With a market of 22 million people, 15 hectares of arable land, a vibrant oil and gas industry, an economy in full swing, and a well educated labor force with over 50,000 IT experts, access to the Black Sea, and Asia. This is Romania's economic outlook presented on the US Trade Department webpage. Are these reasons enough for an American business owner to invest in our country? The figures supplied by AmCham, the US chamber of commerce in Romania, show that the US is one of the main investors in Romania, with a total value of 915.7 million USD by the middle of 2007. As such, the US is one of the main investors in Romania, ranking sixth, after Holland, Austria, France, Germany, and Italy.
Trade Department statistics indicate that American investments are 4.9% of total foreign investments in Romania.

US companies say they are satisfied with results in Romania. The prestigious actors started investing here shortly after the market was liberalized. Among them are big names in soft drinks, fast food, investment funds, and direct sales.

Coca Cola came on the market in 1991, and in two years became a sector leader. Right now they have six factories, in Ploiesti, Timisoara, Oradea, Iasi, and Vatra Dornei (two factories), selling over 44 products, such as mineral water, juice, energy drinks, and fizzy drinks. This year, the company started selling sports drinks, with Powerade.

McDonald's opened its first unit in 1995, and in the 13 years they have been here, they invested around 70 million USD. Cristian Savu, PR manager for McDonald's, said: "In the future, we will make considerable investments. In 2009 we plan to invest over 20 million USD, both for opening 8 or 9 new restaurants, and for modernizing and refurbishing the existing ones". The company had a turnover of 300 million USD in 2007, and estimates the figure at 400 million for the current year. Net profits stood at 30 million lei. McDonald's right now has 55 restaurants in 20 cities, and plans to open 8 or 9 every year.

General Electric also has a long history in Romania, coming on the market in 1984. Now the company is a supplier in energy, health, and infrastructure. GE grew with the local economy, and they believe that Romania is a very attractive and competitive market in the EU. GE opened in 2007 a real estate division for an investment of 175 million Euro, allocated to logistical platforms and industrial storage around the country. Cristian Colteanu, regional executive director of the company, said: "In terms of investments, we set certain limits. We are looking for opportunities to develop the market, and we are making decisions based on them". Another group division, GE Money, almost doubled its investments in Romania lately, reaching almost 320 million USD.

Another important player coming from America is the private equity fund Advent International, who came to the CEE market in 1994. Sebastian Tcaciuc, manager with the company, said: "With the central headquarters in Boston, the headquarters for Europe in London, and regional offices in Romania, Poland, the Czech Republic, and the Ukraine, right now Advent International invests in CEE through two funds, ACEE III, with a capitalization of 330 million Euro (around 75% invested), and ACEE IV, with a capitalization of one billion Euro, a fund closed in April this year". He added that Romania is one of the main countries in the region for Advent International, and the company has a significant advantage, as the largest global fund with a permanent presence on the local market. "So far, we invested in companies that are, or can become, market leaders with our help, capital, knowledge, or experience in those sectors: Brewery Holding, MobiFon/Connex, Euromedia, Terapia, Dufa Deutek, Ceramica Iasi, Labormed Pharma".

For enterprise investors, Romania is the second largest market in Eastern Europe, after Poland. Cristian Nacu, partner in the fund, said that the company is present here because of the size of the Romanian economy and the impressive growth it had here, but also by the existence of very active private companies. So far, the fund invested and contracted capital worth 100 million Euro in 5 companies, of which two have already been sold, Orange and Artima. Other companies in the portfolio are Siveco, Macon Deva, and Simcor Oradea. "The projects we are involved in are large projects, and we plan to invest in each no less than 20 million Euro. We can invest in a single business over 100 million Euro, and we have done it in other countries in the region", said Nacu. Amway had a turnover of 113 million lei in 2007, and they estimate 135 million for 2008. The company profits in direct sales were 16 million lei. Amway is fighting Avon and Zepter in direct sales. However, branch manager George Popescu believes the large portfolio of products will help the company gain on the competition.

In cosmetics, Avon is also relying on the wide portfolio of products, on the customized sales, and on product innovations. On a market that is more and more competitive, the company believes they can overcome with respect for customers and their concern with product and service quality.

Present on the market since 1994, Pizza Hut invested around 22 million Euro so far. The company turnover has reached 47 million Euro, and this year they expect 65 million Euro. According to the company, investments will continue for the purpose of developing new units, and for refurbishing old ones.

This spring, with an investment of around 120 million Euro, Emerson, another large American company, started by opening in Cluj a new manufacture unit, which will create 2,000 jobs. They will manufacture there gas valves, regulators, electric motors, and generators.

Proof of Romania's attractiveness is the the comeback of Ford, the second largest car maker in the US. They bought the former Daewoo factory in Craiova. It is to be expected for this investment to attract in the area part makers, and to encourage the existing ones to increase production.

Even if American companies are still facing issues with the bad or insufficient infrastructure, a lack of experts in certain areas, the legal inflexibility, and a certain lack of predictability, it is expected that more and more American companies will come to Romania.

The tour organized by AmCham and the trade office of the US embassy, with the participation of Ambassador Taubman and the Romanian ambassador to Washington, Adrian Vierita, promoted business meetings between representatives of American companies in Romania and the business community in Washington DC, New York, and Atlanta. The participants displayed real interest for expanding their businesses in Romania, and this is expected to manifest in significant investments.

Source: bbw