17 December 1998

Oskaruri pentru afaceri (Jurnalul National)

"Astăzi se vor acorda premiile de excelenţă - Oskar Capital 1998. Caştigătorii premiilor Oskar din acest an sunt Gheorghe Tofan, preşedintele Tofan Grup - cel mai dinamic om de afaceri"

30 September 1998

Social Change in Russia and Eastern Europe: From Party Hacks to Nouveaux Riches - By Silviu Brucan

"Gelu Tofan worked for five years at the tire factory Danubiana. After 1989, along with a partner and a modest capital of $50,000 sent by his brother from Canada, he bought a big truck and started selling tires all over the country. After only one year, he opened twelve stores to sell tires in major cities. His turnover rose rapidly: 30 million lei in 1992, 6 billion in 1993, 48 billion in 1994, and over 100 billion in 1995."

Brucan Silviu.
Social Change in Russia and Eastern Europe: From Party Hacks to Nouveaux Riches. Greenwood Publishing Group, 1998: p. 91.

23 September 1998

Tofan Grup exhibits Romanian best tyres at Bucharest Car Show (Rompres)

Bucharest, September 23 [Rompres] - Tofan Grup company, present in the Bucharest Car Show with "performing, high quality tyres", covers 70% of the domestic market, 2.5 million pieces yield a year, the group's president Gelu Tofan says in an interview with the daily Cronica Romana. He adds that Tofan Grup links its products quality to its customers' confidence in car driving.

Referring to the progresses registered this year, Gelu Tofan says that, besides the licences from the Romanian Car Office, the Dynamic Fitness Test Institute with the British Ministry of Defence and the European Economic Community Operative Body, the Tofan Grup plants have received a licence according to the regulations by the National Defence Ministry of Romania and SR.EN ISO 9001. These certificates are much more important as the tyres made at Victoria SA plant are dedicated to the military transport means' outfitting, Tofan adds.

Tofan Grup has got licence for its entire range of tyres. The company's exports, meaning 60% of the yield by Danubiana /Bucharest/ are certified by British Standard Institute and head the USA, Finland, Sweden, Great Britain and Germany.

Another aspect Tofan dealt with in the interview is referring to the "unfair competition of second-hand tyres importers". In order to make suitable to these "unfavourable circumstances", Tofan Grup has last year adopted a range of restructuring measures. Some technological lines have changed and the tyres standard design diversified.

Tofan Recap for retreading tyres plant and its distribution system also belong to the Tofan Grup. The said plant has built, in cooperation with Automaxima, a system of its own including 40 county branches and a network of shops.

03 August 1998

Literatura de cearceaf (Ziua)

Minunata noastra tranzitie, in expresivele ei pulsiuni periodice, a scos la malul postrevolutionar un gen nou de femei. Cu memorabila expresie a prietenului meu, pictorul Catalin Guguianu, ele s-ar putea numi "atarnici". Filozofia lor de viata ar putea fi rezumata cu versurile dintr-un final de poem al lui Ion Muresan:"Nu va suparati, stau si eu la masa dumneavoastra, consum ce consum si plec". Si nici nu consuma mult: cate-o bere, o votca, o maslina, un fursec si din cand in cand cate-o idee. Mai nou, atarnicile, satule de-atata lipsa de posteritate, au atacat literatura. S-a nascut astfel o specie literara inedita, pe care as boteza-o "literatura de cearceaf". Avand model indepartat si, ce-i drept, cam vag, pe ilustra precedesoare George Sand, junele prozatoare, cu un notabil avant auctorial, au inlocuit in panoplia lor culturala vetusta biblioteca cu - scuzati inevitabila cacofonie - patul larg, cu geometrie variabila. Literatura de cearceaf isi are deja clasicele ei: Floriana Jucan (care practica si-o literatura de prosoape), Ioana Hermenean (cu satanicele ei experiente prin atelierele artistilor plastici) si, iata, pe ultima turnanta, Dana Achim, cu romanul "Amantul de la km O", unde protagonisti sunt colegii nostri Horia Tabacu (in carte personajul Andrei Ivanescu) si Sorin Rosca Stanescu (Nasu). "Faptura liliala" (cum o numeste pe Dana Achim, intr-un scurta prezentare, Gabriela Hurezean) isi povesteste cu nonsalanta tribulatiunile erotice de fata venita din provincie si nu se sfieste sa si le imagineze - nu fara talent, recunosc - si pe ale celorlalti.

Nu voi rapi cititorului placerea parcurgerii subiectului, rezumandu-l (de fapt, nici nu prea am ce). Ma voi margini sa constat un alt lucru, poate cel mai interesant din toata cartea. Pe pagina 2, scrie negru pe alb: "Lucrare (!) sponzorizata - ei, de cine credeti? De Fundatia Soros? De "Tofan-Group"? De "Gelsor"? As! - de Hotel Majestic". Exceptional!

Visez o "lucrare" sponsorizata in intregime de "Str.Stefan Furtuna, nr.68-72".

Ioan Grosan

07 July 1998

Radu Vasile se intalneste azi cu Papa Ioan Paul al II lea (Ziua)

Premierul roman, insotit de numerosi oficiali si oameni de afaceri isi incepe astazi vizita oficiala in Italia.

Primul punct al vizitei il constituie intalnirea cu Suveranul Pontif, Papa Ioan Paul al II lea, urmata de convorbirile oficiale cu primul ministru italian, Romano Prodi.

Maine, delegatia romana va fi primita de presedintele Italiei, Oscar Luigi Scalfaro, si va participa la un dejun de lucru cu conducerea grupului ENI.

In ultima zi a vizitei, Radu Vasile va participa la deschiderea lucrarilor seminarului cu tema "Italia primul partener economic al Romaniei. Oportunitati de afaceri in Romania" si la inaugurarea "Centrului de Afaceri" al Fondului Proprietatii de Stat- in Milano. Seful Executivului roman va fi insotit de numerosi ministrii, de bancheri, Vlad Soare (Bancorex), Bogdan Baltazar (BRD) Elena Petculescu (Banc Post), Mihai Bogza (Eximbank) si de oameni de afaceri, printre care Gelu Tofan si George Copos si de catre alti invitati. Delegatia romana va reveni in tara, joi la ora 24.00.

Floriana Jucan

01 July 1998

If you've got it, spend it (Euromoney)

Copyright Euromoney Publications PLC Jul/Aug 1998

Once conservative Japanese securities house Nomura has been on a central European spending spree. But its acquisitions, of both banks andindustrial companies, are causing controversy among governments and competitors. Jason Bush reports

Nomura used to be a byword for caution and conservatism. For decades, the Japanese securities house shied away from risk, and built up huge capital reserves. But in recent years Nomura has been establishing a new reputation for itself. The days of parsimony are over: Nomura's new motto is spend, spend, spend.

Nomura can afford to go on a spending spree because of its large capital base and very low levels of debt. "We can do it because we've got it: we have $14bn in shareholders' equity," says Michael Boardman, head of equity new issues at Nomura International. "Our leverage is also very low. This is because of a historically conservative approach to life and the universe. But that's changing. They realized they had to use this capital base in the best interest of shareholders.

In recent months, Nomura has been investing an increasing amount of its own money in central and eastern Europe. According to Boardman, Nomura has around $lbn invested in central and eastern Europe, the middle east and Africa - most of it in emerging Europe. "There are not a lot of houses that can say that," he says.

One explanation for this exposure is Nomura's increasingly heavy proprietary trading, particularly in the Russian GKO market. According to Daniel Jackson, Nomura International's deputy managing director for emerging Europe, over the past 18 months Nomura has been heavily involved in proprietary debt trading. He says that this in turn parallels the growing interest in the market from Japanese investors. In the long term he does not think they will be put off by the current instability in emerging markets. "Japan's domestic problems will lead to a strengthening of capital exports, because domestic investment opportunities don't exist," he says.

The other reason for Nomura's growing exposure is the expansion of its corporate finance business. In the past few months Nomura has embarked on a new strategy in the region. This involves committing large amounts of the bank's own capital to direct acquisitions. In March, the firm bought the Czech bank IPB (Investicni a Postovni Bank). It has also successfully bid for the Bulgarian bank Post Bank, with signature of the deal imminent as Central European went to press.

Nomura's appetite for direct stakes has not stopped with banks. Unusually for a financial institution, it has also acquired major industrial holdings. Last year it bought a $60m direct equity stake in Romanian tyre manufacturer Tofan, as part of a $100m financing. Nomura's readiness to put its own money on the table enabled it to beat off competition from WestMerchant and Societe Generale, which were also pitching for the deal.

According to David Tate, WestMerchant's director of central and east European equities: "We were coming up with syndicated loan solutions, but we had to compete with Nomura offering a private equity partnership ... We are looking at putting $5m or $10m into deals, so we are not competing. It was a very sporty move by Nomura - but they picked an extremely good company."

Last year Nomura also acquired an $18m stake in Polish metal producer Impexmetal, and a 60% stake in Czech brewery Radegast. The purchase of IPB means it has also inherited the bank's industrial holdings, including Prazdroj, the largest brewery in the Czech Republic.

The man behind the new strategy is Randall Dillard, the managing director of central and eastern Europe group at Nomura International, Nomura's London subsidiary. He explains that the inspiration comes from Nomura's merchant banking activities in the US and Britain.

In the US, Nomura Holdings America has pioneered the so-called mega deal, which involves investing as much as $500m at a time in real estate and then securitizing these assets by issuing bonds. In Britain, the buzzwords have been principal finance. Guy Hands, ex-Goldman Sachs, and now head of Nomura International's principal finance group, has been making the news with acquisitions of a motley collection of assets, including pubs (Nomura is the biggest pub landlord in Britain), ministry of defence housing, railway rolling stock and the betting shop chain William Hill. According to Paul Heaton, a banking analyst at Deutsche Morgan Grenfell in Tokyo, since the operation was established in 1994 Nomura has invested $17bn in principal finance, mostly in Britain.

The goal of these acquisitions has been to pass them on to other investors, either through securitization, or else by finding a new buyer for the assets. So far it has been a lucrative strategy. "Nomura has been able to make returns of up to 50% in three years," says Heaton. Last year Nomura sold the railway rolling stock company Angel Trains for L1bn ($1.6bn), having paid L700m for it eleven months earlier. "It's fairly risky of course. If the economy turns down you're left with something you can't sell," he notes.

All this is a far cry from Nomura's traditional activities. Until the 1980s, Nomura stuck to the buying and selling of Japanese securities. But in recent years, the disappointing performance of the Japanese stock market has resulted in Nomura going international, and expanding the range of its operations away from its traditional brokerage activities, with largely independent subsidiaries in New York and London.

This has had impressive returns, which have contrasted with the lacklustre state of Nomura's domestic business. In 1997 Nomura's international operations accounted for 80% of the group's profit.

Given the success of its operations in Britain and the US, it is not surprising that Nomura should be looking to apply the same techniques elsewhere. Central and eastern Europe was an obvious location. Nomura International, Nomura's London arm, has been active in the region since the beginning of the 1990s. It has not been put off by recent instability. "Nomura can take a long-term view," says Boardman. "Central European markets have gone belly down. And yet since then we've acquired IPB and a stake in Bulgaria. The fact that the market has gone up or down in nine months is neither here nor there."

Nomura's strategy has involved gaining exposure to a market through fixed income advisory work, and using this experience as a basis for expansion of corporate finance activity: "We have used the fixed income business as a pathfinder. It's fair to characterize the period 1991 to 1996 in that way," says Nomura's Jackson. Nomura carved out a niche for itself in ratings advisory work (in 1992 and 1993 it had 80% of this market). It has consequently underwritten a number of debut issues, beginning with Czechoslovakia in 1991, the Czech Republic in 1993, and the Slovak National Bank in 1994.

Nomura's biggest direct investments are therefore in the Czech Republic, where it began its advisory role in the early 1990s. In March Nomura purchased a 36% stake in IPB bank, for Kr2.9bn. This was immediately followed by a capital increase of Kr6bn, funded by Nomura.

The purchase of the government's stake, together with the capital increase, gave Nomura 71% control. But this was reduced to 53% when Nomura sold part of its stake in June. Dillard says that Nomura ultimately intends to hold a stake of just below 50%. That will enable it to avoid a Czech legal requirement to make a public offer for the remaining shares.

However, Nomura's control over the bank is in practice greater. Many of the remaining shares are owned by companies owned in whole or in part by IPB itself, such as the investment find Bankovniholding. "Effectively Nomura still controls 80% to 85% of the bank," says Martin Nejedly, banking analyst at Prague brokerage Wood & Co.

As with Nomura's recent principal finance acquisitions, the plan for IPB is to sell it. "We see a holding pattern of between two and five years," says Dillard. "I imagine a strategic partner will join us and we will gradually release control through GDRs," he says.

Nomura's strategy of buying in order to sell for a profit has invited the criticism that the companies are not gaining strategic owners. There are also complaints that, if Nomura can make a quick profit, the assets must be being sold for less than they are worth. However, most analysts believe that the Czech government got a reasonable price for IPB bank and its holdings. Nomura also inherited the bank's substantial liabilities, notes Vojtech Kraus, equity analyst at ING bank in Prague. "The important point is that the government didn't strip out the bad loans;' he says. "It was not such a bad deal for the government and will be very beneficial for the bank."

Dillard remarks: "There was a lot of suspicion about IPB. We have had bad publicity. The bank has a lot of industrial holdings and people said that was the reason we bought it. But we thought this company was not as bad as the market felt." He points out that to sell for a profit it is necessary to add value for shareholders.

This raises the question of how Nomura, a securities house, can add value to companies such as retail banks, brewers or tyre factories, where it has no specific expertise. According to Dillard: "In central Europe, we like to ally ourselves with strong management. We bring outside capital. We want to avoid investing in companies where there's a substantial amount of work involved."

He admits, though, that in the case of IPB more active restructuring is required: "We can't just sit back and write cheques;' he says.

However, in IPB's case the most important restructuring is on the financial side of the bank. In the past its share price has been depressed because of concerns over its balance sheet and lack of transparency. "No foreign portfolio investors are interested because of the bad experience they've had over the last couple of years. If the bank was as transparent as Komercni or Sporitelna the price would be much higher;' says Wood & Co's Nejedly.

Nomura's first step was to wipe the bad loans off the balance sheet and invest new capital, which has addressed one major concern. Nejedly also sees improvements in transparency and the position of minority shareholders. The bank is preparing a rights issue which will enable these shareholders to purchase additional shares on favourable terms (three new shares for one old share). This addresses a complaint that when Nomura bought the government's stake, it did so for a nominal price (Kr100) below the market price (Kr140).

However, Dalibor Vavruska, banking analyst at ING in London, is not so sure. She wonders why Nomura, having committed itself to a public rights issue, unexpectedly divested itself of an 18% stake in advance of the issue. If the terms of the forthcoming rights issue are so favourable, she asks, why is Nomura only expecting to reduce its stake from 53% to 48%? "The dilution risk I see is still there. We downgraded our recommendation for IPB until these issues are resolved," she says.

On the operational side, Nejedly is optimistic about IPB's business prospects. "From the management point of view, IPB has done the best," he says. He gives the example of nonbanking activities, such as building societies and insurance, where IPB has acquired 50% shares of the market. The big growth area is retail banking. IPB has a natural advantage because, like Post Bank in Bulgaria, it has a large branch network based on its role as a bank-cum-post-office.

Although Dillard downplays the role of IPB's industrial holdings, others believe that Nomura stands to make big gains from these acquisitions. IPB bank is one of the major owners of investment funds and has, as a result, acquired substantial chunks in Czech industry. These include major stakes in the food industry and pulp and paper industry, as well as the leading tile manufacturer CHKZ and leading brewery Plzensky Prazdroj. "Nomura will either sell them off to strategic partners, or else may get corporate finance mandates," says Nejedly.

The purchase of IPB means that improbably for a Japanese securities house - Nomura now plays a leading role in the Czech brewing industry. IPB owned an 84% stake in the largest brewery, Prazdroj, which has a 28% share of the market. Nomura has also acquired 60% in the third largest brewery, Radegast, with a 14% market share.

Nomura's links with the industry go back several years. In the early 90s, when Dillard was Nomura's representative in the then Czechoslovakia, it advised the government on brewery privatization. Jackson, who joined Nomura from Citibank in 1991, remarks: "At Citibank I was doing AAA transactions, then two weeks later I was in Pilsen advising a brewer not to brew his beer in oak barrels."

Czech beer is big business. For one thing the Czech Republic has the largest beer consumption per head in the world. It also has many famous brands with potential for export. Dillard's explanation for Nomura's interest is straightforward: "The Czechs make very good beer. After all, they invented beer, back in the twelfth century"

The more immediate reason for Nomura's activity is the money-spinning potential of merging Prazdroj and Radegast. A merger would increase the combined value of the companies by at least 25%, or Kr3bn. That is more than Nomura paid for IPB bank, recouping its investment at a stroke.

The proposed merger has led to a showdown with Bass, the British brewing company. Bass owns the other leading Czech brewer, Prazske Pivovary, which has a 14% market share. Bass also wants Radegast for itself, and already owns a 33.4% stake in the company.

Graham Staley, Bass's country director for the Czech Republic, says that the merger of Prazdroj and Radegast will create a monster, with a 41% market share, which will squeeze the other brewers out of the market. He predicts it would have a 60% market share within two years.

According to Nomura's Dillard, the merger is necessary to make an internationally competitive company. Staley describes that as a "rubbish argument" He points out that brands such as Budvar have been able to compete internationally despite their small size.

Last December the Czech antimonopoly commission ruled against the merger. However, in June it revised its previous decision and announced that it will make a new judgement within 60 days. It justified this reversal with the observation that Nomura's appeal against the decision was based on "sound and founded" arguments.

Bass's Staley believes that the antimonopoly commission may now rule in favour of the merger. He puts this down to IPB's success at lobbying. "They can have meetings with cabinet ministers, while we have to wait six months," he says. How the Czech Republic's recent inconclusive elections will affect the relative lobbying strength of the two parties is unclear. But local analysts believe that the decision is likely to go Nomura's way.

Even without the merger, Bass and the smaller Czech brewers are suffering from Prazdroj's pricing policy, which has contributed to low margins for the sector. Czech beer, at between 30 cents and 60 cents per half litre, is eight times cheaper than beer in western markets. The effect of Prazdroj's aggressive pricing has been to increase its market share, which makes it a more attractive buy to an international brewing company - the ultimate goal of Nomura's interest in the company. "An international brewer wouldn't look at profitability - it would look at market share," says Staley.

Bass is suffering not only as the owner of rival brewer Prazske Pivovary, but also as a 33.4% shareholder in Radegast, which has been losing market share to Prazdroj. Staley points to the fact that, while Prazdroj has been cutting prices, Radegast has been increasing them.

He also criticises the lack of transparency within the company. Nomura's and IPB's stakes in Radegast have been sold to IMP Finance, a company registered in the Netherlands. However, at Radegast's annual general meeting on May 28, Bass's two representatives were turfed from the board and replaced by representatives from Nomura, which now has four representatives out of nine. "That tells you a lot about Nomura and IMP," says Staley. According to Wood and Company's Nejedly: "IMP Finance is a Dutch vehicle for Nomura."

IPB's 84% stake in Prazdroj has also been sold, in March, to a company called Ceske Pivo (Czech Beer), which is also registered in the Netherlands. "Who owns Ceske Pivo? It's a tangled web," says Staley. However, two out of the company's three representatives on the Prazdroj board are from Nomura.

Staley nevertheless has some backhanded compliments for his rivals. "If I was Nomura I'd do exactly the same thing ... I'd like to meet Randall Dillard - so far I've only traded insults with him at shareholders' meetings. He's a very clever man."

It is not only in the Czech Republic where Nomura has run into controversy. In Bulgaria, Nomura was selected as preferred bidder for Post Bank following a tender in February. It beat rival bids from National Bank of Greece, American Insurance Group and Bulgaria's Eurobank, having reportedly offered $24.6m. The Bulgarian Bank Consolidation Company (BCC) then established a deadline of 90 days for the completion of negotiations. Yet since then the deadline has expired, and the deal had still not been signed by the end of June, when Central European went to press. Sources at Nomura say that the deal has been finalized and is awaiting approval from the Bulgarian cabinet.

This follows tough negotiations. In May Peter Zhotev, the head of the BCC, even went so far as to announce publicly that the BCC would consider reopening negotiations with the failed bidders. He explained that Nomura would be required to hold on to a stake of at least 50% plus one share, for a period of not less than two years. This has fuelled speculation that Nomura had been aiming to sell a major part of its stake within a shorter period of time.

According to a source at Nomura, another sticking point has been access to Post Bank's distribution network. Unlike IPB, Post Bank lacks industrial holdings. The main attraction for Nomura is the potential for the development of retail banking. Like IPB it is linked to the post office. "We love post offices because they are culturally familiar places, with access to a branch network cheaply," says Dillard. But the terms of Post Bank's access to the post office network have been subject to hard bargaining.

The difficulties of the Post Bank negotiations are reminiscent of the tortuous negotiations over the sale of IPB. At one point Czech finance minister Ivan Pilip said publicly that he did not trust Nomura. He also accused it of prolonging the negotiations, as has Bulgaria's Zhotev.

Dillard makes light of the difficulties: "When the state acts as seller they need to comment a lot publicly... They have a lot of people to satisfy. We know that and are patient, but they get under pressure."

The government's tough line reflects criticisms in the domestic press about Nomura's short-term strategy. The defeated bidders are also unhappy. Hristos Katsanis, director of National Bank of Greece, the runner up in the bidding, says that two years is too short a period to hold the bank. "It's not the best strategic move. But Nomura are very good at lobbying," he says.

Nomura's involvement in Bulgaria has not followed its strategy in other countries, where it has begun with fixed income advisory work (though earlier this year it pitched unsuccessfully for Sofia's debut Eurobond). However, it is keen to stress that it is not there to make a quick buck: in June it won the mandate to advise on the privatization of Bulgartabac, the tobacco company, and according to Dillard Nomura is also interested in subsequent bank privatizations.

More generally, Dillard dismisses the charge of short-termism: "Making money is what companies are about. The question is: are you going to create more value for shareholders or someone else? Very few people have the confidence to invest their own money. The negative comments usually come from people selling advice for money, but we think providing capital is more helpful than taking money by providing advice."

by Jason Bush. Central European. London: Jul/Aug 1998. Vol. 8, Iss. 6; pg. 15

01 June 1998

Certificate of merit - 1997 - The Chamber of Commerce and Industry of Romania

The Chamber of Commerce and Industry of Romania
Certificate of merit
First place
Large enterprises category
Tofan Grup SA

The Young Wolves of the Private Sector (World INvestment NEws)

Despite all difficulties, high inflation, expensive credits, and old-fashioned mentalities, Romania has got a young and dynamic private sector. Most of these company-builders are rather young people who had the rare opportunity during the communist regime to take advantage of some Western exposure. Quite a number of them managed to build in just a few years vibrant companies, some of them pretty diversified, with sophisticated management and able to face competition not only from local state-owned companies (usually worse equipped to operate in a market economy), but also from powerful foreign companies. George Copos and his Ana Group (a $150 million company last year) is a good example of bold diversification. Copos started in early ‘90s as an importer of home audio/video electronics; as the exclusive distributor of Samsung electronics, Ana Electronic became quickly a leader on this market. Later on the company expanded vertically in the business, turning from a simple distributor to a manufacturer, assembling locally color TV sets and home appliances, few years later entering in the food processing industry. The GSM business was next, followed by the tourism industry, Ana Group acquiring a hotel in Bucharest and three in Romania’s most fashionable mountain and winter sports resort, Poiana Brasov.

This is not to say that success is necessarily related to diversification. The now-34 Cristian Burci was pioneering in early ‘90s the newly-born Romanian advertising industry. He set up country’s first advertising agency, that has later associated with Grafitti BBDO. Then the restless Burci started two media buying companies for international ad agencies -- "They now rank second and third in Romania, but if put together would rank first by far" – and a billboard company. A modest and rather low profile man, Cristian Burci came into the limelight when he decided to join forces with a group of American investors and to challenge the supremacy of PRO TV (the TV station of another Romanian media mogul, Adrian Sarbu) on the local TV market. That is how Prima TV was born in December 1997. "We look forward to win a 30 percent market share by the end of this year and to make somewhere between $12-16 million advertising sales. I believe it is going to be a $80 million TV advertising market this year, but it will be booming over the next 3 to 5 years. In Romania you have some $4/capita TV advertising spending, while in Hungary or Czech Republic is $20-22/capita. We want to appeal to a younger family base, people who have aspirations and look towards the future, something like CBS is doing in the States," says Burci.

There were not only Romanians who quickly understood that the booming Romanian media and advertising market could be very rewarding for those who move fast. It was early 1995 and William "Bill" Avery, a native of Seattle (and at the time project manager with the USAID office in Romania), felt that the country had an unfairly negative press in global media – if it had at all – and decided that he should do something about that. It began like a high school operation, with an electronic publication on the Internet, Romanian Press Review . Later during the year it developed to be less and less a simple press review, but began to feature genuine stories, as Avery managed to attract professional journalists in the game. By November 1995 Bill Avery had joined forces with Rachad Al Jisr, an Italian citizen, and both unveiled Romania’s first monthly English language magazine, In Review Romania. "I must agree that it was not an instant success, as we were kind of unexperienced. But we learned as we grew, and last year, in 1997, we were quite successful," says Avery. Successful enough to launch by the very beginning of 1998 a weekly newspaper, The Business Review Bucharest. At this point, the company – Business Media Group – runs in parallel both the Internet wire service, and the two printed publications. However, the competition – not very intense few years ago – becomes tougher every day. "We don’t have a problem with competition – as long as it is fair. Competition is good for us and for our readership," adds the 35 years old Avery.

Daniel Marin was about the same age when, in 1992, he and his partner – two high profile engineers with a Bucharest-based research institute for precision mechanics – decided that it was the time to move. As experts in fluid dynamics, the choice of the profile of the future business wasn’t very difficult: "We thought that fluid measurements will definitely be a very interesting market. Since before 1989 the prices of water, steam, and power had no connection with the reality, nothing was measured, not even the technological fluids," explains Marin the rationale behind his selection. From 2 employees in 1992, General Fluid grew fast to 25 two years later and to 115 to date, on a 1997 turnover of $3 million. Daniel Marin is aware, but not really worried: "One of the keys of our success was that if somebody would try to enter this business, would have to invest a lot in its people. This is a high-tech business, and you can hardly assemble a team of skilled people. In other words, the entry barriers are very high." The market is huge – "Only in Bucharest there are 12,000 blocks of flats, 95 percent heated through a state-owned network. Each block would need at least four meters. During the last two years we were deply involved in this multi-million project and we only installed 5,000 measurement points – which means another 25,000 are necessary, and this only in Bucharest." Although there is a lot of demand for General Fluid’s products and services, Daniel Marin is skeptical about explosive growth: "I am in a strange position and I’m a little bit afraid of making an aggressive marketing, because we may not be able to meet demand. We have to be very careful about this issue – not meeting the whole demand creates the risk of loosing customers’ confidence."

Yet probably the most spectacular Romanian business story was written by Mr. Gheorghe "Gelu" Tofan . A man in his late 30s, Tofan has silently built over the years an empire in the tires business. A former employee of Romania’s largest tire manufacturer, Danubiana, Gelu Tofan started his personal business crusade with a tiny operation, distributing and servicing Danubiana-made tires. As the cash flow improved, he eventually set up an extremely successful tires re-treading company, opearting American Bandag technology. By the end of 1995 Gelu Tofan was the new owner of his former employer, Danubiana, which he has bought from the State Ownership Fund. Less than two years later Tofan Group was taking over another two Romanian tire factories, Silvania and Victoria. "Tofan Group produces now about 95 percent of the total output of the tire industry in Romania. We closed the year 1997 with some $250 million turnover, which puts us on the 23-rd position in the ranking of world’s largest tire producers. We employ some 10,000," says Gelu Tofan. As digesting the new acquisitions takes time, Tofan Group launched a comprehensive investment program to technologically upgrade its facilities, aiming to produce top quality tires. "When we took it over, Silvania was heavily indebted. We managed to cut the losses and right now the company undergoes a vast modernization and restructuring process. It will produce truck radial tires, pumps and other components for tires. We already have large export orders for this factory’s products, but we will only start exporting after the modernization process is over, next year," explains Tofan. Otherwise a nice, charming person, Gelu Tofan is serious about his business: "When we will be done with this modernization process, we’ll be in the top twenty tire producers. We are competitive enough to sell on the American market right now – we sold tires for agricultural vehicles and heavy lorries worth $10 million and we have orders for $20 million this year – and we will be even more so since next year." But the prying mind of Gelu Tofan wouldn’t stop here. The man is ready to seize whatever business opportunity would show up. And business opportunities do show up in Romania: "We have already signed a partnership with an American company for satellite communication technology. We will be the first Romanian company that will operate a satellite system; we will sell these services to others, too. It’s going to bring a lot of money," adds Tofan. By mid-1997 Tofan Group scored the biggest ever victory achieved until then by a private Romanian company, when it made a financial arrangement with Nomura International, under whose provisions Nomura got a 49 percent stake in the group for $40 million in cash and $60 million long-term debt financing. Gelu Tofan is likely the best representative of the new, emerging class of Romanian business people: "We built up a very young team of professionals in our company. This generation is coming to power. When people like ministers Daniel Daianu or Valentin Ionescu, young, open-minded people, with a different mentality, reach top positions within the government or business, this means that we have a future, there still is a chance for us. The main difference between us, the young generation, and the older ones is that if we need a glass of water and we don’t have it, we will make it, create it, not just sit and wait for somebody to give it to us," concludes Tofan.

© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Romania published in FORBES Magazine's enriched with complementary information, such as full interviews, detailed company files and more.
June 1 st 1998 issue

11 May 1998

In the wreckage of the economy... a tire tycoon rides high (Business Week)

Not so long ago, Bucharest seemed to be a city on the move. Office developments were rising all over to accommodate the expanding private sector. Hardly a day passed without some sparkling new shop or restaurant opening. Traffic jams were filled with expensive Western cars. Today, the building sites lie abandoned, victims of the 6.6% drop in gross domestic product in 1997. The fancy eateries are mostly empty, since few Romanians can afford the prices after inflation topped 150% last year, with living standards down 22% in real terms. ''It's a mess right now,'' says one restaurant owner who puts his menu prices on a blackboard to keep up with inflation. ''You never know what's going to happen next.''

It wasn't supposed to be like this. Back in November, 1996, Romania was set to be the next big thing in Eastern Europe. A reform coalition had just won a mandate from an electorate tired of neo-socialist government. The coalition promised speedy privatization and restructuring. Instead, the ambitious plans fell victim to internal squabbles and Prime Minister Victor Ciorbea's weak leadership.

On Mar. 30, the government fell, so Romania's battered hopes now lie in the hands of Prime Minister Radu Vasile, who took office on Apr. 2 with promises to rekindle reform. A first step will be to persuade the International Monetary Fund to resume its $ 410 million standby loan arrangement, agreed to a year ago but halted in October with less than a third of the money disbursed. Convincing the IMF that reform isn't dead would help woo back foreign investors. ''Western companies are extremely apprehensive,'' says Petre Datculescu, head of Romanian market research group IRSOP.

So are most Romanians, and reassuring them won't be easy. In early March, fuel prices jumped 50% overnight, while inflation is still running at more than 100%, putting many products out of reach of the poor. Things are even worse in the countryside. Late planting last year is expected to bring a poor harvest, while layoffs in mining and heavy industry and the failure of the private sector to take off have reduced many areas to near-penury.

Given such suffering, it's unclear how Vasile can kick-start reform, which will involve laying off many workers, overhauling huge, communist-era dinosaurs such as the Galati steel mill and the Dacia auto plant, and cutting state spending. Privatization promises are not being kept: Some 3,000 enterprises were to have been sold this year, but as of mid-April, virtually none had been. LOATHING. And Vasile's goals aren't shared by all in his government -- or even in his own party. The Social Democrats and his own Christian Democratic National Peasants' Party are both pro-reform but come from opposite ends of the spectrum, which in the Romanian context means they loathe one another. The former are ex-communists turned fast-track reformers, while the latter are preoccupied with settling old scores such as returning land to its original owners. ''It will be a miracle if the government fulfills any of its promises,'' says one international banker in Bucharest. ''These guys can barely agree on what day it is.''

Romania's woes have begun to sort the strong from the weak among its tycoons. George Paunescu, a classic crony capitalist with murky links to the former Socialist government, is having cash-flow problems that forced the grounding of his domestic airline, Dac-Air, three months ago.

Gelu Tofan, on the other hand, is using entrepreneurial skills to make a fortune from an old-style industrial commodity, tires. Last year, sales of Tofan tires jumped from $ 90 million to $ 200 million, encouraging Nomura Securities Co. to invest $ 60 million in the business. Not bad for a man who got his start as a sales manager in the former state tire monopoly, and who in 1991 tried and failed to emigrate to the U.S. because he felt Romania had no future.

''Staying was not my choice,'' recalls Tofan, 37, ''but when I saw there was no option, I felt it best to stick with the business I knew.'' Today he's diversifying, building up his Nordest media business, which owns radio and TV stations, newspapers, and magazines. So what should the government do to encourage more businesspeople like him? ''Simplify the laws and recognize that what entrepreneurs do is positive for the country,'' he says. Sounds simple -- but not for Romania's warring politicians.

By Justin Keay in Bucharest
BUSINESS WEEK INTERNATIONAL EDITIONS; Spotlight on Romania; Number 3577; Pg. 4

01 May 1998

Un botosanean a ajuns unul din cei mai bogati oameni ai Romaniei (Monitorul de Botosani)

Din muncitor necalificat Gelu Tofan a ajuns omul care este pe locul sapte ca avere in tara. Mama lui si acum ii trimite mincare la Bucuresti "sa manince bine baiatul".

La numai opt ani de la Revolutia din 1989, populatia Romaniei s-a impartit in clase sociale foarte distincte. Cea mai interesanta dintre toate acestea este cea a oamenilor foarte bogati. Aici se incadreaza doar citeva zeci, poate citeva sute de familii. Vom vedea in rindurile de mai jos, povestea copilariei unuia dintre cei mai bogati oameni ai Romaniei, care este botosanean. Este vorba despre multimiliardarul Gelu Tofan, la doar 38 de ani, proprietarul uneia dintre cele mai puternice firme din tara, "Tofan Grup".

Este in fapt povestea celui mai reprezentativ "self-made-man", ceea ce, tradus mot-a-mot, ar insemna "om care s-a realizat de unul singur", din pestrita lume a marilor afaceri din ziua de astazi. In 1997, "Tofan Grup" era cotat intre primele cinci firme din tara, iar, dupa cum declara el insusi, Gelu Tofan, credea ca este pe locul sapte in topul celor mai bogati romani. Intre timp situatia s-a schimbat in sensul ca Gelu Tofan si firma sa au mai urcat citeva locuri in aceste clasamente.

Povestea vietii multimiliardarului, este cel mai bine spusa de catre cea mai importanta persoana din viata lui, adica mama sa, Feodora Tofan. Al doilea din 10 frati, din care doar 8 mai traiesc, Gelu nu a avut o copilarie tocmai idilica. Inca din frageda copilarie, el a fost un fel de al doilea tata pentru fratii sai mai mici. Tatal, Gheorghe Tofan, pensionar si consilier la Primaria Todireni acum, a lucrat 32 de ani in constructii, 10 luni pe an fiind plecat de acasa, pe diverse santiere ale tarii si nu numai. In tot timpul cit tatal era plecat, grijile gospodariei cadeau exclusiv pe umerii mamei si ai fiului mai mare, Gelu. Feodora Tofan spune ca lui Gelu ii place ca atunci cind vine pe acasa, sa asculte povestile sale: "Hai mama, spune ce mai faceam noi". Cel mai mult ii place sa isi aduca aminte cum atunci cind venea de la scoala, mama sa ii spunea "Gelucu, ia sacul mama, si hai sa adunam niste buruian la porci".

La vremea respectiva aceste afirmatii nu ii faceau chiar asa o mare placere, caci tot se plingea cum de numai el trebuia sa faca corvoadele. Caci se adaugau mulsul oilor, pascutul vacilor si ingrijitul celorlalte oratanii din jurul casei. Familia Tofan avea, pe atunci, 3 vite, 26 de oi si 3 porci "caci altfel cum puteam eu sa cresc si sa tin la scoala 7 copii", spune mama.

Cu toate greutatile Feodora si Ghita Tofan au facut tot posibilul ca toti copii lor sa aiba parte de o viata mai buna. Gelu, a absolvit ciclul primar si gimnaziul la scoala comunala din Todireni, iar liceul l-a facut la Botosani la "A.T.Laurian". In clasa a cincea, elevul Gelu Tofan a participat la o excursie in Bulgaria. Sacrificiile pe care le-a facut mama sa pentru a face posibila o asemenea calatorie le spune chiar ea: "eu umblam prin sat cu o soseata de o culoare si una de o culoare, numai ca sa-l pot trimite pe Gelu in excursie". Paradoxal pentru un om de afaceri asa de activ, trasatura comuna prin care este descris de toti cei care l-au cunoscut este cumintenia. Tatal sau spune despre el ca "era cuminte ca o fata mare. Niciodata nu a fost nevoie sa ii bat pe nici unul dintre baietii mei, ii amenintam doar. Am avut norocul sa am copii intelegatori". Oamenii din sat cred si ei acelasi lucru, un batrin declarindu-ne "Baiat cuminte Gelu, altfel nu ajungea acolo, sus".

In ciuda cuminteniei sale, nu a trecut prin copilarie fara sa se intilneasca cu bataia aceea "rupta din rai". Pe cind avea citiva ani si deja preluase o parte din indatoririle de frate mai mare, Feodora la lasat pe micul Gelu sa pazeasca pridvorul, unde intr-o covata dormea lipsit de griji fratele sau in virsta de 5 luni, Dumitru, in timp ce ea s-a dus sa coaca piine la o ruda. Cind s-a intors, dupa doua ceasuri, copilasul plingea de-ti rupea inima, cu covata intoarsa deasupra. "Cele doua cotoare de matura pe care le-a primit cind s-a intors de la batut mingea pe imas, i-au fost indeajuns pentru toata viata" ne spune mama.

Imediat dupa absolvirea liceului, el s-a casatorit cu o fata dintr-un sat vecin, Dimacheni. Mariana, caci asa o cheama pe sotia sa, si Gelu au impreuna doi copii gemeni un baiat si o fata, care in fiecare vacanta vin cu mare bucurie la bunici. "N-am vrut sa-l las sa se insoare asa tinar, n-avea nici 20 de ani. Dar ei se iubeau si se intelegeau asa ca nu am avut ce face".
Si ceilalti copii ai familiei Tofan sint oameni realizati. Costel si Dumitru sint emigrati de multi ani in Canada, iar o fiica, Danuza, locuieste in Statele Unite ale Americii, unde impreuna cu sotul ei, este proprietara unui autoservice. O fata este la Bucuresti cu Gelu, iar cealalta la Suceava, unde reprezinta tot interesele firmei "Tofan Grup". Cel mai tinar dintre copii, Adriana, are 19 ani si invata la un liceu din Botosani, in clasa a XII-a. Cind ea a venit pe lume, Gelu era in armata.

Inainte de armata, Gelu a lucrat alaturi de verisorul sau, Vasile Gontaru, timp de trei luni de zile intr-o exploatare miniera, iar dupa, s-a angajat muncitor necalificat la Intreprindere Danubiana Bucuresti, unde lucra si sotia sa. A ajuns si pe panoul de onoare al fabricii, ca muncitor fruntas. Revolutia l-a prins sef la magazia intreprinderii. Parintii cred ca drumul de la un simplu muncitor, la stapinul de necontestat al unei intregi ramuri ale industriei chimice romanesti se datoreaza in buna masura vointei divine. Feodora isi aduce aminte ca Gelu obisnuia sa repete aproape obsedant "Mama sint eu necajit acuma, dar crede ca Dumnezeu ma va ajuta sa scap de saracie" Ambitia aceasta, neobisnuita la un copil timid, alaturata de curaj si de un spirit atit de organizat ca in copilarie intocmise un fel de orar, in care erau precizate foarte precis sarcinile pe care fiecare dintre frati le avea de indeplinit in ziua in care era de serviciu, l-au ajutat probabil pe muncitorul necalificat Gelu Tofan sa ajunga miliardarul Gelu Tofan. Tatal crede ca Gelu a avut succes in afaceri deoarece este extrem de cinstit. Nu de mult el i-a spus tatalui sau ca "imi place ca atunci cind ma culc, sa ma trezesc pentru ca vreau eu si nu ca vine Politia".

Masura credintei sale este data si de faptul ca in mai putin de un an de zile, Gelu Tofan, a construit o biserica in satul natal al sotiei sale, din bani proprii. La Todireni nu a construit o biserica, ci altceva mai potrivit cu saracia in care era scufundata pina atunci comuna. 17 miliarde de lei a costat punerea pe picioare a uneia dintre cele mai moderne mori de griu din tara, care poate produce in 24 de ore, 30 de tone de faina de cea mai buna calitate. Mama sa ne spune ca Gelu nu a putut sa uite cum tatal sau aducea pe vremuri cu mare greutate, cite un sac de piine de la Dorohoi, cel mai apropiat loc in care se gasea pretiosul articol, un adevarat lux culinar pe mesele todirenilor. El recunoaste ca intoarcerea in satul sau il bucura de fiecare data, mai ales reintilnirea cu casa in care s-a nascut si unde a crescut. Spre uimirea reporterilor, aceasta arata exact ca oricare alta casa moldoveneasca. Doar un congelator "Arctic" si un televizor "Megavision" arata ca ne aflam la sfirsitul secolului XX. Pina si lavitele pe care dormeau ingramaditi "ca pestii" toti copii familiei, au ramas la locul lor.

Chiar daca nu o recunosc parintii accepta cu greu ajutorul copiilor, in special a lui Gelu. Mai mult ei sint aceia care si-au ajutat copii. "Tofan Grup", cu cifra sa de afaceri de peste 136.000.000 de dolari, isi are originea in 500 de dolari, pe care Gelu i-a imprumutat in 1990 de la tatal sau si cu care si-a cumparat un cap de Raba. Cind am ajuns noi la Todireni, batrina mama tocmai se pregatea sa taie o gisca pentru a o trimite prin cineva tocmai la Bucuresti, "ca sa manince bine baiatul". Si de Pasti ea a trimis, ca de obicei, un pachet care continea oua, brinza si carne. Probabil gestul reprezinta obisnuinta mamei de a-si creste copii, chiar daca folosind averea pe care o are baiatul isi permite sa cumpere cite o gisca pe minut pina la sfirsitul vietii. Grija este reciproca. Gelu Tofan isi trimite in fiecare an la bai, pentru tratamente batrinii parinti iar in urma cu trei ani i-a dus pe acestia in Canada si SUA sa-si vada si ceilalti copii. Ultima intilnire intre mama si fiu a fost de Revelion, pe care intreaga familie l-a petrecut la una din vilele lui Ceausescu din judetul Suceava. "Nu mi-ar fi ajuns o saptamina sa vad toate minunatiile ce erau pe acolo", ne spune Feodora Tofan. De atunci ea si-a mai vazut fiul doar la televizor "Cind il vad la televizor parca-mi vine sa-i spun sa se dea mai aproape sa-l pupe mama". Ea spera ca Gelu nu va uita sa treaca pe acasa, la intoarcerea de la intilnirea de afaceri din Anglia, unde se afla acum. Ghita Tofan isi compatimeste fiul pentru lipsa de timp "Eu am fost la Bucuresti la el. Din 24 de ore, daca sta 3 linistit". Ambii parinti sint fericiti pentru succesul fiului lor. Ei cred ca imbogatirea nu l-a schimbat, atita doar ca nu are destul timp.

Multi botosaneni isi vor recunoaste probabil propriile copilarii in cea a lui Gelu Tofan. S-ar putea spune ca diferenta dintre un somer si un multimiliardar nu este atit de mare, aceleasi conditii efemere, aceeasi pregatire si poate aceleasi ambitii din tinerete. Unde este deosebirea, vom afla poate cu timpul. (CATALIN ALISTARI)

23 April 1998

Astazi se sarbatoreste "Ziua Sfintului Gheorghe - patron spiritual al municipiului Botosani" (Monitorul de Botosani)

Manifestarile dedicate acestei zile sint oferite gratuit botosanenilor Profesorul pensionar Gheorghe Cojocaru, membru al Uniunii Compozitorilor din Romania, va primi diploma de onoare pentru intreaga activitate desfasurata, iar invatatorul Stefan Ciubotaru pentru realizarea unei monografii a orasului Botosani. Profesorul Aurel Dorcu, organizatorul cercului "Dialogul artelor", va primi de asemeni diploma de onoare "Sf. Gheorghe". Acest insemn de apreciere va fi oferit si scriitorului Gellu Dorian, membru al Uniunii Scriitorilor din Romania, lui Mihai Elvadeanu, fost director al Teatrului de papusi "Vasilache", in prezent secretar general al Prefecturii judetului Botosani, actualului director al Teatrului de papusi, Dumitru Ignat, membru al Uniunii Scriitorilor. Pentru activitatea editoriala si traduceri va primi diploma de onoare profesorul Emanoil Marcu. Reprezentantii Primariei Botosani au hotarit sa acorde acesta disctinctie si unor oameni de afaceri sau manageri.
Astfel, Manuela Ana Zarug, manager al societatii comerciale Serconf SA din Botosani si omul de afaceri Gelu Tofan, considerat un model de reusita in afaceri, cunoscut ca un admirator al vietii culturale botosanene, vor primi Diploma de onoare "Sf. Gheorghe". Pentru ora 14.00, in foisorul din Parcul "Mihai Eminescu", a fost programat un concert sustinut de Fanfara Militara, iar seara, la orele 18.00, in Sala mare a Teatrul "Mihai Eminescu" un concert simfonic "George Enescu" cu participarea Orchestrei Filarmonice de Stat. In incheierea spectacolului, Corul Seminarului Teologic din Botosani va intrepreta citeva piese religioase. Daca nu va ploua, pe terasa Casei de Cultura a Sindicatelor se va desfasura un concert de muzica populara cu participarea solistilor Sofia Vicoveanca si Anton Achitei sustinut de Orchestra "Rapsozii Botosanilor", dirijor fiind Ioan Cobala. Organizatorii spun ca spectacolul va avea loc in Sala Casei de Cultura a Sindicatelor doar daca vremea va fi ploioasa. Manifestarile se vor incheia cu o discoteca in aer liber pe stadionul Fundatiei Judetene pentru Tineret Botosani, doar daca vremea va fi favorabila. Totusi, tinerii vor putea participa la o discoteca in sala de dans din incinta Casei Tineretului. Purtatorul de cuvint al Primariei, Ortansa Albu, ne-a declarat ca toate aceste manifestari sint oferite botosanenilor gratuit, cheltuielile fiind suportate din bugetul local. (R.BURLACU)

16 February 1998

Nokian to outsource ag tires (Tire Business)

BUCHAREST, Romania--Finland's Nokian Tyres P.L.C. has picked Romanian tire producer S.C. Tofan Grup S.A. to make a range of its agricultural and industrial tires in Romania.

The long-term cooperation agreement covers $6 million to $8 million worth of products, Nokian said, and will allow the Finnish company to focus its resources on higher-value premium products in its forestry, mining and related segments.

Tofan Grup controls Romania's three largest tire producers: Danubiana S.A., Victoria S.A., and Silvania S.A. Tofan also manufactures farm/implement tires for Titan Tire Corp.

Nokian plans Russian venture

NOKIA, Finland--Nokian Tyres P.L.C. and Russia's largest tire and rubber company, Group Rosshina Ltd., have signed a letter of intent to establish a joint-venture tire plant in Yaroslavl, Russia, site of Rosshina's existing Yaroslavl Tyre Plant P.L.C. unit.

The proposed tire plant would have capacity for 1.5 million passenger tires initially, according to Nokian President Lasse Kurkilahti. Other tire types could follow later. Rosshina controls an extensive tire distribution network in addition to owning shares of five tire and rubber plants, Mr. Kurkilahti said.

Yaroslavl Tyre Plant P.L.C., located about 150 miles northeast of Moscow, is Russia's second-largest tire manufacturer, Nokian said, with annual production of 4 million car and truck/bus tires. Rosshina's annual tire sales total $360 million.

12 February 1998

Rubber business remains in the family (Capital)

An upturn in trading on the over the counter market was seen in the first week of February with daily turnover exceeding 10 billion lei.

Forty five percent of deals involved Danubiana tyre maker in Bucharest, owned by the Tofan Group, the employees and the Muntenia investment fund.. Almost 20 percent of the company are owned by a large number of individuals.

Danubiana joined trading on February 4 with 110,000 shares changing hands in one transaction at 43.709 lei a share. That mean the deal involved a sole seller and a sole buyer: the Tofan Group. Next day, turnover reached almost 10 billion lei, of which four billion were obtained from special transactions. A quarter of that day's turnover was recorded by Romcim cement maker and other 700 million lei were brought in by Romcif, another cement company. Prices of the two cement makers' shares rose by 3.29 and 17.87 percent.

Although this slight pick-up in the market is not constant, it may have a positive influence on investors, tempting them to buy. As a matter of fact, the OTC market is at present the best ground for investments in small companies, mainly because of low prices.

Copyright CAPITAL ROMANIA - business weekly magazine.

05 February 1998

Romania Competition Council monitors tyremaker (Reuters)

BUCHAREST, Feb 5 (Reuter) - The independent body overseeing competition in Romania said on Thursday it had given conditional approval to the dominant position held by private tyremaker distributor Tofan Grup SA in the local market.

"We will monitor Tofan Grup in the next five years to determine whether it respects ours conditions, which allow the firm to have ecomomic concentration in local tyre market," said Viorel Munteanu, president of the Competition Council, a watchdog body guaranteeing fair competition in Romania.

Under a decision issued by the Council, Tofan Grup must provide over the next five years data on turnover, net and gross profit, investments, shifts in shareholders' structure, tyre imports, the average number of its customers and the level of local and foreign market sales.

Last year, Tofan Grup bought a 51 percent stake in two state-owned tyre makers, after taking over Romania's largest tyremaker, Danubiana SA, in 1995. Tofan also has its own sales network.

Tofan Group SA, with a staff of 12,000 and a reported 1996 turnover on sales worth $90 million, is estimated to have raised its sales figure last year to $200 million.

((Andrei Iva, Bucharest Newsroom +40-1 312-0264, fax +40 1 315-8448, bucharest.newsroom@reuters.com)) REUTERS IVA RP

02 February 1998

Tofan to produce ag tires (Rubber and Plastic News)

BUCHAREST, Romania--Finland's Nokian Tyres P.L.C. has selected Romanian tire producer S.C. Tofan Grup S.A. to make a range of its agricultural and industrial tires in Romania.

The long-term agreement covers products that represent between $6 million and $8 million in annual sales, Nokian said. The deal allows the Finnish company to focus its resources on higher-value premium products in its forestry, mining and related segments.

Nokian also paid $8 million for Norway's third-largest tire distributor, Bergs Gummi-Industri A.S., a company with 18 retail stores, two truck tire retreading plants and annual sales of $18 million.

The acquisition doubles Nokian's retail presence in Norway and increases annual sales there to nearly $43 million.

Tofan Grup is a privately owned enterprise that controls Romania's three largest tire producers--Danubiana S.A. in Bucharest; Victoria S.A. in Floresti; and Silvania S.A. in Zalau.

Tofan also makes farm/implement tires for Titan International Inc.'s European subsidiaries. Tofan will produce Nokian-brand tires at two of its three plants and utilize Nokian molds and technical specifications, the firms said.

17 January 1998

Zilele acestea, Botosaniul a fost capitala culturala a Romaniei (Monitorul de Botosani)

Stefan Augustin Doinas a tinut sa vina "pe aceste plaiuri bucovinene".

Manifestarile prilejuite de sarbatorirea celei de-a 148 aniversari a nasterii poetului Mihai Eminescu, grupate sub genericul "Zilele Eminescu" si desfasurate la Botosani intre 13 si 15 ianuarie, pot fi considerate cea mai importanta actiune culturala din acest an a orasului nostru, dar si un eveniment de talie nationala. Adunind sub auspiciile sale personalitati de prima marime ale scenei romanesti, ca Victor Rebengiuc, Mariana Mihut, Valeria Seciu, Leopoldina Balanuta, Ovidiu Iuliu Moldovan, Olga Tudorache si Ion Caramitru.

Spectacolul de gala, care a inclus si Festivitatea de decernare a Premiului National de poezie "Mihai Eminescu" pe anul 1997, a avut, dupa cum spunea Laurentiu Ulici, "anvengura pe care ar fi trebuit sa o aiba de mai demult". Juriul, din care au facut parte: Laurentiu Ulici ca presedinte si prof. Mircea Martin, prof. Marian Papahagi, prof. Daniel Dimitriu si prof. Cornel Ungureanu ca membri, a desemnat dintre cei nominalizati: Gabriela Melinescu, Mircea Ivanescu, Dan Laurentiu, Alexandru Lungu, Stefan Augustin Doinas, pe acesta din urma ca fiind cistigator al Premiului de poezie. Desi se afla intr-o perioada de convalescenta, scriitorul a reusit sa ajunga pe "aceste plaiuri bucovinene" dupa cum a mentionat in cuvintul sau si sa incaseze cele 10 milioane de lei pe care le-a oferit Consiliul Local.

Deosebit de generos, Gelu Tofan, presedintele "Tofan Grup", a creat un fond de 100 de milioane de lei destinat restaurarii manuscriselor eminesciene. Acesta a declarat: "Eu consider ca am fost un rasfatat al soartei, in aceasta perioada de tranzitie. Din ceea ce am, incerc sa daruiesc cite ceva pentru acele domenii care sint in suferinta astazi". Spectacolul de gala, care a fost transmis in direct de TVR 2, a umplut, ca niciodata, Sala mare a Teatrului "Mihai Eminescu". Printre cei prezenti s-au aflat atit oameni de cultura, cit si politicieni si oficialitati locale. Minati de inalte trairi spirituale si imbolduri artistice, senatori, deputati si consilieri locali, insotiti de consoartele lor, au venit sa-l omagieze pe Eminescu. Trecind peste cele citeva ezitari ale primarului, ca "invit Grupul Tofan Grup", si greselile de pronuntie, ca "Mihai Ursache", corectate cu promptitudine de un spectator, reusita manifestarii a fost deplina. Cocktail-ul de dupa spectacol, gustat cu multa placere de cei invitati, a durat pina ce s-a terminat sampania. Feeria becurilor colorate din fata teatrului, pe care Primaria le-a "mai lasat oleaca" in cinstea "Zilelor Eminescu", a fost in deplina consonanta cu "haina noua" pe care a imbracat-o teatrul in doar citeva zile. Si, deoarece dupa cum spunea Stefan Augustin Doinas, laureatul Premiului "Mihai Eminescu" pentru anul 1997, "timpul a facut ca Mihai Eminescu, devenind cel mai mare poet al romanilor, sa consacre aceste locuri in care s-a nascut, pe care le-a cintat ca nimeni altul si care vor constitui intotdeauna un punct spre care se vor indrepta pelerinii poeziei", nu ne ramine decit sa speram ca Botosaniul va deveni din nou, pe 15 ianuarie 1999, nucleul cultural al Romaniei. (A.V.)

15 January 1998

Leopolodina Balanuta, Ovidiu Iuliu Moldovan si Valera Seciu vor veni la Botosani (Monitorul de Botosani)

Alaturi de alte mari nume ale scenei romanesti, ei vor fi prezenti la spectacolul de gala dedicat lui Eminescu.

Pe data de 13 ianuarie a avut loc, la Vorona, deschiderea Zilelor "Mihai Eminescu-1998". Intrata in traditie, intilnirea scriitorilor botosaneni la Grupul Scolar Vorona s-a materializat printr-o sezatoare literara cu participarea scriitorilor Dumitru Ignat, Dumitru Tiganiuc, Gellu Dorian, Ionel Bejenaru, Dorin Baciu si Nicolae Corlat. Sub semnul "Luceafarului" poeziei romanesti, cei invitati au recitat din creatia poetului, dar si din cele personale. Un alt moment al intilnirii l-a constituit vernisajul expozitiei de pictura apartinind artistului plastic Ion Livadaru, ale carui lucrari au fost inspirate de poeziile lui Eminescu. A urmat prezentarea volumului "Colinde, colinde..." realizat de prof. Aurel Stefan. Intilnirea scriitorilor s-a incheiat cu programul artistic oferit de Grupul "Hyperion" al Societatii culturale "Raluca Iurascu" din Vorona. Ieri a putut fi admirata, la Galeriile de arta "Stefan Luchian", expozitia de pictura "Eminescu in arta plastica", continind lucrari din pinacoteca Sectiei de arta a Muzeului judetean Botosani. Tot ieri, la Filiala Asociatiei Filatelistilor Botosani, Gellu Dorian a prezentat volumele apartinind seriei "La steaua-poeti optzecisti", fiind lansat totodata si plicul filatelic "Eminesciana '98". Programul manifestarilor a inclus si vizitarea noii biblioteci "Eminescu". Zilelele "Eminescu" vor fi incheiate astazi cu spectacolul de gala dedicat celei de-a 148-a aniversari a nasterii poetului. La spectacol vor participa personalitati de prima marime ale scenei romanesti: Victor Rebengiuc, Mariana Mihut, Leopoldina Balanuta, Ion Caramitru, Ovidiu Iuliu Moldovan, Valeria Seciu si Dan Grigore. In cadrul manifestarilor de miine reprezentanti ai "Tofan Grup" vor propune crearea unei fundatii care va avea drept scop editarea si pastrarea manuscriselor eminesciene. Sociatatea amintita a donat pentru aceasta actiune peste 100 milioane lei.

La reusita deplina a acestei manifestari au contribuit Ministerul Culturii, Inspectoratul pentru cultura a judetului Botosani, Uniunea Scriitorilor din Romania, Primaria municipiului Botosani, Consiliul municipal Botosani, Memorialul Ipotesti, Teatrul "Mihai Eminescu", Biblioteca Judeteana "M.Eminescu", Centrul Judetean de Conservare si Valorificare a Traditiei si Creatiei Populare si Editura "Geea". (A.V.)

01 January 1998

"Capitalists better than politicians for economic development" (Romanian Daily)

Bucharest - Representatives of the Industrialists General Union of Romania (UGIR-1903) say a timeliness occurred in Romania between political and economic entities, the privately-owned economic sector being more quick to develope than the political milieu.

"Romanian capitalists have greater experience in economic development than the politicians and this generates the problems the country is confronting," Ion Hohan, deputy-president with the UGIR-1903 says.

This dysfunction between political and economic entities emerged after talks at the Cotroceni Palace between business leaders and President Constantinescu.

Both sides recognized unanimously that the lack of a homogenous communication link between them slowed down Romania's economic development, therefore "President Constantinescu vowed to mediate between us and the political factor," Ion Hohan added.

Employers' federations, business leaders and foreign investors alike are not happy with the present legislative instability. "A law which has been endorsed and then suspended arouses nothing but discord and discontent to both domestic and foreign investors," Hohan said. That is why the UGIR-1903 supports the idea to establish a presidential commission for economic development and proposes the nomination of certain representatives to draft the fiscal Code.

Development of the domestic privately-owned and of the industrial sector is a fundamental condition for Romania's development. The policy of denigration of domestic capital against the foreign one casts the country's image in a very bad light. "In any country among the developed ones, foreign capital constitutes more than 20%-25%," Hohan said.

Essential as well is development of the industrial sector. A country lacking a strong industry able to meet international technological criteria has no chance to survive. "Until now, industry was considered only a loss-making " scrap-iron pile", and the lack of competence caused the failure of this sector, the UGIR representative said.

Referring to the stand-by loan agreement with the IMF, deputy-president Hohan says that the accord would not be signed quickly. He added that the 2% budgetary deficit is artificial, as an abnormal condition."

UGIR-1903 is the leader of employers confederations of Romania, including most of the associate employers federations, and it is the only confederation which signed the cooperation protocol with the Chamber of Commerce and Industry of Romania.

Members of the organization include Radu Berceanu, Minister of Industries and Commerce; Constantin Stroe, director general of Dacia - Pitesti; Gheorghe Tofan, president of Tofan Grup and Gorea Valica, president of Apemin a. s. o.

Mihaela Iosif