2015-10-02

Interview with Marius STICLARU, President of the Chamber of Commerce and Industry Romania – Republic of Korea (CCRC).

Mr. Sticlaru, the Chamber of Commerce and Industry Romania – Republic of Korea (CCRC) has a very clear objective: to facilitate the development of suitable business opportunities for Korean and Romanian companies. Concretely, which are the achievements of CCRC since its establishment?

First of all thank you for your interest in the bilateral relations between Romania and the Republic of Korea especially as this year we celebrate the 25th anniversary of the establishment of diplomatic relations between the two states.

In 2008 the Strategic Partnership between the two countries was signed, which represented a very important step for Romania as it was the first to have been signed with an Asian nation. The Republic of Korea continues to be one of our most important Asian partners and during these years we have developed a regular political dialogue, increased our economic relations and enhanced our cultural and educational cooperation.

In this regard, the purpose of the Bilateral Chamber of Commerce Romania-Republic of Korea certified as public utility organization is to promote the trade, services and industry of the two countries both in bilateral and international relations and to support the interests of economic agents in Romania and in the Republic of Korea in their relations with the inland authorities and with the specialized bodies abroad.

In the year 2014, Romania attended for the first time a fair organized in Seoul, in the Republic of Korea, with a National Pavilion. This attendance was facilitated by the efforts made by the Chamber of Commerce and Industry Romania – Republic of Korea (CCRC) and by APEV (The Association of Wine Producers and Exporters) in partnership with Korea Business Center-KOTRA Bucharest.

Seoul Food-Kintex is the third greatest fair of this industry in Asia, with a tradition of 30 years that has a strong reputation and represents an exhibition landmark, as it includes over 1,450 exhibitors and 47,000 visitors from almost 50 countries.

The attendance with a National Romanian Pavilion to this event granted an excellent exposure to Romanian producers and exporters, enabling them access to the South-Korean food market, estimated at USD 45.7 billion in 2012 and USD 53.5 billion in 2013.

The stall approached a modern, clean line, a simple and refined style, both in its overall design and in its constitutive individual elements, integrated in and developing the concept of general branding – “Wines of Romania, Tradition Redefined”. Based on the idea of “tradition redefined”, the organizers intended to create a new, actual, modern and powerful image, not just of the exhibition space, but of the Romanian wines overall.

The organization of a National Pavilion of Romania at the fair empowered the economical relations of Romania and South Korea, gaining the interest of a highly attractive market section; respectively of the food and beverages industry in this country.

This year, CCRC collaborates with KOTRA in order to help Romanian companies attend the Global Mobile Vision 2015 fair, destined to target the ITC section.

Moreover, CCRC with the support of the Romanian Embassy to Seoul and of the Commercial Office, have established meetings with the organizers of the Korea World Travel Fair (KOTFA 2015) to facilitate the attendance of Romanian travel agencies to this event, in order to promote the Romanian tourism.

CCRC was also working actively, jointly with the Republic of Korea Embassy and with KOTRA to organize an event dedicated to the anniversary of 25 years of diplomatic relations between Romania and the Republic of Korea. At this event, trade companies from Korea have exhibited their products and services. Next year, we will support the project of organizing a National Pavilion of the Republic of Korea at one of the greatest fairs held at ROMEXPO.

From your point of view, what are Romania’s strengths compared to other countries in Europe?

The development of bilateral relations, economic and commercial will use the potential cooperation between the two countries at its true value, with Romania providing an advantageous geostrategic position to enable Korean companies accede on the European market. Moreover, Romania is a member of the European Union, NATO member with growth potential ahead. Romania offers further minimis aid and the 16 percent flat tax, one of the lowest in the area.



Mr. Sticlaru signing the document by which CCRC is certified Bilateral Chamber of public utility

How would you shape the profile of the Korean investor on the local market and what are his domains of interest in Romania and vice versa?

Their concerns range from simple things like for example how to travel in Romania, to more complex issues such as infrastructure and taxation. But usually their questions are divided into two categories.

First it’s about how to do business in Romania. They want to know who would be suitable to do business with, who should join or how the market looks like.

Secondly, they are interested to find out more administrative details. What are the legal provisions that should provide an employment contracts that they conclude, when they had to pay taxes and so forth.

Given the cultural differences between Asia and Europe, differences that can be found in the way business is done, the European Commission launched a program in 1979 to help European companies establish on the South Korea markets, through intensive courses and the business management Executive Training Programme especially for managers – ETP. ETP program provides the participating companies with a competitive advantage, offering them the tools and information needed to succeed in the South Korean market.

CCRC in cooperation with Deloitte promotes this program for training young managers among companies in Romania, performing their will to conduct trade with South Korean partners. There is a positive trend in bilateral trade, but the Romanian side considers that Romanian export value is still below the potential of the South Korean market and aims to increase and diversify the supply of Romanian products to Korea. Free Trade Agreement between the European Union and the Republic of Korea came into force in a very opportune moment for the evolution of bilateral trade between Romania and South Korea, while decisively contributing to capitalize our export on this market.

South Korea is definitely one of the most important investors in Romania. From the data available now, how the economic relations (trade statistics) between the two countries look like?

In Romania, there are 216 active commercial companies based on South-Korean capital. The total figure of South-Korean investments in Romania, on February 28, 2014, reached USD 158 million, which puts South-Korea on the 25th place in the chart of foreign investors in commercial companies located in Romania (data supplied by ONRC).

Worth-mentioning are the investments made by the Daewoo group in the shipbuilding industry, as the joint company Daewoo Mangalia Heavy Industries, a producer of sea transportation ships, between the Building Site 1 Mai Mangalia (49 per cent of the shares) and Daewoo Heavy Industries (51 per cent of the shares), with a social capital of RON 306.1 billion and USD 52.98 million.

The modernization of the telecommunications systems in Prahova, Buzau and Alba counties are based on contracts between the RA Romtelecom and LG Information and Communication, and on loans granted by the Government of the Republic of Korea, of approximately USD 100 million.

In addition, it should be mentioned Doosan that took over Kvaerner/IMGB in June 2006 and Samsung that took over Otel Inox Targoviste, and lately, in 2012-2013, the investments made by the group Hyosung in Sighisoara (at the airbag factory).

Under these circumstances, Romanian exports in the Republic of Korea have increased substantially every year, starting with 2010 – USD 284.70 million; USD 344.03 million in 2011, USD 482.02 million in 2012, USD 610 million in 2013. A positive evolution of bilateral commercial changes is to be noted, but the Romanian side considers that the value of Romanian exports is still lower than the potential provided by the South-Korean market and intends to increase and diversity the offer of Romanian products for the Republic of Korea.

As member of the CCRC Board from many years already and businessman, you know very well the domestic business environment. Have you noticed any changes in all these years, as well as after July 2011 when the FTA between EU and the Republic of Korea came into force?

On July 1, 2011, the Free Trade Agreement (FTA) of the EU with South-Korea came into force, establishing a new stage in the history of bilateral relations. Romania sealed the FTA on July 31, 2012, by Law No. 100. It is the first complete agreement in a new generation of FTAs launched by the EU after 2007. Also, it is the first FTA signed by the EU with an Asian country. This Free Trade Agreement eliminates tax barriers for industrial and agricultural products, gradually. But, there are a few agricultural products that represent exceptions to tax cuts.

Also FTA stipulates the elimination of non-tax barriers in bilateral free trade, includes specifications referring to services and investment, competition, public acquisitions and grants transparency in regulating sustainable development. After signing the FTA, the total volume of bilateral trade of Romania and the Republic of Korea stabilized at USD 1 billion in the same period and the trade balance between Romania and the Republic of Korea is even.

At the same time, the exports of the EU and of Romania were stimulated by the application of the FTA.

In your opinion, what local authorities should make to open more its doors to foreign investors?

I believe that a predictable, level playing field and stable business, political and legislative environment is the key to Romania’s progress. Romania needs a long-term strategic country project focused on competitiveness and value.

CCRC collaborated with KOTRA in order to help Romanian companies to attend the Global Mobile Vision 2015 fair from September 16 to 18 at KINTEX in Goyang, South Korea. How Romania unveiled itself and what are the expectations after this important event?

CCRC and KOTRA support partnerships and cooperation between Korea and overseas firms. GMV exhibition is looking forward to capturing the attention of the world as innovative technology and service as world class Mobile exhibition. There, we expect that 350 exhibitors and 500 booths from over 50 countries will be set up at GMV 2015. Romanian companies have the opportunity to promote new IT products/technologies and expose them overall.

Another event about which I can tell you is Global Green Hub Korea 2015- Korea’s largest conference focused on green industries attended by three Romanian companies from the waste water treatment sector.

2015 marks the anniversary of 25 years of diplomatic relations between Romania and the Republic of Korea. How do you see everything after another 25 years?

Romania and the Republic of Korea celebrate today 25 years since establishing diplomatic relations. As any anniversary moment, celebrating a quarter of a century of diplomatic relations between Seoul and Bucharest is not only a great opportunity for a balance and a review of steps and achievements made so far in building the edifice of bilateral cooperation, but also a chance to contemplate the future opportunities, based on the realities of the present and the potential of the two states.

The Seoul – Bucharest relations experienced remarkable dynamics in all fields: political-diplomatic, economy, culture, but also on the wider international level of supporting their mutual interests in the areas and regions they belong to.

What is your message to potential Korean businessmen seeking to invest in Romania?

Romania is well positioned to develop into a major assembly and service location for service added value of Europe and Black Sea region. From international experience, figures show that Romania’s economy may expand by over 10 percent. Romania can be regarded as an extremely attractive location for companies in terms of placement of assembly activities, providing services markets in the CEE region, the Black Sea and the former Commonwealth of Independent States (CIS) using Constanta Port as a gateway to EU.

By promoting port of Constanta as gateway for goods from the Asian and the Middle East means using a direct route that shortens the distance during 2,400 nautical miles from the routes currently in use, and environmentally by reducing CO2 emissions, a route that can become a viable alternative.

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