Watchful Swiss keep investments ticking over

Investors such as Holcim, Nestle and Roche are among the Swiss companies active in Romania, which managed to consolidate their local operations last year against the sharp 36 percent drop in overall foreign direct investments in the country. As for potential newcomers, Swiss companies are looking at the local metal-processing, textile and food industries, BR discovered.

Simona Bazavan

From the cement industry to pharmaceuticals, FMCG to media, Swiss investors have been a strong presence in Romania in recent years. An estimated 350 Swiss companies are active locally, Gentiana Avrigeanu, executive director of the Swiss-Romanian Chamber of Commerce, told BR.

Citing the most recent data from the central bank, Marc Bruchez, deputy head of mission with the Swiss Embassy to Bucharest, told BR that Swiss direct investment stock amounted to EUR 2.02 billion at the end of 2010, down 4.4 percent y-o-y. It represented 3.8 percent of the total foreign direct investments and placed Switzerland eighth among the top foreign investors in Romania. “This 4.4 percent decrease does not reflect a general withdrawal of Swiss investors from the Romanian market. In fact, due to the adverse evolution of the Romanian economic situation, Swiss firms active here have had to adjust their investments in this country,” he said.

The reasons why Swiss companies are investing in Romania haven’t changed, added Bruchez. “Romania has a lot of economic potential in various fields of activities, like for example infrastructure, agriculture, tourism and services, and has very well educated people willing to develop those sectors. The good macroeconomic figures as well as the stability given by EU membership make the country attractive to Swiss investors,” he said.

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Unfortunately, the setbacks in the Romanian business environment also remain the same as a few years back. “The situation has not changed a lot in that respect. Lack of juridical security, corruption and political instability are still affecting Romania’s attractiveness to foreign investment,” he stated.

Looking at what may come, Avrigeanu says that Swiss investors are showing interest in the metal-processing, textile and food industries.
Major Swiss investors on the local market include Holcim, Nestle, Novartis, Ringier, Roche, Swisspor, Rieker, the companies belonging to investor Jean Valvis, Angst, Carpatair, Franke, Heidi Chocolat,  Ameropa, Inter-Spitzen and Sefar.

One of the most recent Swiss investments made locally came from outdoor advertising company Affichage Holding, which bought a 30 percent stake in Affichage Romania from American company Ventris, and now has total control of the Romanian office. The value of the transaction has not been disclosed. Nationwide, Affichage Romania has over 4,686 advertising spaces, distributed in over 60 cities including Bucharest, Brasov, Iasi, Constanta, Timisoara, Oradea, Botosani, Vaslui, Sighisoara and Cisnadie.

Despite poorer financial results in the past couple of years, Ringier Romania, the local division of the Swiss media company Ringier AG, previously announced that it had no intention to sell its local business. Ringier Romania currently publishes
the tabloid Libertatea and other magazines such as Unica, Lumea Femeilor, Joy and TvMania.

Last August the firm invested in expanding its local product portfolio by buying Romanian company Edipresse, which publishes titles including Elle, Avantaje, Look!, Psychologies, Intamplari adevarate, Povestea mea and Lucru de mana, and holds the local licenses for Viva! and Popcorn.

Despite the slowdown in the local construction market, one of the main Swiss investors in Romania, Holcim, managed to increase its sales of cement and clincher by 6.7 percent in the first three quarters of last year. The company has been present in Romania since 1997 and has invested about EUR 700 million locally so far, with more to come. Holcim Romania has announced that it will continue to invest between EUR 30 million and EUR 50 million yearly in its local operations.

Two big Swiss companies are active on the local pharmaceuticals market: Roche and Novartis. Roche estimates for 2011 a turnover of about RON 900 million (approximately EUR 214 million).
According to data from IMS Health, the company managed to become the top player on the local pharmaceutical market in the first 11 months of 2011, dethroning Sanofi.
The same source predicts the local drugs market will grow by double digits this year after posting a 7 percent growth in 2011.

Elsewhere, another Swiss brand present locally is Franke. Franke Romania, subsidiary of Kitchen Systems Group, part of the Swiss corporation Franke Artemis, started operations in Romania in 1998, offering comprehensive systems for domestic kitchens.

The company previously announced that it estimated a 10 percent turnover increase for 2011 to about RON 47 million, after reporting an 8 percent drop in 2010. For 2012 the company plans to further boost its sales and continue investing in opening new showrooms.

Another prominent Swiss investor active locally is businessman Jean Valvis, who has projects in the wine trade (Domeniile Samburesti), bottled mineral water (Aqua Carpatica) and the bio-energy industry (Dorna Agri) after selling the Dorna dairy business to French group Lactalis in 2008 and Dorna Apemin mineral water producer to Coca Cola back in 2002.

Also on the FMCG market, Heidi Chocolat – part of Swiss Laderach Group – managed to boost its sales by 17 percent last year against 2010, although the growth was mainly generated by exports, Erwin Vondenhoff, general manager of Heidi Chocolat, told BR. “Heidi invests approximately EUR 500,000 in our facility in Pantelimon each year. Last year a big part was invested in Heidi Chocoworld (e.n. the factory’s concept store). In 2012 we will also invest significantly in increasing our capacity as well as improving our efficiency,” he added.

simona.bazavan@business-review.ro