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13th april 2007

Austrians Invest in Romania

In 2007, Romania will be the main destination for the Austrian investors among the countries of Central and Eastern Europe, according to a report conducted by Oesterreichische Kontrollbank (OeKB), cited by Mediafax. In 2007, Romania will attract 20 per cent of the new FDI made by Austrian companies in its region. Austrian enterprises will invest in 169 new projects in Eastern and Central Europe, and Romania will benefit from one fifth of the overall investment. The main sectors targeted by the Austrian investors are the manufacturing industry, the constructions sector, the banking industry and the corporate services. The OeKB survey seeks to assess the attractiveness of the business environment in 19 Central and Eastern European countries: Albania, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Estonia, Croatia, Latvia, Lithuania, Macedonia, the Republic of Moldova, Poland, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia, Ukraine and Hungary.

The number of Austrian tourists to Romania in 2006 exceeded 150,000, more by 17.3 per cent compared to the previous year, and generated EUR 40 M in revenues to tour operators, according to the ‘Adevarul’ daily. The growth trend will continue throughout 2007. The number of Austrians visiting Romania overrides the number of Romanians travelling to Austria. Romania’s EU membership has boosted incoming traffic and led to a growth by 17.1 per cent of the number of Austrian visitors to Romania in January this year.

Nokia confirms investment in Cluj

Nokia, the biggest global producer of mobile phones, will start construction work on a mobile phone factory and a research centre located near Cluj. A memorandum on the partnership between the Cluj County Council and Finnish company Nokia, to open a mobile phone plant and a research centre, an investment estimated at 200 million euros, was signed on Monday at the Government headquarters, in the presence of Prime Minister Calin Popescu Tariceanu.

The document was signed by the chairman of the Cluj City Council, Marius Nicoara, and by Raimo Puntala, vice-president of Nokia. The investment will target Industrial Park Tetarom III in Jucu, Cluj county. According to Nokia, the value of the investment will stand at 60 million euros, with the new plant to start production midway through next year. The general manager of Cluj-Napoca-based Tetrarom, Viorel Gavrea, said Nokia will use the 60 million-euro investment to build the mobile phone factory, a project which will also see the contribution of around ten other component suppliers, who will add their share to the investment, valued at a total 200 million euros.

Elimination of customs duties triples BDG's business

BDG, the importer of Jack Daniel's whisky and Corona beer, in Q1 of this year registered 72% higher sales volume against the same period in 2006. Consecutively the company's turnover soared by 215%; however, BDG representatives refused to disclose the exact sales figures. "Growth is primarily due to price changes implemented at the beginning of the year, as well as to the continuous supply of traditional brands (Corona, Budweiser, Evian, Baron Phillipe, Heinz wines) and the Easter sales peak, which was experienced in March instead of April, as it was last year," stated Petre Berciu, managing partner with BDG Import. According to the company's representatives, the biggest increases in Q1 were witnessed by Corona (53%), Budweiser (176%), Evian (69%) and in the wines category, which saw an increase almost four times as much as in 2006.

Last year, imports of Corona beer were limited in terms of quantity because of the level of custom duties, which stood at 280%. For 2007 BDG plans to sell more than 1.2 million bottles (0.33 litre each) of Corona beer, which would result in Corona becoming one of the company's top five brands. "If looking at the sales to consumers, the biggest increases were registered by the brands of Brown Forman, in particular Jack Daniel's which experienced 73% higher sales and Finlandia, which witnessed a 600% increase," stated Berciu. Last March, BDG Import took control of the import and distribution of the Jack Daniel's, Finlandia Vodka and Southern Comfort brands owned by Brown Forman, one of the biggest US companies operating on the wine and alcoholic drinks market, with annual sales worth 2.7 billion dollars. "The Brown Forman brands accounted for 61% of the total sales generated by BDG Import," Berciu added. BDG's portfolio comprises only premium products, including Corona Extra, Budweiser Budvar, Evian and Heinz. Most of these products were subject to custom duties, which were dropped this year, a move that resulted in 10-30% lower prices. In the wake of these price decreases, the whisky market is expected to reach 3.7 million litres this year, over 30% more than in 2006. In terms of value, the market will expand by a maximum of 10-15%, to 45 million euros.In 2006 BDG posted a turnover worth around 12 million euros and expects to derive a turnover between 15 and 20 million euros this year.

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