Entrepreneurs in Sibiu and Mures believe Romanian private capital can stay on the market but opinions vary when it comes to the involvement of the Romanian government in supporting the Romanian business environment.
“I wouldn’t say Romanian companies do not have a chance in Romania, because we Compa are an example that it can be done. Yet the chance does not come from the Romanian government or the tax authority department in Brasov, but everyone has it and can make something of it with perseverance (…),” said Ioan Deac, the general manager of automotive component manufacturer Compa SA in Sibiu, which posted about EUR110 million revenue in 2015.
“Compa has been working in this difficult business environment and we’ve had to constantly find solutions to keep us from shutting down.”
The statement was made during the `Capitalul privat romanesc – o sansa pentru dezvoltarea economica a Romaniei’ (‘Romanian capital – a chance for Romania’s economic development’) conference organized by ZF and Banca Transilvania in Sibiu.
This is the third stop of the ‘Antreprenorii Romaniei’ (‘Romania’s Entrepreneurs’) ZF project, which will continue with more conferences in major cities of the country.
Sibiu and Mures are two of the most important counties in Romania in terms of industrial development and foreign investment has also led to development of entrepreneurship there. Fully Romanian-owned businesses generate 40% of the revenue of the companies in Sibiu County, while in Mures, they generate 50%, according to Trade Registry data.
Entrepreneurs and managers, however, are talking about a discrimination of the Romanian government towards foreign companies via incentives, and about the the local businesspeople not being united.
“I’ve noticed that the strength of the Romanian capital can grow by union and partnership,” said Andrei Dudoiu, deputy chief executive officer of Banca Transilvania.
Unfortunately, people in Romania mostly have the ‘why should he/she be better off’ mentality when it comes to others instead of forming partnerships to become more powerful, which is a problem for Romanian entrepreneurs and the overall Romanian culture, he added.
If the government does not get involved, Romania will be a nation of service providers, says Scandia Food Sibiu’s Andrei Ursulescu, adding he even wonders how many square meters of office space and how many square meters of manufacturing space have been built.
“There’s no way you can succeed in the battle with multinationals, which have resources and know-how. Let’s find a way for government and private sector actors to unite and find that unique selling proposition of Romania. Each country in Europe and in the world is known for something. Switzerland is known for watches and chocolate and Germany for its cars. What are we known for, what do we know how to do well?” Andrei Ursulescu says.
The entrepreneurs in Sibiu and Mures believe investments in the education system are needed to make it more capable to address the needs of the local market and help companies improve competitiveness.
“There is no workforce in Sibiu. We have to find solutions to bring Romanians from abroad, to improve competitiveness of companies and the ensure as high a quality of the staff training as possible. We must implement the dual education system in Romania, as the Germans did [in Germany]. The University of Sibiu does not work with the future in mind, but with the past,” said Compa’s Ioan Deac.
Entrepreneurs say that Romanian businesses tend to lose to multinationals due to the lack of know-how, capital, and – often, of government support.
“Foreign capital is welcome and we are waiting for it because we in our turn have a lot to learn. Unfortunately, we do not have a business, entrepreneurial and managerial culture. (…),” said Remus Borza, chairman of the medical service group Polisano in Sibiu.
“The government should have devised a set of legislative steps to support, protect and promote domestic capital. Romanian companies didn’t have a chance against multinationals coming from countries with a much longer history of business.”
Entrepreneurs’ opinions vary, with Compa’s Ioan Deac and Zoltan Prosszer, owner of wiring manufacturer Romcab Targu Mures, saying businesspeople must not expect government help and instead work to grow their businesses.
“My first recommendation for entrepreneurs would be to stay positive and keep going. The second is to work. I work Saturdays and Sundays, too. (…) We can find good workforce in Romania. You need a bit of courage to invest, to get modern technologies and the path to exports is open. The Romanian government doesn’t have to be the one to provide support, it can be an anchor,” said Zoltan Prosszer, who runs an over EUR190 million business.
Romanian capital has been losing ground to multinationals in Sibiu, as the business of Romanian-held companies is in decline.
“Romanian private capital is suffering. Such companies lost 10% of their employees in Sibiu County and the revenue dropped 10% from 2014 until the end of last year. Losses, on the other hand, went up 40%,” said Gheorghe Aldea, the chairman of the Chamber of Commerce, Industry and Agriculture of Sibiu.
“This is the reverse image of the financial results of multinational companies that developed and continued to grow in the western part of Sibiu.”
The ten largest entrepreneurial businesses in Sibiu, a county with a population of about 400,000 people, generate about 2 billion lei (some EUR460 million in 2014) revenue and employ 6,500 people. The revenue of all companies in Sibiu stands at RON29 billion a year.
Dan Isai, chief executive of Salad Box, the largest Romanian-held healthy fast-food chain, believes the curriculum of the economic studies colleges should be in tune with the local developments.
“There is room for entrepreneurs, but they don’t know how to apply what they learn. They learn strategies from New York in college, which are applicable in New York, not Romania. My advice for them is to not start their own firm right away but work in a small firm first. (…) This way they will see what is really going on in Romania and using what they learnt in college will be able to start as entrepreneurs,” Isai said.
(English version by Loredana Fratila-Cristescu)