Trends in Shared Services in Central and Eastern Europe The Coming of the New Wave

Transcription

1 Trends in Shared Services in Central and Eastern Europe The Coming of the New Wave Winter 2008/2009

2 Table of contents Section Page No 1. Introduction 3 2. The environment for investment in CEE region Economic environment Key demographic trends Infrastructure development in CEE Factors influencing SSC location trends in the region Financial incentives Language skills Labour turnover Office availability and costs Education and professional skills available Pay inflation Operations in the area Our recommendations for developing shared services in CEE Make the most of regional competitive advantage in selecting a location Watch out for these lessons learnt What does the future hold The rise of the new wave 29

3 1 Introduction Poland Wroclaw Krakow Prague Czech Rep Ljubljana Slovenia Estonia Latvia Lithuania Vilnius Warsaw Slovakia Brno Bratislava Budapest Hungary Szeged Tallin Riga Cluj Napoca Romania Timisoara Bucharest Sofia Bulgaria During the last five years, the number of Business Process Outsourcing (BPO) and new Shared Service Centre (SSC) deals in the Central and Eastern European (CEE) area has increased dramatically. Even accounting for the dramatic impact the Global Credit Crunch has had on the region. It is now an area that has to be considered in every Shared Services leader s strategy. As part of a leading HR transformation consulting firm, the shared services and outsourcing teams at Orion Partners have used our recent experience and research to provide this update on the region. For anyone considering; developing an international shared services operation, offshoring any of their current activities, or utilising an outsourcing provider with delivery capability in CEE, this report provides an update and insight into: The overarching areas that shape investment decisions in the region The current trends in the key factors that should shape your location decision Orion Partners recommendations for developing international SSC operations What the future holds and the emergence of viable new countries in the region Emerging countries Mature countries Over 40 major SSCs have been established in CEE since Companies doing so have included: DSGi Group (formerly Dixons), TRW Automotive, Lufthansa, Morgan Stanley and Phillip Morris International 1. These offer a range of business support services including: Finance, Procurement, Human Resources and Information Technology support. This growth has mainly been fuelled by the development of the CEE countries, allowing them to offer a real alternative to offshoring in Asia. 1 Orion Partners research

4 These new players in the offshoring market are utilizing the competitive advantage they have over on-shore and Asian destinations, including: Attractive environments for foreign investors High availability of technical and language skills (especially in European languages) Strong cultural similarities to other European countries; Geographical position and time zone (close to Western European markets) Increasing availability of low cost office spaces Increasingly robust infrastructure It still remains a region that is subject to dynamic forces that influence SSC strategies in the region. Established locations such as Poland are reaching maturity and saturation, new countries such as Romania are becoming credible alternatives, and the socio-economic environment continues to change dramatically. This report examines these trends and provides a background to developing a location strategy that supports your organisation, as it develops its shared services and outsourcing approaches. 4

5 2 The environment for investment in the CEE region and future trends Since the fall of the communist bloc in 1989, the countries of CEE have been in constant transformation, moving towards creating democratic free economies that can successfully exist and compete in a world market. This transformation has not by any means been an easy one and has taken its toll on many aspects of the social, economic and political lives of people living in the area. To differing degrees this process is still being played out across the region. This history and atmosphere have very real implications for investment decisions in this region. In this section we look at the prospects for the region in the following overarching areas that impact SSC operations; Economic environment Key demographic trends Infrastructure development 5

6 2.1 Economic environment Despite recent credit market events, the long-term economic outlook continues to remain upbeat for the region, providing a positive background into which to develop SSC operations. The massive investments in Central and Eastern Europe, together with the birth of a strong new private sector has had a positive impact on the growth of GDP. This has put East European countries in the top ranks of locations in the world in terms of economic growth. 8.0 Average growth of GDP (%) during the period (est.) Italy Germany UK Spain Hungary Latvia Slovenia Czech Republic Estonia Lithuania Poland Bulgaria Romania Slovak Republic Source: International Monetary Fund-Data Mapper (Dec. 2008) The current disruptions in international credit markets are less likely to have a significant long-term effect on the CEE economies. The European Bank for Reconstruction and Development (EBRD) has noted that the impact of the international credit crisis will be limited as banks in the region had little if any exposure to 6

7 structured assets linked to U.S. mortgage markets. The problems faced by a few countries, including Hungary, in financing their foreign currency debts, causing them to resort to the International Monetary Fund, look to be a short-term exception to this. Whilst the region will not escape any slowdown in the global economy, growth trends are likely to remain in place. According to the latest estimates from EBRD 2, the CEE region is actually expecting a growth of 4.3 percent in 2008, and 2.2 in 2009, thus a painful slow down from recent years trends, but no signs of recession. The impact of this is explored throughout the report. Undoubtedly this positive economic environment presents challenges as well as opportunities for those thinking of moving into or expanding operations in the region. These are covered in more detail later in this report. 2.2 Key Demographic Trends As workforce mobility increases in the European Union, the demographics of EU countries is increasingly more dynamic. This is especially the case in new members that traditionally tend to have a higher rate of emigration. SSC operations are usually dependent on highly educated, young workforces. As a result demographic trends are vital to establishing workforce stability. Recent studies have suggested that the services labour market is tightening in CEE countries like Poland 3, however the latest statistics show that the trend is now reversing and that labour supply is improving. In May 2008, the UK Border Agency announced that the number of Eastern Europeans applying to work in the UK has dropped to its lowest since 2005, while many Eastern Europeans who work in Spain and Italy are also returning to their home countries. 2 European Bank for Reconstruction and Development (EBRD), December DTZ BPO in the CEE region, Jan

8 A UK-based think-tank has also recently reported in a poll of Poles that around 50% of immigrants from Poland have returned home 4. Whilst a large number of these will have left a building labour market that has shrunk by over 20% in the last year 5, many will be leaving the service sectors. Those returnees to Poland will have strong English language skills and understanding of the UK cultural context. Such a combination puts them in a good position to work in SSCs that serve the UK market. 70 Approved applicants for the Worker Registration Scheme, Source: Home Office 4 The Institute for Public Policy Research (IPPR). 5 The Financial Times July and September Research by Orion Partners interviewing academics supporting the career choices of graduates in CEE,

9 THE VIEW FROM A LEADING ROMANIAN UNIVERSITY Graduate entrants to the labour market form a core part of the talent pool for shared service operations. In Romania, there has not been the brain drain many expected in the last 5 years as the country has opened up. The environment here is motivating, many of the young people who graduated from university choose not to go abroad. Then there is also the important economic growth Romania is experiencing that is starting to be felt and that makes them remain in the country. So from this point of view I don t think we can talk about a labour shortage crisis. Dr. Octavian Thor Pleter (British Romanian University) 6 These fluctuations in migration trends can have multiple causes; the international credit crisis, the improvement of living conditions in CEE countries and changes in workforce supply and demand. It also remains to be seen whether these outflows back to CEE countries will be permanent. Nonetheless this pattern provides a healthy boost to the CEE labour markets and reverses the trend of a tightening labour pool. 9

10 2.3 Infrastructure development in CEE Poor infrastructure is a barrier to developing SSC operations anywhere in the world. This has hindered the development of SSC centres in India, China and also CEE countries. The poor state of transport and Information Technology (IT) infrastructure in Romania, Bulgaria and Slovakia in particular are the result of decades of underinvestment. The picture is improving rapidly, though in areas like road networks the full effects will not be felt for 5 to 10 years. As part of the EU enlargement development programmes, large sums of money are being invested in the infrastructure development of new member countries. For example, Romania is receiving grants of over 31.5 billion Euros from the EU, of which 15 billion Euros will be used for the modernisation of the country s roads and railway networks. It is estimated that around 180 billion Euros will be invested in the development of infrastructure in the CEE region by Since 2003, Hungary alone received over 1.3 billion Euros for transport projects, while Poland received over 3.2 billion in funds from the European Investment Bank. The most important infrastructure projects in the area are new highway and railway developments such as: PROJECT NAME COUNTRY EIB FUNDS Warsaw Gdynia Rail Rehabilitation Poland 400,000,000 EUR BGK NRF Road Rehabilitation Poland 300,000,000 EUR A1 Motorway Poland 500,000,000 EUR M3 Motorway Hungary 320,000,000 EUR Motorway Cernavoda Constanta Romania 250,000,000 EUR General Roads Rehabilitation Romania 450,000,000 EUR (Source: European Investment Bank) 10

11 The CEE countries are experiencing an unprecedented growth in transport infrastructure development projects as those presented opposite demonstrate. These are aimed at bringing the infrastructures of these countries to European standards. Besides the transport infrastructure, CEE countries generally have access to world class technology and communication infrastructures. This area has been a positive legacy of their past and a continuing priority for the current round of investment. The scores shown in the chart below are good indicators of the level of technological development in the region. This index takes into account elements such as technology infrastructure, IT skills and data protection legislation. All these countries, with the exception of Bulgaria, are now in a position where their IT infrastructure can support SSC operations in multiple locations. CEE countries have a clear advantage over India, China and emerging parts of Africa with regards to technology infrastructure. 5.5 Networked readiness index Bulgaria Poland Romania China India Latvia Slovakia Hungary Czech Republic Lithuania Slovenia Estonia Source: World Economic Forum / Networked Readiness Index Rankings

12 3 Factors influencing SSC location trends in the region From our work and research Orion Partners have indentified seven factors that are essential to examine when deciding where to site SSC operations. We have looked at the future trends for these in the Central and Eastern European region. Financial incentives Pay inflation Language skills Operations in area Education and professional skills Labour turnover Overhead costs 12

13 3.1 Financial incentives The financial incentives to invest in the region are specific to each country and each investment. Nonetheless their flow is not decreasing as the countries mature. In order to encourage economic development and foreign investments, the governments of CEE countries offer foreign investors tax breaks, subsidies and other types of financial incentive. A large proportion of which come from the financing offered by the European Union which allocated billion to promote economic convergence, cohesion and competitiveness in the new member countries between 2007 and (97% of the structural funds is allocated towards convergence and cohesion). 70,000 European Union structural funds ( Million) 67,284 60,000 50,000 40,000 30,000 25,307 26,692 20,000 10, ,456 4,205 4,621 6,853 6,885 11,588 19,668 Estonia Slovenia Latvia Bulgaria Lithuania Slovakia Romania Hungary Czech Republic Poland European Communities 2007, Cohesion Policy National Strategic Reference Frameworks 13

14 However whether or not specific shared services investments are eligible for such incentives depends from country to country, area, types of economic advantages that the investments bring (for example new job openings) and other factors. This requires each case to be examined individually. The governments of CEE countries have also been competing to make their countries more and more attractive to foreign investors. They have taken measures such as tax reforms that would encourage business development. For example, Estonia started a 19% flat-tax regime in the mid-90s, Romania, Poland and Hungary cut taxes under 20% for corporations while Latvia and Lithuania have instituted a low 15% flat tax on all income, corporate and personal. These incentives are not applicable to internal shared services functions, which are non-revenue generating. However for more complex internal arrangements where SSCs operate as profit centres and BPO operations, these changes make for a very positive tax position. These are now well embedded and there are no indications that they are going to be rolled back. 14

15 3.2 Language skills 70,000 60,000 Whilst there has been a trend in recent years to keep voice services on-shore, this region offers genuine opportunities to provide voice services in the customers own language. Even if voice services are retained on-shore, there still needs to exist the language capability to communicate with the customer countries local teams. As a result language skills still remain an attractive feature of this region. 12,000,000 Number of English speakers by country 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Estonia Latvia Lithuania Slovenia Slovakia Bulgaria Hungary Czech Republic Romania Poland European Communities, Source: Eurostat The total number of English speakers in Central and Eastern European countries is estimated to be over 30 million speakers, while the number of German speakers is over 16 million. In terms of foreign language skills (other than English) the countries of CEE can be divided in 3 main groups: German language: Poland, Czech Republic, Slovenia, Hungary, Romania Russian language: Latvia, Lithuania, Poland, Bulgaria, Czech Republic, Slovakia Latin languages (French, Spanish, Italian): Romania However this strength does have a down side. The region is a poor one for developing operations that service countries in Asia. 15

16 3.3 Labour turnover A low labour turnover is a very desirable thing for any shared services centre as it not only shows the loyalty of employees, but also leverages the investments in employee development to the maximum. As seen in the chart below, most CEE countries are positioned in the most favourable area benefiting from both low labour turnover and low labour cost. Low turnover/high cost High turnover/high cost Luxembourg United Kingdom Belgium Austria Germany France Finland Sweden Denmark Labour Cost Malta Czech Republic Slovak Republic Cyprus Spain Portugal Slovenia Poland Latvia Estonia Lithuania Low turnover/low cost High turnover/low cost Labour Turnover CEE Countries Sources: Federation of European Employers / European Communities, Source: Eurostat The BPO industry however generally has higher labour turnover rates than the overall average per economy, for example; 30-35% in India, 20-30% in Eastern European Centres, 20% in the UK and 15% in South Africa. Shared service centres themselves are reporting varied effects. Whilst in major cities these turnover rates are often exceeded, 16

17 with careful management these levels can be reduced. In the case of a major centre opened by a European electronics group they have managed to keep levels around 10% per annum. However turnover ratios depend a lot on the chosen location within the CEE countries. It actually took us 12 months before we had the first leavers. So our experience in labour turnover is between 10 and 12 percent. But I think a lot of this depends again on the location we chose. There isn t much competition yet... Michael Hyltoft DSGi Group In the most populated areas shared services leaders are now recognising that the costs of reducing this turnover are an inevitable cost of operating in the region. As in the case quoted previously, managers are reducing turnover by 7 ; Using secondments to the markets supported for agents and team leaders Developing career paths that link the SSC into the wider organisational ones Using job scope expansion to stretch staff and maintain their interest Investing in strong cultures in their SSC that engage staff in the team and wider organisation Locating in second or now third cities to exploit those graduates who want to return to the cities of their birth, after graduating from universities in capital cities 7 Orion research

18 3.4 Office availability and costs Even though real estate costs have been growing constantly during the past years in all CEE countries, these locations are still attractive compared to others in Asia or Western Europe. 20,000 18,000 Office occupancy costs (workstation/year, USD) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Chennai Bucharest Budapest Warsaw Prague Vienna Kyiv Barcelona New Delhi Moscow London (City) Source: DTZ Research Annual Global Office Occupancy Costs % 60% 50% 40% 30% 20% 10% 0% New shared services centres located out of capitals in CEE Source: Orion Partners ice occupancy costs (workstation/year, USD) As seen in the chart above, new EU entrants tend Source: to have IMF the lowest office occupancy costs amongst the CEE countries. A decade ago finding quality business spaces in most Eastern Romania European countries was a challenge, especially outside the capitals. Today the situation is changed as large scale real estate developments have been completed such as business and technology parks, as well as numerous office buildings. Office spaces are now available at reasonable costs in capitals, and smaller towns in all CEE countries. 18 Source: IMF

19 Many shared services centers choose locations at the outskirts of capitals or even in smaller cities where the costs are substantially lower. Some examples of shared service centers located in smaller cities are: COMPANY CITY/TOWN COUNTRY Confidea Nitra Slovakia Acer Brno Czech Rep. Bayer Krakow Poland Fiat Bielsko-Biala Poland GE Money Bank Wroclaw Poland Alcatel Timisoara Romania Office space availability is forecast to continue growing at a significant pace throughout the region. It is important to note that whilst growth is rapid in the smaller cities of Romania, Slovakia and Bulgaria, that rapid rate of growth comes from a very small base, thus demand continues to outpace availability. This means only 25,000 to 100,000 sqm of modern office space every two years is coming on line in these locations. 8 As a result planning office space acquisition is a key task for every entrant to these markets. 8 DTZ BPO in the CEE region, Jan

20 3.5 Education and professional skills available 70,000 60,000 The communist era left a legacy in the CEE countries of a skilled workforce that had free access to high level professional and language education. This represents an on-going strength in the region for those looking to develop SSC operations. 600,000 Graduates from tertiary education , , , , ,000 0 Estonia Slovenia Latvia Austria Slovakia Lithuania Bulgaria Czech Republic Source: Orion Partners / Eurostat Ireland Hungary Romania Poland European Communities, Source: Eurostat, Key figures on European business 2008 New EU member states produce a higher number of tertiary education graduates (8.59 per 1000 inhabitants) than the EU15 average (7.47 per 1000 inhabitants), public spending on education (as a percentage of GDP) is similar amongst the new EU countries, EU15 and US being around 5.3%. (Source: Orion Partners / Eurostat). In recent years the general availability of these skills has been restricted because of two correlated reasons: the fall in unemployment and emigration. 20

21 4 Change in unemployment (%) After the enlargement of the European Union, the migration of workforce from the new to the older members, combined with increased foreign investments in the new entrants, resulted in a drop in unemployment levels in the CEE countries. In Poland for example, unemployment dropped from 20% at the time the country joined EU to 11.5% in Whilst this could begin to present wage and employment difficulties for SSCs in the region, the current return of émigrés should have a positive impact on this. Their return will put increasing pressure on the local job markets and damp wage inflation Bulgaria Poland Lithuania Slovakia Latvia Estonia Czech Republic Romania Slovenia Euro Union 15 Countries Hungary European Communities, Source: Eurostat Added to the availability of skilled employees, professional skills are also in short supply, though this is improving. As companies look to move more than basic transaction processing to the region, the availability of skilled employees becomes increasingly 21

22 important. A number of organisations are also finding that to improve service levels, they need deeper functional skills in their SSC workforces (source: Orion Partners interviews with SSC leaders 2007 and 2008). Where advice and guidance services are provided, for example HR and pay advice to staff and managers, a much richer and robust service can be provided where staff have some professional knowledge of the functional area they are working in. This is achieved through undertaking professional qualifications in; HR, Finance, IT and Procurement. THE HR EXAMPLE In this region there is a very limited group of HR professionals in existence who have a body of knowledge based on developed economies best practices. Many local practitioners in CEE are still dominated by the communist era need to run HR as a pay and rations function. To overcome this, SSC operations are starting to use UK and US HR qualifications for their staff. The Chartered Institute of Personnel and Development (UK) and Society of Human Resource Management (US) both have operations in the area offering local qualification. There are also local professional bodies emerging, though membership is often small and focused on sharing best practice, rather than providing qualifications. A selection of these include; Poland Polish HR Association (PSZK), 100+ members Czech Republic Czech Society for HR Development (CSRLZ), 300+ member companies Hungary Hungarian Association for Human Resource Management (OHE), 270+ members Romania HR Club, 250+ members 22

23 3.6 Pay inflation An important trend in CEE, that became clear especially after these countries joined the European Union, is the rapid increase in wages. However even where pay inflation reaches up to 5 to 6 percent per year, at these rates it would take 16 years for the salaries to double, but they would still be lower than today s salaries in countries such as Germany or the UK projected pay increases above inflation (%) Czech Republic Germany UK Spain Slovakia Romania Bulgaria India Source: Mercer HR As seen in the chart above, pay increases above inflation in India are projected to rise well above the increases in European countries. In Europe, countries with more mature BPO markets such as the Czech Republic will have lower pay inflation than emerging markets such as Bulgaria or Romania. However the total labour costs (including non-wage components) registered much higher changes over the Q to Q period with CEE countries leading the list. 35 % change in nominal hourly labour costs Q (compared to Q4 2006) EA13 EU27 Belgium France Sweden Slovenia UK Spain Portugal Czech Hungary Slovakia Poland Bulgaria Lithuania Estonia Romania Latvia Republic European Communities, Source: Eurostat 23

24 3.7 Operations in the area One of the most important factors contributing to organisations deciding on the location of shared services centres is whether or not they already had operations in the area. This factor weighs so heavily because having operations in a country/region offers the following advantages: Proven track record Administrative and managerial know-how / experience on doing business in the area Ability to leverage existing resources / achieve economies of scale (in terms of overheads) Local reputation Though we recognize the importance of this factor in making the location decision, organisations must be aware that these advantages can easily be outweighed by other factors such as the general IT infrastructure, skills or even office base availability in the area. For example an organisation operating large manufacturing sites in one of the rural / industrial regions in CEE, might find it difficult to find the skills necessary for operating a shared services centre in the same area. Also, having operations in an area might act as a biasing factor to the decision makers, who might be tempted to exaggerate either the good or bad experiences or ignore the difference between the real and perceived risks. Shared services leaders should be mindful of these when making location decisions. 24

25 Our recommendations for developing shared services in CEE 4 Outlined below are our recommendations for developing your location strategy. We offer insights into; How to make the most of each country s competitive advantage Lessons learnt from Orion Partners work in this area 4.1 Make the most of regional competitive advantage in selecting a location 70,000 Based on our detailed analysis of the SSC and BPO operations in the CEE region, we have identified that countries compete from different positions. Each offers a different set of advantages to the organisation looking to open or relocate shared services centres. Low cost Lithuania Bulgaria Latvia Romania Poland Skills availability Hungary Czech R Slovenia Estonia Infrastructure 25

26 In choosing the SSC location, besides looking at the general factors that influence the day to day, tactical delivery of services, organisations need to make sure that the decision is in line with their strategic objectives. In the figure on the previous page we can see which countries top the list on strategic positioning in the market for three of the main competitive advantages. The maturing of countries like Poland still offers real opportunities for organisations that really need to access a sophisticated skills base. However it is interesting to note that Romania is emerging as a real alternative that also provides increasingly high level skills at a lower cost. 4.2 Watch out for these lessons learnt Based on our experience of working with our clients to design and implement international shared services and BPO services, we have identified some key lessons learnt that shared services leaders should consider. ENSURE THE CULTURAL ACCEPTANCE OF INTERNATIONAL SHARED SERVICES is your organisation really comfortable with the concept of receiving service from foreign nationals? In businesses with highly localised operating units the resistance can be strong. In these situations, at best, only non-voice processing can be offshored. ENSURE YOU HAVE BUY-IN TO YOUR SERVICE DESIGN has your organisation and its senior management really bought-in to the service you are offering, and does it see that as adding value to the business? If the service is the wrong one to start with, that needs fixing, before looking to exploit the opportunities offered by offshoring. 26

27 PREPARE YOUR PROCESSES FOR OFFSHORING are your processes already running in a way that supports the separation of activities across international boundaries and time zones? Eliminating unnecessary hand-offs, ensuring that workflow and self-service are fully exploited, and that the roles of each team are very clear in service delivery all are vital in preparing for offshoring. PLAN FOR UNEXPECTED TRANSITION AND RUN COSTS have you considered all the hidden costs in your business case? Items like; expat support from local HR during the launch, and the need to return offshore staff at all levels to operating countries to develop awareness, need to be factored in. DO NOT UNDER-ESTIMATE BUSINESS CONTINUITY ISSUES does your offshoring location strategy magnify the concentration of your processing and data management? The drive to exploit economies of scale can mean that one or very few hubs support your business. Leaving all your data and operations located in one or a few countries can dramatically increase business continuity risks. Look at your fall back locations as a key part of your location strategy. 27

28 5 What does the future hold? The current developments that are taking place in Central and Eastern Europe are likely to continue for the years to come as the increased stability, ongoing support from the EU, and unique set of advantages make these countries appealing to foreign investors. Growth seems to be a reliable certainty, barring any further shocks to the global economy. However, there are two potential barriers that could slow down this trend and impact the business environment in the region; these are corruption and workforce availability. We also forecast the rise of a new force in the region, Romania. The fight against corruption is one of the main political strategies that the new EU members had to adopt. The question however is how effective this will be and how quickly will the results start to show. Whilst it may not directly affect SSC operations, it does impact their staff (e.g. in securing healthcare) and can greatly increase the difficulty of setting up the operation. The availability of workforce is influenced by skill levels, unemployment and migration. These will remain volatile factors, particularly as migration levels respond to slowdowns or ramp-ups in growth across the developed economies of Europe in the next five years. However the depth of the labour force and skill base in the region indicates that though pay inflation may again start to rise in pace, the underlying workforce will remain available in sufficient numbers to support long-term operations in the region. 28

29 5.1 The rise of the new wave Throughout our analysis we have found that a new player in the region is beginning to take its place alongside more established countries. Romania s position in a range of areas is becoming increasingly strong. The workforce is highly educated, the office facilities and infrastructure are improving rapidly, and the cost advantage over other parts of the region is still significant. We see a bright future for this country as the mature locations begin to lose their competitive advantage. Competition amongst the offshore locations is strengthening and an increasingly wider range of possible locations have become available to organisations. This increased number of choices available affects the opportunity cost of relocation, making the decision more complex than it was just five years ago. However, given this range of choices, it is now possible to choose a feasible location in line with your organisation s strategic agenda with minimal or no compromise. This represents a strong incentive for SSC leaders to pursue the opportunities on offer with more vigour than ever. 29

30 THE ORION PARTNERS TEAM FOR THIS REPORT Simon Constance, London Mircea Albeanu, London and Bucharest Orion Partners LLP. Tel: +44 (0) Website: Orion Partners 2008