Italian direct investment, over one billion euros in 2009

• (Interview with Head of Economic and Commercial Office Embassy of Italy in Bucharest, Mr. Carmelo Barbera)

Reporter: What is the total value of direct investments made in Romania by Italian companies in 2009? How is this value against the level of 2008?

Carmelo Barbera: In 2009 Italy ranked at the 8th place among foreign investors in the Country, with a total investment amount slightly above euro 1 billion. I would like to point out anyway that this value does not reflect the actual importance and size of Italian investments in Romania because several Italian companies are registered as Romanian ones while others are not counted as Italians because they are based in other European countries.

Reporter: How many Italian companies are currently active in Romania? How many Italian companies have ceased activity in Romania, in 2009, and why?

Carmelo Barbera: In 2009, Italy continued to be the first Country in terms of number of companies registered in Romania, counting over 28.000 firms, compared to the 27.000 of the previous year. Although the global economic crisis produced serious consequences on the European economies, including the Romanian one, the number of Italian companies does not give evidence of any forthcoming reduction of our presence in this market. On the contrary, it shows a growing trend in certain sectors. In addition, I would like to add that the extraordinary economic and commercial ties existing between our countries take also advantage of the very significant number of Romanian companies active in Italy, (there are around 23.000 firms led by Romanian citizens in Italy). This number is expected to grow further in the near future.

Reporter: What are the biggest Italian investors in Romania?

Carmelo Barbera: There are several Italian big firms active in Romania and I will mention just a few of them, being the following list by no means exhaustive: ENEL, for example, the first electricity distribution player in Romania, that since 2005 acquired state-owned distribution companies and has now 2,5 million customers (30% of market share) with more than 5.000 employees. Furthermore this group, that is also interested in the generation market, is planning investments for around euro 700 million for the modernization of the existing network. Among other big players I can mention Astaldi in the infrastructure field, Finmeccanica Group (active with various subsidiaries including Ansaldo, that took part in the construction of the first and second nuclear reactor of the Cernavoda powerplant), Pirelli (that already made relevant investments in Romania), Tenaris-Silcotub active in the steel sector in Calarasi and Zalau, Riso Scotti operating in the agricultural field and so on. Furthermore I would like also to add some banks to this short list (for instance Unicredit Group, Intesa San Paolo and Veneto Banca).In fact, the important presence of Italian banks in Romania allowed our companies to better integrate into the local market and further develop their business plans.

Reporter: What is the total value of Romania-Italy commercial exchanges for 2009?

Carmelor Barbera: Italy has been since some years now the Romanian"s second business partner. The data available for the first six months of 2009 show a bilateral commercial exchange of over euro4,4 billion, euro2,2 billion in Romanian imports and a similar level of exports. These values in the previous year were of euro6 billion, respectively euro2,7 billion of exports and euro3,3 billion of imports. The evolution is in line with the overall trend of the Romanian commercial trade deficit, that is quickly improving since the beginning of 2009, showing a much stronger decrease in imports in comparison with exports.

Reporter: What are the most popular Romanian goods for export to Italy? But the most popular Italian goods in Romania?

Carmelo Barbera: Romanians as well as the Italian community resident in Romania, appreciate Italian goods very much and, because of that, there are plenty of Italian products available here (and their range is growing day by day). The "Made in Italy" and the "Made by Italy" is mainly present in Romania with the traditional sectors that gave Italy its fame all over the world: for instance food products, automotive, industrial machinery, chemicals, leather products, branded apparels and high quality furniture. On the other hand, the biggest part of Romanian exports in Italy is represented by some "labor-intensive" products as for instance clothes, shoes, electric equipments and mechanical heating equipments. In the car sector, "Dacia" is one of the most renown Romanian brands even if, due the high competition existing in the Italian car market, it is not among the leading car manufacturer in our Country.

Reporter: What are the most attractive economic fields in Romania for Italian investors?

Carmelo Barbera: Among all other European partners, Italy plays an extraordinary role in respect not only to the substantial investments in Romania, but also to the outstanding number of companies actively operating throughout the country in all fields of activity. Some outstanding figures related to the Italian presence in Romania give a concrete evidence of the strong bilateral relation between the two countries: 800.000 salaries provided by Italian companies to Romanian workers every month, thousands of trucks that travel every day between the two countries and more than 400 flights per week between Italy and Romania linking 27 airports. In addition, invested capital is not limited to a few traditional sectors of interest, but it is homogeneously distributed in all the economic areas. Actually, the important development in constructions recorded in recent years has been followed by wide investments in other key sectors such as energy, agriculture, infrastructures, services, high technology, transports as well as food industry and tourism.

Italian entrepreneurial presence in the country is extraordinary also from a geographical perspective. Thanks to the extensive expansion of Italian little and medium-size firms with the so called "Timisoara miracle" in the "90s, together with the recent investments of some major companies in other geographical areas within Romania, Italy reached a widespread presence in the whole country.

In addition, together with the Italian Institutions present in Romania, with the companies as well as with the entrepreneurial associations, we are making a strong effort in order to operate as a structured network, in an increasing coordinated manner, with the so called "Sistema Italia".

Regarding the future, the more appealing fields for the Italian economic players appear to be the energy sector, the infrastructure field (thanks to the big investments that Romania will have to make in the future, with the help of the European Funds) and agriculture. Agriculture, for example, despite its current backwardness, has huge possibility to become one of the main engine for the oncoming economic recovery and, more generally, for the future of Romania"s economy.

Reporter: Have big Italian investors withdrawn from our market last year and why?

Carmelo Barbera: No. Even if, in line with a more general international trend, our firms are expected to be affected by the consequences of the recent economic crisis, there are no signals of withdrawing of Italian companies from Romania. On the contrary, due to their well structured presence in the local market, they will keep being active in this country. For instance I point out again that the number of Italian companies registered in Romania increased by roughly 1000 units in 2009. I think it would be crucial for Romania in the next years to be capable to offer to Italian investors and foreign ones a good business environment, as it has been until now. In recent years, our companies have been getting closer to Romania not only because of low cost labor market but, above all, to explore the high potential of the Romanian market. This trend has been growing in recent years and I"m sure that it will go on doing so also in the future.

Reporter: Are there Italian investors active in the Romanian real estate market? If so, what are the biggest active real estate investors on our market?

Carmelo Barbera: The real estate has been one of the pillars of the Romanian economic boom of the last few years. Many Italian players entered the Romanian real estate market attracted by rapid growth and by the strong demand of local economy for both residential and commercial buildings with higher quality standards. The Italian players operating in this industry count costruction, design, interior furniture as well as costruction material distributor firms. Anyway, the bigger Italian players are mainly active in the infrastructural sector even if some of them have strong capabilities also in the "pure" real estate market. The number of the Italian firms, big medium and small size ones, active in the real estate sector is so high that it would be very difficult to make an exhaustive list.

Reporter: Thank you!