Page 15 - bne IntelliNews monthly magazine December 2024
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bne December 2024 Companies & Markets I 15
Other companies have emerged as suppliers to the automotive industry, and Moldova is particularly strong in exports of high-tech cables and wires. Companies in this area include ELIRI, which produces advanced technology and equipment for the creation of moulded glass-insulated microwires. Moldovan companies supply well-known automotive brands such as Volkswagen, Renault and Stellantis.
Alongside these local companies are a growing number of international companies which, Maevski says, “play a crucial role in modernising the electronics industry.”
Growth of the sector has been helped by Moldova’s advances towards EU integration. The country signed its Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) agreement in 2014. In 2022, Moldova, along with neighbouring Ukraine, was given EU accession candidate status, and in December 2023 it got the nod to start accession talks. In October 2024, Moldovans voted (albeit narrowly) in a referendum in favour of including the country’s EU accession aspiration in the constitution.
“Moldova’s path is to integrate into the EU. International companies export to their mother companies or countries where they come from. Moldova’s integration into the EU also helps local producers to export their products abroad,” said Maevski.
The emphasis on exports is essential for Moldova, where the local market is too small to sustain the sector alone. Electronics sector exports have grown steadily, reaching $536mn in 2022 – double the 2016 figure.
“This export growth has been driven by international companies establishing production in Moldova, thanks to favourable legislation and government incentives,” according to Maevski.
One of Moldova’s advantages is its highly skilled workforce, thanks to strong educational partnerships that supply trained professionals to the electronics sector. “We see local and international companies investing heavily in education, partnering with universities and vocational schools to develop curriculums that meet the demands of the electronics industry,” Maevski explained. This strategy not only attracts foreign investors but also provides local companies with a steady pipeline of qualified workers.
The country is not just a centre for low-value manufacturing. Maevski points to the example of Germany’s Magnetec, which launched operations in Moldova’s second city Balti. “Magnetec is expanding their production in Moldova because they identified that we have very highly skilled staff, who will not only help them produce parts or components, but help them carry out the R&D for their components.”
Another international company active in Moldova is Germany’s Steinel, which produces lighting and sensor technology at its factories in several European countries including Moldova.
Steinel Electronics SRL's manufacturing hall. Steinel is one of numerous inter- national electronics companies active in Moldova. / ACEM /Steinel Electronics
The sector also benefits from Moldova’s multilingual workforce, which includes Russian, Romanian, English, French, Italian and Turkish speakers, among others. “Being a multi-language country makes it easier to communicate with global partners and clients without language barriers,” Maevski pointed out.
Moldova’s free economic zones (FEZ) have played a role in attracting foreign investors. Companies operating within these zones enjoy preferential tax rates, easing their cost burden and helping them remain competitive.
The country’s proximity to European markets is another aspect. “Our logistics are favourable, too,” said ACEM’s head. “We’re just a two-hour flight from Germany, and goods can be transported by lorry within three days, making Moldova an attractive production base for European companies.”
Still, companies in the sector have had challenges to overcome. Maevski pointed to the war in neighbouring Ukraine, which forced some electronics companies to reorient. "Before the war in Ukraine started, our market was divided. We had companies exporting to the CIS and also to the EU. Unfortunately electronics companies faced some challenges when the Russia, Belarus and Ukraine markets were closed due to the war,
but most were ready to redirect, or to identify new markets,” Maevski said. "Some companies closed their doors because they were oriented only to the Russian or Ukrainian market, but most companies identified extra markets.”
Maevski believes the sector has strong prospects for future growth. Admittedly, she said, “Sometimes problems happen, because the electronics sector is part of a global chain and international problems can cause internal problems, but we think will have constant growth.”
She points out that ACEM is aware of new foreign companies considering an entry to the Moldovan markets or expansion of their existing operations, while local companies continue to grow. “The electronics sector continues its growth under any circumstances,” she said.
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