Investment opportunities of Moldova: Agribusiness, textilefootwear, furniture

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• Investment opportunities of Moldova
  Agribusiness, textile/footwear, furniturewood
  processing
• Presented by Ion Serbusca, MEPO

Central European Initiative Summit Economic Forum
- Warsaw, 19-21 November 2003
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Agribusiness - Characteristics

• 75 of total arable land is black soil

• Middle country climate (average temp January -
  3,5 C)

• Food industry is a major player in the domestic
  industries and accounts for 75 of the total
  export of the country

• 46 of the total population is working in
  agriculture

• About 70 of GDP (40 is created by agriculture)

• About 60 of total export

• Strong wine and wine growing industry

• Stable and promising fruit and vegetable
  processing industry

• Small dairy and meat production

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Agribusiness Wine production

• 2,3 of world vineyards (147 th. ha)
• 19 industrial production
• 25 of food processing industry
• 25 of countrys exports
• 4,9 of GDP

• If in 1992 the share of high quality wines
  was 3 of total, than in 2002 their share was 12

• Companies
• 130 wineries (60 primary, 30 secondary and 40
  mixed)
• 5 producers of divine and brandy
• 7 producers of sparkling wines
• 3 wine basements
• Production
• Bottle and sparkling wines, divine and brandy
• Volume 175 million USD
• Sales markets Export 90 (CIS - 96,89)
• Moldova 10
  

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Agribusiness Evolution of wine sector
Past
Future
Mass production Division of vine-growing from
wine-making Production focus Export of bulk
wine Lack of image Low quality wines Market of
CIS states Short-term business relationships
Qualitative viticulture Integration of
vine-growing and wine-making Market focus Export
of bottled wine Brand development High quality
wines Developed markets Development of
distribution chain, long-term partnership
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Agribusiness FruitsVegetables Processing

• Sector structure
• Processing fruitsvegetables - 25 Companies
• Canned Fruits and Vegetables 20 companies
• Juice producers 12 companies
• Dried fruits producers 5 companies
• Frozen FV producers 2 companies
• Main producers
• Orhei-Vit 32,000 tons of canned FV
• Alfa-Nistru 26,000 tons
• Natur-Vit 23,000 tons
• Rozmiar 22,000 tons
• Fabrica de Conserve Cosnita 14,000 tons
• Fabrica de Conserve Floresti 4.000 tons
• Sector production capacity
• 300,000 tons of canned FV
• 60,000 tons of apple juice
• 6,000 tons of dried fruits

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Success factors
Agribusiness FruitsVegetables Processing

• Favorable climate conditions for growing own
  ecologically pure and qualitative raw material
• Qualified and experienced specialists in the
  sector
• Relatively low incomes in comparison with Western
  Europe countries
• Free access to CIS market
• Possibility to adapt rapidly to demand
• Investments in packaging improvement
• Acceptable price on final products
• Reasonably developed infrastructure

Investment Opportunities/Needs

• Development of production process
• Packaging, quality improvement
• Frozen FruitsVegetables, with ultimate export to
  CIS market (demand in Russia increases annually
  with 15-20)

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Agribusiness Dairy, Meat

• About 30 companies employing cca 5000 people
• Carmez and Basarabia-Nord have 80 of local
  market, employing more than 700 people each
• 65 of market Chisinau and suburbs
• Structure of meat production
• Pork meat 58
• Beef, veal meat 23
• Poultry meat 15

• 12 operating companies with about 2000 employees
• Incomlac, Inlac, Combinatul de lapte
  Hâncesti and Lapte cover 80 of dairy market
• Incomplac has 45 of Moldovan milk market and
  produces 50 of milk powder
• Moldova is a net exporter of dairy products,
  primarily milk powder, butter, whole milk and
  cream (Romania, the Baltic States and Russia)
• Production capacity is used at 15 , all
  companies could process 945,000 tons of milk per
  year.

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Apparel Sector overview

• About 70 companies operating, of which 27 are
  medium and big sized
• 25,000 employees
• Sector turnover 64 million USD
• Lohn and subcontracting cooperation with Western
  companies
• Joint-ventures and greenfield investments
• 80-130 USD/month average salary
• 100 export oriented
• 25-30 annual export growth
• 70 of exports Germany, Italy, Great Britain

• Ionel men and women suits and coats
• Vestra light women garment
• Dana Ladies coats
• Baltsanca Men suits and coats
• Codreanca- working cloth
• Tricon light ladies wear
• Odema shirts
• Astroline underwear
• Rada underwear
• Garment factory in Dubasari - outerwear

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Apparel Opportunities
Competitiveness factors

• Good qualification of labor force and good
  discipline
• Very low cost of labor force
• Relatively high productivity and good technical
  know-how
• Short distance to target markets

Opportunities

• Increasing demand for qualitative textiles at
  reasonable prices on CIS markets
• Possibility to deliver fast to Europe and CIS
• Stable trend of labor force cost
• Increasing prices for imports from UE to Russia

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Footwear

• 28 companies operating
• Cost structure allows cooperation in lohn and
  subcontracting with Italy, Germany, Romania
• Established joint ventures and greenfield
  investments
• Developed complementary industries like leather
  production, soles, moulds, other
• Good supplying system
• Good technological level, competitive quality
• The main companies that have ability and
  production capacities to supply export markets
  are
• Becker Rotan
• Gabini
• Tocusor
• Zorile
• Tighina

• About 95 of production is exported
• Exports on own brand 8-9 of total Russia,
  Ukraine, Byelorussia, Uzbekistan
• Main export market on subcontracting are Italy
  and Romania

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Furniture/Wood processing

• About 6,000 people employed
• Production capacity used at 15-20
• Value added is about 42 in comparison with 29
  in Europe
• Major players
• Furniture
• Creator-Iu.Bors
• Viitorul JSC
• Nord-Mobila JSC
• ICAM JSC
• Wood products
• Rolinda Ltd
• Dumix Pro Ltd
• Benim Masiv Ltd
• Cambii Iavor Ltd

• Competitiveness factors
• Availability of inexpensive, qualified labour
  force
• Competitive Price and Good quality
• Nice design
• Flexibility, work on order
• Hand wood engraving elements use

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• Moldovan Export Promotion Organization
• 65 Alexei Mateevici str., MD 2009
• Chisinau, Republic of Moldova
• Tel [phone], Fax [phone]
• e-mail office_at_mepo.net
• www.mida.md
• www.mepo.net