Report

At the theme: ,,The Micro &

Macroenvironment
of the company ,, Sdzucker Moldova
S.A.

Introduction
The Moldovan-German joint venture Sdzucker Moldova SA is the leader of sugar market in
Moldova. Throughout more than 11 years the company makes investments in sugar beet
cultivation sector by implementing the newest scientific developments in sugar beet growing
and up-to-date energy-efficient technologies in sugar production.
An important aspect of enterprises activity is ensuring a long-term strategic partnership with
sugar beet growing farms in Moldova. Together with its agricultural partners Sdzucker
Moldova SA improves sugar beet crop capacity and assists in modernization of Moldavian
agricultural sector.

Microenvironment analysis
Intermediaries
Distribution of sugar is a complex process that includes more stages. Taking into
consideration the fact that sugar is a primary good, it is important that the efficient
distribution correspond directly to the market needs. Sudzucker Moldova has a large
distribution network, consisting of middlemen, physical distribution firms, marketing
services agencies and financial intermediaries.
Company has a logistics centre in Chisinau, with the capacity of 800 tons of
sugar. This quantity assures the whole retail network from the centre and the south of
the country. This centre assures efficient distribution to the main whole sellers
(middlemen) from Chisinau - Green Hills Fourchette, Fidesco, N1, Linella and
METROCash and Carry. Also the sugar can be bought almost in each food shop from
Moldova.
In order to assure the efficient distribution in the whole country, the company
created a network of physical distribution firms that consist of around 25 partners:
1 S.A "Comtiras" or. Soroca, str. Uzinelor, 2/4
2 SRL "Rusanda" mun. Chisinau, str. Muncesti, 162/a
3 SC "Vichivalcom" SRL or. Ceadir-Lunga, str. Bujeac, 23
4 SRL "Almaian" mun. Chisinau, str. Uzinelor, 7
5 SRL "Amadis-Service" mun. Chisinau, str. Alecu Russo, 1, of.425
6 SRL "Bandaira" mun. Chisinau, str.Uzinelor, 165B
7 SRL "Clorofila" mun. Chisinau, str.Iazului, 3/1
8 SRL "Elcatras" or. Ungheni, str. Boico,7 ap.3
9 SRL "Biconex-Grup" mun. Chisinau, str.M.Cibotari, 16, of.150
10 S.C "Fiat-Garbal" SRL or. Taraclia, str.Lesnaia, 5,
11 SRL "Sediorus" mun. Chisinau, str.Petricani, 19
12 SRL "Tiramisa" or. Orhei, str.Eminescu, 9
13 SRL "Agro-Dinian" r-nul Edinet, s. Alexandreni
14 SRL "Ivaro" mun. Chisinau, str. Calea Iesilor, 33
15 SRL "NM-DL" or. Comrat, str.Malinovskovo, 24
16 SRL "Carsamba Com" or. Ceadir Lunga, str. Karl Marx, 13, ap.52

17 .I "Ghiocel-Negru" or. Cimislia, str. N.Iorga, 1

18 SRL "Daniela Bujor" or. Hincesti, str. Columna, 7/A
19 SRL "Magdalinas" or. Balti, str.31August, 25
Also, it has partners from outside the country in order to assure export in
European Union and Russia Federation.
According to Adrian Lipcan, manager of Department of Marketing and Sales,
Sudzucker Moldova has as partner the agency Magenta Consulting that is
responsible for focus groups and pools.
Moldova Agroindbank is the financial intermediary, because register all the
transations that are made by the company.

Suppliers. As fix assets, the company owns currently 3 sugar factories. 2 sugar
factories in Drochia and Falesti are involved in sugar production, while the sugar
factory in Alexandreni avails of a modern logistics and packaging centre. So the
suppliers of these assets are the Local Public Administration and the physical persons
from which they have bought them. The agricultural enterprise rented 7.6 thousand
hectares of arable land, most of which has not been processed for many years, in the
rayons of Drochia, Falesti, Floresti and Sangerei, which are considered source-areas of
raw material of the "Sdzucker Moldova" sugar factories. For the next season, the
management of "Sdzucker Agro" plans to expand its rented land area, for the next
three years the company plans to rent up to 12 thousand hectares of arable land. As
the land area will increase, the material and technical resources of the company will
be increased accordingly.
In order to equip the "Agro-SZM" company with current assets- machinery, five
sugar beet harvesting combines and four grain harvesting combines, eight U.S.
manufactured high capacity tractors and other 36 tractors, universal seedingmachines, disc harrows, cultivators were brought from Germany. The "Agro-SZM"
tractor fleet is located in two facilities of the company, in Drochia and Falesti rayons.
"Sdzucker Moldova" pays special attention to the development of raw
materials. In 2009, "Sdzucker Moldova" has contracted about 16 thousand hectares
of sugar beet (with a total area of about 22 thousand hectares) in the areas of raw
material cultivation owned by its factories. The company provided around 100 million
MDL of technical credits for the production of this crop, based on a harvest mortgage
contract. So, the company tries to create a stable environment for resources, by
providing them by itself. But they also organize activities of collecting beet from
physical person and legal entities.
The company established agro-technical centers at the Drochia, Falesti and
Alexandreni factories. The agro-technical fleet performs all types of works on sugar
beet fields of adjacent farms for subsidized rates. While providing comprehensive
advisory and financial support to farmers, the German experts of the company
introduced the European culture of sugar beet growing in Moldova. In this case
suppliers are the German experts and also farmers that offer their labor force. In the

category of labor force, there is also included the new company's management team
comprises managers, agronomists, engineers and mechanics

Customers
The trademark issued by Sdzucker Moldova Company has won the trust and
respect of consumers from the very beginning. For many years, "Zahar cinci inimioare"
and Domnita have been deservedly considered one of the most popular brands in
Moldova.
Almost each family from Moldova is a final consumer of this good, They usually
buy paper bag 1 kg and more.
The company has a lot of industrial consumers, due to the new types of
packages by 5 g- special paper sticks with sugar for cafes, restaurants, offices.
Bucuria, Nefis, McDonalds, Celentano, Sky Land and many others use this brand.
Company tries to distribute by itself the products, in order to maintain price at
lower level, so discourages the emergency of resale markets.
Government markets buy sugar in order to assure the schools, kinder gardens,
government agencies and others with this product.
The company exported sugar to several countries of the European Union and the
Russian Federation. So, there is developed and an international market.
Competitors
The company owns more than 60% of total sugar production in Moldova. So it is
the leader in the market. It has some direct competitors. The main ones are Marr
Sugar Moldova and MoldAgroProduct SRL (Grand Mersi). Marr Sugar Moldova operates
three sugar factories: Glodeni Zahar,Ghindesti Cristal, and Cupcini Cristal. But they
have a small distribution network that is limited by the local and regional zones. Also,
IM Sudzucker Moldova SA is the only company on the post-soviet territory that has
both certificates of conformity to ISO 9001:2000 and HACCP International Standards.
So, competitors represent a low risk.
Indirect competition is established among goods and services that can be
substituted for one another. In this category there are included the producers of:
-

honey (Vladov Honey Company, Elis- SV SRL, Apiflora SRL, Taina, individual
enterprises)
Sweets, chocolates (Bucuria , Nefis, Franzeluta, Acvilin- Grup, Cvin- Com,
Roshen, Vladalina)
Jam, marmalade (Alfa Nistru, Orhei Vit, Natur Bravo)

These can be considered as real competitors, because researches show that sugar
is not a healthy product and many people begin to substitute sugar with healthier
products.
Intraindustrial competition they are few, because sugar is a primary good and is
not so expensive.

Publics
The company's marketing environment also includes various publics. A public is
any group that has an actual or potential interest in or impact on an organization's
ability to achieve its objectives.
Financial publics - Over the past five years, the volume of investments allocated by
stockholders for the modernization of two sugar factories was 20 million Euro.
Media publics is considered to be the fourth power in the state, because it is hard to
control. Till now company has only good reviews by VIP Magazin, Business Class,
Unimedia, Jurnal TV, ProTV, Timpul, Publika TV, interlic.md.
Government publics As a Joint Stock Company, it is
reglemented by some
government agencies, such as Chamber of Registration, Chamber of Licensing,
Financial Agencies and The Association of Sugar Producers, Minister of Agriculture and
Food Industry, MIEPO. But company complains that in the last time it is amenable
under the groundless fiscal pressure, made under the control of Vice minister of
Finance.
Citizen action publics are not so developed in the Republic of Moldova, so do not
represent a threat for this kind of business.
General public see as a good company, because it maintain the price of sugar at low
level. In order to improve its image through citizen action publics and general public,
the company foresee some steps. The Sdzucker-Moldova Moldovan-German
enterprise will implement a project on using the sugar production wastes (bagasse) for
producing energy.
Representatives of the Ministry of Environment told Infotag that a station for the
biological treatment of bagasse and the production of bio-gas and organic fertilizers
will be built at the Drochia sugar refinery.

Macroeconomic environment
Demographic factor - The number of resident population of the Republic of
Moldova at January 1st , 2009 constituted 3567,5 thou. inhabitants, of which 41,4% urban population and 58,6% rural population. In less that at January 1st, 2001 with
67,6 thou. persons (including urban - with 10,3 thou. and rural with 57,3 thou.)

According to these data, the company should increase its distribution channels in
urban areas, also to export its products abroad in order to keep the same production
level.
The structure of population by age has the characteristic of a demographic
ageing process, namely the increase of the share of old women and men and the
decrease of the share of person aged 0-14 years. In the last 8 years was registered a
diminuation of the share of this age group from 22,8% to 17,1% and increase of the
share of old population (aged 65 years and over), from 9,5% to 10,2%.
Sugar is used both by men in women, so the ranges in the structure of
population does not affect the sales. Children tend to consume more sugar and eat
more sweets, so it can affect in the long run the sales , because of the decrease of
share of group 0-14 years. Old people tend to decrease the consumption of these
products, because of their health problems.
All these changes should be taken into account in order to maintain or to
increase the sales.

Natural factors
Moldova's climate is moderately continental: the summers are warm and long,
with temperatures averaging about 20 C (68 F), and the winters are relatively mild
and dry, with January temperatures averaging 4 C (24.8 F). Annual rainfall, which
ranges from around 600 millimeters (23.6 in) in the north to 400 millimeters (15.7 in)
in the south, can vary greatly; long dry spells are not unusual. The heaviest rainfall
occurs in early summer and again in October; heavy showers and thunderstorms are
common. Because of the irregular terrain, heavy summer rains often cause erosion
and river silting.
The soil is black earth (cernoziom) and is rich in humus. This extremely
favourable combination of climatic and soil conditions creates high yields. Agricultural
production continues to be a bulwark of the economy.
The climate is good for the cultivation of beet, but there is a lack of raw
materials for the production of energy. In order to solve this problem, want to
implement a new technology of biogas. "Sdzucker-Moldova process yearly 300
thousand tons of sugar beet. After the technological treatment 80 thousand tons of
wastes in the form of dry bagasse remain. The station will be able to produce yearly
10.3 million cubic meters of bio-gas, which contains 55-70% of methan.The project will
allow reducing by a half the consumption of energy resources by the enterprise, to
lower their self-cost and to create new jobs.
About 72% of wells and 5.2% of artesian wells in Moldova contain nitrites. The
increased contents of nitrites is conditioned, in the first place, by a human factor, that
is to say, by the production and use of mineral fertilizers, the production of aluminum,
livestock, functioning of households and primary processing of products.

The same situation is valid for soil, air and fauna pollution, so the company
should be aware of the avertisment and do not use chemical fertilizers in oder to
obtain higher production of beet.
Economic factor
Since 2000 - following a decade of economic decline - Moldova has achieved and
maintained macroeconomic stability. Fiscal management has been prudent, with a
roughly balanced budget in recent years. The governments economic stabilisation and
structural reform programmes have made several notable and positive achievements:
- The privatisation programme has been successfully completed;
- The foreign trade sector has been privatised and liberalised;
- Monetary stability has been achieved;
Full current account currency convertibility has been introduced;
- National accounting and audit standards based on international standards have
been implemented;
- The banking system has been privatised and streamlined;
- The process of land privatization has been successfully completed.
The GDP has been growing with 4,7 % in 2010, exports with 6,9 % and imports12%, inflation is 10%. National Bureau of Statistics informs that in quarter II 2010,
monthly disposable incomes of population summed up in average per person 1259,8
lei, which is with 10,8% more than in the similar period of 2009. Monthly population
expenditures in quarter II 2010 in average per person constituted 1325,3 lei, which is
10,6% more than in 2009.
All these factors can affect the production and sales of Sudzucker Moldova, because
can increase prices for raw material and final product. Population should be able to
buy them.
Technological factors
Technological factor is in continous changing, by introducing new technologies
and standarts. The company tries to acquire only the newest technology. Over the past
five years, the volume of investments allocated for the modernization of two sugar
factories was 20 million Euro. The quality of sugar improved considerably. In 2008 JV
Sdzucker Moldova SA has been certified under the ISO 9001:2000 and
international standards. Also, implement a project for producing biogas. These give to
company strong competitive advantages.

Legal political factors

The activity of Sdzucker Moldova" is reglement by the Civil Code, Law on
Joint Stock Companies and Law of Investment.
It cooperates actively with the government authorities on improving the legal
framework designed for a proper operation of the sugar beet industry in Moldova,
which is favourable for the European Union sugar market

August 2003 with the participation of companys experts, temporary safeguard

measures were introduced in Moldova as an additional 40% duty on the sugar
imported to Moldova, thus the customs duty amounted to 55%.
December 2003 The Government of Moldova approved the extension of safeguard
measures for 4 years to protect the sugar market, by introducing special tariffs on
imports of sugar
November 2004 the legislative amendments, under which VAT on sugar was
reduced from 20% to 8% entered into force.
Legal framework is favorable for the development of sugar business, but there is
a problem created by the political instability and corruption. The last groundless
controls are considered to come directly from the Vice minister of finance, Victor
Barbaneagra, that has a personal negative idea
Cultural factors
Religion in Moldova is separate from the state. The Constitution of the Republic
of Moldova provides for freedom of religion, and the Government generally respects
this right in practice; however, the law includes restrictions that, at times, inhibit the
activities of some religious groups.The generally amicable relationship among religions
in society contributes to religious freedom; however, disputes among various branches
of the Christian Orthodox faith continue, and there are some reports of Jehovah's
Witnesses experiencing harassment from local town councils, as well as Orthodox
priests and adherents. These do not create problem for operating business.
Moldova's cultural tradition has been influenced primarily by the Romanian
origin of its majority population and cannot be understood outside of the development
of classical Romanian culture, in which it played a significant role. There are ethnic
problems between Romanian and Russian people, thats why producers should write
on packages, both on Romanian and Russian language.
Role of family in society is still proeminent. In 2006, Sdzucker Moldova
Company released a new trademark on the market Domnita. The image of the new
trademark is based on true and unforgettable values of the Moldovan family love,
warmth, mutual understanding and care for close people. These values are eternal.
Conclusion:
Understanding Moldovan realities, Sudzucker undertook managerial and
organizational steps to make sure its investments reaped proper results within optimal
time frames. In its effort to increase the quality of the raw material supplies,
Sudzucker completely changed the system. It established a raw material supply
development division to help growers. These actions helped to create a relatively
stable microenvironment, but the macroenvironment is more risky, because it is
harder to control, but can affect the process of doing business.