Business Newsletter INSIDE: UNITY, COMMITMENT, SUCCESS!

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1 QENDRA E EKSPORTEVE SHQIPTARE AFI SHOQATA E INDUSTRIALISTËVE USHQIMORË January, Issue UNITY, COMMITMENT, SUCCESS! Business Newsletter Access to nance was always one of the main constrains for the development of small entrepreneurship, especially in agro sector. That's why it is very important for businesses operating in agro-processing sphere to know where to get nancial support. There are a lot of such sources of nancing! Problem is that small businesses do not know where and how to apply. There are IPARD funds, there are subsides from Albanian Government it is simply necessary to follow the information and know whom to address in order to receive consultation on this. INSIDE: Albanian agribusinesses and agro-processors will have access to million Euros for rural development under IPARD II program Subsidy schemes. Consultation meeting between the Ministry of Agriculture and the milk industry Exports in 2017 and expectations for 2018 Ukraine is ready to start negotiations for the Free Trade Agreement with Albania Advocacy Cases followed up by AFI/Alb Export December & January Our newest members Albanian agribusinesses and agro-processors will have access to million Euros for rural development under IPARD II program Albanian Export Center and Albanian Food Industry will inform and assist its members and partners on the criteria that have to be ful lled for farmers and companies to bene t from available funds. IPARD With the aim to help Albania in gradual approach with production standards, with EU legal standards and politics in agricultural sector and rural development, European Union accorded a fund of 94.4 million euro (including Albanian government subsidies) to nance three measures, investments in farms, investments in processing and diversi cation of the farms or other rural business.

2 Albanian agribusinesses and agro-processors will have access to million Euros for rural development under IPARD II program IPARD For the rst measure, the one who pro t from this measure are enterprises or farmers group, and other legal agribusiness subjects, for example: private agricultural companies, producer groups etc. For the second measure, bene ciaries are enterprises. Investments supported according this measures have to be related with processing and/or trading of agricultural products, including sheries products, and/ or development of new products, processes and technologies related to agricultural products, including sheries products. Bene ciaries of the third measure are farmers that expand agricultural activities without taking into account if they are established in urban area or in a rural area, physical persons, which administrate an economic activity, who live in a rural area. They can work, for example, like self-employed, handicrafts- man etc. The last bene ciaries are also micro and small enterprises with activity in rural areas, including crafts enterprises, which have potential to implement the project. Legal private subjects established out of rural areas, it can be also acceptable if the supported investments / activities are established in rural areas. AFI will follow closely the work of Ministry of Agricultural to de ne the criteria of the application for each of the schemes, and will inform the members into a short time about their contents. Also, we will offer our assistance for preparing this application case by case according to our member's request, in the way to maximize the absorbing ability of those funds from Albanian agriculture BUSINESS NEWSLETTER, JANUARY 2018 ISSUE 8

3 Subsidy schemes. Consultation meeting between the Ministry of Agriculture and the milk industry In the framework of the nalization of subsidy scheme and consultative meetings, the biggest operators of milk and milk processing industry met with Vice Minister of Agriculture and Rural Development Mr. Ilir Halilaj. In this meeting, organized by the Albanian Food Industry, the companies of this industry proposed to the Ministry of Agriculture to be careful regarding the investments in dairy industry in order to have the desired impact to increase the quality. Operators unanimously demanded special attention towards the processing industry, because the subsidies for the farmers are not enough to guarantee and increase the milk quality. On the other hand, the focus on the processing industry will increase the food safety, because this makes it easy for the competent institutions to control the traceability. It is easier to supervise several processing companies than thousands of farmers in the eld, said Mr. Arben Ndreka, the Chairman of Milk Committee of AFI. From his side, Mr. Halilaj thanked the operators of this industry and expressed the willingness of the Ministry of Agriculture to take into account any recommendation which guarantee and increase food safety. Vice Minister, Mr. Ilir Halilaj 2-3

4 Exports in 2017 and expectations for 2018 Alban Zusi, President of Alb Export & Executive Director of AFI Why export is important? Overall, 2017 has been a good year for exports, especially for industrial exports. Agro-industrial exports, which continue to increase, are either fresh fruit-vegetable or processed food products. In general, these types of exports have had a steady growth that I believe will continue to be sustainable this year as well. However, there is no national protection on exports; for example, the Macedonian products are protected because, as soon as their season of exports starts, Albanian products are blocked at the border by the customs authorities, with the argument of the risks. We should address this, so our exported products are protected as this is an unfair practice. For this it is needed a holistic policy from government. Economic diplomacy should not be a theory but a real commitment in function of promotion of Albania and Albanian products, and why not a qualitative lobbying to penetrate into particular and new markets. 1 2 At international fairs, there should be a national stand paid by the Albanian government funds, where Albanian exporters show their products. This is not yet happening, while in many countries, this is a completely normal practice. Today, the Albanian exporters are alone in front of foreign markets and need concrete support from the government through an agreed strategy between all parties. We hope that this year, the Albanian government together with business organizations - mainly focused on exports, will develop an export strategy. This strategic plan will help to remove the barriers for low implementation and also design packages to support Albanian exports. In 2018, we are expecting that exports will continue to grow by double-digit numbers, especially agribusiness sector. We predict that the agribusiness industry in the country is expected to replace more import products in the market Tirana, January 17, 2018: In 2017, the value of exports was 273 billion lekë, increasing by 12.1 %, compared with previous year and the value of imports was 626 billion lekë, increasing by 8.1 %. Trade de cit was 353 billion lekë, increasing by 5.2 % compared with the same period of Exports in 2017, are increased by 12.1 % compared with previous year. The groups affected positivity in annual increase of exports, are: Construction materials and metals with +4.9 percentage point, Textile and footwear with +4.4 percentage point, Food, beverage, tobacco with +1.9 percentage point. In the annual change in exports a negative contribution was given by the group: Minerals, fuels, electricity with 1.4 percentage point. BUSINESS NEWSLETTER, JANUARY 2018 ISSUE 8 Institute of Statistics In 2017, imports are increased by 8.1 % compared with previous year. During 2017 all groups affected positivity in annual increase of imports, who the groups that in uenced more in annual increase of imports, are: Minerals, fuels, electricity with +2.8 percentage point, Textile and footwear with +1.2 percentage point, Chemical and plastical products with +1.2 percentage point. Trade with the EU countries, in 2017 is 66.3 % of total trade. During 2017, exports to EU countries occuped 77.1 % of total export and imports from EU countries occuped 61.6 % of total import. The main trade partners are: Italy (36.2 %), Greece (6.8 %), Germany (6.8 %) and China (6.4 %). For more information, visit INSTAT webpage:

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6 Ukraine is ready to start negotiations for the Free Trade Agreement with Albania Ukraine is open to negotiate the Free Trade Agreement with Albania. This issue was rst discussed in April last year during the Ukraine- Albania Business Forum, organized by the Albanian Export Center. The Governments of both countries are now preparing the working plan of the Intergovernmental Commission for trade-economic cooperation. The Minister of Foreign Affairs of Albania, Mr. Ditmir Bushati, is visiting Ukraine at the end of this month. Alb Export and AFI consider this step a great opportunity for Albanian businesses to become more competitive in the Ukrainian market with their products compared to Montenegrin or Macedonian businesses, which already bene t from the signing of Free Trade Agreement with Ukraine. Albanian consumers will also bene t from lower prices of Ukrainian products, such as sugar, vegetable oil or our, which are already sold in the Albanian market due to preferential fees that will be applied after the signing of the agreement. UKRAINE at a GLANCE Europe's second largest country, Ukraine is a land of wide, fertile agricultural plains, with large regions of heavy industry in the east. Ukraine is 603,628 square kilometres, stretching from Russia in the east to Poland in the west. Ukraine has two seas Black Sea and Azov Sea. Within Ukraine is the geographical centre of Europe in the small town of Rakhiv in western Ukraine. Population of Ukraine is about 44 million. There have been no active relations between Albania and Ukraine till last 2-3 years. Economic relations come usually after established diplomatic contacts. On November 4, 2016, Minister of Foreign Affairs of Ukraine Pavlo Klimkin paid an of cial visit to the Republic of Albania. Issues of bilateral cooperation, including the implementation of priority projects in trade and economic cooperation, were discussed. Also an Agreement between the Cabinet of Ministers of Ukraine and the Council of Ministers of the Republic of Albania on mutual abolition of visa requirements was signed, so now there is a free visa regime between both countries. This was really very important step to open the road for business cooperation. Free trade agreements (FTA) are arrangements in which countries give each other preferential treatment in trade, such as eliminating tariffs and other barriers on goods. FTAs lead to the creation of new markets for businesses, facilitate the production of high-quality goods and enhance economic growth. BUSINESS NEWSLETTER, JANUARY 2018 ISSUE 8

7 Advocacy Cases followed up by AFI & Alb Export - December & January NOTARISATION OF TRANSLATED CERTIFICATES During January and December AFI continued its work on issues that are raised by its members. In particular, a lot of work was done on the issue of notarization of veterinary certi cates. Since several years now the practice at customs continues that Albanian importing businesses have to not only translate the veterinary certi cates in Albanian, but they also have to notarize those. The practice is costly and timeconsuming for businesses, because they have to physically go to the notary who is not situated in the border, but in some urban areas. Moreover, and more problematic, is the fact that the notarization of a document cannot be a veri cation of the content of a document which is not a true copy of the original. In this case, the certi cate in English cannot be the original document of its translated copy in Albanian. For this reason, AFI has sent a lengthy letter to the Albanian Customs Authority and the National Food Authority where the problem has been presented in legal terms. The letter offers a solution of the problem. It is expected that the NFA and the Customs Authorities will now organize a meeting where this problem is discussed technically among stakeholders. The Ministry of Agriculture and the Ministry of Enterprise are also invited to participate. TAX FOR PLASTIC PACKAGING Another case concerns the rate of plastic tax which is considered as quite burden-some for the Albanian companies. There have been several letters addressed to the government on this issue, but with no result so far. Efforts continue to get the attention of the Ministry of Finance and have a discussion with them on the issue that will lead to the lowering of the tax. Another letter was sent this month for this purpose. RECOGNITION OF VETERINARY CERTIFICATES OF NON-EU COUNTRIES Several issues on veterinary certi cates are pending too. There has been exchange of information between our members and AFI staff in order to take decisions on the steps that will be taken to address these issues. The information has been prepared and sent to the Ministry of Agriculture, and we wait for their reaction in the months to come. 6-7

8 OUR NEWEST MEMBERS: MULTIVAC Multivac is one of the world's leading providers of packaging and packaging equipment. Multivac's quali- ed production network extends worldwide and consists of sales and service companies that are always supporting the customers and they offer a leading service of its kind. Packaging is used for all types of food, packaging of industrial articles, health care products and pharmaceuticals. They are distinguished for their high quality and longevity. Packaging protects Multivac's goods and retains their quality which is one of the priorities of Multivac. Their machines contribute each day to the business success of their customers, thus making a guaranteed investment. Machines can be purchased, funded or leased. MULTIVAC MUHARREM HOXHA Muharrem Hoxha is a meat plant and meat processing Company that started to operate since The main activity is slaughtering, meat processing and sale of meat products. The current capacity is about 50 pigs per hour, 50 cattle and 200 goats/ sheep/ lambs per 8 hours. Muharrem Hoxha company has recently invested on high technology that includes: stainless steel appliances, 5 refrigerating rooms, water puri cation facilities, animal accommodation facilities etc. The actual number of employees is 15, but if their plant would work in full capacity, the number of employees could be doubled. Muharrem Hoxha distribution of meat and processed meat delivers from small shops to restaurants of the area, as well as in the whole national market. MUHARREM HOXHA Contacts: Address "Gjin Bua Shpata" rr., Pallatet e Aviacionit te Vjeter, building 4, Ap.16, Tirane center@albania-export.com web /ALB.Export /AlbanianFoodInduistry 6-7