Introduction to the Automotive Sector. Republic of Moldova

Size: px

Start display at page:

Download "Introduction to the Automotive Sector. Republic of Moldova"

Neal Walsh
6 years ago
Views:

1 Introduction to the Automotive Sector Republic of Moldova

2 FREE TRADE AGREEMENTS Population: 3.55 million Area: 33,846 2 GDP per capita at PPP: 2,998 EUR Economic growth 2013: 8.9% Inflation: 5% Employment rate in Moldova: 39.3% (2013) increased, versus 38.4% (2012) Corporate ta: 12%, 6% in Free Economic Zones, 3% in Free Port Labor costs (gross salary): averaging 250 EUR/month Full load labor cost: cca. 2 EUR/hour Proimity 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 DCFTA (Deep and Comprehensive Free Trade Area) 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) million; GUAM Organization for Democracy and Economic Development - 60 million. FTA with Turkey - 80 million 880 million Customers duty-free market NOR SWE FIN RUS EST LVA LTU GBR EU DEU CZE POL BLR UKR CIS FRA ITA AUS HUN CEFTA ROM BGR GUAM KAZ UZB ESP GRC TUR

3 Contents Industrial Tradition in Moldova...4 Current Automotive Industry in Moldova...4 Top Reasons to Invest in Automotive Sector in Moldova...5 What can Moldova offer...5 Human Resources are one of the most important Assets of Moldova...5 Labor Cost vs. Production Cost...6 Utility Costs are lower than in the Region...6 Location, Location, Location...7 What can you produce...8 Automotive Supply Chain structure...8 Attractive opportunities for your Investment - Free Economic Zones...9 Free Economic Zones Map...10 Success Stories and Industrial Competences...11

Industrial Tradition in Moldova Moldova s modern automotive industry foundations build on its strong industrial past. The share of industry in Moldova s GDP represented 60% until the 1990s.

4 Industrial Tradition in Moldova Moldova s modern automotive industry foundations build on its strong industrial past. The share of industry in Moldova s GDP represented 60% until the 1990s. Then, Moldova was one of the important creators of industrial products among the CIS states and now it revives. Moldova was active in 97 branches of production. 558 industrial enterprises, 21 R&D institutions and 392 thousand workers were part of the industry. Moldova successfully eported 90 percent of its produce in the machine building industry which represented 20 percent of total industry output. The foundations of local industry were companies that produced a large variety of products, from TV sets, refrigerators, washing machines to tractors, and eported them in over 60 different countries. Here are a few more eamples from the history of industry: The plant Mezon was one of the 5 biggest microelectronic companies of the e-ussr, which produced a volume of 130 million integrated circuits per year; The plant Răut produced comple hydro-acoustic devices for vessels security; radio-telemetric devices, cathode protection assemblies (stations). The plant Moldovahidromash develops and produces Hermetic pumps for the most severe toic or hazardous applications, which require zero leakage tolerance, being the leading supplier to CIS market. The fueling Station of the Baikonur Cosmodrome, and space rockets are equipped with Moldovan pumps. Current Automotive Industry in Moldova Nowadays, the automotive industry is a key growing sector for the Moldovan economy. This is due to an increased focus on the unused industrial potential of Moldova and the maintained industrial orientation in the education system (Technical University, technical colleges, vocational schools). The total eport in the industry was over EUR 179 million (in 2013), and shows a positive growth trend of cca. 30% compared to 2012 (EUR 137 million). This represents appro. 9.8% from the total eports in The Moldovan automotive industry provides over 6,200 direct jobs (2013) and shows a positive growth compared to 5,100 direct jobs (2012). Up to now, large direct investors prefer to locate themselves in Moldova s Free Economic Zones (FEZ), which represent an ecellent location for industrial development and production relocation oriented for eports. Production concentrates on cables, wiring harnesses for cars, car seat covers, articles of furniture, carpets, and wool yarn, tetile weaving, plastic molding injection, metal processing, electronics and electronic components and assembling. This production is eecuted in Tier 1 and 2 supplier plants, as well as local subcontractor companies. Important eamples would be Lear Corporation, Drälmaier Group, Gebauer & Griller, Romina Cablaggi, Elektromanufacturing, and Tommy Te. The plant Hidroinpe develops and produces hydraulic pumps. The plant Hidropompa develops and produces submersible pumps. 4

5 Top Reasons to Invest in Automotive Sector in Moldova Competitive and welleducated labor force, which is the result of Moldova s industrial past and of a comprehensive education system. At the same time, Moldova features the lowest labor costs in the region. Just in time / Just in sequence delivery to EU, CEFTA and CIS markets: Geographical proimity and Trade Agreements with EU and CIS countries makes logistics fast, easy and reliable in all your markets. Free Economic Zones are ecellent manufacturing platforms for automotive growing supplier base. They offer important incentives, preferences, and state guarantees. What can Moldova offer Human Resources are one of the most important Assets of Moldova Moldova offers an active, educated and multilingual workforce. It is a melting pot of several nationalities, such as Romanians, Russians and Ukrainians and others. There is one official language Romanian, however there are more languages in use: Russian, English, Ukrainian, Bulgarian and Gagauzian, which is close to Turkish. In addition, many Moldovans speak French, Italian and German. The population of Moldova has a size of approimately 3.5 million people, cca. 2.9 million above 15 years and cca. 1.2 million represent the active labor force. The unemployment rate is 5.2% in A considerable additional potential labor force are Moldovan migrants who are willing to return back to Moldova when can they find a job. Well-educated young students, in sector-specific faculties, are available to work in companies and increase their productivity. Moldova has strong technical faculties and specific colleges e.g. Chisinau and Balti Polytechnic Colleges, Technical College of UTM, Microelectronics College, Informatics College, etc. Higher Education Institutions (2012/2013) Cycle l Cycle ll Economic sciences Law Engineering and Engineering activities Humanitarian sciences Manufacturing technology and processing Chemical technology and biotechnologies Architecture and construction Real sciences Colleges (2012/2013) Graduates Economics 4483 Informatics (Information Technologies) 1552 Electrotechnics and energetics 1125 Mechanics 1520 Transport 2519 Electronics and communication 1003 Information systems and computers 1036 Food industry technology 1059 Apparel industry 997 Construction

6 No. of students enrolled in Universities (Engineering & Real Sciences) 2012/ Engineering No. of students 2012/ Vocational schools 1289 Real Sciences 2381 Science 3004 Engineering & Industrial Technologies 3753 Architectures& Construction 1439 Professional Lyceum 2360 Trade Schools Labor Cost vs. Production Cost Moldova commends a highly-skilled, competitively-priced workforce. Labor costs are among the lowest in the region and low enough to ensure cost-effective operations. This provides an attractive basis for successful business. Wages in Comparison - Monthly net wage in the economy (2013) 436 Serbia 395 Romania 394 China 340 Macedonia 217 Moldova Technical education is one of the strongest in Republic of Moldova, and it comprises best engineers known for their epertise. The number of engineers, managers and other specialists is sufficient to meet the investor s demand in most sectors. In contrast to other Eastern European countries, Moldova s unit labor cost is stable and and growing very slowly. Minute Production Costs in Euro Moldova 0.24 Bulgaria PR of China 0.27 Romania 0.3 Serbia 0.38 Turkey Source: National Bureau of Statistics of Moldova, Romania, Serbia, China. The gross wages in Moldova for workers in the industry sector range from 200 EUR-500 EUR, depending on the region and professional level of the employee, which is lower than the wages in the region. A newly-graduated university student of engineering could earn up to 800 EUR. Moldova s labor force combines low-cost with high productivity, thus reflecting the key factor for a strong business performance. The quality of the labor force also derives from the industrial eperience and history of Moldova, as it was one of the most industrialized republics in former Soviet times. Source: Spelleken Assoc. and Avanz Eperts Panel. Utility Costs are lower than in the Region Electricity Water Sewerage Gas 0.09 EUR/kWh EUR/m 3 EUR/m 3 EUR/m 3 Rental prices for industrial spaces: Moldova Romania Serbia EUR / m 2 EUR / m 2 EUR / m 2 In Free Economic Zones the rental price for production halls is even lower, accounting for 0.8 to 2 EUR per square meter. Prices of course vary depending on building conditions. 6

7 Location, Location, Location The outstanding location of Moldova and good transportation infrastructure provides easy access to both CIS and European Countries. The ecellent location enables just-in-sequence and just-in-time delivery of goods. Considering Germany, it takes 2 days for truck deliveries. It takes even less time to reach Eastern European countries. The longest Pan-European Corridor is passing through Moldova. Railway and road corridor IX from Helsinki (Finland), St. Petersburg (Russian Federation), Gomel (Belarus), Kiev (Ukraine), Chişinău (Moldova), Bucharest (Romania), Dimitrovgrad (Bulgaria), Aleandroupoli (Greece) crosses the country from North to South, linking it to key trade partners. Moldova is also linked to Corridor VII (Danube from Passau-Germany to the Black Sea) through the International Giurgiulesti Port, situated at of the River Danube. Giurgiulesti Port offers container, bulk and oil terminals and forwarding services. One way Transportation Time to Germany: Germany Moldova 2 days China (TranSib) 23 days China (Ship) 35 days A strategic location in close proimity to OEMs, Tier 1 and Tier 2 suppliers, enabling just-insequence and just-in-time delivery. No. of Country City Supplier Distance, borders Pitesti Dacia-Renault Romania Craiova Ford Poland Hungary Slovakia Bielsko Biala Fiat Gliwice GM/Opel Gyor Audi Esztergom Suzuki Trnava PSA Bratislava VW Zilina Hyndai/KIA Austria Graz MagnaSteyr Bosnia & Herzegovina Sarajevo VW Czech Republic Mlada Boleslav VW Kolin PSA/Toyota Slovenia Novo Mesto Renault Russia Taganrog Hyundai, GM Kaluga VW, PSA, Mitsubishi Sankt Petersburg Toyota,Nissan, Hyundai Nijnii Novgorod Toliatti Renault

8 What can you produce Moldova provides ecellent opportunities in 2nd Tier and 3rd Tier supplier production in the Automotive Industry. Automotive Supply Chain structure: 1st Tier (System Modul Supplier) 2nd Tier (Component Supplier) MOLDOVA 3rd Tier (Part-/Raw material Supplier) The combination of the knowledge pool, labor cost advantages, favorable ta and social security regimes, and close trade relations makes production competitive for products like: Already Produced in Moldovan Automotive Industry Already Produced in Moldovan General Industry Seat covers, tetile parts Airbags, safety belts, tetile tapes Cables and wires Wire harnesses Foams / Felts Plastic molding injection Carpets / Rugs Laminations (leather / cloth) Foundry Metal parts lathe Electronics, SMT 8

Attractive Opportunities for your Investment - Free Economic Zones: Most although not all automotive industry suppliers decide for a location within a Free Economic Zone.

9 Attractive Opportunities for your Investment - Free Economic Zones: Most although not all automotive industry suppliers decide for a location within a Free Economic Zone. There are 7 Free Economic Zones in Moldova, spread around throughout the country and located either near a border, or in big cities. The Free Economic Zones offer preferential conditions, and a dedicated customer-oriented administration. In addition, Giurgiulesti Port and the Marculesti Aiport offer conditions that are comparable to that within FEZ. Why Free Economic Zones for Automotive Industry? 1. FEZs are connected to all important transport routes and have access to all regions through the National and International roads; 2. Customs Office available on site: operating 7days/week; if necessary 24h/day; 3. Eemption from customs duties and ecise duties on goods imported into the FEZs and subsequently eported; Fiscal preferences for Investments: 1. Residents who invested in fied assets of the company and/or in FEZ infrastructure development a capital equivalent to at least $1 million are eempted from Corporate Income Taes for a period of 3 years, starting with net quarter after the mentioned investment volume was achieved; 2. Residents who invested in fied assets of the company and/or in FEZ infrastructure development a capital equivalent to at least $5 million are eempted from Corporate Income Taes for a period of 5 years, starting with net quarter after the mentioned investment volume was achieved; The total Volume of Net Sales of Industrial Products manufactured by FEZs residents in 2013, increased by 20.8% (in nominal value) compared to previous year and 84.7% of products were eported. The automotive sector plays an important role especially in FEZ Balti and FEZ Ungheni Business. 4. VAT for equipment and machinery: 0% VAT 5. Corporate ta rate stands at 6%, 3% (12 % in the rest of the country) 6. Customs Duties eemption 7. Customs procedures ta: 0.1% (from Customs value of goods)/ outside FEZs 0.4%; years state guarantee for protection against adverse changes in legislation (15 years in Free Port) 9. Free connection to utilites in FEZ and Industrial Parks 10. EUR/ USD payment among FEZ residents 9

10 H03 M21 M12 Chernivtsi, UA Ivano-Frankovsk, UA Katowice, PL Lviv, UA Tychy, PL MD: Criva UA: Mamaliga FREE ECONOMIC ZONES Kaluga, RU Kiev, UA Mohyliv-Podolskyi, UA Vinnytsa, UA MD: Otaci UA: Mogiliov-Podolisc M05 UKRAINE M12 H10 P63 Prut MD: Briceni UA: Rososeni Briceni Edinet Ocnita Otaci Donduseni Mohyliv-Podolikyi MD: Unguri UA: Bronnita Soroca Nistru FEZ Otaci Business M05 Baia Mare, RO Bototsani, RO - 55 Suceava, RO - 97 MD: Costesti RO: Stinca 24D FEZ Balti Cupcini Iasi, RO - 24 MD: Sculeni RO: Sculeni Rișcani Iasi Glodeni 24C FEZ Ungheni Business Falesti Drochia BALȚI Ungheni M2 Floresti M2 Singerei Telenesti Calarasi Nisporeni M4 Soldanesti Rezina M2 Orhei M4 M13 Ribnita M4 M13 M05 M21 Dubasari M2 Criuleni Straseni M21 Cricova Grigoriopol M4 FEZ Marculesti hub airport CHIȘINAU FEZ Epo Business Chisinau FEZ Balti/ Subzone nr.4/ Straseni Arad, RO Bucharest, RO Craiova, RO Pitesti, RO MD: Leuseni RO: Albita 24 Ialoveni Hincesti M3 Cimișlia M3 Leova Causeni TIRASPOL Anenii Noi M4 BENDER (TIGHINA) Slobozia Stefan Voda Nistru M05 Odessa, UA - 77 MD: Palanca UA: Udobnoe Odessa ROMANIA 10 FEZ Giurgiulesti International Free Port Focsani Buzau Bucharest, RO Constanta, RO Craiova, RO Galati, RO - 10 Pitesti, RO Timisoara, RO MD: Giurgiulesti RO: Galati 21 Galati Braila Prut Cantemir Cahul M3 Giurgiulesti 22E Danube Basarabeasca COMRAT M3 Ceadir-Lunga MD: Ceadir- Lunga UA: Novie Troiani Taraclia M3 MD: Giurgiulești UA: Reni MD: Mirnoe UA: Tabachi Bolgrad MD: Vulcanesti UA: Vinogradovca FEZ Valcanes Tulcea Izmail MD: Basarabeasca UA: Serpniovoe 1 Kilia Branch Razim lake Sulina Branch Sf. Gheorghe Branch MD: Tudora UA: Starokazacie FEZ Tvardita FEZ Taraclia Kilia Sulina Dnestrovsky Liman Belgorod Dnestrovsk Constanta Istambul BLACK SEA

Briceni SUCCESS STORIES & INDUSTRIAL COMPETENCES Ocnița Otaci Mohyliv-Podolikyi Tommy Te UKRAINE Prut Edineț Dondușeni Soroca Nistru Rîșcani Drochia Florești Costești Glodeni BĂLȚI Șoldănești

11 Briceni SUCCESS STORIES & INDUSTRIAL COMPETENCES Ocnița Otaci Mohyliv-Podolikyi Tommy Te UKRAINE Prut Edineț Dondușeni Soroca Nistru Rîșcani Drochia Florești Costești Glodeni BĂLȚI Șoldănești Sîngerei Rezina Fălești Telenești Romina Cablaggi Ungheni Călărași Strășeni Orhei Criuleni Iasi Nisporeni CHIȘINĂU Hîncești Ialoveni Anenii Noi Căușeni Cimișlia Ștefan Vodă Leova Nistru Odessa Prut Prut Basarabeasca ROMANIA Cantemir COMRAT Tvardita Dnestrovsky Liman Belgorod Dnestrovsk Ceadîr-Lunga Cahul Taraclia Vulcănești Bolgrad LEGEND 11 Focsani Shoes Carpet Garment & Knit wear Furniture Seat covers Tetile tapes Buzau Rubber & Plastic injection Steel casting Pumps Construction material Electronics Galati Glass manufacturing Cardboard manufacturing Braila Metal processing Gravel & stone etraction Energetics Wires and harnesses Ceramic tiles Alcohol & bioethanol Railway Cannery Sugar Danube Water bottling Izmail Food products Winery Chocolate Tulcea Bakery Kilia Branch Cigarette and tobacco Dairy products Meat processing Razim lake Beer Brandy production Pharmaceuticals Kilia Sulina Branch Sf. Gheorghe Branch Sulina Constanta Istambul BLACK SEA

12 port eisting investors in etending their operations. The Moldovan Investment and Eport Promotion Organization (MIEPO), in cooperation with the Prime Minister s Office, is the prime source of information and assistance for potential investors. Contact us: invest@gov.md Our team consists of permanent investment attraction staff, sectorial consultants, as well as regional officers. Combining our eperience, we are able to provide you with information relevant for your decision making, as well as links to businesses and government. We provide tailored services for potential investors throughout the investment decision process. We also sup- This project is a very important part of our global presence strategy. We established an ecellent partnership with the central and local officials and we are planning already the future growth of Gebauer& Griller in Moldova. Vasile Boangiu Managing Director at Cables and Wires G&G EE Moldova has many advantages for foreign investors. The proimity to the European market and the close links to markets of the CIS make Moldova interesting for European businesses. Our decision to open a facility in Balti is influenced by the proimity to key locations in Romania, as well as the good opportunity to train and develop skilled workers here. Peter Hilbert Managing Director at DRA Draelmaier Automotive SRL 2000 Sankt Petersburg Nijnii Novgorod Kaluga m 500 k m Lviv Munchen m Bursa m 0k k Valls Pamplona Pitesti Craiova 1500 Sarajevo 00 Timisoara 1000 Turin Zaporoje m Pecs Novo Mesto Balti MD Chisinau 500k Graz Bratislava Esztergom Gyor Oradea 500 Sindelfingen 0k Kiev 50 Mlada Boleslav 500 Glewice Katowice Leipzig Poznan Wolfsburg Kolin 12 Tolyatti Bremen Genk Paris Minsk

Republic of Moldova. Detailed Design of Road Repair for L326 M2 Clisova Suhuluceni. State Road. Administration

Republic of Moldova. Detailed Design of Road Repair for L326 M2 Clisova Suhuluceni. State Road. Administration Name of project Beneficiary Year Republic of Moldova Detailed Design of Road Repair for L6 M Clisova Suhuluceni Leuseni Verejeni, total length of.7 km 06 Engineering Design and elaboration of tender documentation