Logistic and industrial investment in romania


1. Is Romania still an interesting country when it comes to logistic and industrial investments? Why yes/or not?

Romania is still an interesting country when it comes to logistic and industrial investments.

For industrial production the salaries will stay low and the crisis will not end in 2011 in my opinion. Growth will be slower or slow down in the next years. In a global economy, language skills are a key workforce advantage. Born at the cross roads of different cultures and civilizations, where East meets West, Romanians are multilingual, open to new experiences, innovative and future oriented. This combination with relatively low salaries can be attractive to foreign investors. The geographical location is the second point were Belgians are keen on (close to Belgium and a central location in a wider area and the potential of an internal market).

The emerging region of Central and Eastern Europe (CEE) is the main macroeconomic driver impacting European supply chains. Simply developing a warehouse that fits building requirements is no longer sufficient. A prime location and availability of additional services in a “logistics park” become more important. For logistic investments the investors look at the country and the possibilities and the area around the country. The industrial investments and the retail investments are booming in Romania even in crisis. We still produce around 20 hot leads with all contact data per month for the chamber members. This is a surprise and it is an indication that Romania is moving on. It's a big country with an extremely young and dynamic population. With its geographical positioning, bordering onto the Black Sea, the Romanian port of Constanta is also the new logistics gateway to Europe, but from the East this time, aside from the western gateway Le Havre-Hamburg. Investors will migrate towards other interesting parts of the country, after having invested largely in the Bucuresti-Ilfov area in 2009.

2. How do the Belgian investors see Romania in a time of crisis?

The number of investors has decreased with the crisis but Belgians are still looking at Romania. The proof is that we had 147 subscribers for a seminar in Brussels on 10 June 2010 around infrastructure and construction. CIBR co-organized this seminar. Belgians look at Romania as being most probably one of the best choices in the CEE region.

A second view point is that Belgians look at the crisis as being a second opportunity to take a position in Romania. It is possible that this opportunity will not be reproduced.

3. What are the most important problems the Belgian companies meet in Romania?

I want to brief on this question. Belgian people are pretty direct and straight forward. They want to focus on their business. In the field they encounter the Romanian administrative system. Some find it time consuming others are quite negative about this item.
I noticed that there is a difference and a change of mentality in the 10 years that have passed but there is still a lot of work left for the next decade.

4. Do you happen to know how many Belgian logistic companies have invested until 2008, and how many after 2008 or with what percent the number of Belgian investors dropped?

WDP from Belgium made substantial investments in Romania They opted for Romania because of the outstanding growth potential. 200 million Euro investment: the project concerns the Promoter’s strategic investment programme for its logistics network extension in the Romanian market, with the construction of four industrial estates for logistic warehouses to be erected and operated in two sites close to Bucharest (Corbii Mari and Fundulea), one site close to Ploiesti (Aricestii), and one close to Pitesti (Oarja). In total WDP has around 10 plots of land in Romania. WDP is the market leader in Belgium as well as a European player. WDP Romania is a member of the Belgian Romanian Real Estate Chamber. Feel free to contact us for more information on all WDP projects. “Warehouses with brains” from Belgium.

The Belgian Alinso Group has announced that it is allotting 15,000 sqm to start a new building for SMEs in Ploiesti West Park. The first building in Ploiesti West Park, a 30,000-sqm construction was rented to Unilever. The surface of the park, which required a total EUR 750 million investment, is 220 hectares. Alinso has a substantial real estate portfolio (residential, commercial, industrial and offices).

The Bucharest Industrial Park project was launched in 2000 and now consists of a plot of 102 hectares of land located in the Bolintin Deal commune, Giurgiu county, on the edge of Bucharest on the A1 Motorway. With the help of Belgian investors this park was brought to its current status 840.000 sqm and 420.000 sqm are constructible.

As a chamber we are actively looking for investors in logistics and industrial investments.
We monitor the market and help the investors with their entry on a tailor made basis. Our members come from different continents and countries all over the world.

5. What are the main errors the government/ state has done and what should they do so that they encourage the Belgian investors and not only to come to Romania?

It is not my mission to give advice to a government as I am here as a facilitator and observer. However I understand that Romania is a young economy going through a transition period.

On the other hand I would like to promote the Romania of the regions in order to remove the bottleneck that resides in Bucharest. In my opinion it is worthwhile to consider a decentralization in regions.

A second remark is that within the lines of the EU policy a new set of measures should be drafted and funds should be allocated to accelerate and facilitate absorption of funds and a higher amount of money is needed to ensure a sustainable development at a reasonable speed. Let’s look at agriculture: a lot of fields are not utilized. It might be the wish of the ministry of health to have new hospitals and medicaments but you cannot eat medicaments ...as an example. Complex matters and paradigm shifts that go way beyond my head. To be sincere: I would not like to give a solution to this complex matter. But one thing is sure somebody has to provide solutions.

6. What are the main qualities of the Romanian market that encourage logistic / industrial investments?

I have already answered part of this questions in the section above. But I would like to add some interesting facts.

Romania has highly skilled labour force at competitive prices (solid knowledge in foreign languages, technology, IT, engineering, etc). This labour force can be used in Romania and in Europe. For this reason we have a special department that takes care of detaching to the EU (gains importance in times of crisis). On the other hand the same department provides the members with project teams and white collar workers for the existing or new projects.

Especially for logistics I would like to conclude with the cliché that it is all about taking positions or not taking positions. Do not worry about your hesitation as an investor.Even in crisis somebody else is looking to take a prime position….

7. What about European funds. Do they attract the investors?

European funds attract European investors. More funds are needed after 2013 to ensure the continuity of what was initiated before the entry and realized in the period 2007-2013.
Bottlenecks should be removed and the adsorption speed can quadruple….or sky rocket as it was the case with the pre-adhesion funds a couple of years ago.

Freddy Jacobs
Belgian Romanian Real Estate Chamber