Economics

THE UNION OF THE SUGAR PRODUCERS CALLS ON “MOLDOVA-ZAHAR” TO RETURN BACK IN THE UNION AND STAY ON THE MOLDOVAN MARKET

04 april, 2018

The Company “Moldova-Zahar” was called to return to the Union of the Sugar Producers from Republic of Moldova (hereinafter “Union”) and stay on the Moldovan market.

"We could assume that by leaving the Union of Sugar Producers from the Republic of Moldova, the “Moldova-Zahar” company plans to leave the non-profitable market of Republic of Moldova. However, this is not an excuse to ignore the progress of the Moldovan sugar industry over the last 15 years and to close so dramatically the door behind them", thinks Alexander Koss, the President of the Union of the Sugar Producers from the Republic of Moldova and the Speaker of the Management Board of “Sudzucker Moldova”.

During a discussion with the „Infotag” journalist, he stated that “the competitor company has exploited the “sugar crisis” subject and withdrew from the Union presumably because of its inefficiency in the context of decrease in sugar prices”.

According to Alexander Koss, some time ago, „Sudzucker Moldova” chose the most logical strategy for conducting its operations in similar conditions.

"We always tried to reduce the cost of sugar by diversifying our business. Besides the modernization of our sugar factories and distribution centers, we have created a facility for the production of the green energy from biofuel, one of the largest agricultural enterprises from Northern part of Republic of Moldova and a “mini-bank”. Therefore, we are ready for the current market challenges. We can assume that our competitor has problems in terms of cost optimization ", - he noted.

The Manager considers the fact that the two factories of “Sudzucker Moldova” from Drochia and Falesti function at almost its full capacity while “Moldova-Zahar” factory from Cupcini, with a capacity of processing of around 400-450 thousand tones of sugar beet per season, function at half of its production capacity to be “indicative”.

„In 2017, the average yield of sugar beet from the raw materials zones of “Sudzucker Moldova” exceeded 40 t/ha, while for “Moldova-Zahar” it went slightly above 30 t/ha. The refund of the technical loans provided by “Sudzucker Moldova” to its agricultural partners is 100%. While, according to the data published on the website of the Supreme Court of Justice, “Moldova Zahar” financial claims from the two of its debtor companies are of 19 and 17 million MDL”, - said Koss.

Concerning the decision of the Polish investor to withdraw from the Union, Alexander Koss noted that the main reason stated by “Moldova-Zahar” was that, contrary to the Management of “Moldova-Zahar” opinion, in 2017 the Union of Sugar Producers from the Republic of Moldova voted for the proposal of the Ministry of Agriculture and Ministry of Economy to allow sugar imports on the domestic market with limited preferential quota.

The position of “Moldova-Zahar” was that “the demand of the Moldovan market was fully ensured by domestic reserves and foreign sugar import without any customs duties was unnecessary”.

Alexander Koss mentioned that during 2016-2017 Republic of Moldova actively exported sugar to the EU member states under a preferential regime.

„The quota sugar import was necessary to avoid the sugar deficit and a dramatic increase in sugar prices. “Sudzucker Moldova”, unlike “Moldova-Zahar”, has reacted to the request to reduce sugar prices for the largest food companies from the country. Currently, “Sudzucker Moldova” supplies sugar to almost 80% of the industrial sugar consumers, at a price which is below market price in the Republic of Moldova, around 40 USD / tone”- explained Koss.

According to Koss, in the above stated context, the statement of the “Moldova Zahar” that the company is in a critical situation, because it was “stripped of its brand” through a court decision, is simply ridiculous.

"The commercial brand "Moldova Zahar" should belong to the Republic of Moldova and not to a private commercial company, even if it owned by a company financed from the budget of another state”, - thinks the Manager of “Sudzucker Moldova”.

In his opinion, the reasons used by “Moldova-Zahar” to justify it’s withdrawal from the Union, do not stand up to the criticism that it “goes against the interests of the investor” and “represent components of the anti-crisis plan” agreed upon with the investor - the Polish Government.

„It is not correct to identify the interests of the “Moldova-Zahar” company, an economic entity of the Republic of Moldova, with the interests of a foreign state, even if the Government of that state is the exclusive founder of this company”, thinks Alexander Koss. This situation can be interpreted as an inadequate declaration of a commercial company supported by budgetary means and as the protectionist ambitions of a foreign state on the sugar market from the Republic of Moldova. Following this logic, our response probably should be that the economic position of our founder, the international corporation Sudzucker AG, is supported by the interests of its co-owners - hundreds of thousands of European farmers who, in their turn, influence the donor countries governments, who provide assistance to the Republic of Moldova", - concluded Alexander Koss.


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