industrial GuidEof thE rEpublic of Moldova
2011
Industry of the Republic of Moldova 2001-2010
Within 2001 - 2010 in the economy of the Republic of Moldova there were significant structural changes, reflected in its shift from agriculture and industry to services (Pic. 1), due to the creation of favorable economic conditions for import expansion and reduction of the volume of own industrial production, associated with the loss of traditional outlets.During this period, the share of industry in GDP fell by 5.5% and in 2010 it made up 13.2%. The share of agriculture declined by 10.5% amounting to 11.9%. At the same time, the share of services sector in GDP reached 58.2%, having increased by 11.4% during this period.The structure of the industrial sector has also changed. The largest share in total industrial output in 2010 belonged to such activities as “production of current consumption goods” (56.6%) and “production of intermediate goods” (21.9%) (Table 1). 567 enterprises or 81.0% of the total number of industrial enterprises of the republic are engaged in the production of these types of products. However, the types of industrial activities that generate the largest value added in 2010 made up a rather low level, “ production of fixed assets” - 3.8%, and “production of durable goods” - 1.9%. Thus, the today’s industry of Moldova is characterized by prevailing production of current consumption goods, while investment production (production of fixed assets) has an insignificant component.In 2010 in the structure of industrial production the share of processing industry made up 82.7%, the share of production of electricity and heat, gas and water supply - 15.8%, while the share of extractive industry (quarrying) - 1.5%.45.0% of total production or 55.0% of the volume of production of the processing industry belong to food and beverages. At the same time, the share of so-called “non-food” industry made up 32.8% and 39.7%, respectively, which was due to the highest increase in sales volumes as compared to other industrial sectors, which in 2010 made up 21.6% as compared to 2009. For comparison, the sales volume in the production of food and beverages increased by 17.1%.The main sectors making up 2/3 of the volume of production of non-food industry (Pic. 2) are: textile and garment production, whose share in 2010 amounted to 17.3%; production of glass and glass articles - 25,1%; production of rubber and plastic articles - 8.4%; chemical production - 7.4%; furniture production and others - 6.1%; machinery and equipment production - 5.2%; leather and leather articles manufacture, footwear manufacture - 4.2 % and other types of production - 26.3%.Despite the decline in industrial production over the past decade the volume of export of the republic has increased 3 times, having reached 1.6 billion US Dollars (Pic. 3). The export growth rate in 2010 made up 23.0% as compared to 2009, which allowed reaching the pre-crisis level of exports. The volume of export of the Republic of Moldova to the European Union countries in 2010 made up 47.0% of total exports, while the share of exports to CIS countries made up 39.0%, respectively.The main types of Moldovan export products are food, soft drinks and liqueur, tobacco whose volume of shipments to foreign markets increased over 10 years 2.2 times, and in 2010 made up 20.0% in total exports; the volume of textile materials and textile articles made up 16.9%, respectively; electrical machinery and equipment - 11.0%; chemical industry products - 4.7%, furniture products, toys - 3.3%.In-depth analysis of structural changes, which occurred both in the economy as a whole and in the industrial sector, led to a radical revision of directions of economic development of the country, used instruments to implement economic policy and to definition of a new development paradigm - industrialization of the economy as the only intensive path of economic growth.
* The information is presented based on the data of industrial enterprises, included in the annual statistical analysis of industrial production.
Production output in 2010 (at current prices),
mln. MDL
2010/2009
%
Share in the total output, %
Number of enterprises
Industry, total 21644,5 107,0 100,0 697
Production of intermediate goods (except for energy) 4743,8 103,8 21,9 217
Production of fixed assets 811,6 107,4 3,8 81
Production of durable goods 417,1 101,7 1,9 29
Production of current consumption goods 12245,1 110,0 56,6 350
Activity and products related with the energy generation 3426,9 100,5 15,8 20
Table 1. Industrial output by main industrial groups
Рiс.1. Dynamics of the GDP structure, 2001-2010
Pic.2. Structure of the non-food industry sector,2010
Pic.3. Dynamics of export volume, 2006-2010
MAP OF GAS PIPELINES NEtwOrk IN tHE rEPUBLIC OF MOLDOVA
Active gas-main pipeline
Gas-main pipeline in perspective
Active district gas pipeline
District gas pipeline in perspective
Active gas measuring station (SMG)
Gas measuring unit in perspective (PMG)
Active gas compressor station (SСG)
Active gas distribution station (SDG)
Gas distribution station in perspective (SDG)
Active gas management unit
Gas management unit in perspective
Existing gas field
Legend
Rating of Moldova in Europeby the natural gas pricefor industrial consumers
(Euro/м3)
Romania 0,14United Kingdom 0,22Estonia 0,25Netherlands 0,25Latvia 0,27Bulgaria 0,27Czech Republic 0,28Belgium 0,29Poland 0,31Slovakia 0,31Finland 0,31Portugal 0,32Lithuania 0,33Ireland 0,33Macedonia 0,35Moldova 0,36Slovenia 0,38Croatia 0,38Germany 0,39Sweden 0,40
AustriaBelgium
from 1,7 to 0,28
GermanyDenmarkIrelandCyprusMaltaNetherlandsPortugalSlovakia
BulgariaUnited Kingdom HungaryGreeceLatvia
from 0,8 to 0,16
LithuaniaMoldovaPolandRomaniaSloveniaFinlandFranceCzech Republic
Estonia
Rating of Moldova in Europeby the electricity price for
industrial consumers (Euro/ kWh)
MAP OF ELECtrICIty NEtwOrk IN tHE rEPUBLIC OF MOLDOVA35-400 kV for 2010
Power plantsCombined heat and power plant (CHP)Hydroelectric power station (HPS)Transformer substations (TS)400 kV330 kV110/35/10-6 kV110/10-6 kV
Overhead power lines750 kV400 kV330 kV 110 kV
Construction of overhead PL 330 kVRenewal of PL 35 kVConstruction of overhead PL 110 kVRemoval of overhead PL 110 kVRecovery of TS
Legend
Industrial sector of Moldova in investment-favored treatment
In order to change the paradigm of economic development, the Government of the Republic of Mol-dova aims for the industrialization of the economy based on investment, exports and competitiveness.
Representing the basis for long-term economic development, the set goal can be achieved by ensur-ing such fundamental assumptions as the creation of a favorable investment climate, attraction of foreign direct investments in retechnologization of production processes and entry of export-oriented products to major international markets.
Investment-favored mechanisms are being continuously developed in the republic, as evidenced by the fact that 89 countries, including EU members, have already invested in the Moldovan economy.
As a result, foreign direct investment flow increased from 74 mln. US dollars in 2003 to 713 mln. US dollars in 2008. But, because of consequences of the global financial crisis this indicator fell to 199 mln. US dollars in 2010. The amount of capital, invested by the European Union countries, makes up about 75% of the total foreign direct investments.
At the same time, for the period from 2001 to 2010, the foreign investment amount increased fivefold from 549 mln. US dollars in 2001 to more than 2.8 billion US dollars in 2010.
Thus, during this period, the volume of Moldovan export increased almost 3-fold, having reached 1.6 billion US dollars, of which the export of Moldovan products in 2010 made up 47.2% in EU countries and 39,4% in the CIS countries.
Today, Moldova’s trade policy is aimed at extending markets, using its favorable location in the geo-economic space as a benefit.
Being an active member of the Commonwealth of Independent States over 20 years, the Republic of Moldova signed bilateral free trade agreements with all CIS member states, thus ensuring duty-free import of Moldovan products to markets of the Commonwealth countries.
Also, the Republic of Moldova signed bilateral agreements on industrial cooperation with the Russian Federation, Republic of Belarus and Ukraine.
Since July 2001, the Republic of Moldova is a member of the World Trade Organization, which allows extending the markets of Moldovan goods, based on WTO rules on non-discrimination.
Also, as a result of the unilateral granting by the European Union of autonomous trade preferences, the customs duties on imports to the EU of industrial and most agricultural goods of Moldovan origin were abolished.
It should be mentioned that Moldova is the only CIS country, which has reached such a level of coop-eration with the EU, representing an indisputable advantage for business.
Besides, Moldova is a member of the Central European Free Trade Agreement, ensuring free access of goods, produced in the country, to the markets of Croatia, Macedonia, Bosnia and Herzegovina, Serbia, Montenegro, Albania and Kosovo.
Thus, the opportunities offered to business in Moldova, provide access to the vast market for goods totaling over 800 million people and contribute to strengthening trade and economic relations be-tween East and West.
The Republic of Moldova has a competent and skilled workforce, which is at the same time competitive by the remuneration as compared to other countries in the region (1.1 Euro/hour, as compared to 2 Euro/hour in Ukraine, and 4 Euro/hour in Romania and Bulgaria).
The tax legislation in Moldova provides for a wide range of benefits provided to business, including a VAT refund on tangible assets and services, related to long-term investments; exemption from VAT and customs duties on assets in case of their inclusion in the company’s authorized capital; the opportunity to avoid double taxation in accordance with international agreements, signed with 39 states etc.
The Public-Private Partnership mechanism allows providing services to the society, partially or fully using tools and new technologies of private companies with transfer of the construction, opera-tion and financing risk to the private sector (Law on public-private partnership No. 179-XVI of July 10, 2008).
Free Economic Zones provide significant benefits for entrepreneurs that export the products, manu-factured by them (Law on Free Economic Zones No. 440-XV of July 27, 2001). There are 7 FEZ, cre-ated in the republic, where 159 resident enterprises were registered in 2010. The total amount of investments in the development of FEZ for the entire period of their operation made up 129 mln. US dollars, of which 12.3 mln.US dollars in 2010. Tax and customs regimes, similar to the regime of the free economic zone also provides for Giurgiulesti International Free Port and Free International Airport “Marculesti”.
The condition for the activity as a FEZ resident is the industrial production of export-oriented goods and thereto related services, for which the resident has the right to use production and technical infrastructure of FEZ and a wide range of tax benefits: exemption from VAT and excise duties, exemp-tion from customs duties, an incentive of 50 % of the income tax rate established in the Republic of Moldova, etc.
The adoption of the new Law on Industrial Parks (No. 182 of July 15, 2010) created entirely new conditions for attracting investments in the development of the industrial sector of economy. Thus, within one year after adoption of this law on the initiative and with the support of the Ministry of Economy of the Republic of Moldova 13 feasibility studies were developed on the creation and de-velopment of industrial parks, based on various types of property in different regions of the country.
When creating and developing the activity of industrial parks, investors are provided with the state support both in the process of obtaining authorizations to operate (the principle of “single window”), and in the process of park functioning: granting of special benefits for use and redemption of assets, optimization of government inspections of the residents’ activity, as well as support of investment projects of national significance.
In addition, three research and technology parks and an innovation incubator are established in the republic, where development works in the field of energy and electronics take place, as well as projects in the areas of intensive agriculture and creation of ecological products and other projects are being conducted.
The Moldovan government is open towards investors and is ready to provide assistance for the implementation of effective and mutually beneficial investment projects on the develop-ment of the Moldovan economy.
Spain Portugal
France
Italy
Germany
Ireland
Serbia
Czech Rep.
Poland Neth.
Lux.
Belgium
Switz. Austria Hungary Romania
Bulgaria
Turkey Greece
Alb.
Russia
Finland
Sweden
Norway
Faroe Islands
Denmark
Liech.
(Denmark)
Estonia
Latvia
Lithuania
Belarus
Ukraine
Monaco
San Marino
Russia
Slovakia
U.K.
Bos.& Herz.
Mace.
Mont.
Slovenia
Croatia
Moldova Moldova
industrial potEntial of thE rEpublic of Moldova (types of production, industrial parks, free economic zones,
the largest industrial enterprisesinnovation incubators, scientific-technological parks, with sales over 3 million. MDL)*
* The information is presented without the data of enterprises and organizations from the left bank of the Dniester and Bender municipality.
Free economic zones (FEZ) FEZ „Otaci-Business”, Ocnita district FEZ „Balti”, Balti municipalityFEZ „Ungheni-Business”, Ungheni district FEZ „Expo-Business Chisinau”, Chisinau municipality FEZ „Tvardita”, Taraclia district FEZ „Taraclia”, Taraclia districtFEZ „Vulcanes”, Vulcanesti district
Research and technology parks and innovation incubators (RTP and II)
RTP „Academica”, Chisinau municipalityRTP „Inagro”, Chisinau municipalityRTP „Micronanoteh”, Chisinau municipalityII „Inovatorul”, Chisinau municipality
Industrial parks (IP) (which obtained the title of Industrial Park)
IP „Bioenergagro”, Drochia district IP „Tracom”, Chisinau municipalityIP „Cimislia”, Cimislia district
Industrial park projectsIP „Dacia”, Ocnita districtIP „Edinet”, Edinet districtIP „Rаut”, Balti municipalityIP „Bаlti”, Balti municipalityIP „UMS Falesti”, Falesti districtIP „CAAN”, Straseni districtIP „Hincesti”, Hincesti districtIP „Cainari”, Causeni districtIP „Cania”, Cantemir districtIP „International Industrial Park”, Ialoveni district
Production output per 1 person (mln. MDL /person)
0 - 3,0
3,1 - 6,0
6,1 - 15,0
15,1 - 19,0
capital
municipality
city-residence
BALTI municipality (TOP 10)“DRA DRAEXLMAIER AUTOMOTIVE” Ltd.
“FLOAREA SOARELUI” (SUNFLOWER) JSC
JV “KNAUF-GIPS” Ltd.
“RĂUT” JSC
JV “BALTEANCA” JSC
“MOLDAGROTEHNICA” JSC
JV “FASHION GROUP” Ltd.
CFC “EXCEL MANUFACTURING” Ltd.
“INCOMLAC” JSC
“BASARABIA-NORD” JSC
Industrial parks
Free economic zones
Research and technology parks and innovation incubators
Light industry
Machinery and equipment industry
Electronic industry
Food industry
Beverage industry
Tobacco industry
Metallurgy
Production of building materials
Glass industry
Furniture industry
Chemical industry
Production of paper and paperboard
Extractive industry
Energy industry
Briceni
Ocnita
Edinet
Donduseni
Riscani
Drochia
Soroca
Glodeni
Floresti
Balti
Singerei
Telenesti
Falesti
Soldanesti
Rezina
UngheniCalarasi
Orhei
Nisporeni
Straseni Criuleni
Cocieri
Hincesti
Ialoveni
Leova
Cimislia
Comrat
CantemirBasarabeasca
Cahul
Causeni
Tiraspol
Anenii Noi
Chisinau
Stefan Voda
Taraclia
AUTONOMOUS TERRITORIAL
UNIT GAGAUZIA
GAGAUZIA
GAGAUZIA
JV “GLASS CONTAINER COMPANY” JSC
JV “INFINITY INC” Ltd.
“IONEL” JSC, Garment factory
“ZORILE” JSC
“CONFORT” Ltd.
SE «FABRICA DE STICLĂ DIN CHIŞINĂU»
CFC “F.A. FASHION” Ltd.
“MACON” JSC
“MOLDOVAHIDROMAŞ” JSC
CFC “EUROPLAST-CHIŞINĂU” Ltd.
“TUTUN-CTC” JSC
JV “SANIN” Ltd.
“SUPRATEN” JSC
“FARMAPRIM” Ltd.
JV “M. EFES VITANTA MOLDOVA BREWERZ” JSC
JV “MICHAILIDES TOBACCO MOLDOVA”
“FRANZELUŢA” JSC
“JLC” JSC
“BUCURIA” JSC
“PEGAS” Ltd.
“CARDBOARD MILL” JSC
CHISINAU municipality (TOP 20)
“FILATURA UNGHENI” Ltd.
“MOLDABELA” Ltd.
CFC “ECOVIT” Ltd.
CFC “PINTO-MOLD” Ltd.
“CAVIO” Ltd.
UNGHENI District center (TOP 5)
ASPA JSC
“PARSE-TUTUN” Ltd.
JV “CHATEAU VARTELY” Ltd.
“BRODETCHI” Ltd.
“ORLACT” JSC
ORHEI District center (TOP 5)
“TRICON” JSC
“CAHULPAN” JSC
JV “VINIA TRAIAN” JSC
“VIERUL-VIN” Ltd.
JV “GRAPE VALLEZ” Ltd.
CAHUL District center (TOP 5)
CFC “ASENA-TEXTIL”Ltd.
CFC “DK-INTERTRADE” Ltd.
JV “VINARIA BOSTOVAN” Ltd.
“CIOC-MAIDAN-VIN” JSC
“INVINPROM” Ltd.
ATU Gagauzia (TOP 5)
ChisinauBaltiComrat
Legend
Tvardita
Spain Portugal
France
Italy
Germany
Ireland
Serbia
Czech Re p.
Poland
Neth.
Lux.
Belgium
Switz.
Austria
Hung ary Romania
Bulgaria
Turkey
Greece
Alb.
Russia
Finland
Sweden
Norway
Faroe Islands
Denmark
Liech.
(Denmark)
Estonia
Latvia
Lithuania
Belarus
Ukraine
Monaco
San Marino
Russia
Slovakia
U.K.
Bos.& Herz.
Mace.
Mont.
Slovenia
Croatia
Moldova
Moldova
location of EntrEprisEs With forEiGn capital and of thE JoinEd vEnturEs
(with sales over 3 million U.S. dollars, 2010)*
CFC Wine and cognac plant “Zolotoy Aist” (Golden Stork) Ltd.
CFC Wine and cognac plant “Moldavskiy STANDART” Ltd.
JV “Soroca cheese-making plant” JSC
CFC - Company with Foreign CapitalJV - Joint VentureJSC - Joint-Stock Company Ltd. – Limited Liability Company
CFC “KNAUF-GIPS” Ltd.
JSC “LAFARGE CIMENT (MOLDOVA)”
JV “MAGT-VEST” Ltd.
CFC Canning factory “ECOVIT” Ltd.
JV “PURATOS-MOLD” Ltd.
JV “SUDZUCKER-MOLDOVA” JSC
JV «EFES VITANTA MOLDOVA BREWERY» JSC
JV “LION-GRI” Ltd.
JV Chisinau Factory of Sparkling and Fine Wines «VISMOS» JSC
JV “SALCUTA” Ltd.
CFC «ICATEX-PRO» Ltd
CFC “CRISTINA MOLD-ROM SIMPEX” Ltd.
CFC “STAG TEXTILE INDUSTRY”
CFC “ICATEX-PRO” Ltd.
CFC “DRAEXLMAIER AUTOMOTIVE” Ltd.
CFC “LAPMOL” Ltd.
JV «MICHAILIDES TOBACCO MOLDOVA»
JV «TOPAZ»
JV «FIRSTLINE» Ltd.
JV «SANIN» Ltd.
JV «GLASS CONTAINER COMPANY»
JV «GLASS CONTAINER PRIM» JSC
more 110 000
61 000 - 110 000
41 000 - 60 000
19 000 - 40 000
The economically active population, pers. (men from 16 to 61 years) (women from 16 to 56 years)
CFC “DK-INTERTRADE” Ltd.
CFC “ASENA-TEXTIL” Ltd.
JV “VINARIA BOSTAVAN” Ltd.
JV “BALTEANCA” JSC
CFC «F.A. FASHION» Ltd.
CFC “OILTECH” Ltd.
CFC “NEFIS” Ltd.
JV “INFINITY INC”
CFC “BETON-LUX” Ltd.
Legend
* The information is presented without the data of enterprises and organizations from the left bank of the Dniester and Bender municipality.
JV “CHATEAU VARTELY” Ltd.
JV “VINIA TRAIAN” JSC
CFC “RENAISSAANCE-PERFECT” Ltd.
CFC «EUROPLAST-CHISINAU» Ltd.
CFC “SUVOROV-VIN” Ltd.
JV “FARMACO” JSC
CFC “COCA-COLA IMBUTELIERE CHISINAU” Ltd.
CFC “WINE INTERNATIONAL PROJECT” Ltd.
MAP OF trANSPOrt rOUtES IN tHE rEPUBLIC OF MOLDOVA
Dear all,
Over the past 20 years, Moldova has travelled a long and difficult way. We managed to establish workable relationships not only with the CIS countries, but also with the countries of South-Eastern Europe and the European Union. The value of this experience is that at present, by combined efforts, we are able to ensure stability and economic development of the vast region.
Further economic growth will be accompanied by a revival of investment processes, including by increasing the flow of foreign direct investments in development of production, agriculture and export - a reality that needs to be fed by the appropriate tools of fiscal and trade policy.
The priority in this process is not only the gradual reduction of trade barriers, but also the simplification and improvement of the existing legislation in terms of investment attraction, elimination of the existing bureaucratic barriers to economic cooperation.
Currently, however, it is impossible to speak about a sustainable economic development without the appropriate attention in the field of innovations. In this regard, we aim at building an effective mechanism of interaction with the view to determining mutually beneficial innovative projects with a high degree of readiness for possible commercialization.
In 2010 a new law on industrial parks was adopted in Moldova. This law regulates the process of establishment and operation of industrial parks under preferential terms, provided by the state. Establishment of industrial parks aims at attracting local and foreign investments and creating competitive industrial sectors on the basis of modern innovative technologies. As the world practice shows, the development of industrial parks is an effective way to attract investments and the Republic of Moldova is open to investors.
Besides, it is already becoming clear now that it is impossible to implement the global infrastructure projects solely by the state or the private sector, but only a wise balanced investment policy making, using the strengths of public-private partnership will allow us to achieve optimal results.
It is important to note that the development of mutually beneficial cooperation is defined by the Republic of Moldova as one of the most important goals, which together with our European integration aspirations, is a successful formula for regional policy, providing both the Republic of Moldova and its Eastern and Western partners, with a constructive and long-term platform for substantial, dynamic and consistent foreign economic policy making, designed to serve the national interests of our country.
In this sense, having economic benefits, the Republic of Moldova is an advantageous investment platform for all stakeholders and is ready to implement ambitious economic projects.
With best wishes for a fruitful cooperation, Deputy Prime Minister, Minister of Economy
Valerii LAZAR
Contact information:Ministry of Economy of the Republic of Moldova
МD-2033, 1, Piata Marii Adunari Nationale, Chisinau Tel.: (+373 22) 25 01 07, fax: (+373 22) 23 40 64
Tel.: (+373 22) 23 77 43, fax: (+373 22) 25 06 73 www.mec.gov.md
Agency for Innovation and Technology TransferMD-2028, 5 Miorita Str., Chisinau
Tel./fax: (+373 22) 88 25 60E-mail: [email protected] www.aitt.md
Moldovan Export Promotion Organization 65 Alexei Mateevici Str., Chisinau
Tel.: (+373 22) 27 36 54, fax: (+373 22) 22 43 10 www.miepo.md
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