Industry of Romania
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| Industry of Romania |
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Mining |
| Industrial production | ||
|---|---|---|
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| Dacia Logan | ||
| Main industries | Automobile industry, petrochemicals, cement and construction, aircraft, textiles, food and beverages, mining, consumer durables, tourism | |
| Industrial growth rate | 10.1% (2007) | |
| Labor force | 15% of total labor force | |
| GDP of sector | 39.6% of total GDP | |
Romania has been very successful in developing dynamic telecommunications, industrial robots, aerospace, and weapons sectors. Industry and construction accounted for 32% of gross domestic product (GDP) in 2003, a comparatively large share even without taking into account related services. The sector employed 26.4% of the workforce. Romania excels in the production of automobiles, machine tools, and chemicals. With the manufacture of 0.5 million vehicles in 2003, Romania was the Europe’s 12th largest producer of automobiles. In 2004 Romania enjoyed one of the largest world market share in machine tools (5.3%). Romanian-based multinationals such as Dacia Logan, Igero bus, PETROM, Rompetrol, Bitdefender are brand names throughout the world. What is less well known is the vital role of small- to medium-sized manufacturing firms, which specialize in niche products and often are owned by management. These firms employ two-thirds of the Romanian workforce.
Romania's industrial output is expected to advance 9% in 2007, while agriculture output is projected to grow 12%. Final consumption is also expected to increase by 11% overall - individual consumption by 14.4% and collective consumption by 10.4%. Domestic demand is expected to go up 12.7%.
The growth of the industrial sector was the principal stimulus to economic development. In 2007 manufacturing industries accounted for approximately 35 percent of the gross domestic product and 29 percent of the work force. Benefiting from strong domestic encouragement and foreign aid, Bucharest's industrialists introduced modern technologies into outmoded or newly built facilities at a rapid pace, increased the production of commodities--especially those for sale in foreign markets--and plowed the proceeds back into further industrial expansion. As a result, industry altered the country's landscape, drawing millions of laborers to urban manufacturing centers.
Factory automation systems were introduced to reduce dependence on labor, to boost productivity with a much smaller work force, and to improve competitiveness. It was estimated that over two-thirds of Romania's manufacturers spent over half of the funds available for facility investments on automation.
In 2007 Romanian manufacturers planned a significant shift in future production plans toward high-technology industries. In June 2005, panels of government officials, scholars, and business leaders held planning sessions on the production of such goods as new materials, mechatronics-- including industrial robotics-- bioengineering, microelectronics, fine chemistry, and aerospace. This shift in emphasis, however, did not mean an immediate decline in heavy industries such as automobile and ship production, which had dominated the economy in the 1990s.
Except for mining, most industries were located in the urban areas of the northwest and southeast. Heavy industries generally were located in the south of the country. Factories in Bucharest contributed over 25 percent of all manufacturing value-added in 1998; taken together with factories in surrounding Ilfov, factories in the Bucharest area produced 26 percent of all manufacturing that year. Factories in Bucharest employed 12 percent of the nation's 2.1 million factory workers.
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[edit] High technology
Romania planners realized that the country needed to advance quickly in such areas as high technology if the economy were to grow while matching foreign competition. In 1997 the Romania Development Institute issued a report, Romania Year 2000, that profiled Romania economic development in 2000. The Romania Development Institute noted that the industrial structure would be highly developed and would resemble that of advanced countries inasmuch as high value-added industries, high-technology industries, and soft industries grew relatively rapidly. Further, changes in industrial structure were expected rapidly to reduce the demand for unskilled workers while simultaneously increasing the demand for professional and technical manpower, resulting in further change of the employment structure.
The Romania Development Institute also noted that the Ministry of Science and Technology had prepared a long-range plan of science and technology for the twenty-first century that took into account limited available resources. Accordingly, Romania selected its comparative advantage areas, including informatics-- particularly information storage and retrieval and electronic data processing, fine chemicals, and precision machinery in the short term; biotechnology and new materials in the mid-term; public benefit areas, such as the environment, health, and welfare, as another group; and oceanography and aeronautics for the medium and long term.
In 2000 Romania announced an ambitious plan to promote science and technology so that high-technology activities would dominate the economy by the year 2007. The Ministry of Science and Technology intended to coordinate technology-related projects between government and industry in a variety of fields including semiconductors, computers, chemistry, and new materials.
[edit] IT tech
Romania is one of the fastest-growing information technology (IT) markets in Central and Eastern Europe. The country has made significant progress in all of the information and communications technology (ICT) subsectors, including basic telephony, mobile telephony, the Internet and IT. The country’s telecoms sector has been deregulated, expanded and modernised over the past 15 years. [1]
Romania is the leader in Europe, and sixth in the world, in terms of the number of certified IT specialists, with density rates per 1,000 inhabitants greater than in the US or Russia. There are about 64,000 specialists in the IT sector. Approximately 5,000 of the 30,000 engineers graduating every year in Romania are trained in ICT. [2]
[edit] Construction
Construction activity (about 10% of GDP) has increased due to recent tax incentives. Romania is becoming an increasingly popular choice for British property investors, according to recent research from Currencies Direct. [3] The latest Global Emerging Markets Index from the foreign exchange company shows that Romania has made the top ten for the first time, reaching number nine. The monthly index is based on the number of foreign exchange transfers undertaken by the firm to emerging market regions for property purchases. According to Currencies Direct, Romania has seen significant increases in house prices in recent years and its interest rate has dropped from a level of 154 per cent in 1997 to 8.9 per cent in 2005.
The construction industry in Romania contributed an estimated 5.95% in 2006 to the country's gross domestic product (GDP). Business Monitor International released Romania Infrastructure Report Q2 2007 in which they forecast an average industry growth rate of 6.84% over the 2007-2011 period.[4]
The construction industry has been receiving funds from foreign institutions including European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB). Furthermore, the Romanian Ministry of Environment and Water Management is making efforts to align the Romanian environment standards with the European standards. One of the ongoing projects in the country is the construction work on the various sections of the Bucharest-Brasov motorway. An increasing number of foreign companies are showing interest in electrical production capacities in the country. Companies include Germany's Siemens, U.S-based AES Corporation and Geneva-based Societe Bancaire Private.
However, the construction industry is subject to a number of risks, which can affect its growth. The rising budgetary deficit, for example, has had an increasingly adverse impact on the availability of funds for the infrastructure sector.
Despite the drawbacks, BMI ranked Romania 12th out of the 13 states included from the Emerging Europe for the infrastructure business environment. The construction industry is forecast to reach a value of RON36.2bn (US$13.41bn) by 2011, from an estimated RON20.88bn (US$7.43bn) in 2006.[5]
[edit] Manufacturing
The general pattern of development for wealthy nations was a transition from a primary industry based economy to a manufacturing based one, and then to a service based economy. Romania did not follow this pattern, manufacturing has always been secondary, though certainly not unimportant. In part because of this, Romania did not suffer as greatly from the pains of deindustrialization in the 1970s and 1980s. Manufacturers have been attracted to Romania due to the highly educated population with lower labour costs than the EU. Romania's government-run healthcare system is also an important attraction, as it exempts companies from the high health insurance costs they must pay in the EU.
[edit] Car manufacturing
Much of the Romanian manufacturing industry consists of branch plants of EU firms, though there are some important domestic manufacturers, such as Dacia Logan, Daewoo, Roman Braşov, Igero bus [6]. This has raised several concerns for Romanians. Branch plants provide mainly blue collar jobs, with research and executive positions confined to the EU. About half a million cars are produced each year in Romania.
Ford bought Daewoo Romania company for $ 57 millions to produce Ford automobiles to a car production estimated to be over 300,000 by 2010. [7] [8] [9] Ford will invest €675 million (US$923 million) in the former Daewoo car factory. Ford also said it would buy supplies from the Romanian market worth €1 billion (US$1.39 billion). [10]
The Dacia Logan was the top-selling new car in Central and Eastern Europe in the first half of 2007 with 52,750 units sold, ahead of Skoda Fabia (41,227 units), Skoda Octavia (33,483 units),Opel Astra (16,442 units) and Ford Focus (14,909 units), shows a market survey of JATO Dynamics, the leading supplier of automotive market intelligence. [11] Romania lead the regional auto market growth in the first half of 2007, both up 25 percent as against the similar period last year, said the local weekly Capital in its latest issue Wednesday.
[edit] Arms industry
Romania is the 11th largest arms supplier in the world. The Romanian arms industry's main customer, for whom they mainly build warships, guns, nuclear weapons and equipment, is the Romanian Government. Furthermore, record high defense expenditure (currently at 5 billion €), which was considerably increased under the government of Prime Minister Calin Popescu Tariceanu, have contributed to the success of the Romanian arms industries. In addition, external demand plays a big part in the growth of this sector: for example, Romanian exports great quantities of weaponry to the Middle East.
In recent years, the Romanian Government has called, unsuccessfully, for the lifting of the EU weapons trade embargo on China.
[edit] Petrochemical industry
This is an incomplete list of oil refineries in Romania:
- Arpechim Piteşti Refinery, (Petrom/OMV), 70,000 bbl/d (11,000 m³/d)
- Astra Refinery, (Interagro), 20,000 bbl/d (3,200 m³/d)
- Petrobrazi Ploieşti Refinery, (Petrom/OMV), 90,000 bbl/d (14,000 m³/d)
- Petromidia Constanţa Refinery, (Rompetrol), 100,000 bbl/d (16,000 m³/d)
- Petrotel LUKoil Ploieşti Refinery, (LUKOIL), 68,000 bbl/d (10,800 m³/d)
- Petrolsub Suplacu de Barcău Refinery, (Petrom/OMV), 15,000 bbl/d (2,400 m³/d)
- RAFO Oneşti Refinery, (Calder A), 70,000 bbl/d (11,000 m³/d)
- Steaua Romană Câmpina Refinery, (Omnimpex Chemicals), 15,000 bbl/d (2,400 m³/d)
- Vega Ploieşti Refinery, (Rompetrol), 20,000 bbl/d (3,200 m³/d)
[edit] Main industrial output
Industries: iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture and other wood products, shipbuilding and refurbishment, windmills, pharmaceuticals, medical equipment, textiles and footwear, light machinery and auto assembly, mining, timber, construction materials, metallurgy, petroleum refining, computers
[edit] Selected products
According to europaworld.com, in 2004, this many thousant metric tons were produced:[12]
- meat and meat products: 464
- refined sugar: 506
- wine: 7,071 (thousants hectoliters)
- beer: 14,406 (thousants hectoliters)
- paper and paperboard: 521
- synthetic rubber: 12
- sulphuric acid: 28
- sodium hydroxide: 414
- sodium carbonate: 398
- nitrogenous fertilizers: 1,104
- petrol: 4,292
- distillate fuel oils: 3,947
- asphalt: 203
- coke: 1,675
- cement: 6,239
- pig-iron: 4,244
- crude steel: 6,076
- aluminium: 229
- electric energy: 56,645 (million kWh)
[edit] References
- ^ E-readiness: Romania
- ^ E-readiness: Romania
- ^ Romania named property hotspot
- ^ Romania Infrastructure Forecast Report - Business Monitor International
- ^ Romania Infrastructure Forecast Report - Business Monitor International
- ^ El Car
- ^ AUTOSHOW-Ford to invest in Romania, no plans for low cost car | Reuters
- ^ UPDATE 1-AUTOSHOW-Ford invests in Romania car plant | Reuters
- ^ US carmaker Ford buys car plant in southern Romania and pledges investments - International Herald Tribune
- ^ Reuters | Latest Financial News / Full News Coverage
- ^ http://english.people.com.cn/90001/90778/6280650.html The Dacia Logan was the top-selling new car in Central and Eastern Europe in the first half of 2007 with 52,750 units sold, ahead of Skoda Fabia (41,227 units), Skoda Octavia (33,483 units),Opel Astra (16,442 units) and Ford Focus (14,909 units), shows a market survey of JATO Dynamics, the leading supplier of automotive market intelligence.
- ^ "Romania". The Europa World Year Book (48) 2. (2007). London and New York: Routledge. 3734-3759.
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