Road to more investments is paved with good infrastructure

Many major French companies have already started a business in Romania and in future SMEs from healthcare, IT&C, energy, the environment and agriculture are expected to join them. But future investments depend a lot on the authorities’ capacity to modernize and further develop the country’s infrastructure, Bruno Roche, president of Chambre Francaise de Commerce, d’Industrie et d’Agriculture en Roumanie (CCIFER), told BR.

Simona Bazavan

Is Romania still an attractive destination for French investors or is it beginning to lose ground in favor of other countries in the region?

In the first semester of 2010, France was among the top foreign investors and commercial partners to Romania. In the past two years the CCIFER has been consulted by about 100 French companies interested in doing business in Romania. Because of the advantage of its strategic geographical position, which allows it to act as a link between Eastern and Western countries, Romania remains an attractive destination for French investors. However, if the country doesn’t do more to develop its infrastructure, it could lose out to neighboring countries. In the past two years, despite the economic crisis, no important French company has left Romania. Since January 2009, about 400 new firms with French shareholding have been created.

How much did French-owned companies invest locally last year and how does this compare to previous year? What are the estimations for 2010?

Official statistics show that France ranks fifth among the top foreign investors to Romania with approximately EUR 3.9 billion invested so far and EUR 591 million in 2009. According to data from the French Embassy to Bucharest, which includes updates of investments as well as the origin of the companies rather that of the capital, France is the third biggest investor in the country with EUR 7 billion invested so far. Between 1999 and 2009 French FDI increased nine fold. Currently there are 6,000 companies with French shareholding registered by the National Trade Register Office (ONRC).

What do you estimate to be the value of French exports to Romania and Romanian exports to France in 2010?

France is currently Romania’s third main commercial partner with exports to Romania amounting to EUR 1.43 billion and imports reaching EUR 1.23 billion in the first six months of 2010

What were the most important French investments in 2009 and what local industries have the potential to attract French investments in the future?

In 2009 French companies which are already present in Romania (Renault-Dacia, Orange, Lafarge, Michelin, Alcatel, Bouygues, Danone, Alstom, Veolia, Accor, Carrefour, Cora, BRD-Société Générale, BNP-Paribas, Colas, GDF Suez) reconfirmed their interset in developing their business here. At the same time, new industrial groups and small and medium companies have shown interest in developing investment projects and industrial partnerships with a strong potential to develop economic relations.

In recent months the latest newcomers have been Bongrain, which acquired the majority stake of Delaco, and AXA through the takeover of Omniasig. Major French groups are present in all the important local industries: automotive, telecommunications, aeronautics, constructions, banking, services and IT.

What are the main incentives for French investors in Romania, and what has changed in this respect in recent years?

The country’s main advantages remain its EU membership, cultural and geographical proximity and a well qualified and competitive workforce. These advantages have evolved and especially diversified over the years. EU membership has allowed Romania to win credibility on the long term. If a few years ago investors were attracted by the emergence of the local consumer market in the future investments will be driven by more value-adding arguments: the professional qualifications of the local workforce, economic dynamics, maturing of the local market, and growth and development potential of certain fields like technology, energy, the environment and services.

From your contact with French companies, what are the main setbacks of the local business environment and what should the Romanian authorities do to help foreign investors?

For French companies – and others – to invest in Romania it is vital the country solves the issue of its road and railway infrastructure. Romania must develop its infrastructure otherwise it will be avoided. It is absolutely necessary to build highways and to entirely modernize the railway system. This is vital for transport between Eastern and Western Europe. Developing public private partnerships would be extremely useful for further developing large scale projects.

To what extent do you expect an increase in French investment projects in Romania? Can you give any names or mention industries where they might be coming from?

French companies that are currently interested in the local market come from the medical energy and environmental fields as well as IT&C, agriculture and services. Major French firms are already here and on the short term we are expecting small and medium companies from the above mentioned fields.

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