Which sectors will attain a growth rate high enough to trigger investments in the next few years? Romanian businesspeople are constantly asking themselves this question and the most recent answers can be found in a Ziarul Financiar overview of H1 foreign investment.
The sectors at the top of foreign investors’ preferences are banks and insurance; energy; the automotive industry; constructions; metallurgy; steelworks; and perhaps many of the industries related to these sectors. It’s a verdict that’s difficult to ignore, since it comes attached to hundreds of millions of dollars in investments.
Out of the total 79 companies that have received more than one million euros each in terms of foreign investments in their capital in H1, eleven companies (accounting for 14% of the total) belong to the banking and insurance sector. The energy and oil sector ranks second, having attracted eleven percent of the total foreign investments (with nine companies), whereas the third place went to the automotive industry (five companies, accounting for five percent). Significant investments were also attracted by the constructions industry and the construction materials sector.
Moreover, an important share of the total investments went to the metallurgy and steel industries, two sectors that were not credited with any chances of survival two or three years ago.
The trends shaping up after the first half of 2004 confirm the estimates made by many analysts, and every sector is attractive for its own diverse reasons. In the case of financial services, the development is rather low, which can only mean growth is soon to follow. In the field of automotive components, it is no longer a secret that Romania has become a paradise for producers operating in this particular industry, due to the low labour costs and to its geographical location.
Metallurgy and steelworks have been boosted by privatisations and by the favourable economic conditions, as prices in this particular sector have gone up 50-100%, due to huge demand from the Asian markets.
“There are two forces influencing the investment structure: the opportunities granted by the respective sector and the privatisation programmes. It is obvious that the financial sector is very poorly developed in Romania, compared to other countries in the area, and growth is sure to come. The need to modernise the energy sector is also an obvious reason for the investments in this area,” says economic analyst Matei Paun.
Doina Popescu, investment manager for Romania at the American AIG New Europe Fund, feels that the situation of foreign investment after the first half of 2004 is shaping a trend that will see no significant changes in the next few years.
“Very large infrastructure works are commencing and they will attract investments not only in constructions, but also in construction materials. Then there will be the privatisation of CEC (Savings Bank) and BCR (Romaian Commercial Bank), which will keep the banking sector at the top of investments. Privatisation is only just beginning in the energy sector, which is also the case for the big investment programmes. I believe that services on the whole, not only the financial services, will attract many investments, at least in terms of numbers, if not value-wise,” Doina Popescu maintained.
laurentiu.ispir@zf.ro ; andreea.paun@zf.ro