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Manufacturing in
RomaniaAda Bacalum & Alina Ionita
Finpro Romania
September 2008
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Romania
Quick facts:
- population: 22, 2 mio- area: 238,391 sq km
- biggest cities: Bucharest
(population: 2,1 mio,
0.8% of Ro area)- inflation: 6.6 (2007)
- EU 2007 / euro est. 2012
- avg. (gross) wages 440E (2007).
- social costs for employer:
27.75- 39.85%
Key Industries:
-Energy industry
-Manufacturing industry
-Construction industry
-Telecommunication industry
Logistics and infrastructure:-The present state of the infrastructure and services, which can be qualified as
having a poor quality and not responding to the present needs, is a major obstacle
to social cohesion and economic development. It impedes competitiveness, the
transition of goods, labor force, business settlements, investments.
-The upgrading of transport system is considered urgent and requiring huge
investments, but financial constraints require prioritization based on straight
objectives.Materials: steel production amounted 7.5 mill tons in 2007 and it is forecasted to
reach 8.8 mill tons in 2010. The biggest steel producers in Romania are:
AcelorMittal,Mechtel.
2006 2007e 2008f 2009f 2010f
Nominal GDP (EUR, bn)
Per capita GDP (EUR)
Real GDP, yoy (%)
Inflation (CPI), yoy, avg. (%)
Unemployment rate (%)
Current account balance/GDP
(%)
FDI/GDP (%) 9.3 6.0 4.8 4.1 3.6
-15412812197
4,500 7,260
7.7
6,570
4.9
5,830
5.4
4.7
5,390
5.7 5.0
6.6
4.3
5.4
5.8
4.2
4.4
-14.5 -14.8
4.2
-14.5
3.7
4.1
-14.0-10.3
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Availability of labour force
Recruitment
The recruitment process takes longtime in Romania (2 weeks-one monthor more). In Romania, most of thepeople have higher education and is agreat demand of jobs, especiallytechnical and economic jobs.
The recruitment process is usually
made using recruitment agencies orInternet recruitment pages.
There are also many job fairs especiallyfor new-graduated ones.
Region %
Bucharest 2
South-West 6.8
North-East 5.9
Vaslui County
( North-East)
11 (max)
Timis County
(near Hungarian
border)
1.6 (min)
In 2007, the budget for education was 5.2% of the GDP, but much of it waswasted uselessly on supporting what is called "useless teaching".Higher education in Romania is provided by universities, polytechnic, vocationalschools, and other institutes.
There are 6 Technical Universities in Romania which are accredited.
There are 24.054 students which graduated Technical universities.
The largest technical university in Romania is the Polytechnic University of
Bucharest. It is one of the most difficult faculty of the educational system.Studying technical universities, English language is compulsory and sometimes,French or German.
More than 90% of Romanian young people speak English, more than 47% ofRomanian people speak at least one language, 26% speak two languages and6% three languages.
Engineering became unpopular after many industries closed down (1990), but,
became again hugely popular in the early 2000s, after the new boom in industry(communications, metal industry, chemical industry, cement etc.) andconstruction.
Unemployment
Labor Productivi ty:
GDP/medium number of employees: 121 bn euro/4.7 mill employees=
25.7 bn euro/employee
Number of employees in manufacturing: 24.2 bn euro/1.46 mill =16.57 bn
euro/employee
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Wages, social costs and taxation
Type %
Social cost for
employerMin - 27.75 % 25.95 %
(as 01.12.2008)
Max - 39.85% 38.05%
(as 01.12.2008)
Corporate tax 16%
Income tax 16%
VAT 19%
Social costs & taxationWages
Regional differences in salaries
Bucharest and Ilfov: with 1/3 more than the medium salary
North-East: 86.7% of the medium salary
South-West: 99.5 % of the medium salary
Center: 91.3% of the medium salary
Source: Information received from HR companies, Adecco and Aims
TypeAvg. salary
(gross Eur)
Welder
CNC programmerMetal worker
Labourer
Project manager
735 EUR
515 EUR
690 EUR
405 EUR
845 EUR
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Investment Incentives
Several different types of incentives: grants, financial allocations, tax redemptions
Both national and regional level incentives. Local incentives usually tax holidays on
property taxes or cheap land and connections to local infra
Incentives to manufacturing to both large companies (max 5 Meuro) and to SMEs
(max 1,5 Meuro)
Investments to more environmentally friendly production can have separate funding
Incentives for Micro-Enterprises:
Starting from 1 January 2007, several amendments are brought to the micro-companies taxation regime.
Thus, the companies that have opted for the micro-company regime (annual turnover up to EUR 100,000
and between 1 and 9 employees) must fulfill a new condition, namely they have to derive more than 50%
of their income from activities other than
consultancy and management.
Also, the income tax rate is 2% of revenues earned in 2007, 2.5% of revenues earned in 2008 and 3%
of revenues earned in 2009. The income tax is payable each quarter, by the 25th of the month following
the quarter for which the tax is paid.
If during a fiscal year a micro-company derives revenues higher than EUR 100,000, it becomes a profit
tax payer starting from the quarter in which the limit was exceeded; its first tax computation should include
all revenue and expenditure from the start of the fiscal year.
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EU funds are a type of public support. As a result, EU funding is regulated by state aid thresholds. Focus isplaced on SMEs that are regarded as the most flexible type of company, likely to increase the
competitiveness of EU products.
The following activities may benefit from EU funding: acquisition of fixed assets (buildings, equipment);
acquisition of intangible assets (patents, trademarks and know-how); research & development; IT
development; human resources; participation in fairs and exhibitions; standardization and certification of
companies.
ALLOCATION of EU FUNDS 2007-2013 (millions Euro)
Operational Program Allocated Funds EU Funding National Funds
SOP Competitiveness 3,011 2,554 457
SOP Development of
Human Resources
4,089 3,476 613
SOP Environment 5,611 4,512 1,098
SOP Transport 5,698 4,566 1,132
Regional Operation
Program
4,383 3,726 657
EU Funding
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Key locations Romanian manufacturing
companies (national companies)
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GERMANY
CONTINENTAL AUTOMOTIVE PRODUCTS (Timisoara, Sibiu)
CONTINENTAL AUTOMOTIVE SYSTEM tyres, software
CONTI TECH
LISA DRAXLMAIER (Pitesti, Satu-Mare, Timisoara) cable and wires
PHOENIX AG - (Carei) - rubber car parts
KROMBERG & SCHUBERT - (Timisoara)-car cables
DAIMLER-CHRYSLER (Cugir) gear boxes
INA SCHEAFFER (Brasov) bearings;
HONSEL- (Slatina)- casting alloys
LEONI WIRING SYSTEMS - (Arad, Bistrita) wires&cables
BAUMEISTER & OSTLER - (Arad) aluminium and plastic car parts
SIEMENS AUTOMOTIVE (Timisoara, Iasi ) software
SCHLEMMER (Satu Mare)
MARQUARD SCHALTSYSTEME (Sibiu)
HELLA (Timisoara) electronics
FRANCE
MICHELIN - (Floresti, Zalau, Bucharest) - tires
VALEO - (Pitesti) - electric wiring systems
SNR ROULEMENTS - (Sibiu) - bearings
FAURECIA - (Sibiu) - seats covers
AUTO CHASSIS INTL. (Mioveni) - auto chassis
RENAULT-NISSAN (Pitesti) gear boxes
Key locations: brand owners
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JAPAN
SUMITOMO ELECTRIC WIRING SYST. - (Hunedoara, Deva, Orastie) - wiring systems
YAZAKI CORP. - (Ploiesti, Arad) - wiring systems
KOYO SEIKO - (Alexandria) - ball bearings
TAKATA CORP. - (Arad) - airbags and steering wheels
CALSONIC KANSEI (Poiesti) - air condition and cooling units
USA
JOHNSON CONTROLS - (Mioveni, Ploiesti) - seats
HONEYWELL GARETT - (Bucharest)- spare parts for turbochargers
ALCOA FUJIKURA INC. - (Chisineu-Cris and Caransebes) - wire harnesses
DOW AUTOMOTIVE - (Pitesti) - chemical compounds
BORLA ROMCAT - (Curtea de Arges) - mufflers, catalizersLEAR CORPORATION - (Pitesti) - wiring systems
DELPHI (Iasi) car components
DELPHI PACKARD - (Sannicolau) - wiring systems
TRW (Timisoara) steering wheels
DURA AUTOMOTIVE - (Timisoara)
ITALYMAGNETTO GROUP - (Dragasani) - wheels
MOMO - (Brad) - steering wheels
PIRELLI - (Slatina) steel cord and tires
Key locations: brand owners
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