Investment plan of the political summit for Moldova
Commentary by InfoMarket Agency
The European Political Community (EPC) Summit will attract the attention of the world media and will make Moldovamore noticeable. Although the Summit is a political event, it also has a tourism and investment mission. Most of more than forty heads of states and governments have never been to Moldova and they will be accompanied by delegations.
For our country, it is also an excellent opportunity to attract the attention of future foreign investors. And the existing projects can display the investment potential of Moldova in different areas. Just as banks open where their clients work, politicians lead their businesses that in turn apply for political support.
For more than 30 years of independence, Moldova has accumulated enough experience in working with foreign investors. Why is there so much talk about this? Because in the region there is a tough struggle to attract foreign capital, which creates new jobs and comes with its new technologies, enriching the economic development of the country.
There are 44 countries in the EPC and several more are expected to join during the Summit. For many countries, Moldova, as a country where their investors work, is familiar. But some are not represented in our country at all. At least for now.
Today there is an occasion to mention a number of successful projects, both those that have been operating for decades, and those that have come to Moldova relatively recently. Let us say right away: we will try to cover different sectors of the economy, from among the EPC member countries, and it is not possible to name the most representative of them along with all investors.
Communications and technology. France Telecom came to Moldova in 1998 under the Voxtel brand. Since 2007 the company was renamed to Orange Moldova. Having made and continuing to make multimillion investments, today the company, which employs over 700 people, holds a leading position in the mobile telephony and mobile Internet market. The annual turnover of Orange Moldova exceeds 3 billion lei (157 million euro).
Agriculture. Südzucker (Germany). Südzucker Moldova has started its activity in 2001 and is a leader in sugar beet industry. The company has acquired and modernized several sugar mills. It also actively works with agricultural producers, training them and providing modern technologies to increase the sugar beet yield. During its activity, Südzucker Moldova invested more than 60 million euros in the modernization of sugar production, the "Green Energy" project, the technical and technological development of sugar beet farming. Moldovan sugar is sold in the European Union and CIS countries. The average number of Südzucker Moldova employees - almost fifty people, the annual turnover - about 1 billion lei (52 million euros).
Energy. In 2000, Union Fenosa (Spain) bought three power distribution networks in Moldova for $25.3 million during the privatization. In 2009, Spain's Union Fenosa was acquired by Gaz Natural and the Moldovan company was renamed Gaz Natural Fenosa. In total, Gaz Natural Fenosa invested over 300 million euros between the company's privatization and sale in 2019. In 2019, it was announced that the company had been acquired by a London-based company under the international group Duet Private Equity Limited, which renamed the Moldovan asset Premier Energy. The company's turnover in 2021 was 4.3 billion, and it employs about a hundred people. At the same time, the company serves almost 836 thousand electricity consumers.
Insurance. Grazer Wechselseitige Versicherung (Austria). Having opened in Moldova in 2004 as a life insurance company, Grawe Asigurare de Viaţă brought to the country almost two centuries of experience of its investor. Strengthening itself in the Moldovan market, in 2009 it acquired a local insurer, Carat, through a takeover. This allowed the renamed GRAWE Carat Asigurari to be the only one in Moldova to offer a full range of life and general insurance products. With 1.3 billion lei (67 million euro) in assets, the company is the leader in the Moldovan insurance market.
Food industry. Lactalis International (France). Lactalis-Alba opened in 1999, having bought first the Hincesti dairy factory and subsequently the Soroca Cheese Factory. The most famous brand in the world of this group is Prezident. The turnover of these enterprises, which employ almost 300 people, is about 0.6 billion lei (31 million euros).
Logistics. Since 1998, French investor Frank Arif is operating in Moldova. His company Le Bridge is a large operator of logistics and distribution of a wide range of goods. It is a company with 430 employees, with a turnover of 1.7 billion lei (88 million euro). It is also the largest producer and exporter of Moldovan ice cream. The Sandriliona ice-cream factory exports up to 90% of its products to the Middle East, West Africa and, starting in 2019, to Europe. The turnover of the company is over 0.2 billion lei (10 million euros), and it employs over 220 people.
The banking sector. This is a separate topic. The fact is that 10 out of 11 commercial banks operating in Moldova are owned by foreign investors. The geography of the shareholders is very broad. Among the countries that are members of the European Political Community, there are Bulgaria, Hungary, Germany, Greece, Spain, Romania, and Estonia, not counting consortiums, venture investors and international banks.
There have been many events connected with the change of shareholders in the banking sphere in recent years. But speaking of strategic investors, we can mention several financial institutions. Mobiasbanca, founded by Moldovan shareholders in 1990, was sold in 2007 to Groupe Societe Generale (France). Twelve years later, in 2019, an institutional investor from Hungary came to the bank, buying it out from the French, and renamed it OTP Bank. The assets of the Moldovan OTP Bank are 18.6 billion lei, and it is a bank of systemic importance.
In 2022, the European personal finance group Iute Credit acquired a controlling stake in Moldova's Energbank. Interestingly, Iute Credit microfinance company was founded in 2008 by investors from Estonia, subsequently expanding its network to several Balkan countries. The acquisition of the bank is a transition to a new level. Energbank's assets are 2.8 billion lei.
But perhaps the most promising was the acquisition of Moldindconbank by Doverie United Holding AD (Bulgaria) in 2020. This holding is interesting because it grew out of a privatization fund. Doverie has been operating for more than 20 years and has managed to build a reputation as a serious investor.
The main shareholder of the holding is Sopharma, the largest group of companies in Bulgaria, which includes 50 legal entities. Sopharma shares are in demand on the Sofia Stock Exchange. However, in 2020 they were overtaken by the shares of Doverie Holding, which was due to the acquisition of Moldindconbank. Curiously, unlike the other two new investors of the aforementioned Moldovan banks, the Doverie holding previously did not have any financial or credit institution in its package. For two years, as it was said, the investor has invested over 10 million euros in the development and modernization of the bank. The assets of Moldindconbank - 26.5 billion lei (the second index in the system); it issued 1.09 million payment cards and has 158 subdivisions in the country (the first figures); it is a bank of systemic importance.
Retail trade. Kaufland (Germany, Romanian division). While starting the construction of the first stores, Kaufland declared an investment of 100 million euros in the first three years of activity, and the creation of more than 1 thousand new jobs within five years. The first two stores opened in 2019, expanding to nine nationwide by the end of 2022. At the end of 2021, the company had a turnover of 1.64 billion lei (84 million euros) and more than 700 employees.
Automotive Industry. Enterprises of the global automotive industry appeared in Moldova. In 2010 the Balti free economic zone was created, the first resident of which was the company Draexmaier (Germany) - producer of electrical equipment, cables and other products for global automotive brands, which has been working in Moldova since 2007. Later, other manufacturers of parts and components for the automotive industry - Gebauer & Griller, SEBN and others opened their plants in the Balti free economic zone. Over the 13 years of activity over 80 foreign companies have become residents of the Balti free economic zone, which have invested in total over 250 miillion euros and have created 10.2 thousand workplaces. The total volume of sales of the Balti free economic zone residents is 8.2 billion lei (420 million euro).
No matter how attractive Moldova would be to established investors, any country needs new investments - both monetary and technological. The country has an Agency for Investments, designed to reduce any possible bureaucratic obstacles to new investors. This is an indicator of serious attitude of the authorities to attract and protect foreign investors.
The European Political Community Summit is a unique occasion for Moldova to present the country to almost all European countries on its territory at once. The business follows the politicians, as well as the politicians are guided by the economic interests of their businessmen. It is necessary to create conditions so that the mutual interests match in the field of attraction and protection of investments in Moldova. // 31.05.2023 - InfoMarket.
