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September 15, 2019

Romania continues to be an interesting country for French investors

With a level of investment of over EUR 7 bn (at the end of 2008 according to figures posted on the website of the French Embassy in Romania – our note) and over 3,000 companies with French or Franco-Romanian joint equity, France remains one of the top three biggest foreign investors in this country. It may be true that today we are far from the golden age of the late 1990’s or the beginning of the new millennium when one could say without the risk of being too biased that French was the business language spoken in Romania, but we have to recognise that, in the meantime, we have been through a deep economic crisis at world level as well as local level which is still not over, as it has been amplified in the latest months by an internal political crisis that can be anything but a reason of joy. Under such circumstances, questions such as: ‘Is Romania still attractive to the French investor, be it a big enterprise or an SME?’; or ‘What could still be the fields of interest after the boom in the automotive, telephony, banking, retail, cement industries and so on?’ Both Bruno Roche, President of the Chamber of Commerce, Industry and Agriculture in Romania (CCIFER) and Philippe Garcia, head of the UBIFRANCE Romania Bureau say the interest exists and withstands adversities, if we may add. ‘A country as close to France as Romania is, politically stable, a EU member state, having a rate of economic growth of 7 per cent (in 2002-2008) cannot leave our enterprises indifferent,’ Mr. Garcia explains, also admitting to a spontaneous decrease of interest in Romania having been reported in the last few years.

A reason – he says – could be the fact that French investors are prone to following the ‘trend of the day’, which means that more attractive today may be the BRICS countries – Brazil, Russia, India, China and South Africa – ‘emerging economies with a great potential for development, also posting important economic growth indicators’. But even under such conditions, thanks to the conjugated efforts of bodies such as the Economic Service of the French Embassy, the UBIFRANCE Mission or CCIFER ‘results are excellent’. ‘For example, in 2011 we assisted approximately 250 French companies. We anticipate 40 per cent success rate,’ stresses the head of the UBIFRANCE ROMANIA Bureau. In support of his statement that interest in Romania has been preserved among French investors, he gave the example of an event organised approximately ten days ago, that brought to Bucharest ten prestigious French luxury brands such as LVMH, Galeries Lafayette, Dessange, Éléphant Bleu, DIM, Jennyfer, La Mie Caline, Lancel, Gerard Darrel coming here to look at possibilities to develop their activities in Romania. ‘We are rather good in France in this particular sector, but we have a presence in Romania below the actual potential,’ Garcia says. Other areas of interest for the French: road and motorway infrastructure, the shift to digital TV, agriculture, energy in general and energy efficiency in particular, automotive or healthcare which is now in full development.  As far as difficulties are concerned, there are some, we cannot deny that, for Romania is not a perfect country and neither is France, actually. ‘There have also been failures, but they are part of everyday life,’ Bruno Roche, President of CCIFER and CEO Apa Nova Bucuresti and Veolia Apa Romania explains in turn. However, both he and Philippe Garcia say they are content with the fact that, despite the crisis, no French company has walked out of Romania. ‘That’s a sign that the business environment is rather good than bad and that, with its over 3,600 enterprises present in Romania, France has faith in the Romanian market, in its growth, in good governance and its capacity of using all the instruments made available by the state in the form of European structural funds. This is a strategic country for an important number of French companies,’ Philippe Garcia stresses. In what regards the difficulties encountered by French investors here, Bruno Roche gives a few examples: heavy administration which makes a major difference to a newcomer, the lack of foresight of authorities which is specific for the local political context. ‘Those who come or want to come to install themselves here do not necessarily need a vision spanning the following 20 years, they just want to know what to expect two, three or five years on,’ Roche says. Another obstacle that could gain increasing importance is the absence of a road infrastructure. ‘Be careful! At some point, that could make the difference between Romania and the countries in the region speedily equipping themselves (with motorways – our note), that are more agile in spending European funds,’ he further says. As for the current political context and its repercussions on business, both Bruno Roche and Philippe Garcia keep up optimism. ‘Seeing what is going on today, we could say the context is not favourable and that things are not simple. But we actually realise that people are still interested in Romania. In my view, the political or social context is not a curb on investment in Romania,’ is the conclusion of the CCIFER president.

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