Investment Investment opportunitiesopportunities

in livestock sectorin livestock sector

TABLE OF CONTENTS

Legal framework Structure of livestock sector Favorable regions for animal husbandry Main export markets Challenges Sector priorities Reasons to invest in livestock sector Support mechanisms Investment possibilities

LEGAL FRAMEWORK

in the field of investments: Law on investment in entrepreneurial activity no. 81 from 2004 Law on public private partnership no. 179 from 2008 Law on free economic zones no. 440 from 2001

in the livestock sector: Husbandry Law no. 412 from 1999 Law on selection and reproduction of animals no.371 from 1995 Law on beekeeping no. 70 from 2006

STRUCTURE OF LIVESTOCK SECTOR

43%

36%

16%4% 1%

Pigs

Poultry

Cattle

Sheep & Goats

Other production

FAVORABLE REGIONS FOR ANIMALS HUSBANDRY

North

Centre

South

North region

Due to its climate conditions is more suitable

for cattle breeding,

Centre and South regions

are favorable for breeding of other

species

(pig, poultry, sheep, goats)

INSTITUTIONAL STRUCTURE BY TYPE OF PRODUCTSMILK AND DAIRY

SECTOR INDEXES IN 2010

Scientific-Scientific-Practical Practical

Instititute of Instititute of Biotetehnologies Biotetehnologies in Husbandry and in Husbandry and

Veterinary Veterinary

MedicineMedicine

RepublicanRepublican Center Center for Improvement for Improvement and reproduction and reproduction

of Animalsof Animals

Milk collecting Milk collecting points points (600)(600)

Dairy Dairy processing processing

plantsplants

Market chainMarket chain

(supermarket(supermarketss, , agri-agri-food marketsfood markets, ,

specialized shopsspecialized shops))

CowsCows – 154, 4 thousand heads– 154, 4 thousand heads

ProductionProduction – 591,2 thousand tones– 591,2 thousand tones

ConsumptionConsumption - 642,0 thousand tones- 642,0 thousand tones ProcessingProcessing - 118,8 - 118,8 thousand tonesthousand tones

Distribution of cows

97%

3%

individualsector

farms

INSTITUTIONAL STRUCTURE BY TYPE OF PRODUCTS MEAT (BEEF and SHEEP MEAT, PORK,

POULTRY)Beef and Sheep

Institute of Biotechnologies (genetics)Animal keepersBulls/sheep fattening farmsSlaughterhousesMeat processing plantsTrade chains

Pork

State Enterprise “Moldsuinhibrid” (genetics)

Breeding farmsSlaughterhousesMeat processing plantsTrade chains

Poultry meat

•State Enterprise “Avicola Moldova”•Reproduction centers•Broiler Chicken production facilities•Slaughterhouses•Meat processing plants•Trade chains

Production: 19,6 thousand tConsumption: 10,0 thousand tExport (beef): 1,2 thousand tExport (sheep): 1,3 thousand t

Production: 73,2 thousand tConsumption: 52,5 thousand t

Production: 54,9 thousand tConsumption: 39,0 thousand t

MAIN EXPORT MARKETS (2010)

LIVESTOCK (cattle & sheep)

99%

1%

ARABSTATES

CIS(RussianFederation)

Milk and dairy products

0500

10001500200025003000

KA

ZA

HS

TA

N

RU

SIA

NF

ED

ER

AT

ION

SIR

IA

BIE

LO

RU

SS

IA

US

A

UK

RA

INE

Honey

62%15%

13%

10% RussianFederation

Kazahstan

Bielorusia

USA

Beef and sheep meat

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

RUSSIANFEDERATION

IRAK

thousand USD

CHALLENGES

Insufficient milk production for processingInsufficient milk production for processing(Only 30 % of dairies’ capacities are used)(Only 30 % of dairies’ capacities are used)

Law level of technological Law level of technological endowmentendowment

of farmsof farms

SECTOR PRIORITIES Fulfillment of EU sanitary veterinary to be allowed to Fulfillment of EU sanitary veterinary to be allowed to

exports meat and milk products exports meat and milk products

Attract investments in tehnical upgrading of farms Attract investments in tehnical upgrading of farms for milk productionfor milk production

Re-launch and diversify export markets Re-launch and diversify export markets (e.g.to negotiate (e.g.to negotiate re-launch of pork to Russian Federation market)re-launch of pork to Russian Federation market)

REASONS TO INVEST IN LIVESTOCK SECTOR

Attractive factors of production: Large areas of grassland Favorable climatic conditions High quality of soil Labor force for advantageous cost Lease of agricultural land for long term (up to 30 years)

Fiscal incentives: Tax for corporate profits is 0 % VAT exemption in free economic zones

Favorable geografical location: Access to CIS and EU markets

SUPPORT MECHANISMS

State subsidies

Credits at attracting

rates provided by IFAD

Upgrading and technological renovation

of livestock farms

Procurement of breeding animals

and keeping genetics

40 % of cost for equipment for cattle farms

30 % of cost for equipment for other species farms

Development of livestock and poultry

INVESTMENT POSSIBILITIES

Establishment Establishment of milk farms and milk processing of milk farms and milk processing plants plants

Upgrading and technologization of milk farmsUpgrading and technologization of milk farms

Creating farms of fattening and slaughtering of cattleCreating farms of fattening and slaughtering of cattle

Genetic improvement of animalsGenetic improvement of animals

Implementation of Public Private Partnership Projects Implementation of Public Private Partnership Projects with Scientific-Practical Institute of Biotechnologies with Scientific-Practical Institute of Biotechnologies and Veterinary Medicineand Veterinary Medicine((in the field of embryo transferin the field of embryo transfer, , milk processingmilk processing, , improvement of improvement of management practices of animal breeding)management practices of animal breeding)