Why this is important to Wisconsin businesses: The industry's diverse needs range from pharmaceuticals to agrochemicals and beyond.
Romania is one of Europe’s most dynamic economies, with consistent GDP growth over the past eight years. Last year’s growth amounted to 4.1%, and this year's forecast is about the same. With a GDP of $240 billion, Romania is the 19th largest economy in Europe, and still very small compared to the U.S. GDP of $20.5 trillion. However, Romania’s 19.5 million inhabitants, its strongly increasing domestic demand, its strategic geographic location between East and West, and its membership in the European Union add to the appeal of the Romanian market. Romania’s total imports amounted to $92 billion in 2018; of this, only $1.1 billion came from the U.S.
Before the collapse of the Soviet Union, Romania’s chemicals industry was a strategically important and diversified sector that employed more than 200,000 workers. The number of workers today is one-quarter of that, but the chemicals and pharmaceuticals industry has experienced promising growth rates in recent years, and is expected to expand further. In 2018, revenue in the chemicals sector increased by 16.4% to $3.2 billion, while in the pharmaceuticals sector it rose by 7.2% to $964 million. Interestingly, this former Soviet satellite state possesses many natural resources needed by the chemicals industry. Exploration of these resources is much needed Romania’s chemicals industry is currently heavily reliant on imports.
Overall, the chemicals and pharmaceuticals sector is diversified, with products ranging from generics to dyes to agrochemicals. Production facilities of Romania’s chemical companies are as geographically widespread as the range of chemicals produced in Romania is broad. Azomures, the biggest local firm by annual revenue ($350 million), is located in the center of the country, while others are based south of the Carpathians in the west and southeast.
Many other industry sectors in Romania are reliant on the chemicals industry. In particular, the automotive sector and its suppliers have high demand for paints and varnishes, and a booming construction industry requires large quantities of construction chemistry and adhesives. This year in Bucharest alone, new office space of more than 4 million square feet is supposed to be built.
Wisconsin exporters of chemicals can find opportunities in Romania’s dependence on imports in this sector. Overall, in 2017 Romania imported $8.3 billion worth of chemical products, of which only half a million dollars’ worth came from Wisconsin.
The pharmaceutical market is worth exploring for Wisconsin exporters. Although the market experienced significant growth recent years, relative to the size of the population, the supply of medications is low. Drug pricing and taxation policies have led to low prices for prescription-based drugs and the disappearance of certain medications from the Romanian market. As a result, pharmacies (where most drugs are sold in Romania) focus on over-the-counter medications. From March 2018 to April 2019, the total value from of over-the-counter sales in pharmacies was $878 million. Furthermore, Romania has invested heavily in the construction of nine hospitals, including several centers for blood transfusion, opening up relevant opportunities for blood exports from Wisconsin. The state’s exports of human blood, animal blood preparations, toxins and cultures of microorganisms totaled in at $221 million in 2018.