Investment opportunities of Moldova: Agribusiness, textilefootwear, furniture

1

• Investment opportunities of Moldova
  Agribusiness, textile/footwear, furniturewood
  processing

2
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

3
Overview of wine sector

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

• Production of bottled wines in 2003 has
  increased with 31
• to up to 18,238 million dcl.

• Companies
• 130 wineries (60 primary, 30 secondary and 40
  mixed)
• 5 producers of divine and brandy
• 7 producers of sparkling wines
• 3 large wine basements

4
Export of wines
In 2003 Moldova exports of wines increased by
25,8, being performed in about 35 countries

5
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
6
Wine sector - Investment opportunities

• Privatisation (www.privatization.md)

• Green field investments Joint-ventures
• - Plantation of vineyards
• - Purchasing new equipment and technology

• Free Economic Zones

7
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

8
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)

9
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
• Investment opportunities
• Livestock breeding
• Modern equipment and technology for meat
  processing

Diary and diary products Export/Production (mln.
)
33,5
31

• 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.

29,5
25,3
21,9
17,6
30,1
13,08
10,9
8,02
7,52
6,56
6,5
5,8
1996
1997
1998
1999
2000
2001
2002
10
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

11
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

12
Apparel/Footwear 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 (EU, Russia)

Investment opportunities

• Subcontracting
• Creation of Joint Ventures and Greenfield
  Investments
• Free Economic Zones

13
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
• Investment opportunities
• Subcontracting
• Creation of Joint Ventures and Greenfield
  Investments
• Free Economic Zones

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

14

• 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