"The collapse of Communism in 1990 resulted in the severe downturn of the Romanian economy. However, the past few years have seen the economy improving and production and consumption levels rising," notes Frost & Sullivan analyst Malavika Tohani. "Inclusion in the EU has accelerated improvements in infrastructure and efforts are underway to weed out corruption and red-tapism. The global economic slowdown, affecting the US and Western European economies significantly, is expected to have a lesser impact in Romania. Short-term growth (next 1-2 years) might slow down due to fall in foreign direct investment (FDI), industrial output, investment in real estate, available financing, purchasing power of consumers, etc. However, the medium to long term scenario looks bright for this emerging economy, thereby providing immense opportunities for backup power manufacturers."
A quickly expanding sector in Romania is the automotive industry and companies like Renault, Mercedes-Benz, Audi and Ford are starting to manufacture cars there, creating more jobs. Mercedes-Benz and Audi are viewing Romania as a strategic location to set up production facilities designed to benefit close markets like Russia, China and India. These factories are highly automated and require power continually, making investment in backup power equipment essential.
The telecommunications market is also soaring due to its large target market. Compared to Western European markets, Romania boasts of a fairly low installed base, and therefore has room to grow. Since implementing the EU Data Retention Directive in 2006, information like the identity of the caller, time and means of communication must be stored for a minimum of 6 months. This has added the need for datacenters, which require power and power backup around the clock.
The power generation sector is growing, as Romania draws foreign investors. Inclusion in the EU as well as privatisation of the state monopoly RENEL has attracted many foreign companies such as E.ON, CEZ and Enel. Although Romania generates energy from a variety of different fuel sources, nuclear energy is an important source of power generation. Czech power company CEZ is constructing two additional reactors at the nuclear power plant located in Cernavoda, scheduled to finish construction by 2015. Nuclear power plants, where safe shut downs are essential, depend on backup power systems.
Given the positive growth of the power generation sector along with opportunities emerging in both the telecommunication and automotive sectors, backup power manufacturers have much to look forward to in Romania.
