCURESTI 10 Major University Centers Labor Cost – A debated topic: 13 Labor Cost – A debated topic Regional Comparison 2006 - EUR Gross monthly wages EUR 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% Slide14: 4. FDI Performance Slide15: 15 Inward FDI Flows Q3 2007 FDI Stock over EUR 41 bill (1990 –2007); The forecast for 2008 refers to over 7 bill euro; Source: Vienna Institute of International Economic Studies Source: National Bank of Romania EUR million Slide16: 16 FDI by Field of Activity (1990-2006) Source: National Bank of Romania Slide17: 17 Major Investing Countries (1990-2006) Source: National Bank of Romania Chinese Investment in Romania: 18 Chinese Investment in Romania Source: National Trade Register Office; 1990 – December 2007 Slide19: 5. Infrastructure Development Slide20: 20 BUCURESTI FETESTI CERNAVODA GIURGIU DROBETA TR. SEVERIN ARAD TIMISOARA DRAJNA ORADEA BORS NADLAC LUGOJ DEVA ORASTIE SEBES SIBIU PITESTI CONSTANTA MIHAILESTI CAMPIA TURZII TARGU MURES SIGHISOARA FAGARAS BRASOV PREDEAL COMARNIC PLOIESTI BUZAU FOCSANI CRISTIAN GHIMBAV BICAZ PRAID SOVATA PIATRA NEAMT GHEORGHIENI SABAOANI ALBITA CRAIOVA CALAFAT IASI CLUJ NAPOCA Slide21: 21 ARAD CRAIOVA TIMISOARA BAIA MARE SATU MARE CLUJ NAPOCA ORADEA TARGU MURES SIBIU OTOPENI IASI BACAU SUCEAVA M. KOGALNICEANU BANEASA MANGALIA CONSTANTA BRAILA GALATI OLTENITA GIURGIU SULINA CORABIA DROBETA TR. SEVERIN Ports and Airports TULCEA CARAS-SEVERIN ORSOVA CALARASI Mobile Communication Infrastructure – coverage area -: 22 Mobile Communication Infrastructure – coverage area - Consolidated market; Major international players; More than 90% network coverage. Slide23: 23 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 high-tech activities Slide24: 6. Investment Legal Framework Competitive Taxation: 25 Competitive Taxation Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers Many Central and Eastern European countries reduced considerably their corporate tax in order to diminish the fiscal burden Structural funds channeled by Operational Programmes: 26 Structural funds channeled by Operational Programmes Operational Programmes of interest to business State Aid: 27 State Aid 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 Regional state aid schemes granted for investments in industrial parks; “de minimis” state aid for developing and modernizing enterprises and developing activities in the SMS sector Slide28: 7. Potential Sectors for Development Potential Sectors for Investment: 29 Potential Sectors for Investment Automotive Industry Opportunities: 30 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 Automotive top-tier investors: 31 Automotive top-tier investors Slide32: 32 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 Major Foreign Investment In Automotive Industry Slide33: 33 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 Major Foreign Investment In Automotive Industry Slide34: 34 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 Major Foreign Investment In Automotive Industry Slide35: 35 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) Major Foreign Investment In Automotive Industry Romanian ITC Industry Trends: 36 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. Romanian ITC Industry Trends A Top European Location for product R&D, outsourcing, customer service and BPO: 37 A Top European Location for product R&D, outsourcing, customer service and BPO Slide38: 8. ARIS – one stop shop for foreign investors Who is A.R.I.S?: 39 Who is A.R.I.S? Governmental body under the authority of Prime Minister In charge with attracting and retaining foreign direct investment Interface between investors and central & local authorities Providing free of charge SERVICES for foreign investors in Romania Search and advice on the best location in Romania to fulfill the company' needs including site search, analysis & touring around Search for industrial and service suppliers Value added information on incentives and other administrative procedures Thank you for your attention!: Thank you for your attention!