Agriculture ReportRepublic of Moldova

Introduction to the Agricultural Sector Republic of Moldova

1. Executive Summary ............................................................................................................. 4

2. Domestic Sector Overview ................................................................................................. 5

2.1 Major Agricultural Products ........................................................................................... 6

2.2 Organic Agriculture ....................................................................................................... 10

2.3 International Trade ........................................................................................................ 14

2.4 Investment Opportunities .............................................................................................. 15

3. Success story ..................................................................................................................... 20

4. Testimonials ....................................................................................................................... 22

5. Sources .............................................................................................................................. 22

GUAMCEFTA

CISEU

ESP

FRA

GBR DEU

ITA

TUR

ROMHUNAUS

CZE

BGR

LTU

LVA

EST

GRC

POL

SWEFIN

NOR

BLR

RUS

KAZ

UZB

UKR

FREE TRADE AGREEMENTS

Population: 3.55 million Area: 33,846 km2 GDP per capita at PPP: 2,998 EUREconomic growth 2013: 8.9%Inflation: 5%

Proximity to:• Major markets: cca 880 million customers (FTA with EU, CEFTA, CIS, GUAM). • OEMs, TIER 1 & 2 suppliers (i.e. RO, PL, HU, CZ, SK, RU, etc.);

Free Trade Agreements signed - 43.• DCFTA (Deep and Comprehensive Free Trade Area) - 500 million; • CEFTA Central European Free Trade Agreement (Moldova, Macedonia, Albania, Serbia, Montenegro, Bosnia and Herzegovina and UNMIK (Kosovo) - 30 million; • CIS Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan) - 250 million; • GUAM Organization for Democracy and Economic Development - 60 million.• FTA with Turkey - 80 million

880 millionCustomersduty-freemarket

Employment rate in Moldova: 39.3% (2013) increased, versus 38.4% (2012)Corporate tax: 12%, 6% in Free Economic Zone, 3% in Free Port Labor costs (gross salary): averaging 250 EUR/monthFull load labor cost: cca 2 EUR/hour

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1. Executive Summary

With its favorable climate and geographical con-ditions, rich soil resources and biological diversity, agriculture is one of the leading sectors in Moldo-va’s economy. The share of agricultural production in Moldova’s Gross Domestic Product stood at around 13 percent during the last years. Together with the processing industry it represents more than 17 percent of the Gross Domestic Product and ap-proximately 45 percent of total exports. At the same time, agriculture still constitutes the most important social sector of the national economy, using over 27 percent of country’s labor force.

Traditionally, the agriculture and processing industry represented the main branches of the nationalecon-omy.

Agro-food exports account for a significant part of total exports. The most export-oriented products are wine and spirits, as well as fruit and vegetables, both fresh and processed. These two categories alone account for more than 41 percent of exports. To achieve stable growth in agro-food exports, there is a need to diversify and increase access to high value markets. Increasing exports to the EU would help achieve this diversification and provide access to higher-value markets.

Moldova supplies agricultural products in more than 70 countries. Moldova’s main trading partners are the EU and CIS, which together account for 90% of the country’s foreign trade. In 2012 the Repub-lic of Moldova’s exports to EU countries constituted 1,013 million US$, while imports from the EU rep-resented 2,318 million US$. The trade of the main products is structured in the graphs that follow.

Moldova offers a large range of agricultural products, such as fruits, vegetables, grains and livestock. The main products in the grain group are wheat, barley, corn and rape seeds. The main products in the Mol-davian livestock sector are poultry, pork and beef. Poultry, pork and beef production in 2013 was 164 thousand tons.

Main arable products are: winter wheat, spring and winter barley, oats, soya, peas, sunflower seeds,

grain maize, sugar beet, tobacco. Main varieties of vegetables grown are: tomatoes, onions, cabbage, cucumbers, pumpkins, peppers, carrot, red beet, garlic, squash, aubergine, potherb, green peas.

Fruit production concentrates on: apples, plums, sweet and sour cherries, pears, peaches & nectar-ines, quinces, apricots, soft fruit, walnuts, table and technical grapes.

2. Domestic Sector Overview

Agriculture has always been one of the leading sectors in the Moldavian economy, largely for natural reasons: the rich soil resources, biological diversity, good cli-mate and geographical conditions. There is also a tra-dition of hardworking farmers and, more recently, pri-vate entrepreneurs interested in investing in Moldova’s agriculture. Agriculture has an important impact on the social and economic development of Moldova since it meets the majority of the population’s food require-ments domestically and prevents Republic of Moldova from being dependent on international sources and also supplies the raw materials of other sectors de-pendent on agriculture.

Moldova has exceptional resources that are highly fa-vorable to agricultural production. Its black, fertile soil is ideal for growing corn, fruit and vegetables. Tradi-tionally, the agriculture and processing industry repre-sented the main branches of the national economy, placing Moldova among the main suppliers of agricul-tural products and foodstuffs on the huge ex-USSR market.

In 2013 the agro-industrial activity currently accounts for more than 17 percent of GDP.

At the same time, agriculture constitutes the most im-portant sector of the national economy, using over 27 percent of the country’s labor force.

41%Ltd. companies

36%Rustic households and farms

10%Production cooperatives

3.5%Joint Stock Companies

9.5%Other formations

Structure of farmsteads holding agricultural land in breakdown by category (in percent of total area)

Export to EU countries

16%Food and live animals

3%Beverages and tobacco

14%Crude materials,inedible, except fuels1%

Mineral fules, lubricants and related materials

7%Animal and vegetable oils, fats and waves

1%Manufacturing goods classified chiefly by material

17%Machinery and transport equipment

36%Other

Imports from EU countries

7%Food and live animals

1%Beverages and tobacco

2%Crude materials,inedible, except fuels

16%Mineral fules, lubricants and related materials

17%Animal and vegetable oils, fats and waves

20%Manufacturing goods classified chiefly by material

28%Machinery and transport equipment

9%Other

• From 2009 to 2012 the agricultural production grew by 14 percent to 22 120 milion lei

• The entire agricultural lands cover 2.48 million hectares or 75 percent of the country’s entire territory. Out of which 1820 hectares are arable land, 300 hectares are perennial plantations

• Black soils amount around 75 percent of the overall territory

• Total area of the Republic of Moldova is 33.800 square km

• Agricultural lands 2.48 million hectares

• Arable land 1.82 million hectares

• Perennial plantations 0.3 million hectares

• Meadows & pastures 0.36 million hectares

Source: National Bureau of StatisticsSource: National Bureau of Statistics

* Throughout the report, 2012 figures are used in cases 2013 statistics have not yet been available.

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Agriculture represents the dominant land used in Moldova.By far the most significant land used is arable land for annual crop production. Much of this arable land sits on highly fertile and productive black chernozem soils, which cover 75 percent of the country, especially in the northern districts. High quality soil resources, along with various microcli-mates, support a wide array of annual and perennial crop production across the country.

The major advantages of doing agriculture in Moldova are:

Favorable geographical location and cli-mate, it is possible to grow early varieties of vegetables, which is a competitive advan-tage for Moldova. The country has moderate continental climate with short and relatively mild winters and long summers. Moldova has good humus soils and sufficient water resources.

Moldova’s population accumulated affluent experience and knowledge in growing high value crops such as: fruits and vegetables, tobacco, as well as in viticulture and wine production.

The fertile soil and adequate labor force are able to ensure efficient specialization in growing products for export with high profitability and productivity.

2.1 Major Agricultural Products

With its rich soil, vast arable land and favorable cli-mate, Republic of Moldova offers a wide range of agricultural product groups including, fruits, vegeta-bles grains and livestock.

Global agricultural production in current prices, millions lei

2010 2011 2012 2013

Crop production

13 616 15 751 11 968 16 212

Animal production

5 786 6 347 7 529 7 810

Source: National Bureau of Statistics

Fruits, Vegetables and their Processing

Fruit-growing represents one of the main strategic branches of the national economy, accounting for around 40 percent of the agricultural production value. Moldova is a net exporter of fruits and from

2003 a net importer of vegetables. With vegetables, however, being a net importer is due to the off-sea-son import of products that are grown seasonally (May- November) in Moldova. The local production and marketing season could be extended to pro-vide more competition to imports over a greater time period.

The market structure for fruits and vegetables in Moldova includes the following distribution chan-nels: approximately one hundred open air markets, four wholesale markets, one hundred supermarkets, and a myriad of small kiosks. In addition there is HoReCa (Hotels, Restaurants, Cafes, the foodser-vice sector) that buys directly from the open air and wholesale markets as well as directly from growers and retailers. Besides those commercial channels, a large portion of rural households consume and preserve their production for their own consumption or informal exchange with their neighbors.

Official governmental statistics of fruit and vegeta-ble consumption (including potato and melons) per capita in kg for the last 3 years are presented below. It draws a picture of a relatively stable consumption pattern with some small variations from year to year.

Total production of vegetables and fruits, thousands of tons

2010 2011 2012 2013Vegetables 341 362 231 292Fruits 322 378 380 415

Source: National Bureau of Statistics

Fruit and Vegetable Consumption (Including Potatoes and Melons) per capita in kg

2010 2011 2012Quantity 208 218 214

Source: National Bureau of Statistics

Overall Moldova has very good conditions for pro-ducing horticultural crops. Official statistics in 2013 indicated that the total area of fruit and nut plan-tations is 136 thousand hectares including 121 thousand hectares of fruit, 14 thousand hectares of nuts, and 1 thousand hectares of berry bushes, which, combined account for about 5.4 percent of agricultural land area. The main fruit planted is ap-ples, covering approximately 64 thousand hectares, followed by stone fruit with 40 thousand hectares of mainly plums and cherries, and table grapes with

20 thousand hectares. The average annual area of planted open field vegetables is 33 thousand hectares and the protected area (greenhouses) for growing vegetables has a surface area of 550 hec-tares.

Geographically the main zones for production of ap-ples and potatoes are in the Northern part of the country. Plums mainly are produced in the Central part, peaches in the South and table grapes in the Southern and central areas. Vegetable production, greenhouse and open field are scattered throughout the country, based on water accessibility and soil quality.

Fruits – total annual production is about 415 thou-sand tons, with apples the 1st most important crop accounting for a minimum of 60 percent of total pro-duction (circa 307 thousand tons depending on the year). Plums are the second most important crop with annual volumes of around 56 thousand tons followed by cherries (7 thousand tons), peaches (17 thousand tons) and apricots (5 thousand tons). Ap-proximately 50 thousand tons of table grapes are produced annually.

Vegetables – annual production totals 292 thou-sand tons excluding potatoes, which alone account for another 240 thousand tons. The main vegeta-ble crops produced in open fields are tomatoes (52 thousand tons), cabbage (30 thousand tons), on-ions (52 thousand tons), peppers (16-45 thousand tons), cucumbers (24 thousand tons), pumpkins (41 thousand tons), carrots (20 thousand tons), red beets (14 thousand tons) and garlic (10 thousand tons) with averages fluctuating by 10 percent year by year. In greenhouses, total production approxi-mates 50 thousand tons of vegetables.

Vine and wine. Wine-making is an essential branch of the economy. The share of viticulture and wine-making in global agricultural output is about 15 per-cent and respectively 23 percent from the total agro food export.

In 2013, the vineyards covered a total area of 140 000 hectares. About 31 500 hectares of wines were planted during 2002-2011, over 95 percent of the areas being privately owned. The existing wine production companies have a wine grape process-ing capacity of 1 million tons and storage of wines over 700 million litres. Over 60 percent of compa-nies processing grapes are equipped with modern

300 000 tons per year

240 000 tons per year

140 000 ha in 2013

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machinery and technology. Secondary wine units have been reassembled almost entirely with modern bottling lines. The volume of grape processing and wine production from raw material is maintained at the level of 360 000 tons and approximately 250 million litres of wine. Exports progress depends on the markets. Total exports registered in 2013 val-ue approximately 150 million USD because of lower exports to Russia.

Walnut production and processing

According to the International Trade Centre in Ge-neva, Moldova is one of the largest exporters of walnuts to Europe, after USA, Mexico and China. Walnuts are grown on 14,000 hectares, an area that has been consistently expanding. Average productivity varies from 2 to 3 tons per hectare depending on the variety and climatic conditions. Walnuts plantations have registered a rapid growth since the year 2000 from an area of 4000 hectares and reaching an area of 14 000 hectares in 2013. Thus, the amount of exports grew from 39 million USD in 2007 to 98 million USD in 2013.

Some of the key exporters and processors of prod-ucts destined for the EU markets are:

• Reforma Natural Fruit and Nuts (a German investment operating in Moldova in walnut export),

• Monicol (processor and exporter of dried fruit and walnut kernels),

• VM Plumcom (processor and exporter of dried fruits), and

• Prometeu-T (the major processor and ex-porter of walnut kernels in Moldova),

• AMG Kernel Group Soroca (producer and exporter of walnut kernels).

Production of walnuts, thousands of tons

2010 2011 2012 2013Walnuts 12 14 9 13

Source: National Bureau of Statistics

Processing

Annually, approximately 9 percent of all vegetables and 45 percent of all fruits are processed. The total volume of fruits and vegetables that are processed are approximately 230-280 thousand tons per year.

Six companies (Orhei-Vit, Alfa-Nistru, Natur-Vit, Na-tur Bravo, Rozmiar, Floresti) export a diverse range of products, including apple juice (clarified and with pulp), fruit nectars, fruit drinks, and preserved fruits and vegetables. Canned fruits and vegetables are the most significant export volumes including peas, corn and whole tomatoes. Additional processed items are tomato pastes and ketchups, purees for babies, jams, preserves and specialty items. More than 90 percent of production is destined for ex-port. CIS countries remain Moldova’s biggest export market for processed fruit and vegetable products accounting for 70 percent in total, including Russia (38 percent) and Ukraine (9 percent). Other Europe-an countries account for the remaining 30 percent of exports, mostly in the form of semi-finished prod-ucts.

Just one tenth of cereals are milled, the rest being used as fodder. Around one fourth of milk is pro-cessed and less than 10% of meat and pulses. Most sugar beets are processed, as are 70% of oil crops.

Dried fruits production

The Moldovan dried fruit sector includes a few large and medium sized companies and a larger number of smaller companies, all competing amongst each other. Over the past three years Moldova produced 2 000 - 3 500 tons of dried fruits (mostly plums, but also apples, cherries, pears, etc.) per year depending on the growing conditions and availability of raw materials. Export levels are usually about 70 percent of production. The EU absorbs about 80 percent of Moldova’s dried fruit exports; CIS countries, primarily Russia, Belarus and Ukraine, accounting for the remaining 20 percent.

Grains

The cereals sector has a vital importance for the country. The main crops cultivated in Moldova in-clude wheat, barley and corns. The majority of prod-ucts produced within this sub-sector are provided for the domestic market. The main trade markets are Ukraine, Switzerland, Puerto Rico and Romania. The majority of products manufactured within this sub-sector are provided for the domestic market, except for small/minor quantities of biscuits, which are exported. Although Moldova is an important producer of grains, with a wheat yield of 2.87 tons per hectare in 2013, it is still lagging behind the EU-27 average yield of 5.66 tons per hectare. The main reasons behind this deficiency are: the production in smallsized farms and the inefficiency in input usage.

Production of wheat, barley and corn, thousands of tons

2010 2011 2012 2013Production of wheat

744 793 496 1008

Production of corn

1420 1468 572 1419

Production of barley

208 198 118 219

Source: National Bureau of Statistics

14 000 ha in 2013

≈ 4 000 tons in 2010-2013

2.87 tons per hectare in 2013

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Livestock

Between 1995 and 2010, cattle livestock decreased by 56%, pig production by 45%, and sheep and goats by 35%. The fall in livestock numbers was the consequence of inefficient restructuring of large animal and bird farms and also the consequence of a lack of investment funds.

Livestock production in Moldova is very sensitive to climate changes, mainly through a lack or shortage of fodder.

Moldova is importing approximately 60 percent of its consumption of dairy and beef products with only 40 percent coming from domestic production.

Pork is the most extensively produced type of meat.In particular, pork is one of the most popular meat types for Moldovan customer since it is much more affordable than beef. Moldova’s pork production was 45 thousand tons in 2008 and increased by 85 percent in 2012, reaching 83 thousand tons.

Livestock by categories of producers (thousands capita)

  2011 2012 2013

Cows 154 144 134

Swine 479 439 410

Sheep and goats 906 838 824

Horses 52 50 47

Source: National Bureau of Statistics

2.2 Organic Agriculture

Currently, sales of organic processed foods are growing in Western Europe and now totals 23.8 billion EUR. Turning production over to organic products might revitalize the Moldovan food processing sector. Organic ag-riculture demands considerable manual work and non-use of chemicals. The governmental institutions are fully aware of the enormous export potential of organic agricultural and food products.

Moldova is the country in the Eastern Europe, Caucasus and Central Asia region (EECCA) with the most devel-oped organic sector, both commercially and in terms of policy and government involvement. The organic sector does not have a long history, but combined efforts by NGOs, private investors and the Government of Moldova has led Moldova exporting to the European Union around 81 thousand tons of organic products at a value of US $32 million in 2013.

The area of certified organic land represents almost 2 percent of the total arable area. Moldova has had an organic marketing law and the implementing regulations since 2006.

There are five certification bodies. What is striking is the high level of government sup-port, surpassing even many Western European govern-ments and featuring unique interventions such as govern-ment support for marketing 20 percent in value of domestic sales.

The Republic of Moldova holds many of the various prerequisites necessary for organic agro-food production development. These include the following: favorable con-ditions for the cultivation of a large spectrum of ecological and organic value-added ag-ricultural plants (vegetables, fruits and vines, essential and oleaginous crops, etc.); good ecological soil conditions, mainly on large reduction over the last 10 years of chemicals used in agriculture; protection of agricultural plants against diseases and pests, which can

-20 000

-10 000

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

ha

2012 2013201120102009200820072006200520042003

Evolution of organic surfaces (hectares) (2003-2013)

80168 250 715

734511755

16585

22102

32450

61280

51681

Source: National Bureau of Statistics

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Austria Switzerland Kazackhstan France Germany Romania Ukraine Belarus Russia

Top trading partners for exports, %

13.1 3.5 4.5

5.6

9.1 9.111.6

30

27 000

95 000

107 000

130 000

Import and Export of Livestock(thousands USD)

201220112010

ImportExport

38 00038 000

360 000

204 000

Import and Export of vegetables, fruits, grains (thousands USD)

201220112010

ImportExport

340 000

169 000

470 000

200 000

Source: Ministry of AgricultureSource: Ministry of Agriculture

0 tones

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

20112010 201320122009200820072006200520042003

Export of organic products (tons) (2003-2013)

1373 2486 36754165

675011600

14500 1540018650

32860

80817

ImportExport

Top trading partners for exports, %

be ensured through the applica-tion of integrated organic sys-tems and crop rotation etc.

Legislation has recently been har-monized with EU requirements, in particular there were regulations adopted on ecological principals and methods of processing or-ganic food production, inspec-tion and certification system in the field and organic food prod-ucts import and export. There are 168 companies registered at the Ministry of Agriculture and Food Industry owning lands with eco-logic production.

The market of Moldovan organic products is mainly the European Union. 95 percent of vegetal or-ganic products (cereals, oilseeds and protein, berries and herbs) are exported to Germany, Swit-zerland, Netherlands and Great Britain. In 2006 the export volume of organic products was 4165 tones, in 2013 it raised up to 80 thousand tones.

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2.3 International Trade

The agro-food trade had a positive balance of $204 million in 2013 and the share of agrifood exports in total exports is 41 percent (2013), while the share of agrifood imports in total imports stands at just 14 percent.

The main exports are wines and spirits, fruits and nuts, and oilseeds. The largest deficits are gener-ated by tobacco, fish products, flour, dairy, pastas, chocolate and meat.

The volume of agrifood imports has steadily in-creased in the last 3 years, from $591 million in 2010 to $688 million in 2011, to a record $783 mil-lion in 2013.

In 2013 agricultural and agro-food products were exported for a total value of US$ 988 million, which is by US$109 million more than in the previous year.

Within the total export of the Republic of Moldova in 2013 the largest share is held by foodstuffs, alco-holic drinks, tobacco and tobacco articles, which account for 60 percent (US$ 607 million).

Plant products totaled US$ 470 million or 51.3 per-cent of total exports.

Sun-flower seeds, walnuts, apples, grapes and soy beans account for the largest share.

Animal oils and fat forms totaled US$ 78 million or 8.44 percent of total export.

Exported livestock products totaled US$ 38 million or 4.1 percent of total value.

Over 2011, the Republic of Moldova imported agro-food products in a total value of US$ 700 million, surpassing by US$ 96 million, the 2010 indicator.

Within the total volume of imports, foodstuffs, alcoholic drinks, tobacco and tobacco products prevail, accounting for 51.73 percent representing US$ 360 million, growing by US$ 47 million from 2010.

Imported plant products totaled US$ 200 million, accounting for 30 percent of total imports.

Animal and plant oils and fat imported in the Repub-lic of Moldova constitute 3.6 percent of total imports and amount to US$ 25 million.

Imported livestock products totaled US$ 110 mil-lion, or 15.6 percent of total import value.

About 95 percent of the alcoholic products are ex-ported to foreign markets to around 55 countries.

Main markets:Commonwealth of Independent States (CIS)

• Russian Federation – 39.7 percent

• Belorussia – 32.6 percent

• Ukraine – 11.7 percent

• Kazahstan – 11.4 percent

European Union (EU)

• Poland – 38.3 percent

• Germany – 19.1 percent

• Czech Republic – 14.2 percent

• Romania – 12.6 percent

• Latvia – 3.2 percent

• UK – 2.0 percent

Other countries

• US – 14.2 percent

• Israel – 51.4 percent

To achieve stable growth in agro-food exports, there is a need to diversify and increase access to high value markets. Increasing exports to the EU would help achieve this diversification and provide access to higher-value markets. Meeting the requirements of global food supply chains is the challenge facing the agro-food sector and at the same time an op-portunity for international investors.

2.4 Investment Opportunities

I. Viticulture and Wine industry investment opportunities

1. Overview:

Wine industry represents an essential branch of the Moldovan economy. Approximately 15 percent of the national annual budget is formed of incomes gener-ated by viticulture. The total area of wine-producing plantations is 136 thousand hectares of vineyards, including 128 thousand hectares of yielding planta-tions. Over 95 percent are under private ownership. The annual vintage is 400 – 500 thousand tons. The Moldovan viticulture can be characterized as including a large variety of species, of which 90 percent repre-sents European ones. Around 10 percent of produced wine is consumed by the domestic market and 90 per-cent is exported, which amounts to US$ 148 million.

2. Advantages:

Geographical area: Natural factors of Moldova as a combination of a unique microclimate (sun, rain, and temperature), fertile soil, favorable geographical position on the same latitude as France and North-ern Italy.

Traditions: Viticulture and winemaking is an activity, that has been practiced in Moldova over millenia.

Novel variety: The wine produced in Ialoveni is ac-tually a Xeres wine, Prometheu is in fact a Porto wine, the Moldovan equivalent of Cahor are red and rosé dessert wines; “Pastoral,” “Bouquet of Moldo-va “ is made by the same technology as vermouth.

Unique collection: The collection of wine from Milestii Mici was included in the Guinness Book at

the category “The largest collection of quality wines in the world” (1.5 million bottles).

Quality: Distinct qualities: taste, flavor, properties, varieties.

3. Investment opportunities:

• Implementing product’s quality and safety standards in wineries

• Re-equipment of wineries

• Installation of seven zone laboratories to deter-mine products’ safety

• Installation of seven zone laboratories to deter-mine products’ safety

• Vineyard replanting

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II. Fruit and vegetables sector

1. Overview:

Fruit-growing represents one of the main strategic branches of the national econ-omy, accounting for around 40 percent of the agricultural production value. The area under fruit plantations in 2013 to-taled 122000 hectares. Regarding the vegetables production, the annual har-vest totals, on average, around 370 thousand tons. Within the total volume of vegetables, 4.7 percent of vegetables are exported as fresh vegetables, 8 per-cent are used as raw material within the processing industry, and 87.3 percent are traded in fresh condition in the domestic mar-ket. Vegetables are exported into 23 countries of the world.

2. Investment opportunities:

• Planting new orchards

• Fruit and vegetables storage

• Fruit and vegetables processing: Equipment and technology are required for storage, pack-aging and long distance transportation of fresh products; drying; instant freezing; canning; and the production of ingredients and additives.

III. Livestock sector

1. Overview:

Livestock is an important branch of agriculture, which is focused on breeding, reproduction, im-provement of breeds and exploitation of agricul-tural animals. Growing and improvement of animal breeds is necessary to ensure the population with animal products, of the food industry and light in-dustry – with raw material, of the agriculture – with organic fertilizers.

Livestock sector consists of the following main branches: breeding and fattening cattle, pigs, sheep and goats, poultry and horses.

Today, Moldova is importing approximately 60 percent of its consumption of dairy and meat products with only 40 percent coming from domestic production.

Renovation and operation of exiting farms.

The Republic of Moldova used to have a very strong livestock sector in the former USSR. Ex-isting infrastructure allow investors to start oper-ations in a very short time.

Cattle feed mills.

Cattle feed industry is now emerging but it still produced below potential. The demand for livestock feed of various types (dairy, fattening, bulls, etc) is definitely going to increase, thus cattle feed industry will probably grow.

Integrated meat production and processing.

Meat consumption is increasing rapidly. The only way to meet the demand of pork and beef in the country is conversion to feedlot fatten-ing. Thus feedlot fattening offers a good invest-ment opportunity. Furthermore, establishment of slaughterhouses and model butcheries with grading system and commercial cuts will add value. Moreover, there is tremendous scope and need to establish slaughterhouse by-product plants for further profitability.

3. Other strategic sectors for potential investment

a. Walnut: Moldova is one of the largest European exporters of walnuts shelled and nut kernel ac-counting for a total volume of 18 thousand tons and amounting to Euro 29.8 million. The walnut growing area constitutes around 9000 hectares, and is constantly expanding over the last years, especially through plantation of walnut industrial

Increasing productivity, especially in the small to medium scale production systems, is currently con-strained by lack of skills, knowledge and appropriate technologies compounded by insufficient access to markets, goods and services, and weak institutions. The result is that both production and productivity remain below potential.

2. Advantages:

• Strong local and especially regional demand growth.

• Potential to use existing infrastructure.

• Easy access to the forage base.

• Tradition in livestock sector.

• Potential to export to Middle East markets (e.g. Saudi Arabia, UAE)

• Large and growing local market with increasing animal product needs

• Fragmented and inefficient structure of current livestock producers

• Breed optimization and animal feed are key fac-tors to be solved for sustainable livestock

Investment opportunities:

Setting up new large breeding and fattening farms.

Large farms can serve as primary source of sale of genetically superior animals for new farms, dairy colonies (which have high turn over of an-imals) and export.

orchards. The sector has an enormous non-used potential in terms of extension of orchards’ areas. To make this potential efficient and operating, an adequate storing and processing infrastructure, as well as relevant market diversification are needed.

b. Sugar Industry: The complex includes two main segments – sugar beet producers and produc-ers and traders of sugar beet seeds. Current-ly, sugar beet in Moldova is processed by two companies – JSC “Südzucker Moldova” and “Magd-Vest”, which supply sugar in the domes-tic market; the sugar surplus is exported. The annual domestic market demand totals around 85 – 90 thousand tons of sugar; the country ex-port potential is around 50 – 60 thousand tons.

c. Oleaginous Plants and Industry: The main ole-aginous plants in Moldova are the sunflow-er, soy and rape. The overall volume of these plants in 2011 totaled 530 thousand tons, 382 thousand tons, 111 thousand tons respective-ly. The oleaginous sector includes around 542 small- and medium-sized enterprises (oil mills), which annually process approximately 55 – 60 thousand tons of sun-flower, partially satisfying the domestic market demand. The JSC “Floar-ea-Soarelui” is the main oil producer (of both sun-flower and soy oil), having a production ca-pacity of 262 thousand tons per year.

d. Organic farming: The rich soils, and skilled, rel-atively cheap and available labor present oppor-tunities to take advantage of the increase in de-mand for organic farming products in western markets, and this provides a huge opportunity for investment in this area.

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IV. Why invest in the agricultural sector in Moldova?

1. Arguments that make Moldova attractive for investment

The main advantages:

Encouraging investments through a subsidy fund, which is very competitive and covers the entire spectrum of agricultural activities.

Moldova’s location: access to EU and CIS mar-kets (free trade regimes and geographical loca-tion);

The fertile soil and favorable climate conditions: the main conditions required to develop inten-sive agriculture;

High efficiency of a profitable agro-industrial sector, which significantly exceeds the efficiency ratio of neighboring countries;

Large popularity of Moldovan brands in CIS markets: high quality of Moldovan products rec-ognized in all former USSR regions;

Ecologically pure products in Moldova: the products in Moldova have remarkable gustative quality provided at exclusively accessible prices;

The production capacities of the agro-industrial complex are located at short distance from raw material location and are placed uniformly within the country territory;

Extremely competitive labor force and availabili-ty of qualified staff;

Possibility of setting up joint ventures;

Potential to develop the local market;

Example of foreign investors in Moldova

Name Subsector FDI Origin Comments

Sauron Grapes and fruitnursery USA

Table grapes and stone fruit seedlings. First one to introduce seedless table grapes to the local market

Interconsult MD Strawberryproduction

The Nether-lands

Commercial scale strawberry growing operation using

Reforma Fruit’n’Nuts

Dried fruit andvegetables Germany Largest exporter of dried fruit and vegetables

Natur BravoFruit and vege-tableprocessing

USA Canning and juice making business operating three processing facilities

Cardico Walnuts Greece Part of a larger Europeanprocessing chain

Pinto-Mold Walnuts Austria Processor and exporter

Bienenhaus Honey Germany Modern honey processing and export facility

Lactalis-Alba Dairy France Part of a larger dairy chain in Europe and CIS

Südzucker Moldova

Sugar process-ing Germany

Largest sugar maker in the nation with 3 different processing facilities aroundthe country

Kelly Grains Elevator

Grain growing and processing USA Grain storage and export

Floarea Soarelui Oil press USA

Largest producer of sunflower oil in the country holding a significant share of the local market and considerable export operations.

Agrimatco Input supply Middle East Member of an international

input supply business

800

1 500

1 600

5 500

6 000

14 000

Approximative price per hectare of arable land in some European countries (EUR)

14 00012 00010 0008 0006 0004 0002 000

Republic of Moldova

Ukraine

Chech Republic

Romania

Slovakia

Netherlands

2120

3. Example of a Success story

Südzucker

Südzucker AG is a very well known German com-pany. With a production of some 5 million tons, Südzucker Group is the market leader in the sugar sector. The Group’s European factories are based in France, Belgium, Germany, Austria, Poland, the Czech Republic, Slovakia, Romania, Hungary and Moldova. It operates 43 sugar factories and 2 refineries.

In 2001, on the basis of the earlier purchase of Mol-dovan sugar processing facilities in Drochia, Alex-andreni and Falesti, Südzucker-Moldova JSC was established. Südzucker-Moldova JSC produced 83,000 tons of sugar last year, 56 percent of the production of the Moldovan sugar sector. In mone-tary terms, Sudzuker’s annual turnover in Moldova grew to € 37 million during the last year of oper-ation. When Südzucker AG came to Moldova, the sugar industry was in such a dismal state that many questioned whether Moldova even needed a sugar industry. Before investing, the company established that there was a need to introduce new manage-ment systems into the industry. It allocated the man-agement of key processes to several professional managers who valued openness and transparency –values the company prizes highly. The company set constructive relations with the public, growers and government authorities contributing to serious changes in legal frame conditions of the industry.

Soon after Südzucker’s arrival, thousands of people obtained stable employment. Understanding Mol-dovan realities, Südzucker undertook managerial and organizational steps to make sure its invest-ments reaped proper results within optimal time frames. In its effort to increase the quality of the raw material supplies, Südzucker completely changed the system. It established a raw material supply de-velopment division to help growers. The division or-ganizes regular workshops and field-days where the company and its suppliers discuss methods of ob-taining optimal yields. As a result of this approach, local growers have changed to new varieties of sug-ar beet and learned new pest management, main-tenance and harvesting technologies. Regardless of the fact that energy is slightly cheaper in Ukraine and Russia, Südzucker has managed to make the product competitive in these markets. In a little over five years, the company invested over €12 million in renovating production, marketing and institutional facilities.

Millstream dairy

In 2010, Millstream started to develop a plan for set-ting up a dairy farm in Moldova. Years of preparation have finally led in 2013 to the start of a dairy farm with the purpose to have 250 cows on average at full production.

In the village Goleni (in the region of Edinet in the north of Moldova) the yard and buildings of an old state farm was purchased, with the objective to develop a modern dairy farm. For this purpose, a totally new dairy stable has been constructed with a local construction company. This new stable is

based upon dutch design, machinery and equip-ment. Besides the farm and constructed buildings, Millstream Moldova has 250 ha of agricultural land at its disposal for growing crops to feed the cows.

At this moment the farm has 160 cows with the plan to grow to 250.

Main purpose for the dairy farm is to provide high quality milk during every month of the year. This high quality milk is collected by the major dairy produc-ers in Moldova.

2322

Danube

Sulina Branch

Sf. Gheorghe Branch

Kilia B

ranch

UKRAINE

FREE ECONOMIC ZONES

ROMANIA

Prut

Prut

Nistru

Nistru

Edinet

Cupcini

Donduseni

Drochia

Soroca

Floresti

Rișcani

GlodeniBALŢI

Falesti

Singerei

Soldanesti

Ribnita

Telenesti

Ungheni

Calarasi

Straseni

Orhei

Nisporeni

Hincesti

Causeni

Stefan Voda

TIRASPOLAnenii Noi

Leova

Cantemir COMRAT

Basarabeasca

Ceadir-Lunga

Taraclia

Giurgiulesti

Slobozia

Grigoriopol

Dubasari

Otaci

Rezina

CHIȘINAU

Cahul

Criuleni

Cricova

Cimișlia

Ialoveni

BENDER(TIGHINA)

Briceni

Ocnita

Mohyliv-Podolikyi

Odessa

Izmail

Bolgrad

Galati

Iasi

Bucharest, RO - 255kmConstanta, RO - 215kmCraiova, RO - 481kmGalati, RO - 10kmPitesti, RO - 370kmTimisoara, RO - 697kmMD: GiurgiulestiRO: Galati

Arad, RO - 654kmBucharest, RO - 407kmCraiova, RO - 641kmPitesti, RO - 531kmMD: LeuseniRO: Albita

MD: GiurgiuleștiUA: Reni

MD: MirnoeUA: Tabachi

MD: Ceadir- LungaUA: Novie Troiani

MD: BasarabeascaUA: Serpniovoe 1 MD: Tudora

UA: Starokazacie

Odessa, UA - 77kmMD: PalancaUA: Udobnoe

MD: VulcanestiUA: Vinogradovca

Iasi, RO - 24kmMD: SculeniRO: Sculeni

Baia Mare, RO - 443kmBototsani, RO - 55kmSuceava, RO - 97kmMD: CostestiRO: Stinca

MD: UnguriUA: Bronnita

Kaluga, RU - 1063kmKiev, UA - 385kmMohyliv-Podolskyi, UA - 0.5kmVinnytsa, UA - 120kmMD: OtaciUA: Mogiliov-Podolisc

MD: BriceniUA: Rososeni

Chernivtsi, UA - 105kmIvano-Frankovsk, UA - 215kmKatowice, PL - 768kmLviv, UA - 341kmTychy, PL - 771kmMD: CrivaUA: Mamaliga

FEZ GiurgiulestiInternational Free Port

FEZ Balti/ Subzone nr.4/ Straseni

FEZ Ungheni Business

FEZ Balti

FEZ Tvardita

FEZ Taraclia

FEZ Valcanes

FEZ Otaci Business

FEZ Marculesti hub airport

FEZ Expo Business Chisinau

M14

M14

M14

M14

M3

M3

M2

M2

M2

M2

M21

M4

M4

M4

M4

M4

M21

M3

M3

M3

22E

24

24C

24D

H10

P63

M21

M05

M05

M13

M13

M05

M05

M12

M12

H03

21

M14

M14M14

Braila

Focsani

Buzau

Kilia

SulinaTulcea

Belgorod Dnestrovsk

Dnestrovsky Liman

Razim lake

Co

nsta

nta

Ista

mb

ul

BLACKSEA

Danube

Sulina Branch

Sf. Gheorghe Branch

Kilia B

ranch

Prut

Prut

Nistru

Nistru

Mohyliv-Podolikyi

Odessa

Izmail

Bolgrad

Galati

Iasi

Braila

Focsani

Buzau

Kilia

SulinaTulcea

Belgorod Dnestrovsk

Dnestrovsky Liman

Razim

lake

Co

nsta

nta

Ista

mb

ul

BLACKSEA

Prut

Edineţ

Briceni

Drochia

Soroca

Florești

ȘoldăneștiBĂLŢI

Fălești

UngheniCălărași

Strășeni

Orhei

Dubăsari

Nisporeni

Căușeni

Anenii Noi

COMRAT

Vulcănești

Rezina

CHIȘINĂU

Cahul

Criuleni

Ialoveni

Ocniţa

Dondușeni

Rîșcani

GlodeniCostești

Sîngerei

Telenești

Hîncești

Ștefan Vodă

Leova

Cantemir

Basarabeasca

Ceadîr-Lunga

Tvardita

Taraclia

Otaci

Cimișlia

UKRAINE

ROMANIA

LEGENDShoes

Carpet

Garment & Knit wear

Furniture

Seat covers

Textile tapes

Rubber & Plastic injection

Steel casting

Pumps

Construction material

Electronics

Glass manufacturing

Cardboard manufacturing

Metal processing

Gravel & stone extraction

Energetics

Wires and harnesses

Ceramic tiles

Alcohol & bioethanol

Railway

Cannery

Sugar

Water bottling

Food products

Winery

Chocolate

Bakery

Cigarette and tobacco

Dairy products

Meat processing

Beer

Brandy production

Pharmaceuticals

SUCCESS STORIES &AGRO-INDUSTRIAL COMPETENCE

BMO Grup

24

The Moldovan Investment and Export Promotion Organization (MIEPO), in cooperation with the Prime Minister’s Office, is the prime source of information and assistance for potential in-vestors.

We provide tailored servic-es for potential investors throughout the investment de-cision process. We also sup-

port existing investors in ex-tending their operations.

Our team consists of perma-nent investment attraction staff, sectorial consultants, as well as regional officers. Com-bining our experience, we are able to provide you with infor-mation relevant for your deci-sion making, as well as links to businesses and government.

Contact us:www.invest.gov.mdinvest@gov.md

Craiova

Bursa

Istambul

Ankara

Cairo

Jerusalem

Sarajevo

Pitesti

Timisoara

Oradea

Mlada Boleslav

Kolin Lviv

Kiev

Balti

Chisinau

500km

1000km

1500km

2000km

ZaporojeEsztergom

Turin

Munchen

Valls

Pamplona

SindelfingenParis

Genk

Amsterdam

Bratislava

GyorGraz

Novo Mesto

Pecs

Katowice

Minsk

Wolfsburg

Leipzig

Bremen

Copenhagen

Poznan

Glewice

Kaluga

Nijnii NovgorodMoscow

Tolyatti

Sankt PetersburgStockholm

500k

m1000

km1500

km2000

km

500k

m

1000

km

1500

km

2000

km500km

1000km

1500km

500km 1000km 1500km 2000km

500km

1000km

1500km

2000km

MD

“ We picked Moldova as an investment destination due to the benefits the Gov-ernment offers to the foreign investors, the costs of production and the strategic market for us.

Main purpose for the dairy farm is to provide high quality milk during every month of the year.

Favorable climate and geographical conditions are factors that help us achieve our goals.”

Jim BoetMillstream Dairy

“ Moldova works hard on encouraging foreign companies to review it as a possible investment option.

Moldova offers competitive financial support for the investments into agriculture sector and very cooperative state institutions, and, what is most important for us, a market with a high potential”

Perebinos EcaterinaPukoven