SMALL BUSINESS EXPANSION PROJECT Quarterly Report 4 — FY2016 July 1 – September 30, 2016 Contract No: 165-C-12-00101 SUBMITTED: October 12, 2016 TO: MS. TATJANA MARKOVSKA Contracting Officer’s Representative USAID MACEDONIA MS. ANETA DAMJANOVSKA National Programme Officer EMBASSY OF SWITZERLAND in the Republic of Macedonia Mirjana Makedonska Chief of Party SMALL BUSINESS EXPANSION PROJECT Debarca #3, 1000 Skopje Republic of Macedonia [email protected]Eduardo Tugendhat Project Manager CARANA Corporation 4350 N. Fairfax Drive #900 Arlington, VA 22203 [email protected]
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SBEP QUARTERLY REPORT 4 — FY2016: JULY – SEPTEMBER 2016 PAGE | 9
LIGHT MANUFACTURING
IN A NUTSHELL
The Macedonia Manufacturing EXPO
2016 took place on September 15th,
gathering 18 local and international
buyers and 66 local suppliers.
Organizers of the conference were
SBEP, MAMEI - the Macedonian Asso-
ciation of Metal and Electrical Indus-
try - and Macedonia Invest, with the
support of AHK - DMWV, the German
Macedonian Business Association,
AmCham, the Dutch Embassy, and
the Directorate for technological in-
dustrial development zones - DTIDZ.
A total of 170 B2B meetings took
place, and according to preliminary
information, around a dozen deals
are already being negotiated.
In parallel, the consultants have been
working on a number of requests
coming from Germany, Romania
and Japan, from companies interest-
ed to invest or outsource in Macedo-
nia.
MACEDONIA MANUFACTURING EXPO 2016
The main bulk of the work within SBEP’s Light Manu-
facturing initiative this quarter revolved around the
preparation and organization of the Macedonia
Manufacturing EXPO 2016 – the conference and B2B
event, which took place on September 15th in Skopje.
The continuous promotion of the event, both to po-
tential buyers and local suppliers, resulted in a total of
18 companies registered as buyers, and 66 compa-
nies registered as suppliers. Of the 18 buyers, six were
FDIs already operating in Macedonia, one was a lo-
cal company that was registered both as a buyer
and supplier, while the rest were companies from
abroad: five from Greece, four from Germany, two
from the US, as well as companies coming from Bul-
garia, Belgium, Holland, Italy, the UK and Australia.
Prior to the conference, the consultants managed
the process of matching buyers with potential suppli-
ers, including searching and pre-selection of local
companies that can best suit the buyers’ interests, as
well as adjusting the selection based on buyer feed-
back and coordinating with local companies to as-
sure their capacities and capabilities.
The conference went according to plan, with wel-
come speeches from the main donors and partners,
including addresses by the US, the Swiss and the
Dutch Ambassadors to Macedonia, as well as the
Macedonian Minister of Finance. Following were the
presentations by the Macedonian Agency for For-
eign Investment and Export Promotion (Invest Mace-
donia), and by locally based buyers - as WABTEC,
Ariljemetal and Brako - who presented their compa-
nies and discussed the opportunities and challenges
The 52 tour guides who participated in the three trainings, received
certification and licenses from the Kumanovo Museum SBEP’s Light Manufacturing consultants, Mr. Dejan Janevski and Mr. Goce Peshev (second and third from left), presented
activities and results within the initiative to date
PAGE | 10 SBEP QUARTERLY REPORT 4 — FY2016: JULY – SEPTEMBER 2016
of sourcing locally. The Executive Director of
MAMEI, who was the official host of the event,
presented their activities and results to date, as
well as future plans for expanding their platform
for B2B ties. Finally, the representative from
Scoutbee, a German based aggregator of de-
mand in the automotive and machine industries
in the EU, presented their proposal for supporting
Macedonian based suppliers in connecting
them with EU demand.
The B2B meetings took place during the second
part of the one-day event, where the 18 buyers
had a total of 170 meetings with local suppliers.
Around 90% of the meetings were pre-
scheduled through the on-line matching system
that had been developed by the Project and
administered by the consultants. The rest of the
meetings were organized ad hoc, as there were
companies that had not registered in advance,
but still attended the conference.
LIGHT MANUFACTURING
Representatives of 18 buyers and 66 local suppliers, along with donors and organizing partners
participated in the Conference
At least a dozen deals are being negotiated as a result of
the B2B meetings
Some local suppliers had stands with information about
their capacities
A total of 170 B2B meetings were held during the second
part of the event
In addition to the pre-scheduled meetings, participants also arranged to meet
on the spot
SBEP QUARTERLY REPORT 4 — FY2016: JULY – SEPTEMBER 2016 PAGE | 11
The companies present at the event appreciat-
ed very much the opportunity to meet with po-
tential partners, present their offer and express
their interest. A statement (below) by one of the
participating buyers illustrates the sentiments
shared by the majority of the companies that
were looking for local suppliers in Macedonia.
The current available information is that at least
around a dozen deals are being negotiated as a
result of the meetings held during the B2B event.
The consultants will continue tracking the poten-
tial deals that will come out of the connections
established during the Macedonia Manufactur-
ing EXPO 2016.
EXPORT OPPORTUNITIES
In addition to working on preparing the confer-
ence, the consultants also pursued a number of
requests from foreign companies interested to
find suppliers from Macedonia. A couple of them
were not able to make it to the EXPO, although
initially they had the intention. One such compa-
ny is the Japanese Makita, whose request
reached the consultants through the Cabinet of
FDI Minister Mickovski. Makita is interested in local
producers of casting engine parts, stamped
parts, plastic components and electronics. The
consultants have identified nine companies that
are interested to collaborate with the Japanese
buyer and are ex-
pecting a visit from
Makita representa-
tives in the coming
period.
The other compa-
ny that could not
attend the EXPO is
Hitachi’s branch in
Romania, which
contacted the
consultants via the
Macedonian Economic Promoter that covers
Romania. Hitachi is looking for potential suppliers
in Macedonia for casting and forging, and the
consultants have managed to identify five com-
panies and sent the information to Hitachi.
During the quarter, three enquires came from
German companies through the Economic Pro-
moter responsible for that country: one company
was interested in starting production of solar
panels in Macedonia; another one produces
physical fitness devices; the third one is interested
in stamping and bending capacities. The con-
sultants identified a number of local companies
that fit the needs specified by the potential in-
vestors, sent the information and are awaiting
their reply in order to proceed with activities.
The Economic Promoter based in Russia also
contacted the consultants. He has been working
on organizing a B2B visit of companies represent-
ing a cluster in the automotive and machine in-
dustry from the region of Tatarstan. The consult-
ants sent profiles of MAMEI members, but also
other companies worth noting. They also com-
municated the information to a broader number
of local companies, which have shown interest.
All this information was forwarded along, and
now the Russian cluster is to reply.
In addition, this quarter the trial order by the
Dutch company producing airport transport
carts and dollies with Brako from Veles took
place. This initial deal is worth around US$
338.000, and should be completed by the end of
the year. If all goes well, and based on the sales
success from the Dutch, there is potential for big-
ger deals, amounting to up to 2 million US dollars.
LIGHT MANUFACTURING
Consultants will follow up with participants on the poten-
tial deals that have been made during the B2B meetings
PAGE | 12 SBEP QUARTERLY REPORT 4 — FY2016: JULY – SEPTEMBER 2016
IN A NUTSHELL
SBEP’s joint project with the Swiss
funded Nation Conservation Pro-
gram implemented by Pharma-
chem, for growing rice with drip
irrigation is going well. Farmer Jor-
dancho Lefkov is using seven
times less water compared to tra-
ditional methods.
A couple of corn harvesting
events took place this quarter:
the silage harvest in the village of
Malo Konjari took place on Au-
gust 30, and a month later, on
September 30, there was a corn
grain harvest in the village of Ka-
ramani.
SBEP’s Grow More Corn initiative
has been acknowledged in two
consecutive sustainability reports
of Netafim, the Israeli company
that is the world leader in drip irri-
gation systems and technology.
GROW MORE CORN
This quarter, SBEP has continued monitoring the pro-
gress of the rice crop that is being grown with drip
irrigation on the pilot plot in the village of Cheshino-
vo. It has been developing well, and the harvest is
scheduled to take place on October 20th. SBEP has
been providing support to the farmer Jordancho
Lefkov with guidance and advice about the proto-
cols of using the drip irrigation system. The yields are
expected to be at least as high as those when tradi-
tional irrigation methods are used. However, the
greatest benefits lay in the water savings - the farmer
has been reporting using seven times less water than
usual - and in safeguarding the environment, as the
system enables the fertilizers to reach the plants
more effectively, instead of ending up in the
(underground) waters. SBEP plans to develop a bro-
chure with information about the protocols of using
this technology for growing rice, as well as the bene-
fits it provides for the farmer and the environment.
The second pilot plot at the Rice Institute in Kochani
had become irrelevant early on in the testing, as the
Institute decided to flood it in accordance with tradi-
tional methods, due to inadequate handling of the
drip irrigation system.
SBEP is implementing the pilot project of growing rice
with drip irrigation together with the Swiss funded Na-
ture Conservation Project, implemented by Pharma-
chem from Skopje.
Also this quarter, two corn related events were orga-
nized: one was the silage harvest in the village of
Malo Konjari near Prilep on August 30, and the other
was the grain harvest in the village of Karamani near
Bitola on September 30.
The first event took place on the corn field of farmer
and cattle breeder Ilcho Daskaloski. This season, Mr.
Daskaloski and fellow farmer Goran Pavlovski from
Karamani, have received a donation in liquid fertiliz-
ers for one hectare of their land from Alkaloid, the
biggest Macedonian pharmaceutical company,
which also produces fertilizers. Alkaloid approached
The pilot plot of rice grown with drip irrigation at the end of July The same plot in the village of Cheshinovo at the end of August
SBEP QUARTERLY REPORT 4 — FY2016: JULY – SEPTEMBER 2016 PAGE | 13
GROW MORE CORN
SBEP early on in the season for consultations on
whom to donate the fertilizers to. Mr. Daskaloski
has reported a doubled yield this year – he pro-
duced 80 tons per hectare, compared to the 40
t/ha that he used to produce.
The second event was organized on the occa-
sion of the corn harvest of farmer Goran Pavlov-
ski from Karamani. He has been the record setter
among the Grow More Corn farmers, and even
though he hasn’t completed this year’s harvest
yet, the estimates are that he will reach nearly 18
tons of grain per hectare. SBEP is already collect-
ing information from farmers about the results of
this season, and expects to have at least prelimi-
nary information for the final report.
One more piece of information worth noting is
that Netafim, the Israeli company that is the
world leader in drip irrigation systems and
tehcnology, has been acknowledging and re-
porting on the success of the use of drip irrigation
for growing corn in Macedonia through SBEP’s
initiative in two consecutive issues of their Sustain-
ability Report – in 2013 and in 2014-2015.
http://www.netafim.com/Data/Uploads/
Sustainability%20Magazin%20146%20BOOK.pdf
http://www.netafim.com/data/uploads/
Netafim%20Sustainability%20report%20EN.pdf
Farmer Goran Pavlovski has been setting records in pro-
ducing corn since joining the Grow More Corn initiative
Drip irrigation has helped farmers double or even triple