1. ROMANIAN ECONOMIC NEWS

1.1 PM Boc: 2 pc GDP growth in 2011, deficit target met

The Government's objectives - continuation of fiscal reform, restructuring of state-owned companies and of the healthcare system, implementation of the Education Law, Labour Code and Law on Social Dialogue, fight against tax evasion.

Last year, Romania registered almost 2 per cent economic growth and met the budget deficit target of maximum 4.4 per cent of GDP, Mediafax reports.One of this year's objectives is to attract approximately EUR 7bn European funds, representing an absorption rate of 20 per cent, PM Emil Boc announced after the Cabinet Meeting yesterday(3.01). Among the objectives the prime-minister mentioned at the beginning of the government meeting there were the continuation of the fiscal reform, the process of state-owned company restructuring and health system, the implementation of the Education Law, the Labour Code and the Law on Social Dialogue, as well as the fight against tax evasion especially in the area of excise duties. ‘I want the National Tax Administration Agency (ANAF) and the Ministry of Public Finance (MFP) to know that we will be watching everything that means tax evasion,' Boc said.

During the most recent evaluation of the agreement with the International Monetary Fund (IMF), the Romanian authorities and the international financial institutions retained the 1.5 per cent economic growth forecast for this year but significantly reduced the estimation for next year to about 2 per cent. The budget deficit target for last year was 4.4 per cent of GDP. At the end of November, the general consolidated budget had a deficit of RON 16.3 bn representing 2.98 per cent of GDP, higher by 0.5 per cent than in October.

If the cash budget deficit target for last year was 4.4 per cent of the GDP, the state had in the alt month of the year space of 1.4 per cent of GDP or over RON 7.7 bn for additional expenditure compared to the revenue collected. (Full art. - Nine O'clock 4.01)

1.2 Consolidated general budget deficit reached 3 pc of GDP in November

The consolidated general budget registered a deficit of RON 16.3 bln at end-November, accounting for 2.98 pc of the Gross Domestic Product (GDP), 0.5 percent points more than in October, Decebal Gherghina, state secretary with the Ministry of Public Finance (MFP) announced on Tuesday (27.12), quoted by Mediafax. The budget deficit target for this year is 4.4 pc of the GDP based on cash, which means that, in the last month of the year, the state will have room for extra expenditures compared to the incomes it receives, of 1.4 pc of the GDP, i.e. the equivalent of more than RON 7.7 bln. "November's incomes amounted to RON 14.4 bln, and in December so far they total RON 11.4 bln, but we are still waiting, because incomes are usually high in the last few days," the MFP official explained.According to Gherghina, the state tried to curb its operational expenditures this year, so the number of state employees decreased to 1,202,324.

The MFP official explained that, in 2004, expenditures with the personnel amounted to 7 pc of the GDP, and those with social assistance were 9.1 pc of the GDP. By 2009, they had soared to 9.4 of the GDP (salaries), respectively 12.8 pc of the GDP (welfare). "Only at the end of 2012 expenses with social assistance will drop to 11.7 pc of the GDP. We must push the reform forward in the next years too, if we want to reach a situation of normality. (...) If we want to keep this tax regime, with budget incomes worth 33.7 pc of the GDP, and make motorways and other investments, we must further reduce the states' operating expenses," Gherghina explained.

In a meeting of the Cabinet, PM Boc asked the Ministry of Finance not to accept, under any circumstance, a budget deficit higher than the 4.4 pc of the GDP set for this year, no matter how big "the needs of some, or others" may be.The incomes to the consolidated general budget during January-November, worth RON 163.1 bln, were 8.3 per cent higher than those achieved in the similar interval of last year. Significant increases were registered by the incomes from the value-added tax, which were 19.8 pc higher than a year ago, and those from excise duties (+11.6 pc). Incomes from social security contributions were 9.9 pc higher year-on-year, those from the income tax advanced by 5.5 pc, and those from the profit tax increased by 2.5 pc. The sums reimbursed by the European Union advanced by 33.3 pc against the similar interval of last year.

2.3 New Fiscal Code brings tax and excise duty increases starting January 1

Another provision keeps in effect, during 2012, the additional tax for individuals that own several real estate properties, or cars with engines above 2,000 cc.

The government approved the new form of the Fiscal Code, which provides higher excise duties for diesel fuel, tax increases for the companies that do not re-evaluate their buildings, and modifies the deadline for submitting tax statements, as the most important regulations to be enforced in 2012, Mediafax informs. The Executive passed the modifications to the Fiscal Code in its meeting held Tuesday (27.12) evening, according to official sources.

Under the new Code, excise duties for diesel will increase by 4.4 pc as of January 1, from 358 to 374 EUR/ton, while those for coffee will stay in effect during 2012 too, although they should have been eliminated since 2010. The companies that did not re-evaluate their buildings in the last three years will be subject to a tax increase by up to 20 pc of the formal value of these properties, and the figure will increase to 40 pc if no re-evaluation has been made over the last five years. Another important modification for companies is advancing the deadline for submitting the annual profit tax statement from April 25 to March 25 of the next year.

Companies will be allowed to opt between paying their profit tax on quarterly or annual basis, but in the latter case they must pay in advance a quarter of the profit tax due for the previous year. As for the income tax, the Code will eliminate - starting next year - the three-year interval after which non-resident persons that become resident in Romania must pay tax for incomes obtained from any source, both from Romania and abroad. It will also keep in effect the obligation of individual residents living in Romania to pay tax on incomes obtained from any source, three years after they change their residence to another state that has not signed with Romania a convention meant to avoid double taxation.

Also starting next year, taxpayers that run activities of moving people and goods in a taxi regime and which, in 2011, paid taxes in the real system, will be allowed to opt for income calculation based on income norms. To benefit from this option, they must fill Form 220 "Estimated income statement" by January 31, 2012.
Another important provision of the 2012 Fiscal Code refers to keeping in effect, during 2012, the additional tax for individual taxpayers which own several real estate properties or cars with engines above 2,000 cubic cm.

Another regulation makes it compulsory for companies with a turnover under EUR 100,000 to submit the single statement every three months, rather than each month. Furthermore, between January 1 and the middle of next year, companies that pay their dues to the state will benefit from a 50 pc cut of their penalties.
Starting 2012, commercial banks must enforce the international financial reporting standards (IFRS) and will stop using the Romanian accountancy standard (RAS). Banks will also enact a series of prudential filters devised by the Central Bank (BNR), so the volume of their cash reserves does not differ too much from current values.

2.4 Electricity and thermal energy, secured from stocks of coal and fuel oil

The government decided Tuesday (27.12) to make available, from the state reserve, 1.18 million tons of coal and 137,000 tons of fuel oil, in order to secure the electricity and thermal energy needed by the population this winter.The operation was approved as a loan, until October 31, 2012 for 17 thermal and power plants controlled by the Ministry of Economy, or by local authorities. Three of these units - CET Iasi, Uzina Termoelectrica Giurgiu and Electrocentrale Oradea - will be allowed to borrow fuel oil only after they return the overdue quantities of fuel they have borrowed in the past, government spokeswoman Ioana Muntean said. According to the same source, the town of Brad, Hunedoara County, will also benefit from the stocks.

2.5 State companies must transfer 85 pc of their profit to the state budget
Government decided to once again force state companies and corporations to transfer almost all their profit - 85 pc of the total - to the state budget, similarly to last year, Finance Minister Gheorghe Ialomitianu announced. The decision was made by the government via a memorandum. According to the document, Romgaz and Transgaz keep important sums in bank deposits.

Worth mentioning, the government and the IMF agreed to remove Electrica SA from the list of state companies that will receive a private manager, after the electricity provider was included in this category during initial negotiations between the two sides.

2.6 Royalties for gold, platinum and silver will double from 4 pc to 8 pc of the output

The government decided to double the royalties for gold, platinum and silver, from 4 pc to 8 pc of the value of the output, and to increase from 4 pc to 6 pc the royalty for the other mining products, such as coal and mineral water, with 20 pc of the sums thus obtained due to be ceded to local authorities. The decision was made by emergency ordinance, during the Cabinet meeting held Tuesday evening. The piece of news was later confirmed by government spokeswoman Ioana Muntean. The category of precious metals includes gold, silver, mercury and platinic metals (ruthenium, osmium, rhodium, iridium, palladium and platinum).The mining royalty paid to the state budget for natural mineral water is established at source, in the equivalent of EUR 6/1,000 liters, at the exchange rate announced by the Central Bank (BNR) for the day of the payment, reads the ordinance. In their turn, royalties for the gross incomes earned from the transport and transit of crude oil will increase from 10 pc to 15 pc, while those for the underground storage of gas will go up from 3 pc to 5 pc.

2.7 Government raises IMF quota
The government also decided Tuesday to increase Romania's quota in the capital of the IMF, thus enforcing a decision made by the Board of Governors last year, unrelated to the talks at EU level regarding the capitalisation of the Fund, Finance Minister Gheorghe Ialomitianu announced."This is about participating in the capital increase, a decision made by all shareholders in 2010," the minister said. Romania will increase its quota by 781.2 million Special Drawing Rights (SDR), from SDR 1.03 bln to SDR 1.81 bln. The money representing the increase of Romania's quota in the International Monetary Fund (IMF) will be contributed by the National Bank of Romania (BNR), as all rights and obligations that result from the relation with the international institution are reflected in the activity of the Central Bank. Following the increase, Romania will occupy the 4th position within the Dutch Constituency, after The Netherlands, Ukraine and Israel.

2.8 Tanasescu: Romania resorting to IMF money, out of the question in 2012

Mihai Tanasescu, Romania's representative at the IMF, stated yesterday (4.01) that Romania will not resort to the Fund's money because it is capable of attracting the funds it needs from the internal market, realitatea.net informs. "I believe that, given the way this programme was drawn up with the Fund and the way it has been implemented until now, Romania will finalize this precautionary agreement. At this point Romania doesn't have any financing problem. It can finance itself, for now, from the internal market. Financing from the external market is more difficult, but of course Romania will be able to come out stronger on international markets when international conditions settle down," Tanasescu explained. At the same time, the IMF representative called 2012 a year "of trials," since events at international level will have an extremely high impact on the Romanian economy. "I can say that the Romanian economy has evolved a lot in the last 20 years. In 1990 Romania had a GDP of approximately USD 40 bln. For 2012 we expect exports alone to reach USD 40-45 bln. We can see a powerful transformation of the Romanian economy, its integration in world economy," the IMF official explained. Mihai Tanasescu is confident that Romania could register economic growth in 2012, albeit a modest one.

In turn, the minister of Public Finance, Gheorghe Ialomitianu said Thursday on the public radio that Romania is able to finance itself, does not take loans at any interest, and can turn down the offers of some financers. According to the source, the Treasury borrowed money from the domestic market, of late, at reasonable interests of 6.5 pc, and "lowering the key interest rate was a good move of BNR."The MFP official added that the money made available to Romania by the IMF and EC were not taken into account, but these sums and the buffer-fund give a feeling of security in the negotiations aimed at financing the deficit and public refinancing in normal conditions. Ialomitianu also emphasised that Romania is in a situation of macroeconomic stability and took measures meant to stimulate economic growth - investments, state guarantees for crediting, and state aid schemes.

2.9 Industrial production prices' annual growth rate amounts to 8 pc

Overall industrial production prices rose by 0.4 pc last November, backed by a steadier growth for the internal market and a less sharp one for exports, and rose by 7.9 pc compared to the same month of 2010, according to figures supplied by the National Institute of Statistics (INS). Based on their destination, industrial production prices for the internal market rose by 0.5 pc in November, while industrial production prices for the external market rose by 0.2 pc. Based on activity sectors, price hikes were reported for water distribution; sanitation, waste management and decontamination activities (+1.5 pc); electrical and thermal power, gas, hot water and air/conditioning production and supply (+0.6 pc) and the processing industry (+0.4 pc). In the extractive industry prices ebbed by 0.5 pc.

2.10 EUR 204 M for road maintenance

The National Highways and Roads Company (CNADNR) will pay an estimated RON 875.55 M (EUR 204 M), VAT not included, for four road maintenance contracts, Mediafax informs. The maintenance works will take place on 2012-2014 on roads administered by CNADNR's Bucharest, Cluj, Craiova and Brasov branches. For each tender, CNADNR will sign with the winning companies a framework agreement for road maintenance works that will take place during winters and summers. The framework agreements will contain subsequent contracts. The roads that the four branches administer total 8,700 kilometers

2.11 Unemployment rate stagnated in July-September

The unemployment rate of the International Labour Organisation (ILO) stagnated in July-September against the previous quarter, to 7.2 pc, but is higher than in Q3 of the previous year, when the indicator calculated following ILO criteria stood at 6.9 pc, the National Statistics Institute (INS) announced yesterday. On gender basis, the gap between the two ILO unemployment rates was 1.2 percent points (7.8 pc for men, vs. 6.6 pc for women), while depending on the areas of residence it reached 3.8 percent points (8.9 pc urban vs. 5.1 pc rural). The ILO unemployment rate reached the highest level (24.1 pc) among youths (aged 15-24). ILO considers as jobless the people aged from 15 to 74 that simultaneously meet the following three conditions: have no job; are available to start working within two weeks; actively sought a job in the last four weeks.

In Q3, Romania's active population amounted to 9.949 million people, of which 9.231 million were occupied and 718,000 were ILO jobless.

2.12 Udrea: Rise in tourists' numbers in Q4, comparable to Jan-Sept figures

The rise in the number of tourists in Romanian hotels for the first nine months of 2011 will hold for the entire year, the Minister of Regional Development and Tourism, Elena Udrea, argued, quoted by Mediafax. "The number of tourists rose by 17 pc in the first three quarters of 2011. We think the figures will hold for the last quarter, taking into consideration the influx of tourists to resorts during the winter holidays. We hope both tourists' numbers and tour operators' revenue will rise," Udrea stated. The number of tourists accommodated in Romanian hotels, B&Bs and hostels in the first 11 months of the preceding year amounted to 6.53m, rising by 15.6 pc compared to the same interval of 2010, according to figures supplied by the National Institute of Statistics. Udrea also referred to the EUR 25 M-investment made by the Ministry of Regional Development and Tourism (MDRT) to expand the Poiana Brasov ski area, which boosted tourists' numbers in the region. "125,000 people visited the cable transport access points in Poiana Brasov between January 1 and 8, which is higher than the total figure for January 2010. Approximately 150,000 cars drove on Sunday through Poiana Brasov, according to shots taken by the CCTV cameras," the minister added. Moving on to another topic, the national electronic record system for tourists is currently being tested and will start running as of this month, Udrea further stated during a meeting with

2.13 House prices down 10 pc in 2012

Analysts expect the real estate market decline to be a temperate one this year but only if there is no severe economic derailment worldwide, adevarul.ro informs. Current apartment prices have been reduced to a half of what they were in 2006 - 2008 and specialists anticipate a persistent downward trend for this year too. ‘2012 price trend will be similar to 2011. We are talking about one-digit decrease by less than 10 per cent. It will practically be an extension of the 2011 situation. This is the scenario only if nothing bad happens. If an economic derailment is registered, however, the situation will be much more difficult than the one described above. Lending will decrease,' said property analyst Radu Zilisteanu.

Financial analyst Ilie Serbanescu, in turn, said that we cannot speak of stability on the real estate market yet because there is room for prices to still go down. House buying costs will continue to decrease this year because financing is still difficult, therefore the solvable demand is quite low. The only transactions still taking place are in the framework of the ‘First Home' government programme. ‘In the mass-market segment the demand has been relatively constant, with transactions being supported by the <First Home> programme which will continue in 2012. Prices have remained around the limits set by the programme, any evolution or involution in 2011 being given by area-specific factors,' explained Alexandru Pricop, managing partner at Coldwell Banker Romania.

As far as old home prices are concerned, currently a studio in the Bucharest Militari district can be bought with EUR 30,000 and a 57 sq m one-bedroom apartment in the same area with EUR 52,900, according to imobiliare.ro data. On the same property website, a two-bedroom apartment with an area of 69 sq m, in Militari, is posted with an asking price of EUR 68,000.

2.14 Total average monthly wages amounted to RON 835/capita in Q3

Total average monthly wages amounted, in nominal terms, to RON 2,402 per household and RON 835 per capita in the third quarter of 2011, according to the results of the family budgets survey released yesterday by the National Institute of Statistics (INS). Monetary monthly incomes amounted to an average RON 2,102 per household (RON 700/capita), while incomes in kind amounted to RON 390/ household (RON 135/capita). Wages and related income accounted for the largest share of incomes, 50 pc of the total revenue of households, rising by 2.4 pc compared to the first quarter and by 1.4 pc compared to Q2 of 2011. Rural households' revenue relied, in turn, largely on salary income (28 pc) and social benefits (25 pc). At the same time, households' total expenditure amounted to a monthly average of RON 2,167 (RON 754/capita) in the third quarter of 2011, which is the equivalent of 90.2 pc of total revenue.

2.15 Romanian engineer and business man George Iacobescu made Knight by Queen Elizabeth II

On December 31, 2011, with the occasion of the New Year, Her Majesty Queen Elizabeth II of the United Kingdom of Great Britain and Northern Ireland bestowed distinctions and honorary titles to a list of British personalities who made themselves renowned during the 2011, Embassy of Romania in London informs. Among them was honoured George Iacobescu CBE, Romanian engineer and businessman, CEO and Chairman of Canary Wharf Group, the second financial centre of London. He was bestowed the rank of Knight Bachelor for services to Charity, Community and the Financial Services Industry, becoming the first Romanian awarded by Her Majesty the Queen of the United kingdom of Great Britain and Northern Ireland. George Iacobescu is one of the most successful Romanian born business leaders in the world. He was appointed Commander of the Order of the British Empire (CBE) in the 2003 Birthday Honours for services to regeneration and inward investment and in 2007 became a member of the Board of Trustees of the British Museum.

2. ENERGY

Wind turbines, stronger than the Cernavoda NPP in 2012

If everything goes well, wind turbines will reach a capacity of 1,500 MW in 2012, more than the Cernavoda Nuclear Power Plant, which has only 1,400 MW, the Evenimentul Zilei newspaper announces. The draught of 2011 gave a strategic importance to wind generators, as there were moments when they produced more electricity than Hidroelectrica. In 2012, investments might amount to EUR 1.5 bln, and the total capacity will increase to almost 1,600 MW twice as much as in 2011, according to Dana Duica, executive director of the Romanian Association for Wind Energy. "In 2012, we expect investments that could reach as much as EUR 1.5 bln, in the optimistic scenario that has companies completing their investments," she said. Romania also has the potential of hosting a wind turbine production unit, Duica believes. However, in order to see such a plant open in the country, investors should be encouraged. This would not be difficult, because Romania also has another potential: it has both the appropriate locations and the necessary technology. "I see no risk of this industry breaking up in the future, especially as it has a normal and predictable evolution over the last two years, and the trend will stay the same in the future as well," Duica said. However, there is a danger concerning investors, because banks need stability when they extend a loan, so they know what scheme they can rely upon. Another opportunity for the future is represented by the batteries used for the storage of wind power. However, at the present moment, there is no battery system that can store the electricity produced by a wind farm. Technology still does not allow it.

On the positive side, the price of the equipment used for wind farms drops, as technology advances and the market becomes more competitive. Traditional players like Vestas or General Electric see new competitors arising - cheaper brands, usually manufactured in China. However, no turbine made in China has been installed in Romania so far.

3. FINANCIAL AND BANKING NEWS

3.1 BNR cuts key interest rate to 5.75 pc

The Board of Directors (CA) of the National Bank of Romania (BNR) yesterday (4.01) cut by 0.25 pc, from 6 pc to 5.75 pc, the key interest, yet held the minimum required reserve ratios steady, Mediafax reports. The cut will come in effect from Friday, Jan 6. Several analysts anticipated the 0.25 pc drop, despite the risks generated by the euro zone crisis. Six of the 11 experts consulted by Reuters and quoted by Mediafax were expecting the cut by a quarter of a percentage point, while the remainder predicted the BNR will hold the key interest steady at 6 pc, given the risks in the euro zone and the still-weak RON.

The BNR also decided to maintain the current minimum required reserve ratios required of the banks at 20 pc for hard currency liabilities of under two years and 15 pc for RON liabilities also under two years. The Board reaffirmed the central bank's continuing monitoring the domestic and international economic developments, so that the commensurate adjustment of held instruments will ensure medium term price stability. The BNR also stated it will continue the adequate handling of liquidity in the banking sector. (Full art. - Nine O'Clock 5.01)

3.2 BNR reference rate close to 2010 record high
The National Bank of Romania (BNR) informed yesterday (9.01) that the reference exchange rate reached RON 4.3625/EUR, RON 0.0093 above Monday's rate and the highest rate in the past 18 and a half months, close to the record high of RON 4.3688/EUR reached in June 2010, Mediafax reports.

The national currency also lost ground before the Swiss franc, as the rate rose by RON 0.0142, from RON 3.5811/CHF to RON 3.5953/CHF. Thus, Tuesday's rate is the highest rate since September 5, 2011, when the parity against the franc amounted to RON 3.8133. On the other hand, the reference rate against the American dollar ebbed by RON 0.0025, from RON 3.4096/USD to RON 3.4071/USD. Monday's rate marks highest level since July 2, 2010, when the rate amounted to RON 3.4414/USD.During the first hour of trading, the rate reached a maximum of RON 4.3695/EUR and, according to some dealers, the central bank intervened at this point, starting to sell foreign currency to keep in certain limits the depreciation of the RON.

3.3 Finance Ministry sells two-year bonds worth RON 1.48 bln

The Ministry of Public Finance (MFP) sold bonds with a two-year maturity period, worth RON 1.481 bln (EUR 341.4 M), twice the planned sum, with a decreasing average yield of 6.87 pc, in the first auction for government bonds held this year, Mediafax informs. In total, banks subscribed bonds worth RON 2.507 bln, against a planned value of the auction that amounted to just RON 700 M. Some analysts estimated that the average yield of yesterday's auction would drop at, or below 7 pc, given the slight changes experienced in the previous auctions for state bonds.

3.4 UniCredit's BA approves EUR 7.5bln-joint stock boost

UniCredit's Board of Administration decided yesterday (3.01) the terms for the EUR 7.5bln-joint stock boost to be operated by issuing stocks to current shareholders at the price of EUR 1.943/share, with a 43 pc-discount from the reference market value, Mediafax reports. The joint stock boost was approved in the UniCredit's extraordinary shareholders' assembly on December 15. Thus, the bank will issue new stocks at a subscription rate of two stocks per every share they currently hold, at the price of EUR 1.943, which would result in a total joint stock boost of EUR 7.5bln, a press release by the group informs.
3.5 Intesa Sanpaolo Bank has increased its capital with EUR 75 M

Intesa Sanpaolo Bank is increasing its capital with RON 323 M (EUR 75 M), by issuing new shares, underwriting pro-quota by the two shareholders, a press release informs. The value of the capital increased with 65 pc from RON 491.111.110 up to RON 814.111.110. Following the capital increase, the percentages shares remained unchanged: Intesa Sanpaolo SpA owns 99,61 pc from the shares and Intesa Sanpaolo Holding International S.A. 0,39 pc. This capital increase proves once more the trust of the Group in its bank active in Romania and the strong commitment towards our country. This increase will sustain the consolidation of the bank's position and operations on the local market and also the merger process between Intesa Sanpaolo Bank and CR Firenze scheduled for the first half of the year.

3.6 Volksbank Romania share capital increased by RON 362.8 M

The shareholders of Volksbank Romania increased the bank's share capital by RON 362.8 M, EUR 84 M, from RON 540 M to RON 903.15 M, over EUR 210 M and supplemented own funds by EUR 136 M, by means of subordinated borrowings, according to a press release. The bank announced Monday that shareholders passed in late 2011 a set of measures that result in the share capital of Volksbank Romania rising by EUR 220 M. The decisions passed by the latest general meeting of shareholders show shareholders' availability to support operational consolidation in Romania, said Johann Lurf, president Volksbank Romania.

3.7 Marfin Bank Romania opens two new offices

Marfin Bank Romania's territorial network will expand in Bucharest by the opening of two new offices, a press release informs. The new offices lie in the Pipera and Calea Mosilor area. At present, the Marfin Bank Romania network includes 29 offices, out of which eight in Bucharest and 21 in the country's major cities. Also, Marfin Bank reported for the first nine months of 2011 net profit of EUR 4,3 M in IFRS, despite the increased provisions for non-performing loans and high investment costs. At the first nine months of 2011, the total assets of Marfin Bank reached to EUR 681,9 M, up by 18,6% compared to the same period last year with the loans to be increased by 22,6% and deposits by 2,3%. The total net interest income reached EUR 16,2 M up by 13%, while the operating profit increased by 25% to EUR 11M, due to higher revenues from commissions and other fees. The bank, in alignment with the business plan, is going to open 4 new branches until the end of 2011 creating a network of 31 branches.

4. COMPANIES NEWS

4.1 Dacia presents first official photos of Lodgy model's series version

Automobile Dacia presented yesterday (4.01) the first official photos of Lodgy model's series version that will be built by the Renault plant in Morocco, this being Dacia's first model to be produced outside Romania, Mediafax informs. Lodgy will be officially launched at the Geneva Auto Show in March 2012. Apart from photos, the company also publicized the first official data on the new model. Thus, Lodgy is a 5-seat or 7-seat family car who's equipping represents a premiere for Dacia, according to the auto-manufacturer's communiqué. At the end of the year Renault presented a competition version of the model, a race car that was used by pilots Alain Prost, Nicolas Prost and Evens Stievenart in December in the Andros Trophy in France. Lodgy is the 7th model in the Dacia series after Dacia was taken over by Renault. Dacia is preparing for a new generation of the Logan model to come into production in its plant in Mioveni, a new generation set to be launched in the autumn of 2012.According to an announcement published by the Presidential Administration, President Traian Basescu was expected to visit the Dacia Renault Design Centre last evening at 7.30 PM.

4.2 Rompetrol will spend some USD 3 M to dredge the Midia Port

Midia Marine Terminal company, part of the Rompetrol group will spend USD 2.8 M next year to dredge the inner harbour of the Midia Port and make it suitable for tankers."The project is part of the Rompetrol group's strategy of increasing the processing capacity of the Petromidia refinery to 5 million tons of crude, which will be finalised in 2012 and will ensure the development of the transit capacity of end products through the Midia port," the CEO of Midia Marine Terminal, Ioan Taus announced in a press release.

4.3 E.ON Gas Distribution invested RON 180 M this year

E.ON Gas Distribution invested RON 180 M this year, particularly in order to modernize the natural gas grid, Virgil Metea, the company's general manager, stated for Mediafax. 633 kilometres of the natural gas distribution system were modernized, of which 375 kilometres of pipeline were completely replaced. Metea added that investments in modernizations and replacements, as well as those in high-performing equipment, were meant to enhance the degree of safety in use. The company is active in the country's northern half, delivering natural gas to approximately 2.8 million consumers. 100 kilometres of pipeline were modernized in Mures County, the investment totalling over RON 12 M, while 10 kilometres of pipeline were built for new consumers.

4.4 E&Y: Approx. 20 pc of Romanian companies have revenues above EUR 100 M

According to a poll conducted by Ernst & Young, lowering costs was the most widespread strategy that Romanian companies that had good results in recent years adopted, followed by hiking productivity and restructuring activity, Mediafax informs. Five per cent of the companies tried to consolidate their position on the market through mergers and acquisitions, while another 5 per cent sought to draw European funds.At the same time, 38 per cent of the managers nominated cost control as one of the main factors behind their companies' success in time of crisis, 15 per cent pointed to innovation, 12 per cent to using and keeping performing employees, 10 per cent to restructuring and 9 per cent to hiking productivity. 70 per cent of the companies that took part in the poll are business to business companies, 26 per cent work directly with consumers, while 4 per cent do business with the state.

The survey also shows that slightly above 50 per cent of the aforementioned companies have Romanian shareholders, 47 per cent have foreign shareholders, 13 per cent are listed on the stock market, 5 per cent are state-controlled and 5 per cent are controlled by private capital funds. In the case of almost a fifth of them - 19 per cent - revenues stood above EUR 100 M in the last fiscal year, in the case of 8 per cent of them revenues stood at EUR 50 - 99.9 M, in the case of 47 per cent it stood at EUR 10 - 49.9 M, in the case of 22 per cent at EUR 1 - 9.9 M and in the case of 5 per cent revenues stood below EUR 1 M. Likewise, the respondents represented all economic sectors, with a higher representation for the industrial and manufacturing sector, retail and commerce sector, food industry and agriculture sector, as well as services sector.

4.5 EBRD invests EUR 8.8 M in water infrastructure in Braila

The European Bank of Reconstruction and Development (EBRD) is continuing its work to help improve water infrastructure in Romanian cities, with a new loan to improve water services in the county of Braila. According to a press release, the Bank is providing a EUR 8.8 M loan which, alongside EU Cohesion Funds of EUR 74 M and funding from the local and state budgets, will finance the EUR 95.7 M regional water investment programme of the SC Compania de Utilitati Publice Dunarea SA Braila. The investment programme aims to extend and rehabilitate the water and wastewater infrastructure in 45 administrative territorial units representing nearly two-thirds of the population of Braila County. As a result of the project more than 300,000 inhabitants in the area will gain access to safe water supplies and to sanitation services.

The project will also benefit from a benchmarking programme, which will provide the company with the necessary tools and procedures to im¬prove the level of the services delivered to customers, compare operational performance over time and identify underperformance relative to industry standards. The EBRD's EUR 8.8 M loan is a subproject of the EUR 200 M Regional EU Cohesion Fund Co-financing Framework (R2CF) which was launched in 2010 to support investments in Romania's water and wastewater infrastructure and help municipalities absorb the financing available from EU Cohesion Funds. It is estimated that the framework will mobilise additional investments of approximately EUR 1.5 billion in Romania's water and wastewater infrastructure.

4.6 Johnson Controls new plant to make car seats for Ford Craiova

Johnson Controls, one of the world's leading manufacturers of auto parts operating in Romania, will open January 30 a factory in Craiova to produce car seats for the local Ford plant, according to Hotnews.ro. Johnson Controls, which owns several automotive part plants in Romania, has recently announced its purchasing the polyurethane foam division of Spumotim SA. The new factory will employ 160 workers.
4.7 Air Vallee enters Romanian low-cost market

Air Vallee, an Italian air company activating on the low-cost air transportation segment, announced today in a press conference held in Parma its intention to launch new routes on the Romanian market, money.ro informs. Thus, the Italian air company will launch two new routes: Parma - Bucharest and Turin - Iasi. The flights are scheduled to take place on March 31 and will take off from the Henri Coanda International Airport. The Parma - Bucharest route will have two weekly flights, while the Turin - Iasi route will have three weekly flights. The company plans to open three operational bases in Bucharest, Iasi and Constanta. A one-way ticket on the Bucharest - Parma route costs EUR 39 (normal category) or EUR 190 (executive category). In the case of the Iasi - Turin route, a one-way ticket costs EUR 39 (normal category) or EUR 183 (executive category). All taxes are included.

(News are from Nine O'Clock)