Monthly

Macedonian Business
Established 2001

No. 158 Vol. XV, 2015

Export of Textile
Products

he garment industry in Macedonia

exports mainly to EU countries. 93 percent
of the production is organized by the CM or
CMT (Cut, Make& Trim) system for foreign
markets. Full production and own brand
production is partly exported and the rest is
placed in the domestic market.
The competitive export advantages of the
Macedonian apparel industry are: short period
from orders to delivery, capability to produce
small orders at the same prices as big orders,
quality of performance and good transport and
logistics services.
In general apparel industry has a relatively
simple, close to linear, value chain. The amount
of value added, by segment of the value chain
depends on the complexity of the garment
product. The cost of labor in Macedonia is
0.07 per minute, excluding transport costs. This
amount is among the lowest in Europe and
worldwide.

Page 2 >

Published monthly by MIC

With support of the
Macedonian Ministry of Foreign Affairs

MUSALA SOFT TO INVEST

20 MILLION EURO
B

ulgarian IT Company Musala Soft already started operating in Macedonia

and plans to create 300 jobs by 2019 and invest over 20 million euro,
announced Vice Premier Vladimir Pesevski.
In general, this Company will employ highly-qualified staff for developing
sophisticated software products said Pesevski. He stressed that Musala Soft
cooperates with well-known IT companies, having Deutsche Telecom, DHL,
IBM, OMW etc, as clients.
This Company will only place products on foreign markets, but the
knowledge employees acquire could apply later in life, said Pesevski commenting
that this will motivate many young educated people.
He stressed that Government will remain devoted and stay focused on
attracting new foreign investments and reminded of this years new investments
dispersed all over Macedonia, such as Gentherm in Prilep, Kondevo and
Technical Textiles in Stip, Amphenol in Kocani and Vinica, ODW Elektrik in
Ohrid etc.
In time, we will gradually shift the focus on companies like Musala Soft,
which are industries with increased degree of added value, since that is the road
towards accelerated economic growth stressed Pesevski.
President of Musala Soft Elena Marinova stressed that there are over 10
highly qualified professionals who are employed in this company and will soon
expand in Macedonia and focus on employing young staff.
Individuals level of computer skills

Source: State Statistical Office, Eurostat

INVEST IN MACEDONIA
NEW BUSINESS HEAVEN
IN EUROPE

Macedonian Business MontHly

INSIDE

MacedonianInformationCentre

Macedonian Information Centre

page 4

POTENTIAL TO BECOME ONE OF THE

STRONGEST ECONOMIES IN THE WORLD

Director
Dragan Antonov
Address
Naum Naumovski Borce 73
1000 Skopje
Republic of Macedonia
Phone/Fax
+389 2 311-78-76
+389 2 311-78-34
www.micnews.com.mk

KRAEMER: MACEDONIA HAS THE

page 7

page 9

E BRD: MACEDONIAN ECONOMY

WILL CONTINUE TO GROW
S IX COMPANIES USE THE BENEFITS
FROM ERASMUS PLUS PROGRAM

page 11 D
 EVELOPING

THE RAILWAY
INFRASTRUCTURE FOLLOWING
JAPANESE EXPERIENCE

contact@micnews.com.mk
mic@micnews.com.mk
page 15

No. 158, Vol. XV, November 2015

Macedonian Business Monthly

 ONSTRUCTION OF FOOD
C
PRESERVATION CENTERS FOR SECURE
PLACEMENT OF PRODUCTS

Founded in 2001
Editor

Sonja Kiridzievska
Translator

Ema Trenevska
Contributor

Sonja Efremova
Published monthly in the

Republic of Macedonia
2001-2015 MIC, All rights reserved
No parts of this publication may be
reproduced in any form without
permission form the Macedonian
Information Centre. The content
published in the Macedonian Business
Monthly do not necessarily represent
the views of the publisher. The
publisher is not liable for errors.

Export of Textile Products

Continued from page 1

he garment industry in Macedonia exports mainly to EU countries.

93 percent of the production is organized by the CM or CMT (Cut, Make&
Trim) system for foreign markets. Full production and own brand production is
partly exported and the rest is placed in the domestic market. The competitive
export advantages of the Macedonian apparel industry are: short period from
orders to delivery, capability to produce small orders at the same prices as big
orders, quality of performance and good transport and logistics services.
In general apparel industry has a relatively simple, close to linear, value
chain. The amount of value added, by segment of the value chain depends on the
complexity of the garment product. The cost of labor in Macedonia is 0.07 per
minute, excluding transport costs. This amount is among the lowest in Europe
and worldwide.
The total number of production capacities 800. In terms of the number of
employees and company size, the companies can be divided in 4 groups:
More than 250 employees 2.6% of the companies with 38.5% of the
employees
From 50 to 249 employees 9.5% of the companies with 39.2% of the
employees
From 10 to 49 employees 18.8% of the companies with 16.1% of the
employees
From 1 to 9 employees 68.9% of the companies with 6.2% of the
employees.

Macedonian Business MontHly

ollowing the success of its plant in

Stip, Johnson Controls will be
opening a new factory in Strumica, an
investment worth 20 million dollars that
will create 1,500 new jobs. The project
will start off next year as a brown-field
investment, in an existing facility, and be
turned afterwards in a green-field investment in the spring of 2017 at the latest,
announced Tuesday Global Director of
Johnson Controls Willy Van Looy and
CEO of the Directorate for technological

industrial and development zones, Viktor

Mizo.
We are facing with capacity-related
challenges in Europe and after making
thorough analyzes we came to a conclusion that we should invest here, said
Van Looy. According to Mizo, the fact
that Johnson Controls is reinvesting in
Macedonia reaffirms the successfulness of
governments policies for improving the
business climate and creating a fertile soil
for new investments.

Johnson Controls has invested in

Macedonia three times so far, beginning in 2006 in Skopje, then in 2011
in Stip and now in Strumica, stressed
Mizo and added that he will right away
start activities for adapting the industrial
zone in Strumica. The investment plan
anticipates the employment process to
begin by the end of this year, reaching to
a number of 300 persons by 2016.

REASONS TO INVEST IN MACEDONIA

THE PROJECT FOR land purchase As of 2009, is possible
for the land purchase to be realized under favorable conditions with a
discount of 30% if the companies pay it in cash at affordable price. So
far, more than 2,500 companies have used the opportunity for land
purchase under the Government Project launched in 2009, and such
support and assistance to the business community will continue.
AGRICULTURAL LAND INVESTMENT OPPORTUNITY The
Ministry of Agriculture, Forestry and Water Economy as an authorized
body has intensively been distributing agricultural land of good
quality which is in state ownership, that is granted under lease (for
use during the period of several years) to the interested investors,
including foreign entities with established branch offices in the
Republic of Macedonia
Textile Industry With a long, rich tradition in clothing and
textiles, this sector is the second largest export industry in Macedonia.
The competitive export advantages include short delivery periods,
flexibility of delivery size together with exceptional value for money.
In addition to garments, there is manufacturing potential for cotton
thread and fabric, wool yarn, fabric and knitted fabric.
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT The
Constitution of the Republic of Macedonia guarantees an investors
right to property. No person may be deprived of his/her property or
the rights deriving from it, unless the use of that property affects the
general welfare of the public.
Why Invest in Agribusiness in Macedonia? Challenges Opportunities the agriculture production and agribusiness
sector are the most important economic sectors of Macedonia.
Almost 435.500 people, out of a population of 2.1 million, make
whole or part of their income from agriculture activities. The great
natural preconditions and an existing tradition enriched with newly
developed skills create a variety of opportunities in agriculture, from
high mountain pastures of over 2000m high, to the rich water valleys
with a Mediterranean climate.
CONSTRUCTION COSTS Numerous Macedonian construction
companies can build factories quickly to international standards
and at the most competitive prices in Europe. The average cost of
constructing a factory building shell is between 170/m2 210/m2.
Chart below shows the Price Level Indices for construction in selected
countries in Europe as well as EU28 average indexed at 100. The sale
price of state-owned construction land for industrial and production
facilities varies depending on the location, from 5/m2 to 40/m2.
Macedonia a business supportive environment Given the need for speed in todays global marketplace,
Macedonia is fast becoming a major European service and distribution
hub. You can set up a company here in just four hours! The World
Bank Ease of doing Business 2014 report shows that Macedonia is
a regional heavyweight and 25th country in the World. Macedonia
has also had a positive Forbes review coming 36th in a ranking of
Best Countries for Business.

EXPORT PROMOTION STRATEGY In the process of preparation

for the exports, the companies need to conduct a research that will
help them choose a market which will contribute to the maximization
of the benefits and minimization of the risks. The same research will
also help the managers decide not only on the markets to enter but
also on the modes of entry.
EXCELLENT INFRASTRUCTURE Macedonia is at the crossroads
of South Eastern Europe, which makes it an ideal transit and distribution center for products for European markets. The developed road
and railway infrastructure, in combination with the small area of the
country enables access to every inhabited place in Macedonia in less
than 3 hours. The Railway infrastructure in the Republic of Macedonia
has been put in place since 1873, when the first Railway Track from
Skopje to Thessaloniki in Greece has been constructed. Macedonian
railway network system is connected north-south with the railway
network systems of Serbia and Greece.
LABOR LEGISLATION The recently enacted new Labor Law,
prepared in accordance with the EU standards, provides increased
flexibility of the labor market by offering and promoting flexible and
different employment contracts and flexibility of working time. Also,
reforms in this sphere have introduced training programs, support
for entrepreneurs, as well as improvement of the overall business
climate. The average gross monthly salary in 2013is 502.This amount
includes the net salary, personal income tax and social contributions
for pension and disability insurance, health insurance and employment insurance. The minimum salary for each professional branch
is defined by Collective agreements.
free healTH zones Health tourism, attracting foreign capital
to introduce new health methods and procedures, transfer of new
technology, increased competitiveness, employment and quality of
the higher education offer in the field of medicine are part of the
benefits expected from the establishment of free health zones. The
whole concept is designed to establish a health zone over a greater
territory which is likely to be in Skopje on 1520 acres for hospitals
founded and built by foreign companies.
INCREASED SUBSIDIES FOR TOURISTS FROM SERBIA, BULGARIA
AND BOSNIA AND HERZEGOVINA The Government decided to
increase the amount of subsidies for attracting tourists from Bosnia
and Herzegovina, Serbia, and Bulgaria from 25 to 35 euro per tourist.
Subsidies for tourists from 6 other states i.e. the United States, England,
Germany, Kazakhstan, Azerbaijan and Qatar are announced for 2015.
the software industry has emerged as one of the most
dynamic sectors In recent years, the software industry has
emerged as one of the most dynamic sectors of the Macedonian
economy. With a growth rate of 7.7% in 2009, the Macedonian
software industry outran the development pace of the overall economy
and became an engine for growth, innovation and competitiveness.
Like several other transformation countries in South East Europe,
Macedonia has discovered the strategic importance of the software
industry and its enormous potential for exports.

modern digital telecommunications network The

Macedonian Information Technology market has marked another
significant growth in 2009 of 7.7%, reaching $164.5 million. Over
the five-year forecast period, the countrys IT market is expected
to expand at a compound annual growth rate (CAGR) of 5.2%, and
reach $212 million in 2014. Hardware is the largest and most dynamic
segment of the Macedonian IT market, with a striking yearly growth
of 84.7%, taking up nearly 62% of the total IT market.
FREE MARKET ACCESS Duty-free access to a market of over
650 million customers through three multilateral (SAA, EFTA and
CEFTA) and two bilateral (Turkey and Ukraine) Free Trade Agreements
EUR 500,000 IN STATE AID FOR INVESTORS IN INDUSTRIAL
ZONES Up to 500.000 can be granted as incentive towards
building costs depending on the value of the investment and the
number of employees. Land in a TIDZ in Macedonia is available under
long-term lease for a period of up to 99 years
400,000 EURO INVESTMENT THE ROAD TO OBTAINING MACEDONIAN CITIZENSHIP Foreign nationals who are residents of the
EU and OECD countries and have purchased real-estate (house or flat)
in Macedonia in an amount of over 40,000 euro will get the chance to
be immediately granted one-year stay in the Republic of Macedonia
LOW TAXES Flat corporate and personal income tax rates at
10%; 0% tax on retained earnings
LOW OPERATIONAL COSTS One of the most cost-competitive
locations in Europe
EXCELLENT GEO-STRATEGIC POSITION Goods delivered within
a day to Central and Eastern Europe and Turkey, and maximum two
days to Western Europe
FAST COMPANY REGISTRATION One-stop-shop system for
company registration within 4 hours
EXCELLENT INFRASTRUCTURE Wireless national backbone
infrastructure, digital telecommunications system, extensive highway
network, two international airports with regular connections to main
European transportation centers
RESPONSIVE EDUCATIONAL SYSTEM Universities willing to
collaborate with incoming investors in meeting the required skills
EXCELLENT FOREIGN LANGUAGE SKILLS English widely
spoken, French and German embedded in the education system,
regional languages in wide use
AVAILABLE SKILLED WORKFORCE A young (42% under the
age of 30) and educated workforce with a strong work ethic and
excellent industrial relations record
HIGH QUALITY OF LIFE Highly attractive living and working
conditions
POLITICAL, MONETARY AND MACROECONOMIC STABILITY
EU AND NATO CANDIDATE COUNTRY

investment climate

JOHNSON CONTROLS TO OPEN

A NEW FACTORY IN STRUMICA

Macedonian Business MontHly

GRUEVSKI VISITED HUAWEI COMPANY

ECONOMY

In addition, Gruevski stressed Governments commitment to invest in education and that every year allocates
5 percent of the total budget. A new University of Information Technologies St Apostle Paul has been opened
and reforms are continuously being prepared aimed at developing the information society.

acedonian Prime Minister Nikola

Gruevski during his visit of China,
except meetings at political level in Beijing, also had several meetings with companies, among which visited the global
company for information and communications technology Huawei. Gruevski
informed company representatives about
the business conditions, the favorable tax
package and the openness for attracting
new investments.
In addition, Gruevski stressed Governments commitment to invest in

education and that every year allocates

5 percent of the total budget. A new
University of Information Technologies
St Apostle Paul has been opened and
reforms are continuously being prepared
aimed at developing the information
society.
Otherwise, Huawei is a company
with liaison office in Skopje.
Company management reviewed
opportunities for further cooperation
and opportunities for expanding the
Macedonian market.

Company representatives informed

about the available operation and performance of the company. Jim Lu from
Huawei stressed that the visit of Macedonias delegation is a good opportunity
to learn about the business opportunities
and potentials at disposal, but is also
proof of Governments commitment, excellent treatment of investors and readiness for business cooperation. Lu stressed
that Huawei Company will review in
detail the conditions and opportunities at
disposal.

Using the Internet for interacting with public authorities

(% of the internet users in the last 12 months)
Have used Internet for interaction
with public authorities

31.3

Obtaining information from

public authorities websites

26.3

Downloading official forms from

public authorities websites

13.4

Sending filled in forms to public

authorities' websites, electronically

11.2

10

15

20

25

30

35

Source: www.doingbusiness.org

KRAEMER: MACEDONIA HAS THE POTENTIAL TO BECOME

ONE OF THE STRONGEST ECONOMIES IN THE WORLD
In ten years, Macedonia has the potential to become one of the strongest and liveliest economic environments in Europe, stressed Kraemer.

arry Kraemer, the most popular

professor on leadership and management in the business school Kellogg,
considers that Macedonia has the potential to become one of the strongest and
liveliest economies in Europe. Professor
Kraemer was one of the main speakers on
the Macedonian Economic Summit organized by the Macedonia 2025.
The world needs more leaders based
on values, and watching the direction of

Macedonia 2025, the question is how

to develop better leaders. Leadership is
not a destination, it is a journey and people can improve every day, highlighted
Kraemer.
According to him, a successful leader
should focus on the main four principles.
How to perceive better, how to take
time to lead yourself, how to develop
more balanced perspective to understand
all sides of the problem, how to develop a

real confidence to know what you should

or shouldnt do, how to surround yourself
with people who are better than you, and
to realize that everyone is important, everyone in the team, emphasized Kraemer.
He considers that the Macedonian
economy is full of energetic people.
In ten years, Macedonia has the potential to become one of the strongest
and liveliest economic environments in
Europe, stressed Kraemer.

Macedonian Business MontHly

OVER 5,000 PEOPLE WILL HAVE BEEN WORKING IN THE

TECHNOLOGICAL AND INDUSTRIAL ZONES BY THE END OF THIS YEAR

ver 5,000 people will have been

employed in the technological industrial and development zones by the
end of this year, according to the plans
which company-investors announced to
the Directorate. Director Viktor Mizo expects that next year the dynamics of employment will increase due to the finished
construction of plants of the already announced investments.
Some companies are finalizing their
investment cycle which means that most
of employees will start working next year.
According to some estimates, that number will be over 1,500 jobs that can now
be confirmed, stressed Mizo.
The dynamics of employment depends
on the demand of global markets in the
automotive industry, electronics and
other industry activities operating in the
zones.
In the first 10 months, the exports
exceeded 1.2 billion euro which is more
than the total amount last year.
However, it is not only the absolute
value of exports that is important, but
also the difference between exports and
imports. If last year we had 140 mil-

lion euro in added value, this year that

number is 50 percent higher in the first
ten months. By the end of the year it will
exceed 1.4 billion euro exports and the
added value will exceed 200 million euro
direct contribution to GDP, said Mizo.
According to the technical industrial
development zones, domestic companies
are increasing the cooperation with factories in the zones, and as suppliers of raw
materials, catering, insurance, logistics

services, and more in servicing machines,

as well as development of tools, equipment and components for the products
they make.

Job Vacancy Rate in the last four quarters

%

1.6
1.5
1.4
1.3
1.2
1.1
1

IV.'14

I.'15

II

III

Source: State Statistical Office

Job vacancies,
third quarter 2015
The highest number of job vacancies, 2000, was recorded in the fifth group of occupations - Service and sales workers.

ccording to the data of the State

Statistical Office, in the third
quarter of 2015, the job vacancy rate
was 1.55 percent. The job vacancy rate
was highest, 2.69 percent, in section F Construction, while the lowest rate was
registered in sections E - Water supply;

sewerage, waste management and

remediation activities and O - Public
administration and defense; compulsory
social security, 0.19 percent.
Business entities with 3-9 employees
had the highest job vacancy rate of 2.16
percent. The Pelagonia Region had the

highest job vacancy rate at 2.53 percent.

The highest number of job vacancies,
2000, was recorded in the fifth group of
occupations - Service and sales workers.

ECONOMY

The dynamics of employment depends on the demand of global markets in the automotive industry, electronics and other industry activities
operating in the zones. In the first 10 months, the exports exceeded 1.2 billion euro which is more than the total amount last year.

Macedonian Business MontHly

EC NOTED THAT CAPITAL AND FOREIGN DIRECT

INVESTMENTS INCREASE GROWTH AND EMPLOYMENT
ECONOMY

The unemployment rate continuously drops since 2008 when it marked 34 percent, and this number reduced to 28
percent in 2014. Still, EC noted that Macedonia should continue reducing the unemployment rate.

acedonia is highly prepared for

developing a functional market
economy. Positive development has
been noted, especially about creating
a favorable business climate. The
macroeconomic environment is
strengthened. Government continues
to promote growth and employment
through big infrastructure investments
and foreign direct investments. This
contributes for improving the export
structure and creating jobs. Investments
have significantly increased in 2014
through the construction of roads,
railways and energy infrastructure
projects and through the new direct
investments. This was noted in the
recent progress report EC prepared for
Macedonia.
The unemployment rate continuously
drops since 2008 when it marked 34
percent, and this number reduced to 28
percent in 2014. Still, EC noted that
Macedonia should continue reducing the
unemployment rate.
The Economy Committee noted
that prices are stable and monetary
government successfully sustains the
currency. There is slight drop of inflation

which is a result of the reduced food and

energy prices. The bank system is stable.
Deposits are the main source of bank
financing, which continuously grow
since 2013.
In accordance with the
recommendations for 2015 and in
order to provide long-term growth,
Macedonia should pay special attention
to: continuing the structural reforms

in order to improve the business

climate and create efficient bankruptcy
proceedings, undertake additional
measures for improving the channel for
bank crediting, Government to remain
devoted to continuing the market
economic reforms, attract foreign direct
investments and develop the private
sector.

Indices of final product stocks

2010=100

160
150
140
130
120
110
100
90
80
IX'14

XI

XII

I'15

II

III

IV

VI

VII

VIII

IX

Source: State Statistical Office

PESEVSKI: WE REMAIN FOCUSED

ON ECONOMIC GROWTH
His estimation is that the budget contains strong development element and
the actual results and achievements are a good proof of that.

veryone who analyzes the macroeconomic situation in Macedonia

can come to their own conclusions, but
we remain focused on reducing unemployment, creating new jobs, attracting
investments and focusing on economic
growth. This was stressed by Deputy PM
Vladimir Pesevski commenting the as-

sessments of the European Commission

noted in the latest report. If we review
these parameters and analysis for improvement of the business climate we can
be satisfied, said Pesevski.
There is always room for improvement, but we should keep track on the
overall level of Macedonian economy and

then create proper budgetary policies,

stressed Deputy PM.
His estimation is that the budget contains strong development element and
the actual results and achievements are a
good proof of that.

Macedonian Business MontHly

EBRD: MACEDONIAN ECONOMY

WILL CONTINUE TO GROW
M

acedonian economy will continue

to grow at an increased rate of 3.5
percent, this and the following year, anticipates the European Bank for Reconstruction and Development (EBRD) in
the recent report on Regional Economic
Prospects.
Export has significantly increased in
the first half of the year, which according to the report is the main driver of
the economy, which is among the best
ones in the region. However, it is noted

that there are some negative risks arising

from the internal-political problems and
increased public debt.
It is anticipated that the growth of the
region will slow down for only 0.2 percent this year, compared to the 1.8 percent in 2014. A moderate growth of 1.6
percent is expected for next year.
It is stressed that the refugee crisis affects the economies of numerous countries. The transit countries in Southeast
Europe, which secure medical and social

protection, food, water and accommodation for the refugees, are facing logistics
and fiscal challenges.
-The economies of countries from
Southeast Europe also benefit from the
quantitative facilitation, weaker euro and
lower oil prices. In general, it is expected
that growth will start increasing in 2015
and be sustainable in 2016, reads the report on Regional Economic Prospects.

External trade of RM, January-October 2015

Preliminary data

DENARS

US $

EURO

thousand
IX 2015
Trade volume
Further processing volume
Export
Export - further processing
Import

X 2015

I-X 2015

51 024 248 54 360 699 496 707 523

IX 2015

X 2015

I-X 2015

IX 2015

X 2015

I-X 2015

928 383

990 182

8 980 713

827 467

881 380

8 061 923

89 651 085

163 685

162 313

1 619 876

145 852

145 220

1 455 095

22 658 242 21 511 603 206 127 946

412 122

391 371

3 727 580

367 406

348 787

3 345 588

53 887 990

99 387

88 990

973 849

88 571

79 827

874 656

28 366 006 32 849 097 290 579 578

516 260

598 811

5 253 133

460 061

532 593

4 716 335

8 995 611
5 463 166

8 956 093
4 922 965

Import - further processing

3 532 445

4 033 128

35 763 095

64 298

73 323

646 028

57 281

65 393

580 439

Import coverage by export

79.9

65.5

70.9

79.8

65.4

71.0

79.9

65.5

70.9

Source: State Statistical Office

External trade volume, January-October 2015

The trade deficit in the period January-October 2015 was 1.52 billion US dollars or 1.37 billion
euros. Import coverage by export in the period January-October was 71.0 percent

ccording to the preliminary data

of the State Statistical Office, the
total value of exported goods from the
Republic of Macedonia in the period
January-October 2015 was 3.72 billion
US dollars or 3.34 billion euros.
The total value of imported goods in
the Republic of Macedonia in the period January-October 2015 amounted
5.25 biilion US dollars or 4.71 biliion
euros.

The trade deficit in the period JanuaryOctober 2015 was 1.52 billion US
dollars or 1.37 billion euros. Import coverage by export in the period JanuaryOctober was 71.0 percent.
The external trade by products shows
that in the exports the most significant
products are supported catalysts with
precious metal or precious metal compounds as the active substance, ferronickel, ignition wiring sets and other

wiring sets of a kind used in vehicles,

aircraft or ships, iron and steel products
(flat-rolled products). In the imports,
the most significant products are the
platinum and platinum alloys, unwrought or in powder form, petroleum
oils and oils obtained from bituminous
minerals (other than crude), electricity
and other metals of the platinum group
and alloys thereof, unwrought or in
powder form.

ECONOMY

Export has significantly increased in the first half of the year, which according to the report is the main
driver of the economy, which is among the best ones in the region. However, it is noted that there are
some negative risks arising from the internal-political problems and increased public debt

Macedonian Business MontHly

Stavreski: Funds for all capital projects

and Budget needs provided
B

y issuing the new Eurobond in the

amount of EUR 270 million, Republic of Macedonia has provided funds to
finance all projects and Budget needs, as
well as to continue the stable trends and
the stable Budget execution.
This was announced by Deputy Prime
Minister and Minister of Finance, Zoran
Stavreski, at the occasion of the issuance of the Eurobond by the Republic of
Macedonia in the amount of EUR 270
million.
According to the Minister, the most
important for the citizens is that this year
has brought many uncertainties, much
instability, a very serious political crisis,
however, the only bright spot in the
country was and remains to be the economy, an area in which, as he said, they
will not allow any disruption whatsoever.
- All citizens, all businessmen, all final
beneficiaries of budget funds, all companies working on project realization,
should know that funds have been provided for smooth Budget execution. The
Economy in the Republic of Macedonia
in 2016 will be stable; the Budget will
have good liquidity, meaning all envisaged projects will be realized, including
the projects encompassing construction
of roads, hospitals, subsidies, sports halls,

kindergartens, everything financed from

the Budget, Stavreski underlined.
He explained that as an accountable
Government, they have to service the
debt incurred by the previous Government, i.e. the Government which issued
10-year Eurobond in 2005, maturing on
8thDecember this year in the amount of
EUR 150 million.
The Eurobond was issued in the
amount of EUR 270 million, with 5-year
repayment period and 4.875% coupon
rate, i.e. yield of 5.125%.

The Minister stressed that the demand

for the Eurobond, issued by the Republic
of Macedonia, by the investors was 2.5
times higher, reaching EUR 632 million.More than 100 investors have subscribed, most of which are from Europe
and the USA, while the rest of them are
from other countries.World-renowned
investment banks, pension funds, insurance companies and equity funds are
among the investors.The transaction was
realized in cooperation with City Bank,
Deutsche Bank and Erste Bank.

The lure of higher yield

Source: Bloomberg.com

banking

The Eurobond was issued in the amount of EUR 270 million, with 5-year repayment period and 4.875% coupon rate, i.e. yield of 5.125%

GOVERNMENT ALLOCATED 42 MILLION DENARS

FOR PROMOTING REGIONAL GROWTH
In order to develop the regions with specific development needs, 12 projects will be financed for developing villages in 12 municipalities

acedonian Government has provided a total of 42 million MKD

for 44 projects on the second open call
for equal regional development. The projects have been submitted by centers for
development of mountain regions and by
Municipalities, which are reviewed and
evaluated based on previously determined
set of criteria by the expert commission

established by the Ministry of Local

Self-Government, Deputy PM Vladimir
Pesevski announced. The open call was
published in September this year following the budget rebalance.
One third of the projects are on the
preparation of reports, technical and
project documentation and feasibility
studies for which regions and munici-

palities provide funds and other sources

of financing from European funds, the
World Bank, municipal budgets, concessions and public-private partnerships.
In order to develop the regions with
specific development needs, 12 projects
will be financed for developing villages in
12 municipalities.

Macedonian Business MontHly

SIX COMPANIES USE THE BENEFITS FROM

ERASMUS PLUS PROGRAM
S

ix Macedonian companies have

already used the benefits from Erasmus plus program offered by the European Union. The National Agency for
European Educational Programs and Mobility has allocated around 450 thousand
euro for companies needs. The program
encompasses over 70 persons who are
employees in the company, and some are
unemployed and need qualifications. In
general, companies from the Agriculture
and IT sector benefit most from this
program.
-Projects are mostly directed towards
individual mobility i.e. mobility for
training of employees or foreign associates - stressed Darko Dimitrov, Chief of
the National Agency for European Educational Programs and Mobility.
According to Jadranka Arizankovska,
senior advisor in the Economic Chamber
of Macedonia, companies should use the
benefits from this program because it is

additional opportunity to educate and

highly qualify their employees.
The Erasmus Plus Program of the
European Union has been implemented

since January 2014 and it encompasses

Macedonia through the National Agency
for European Education Programs and
Mobility.

Importance of the strategies for reaching business entities goals, 20102012

Degree of importance (%)

Strategies

Medium
10.6

Low
10.9

Not relevant
61.9

7.5

9.4

13.4

69.6

Reducing in-house costs of operation

35.1

26.8

13.6

24.4

Reducing costs of purchased materials,

components or services
Introducing new or significantly improved
goods or services
Intensifying or improving the marketing of
goods or services
Increasing flexibility/responsiveness of your
organisation
Building alliances with other enterprises or
institutions

35.8

27.5

13.0

23.7

27.5

26.5

18.1

28.0

25.3

24.3

20.7

29.8

25.2

31.6

19.4

23.7

4.3

6.3

22.0

67.4

Developing new markets within Europe

High
16.6

Developing new markets outside Europe

Source: The State Statistical Office

Innovative business entities

Of the total number of innovative business entities, 24.7 percent have introduced product and process innovations.
Of the total number of innovative business entities, 46.4 percent have introduced organizational and marketinginnovations.

ccording to the State Statistical Office data, the

share of innovative business entities in the period 2010-2012 was42.8 percent. Innovative business
entities are defined as entities that have introduced
a product, process, organizational or marketing innovation in the reference period.
Of the total number of innovative business
entities, 24.7 percent have introduced
product and process innovations. Of the total
number of innovative business entities, 46.4
percent have introduced organizational and
marketinginnovations.
Of the total number of innovative business entities, 18.2 percent have introduced product, process,
organizational andmarketing innovations, at the
same time.

Expenditures for innovation activities in 2012

Other expenditures
11.9%
Acquisition of existing
knowledge from other
enterprises or
institutions
0.8%

Acquisition of
machinery, equipment,
software and buildings
59.5%

In-house R&D
6.4%
External R&D
21.4%

Source: The State Statistical Office

ECONOMY

The Erasmus Plus Program of the European Union has been implemented since January 2014 and it encompasses
Macedonia through the National Agency for European Education Programs and Mobility.

10

Macedonian Business MontHly

BUSINESS CLIMATE

Business Reforms in Macedonia Macedonia remains

among top performers
Doing Business 2015/2014
Dealing with Construction
Permits: DB 2014

Macedonia made dealing with

construction permits easier by
reducing the time required to
register a new building and by
authorizing municipalities to register
buildings on behalf of owners.

Starting a Business: DB 2015

Macedonia made starting a

business easier by making online
registration free of charge

Macedonia made paying taxes easier

for companies by encouraging
the use of electronic filing and
payment systems for corporate
income and value added taxes.

Getting Credit: DB 2014

Macedonia strengthened its secured

transactions system by providing
more flexibility in the description
of assets in a collateral agreement
and in the types of debts and
obligations that can be secured.

Protecting Investors: DB 2015

Macedonia strengthened minority

investor protection by requiring
prior review of related party
transactions by an external auditor.

Resolving insolvency DB 2015

Macedonia made resolving

insolvency easier by establishing a
framework of electronic auctions
of debtors` assets, streamlining and
tightening time frames for insolvency
proceedings and the appeals process
and establishing a framework for
out-of-court restructurings.

Getting Electricity: DB 2014

Macedonia made getting electricity

easier by reducing the time required
to obtain a new connection and
by setting fixed connection fees

Flow of foreign direct investment by countries per year

Registering Property: DB 2014

Macedonia made property

registration faster and less costly by
digitizing the real estate cadastre
and eliminating the requirement
for an encumbrance certificate.

per kilowatt (kW) for connections

requiring a capacity below 400 kW.

Paying Taxes: DB 2014

2014

2013

2012

Mil.euro
Total

200.60

251.48

2011

2010

2009

Mil. US$
89.77

463.27

2008

2007

2006

Mil.
euro

Mil.
US$

Mil.
euro
344.78

210.98

197.09

399.89

699.09

Top investment countries

Great Britain

40.37

44.63

-0.56

-84.99

41.27

-59.49

38.02

54.95

12.1

Austria

0.40

36.54

50.94

64.42

-10.65

39.14

95.69

14.48

130.9

Germany

26.18

27.07

14.87

14.86

15.58

4.18

4.01

12.65

0.56

Greece

3.20

10.40

3.52

20.56

20.11

-76.88

6.72

61.16

40.67

Netherlands

7.58

10.17

11.14

193.56

-1.05

84.01

2.33

37.11

14.67

Turkey

30.28

13.87

29.9

107.93

20.41

6.47

-1.50

2.75

3.89

United States

1.14

0.82

14.57

3.80

-3.01

2.37

9.64

2.19

6.17

Belgium

0.86

11.92

18.36

1.05

0.09

0.09

0.13

0.38

0.09

Hungary

9.33

1.86

-1.76

-0.73

-51.83

-32.96

-8.70

99.94

0.80

Slovenia

12.55

7.71

-19.25

15.60

28.23

184.87

79.23

85.56

10.5

Switzerland

124.44

5.80

-25.67

-9.09

-59.16

6.46

24.78

42.38

21.26

Bulgaria

0.46

1.26

6.84

4.67

41.01

14.45

38.94

34.96

11.70

Croatia

6.47

8.78

7.08

11.29

0.06

7.10

17.92

32.73

-/-

Russian
Federation

0.31

1.85

0.21

9.39

4.94

-0.36

-0.13

0.26

-/-

Source: National Bank of Macedonia

Investments worth EUR 600 million

for Macedonian Railways projects
The investment cycle in the Railways, as the Government representatives said, also includes the construction of the
railroad tracks to Bulgaria and Kumanovo - Beljakovce section, being already commenced, and the reconstruction
and construction of Beljakovce-Kriva Palanka section, which should start in the first half of next year

eputy Prime Minister Zoran

Stavreski, Minister of Transport
Vlado Misajlovski, representatives of
both the Chinese company and Macedonian Railways Transport, as well as the
Chinese Ambassador to Macedonia Wen
Zhenshun were among the first passengers of the promotional train ride from
Skopje to Veles.
Deputy Prime Minister Zoran
Stavreski underlined that two billion and

200 million denars for investments in

Macedonian Railways are envisaged in
the 2016 Budget, or as he said, 15 times
more than in 2006.
The objective is for Macedonian
Railways to be turned into a modern and
functional infrastructure, something that
should have been done years ago, however, it is happening now and it must not
be further delayed.The results are already
visible, we are witness of how Macedo-

nian railways should look like, Stavreski

said. The investment cycle in the Railways, as the Government representatives
said, also includes the construction of the
railroad tracks to Bulgaria and KumanovoBeljakovce section, being already
commenced, and the reconstruction and
construction of BeljakovceKriva Palanka
section, which should start in the first
half of next year.

11

Macedonian Business MontHly

DEVELOPING THE RAILWAY INFRASTRUCTURE

FOLLOWING JAPANESE EXPERIENCE
J

apanese railway company East Japan

Railway Company will soon support
the development and modernization of the
railway infrastructure of Macedonian railways. This has been agreed on the meeting
between General Director of Macedonian
railways Irfan Asani and the Directors for
international affairs and finance of East
Japan Railway Company Yuji Fukasawa
and Toru Takahashi, in Tokyo Japan.

According to results presented in 2014,

East Japan Railway Company has
7,452 kilometers long railway with 1,665
railway stations and daily transports 17
million passengers.
A delegation from Macedonian Railways, led by Director Asani, visited the
Center for organization of the railway
traffic system, electro-communications,
maintenance and emergency manage-

ment, a process put on the agenda for the

upcoming trainings.
Interlocutors exchanged their views
about the reconstruction of the railway
station in Skopje. Both sides agreed that
the training should start as soon as possible, anticipating a group of employees
in Macedonian Railways to go on a
training in this Japanese railway company.

The Corridor 10 is one of the EU priorities

For this purpose, the EU, through the IPA funds, has invested approximately 5 million euro in the reconstruction
of 11 railway stations along the corridor 10, including those in Skopje, Veles and Demir Kapija

n the past years, the Delegation of the

European Union has closely cooperated with the Ministry of Transport and
Communications in improving the railway network in the country in order to
improve mobility of citizens and goods
along the main Corridor 10. For this pur-

pose, the EU, through the IPA funds, has

invested approximately 5 million euro in
the reconstruction of 11 railway stations
along the corridor 10, including those in
Skopje, Veles and Demir Kapija. The EU
is aware of the importance of this project
for the well-being of the citizens of the

E-RAIL TRAFFIC CENSUS

The E-Rail Traffic Census was conducted for the
first time in 2010. The 2010 E-Rail Traffic Census
covered the entire E-railway network. The total
length of the E-railway network in the Republic of
Macedonia is 246.8 km. The E-Rail Traffic Census
provides data on the E-railway network for the
purpose of facilitating the organization and planning of international goods and passenger transport
between UN/ECE member countries.
The Census was executed in accordance with
the European Agreement on Main International
Railway Lines (AGC) of 1985. According to the
AGC Agreement, the E-Rail Traffic Census was
conducted on the railway line: E-85 (Preshevo-) Tabanovce Skopje Gevgelija (-Idomeni) (General
Jankovic-) Volkovo Both railway enterprises, Macedonian Railways Transport JSC and Macedonian
Railways - Infrastructure, took part in the execution
of the Census.

country as the railway network is one of

the bloodlines for its the future development. The Corridor 10 as part of the
South-East Europe Transport Observatory (SEETO) Comprehensive network is
one of the EU priorities.

Passenger train movements per year

MKS1001

AGC line**

AGTC line***

number

number

E 85

TEN ag*

Number of trains*

790

E 85

790

E 85

730

E 85

730

E 85

366

E 85

365

Tabanovce-Skopje
MKS2001
Skopje-Tabanovce
MKS1002
Skopje-Gevgelija
MKS2002
Gevgelija-Skopje
MKS1003
Volkovo-Skopje
MKS2003
Skopje-Volkovo

Source: State Statistical Office

transport

A delegation from Macedonian Railways, led by Director Irfan Asani, visited the Center for organization of the railway traffic system,
electro-communications, maintenance and emergency management, a process put on the agenda for the upcoming trainings

12

Macedonian Business MontHly

new investments

STARTED THE CONSTRUCTION

OF THE INDUSTRIAL ZONE IN NEGOTINO
The investor, owner of IGM Company, Ilija Gecev stressed that the new industrial zone Negotino
will represent a modern mixture of stores placing goods from China and Korea

tarted the construction of the new industrial zone Negotino located on

30 hectares with a capacity to construct
26 facilities. The positive effects from
the construction of this zone, according
to Prime Minister Nikola Gruevski, are
found in the fact that all 17 land parcels
are already sold. He stressed that Government continues to promote the investment opportunities before numerous
companies worldwide.
-Negotino and Kavadarci region may
be the first to directly feel the contributions from our work. Drekselmaer is a
typical example of this. It motivates us to
work towards attracting new investments
and boost the construction of new factories, said Gruevski.
He welcomed IGM Company for
starting a new business venture and
informed about expanding the zone,
due to the great interest, for which
Government will help the Municipality
to reallocate the agriculture land into
construction land. That will create conditions to expand the zone on additional
40 hectares.
The investor, owner of IGM Company, Ilija Gecev stressed that the new
industrial zone Negotino will represent
a modern mixture of stores placing goods
from China and Korea.

-Goods will be stored in containers

and be shipped to Thessaloniki harbor
and transported to the zone, located 140
kilometers from Thessaloniki, where we
will construct the most successful industrial zone in Macedonia, said Gecev. He

informed that there are investors who are

interested in this zone and there are discussions with Chinese and Korean Companies, but Grcev is mostly driven by the
desire to create new jobs in Negotino.

Industrial zones

Issued building permits

Of the total of 326 structures, for 202 (62.0%) the investors are private persons,
and for 124 (38.0%) structures the investors are business entities

ccording to the data from the

State Statistical Office, a total of
326 building permits were issued in
October 2015, which was 35.3% more
than the same month of the previous
year.
According to the issued building
permits, the expected total value of the

constructions was 5 050 934 thousand

denars, which was 52.9% more than
the same month of the previous year.
Of the total number of issued building permits, 187 (57.4%) are for
buildings, 45 (13.8%) are for civil engineering structures, and 94 (28.8%)
are for reconstructions.

Of the total of 326 structures, for 202

(62.0%) the investors are private persons,
and for 124 (38.0%) structures the investors are business entities. In the reference
period, 869 dwellings are planned for
construction, with total useful floor area
of 69 474 m2.

13

Macedonian Business MontHly

The Textile Cluster of Macedonia also detected the lack of qualified workforce in this industry, and suggests that young people should be motivated
to get engaged in the textile industry. The data of the State Statistical Office shows that in the first nine months this year, the number of workers
in textile production increased for 17.5 percent, and in the same period the textile production marked a positive growth of 12.4 percent

acedonia has a rich history in textile production, but the number

of employees in this industry is reducing.
In 2007, there were almost 44 thousand
employees, and last year this number was
38 thousand. The website of the Employment Agency constantly lists active open
calls for vacancies in the textile industry,
but young people dont want to operate
in this field.
-We try to attract young people and
train them to operate with the machinery. We constantly have vacancies
for textile technologists, said Dragan
Stefanovski owner of a textile factory in
Kumanovo.
The Textile Cluster of Macedonia also
detected the lack of qualified workforce
in this industry, and suggests that young
people should be motivated to get engaged in the textile industry.
-Textile factories are having a real problem, especially with sewers, modelers,
i.e. direct workforce. The situation with
highly qualified stuff is not great either,
but is not as alarming as the situation
with workers in direct production, said
President of the Textile Cluster, Mirjana
Perkovska.

Domestic textile companies are also

having problems with the out-dated
equipment, and demand facilitated
conditions for financing in order to
modernize the production which would
boost the competitiveness of domestic
companies.
The textile industry in Macedonia plays
a huge role in the gross capital formation, absorbing workforce, and export. In
the first 7 months of 2015, the export in
textile industry was 357.5 million dollars,
which is 13.9 percent of the total export

in Macedonia. Our biggest partners are

Germany, Netherlands, England, and
USA. The data of the State Statistical Office shows that in the first nine months
this year, the number of workers in textile
production increased for 17.5 percent,
and in the same period the textile production marked a positive growth of 12.4
percent.

Macedonia: Revealed Comparative Advantages, 20052013

2.5

2.0

2.5
Revealed Comparative Advantages Relative to the
World For Selected Industrial Product Categories
(Percent)

7
2.0

1.5

1.0

1.0

0.5

0.5

0.0

0.0
2005

2007

2009

2011

Revealed Comparative Advantages Relative to the

World For Selected 'Traditional' Product Categories
(Percent)
Food products

Textiles and clothing

Machinery and Transport

Manufactures
Electrical equipment
Chemicals

1.5

1
0

0
2005

2013

2007

2009

2011

2013

Source: World Bank WITS; and IMF staff calculations.

FTU TO ERADICATE ILLEGAL WORKING

The conducted surveys show that illegal work is most present in agriculture, construction, transport,
hotel keeping, trade and services. People most prone to this are persons aged 15 to 30 years and also
students and pensioners. Undeclared work is especially present in seasonal working

ederation of Trade Unions of

Macedonia launched a campaign
against undeclared work with a set of
active measures. The campaign will be
implemented in the next period and is
prepared as a set of measures, from training unemployed persons to performing
activities and implementing measures for

the protection of employees from illegal

work.
-Past surveys showed that the underground economy in Macedonia is 22.5
percent - stressed the President of the
Federation of Trade Unions of Macedonia
Zivko Mitrevski. In the European Union,
this percent varies between 19 and 22.

The conducted surveys show that illegal work is most present in agriculture,
construction, transport, hotel keeping,
trade and services. People most prone to
this are persons aged 15 to 30 years and
also students and pensioners. Undeclared
work is especially present in seasonal
working.

labour market

TEXTILE WORKERS
MOST WANTED ON THE MARKET

14

Macedonian Business MontHly

CONSTRUCTION

HOUSING LOANS MARK

RECORD-BREAKING GROWTH OVER 18 PERCENT
Government gives subsidies up to 14 thousand euro through the project Buy a House, Buy an Apartment. This benefit
has been so far used by 680 families. It is significant to mention that in the last years, the price per meter squared reduced
for around 100 euro, which is a direct savings of 5,000 euro for an apartment located on 50 meter squared

n one year, housing loans marked an

increase of 73 million euro which is a
record-breaking growth of 18 percent,
shows the last data of the National Bank.
The reasons for this, according to banks,
are to be found in the reduced interest
rates of housing loans and the accelerated
growth of approved subsidies for housing
loans through the project Buy A House,
Buy An Apartment.

The project Buy A House, Buy An

Apartment is an exceptional support especially for young couples, stressed Milica Caparovska from Stopanska Banka
AD Skopje, one of the banks involved in
this project.
Stopanska Banka AD Skopje participates with over 35 percent, and the
interest for this project is continuously
growing.

Annual growth of total loans to construction and real estate activities

in millions of denars
3,000

in percentage
25
19.8

2,500
2,000

12.8

1,500

20
13.8
13.6

13.1
10.4

1,000

7.2

500

6.8

15
10
5
0

-500

12.2013

3.2014

6.2014

9.2014

12.2014

3.2015

According to Caparovska, investing in

the housing issue is favorable given the
low interest rates and the offer on the real
estate market, but also regarding the conditions the project Buy a House, Buy an
Apartment offers.
Government gives subsidies up to 14
thousand euro through the project Buy
a House, Buy an Apartment. This benefit has been so far used by 680 families.
It is significant to mention that in the
last years, the price per meter squared
reduced for around 100 euro, which is a
direct savings of 5,000 euro for an apartment located on 50 meter squared.

6.2015

Real estate activities (left scale)

Construction (left scale)
Construction (right scale)
Real estate activities (right scale)
Construction and real estate activities
(right scale)
Total companies (right scale)

-5

Source: NBRMs Credit Registry, based on data submitted by banks.

INCREASED DEMAND OF
MACEDONIAN CONSTRUCTION WORKS ABROAD
New emerging markets are Poland, Slovenia and Greece

n the first nine months this year,

Macedonian civil-engineering sector
performed construction activities abroad
in the amount of almost two billion
MKD which is 102.6 percent more compared to the same period last year.
State Statistical Office published that in
the period January-September this year,

the total amount of contracted construction works abroad was 3.2 billion MKD
which is 53.3 percent less compared to
the same period last year.
In the period January-September this
year, the number of construction activities in Kosovo, Albania, Italy, Serbia,
Croatia, Bosnia and Herzegovina and

Netherlands increased, to the detriment

of the decreased number of construction activities on the other markets. New
emerging markets are Poland, Slovenia
and Greece.

Macedonian Business MontHly

15

Tobacco Industry
T

he tobacco industry in Macedonia is

constantly oscillating, especially with
regard to the purchase of raw tobacco
leaves. According to the data of the Ministry of Agriculture, Forestry and Water
Economy, some 42,367 contracts were
concluded in the 2013/2014 production
year, which is around 45% more than in
2012 (29,090) and 27% more than in
2011 (33,234). Considering the average
price of around 152.6 MKD per kilo
(around 18% lower than last years price),
the purchase of the entire annual production of raw tobacco from the 2013/14
harvest (data with 17.04.2014 inclusive
30,997 kg. 152.6 MKD/kg) will require around 4,730,142,200 MKD or
EUR 77.2 million. The value of subsidies
is 1,859,820,000.00 MKD.
For the first time, early tobacco purchase by several enterprises was carried
out in the 2011/12 production year. It
continued in the following two years,

but the expectations for full purchase of

the planned quantities were not fulfilled.
This years purchase of raw tobacco leaf
commenced only by certain purchasing
firms and ahead of the legally anticipated
term. In the regular purchase of tobacco
there was timely certification of tobacco

Dynamic of Tobacco Purchase

1.Raw
tobacco leaf,
unfermented

Quantity (tons)

griculture Minister Mihail Cvetkov

announced the construction of small
food preservation centers for the surplus
of agricultural product, and their secure
placement as half-products at a higher
price. It is a matter of projects, explains
Cvetkov, which will be realized through
the IPARD programs.
Farmers will be able to dry the products they cannot sell while fresh and then
place them on the market. It practically
enables sales of the entire production,
said the Minister. The IPARD 2 program
anticipates 60 percent co-financing, and
the Guarantee Fund will cover 50 percent
of the mortgage.

-Value (in
millions of
denars)

-Average price
den/kg

1998

20 880

2 725

130.5

2002

21 401

2 636

123.2

2004

19 839

2 718

137

2005

23 196

2 910

125.4

2009

23 196

4 453

192

2010

26 158

3 583

137

2011

21 024

3 511

167

2012

27 993

5 039

180

2013

30 997

4 730

152

CONSTRUCTION OF FOOD
PRESERVATION CENTERS
FOR SECURE PLACEMENT OF PRODUCTS

samples, all preparations were carried out

at purchase points, and representatives
of tobacco producers associations were
appointed.

Source: www.mchamber.org.mk

AGRICULTURE

For the first time, early tobacco purchase by several enterprises was carried out in the 2011/12 production year

16

Macedonian Business MontHly

FARMERS WILL RECEIVE CERTIFIED WHEAT SEEDS FOR FREE

AGRICULTURE

Millers will secure around 400 tons of seed material that will be given to farmers for free. This measure should be
compulsory applied in 2018, because without using certified seed material subsidies wont be paid

illers will provide seed material for

the production of wheat and will
give it to the farmers for free. Farmers,
however, after the harvest will have to
return to the millers mercantile wheat in
2:1 ratio. This measure, agreed between
parties, will be implemented under the
mediation of the Ministry of Agriculture.
According to the President of the Association of Farmers, Eftim Saklev, this
agreement will allow farmers to determine the supply of certified seed material,
and the manufacturers of seeds will have
insight into the quantities and varieties
of seeds they should produce. Millers will
receive high quality wheat for production
of bread flour.
This decision will solve the problem
farmers have with wheat production.

Millers will secure around 400 tons of

seed material that will be given to farmers
for free. This measure should be compul-

sory applied in 2018, because without using certified seed material subsidies wont
be paid, said Saklev.

Average yield per hectare for cereals

kg/ha

7000
6000
5000
4000
3000
2000
1000

2004

2005

2006

2007

2008
Wheat

2009

2010

Maize

2011

2012

2013

2014

Rice

Source: State Statistical Office

AGRICULTURAL INSURANSE INCREASED FOR 63 PERCENT

Starting from 2008, Government introduced a measure for aiding in insurance premiums for agricultural production,
natural disasters and unfavorable climate events. The number of contracts continuously grows

he number of issued policies for

agricultural insurance is on the rise.
Data shows that farmers negotiated 3,784
contracts for crop insurance schemes, 60
percent of the expenses being covered by
the Government.
Finance Minister Zoran Stavreski, on
the occasion Day of Insurance, said that

agricultural insurance marks a growth of

63 percent compared to last year.
Starting from 2008, Government
introduced a measure for aiding in insurance premiums for agricultural production, natural disasters and unfavorable
climate events. The number of contracts
continuously grows. After the initial

problems in 2008, when we had only

146 demands, this number reached 3,784
contracts and the gross policy premium
is 181 million denars, i.e. marks a growth
of 63 percent compared to last year,
stressed Finance Minister.

(thousand MKD)

Gross claims paid by lines of business

Lines of business insurance

2009

2010

2011

2012

2013

Property insurance

459,407

476,584

488,248

587,355

439,745

Motor vehicle insurance casco

529,979

539,443

532,569

500,565

434,905

Accident insurance

354,233

364,772

360,602

366,079

357,631

1,491,083

1,504,818

1,487,067

1,405,306

1,550,495

Travel insurance

15,372

28,102

37,486

28,689

32,463

Other insurance non-life

14,728

21,401

20,131

33,619

29,597

Life insurance

97,448

53,253

80,066

92,060

114,358

2,962,250

2,988,373

3,006,170

3,013,673

2,959,194

Motor Third-Party Liability insurance

Total

Source: Quarterly Reports, ISA