AGROTECHNOLOGY FROM FINLAND GROWTH PROGRAMME COUNTRY REPORT: ROMANIA. June 2016

Transcription

1 AGROTECHNOLOGY FROM FINLAND GROWTH PROGRAMME COUNTRY REPORT: ROMANIA June 2016

2 Table of Contents Pages Aim of the Assignment 3 Introduction 4-15 Executive Summary Analysis of Results and Findings Recommendations Market Landscape Overview of the Romanian Agrotechnology Industry 1/5 Arable machinery and equipment /5 Crops/grain handling equipment and machines /5: Forestry equipment and machines /5: Environmental management equipment and machines /5: Livestock Solutions Industry Insights Market Specific Issues 106 Regulatory Environment Financing Expert Interviews Key Information Sources 126

3 Aim of the Assignment Aims The aims of the market survey are to give an overall understanding of the business opportunities in Romania for Finnish Agrotechnology Growth Programme companies. Agrotechnology includes the following agrotechnology sectors: Arable machinery and equipment; Crops/grain handling equipment and machines; Forestry equipment and machines; Environmental management equipment and machines; Livestock solutions. Deliverables Agrotechnology industry market report 3

4 Introduction 4

5 Romania Country Indicators e Population (million) GDP Per Capita EUR n/a n/a Real GDP Growth Public Debt ( % of GDP ) 1.1% 0.6% 3.5% 3.0% 3.8% 4.2% 34.7% 37.8% 38% 39.8% 38.4% n/a Inflation rate Consumption (annual variation in % ) 5.8% 3.3% 4.0% 1.1% -0.6% -2.5% +2.9% 0.5% 7.0% 8.9% n/a n/a

6 Romania Introduction Land Land area: 238,391 sq km: agricultural land 55.9% forest land 27.3% Economy GDP 2015: EUR billion Real GDP growth 2015: 3.8% GDP 2015: EUR per capita current price agriculture: 4.2% industry: 36.2% services: 47.4% Total Export 2015: EUR 54.6 billion Total Import 2015: EUR 63 billion Commodities Export commodities 2015: machinery and transport equipment (44.5%), food, beverages and tobacco (8.8%), chemicals and related products (4.9%), mineral fuels, lubricants (4.5%), raw materials (4.5%), other manufactured products (32.8%) Import commodities 2015: machinery and transport equipment (37.3%), chemicals and related products (13.7%), food, beverages and tobacco (8.5%), mineral fuels, lubricants (6.4%), raw materials (3.1%), other manufactured products (31.0%) Population M

7 Introduction The surface area of the Romanian territory is of km 2 and comprises of: 61.3% agricultural land (cca mil. ha, of which 64.2% arable land, 32.9 % meadows and natural grasslands and 2.7% plantations of trees and vineyards); 28.3% forests and other forestry vegetation lands; 10.4% built area of localities, waters, roads, railways and unproductive lands. (source: INS Tempo Online, 2012) Out of the total area of the country, around 87.1% is rural area (according to the definition from the national legislation). The area comprises of communes as administrative-territorial units, together with their component villages. In 2013 about 45.0% of the Romanian population lived in rural areas. 7

8 Introduction The territory of Romania includes 5 bio-geographical regions (steppe, Black Sea, Pannonia, continental and alpine) out of the 11 European bio-geographical regions. Land distribution for geographical areas is balanced: 33% plain area (under 300 m altitude) 37% hill area ( m) 30% mountain area (over 1000 m altitude) In Romania good quality soils are threatened by erosion. In the south of the country in the Wallachian Plain, a vast amount of the land is of good quality Chernozem soil, which is well suited for cereal production. The best agriculture lands in the country lie close to the River Danube, where the land is also suitable for field-scale vegetable production. 8

9 Introduction In Romania, the utilized agricultural area (UAA) is declining, the same trend is also in EU28 countries. The regional distribution of UAA varies depending on the variety of landscape and on the social economic conditions. UAA records high values especially in the West and South regions, while arable lands are predominant in South-East (16.5%) and South Muntenia (17.5%) regions. In the Centre and North-West regions, pastures and hayfields represent more than half of the UAA (65.6% and 52.8%). The area under organic farming is still low. Out of the total area of the country, around 87.1% is rural area. 9

10 Introduction 28.3% of the Romanian territory is covered with forests and other forestry vegetation, which are situated mainly in the mountainous areas. The area of forests, which is comprised of the National Forests and the forest vegetation outside the National Forest has remained relatively constant over time. In 2012 the forest area was ha, representing approx. 28.3% of the total area of the national land area, which is lower than the EU average of 37.6% The largest share in the forest area goes to State-owned public forests (50.4%), followed by private and legal entities owned forests (32.6%). The forests owned by local administrative units accounting for approx. 17% 10

11 Introduction Animal breeding is a traditional activity in Romania. Of the total number of farms 68% are livestock and mixed farms. However, the livestock number are low (4.0% of total EU-27 numbers) respectively 5.4 million. The number of animals has decreased at a faster pace in Romania than in the EU27, especially in the case of cattle and swine. The number of cattle has decreased by 20% in 2013 compared to Source map: ZF.ro According to the Ministry of Agriculture, on 31 Oct 2015 the number of cattle was in Romania, with the NE region Botosani, Suceava and Iasi counties - counting most heads. 11

12 Introduction Raising pigs is a traditional activity in Romania. The number of swine has decreased by 21% in 2013 compared to The situation is even more severe in case of reproduction of sows, where the decrease was of 33%. On 31 Oct 2015, there were pigs in Romania, with Timis county (W Romania) counting most of the heads. There were reproduction sows at the date. According to the Ministry of Agriculture, in 2013 there were thousand pigs in Romania. The objectives of the MADR s Support Programme for Pork Meat are: Improving the pigs' livestock to enhance the quality of pork carcass. Stimulating the organisation of competitive and efficient farms in the rural area. Improving the dimensional structure of livestock exploitations. Increasing the incomes of swine breeders. The transition from self-consumption production to commercial production. Source map: FabricadeLapte.ro 12

13 Introduction Strengths of the Romanian agribusiness sector Significant agricultural area, with a large share of arable land Available non-reimbursable funding from EU and public sources Half of the agricultural area is used by large commercial farms Good assimilation of technologies at the level of large commercial farms Good quality of agricultural and non-agricultural raw materials Growth tendency for organic products sector High interest from foreign investors, both corporate and private Strong tradition in research-development activities in agriculture and forestry Increasing number of graduates of agricultural universities as well as those of agriculture and forestry complementary sciences. Regulated food safety system contributing to the mandatory minimum standards for food Pilot experiences in developing quality local food and non-food products. 13

14 Introduction Weaknesses of the Romanian agribusiness sector Poor irrigation systems Poor productivity per hectare Excessive land fragmentation Concentration of arable land in South-Romania Of the 10 million hectares of arable land in Romania, approximately 8 million hectares are located in the southern part of the country, where the rainfall is at its lowest. With such little annual rainfall, and high temperatures in the crucial phase of the growing season, irrigation is vital both as a risk mitigation tool, and in order to utilise the good quality soil to the best of its advantage for crop production. For certain crops such as maize, sunflowers, soya, and field-scale vegetables, irrigation is necessary for optimum productivity. Of the 3 million hectares equipped for irrigation, only 25% of that area has an irrigation system in working order, and only 30% of that was actually used in the 2011 harvest year. Excessive land fragmentation over the past 20 years has led to a chronic lack of investment and development within the agricultural industry and this is especially true of the irrigation systems. Much of the skeleton of the irrigation network is still in place, but only a limited proportion of it is in working order. 14

15 Introduction Weaknesses of the Romanian agribusiness sector More than often the payments made by the State Agency of Payments in Agriculture (APIA) to the farmers are made with considerable delay which hampers their development. The delays in payment are also caused by the lack of knowledge of the farmers in regards to the formalities they need to comply with in order to apply for subventions, back-payments and reimbursements. 15

16 Executive Summary

17 Executive Summary The Romanian agrotechnology market presents a good number of opportunities to a strong foreign manufacturer interested to enter the market in a strategic and structured manner Romania traditionally has a considerable agricultural sector which is currently further developing due to non-reimbursable funds and foreign investment New types of equipment and high quality agrotechnology are demanded by the Romanian market Not all the Finnish products are suitable for the Romanian agrotechnology needs 17

18 Executive Summary SWOT Analysis Strengths (from Finland s perspective) - High quality of the equipments and machinery - Good ratio quality vs. price - EU member state Weaknesses - Finnish offering is not sufficiently known to the endconsumer in Romania -The importer-distributors consider the Finnish offering rather costly - Some Finnish equipment and machinery are not suitable or required in Romania e.g. stone picking machinery, wood processors Opportunities - Availability of EU funds for agriculture development in Romania - Major agrotechnology international trade fair taking place in Bucharest - INDAGRA - Experienced local market-entry and development consultants to assist with further steps and targeted marketing - Market demand for equipment, machinery and new technologies Threats - Well established competitors, both local and foreign - Governmental support, also in terms to local support organisations, to companies from Italy, Germany etc. to enter and further expand onto the Romanian market - Aggressive marketing from other countries and their local embassies (i.e. USA) - Decreasing animal sector, especially pig sector and milking cow sector, which are very affected by various bad market conditions - Decreasing firewood processing due to high prices of wood

19 Analysis of Results and Findings

20 Analysis of Results and Findings The most important factor in the current stage of the Romanian agrotechnology market development is the availability of EU funding. The Romanian clients are interested to receive good-value offers for high quality agrotechnology machinery and equipment and often are interested to buy directly from the foreign manufacturer to avoid VAT add-on. The Romanian agrotechnology market is quite competitive, with active presence on the market of both foreign manufacturers and local producers. A new entrant needs to be quite active and visible in order to attract attention. Most players in the sector are present at INDAGRA international trade fair which takes place in Bucharest every year at the end of October. 20

21 Analysis of Results and Findings Sector 1/5 Arable machinery and equipment The offering of arable machinery and equipment on the Romanian market is quite varied, both imported and domestically produced items. Equipment for manure and slurry management is used increasingly which presents a good opportunity for the Finnish manufacturers. Stone picker machinery is not required in Romania Plant protection sprayers are used on a regular basis in Romanian agriculture. In spite of a competitive market, the Finnish manufacturers could enter this sector using the correct strategy. 21

22 Analysis of Results and Findings Sector 2/5 Crops/grain handling equipment and machines Romania aims to improve yield per hectare and therefore, enhance grains production, which presents a good opportunity for the Finnish manufacturers of crops and grain handling equipment and machines. Silos projects are increasing in Romania, both with EU funding and with private funding. In spite of a competitive market, from local players and foreign producers of crops and grain handling equipment the Finnish manufacturers using the correct market entry strategy can achieve their goal. 22

23 Analysis of Results and Findings Sector 3/5 Forestry equipment and machines According to market players already importing wood processors from Finland, these are not suitable for the Romanian type of wood, which is harder. Boilers using wood or wood pallets are becoming more and more popular in Romania. The Romanian market of boilers is quite competitive, with a multitude of imported brands being already sold. Nevertheless, using the correct market entry strategy and with the required investment in marketing, the Finnish manufacturers could be successful. 23

24 Analysis of Results and Findings Sector 4/5 Environmental management equipment and machines Access to buyers of Environmental management equipment and machines can be done via local importers or directly, as most of the acquisitions are done through public tenders. The greatest majority of buyers are public institutions who use EU funds to purchase Environmental management equipment and machines There are good opportunities for the Finnish manufacturers of Environmental management equipment and machines on the Romanian market 24

25 Analysis of Results and Findings Sector 5/5 Livestock solutions Many large players in the sector are investing and developing their animal facilities farms, slaughter houses, refrigeration etc. - in order to respond to the increasing market demand for food products. Breed improvement and artificial insemination, especially in pigs and cows, is a priority for the Romanian animal farmers as well as for the Government The offer of Livestock solutions on the Romanian market is quite varied, of both imported and locally produced items. However, there are good opportunities for the Finnish manufacturers should they address the market strategically 25

26 Recommendations

27 Recommendations Best route to the Romanian market described below, depending on the specific sub-sector Participate in INDAGRA / be more visible Romanian Client Participate in international / EU bids Through a local importerdistributor Set up a local commercial office Register the offer in the AFIR d-base 27

28 Market Landscape

29 Overview of Agrotechnology Industry In the south of Romania, a vast amount of the land is of good quality Chernozem soil, which is well suited for cereal production. Of the Romanian territory, 61.3% is agricultural land and 28.3% forests Animal breeding is a traditional activity in Romania. Of the total number of farms 68% are livestock and mixed farms New agrotechnology acquisitions EU funds, public money, private investments Foreign agrotechnology manufacturers present on the market directly or via local dealers / representative offices Local producers of some types of agrotechnology quite active on the market Interest from local clients for new technologies, machinery and equipment 29

30 Sector 1/5 Arable Machinery and Equipment Market insights imports in 2015 TARIC code Description Value (million EUR) 8432 agricultural, horticultural or forestry machinery for soil preparation or cultivation, lawn or sports-ground rollers approx disc harrows approx manure spreaders and fertiliser distributors approx roller conveyors and other approx mechanical appliances for projecting, dispersing or spraying liquids or powders approx. 74 Source: Comtrade, FRD Center 30

31 1/5 Arable Machinery and Equipment Key drivers, trends and transitions The main key driver is the National Rural Development Plan with the Measures on Competitiveness of agri sector and sustainable forestry. The NRDP will support investments in the modernisation of nearly farms and cooperatives, the development of more than small farms and the setting up of more than young farmers. There is a particular emphasis on promoting association between small farmers in order to improve competitiveness of the many small farms. Some small farmers will also be supported to permanently transfer their holdings, promoting consolidation of holdings. 2.4 billion allocated to Measure 4 (Investments in physical assets) 1.3 billion allocated to Measure 7 (Basic services and village renewal in rural areas) 1.4 billion allocated to Measure 13 (payments to areas facing natural or other specific constraints) 1.1 billion allocated to Measure 6 (Farm and business development) In forestry sector, there will be investments to expand the limited network of forest roads by over 900 km. 31

32 1/5 Arable Machinery and Equipment Key drivers, trends and transitions The current trend in agriculture is positive, both in regards to output and productivity, as in regards to numbers of companies involved in the sector Agricultural business in Romania The favourable spring weather, the increasing investments in agriculture, the revival of consumption, the price evolution and the development of business relations at regional level could make Romanian agriculture to record the best results in a decade. These factors could make agricultural business exceed 5.4 billion EUR in 2016, by over 2.7 billion EUR above the level in 2010, shows an analysis released by Dekalb and cited by the press.. billion EUR e Source: FRD Center, Dekalb 32

33 1/5 Arable Machinery and Equipment Key players: Importers Lower Design Import Export Established in 1994, Lower Design Import Export distributes rollers, plant protection sprayers, disk harrows, slurry wagons, slurry tankers and other agricultural equipment. Lower Design Import Export has recorded a net turnover of 0.5 million EUR in The company has a team of over 10 employees. Eurosport Trading Set up in 1995, Eurosport Trading imports and distributes plant protection sprayers, the Stihl brand. The company distributes its products in the entire country. Eurosport Trading has reached a net turnover of 2.1 million EUR in Currently, the company has a team of almost 40 employees. Wylze Logistik Founded in 1995, Wylze Logistik is a main importer-distributor of agricultural equipment on the Romanian market. Wylze Logistik imports and distributes plant protection sprayers, manufactured by Fede Pulverizadores. The company has registered a net turnover of 11.4 million EUR in It has a team of over 70 employees. Wirax Established in 2004, Wirax imports and distributes slurry wagons, slurry tankers, disc harrows, plant protection sprayers. The company distributes its products in the entire country. Wirax has recorded a net turnover of 4.1 million EUR in It has over 20 employees. 33

34 1/5 Arable Machinery and Equipment Key players: Importers IPSO With an experience of over 20 years in the agricultural sector, IPSO is the main importer-distributor of agricultural equipment in Romania. Part of the French Group Monnoyeur, IPSO offers integrated solutions to the agricultural players in Romania. The company covers the entire country. IPSO imports and distributes slurry tankers (the Pichon brand), disc harrows (the brands Kuhn, Bednar FMT). IPSO has recorded a net turnover of million EUR in The firm has over 300 employees. Agrosez Com Set up in 2004, Agrosez Com imports and distributes plant protection sprayers, conveyers, slurry tankers, disc harrows. In 2014, Agrosez Com has recorded a net turnover of one million EUR. It has over 10 employees. Lantec Industries Established in 1999, Lantec Industries imports and distributes slurry tankers, plant protection sprayers. The company offers integrated solutions to the agricultural players in Romania and distributes its products all over the country. Lantec Industries has recorded a net turnover of 2.6 million EUR in The firm has approximately 40 employees. Mondistar Set up in 2000, Mondistar imports and distributes disc harrows, plant protection sprayers, slurry wagons. It has a storage platform of 10,000 square meters. The company has a distribution network at national level. Mondistar has registered in 2014 a net turnover of 1.2 million EUR. It has over 20 employees. 34

35 1/5 Arable Machinery and Equipment Key players: Importers Ingcomion Ingcomion is a Romanian private importer-distributor set up in Its portfolio includes plant protection sprayers, slurry tankers, snow blowers, conveyers. The company distributes the following brands of agricultural machinery: BCS, Aldo Biagioli, Perugini, Mecanica Ceahlau, Goldoni. Ingcomion has recorded a net turnover of 0.3 million EUR in It has approximately 10 employees. Keiron Logistics Founded in 1994, Keiron Logistics distributes a wide range of imported and domestically manufactured agricultural machinery, including slurry tankers (Agrogép brand), disc harrows (manufactured by O.M.A, Kelet, Akpil, Moldagrotehnica, Bufer), plant protection sprayers (manufactured by Bufer, Mecanica Ceahlau, MAT Craiova etc), silos, conveyers. Keiron Logistics has recorded a net turnover of 1.7 million EUR in It has some 20 employees. General Confort General Confort imports, distributes and sells plant protection sprayers, disc harrows, slurry wagons, snow blowers. The company has registered a net turnover of 1.2 million EUR in It has over 10 employees. Utilaje Agricole Teleorman (Hari Pet) Set up in 2007, UAT (Hari Pet) is a provider of agricultural equipment. Its portfolio includes disc harrows, plant protection sprayers, silos, conveyers, snow blowers. Some of its partners are Mecanica Ceahlau, TehnoFavorit, Diana Trans, Sembraz Sibiu, Legmas Navodari, Honda. Hari Pet has recorded a net turnover of 0.5 million EUR in

36 1/5 Arable Machinery and Equipment Key players: Competitors Mecanica Ceahlau Established in 1921, Mecanica Ceahlau is one of Romania s leading manufacturers of agricultural equipment. Its range of products includes: disc harrows and plant protection sprayers. The company performs its activity on a surface of 165,000 sqm. Listed on Bucharest Stock Exchange, Mecanica Ceahlau has reached a net turnover of 5.4 million EUR in The company provides financing facilities and has over 200 employees. Madara Romania Madara Romania is the representative on the domestic market of the Bulgarian manufacturer of agricultural equipment Madara. Its range of products includes: rollers, plant protection sprayers, disk harrows etc. Tehnofavorit Set up in 1995, Tehnofavorit is a leading manufacturer of plant protection sprayers in Romania. On the other hand, it imports and distributes grain silos, grain dryers, conveyers, forage silos, slurry tankers. The company covers the entire country. Tehnofavorit has recorded a net turnover of 2.9 million EUR in It has over 100 employees. Vogelsang Romania Vogelsang Romania is the local representative of the German Group Vogelsang. Its portfolio includes slurry wagons, slurry tankers. Vogelsang Romania has recorded a net turnover of 0.5 million EUR. 36

37 1/5 Arable Machinery and Equipment Value chains Finnish manufacturers Local Importerdistributors and Dealers Clients Consulting firms for EU projects AFIR d-base EU Funds + Public money 37

38 1/5 Arable Machinery and Equipment Major projects EUR 9.8 billion out of the entire 40 EU non-reimbursable billion euro allocation are available for agrotechnology investments in Romania during the current programming period, representing a real support for investment projects of companies from the agriculture and rural field (e.g: investments in equipment, constructions, modernization etc.). The ongoing National Plan for Rural Development (NPRD) , started in March 2015 (including agriculture and food industry). This program is funded mainly (app. 85%) by the European Fund for Agriculture and Rural Development and partially from Romanian National Budget (app.15%). The Program is launched on a yearly basis, based on specific financial allocations per each investment measure or sub-measure. So far, the most accessed financial sub measures are those dedicated to the vegetal farms, including grains and large cultures. 38

39 Sector 2/5 Crops/grain handling equipment Drivers, trends and transitions A key driver in the grain output and productivity per hectare in Romania is dependency on precipitation due to lack of proper irrigation infrastructure or the limited usage of the available irrigation network due to the high prices. The continental climate of the southern part of Romania means that summer temperatures can be very high and precipitation levels low, with long periods of drought in the most extreme years. To mitigate the impact of drought, an extensive irrigation network was developed during the communist era. After the fall of the communism, a large part of the network fell into disrepair, with only a few farmers able to afford the cost of irrigation. Water User Organisations Lack of irrigation systems Recent legislation Even if the infrastructure does remain in place today, only a part of the network is actively in use. With the assistance of World Bank and EU funding, a restoration programme is taking place, in the areas, where there is a genuine demand. The creation of Water User Organisations has greatly assisted in the rationalisation and restoration of the irrigation network, where such organisations are thriving. Poor crops due to drought Not sufficient funding for rehabilitation High usage prices for the current irrigation systems 39

40 2/5 Crops/grain handling equipment Drivers, trends and transitions According to the National Agency for Land Reclamation (ANIF), the irrigation system covers only 32% of the total agricultural surface of Romania, 9.4 million ha. The irrigation system under the administration of the National Agency for Land Reclamation (ANIF) is functional on a total area of nearly 3 million hectares, of which about 1.52 million hectares of non-public utility. From the area with irrigation works that are made available to farmers, only 7% do not require major repairs. In 2015, the Romanian state irrigation system that was available to farmers was covering an area of about 1.42 million hectares. The equipment on only 700 thousand ha was properly functional and did not require major repairs and therefore could be contracted by the farmers. However, most of the farmers chose not to irrigate their crops. Signed contracts for irrigation were made only for a surface area of approximately 310 thousand hectares, representing 44% of the total surface area of available equipment. The Pro Agro Farmers Federation and the League of Water Users continue to lobby for legislative changes needed to attract investments in the irrigation infrastructure in Romania. 40

41 2/5 Crops/grain handling equipment Drivers, trends and transitions The objective of rehabilitation and development of the irrigation network is included in the ten-year investment plan of the Romanian Governmental Programme. At the end of 2015, the Irrigation Law Law 269/ was promulgated by the President and published in the Official Gazette. Among other things, the new legislation in the field approves investments for over one billion euros for the irrigation system in the period According to the League of Associations of Agricultural Producers in Romania (LAPAR), the rehabilitation of existing principal irrigation infrastructure, including of the Siret- Baragan canal, requires some billion euros. 41

42 2/5 Crops/grain handling equipment Drivers, trends and transitions The positive trend in agricultural turnover in comes amid the increasing number of companies operating in the field to more than , as compared to in 2010, some in 2013 and in The number of employees in Romanian agriculture (officially registered) is forecasted to reach this year over people, up from the level of employees officially declared in Number of companies operating in agricultural field in Romania 12,000 9,000 6,000 According to a European Commission report, the forecast on productivity for Romanian wheat was boosted by 5.5% in April against March 2016 to the average level of 4.02 tonnes/ha. This is a historical maximum in the last 26 agricultural seasons. It would be the fourth consecutive wheat harvest that exceeds the threshold of about 7 million tons. 3,

43 2/5 Crops/grain handling equipment Drivers, trends and transitions Romania s grain production increased by 6% in 2014 compared to 2013 and by 39% when compared to the average. Romania ranked fifth in the EU with 22.1 million tons, according to the EU s statistical office Eurostat. It was only surpassed by France with 72.7 million tons, Germany (52 million tons), Poland (31.9 million tons), and the UK (24.5 million tons). France 72.7 mil tons Germany 52 mil tons Poland 31.9 mil tons UK 24.5 mil tons Romania 22.1 mil tons 43

44 2/5 Crops/grain handling equipment Drivers, trends and transitions According to Ministry of Finance data publised by Romania-Insider.com, the five biggest grain traders in Romania had cumulated sales of over EUR 2.1 billion in 2015, 4.5% higher compared to American group Archer Daniels Midland (ADM) regained its market leader position in 2015, with a turnover of EUR 535 million, 3.4% higher than in Swiss trader Ameropa Holding was second, with EUR 533 turnover, up 7.7% year-on-year. Ameropa made a net profit of EUR 3.1 million, slightly down compared to American group Cargill, the former market leader, fell to third with EUR 470 million sales, down 10% year-on-year. Cargill posted EUR 18 million losses, slightly lower than in Brisegroup and Glencore Protein are the other two grain traders in top 5. 44

45 2/5 Crops/grain handling equipment Industry insights Romania has over authorized grains storage facilities - silos and warehouses - with a total capacity of nearly 22.3 million tons. Six counties hold together 50% of total storage capacity. At the top is the Timis county (W Romania), with nearly 10% of licensed grain storage facilities and over 13.5% of the total grain storage capacity of Romania. Timis (W): 414 facilities, with a capacity of mil. tons Constanta (SE): 260 stores, mil. tons Calarasi (SE): 315 deposits, mil. tons Ialomita (SE): 174 facilities, mil. tons Teleorman (SE): 203 warehouses, mln. tons Braila (SE): 160 deposits, mln. tons. Source: Ministry of Agriculture 45

46 2/5 Crops/grain handling equipment Key players: Importers Utilaje Constructii Intercom Set up in 2008, Utilaje Constructii Intercom imports and distributes grain silos, grain dryers, conveyers, snow blowers, slurry tankers. The company is ISO 9001 and ISO certified. Utilaje Constructii Intercom has recorded a net turnover of 0.5 million EUR in It has some 10 employees. MG Trade Engineering MG Trade Engineering is specialised in providing grain silo solutions. Since 1997, the company has been the dealer of the manufacturer GSI. Its range of products includes: grain silos, grain dryers, conveyers, fodder production equipment. The company has over 100 clients all over the country, out of which CHS-Silotrans, Marsat, Toepfer Romania, Somalex, Chirea 2000, Izocon MC, Arges Agro Proiect, Agro Chirnogi, Sistem Nutriva etc. MG Trade Engineering has recorded a net turnover of 0.6 million EUR in It has around 10 employees. 46

47 2/5 Crops/grain handling equipment Key players: Importers Agromec Stefanesti Set up in 1992, Agromec Stefanesti is a main importerdistributor of agricultural machinery in Romania. Its range of products includes grain dryers (manufactured by Mecmar Spa Italy), disc harrows, plant protection sprayers, slurry wagons, slurry tankers, snow blowers, sand distributors, loaders etc. The company provides integrated solutions to its clients and covers the entire country. Agromec Stefanesti has registered a net turnover of 8.1 million EUR in The firm has some 50 employees. Agri Tocan Established in 2010, Agri Tocan imports and distributes grain dryers, grain silos, grain conveyers. The grain dryers in its portfolio are manufactured by Antti- Teollisuus Finland. Agri Tocan has reached a net turnover of 0.4 million EUR in

48 2/5 Crops/grain handling equipment Key players: Importers Auto Total Prest RDI Grain Systems Set up in 2006, Auto Total Prest imports and distributes grain silos, forage silos and fodder production systems, the Zuptor brand. Auto Total Prest is a 100% Romanian private company. In 2015, Auto Total Prest has registered a net turnover of 0.4 million EUR. The company has approximately 10 employees. Founded in 2005, RDI Grain Systems imports and distributes grain silos, grain conveyers, grain dryers, fodder production equipment. It collaborates with manufacturers from USA and Europe. The company distributes its products in the entire country. RDI Grain Systems has recorded a net turnover of 0.2 million EUR in It has some 20 employees. 48

49 2/5 Crops/grain handling equipment Key players: Potential clients (examples) Maria Group / Agro Chirnogi Maria Group, owned by Lebanese citizens, is one of the main agricultural players in Romania. The Group grows cereals (wheat, corn, sunflower etc) and has animal farms. Maria Group includes de companies Agro Chirnogi (specialized in growing of cereals, leguminous crops and oil seeds) and Maria Trading (specialised in trading activities). Maria Group administrates over 30,000 hectares of agricultural land in the southern region of Romania. Annually, Maria Group exports 800,000 1,000,000 tonnes of cereals acquired from farmers all over the country. Maria Group has silos and own auto fleet. Agro Chirnogi and Maria Trading have recorded a cumulated net turnover of approximately 200 million EUR in They have a cumulated number of some 1,000 employees. Cerealcom Group Cerealcom Group is one of the most successful Romanianowned players in the domestic agricultural sector. Cerealcom Group includes four companies that operate in SW Romania: Cerealcom Dolj, Oltyre Craiova, Cervina Segarcea and Redias Redea. Cerealcom Group grows and trades cereals and oilseeds and exploits areas of vines in the Segarcea area. Cerealcom Group exports cereals and oilseeds to Greece, Italy, Germany, Cyprus, Spain, Turkey, Egypt, Libya etc. Furthermore, Cerealcom Dolj controls a terminal for export activities in the Bechet Port. Cerealcom Group records a turnover of over 100 million EUR per year and it is the main agricultural producer in the Oltenia region of Romania. 49

50 2/5 Crops/grain handling equipment Value chains Public funding Finnish manufacturers Local Importerdistributors and Dealers Local Clients AFIR d-base Consulting firms for EU projects 50

51 2/5 Crops/grain handling equipment Major projects - examples The trader of agricultural comodities Nidera, controlled by the Chinese Group COFCO, has finalised in 2016 the construction works at a grain silo in the Corabia Port (Olt county). The investment is estimated at approximately 3 million EUR. The silo has the storage capacity of 18,000 tonnes and is able to integrate approximately 60,000 tonnes of cereals per commercial season. Chimpex, one of the main operators in the Constanta Port and part of the Ameropa Group, and Banca Comerciala Romana (BCR) have signed in March 2016 a financing agreement with the value of 27 million EUR for the construction of a new cereal terminal. Chimpex will construct a grain silo with the capacity of 200,000 tonnes in the Constanta Port. The silo will have the operation capacity of over 3.5 million tonnes of cereals per year (wheat, barley, corn, rapeseed, sunflower etc). The terminal will be fully automated. 51

52 2/5 Crops/grain handling equipment Major projects - examples Biochem, controlled by the Chimisliu family, has started in 2016 the construction works at a grain silo in Becicherecu Mic (Timis county). The silo will have the capacity of 10,000 tonnes. The investment in the storage unit will amount 3 million EUR and the project is financed with EU funds. Biochem, specialised in the trading of cereals, seeds, fertilizers and pesticides, has recorded a turnover of 34 million EUR in 2015, up by 20% compared to Agrimat Matca, controlled by Mr. Gavrila Tuchilus, has announced at the end of 2015 plans to construct a new grain silo with an investment of over one million EUR. Through the construction of the new silo, Agrimat Matca will double its storage capacity and will reach 20,000 tonnes. Agrimat Matca records a turnover of approximately 5.5 million EUR per year. 52

53 Sector 3/5 Forestry equipment and machines Market insights According to the latest data published by the National Institute of Statistics, the total area of the forest land in Romania was thousands hectares in 2014, accounting for 27.3% of the total country area. The total volume of forests is estimated at over million m 3. In 2015, the National Forest Authority - Romsilva - had a program to harvest annually million m 3. This volume represents approximately 74% of the maximum allowable cut in the state property calculated in accordance with legal provisions in force. In Romania, there are over 4,700 accredited wood harvest operators, allowed to harvest wood from the Romanian forests, including firewood. 53

54 3/5 Forestry equipment and machines Certification for forestry exploitation According to the Law no. 46/2008 on Forestry Code with subsequent amendments and the Government Decision no. 38/2015, the certificates for forestry exploitation in Romania are issued by the Attestation Commission made up of personnel from the Ministry of Environment, Water and Forests, the Romanian Forestry Association (ASFOR) and the Association of Forest Administrators in Romania. In order to obtain the certificates for forestry exploitation, the juridical entities have to submit to the Romanian Forestry Association (ASFOR) the following documents: application form, copies of constitutive act and registration certificate, status of specialised staff and copies of employees diplomas, status of forestry equipment (the juridical entity must have equipment for exploitation of a minimum annual volume of 2,000 m³), calculation of the annual capacity for forestry exploitation activity, criminal record, document proving the fee payment. The certificates for forestry exploitation are valid for two years. 54

55 3/5 Forestry equipment and machines Market insights The volume of firewood estimated to be generated in 2016, according to the SUMAL system and the Government Directive 924/2015, approving the Regulation of valorification of wood in the public property forests, is of m 3. According to ASFOR, in Romania are harvested annually approx. 19 million cubic meters of timber, of which 12 million cubic meters for the industrial processes, and the difference of seven million cubic meters for heating and other uses. In the process, it is lost about 20% of the wood volume. From the approximately nine million cubic meters remaining, the furniture industry in Romania takes only 1.6 million cubic meters, while 7.4 million cubic meters of wood products are exported. 55

56 3/5 Forestry equipment and machines Market insights Local players input Strengths (from Finland s perspective) - The biggest advantages of the Finnish companies operating the sector of the firewood processors are: (a) the price (that is similar to the price of the competition) (b) the high quality of the equipment and services - Good quality of the products - EU member state Weaknesses - the wood in Romania is of hard consistency compared to the wood in the Nordic countries, which makes the Finnish machinery rather unsuitable - the firewood processors from Finland are considered expensive by the local players and without competitive advantages compared to similar machinery produced in Austria, France, Poland, Slovenia, Italy. Opportunities - Existence of the online system for wood tracking it has generated, in only one year, the decrease of the illegal logging by 50% - Availability of EU funds (partially refundable or nonrefundable), which would support the system - Access to the funds through transparent access mechanisms - Increasing price of manual labour which will increase demand of machines for firewood processing - Increasing demand for ecological heating Threats - High prices set by Romsilva, leading to financial problems of the local processing companies - Lack of long-term contracts for exploitation companies - Lack of transparency and unfair competition of Romsilva, which also exploits the forests - Illegal logging that, although has decreased by some 50% in 2015, is still a problem Lack of subsidies, EU funds and support from the Romanian State for the forest exploitation companies that intend to start the development of projects

57 3/5 Forestry equipment and machines Market insights foreign trade in 2015 TARIC code fuel wood, in logs, in billets, in twigs, in faggots or in similar forms Value in 2015 (million EUR) Comparison to 2014 import 12-27% export 7.4-7% Source: Comtrade, FRD Center 57

58 3/5 Forestry equipment and machines Key drivers, trends and transitions Recent attempts by the National Forests Authority Romsilva to artificially raise the selling price for harvested wood led to mass protests of the sector players. This led to legislative changes, namely the Government Decision no. 43/03 February 2016 amending and supplementing the Regulation of valorisation of wood from the forest public property, approved by Government Decision no. 924 of 4 November 2015 published in the Official Gazette of Romania no. 95 / This new law created the opportunity to determine in a transparent way and under market conditions, the reference prices for the production year 2016 species / species groups, assortment, accessibility and exploitation technologies, at the county level for the wood on leg harvested from the public property forest fund administered by the National Forests Authority Romsilva. Under the new law, the General Manager of Romsilva issued Decision no. 45 / amending and supplementing Decision no. 691 / , a decision published on the website and submitted to application directions forestry and forest districts of under the NFA Romsilva structure. 58

59 million EUR 3/5 Forestry equipment and machines Key drivers, trends and transitions Imports of central heating boilers in Romania reached in 2015 EUR million, some 40% more than in Most of the boilers are imported from Italy, with over 40% of the total. Romania has not imported central heating boilers from Finland in Examples of imported brands of wood boilers on the Romanian market are: Viadrus, Viessmann, Buderus, Bosch, Biodom, Astra, Atmos, Erato, Gobe, Rima, HeizTech, Pyrocal, Defro, SIME, ABC Proizvod, Radijator Inženjering, Steco Metal, DZ, Ferroli, Termofarc, Attach, Woody, Beretta, Lamborghini etc. Source: FRD Center based on Eurostat Imports of central heating boilers in Romania

60 3/5 Forestry equipment and machines Key drivers, trends and transitions Romanian imports of central heating boilers in 2015, by origin countries 22% 28% 6% 10% 17% 17% Source: FRD Center based on Eurostat Italy Turkey Slovakia Czech Republic Germany Others

61 3/5 Forestry equipment and machines Key players: Importers Mecomag HV Alser Forest Established in 2009, Mecomag H.V. imports and distributes firewood processors, manufactured by Balfor Italy. The company is ISO 14001:2004 and ISO 9001:2008 certified. Mecomag H.V. has recorded a net turnover of 1.7 million EUR in It has some 10 employees. Set up in 2008, Alser Forest is the local representative of Alser Forest Oy Finland (founded in 2004 by the Romanian businessman Albert Serban). Alser Forest imports and distributes forest equipment manufactured by Kesla Finland. Furthermore, its portfolio includes firewood processors manufactured by Rabaud France. Alser Forest offers integrated solutions to its clients. Some examples of its clients are: Directia Silvica Neamt, Directia Silvica Bistrita Nasaud, Elekes Forest SRL, Lapus Forest SRL, Rapid Forest SRL, Andrea Forest SRL, Eltim Forest SRL etc. Alser Forest has registered a net turnover of 1.4 million EUR in The firm has approximately 10 employees. 61

62 3/5 Forestry equipment and machines Key players: Importers TMC Lemn Invest SRL & Styl Sicar SRL tmclemninvest.ro Set up in 2005, TMC Lemn Invest imports and distributes firewood processors. Its range of products includes firewood processors manufactured by Pezzolato (Italy). TMC Lemn Invest has recorded a net turnover of 0.3 million EUR in Kenobi Established in 1997, Kenobi imports and distributes firewood processors, the Palax brand (Finland). The company is ISO certified. Kenobi has recorded in 2015 a net turnover of 2.8 million EUR. The firm has around 40 employees. 62

63 3/5 Forestry equipment and machines Key players: Importers Progema Forest catoare-lemn-de-foc-verticale.html Progema Forest imports and distributes firewood processors, manufactured by Balfor (Italy). In 2015, Progema Forest has registered a net turnover of 0.1 million EUR. SP Stroia Product Established in 1998, SP Stroia Product imports and distributes firewood processors, the Posch brand. The company provides integrated solutions to its clients. SP Stroia Product has reached a net turnover of 1.3 million EUR in

64 3/5 Forestry equipment and machines Key players: Importers Creativ Tools Melinda Impex Instal Established in 2009, Creativ Tools imports and distributes wood boilers and pellet boilers. The company has in its portfolio wood and pellet boilers manufactured by Viadrus, Viessmann, Biodom, Astra, Atmos, ERATO. Creativ Tools has recorded a net turnover of one million EUR in Currently, it has around 10 employees. Founded in 2003, Melinda Impex Instal imports and distributes wood boilers and pellet boilers, manufactured by Gobe, Rima, Viadrus, HeizTech, Pyrocal, Viessmann, Biodom, Defro etc. The company covers almost the entire country. Melinda Impex Instal has registered a net turnover of 31.5 million EUR in It has a team of approximately 220 employees. 64

65 3/5 Forestry equipment and machines Key players: Importers Romstal Imex INIC Set up in 1994, Romstal Imex is a main importer-distributor of installations in Romania. Its range of products includes wood boilers, manufactured by Rima, SIME, ABC Proizvod, Radijator Inženjering, Steco Metal etc. The company has a chain of Romstal stores all over the country. Romstal Imex has recorded a net turnover of approximately 111 million EUR in The company has over 1,000 employees. Set up in 1991, INIC imports and distributes wood boilers, manufactured by Viadrus, Termofarc, Attach, Bosch and Woody. The company is SR-EN ISO 9001, SR-EN ISO14001 and SR-EN ISO certified. INIC has registered in 2015 a net turnover of 0.5 million EUR. It has over 10 employees. 65

66 3/5 Forestry equipment and machines Key players: Importers Dedeman IVP Instalatii Established in 1992 by two Romanian businessmen, Dedeman is at present the leader of the domestic DIY market. Its portfolio includes imported wood and pellet boilers, manufactured by Atmos, Bosch, DZ, Ferroli, Termofarc, Viadrus and Viessmann. Dedeman has 42 stores at national level and targets a number of 50 stores in the next two years. Dedeman has recorded a net turnover of approximately 981 million EUR in The firm has almost 8,000 employees. Founded in 1995, IVP Instalatii imports and distributes wood boilers and pellet boilers. The company has in its portfolio wood and pellet boilers manufactured by Bosch, Buderus, Viessmann, Ferroli, Beretta, Lamborghini, Atmos, Viadrus and Biodom. In 2015, IVP Instalatii has recorded a net turnover of 0.7 million EUR. The company has some 10 employees. 66

67 3/5 Forestry equipment and machines Key players: Importers Secpral Pro Instalatii Founded in 1998, Secpral Pro Instalatii imports and distributes a wide range of equipment. Its portfolio includes wood boilers, manufactured by Jaroslav Cankar & syn Atmos from the Czech Republic (Atmos brand) and Hotechnikai es Gepipari from Hungary (Woody brand). The company is ISO 9001:2008 certified. Some examples of its clients are: Savarsin Royal Castle, Oradea City Hall, Transylvania College in Cluj Napoca, Emergency Hospital for Children in Cluj Napoca, Coramet Office Building in Cluj Napoca, Cramele Recas etc. Secpral Pro Instalatii has reached a net turnover of 29.3 million EUR in The firm has approximately 120 employees. 67

68 3/5 Forestry equipment and machines Key players: Producers Industrial Action Founded in 2001, Industrial Action is active in the electro, hydro and pneumatic tool-machines sector. They also manufacture firewood processors among many other industrial tools. Its production facility is located in the Sibiu county (Central region of Romania). Some examples of its clients are: Mecanica Ceahlau, ArcelorMittal, ThyssenKrupp Bilstein Compa, Faurecia, Holcim, Silcotub etc. Industrial Action has reached a net turnover of 0.3 million EUR in The company has over 20 employees. 68

69 3/5 Forestry equipment and machines Key players: Potential clients (examples) Forest Gemir Set up in 2011, Forest Gemir is specialised in the forest exploitation and wood processing. The company produces and sells firewood, logs etc. Forest Gemir has recorded a net turnover of 0.1 million EUR in Costa Wood Trading Founded in 2009, Costa Wood Trading performs activities of forest exploitation and wood processing. The firm sells firewood, timber, wood waste etc. Costa Wood has reached a net turnover of 2 million EUR in The company has some 60 employees. 69

70 3/5 Forestry equipment and machines Key players: Potential clients (examples) Szido Prod Com Set up in 2003, Szido Prod Com is specialised in forest exploitation and wood processing. Its range of products includes logs, firewood etc. In 2015, Szido Prod Com has registered a net turnover of 0.4 million EUR. The firm has over 10 employees. Anicve Set up in 2011, Anicve is dedicated to forest exploitation and wood processing.it sells firewood, pallets, timber etc. Anicve has recorded in 2015 a net turnover of 0.2 million EUR. 70

71 3/5 Forestry equipment and machines Key players: Potential clients (examples) Succes Forest is a Romanian company, part of the Succes Group with HQ in Targu Jiu, SW Romania. They produce fire wood of various species of fir, oak, beech, hornbeam. The firewood production quantity is of 1,000 pallets per week of firewood, cut firewood, split firewood in pallet size of 1m x 1m x 1.8m Another product they make is the barbecue wood packed in raffia or raschel bags. The bags may have 7kg, 10kg or 15kg. Barbecue wood is cut to 25 cm or 33 cm with a diameter of 10-12cm. In the production process, the company uses 10 Posch woodsplitters, out of which 4 are fully automated. Hedrom is one of the leading producers and distributors of firewood, compressed sawdust briquettes, and other types of solid fuels manufactured in Romania. The company manufactures and markets a wide range of solid fuels, split firewood, natural fresh - Firewood beech and hornbeam - Dimensions - cut to cm, - Packed in pallets 1x1x1.8 m 71

72 3/5 Forestry equipment and machines Key players: Potential clients (examples) Bon Euro Gold & D Founded in 2014, Bon Euro Gold & D produces and exports timber, beams, euro-pallets, firewood pallets etc. The company has a warehouse located in the Caras Severin county (Western Romania). The company sells and manufactures pallets of firewood cut to size Veriz and semi-dry and cracked. Firewood are ideal to fit into any type of stove or wood heating. Dimensions of a pallet of firewood are approximately 1m x 1m x 1.8m. 72

73 3/5 Forestry equipment and machines Key players: Trade organisations It operates through 12 regional branches and its main activities are: ASFOR - The Romanian Forestry Association ( is a legal entity which operates as a professional employers organization of the of Forest and Wood Processing Organisations in Romania. It is an autonomous, nongovernmental and non-political body, whose members are almost 1100 companies and entities involved in the forest exploitation industry and the primary wood processing. -To develop and implement the development strategy of the wood processing industry in the context of sustainable development of forestry and in full compliance with its environmental responsibilities. - To lobby and making legislative framework favorable economic development. Their main publication is the Meridiane Forestiere magazine 73

74 3/5 Forestry equipment and machines Key players: Romsilva The National Forest Authority Romsilva ( - operates under the Ministry of Environment, Water and Forests authority. Romsilva implements the public property forests sustainable management in accordance with forest management plans and the rules for forestry, in order to increase the contribution of forests to better environmental conditions. It also ensures the wood requirements of the national economy. The Romsilva Director General has responsibility for setting reference prices for the wood after which the final selling price will be given by the market, in the auctioning process. 74

75 3/5 Forestry equipment and machines Value chains Finnish manufacturers Local importerdistributors Trade fairs in Romania Local Clients / End users Trade fairs in Romania Adds in local sector magazines 75

76 3/5 Forestry equipment and machines Major projects Wood based heating systems appears to become a trend due to the versatility of the equipment, for industrial/commercial businesses (eg. wood based heating systems for vegetable greenhouses, which are priorities within NPRD ) as well as for home purposes (eg. holiday houses and pensions). Firewood processors could have market opportunity due to the increasing area cultivated with fast growing tree species (eg Paulwonia and energetic willow) and the wood based heating systems are more and more used in industrial (eg. greenhouses) and house constructions 76

77 3/5 Forestry equipment and machines Price examples: Boilers Boiler Imported by Price (EUR) Cast-iron wood boiler, Viadrus U22-D10 49 KW Creativ Tools 929 Wood gasifying boiler, Astra NEWG18 18 KW Creativ Tools 1140 Cast-iron wood boiler, Gobe Soliterm ST4 23 KW Melinda Impex Instal 558 Cast-iron wood boiler, SIME Solida EV 67 KW Romstal Imex 1173 Steel wood boiler, Radijator FK KW Romstal Imex 1572 Cast-iron wood boiler, Ferroli SFL5-36 KW Dedeman 925 Wood gasifying boiler, Bosch 6000W SFW 30-2 HFM 30 KW Dedeman

78 3/5 Forestry equipment and machines Price examples: Boilers Boiler Imported by Price (EUR) Pellet boiler, Viessmann Vitoligno 300-C 32 IVP Instalatii Steel wood boiler, Termofarc FI-150NS INIC Cast-iron wood boiler, Attach FD 26 INIC 907 Steel wood boiler, Buderus Logano S IVP Instalatii Pellet boiler, Defro Duo Pellet 50 KW Melinda Impex Instal Pellet boiler, DZ Idrobox 30 KW Dedeman Pellet boiler, Biodom 30 KW Creativ Tools

79 Sector 4/5 Environmental management equipment and machines Key drivers Winters can be quite hard in Romania, with heavy snow falls, road blocks due to winter conditions and traffic stops / delays, including of the main motorways Increasing pressure from the population, as well as from the local and central authorities, for better road management in winter conditions may lead to increasing purchasing of snow and ice management machinery Available public funding for purchasing road management environmental autovehicles and equipment will allow for increasing public acquisitions and call for offers in the public Demand for better road management Road blocks Snow falls New acquisitions Public funds available bidding system 79

80 4/5 Environmental management equipment and machines Key drivers, trends and transitions Loading machinery and autovehicles are mainly used by construction companies the constructions sector has been growing in Romania with an annual rate of 10% and more in the recent 2 years According to the Romanian Statistics Institute, in 2015 compared to 2014, the construction works in Romania registered a 10.4 % increase. In December 2015 compared to December 2014, Romania registered a 13.9% growth rate for production in construction, 3rd highest in the EU. For 2016, developers have plans to deliver a total record of projects of over 700,000 sqm in Romania, representing a total investment of over 800 mil. EUR, according to a report by JLL. Investment in office buildings remains the top choice, followed by retail projects and logistic and industrial. 80

81 4/5 Environmental management equipment and machines Key players - Clients The most important clients for snowblowers and sand distributors are the local authorities and the companies they subcontract the services of snow cleaning and road maintenance to Outside the urban areas, the most important client is the National Company of Roads and Motorways (CNADNR) which is in charge with road maintenance, including during the winter. Other clients are the state enterprises and administration firms, such as transport authorities, the army, but also private companies that have large premises Acquisition of such machinery is almost exclusively done through public offering and call for offers in the public bids system 81

82 4/5 Environmental management equipment and machines Key players - Clients Recent acquisitions and acquisition requests for snow blowers have been made by: ADMINISTRATIA BAZINALA DE APA PRUT BARLAD ANCOM - RATB - ADMINISTRATIA NATIONALA A REZERVELOR DE STAT SI PROBLEME SPECIALE FORTELE TERESTRE ROMANE - REGIA NATIONALA A PADURILOR - ROMSILVA RA- Asociatia de Dezvoltare Intercomunitara EURONEST ASOCIATIA DE DEZVOLTARE INTERCOMUNITARA SUD VEST OLTENIA 82

83 4/5 Environmental management equipment and machines Key players: Importers Avenue Tractor Proiect Comert Founded in 2006, Avenue imports and distributes environmental management equipment and machines such as loaders, snow blowers but also other relevant agrotechnology machineries such as plant protection sprayers etc. Avenue has reached a net turnover of 0.9 million EUR. Currently, the company has a team of over 10 employees. Set up in 1992, Tractor Proiect Comert is specialised in the import and distribution of environmental management machinery and construction equipment. Its range of products includes loaders, manufactured by Terex, E-Crane. The company offers integrated solutions to its clients. In 2015, Tractor Proiect Comert has registered a net turnover of 0.9 million EUR. It has over 10 employees. 83

84 4/5 Environmental management equipment and machines Key players: Importers Genco '93 Valentino Prodex Established in 1993, Genco '93 imports and distributes a wide range of environmental management equipment and machinery. Its portfolio includes loaders, manufactured by Gehl. The company is ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 certified. Genco '93 has recorded a net turnover of 6.6 million EUR in The company has over 30 employees. Valentino Prodex imports and distributes environmental management machinery. Its diversified offer includes snow blowers and sand distributors, manufactured by Giletta (Bucher Group). Some examples of its clients are: FCC Construccion, Conrec Botosani, Spedition UMB, Holcim etc. Valentino Prodex has recorded a net turnover of 4.7 million EUR in The company has approximately 20 employees. 84

85 4/5 Environmental management equipment and machines Key players: Importers Pick Up LGK Equipment Founded in 2004, Pick Up imports and distributes environmental management machinery including snow blowers and sand distributors, the Meyer brand. Some examples of its clients are: Tiriac Auto, Central Motors, Land Motors etc. In 2015, the company has reached a net turnover of 0.7 million EUR. Pick Up has around 10 employees. Set up in 2004, LGK Equipment imports and distributes environmental management equipment such as snow ploughs and snow blowers. One brand of snow ploughs and snow blowers in its portfolio is John Deere. LGK Equipment has recorded a net turnover of 0.8 million EUR in The firm has almost 10 employees. 85

86 4/5 Environmental management equipment and machines Key players: Importers Loreto Exim Furnizorul Meu Set up in 1993, Loreto Exim imports and distributes a wide range of large vehicles including environmental management equipment such as snow blowers. The firm distributes its products in the entire country. Loreto Exim has recorded total revenues of 0.6 million EUR in The company has some 10 employees. Established in 2010, Furnizorul Meu is dedicated to importing and distributing snow management machinery. It imports a wide range of sand distributors and snow blowers. The company distributes its products all over Romania. Furnizorul Meu has recorded a net turnover of 0.3 million EUR in

87 4/5 Environmental management equipment and machines Key players: Importers CB Ecomat Utilben 153/ Established in 2003, CB Ecomat is a 100% Romanian private company. The firm imports and distributes a wide range of environmental management equipment and streets cleaning machines, including sand distributors. Its clients are sanitation and snow removal operators on the domestic market. CB Ecomat has recorded a net turnover of 0.7 million EUR in Founded in 2006, Utilben imports and distributes a wide range of environmental management equipment, including sand distributors, snow blowers and loaders. Some examples of brands of loaders in its portfolio are: Caterpillar, JCB, Komatsu, New Holland, Case etc. The company distributes its products in the entire country. Utilben has reached a net turnover of 2.5 million EUR in The firm has over 10 employees. 87

88 4/5 Environmental management equipment and machines Key players: Competitors Inter Cargo Grup Mira Construct Set up in 2005, Inter Cargo Grup imports and distributes sand distributors and snow blowers, the Dobrowolski brand. The company covers the entire country and offers also financing options to its customers. Inter Cargo Grup has registered a net turnover of 2.7 million EUR in It has some 10 employees. Established in 2007, Mira Construct imports and distributes environmental management equipment and machines, specifically construction equipment manufactured by YTO International China of which they are the official dealer in Romania. Its porfolio includes loaders. Mira Construct has recorded a net turnover of 0.2 million EUR in

89 4/5 Environmental management equipment and machines Key players: Competitors Bergerat Monnoyeur Bergerat Monnoyeur is the representative of the Monnoyeur Group in Romania. It imports and distributes a wide range of CAT equipment, including snow blowers and loaders. The company covers the entire territory of Romania. Bergerat Monnoyeur has recorded a net turnover of approximately 50 million EUR in They have a team of around 130 employees. 89

90 4/5 Environmental management equipment and machines Value chains Finnish Manufacturers Local importerdistributors Public acquisition process Client In case of international bids 90

91 4/5 Environmental management equipment and machines Major projects - examples At the end of 2015, the National Company of Motorways and National Roads (CNADNR) received 100 snowblowers and 7 vehicles equipped for special interventions in winter. These machines were purchased with financial support from the European Commission within the "Acquisition of snowblowers for snow shoveling and vehicles equipped for special interventions in winter" funded by Transport Operational Sectoral programme The total amount of the purchase was of over EUR without VAT. The European Commission contribution by European Regional Development Fund is 85% of the equipment, the remainder being provided by the State Budget. 91

92 Sector 5/5 Livestock Solutions Drivers, trends and transitions Romania has a large number of animal population cattle, pig, poultry, sheep etc. According to the Ministry of Agriculture, on 31 Oct 2015 there were: heads of cattle heads of pigs heads of reproduction sows heads of poultry Vertically integrated processors of meat, milk, eggs Animal farms The vast majority of the animals are in private ownership, either in large corporations that are vertically integrated or in smaller private farms that sell to the meat, milk and eggs processors EU financial support as well as local banks loans are contributing to the development of animal farms in Romania EU funds, Private funding / bank loans, Public funding 92

93 5/5 Livestock Solutions Drivers, trends and transitions Diseases Price decrease Diminishing animal heads Export embargo Recent problems with animal diseases, which prevented Romania from being able to export pigs, as well as the Russian embargo of imports of food products from EU member states, affected in a negative manner the development of the livestock sector in Romania between In the second half of 2015 and continuing in 2016 the private investments and EU funds contributed to a slight recovery of the livestock number Nevertheless, at the end of April 2016 there were heads of pigs, which represents almost heads less than at the end of October 2015 Out of these, a number of piglets were born by artificial insemination. 93

94 5/5 Livestock Solutions Key players APCPR (the Romanian Pork Producers Association) is the professional organization of breeders of pigs operating in Romania. Set up in 1991, APCPR currently comprises over 100 members engaged in pig breeding, slaughtering and pork processing, service providers and schools / research organisations related to the pork sector in Romania. Its main aims are to support increasing the pork production and the economic efficiency of its members. In October 2017, the APCPR organises the 4 th edition of CARNEXPO, the largest trade fair dedicated to animal breeding technologies and meat processing in SE Europe. 94

95 5/5 Livestock Solutions Key players The National Agency for Breed Improvement and Reproduction in Zootechnics "Prof. dr. G. K. Constantinescu" (A.N.Z.) is a specialized body of central public administration, with legal personality, fully financed from the budget State in the Ministry of Agriculture and Rural Development (MARD) and subordinated to it. ANZ is the competent national authority in the field of Breed Improvement and Reproduction in Zootechnics, animal husbandry, state inspection and control of the producers and first purchasers of milk, conservation and sustainable management of animal genetic resources. Among its responsibilities, the ANZ authorizes livestock artificial insemination, the collection, processing and storage of semen storage centers and marketing of embryos and semen, code, approve and authorize the male breeders for artificial insemination. They also authorize breeders' organizations and associations involved in conducting breeding through artificial insemination, embryo transfer breeding directed and authorizes and approves service providers biotechnology to animal breeding. 95

96 5/5 Livestock Solutions Key players - examples Talea Afibanat Established in 1998, Talea distributes cow houses (Afibanat brand - manufactured in Romania), slurry tankers (Meprozet brand), loaders etc. Talea has recorded in 2015 a net turnover of 0.5 million EUR. The company has some 10 employees. Set up in 2007, Afibanat manufactures cow houses. Furthermore, the company imports and distributes feeding systems, the Lely Vector brand. Its production plant is located in the Timis County (Western Romania). The company distributes its products all over Romania. Afibanat has registered a net turnover of 0.4 million EUR in The company has over 10 employees. 96

97 5/5 Livestock Solutions Key players - examples Rota Guido Romania Evialis - Invivo NSA Established in 2008, Rota Guido Romania is the local representative of the Italian manufacturer Rota Guido. Its range of products includes: cow houses, piggeries, feeding systems, circulation of nutrients systems etc. Rota Guido has participated at various international fairs, such as AGRARIA 2016 in Cluj Napoca, AGROFARM 2015 in Moscow, INDAGRA 2015 in Bucharest etc. The international Group Evialis - Invivo NSA includes in Romania two main manufacturers of animal feed and premixes: Guyomarc'h Romania (with the plant located near Bucharest) and G A Nutritie Animala (with the plant located in the Bacau county - NE Romania). In 2015, Guyomarc'h Romania and G A Nutritie Animala have recorded a cumulated net turnover of approximately 12 million EUR and a total number of some 70 employees. 97

98 5/5 Livestock Solutions Key players - examples PIC Romania Ferme Plus Set up in 1998, PIC Romania provides pig genetics improvement solutions. The company has a pig farm located near Bucharest. PIC Romania has reached a net turnover of 1.6 million EUR in It has a team of some 20 employees. Ferme Plus is the dealer in Romania of the swine genetics company Topigs Norsvin. Ferme Plus has a pig farm in Cazanesti, Ialomita county (Southern Romania). Ferme Plus has recorded a net turnover of 3.7 million EUR in The company has some 50 employees. 98

99 5/5 Livestock Solutions Key players - examples Javier Camara Est Europe Tour Impex Group Javier Camara Est Europe manufactures livestock equipment. Its production facility is located in Iasi (NE Romania). The company has attended various fairs such as: Agralim, Indagra etc. Javier Camara Est Europe has recorded a net turnover of 0.5 million EUR in The company has around 10 employees. Set up in 1991, Tour Impex Group imports and distributes livestock solutions for cow, pig and poultry farms. One brand in its portfolio is Chapron Lemenager. The company distributes its products all over the country. Tour Impex Group has recorded a net turnover of 2.6 million EUR in The company has over 30 employees. 99

100 5/5 Livestock Solutions Key players potential clients Some of the biggest pig farms in Romania with the capacity of over 23,000 heads are: Smithfield Ferme, Premium Porc Group, Europig, Nutrientul Group, Nutricom, Denver Com, Crinsuin, Porcellino Grasso, Pigcom and Eurospatial. Smithfield Ferme - Premium Porc Group - Smithfield Ferme, controlled by WH Group China and part of The Smithfield Group, has 46 pig farms with a cumulated number of approximately 900,000 pigs. The pig farms are located in the Arad and Timis counties (Western Romania). Smithfield has a combined feed mill plant in the Arad county, opened in 2008 with investments of approximately 30 million EUR. Smithfield Ferme has recorded a net turnover of 145 million EUR in The company has around 1,100 employees. Premium Porc Group, controlled by DCH International A/S Denmark, has six pig farms that produce approximately 370,000 pigs per year. Premium Porc Group has two combined feed mill plants with a cumulated production capacity of some 140,000 tonnes per year. In 2014, Premium Porc Group has recorded a turnover of some 43 million EUR. 100

101 5/5 Livestock Solutions Key players potential clients Europig - Europig has a pig farm in Brasov county (Centre Romania) with the capacity of approximately 50,000 pigs per year. Europig has a combined feed mill plant with the production capacity of 80 tonnes per day. Europig is part of the Sergiana Group, owned by the Romanian businessman Tudor Neculoiu. The Sergiana Group manufactures meat products and bakery products and operates a chain of restaurants. Europig has recorded a net turnover of 14.5 million EUR in The company has over 200 employees. Nutrientul Group - Controlled by the Romanian businessman Iosif Pazuric, Nutrientul Group includes five pig farms (Nutripork SRL, Nutrisuin SRL, Nutritin SRL, Nutripig SRL and Select Pig SRL), two poultry farms and grain silos. Nutrientul Group has a cumulated number of approximately 42,000 pigs. The pig farms are located in the Bihor county (NW Romania). Nutrientul Group has own combined feed mill plant that produces approximately 10,000 tonnes per month. In 2015, the Group s five pig farms have recorded a cumulated net turnover of 18.2 million EUR and a total number of some 130 employees. 101

102 5/5 Livestock Solutions Key players potential clients Safir Group Transavia Safir Group has two poultry farms with the cumulated capacity of 420,000 chickens, a slaughterhouse with the capacity of 4,000 heads per hour, a combined feed mill plant (Nutriva) with the processing capacity of 15 tonnes per hour and a protein flour plant. Safir Group performs its activity in the Vaslui County (NE Romania) and is owned by Romanian individuals (Safir family). Transavia has 15 poultry farms with 25 million chickens, two poultry breeding farms, two slaughterhouses, a meat processing plant, a combined feed mill plant with the production capacity of 250,000 tonnes per year and four farms that operate agricultural land. Transavia is owned by the Romanian businessman Ioan Popa. Transavia has recorded a net turnover of 104 million EUR in The company has over 1,100 employees. 102

103 5/5 Livestock Solutions Value chains Finnish Manufacturers Local importerdistributors / dealers Local Clients Consulting firms for EU projects Set up local representative office (breeding material) Get certified by ANZ EU funds, Private and Public funding 103

104 5/5 Livestock Solutions Major projects In the last years, Nutrientul Group has invested EUR 5 million in the pig farms and EUR 3.5 million in the combined feed mill plant. Kosarom Group, controlled by the Romanian businessman Neculai Apostol, has announced plans to invest EUR 15 million in order to construct sow farms with the cumulated capacity of heads. For the next years, Kosarom targets to expand the integrated production system, from raising pigs to feed production and meat processing. Premium Porc Group, controlled by DCH International A/S Denmark, has finalised in September 2015 an investment of approximately EUR 23 million in order to modernise and expand its pig farms and to launch a combined feed mill plant in the Constanta county (SE Romania). Premium Porc Group plans to continue its development and targets to double its production by

105 5/5 Livestock Solutions Major projects Smithfield, controlled by WH Group China, has borrowed USD 60 million in 2015 from the International Finance Corporation (IFC) in order to support the growth plans to expand its pig farms and processing facilities in Romania and to restructure its debts. This investment sustains the employment in the agribusiness sector and the expanding of the best practices in the environmental, food safety and animal husbandry in Romania. Smithfield expects the IFC loan to generate production increasing and job creation and to enhance the company s ability to improve its sustainability programme to meet the needs of its customers.. Transavia, owned by the Romanian businessman Ioan Popa, has invested approximately EUR 25 million in 2015 in its integrated business (poultry farms, meat processing plant and combined feed mill plant), a double level compared to the investments in For 2016, Transavia has budgeted investments of some EUR 15 million. 105

106 Market Specific Issues

107 Regulatory Environment Romania is an EU member state since All EU legislation and regulations apply. Furthermore, the current Romanian Prime Minister is the Former EU Commissioner for Agriculture ( ). The grains storage facilities are regulated by the Law 101/2014 on the storage of seeds and the system to deposit. Firewood processing is influenced by the Government Decision no. 43/03 February 2016 amending and supplementing the Regulation of valorisation of wood from the forest public property, approved by Government Decision no. 924 of 4 November 2015 published in the Official Gazette of Romania no. 95 / Order no. 340 / 2013 on authorisation procedures for entities that performs activities and services in the sector of animal artificial insemination regulates the Breed Improvement and Reproduction in Zootechnics activities in Romania. 107

108 Regulatory Environment Registration as a supplier in AFIR d-base In order to be registered into the Database of Reference Prices for specialised machinery and equipment of the Financing Agency for Rural Investments (AFIR), a Finnish company has to fill in in Romanian language a few documents that can be downloaded from the AFIR website: a Registration Form a Registration Statement an Offer Price Table a Price Assuming Statement and to send them by as well as by post to AFIR. It is recommended that the Finnish company sends also a product catalogue. The representatives of AFIR analyse the documents sent and provide an answer in maximum 60 days. The registration is free of charge. The advantage of the registration is that the beneficiaries of the National Plan for Rural Development (NPRD) can buy the machinery and equipment directly at the prices mentioned in the Database, without any other procurement procedure. 108

109 Financing EU funds Although improving in the recent years, the access of SMEs to funding remains problematic. In terms of territoriality, financial services are generally less accessible to rural areas enterprises and to the agricultural sector, due to high credit costs. In 2012, about 4% of the total credits have been granted to agriculture. According to the ex-ante assessment of financial instruments in NRDP , the credits granted to farmers were 4 times lower compared to the level recorded at European level (281 /ha of arable land in RO and 1,203 /ha of arable land in EU). Although financial mechanisms (guarantee schemes) were in place, some of the beneficiaries who signed financing contracts under the NRDP did not succeed to access credits for investment. The main reason consisted in the nonexistence of an agricultural credit adjusted to the specificity of agriculture. 109

110 Financing EU funds EU non-reimbursable grants are the most important financing sources for farmers and agri-businesses in Romania. The companies can perform investments for which they can get reimbursed up to maximum % of their costs. All the agrotechnology sectors that make the object of this research are eligible for financing. The requirements imposed by the banking institutions for farmers for accessing funds (e.g. for guarantees) are similar to the ones applied for any other company or SME, being, in many cases, impossible to fulfil. The insufficient specialization of crediting services are reflected directly into the guarantee system for agriculture, which is not used to its planned capacity. It is reflected also to the limited access to the programme and the high level of project cancellations among selected beneficiaries. 110

111 Financing Problems and threats More than often, there are considerable delays in the payment of State subventions as well as EU funds. The delays are caused by delays in the decisions of the Ministry of Agriculture and its subordinate institutions. Earlier in 2016, 1.3 billion euros from European funds were due to Romanian farmers. The Payments Agency (APIA) made the payments with a few months delay. President of League of Associations of Agricultural Producers, Laurentiu Baciu, openly blamed the officials of the fault of the system and accuses them of sabotage. As a consequence, the APIA Director General has been dismissed at the beginning of May 2016 and a new Director General has been appointed. 111

112 Financing Players APIA Governmental Agency The Romanian Agency for Payments and Intervention in Agriculture (APIA) operates under the Ministry of Agriculture, Forestry and Rural Development as stipulated by Law 1/2004. It has a central office, 42 county centers and 266 local centers. From 1 January 2007, APIA runs the European funds which support the implementation of the financed by the European Agricultural Guarantee Fund (EAGF). The grants are awarded in the form of direct payments per hectare managed by the Integrated Administration and Control System (IACS). By 9 May 2016, 747,000 farmers received payments totalling 373 million euros. For the greening, they are currently paying a financial package of 530 million euros nationwide. Payments in the animal farming sector are due to start on 25 th May. The Agency representatives aim to complete all payments by 15 th June. 112

113 Financing Players Funding Agency for Rural Investment (AFIR) Funding Agency for Rural Investment (AFIR) was established by Government Emergency Ordinance no. 41 of 18 June 2014 by reorganizing the Agency of Payments for Rural Development and Fishing (APDRP). AFIR consists of 13 specialized central directions, of 8 Regional Centers and 41 District Offices. It is the Romania organisation that provides technical and financial implementation of the National Rural Development Plan (NRDP) The main directions of investment in the NRDP represent a natural continuation of the SAPARD Programme and the RDP

114 Financing Players: FGCR-IFN SA The role of FGCR - IFN S.A. is to facilitate access to finance in the agri-food sector and thus to contribute to the fulfilment of projects and future plans of farmers in Romania. Rural Credit Guarantee Fund - FGCR-IFN SA - was established in February 1994 under Law no. 31/1990, as a joint stock company, following negotiations between the European Commission and the Romanian Government, represented by the Ministry of Agriculture and Rural Development, putting into practice the EC s program to support the privatization of agriculture in Romania. It became a Non-banking Financial Institution (NBFI / IFN) in In 2015, the number of beneficiaries of guarantees by the FGCR - IFN S.A was about 1,350 with a value of approx. 683 mil. RON out of which only 130 of the program that provides purchase of land, which is considered characteristic for a program financing year-end. 114

115 Financing Players: Credit Agricole Bank Romania Credit Agricole Bank Romania, part of the Crédit Agricole Group, is the new name of Emporiki Bank Romania, present on the market since They operate through a network of 22 branches, located in the major cities in the country and a dedicated SME Business Center. In Nov. 2015, Crédit Agricole Romania prolonged the convention with APIA, FGCR (Rural Credit Guarantee Fund) and FNGCIMM (National Credit Guarantee Fund for Small and Medium Enterprises) to finance companies receiving subsidies APIA single payment scheme surface (SAPS) for campaign. As per this partnership, they are financing companies with agro activity, which fulfil the eligibility criteria, up to now 90% from the APIA SAPS certificate amounts, funds that can be used to finance their current activity. Moreover the offer of Credit Agricole Bank was developed as to meet a greater variety of the needs of farmers in Romania, their portfolio including loans for agricultural campaigns, acquisition of equipment or agricultural land. 115

116 Financing Players banks and NBFIs Local manufacturers, dealers and importer-distributors of agricultural machinery and farm equipment often partner with banking and non-banking financial institutions to offer attractive packages which encourage purchases. Some of these institutions are: Libra Bank Patria Bank Unicredit Leasing IKB Leasing Impuls Leasing TBI Credit Cetelem 116

117 Financing EU funds Consulting Firms with expertise in Agro-business > Established in 2004, TERRA NOSTRA CONSULTING provides information, consultancy, training and studies in business and management. The company is specialised in preparing investment projects financed under non-reimbursable funds, both pre-accession (SAPARD) and post-accession (EFRD, SEF, CF, EAFRD, EFF, etc). Since 2008, they are members of ACRAFE (Association of Romanian Consultants for Accession of European Funds), and in January 2015 they became members of the National Network of Rural Development (RNDR). The top management worked within the Ministry of Agriculture and SAPARD/APDRP Agency. Their track record includes: Over 100 projects under SAPARD, EAFRD and other financing programmes in 15 counties. 24 SAPARD projects with a total value of more than EUR 37 million in agriculture (crops and animal husbandry), food industry (milk, meat and fish processing) and rural tourism. 44 projects under EAFRD and other financing programmes, with a total eligible value of approximately EUR 50 million in vegetal sector, animal husbandry sector, milk processing, rural infrastructure, industrial production, forestry infrastructure, services, etc Website: 117

118 Financing EU funds Consulting Firms with expertise in Agro-business > VAPRO Romania is part of the Dutch VAPRO International group, with more than 20 years of experience at European level in development and implementation of projects financed from European or national funds. In Romania, their portfolio includes hundreds of clients from various industries and over 150 million euro in grant funding since Till 2020 they are expecting to assist clients - from all the 5 agrotechnology sectors reviewed in this research - to develop projects and receive EU non-reimbursable grants for their investments. VAPRO consultants and experts can assist a company throughout the entire process - from establishing the idea and developing the projects in order to obtain grants, to the management and implementation of the strategies for which the grants have been awarded and to the reimbursement of all costs. Website: 118

119 Financing EU funds Consulting Firms with expertise in Agro-business > Set up in 2007, REI FINANCE ADVISORS is a company specialised in preparing and implementing investment projects on both European funds and state aid grants. Additional to the preparation of all the necessary documentation, they take care of the identification of all the funding sources and the programmes applicable for each category of applicants, as well as regular provision of information concerning the funding opportunities and conditions. Website: > ACE offer tailored, innovative and complex financial solutions. They assist transaction with all the local banks and provide access to non reimbursable funds granted by EU Commission and other financial or public institutions. So far they outperformed on more than 300 grants, state aids and nonreimbursable financed projects, with a total amount exceeding Euro 500 million. ACE provides also capital raising and debt financing advisory services, aggregating other sources available on the market such as: private equity, hedge funds or venture capital. Website: 119

120 Expert Interviews NO Name of the organisation / company Contact person Title Phone 1 ALSER FOREST Sorin Solomonean Sales and Marketing Manager office@utilajedep adure.ro C.E.D.R. Vilcele Cosmina Gheorghe Assistent Manager VAPRO Romania Irina Zugravu Managing Partner i.zugravu@vapro. ro National Agency for Zootechnics (ANZ) Steluta Nitulescu Counsellor, Swine Department TERRA NOSTRA CONSULTING Constantin LEONTE, PhD General Manager c.leonte@terrano straconsulting.ro

121 Expert Interviews Company Name: ALSER FOREST Interviewee: Sorin Solomonean Title: Sales and Marketing Manager Contact details: Mobile: ; Relevant background info Drivers, trends Set up in 2008, Alser Forest is the local representative of Alser Forest Oy Finland (founded in 2004 by the Romanian businessman Albert Serban). Alser Forest imports and distributes forest equipment manufactured by Kesla Finland. Furthermore, its portfolio includes firewood processors manufactured by Rabaud France. Some examples of its clients are: Directia Silvica Neamt, Directia Silvica Bistrita Nasaud, Elekes Forest SRL, Lapus Forest SRL, Rapid Forest SRL, Andrea Forest SRL, Eltim Forest SRL etc. The firewood demand in Romania will decrease in the next 2-3 years. One major factor is the wood price increase by Romsilva. As a consequence, it is expected that the demand of firewood processors in Romania will decrease in the next 2-3 years too. Development areas, concerns - The firewood processors from Finland are not suitable for the Romanian market due to the fact that the wood in Romania is hard and the wood in the Nordic countries is soft. - The firewood processors from Finland are expensive and they do not have competitive advantages. - The Romanian users prefer firewood processors made in Austria, France, Poland, Slovenia and Italy. Recommendations No recommendations 121

122 Expert Interviews Company Name: C.E.D.R. Vilcele Interviewee: Cosmina Gheorghe Title: Assistant Manager Contact details: Mobile: ; Relevant background info Drivers, trends Development areas, concerns Recommendations C.E.D.R. Vilcele is an agribusiness producers association located in south part of Romania (Calarasi county) that includes 88 members. They operate in agrotechnology sectors such as Cereal crops; Cow, pig & chicken livestock. -The main trend is the market monopolization by large companies that make acquisitions, offer low prices to agricultural producers and also very high prices at inputs for production. - All big producers of equipment are present in Romania, directly or through importer-distributors, and therefore the farmers have access to the latest technology. -The biggest need of the C.E.D.R. Vilcele members is to have their own storage spaces in order to stock a part of their production until the market stabilization. - The government role is very important. It should ease the farmers activity by simplifying the legislation, by clarifying the legislation through simple and clear rules which leave no room for interpretation. - EU funding: approx. 95% of C.E.D.R. Vilcele members applied for / received funding from the EU Due to its high number of members, it is an excellent opportunity for those selling agrotechnology products/services to keep C.E.D.R. Vilcele aware of their offering. 122 C.E.D.R. Vilcele members are looking for quality and for good price/quality ratio.

123 Company Name: VAPRO Expert Interviews Interviewee: Irina Zugravu Title: Managing Partner Contact details: Mobile: ; Relevant background info Drivers, trends Development areas, concerns Recommendations VAPRO Romania is part of the Dutch VAPRO International group, with more than 20 years of experience at European level in development and implementation of projects financed from European or national funds. In Romania, their portfolio includes hundreds of clients from various industries and over 150 million euro in grant funding since The EU non-reimbursable budget assigned to Romania during the programming period is around 40 billion euro. This allocation can stimulate companies and stakeholders from various areas to perform different kind of investments. 9,5 billion euro out of the entire 40 EU non-reimbursable billion euro allocation are available for agrotechnology investments in Romania (e.g: investments in equipment, constructions, modernization etc.). The agro-business environment potential in Romania is one of the highest in the EU due to favourable natural conditions and to the current need of new performing and efficient investments. Investments in equipment and constructions for: vegetal farms (arable machinery and equipment, grain silo solutions etc.), animal farms (equipment and constructions); processing and marketing of agricultural products (specific equipment and constructions); other non-agriculture investments in rural area (e.g.: a wood processing factory). They should start applying for EU funding as soon as possible because the EU non-reimbursable grants have started to be awarded and there is a high request. There is the possibility that the 9,5 billion euro allocation to be spent faster than in the previous 123 programming period.

124 Expert Interviews Organisation Name: National Agency for Animal Breeding and Zootechnics (ANZ) Interviewee: Ms. Steluta Nitulescu Title: Counsellor, Swine Department, Contact details: Phone: Relevant background info ANZ is the competent national authority in the field of Breed Improvement and Reproduction in Zootechnics, animal husbandry and sustainable management of animal genetic resources. Among its responsibilities, the ANZ authorizes livestock artificial insemination, the collection, processing and storage of semen storage centers and marketing of embryos and semen, code, approve and authorize the male breeders for artificial insemination. Drivers, trends Development areas, concerns EU funds support the further development of animal farming in Romania, including of the quality of animals and breeds. Order no. 340 / 2013 on authorisation procedures for entities that performs activities and services in the sector of animal artificial insemination regulates the Breed Improvement and Reproduction in Zootechnics activities in Romania Recommendations If a foreign producer of pig semen intends to enter the Romanian market, the indicated procedure for better and quicker access to the local market is to establish a presence in Romania. 124

125 Expert Interviews Company Name: TERRA NOSTRA CONSULTING SRL Interviewee: Mr. Constantin LEONTE, PhD Title: General Manager Contact details: Phone: Relevant background info Drivers, trends Development areas, concerns Recommendations TERRA NOSTRA CONSULTING is a business consultancy, with a major specialization in the consultancy for the preparation of the investment projects to be financed through NPRD Their targeted sectors are agriculture (vegetal and animal farms), food processing (all sectors) and rural development in general. The top management of the company and some of its collaborators worked within the Ministry of Agriculture and SAPARD/APDRP Agency, as well as in assistance programs for the Agency. All the agrotechnology solutions and equipment of interest to the Finnish producers are eligible to be purchased through EU funds for investment projects in the specific sectors, being financed by several investment measures or sub measures in Romania. There is still place on the market for new entries in the agricultural machinery and grain silo solutions. However, the animal sector is still affected in the most important sectors, dairy and pork. A very well targeted promotion campaign and participation at the agricultural machinery fairs in Romania (where the participation of the farmers became a must) 125 Register in the special prices database for agricultural machinery on the portal of the Agency for Financing Rural Investments/A.F.I.R

126 Key Information Sources

127 Key information sources The National Statistics Institute Eurostat Romanian Ministry of Agriculture and Rural Development Romanian Ministry of Environment, Waters and Forests The European Commission The National Forest Authority - Romsilva The Foresters Association in Romania (ASFOR) The National Agency for Breed Improvement and Reproduction in Zootechnics (ANARZ) National Bank of Romania World Bank National Commission for Prognosis Agerpres, Mediafax On-line press articles 127

128 Thank you

129 Authors FRD Center Market Entry Services Bucharest, Romania Indufor Oy Töölönkatu 11, Helsinki Finnish Trade Organisation Fintra Ltd Tammasaarenkatu 5, Helsinki, Finland