Moldovan MP's visit Cosnita Cannery June 19, 2008
Meeting between Moldovan Agribusiness Leaders and Members of Parliament at the SA „Fabrica de conserve din Cosnita”, in Cosnita, Dubasari district
The series of meetings between Members of Parliament with selected agribusiness leaders that commenced in May continued in June with a visit to the SA „Fabrica de conserve din Cosnita”, that is located on the left bank of river Nistru under Moldovan Administration. This program to promote dialogue between Moldovan business leaders and Members of Parliament, is jointly sponsored by the International Association of Business and Parliament (IABP) and the Agribusiness Development Project (ADP), financed by USAID and implemented by CNFA Inc.
Mr. Serghei Grijancovskiy, the Chief Executive of the factory hosted two MPs: Mr. Gheorghe Popa, Deputy Chair of the Budget, Finance and Economy Committee , and Mr. Gheorghe Susarenco, Member of the Legal Issues, Appointments, and Immunities Committee. The deputy director of the factory, Mr. Cojocaru also took part in the discussion.
During the first half of the meeting, the MPs learned about the latest factory investments as well as current challenges. the factory faces. The meeting continued with a visit to the processing areas.
The challenges discussed at the round table concerned: (i) the strengthening of Lei against the dollar and euro, resulting in large losses from exporting activities (95% of the factory output is exported) – a need to develop a hedging mechanism to ensure against such risks; (ii) unfavourable borrowing conditions (high interest rates – 20%, short crediting period); (iii) lack of raw material, as the factory integrates backward to invest in planting and harvesting own agricultural products; (iv) lack of work force, and high work force salary expectations ; (v) the need for futures contracts as currently the services provided by insurance companies are not satisfactory; (vi) the possibility of state subsidies for agricultural processing companies (e.g. excluding VAT payment on imported machinery; excluding levy on gasoline; subsidizing part or all of the interest rates on bank credits); and (vii) political situation with Transnistria as part of the company’s land base is under the jurisdiction Transnistrian authorities that limit the access of company machinery and personnel to its land.
Mr. Popa, MP said that he will raise these issues with his committee and will address them during an upcoming hearing with the Governor of the National Bank.
Starting with 2004, the enterprise made considerable investments in improving technology for fruit and vegetable processing, e.g. installed a concentrated juice production line and a green bean and sweet corn production and packaging line. The enterprise also made investments in production facilities to reduce dependence on outside raw material suppliers. At present SA „Fabrica de conserve din Cosnita” is renting about 1,500 hectares of arable land for growing of green bean and sweet corn and owns about 100 hectares of orchards and a tree nursery. Thanks to these investments in 2007, an unfavourable year for Moldova because of the drought, the company turnover amounted to approximately 94 million lei.
IABP-Moldova would like to thank the ADP Project for the continuous support of the spring-summer company meetings program for Members of the Parliament. The next meeting between MPs and agribusiness leaders will take place at in early July at a food processing company in Stefan-Voda.
Source - www.iabp-moldova.md.
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