|SOUTH-EAST EUROPEAN INDUSTRIAL МARKET » South-East European INDUSTRIAL Мarket - issue 3/2016, September
Albania has been one of the fastest-growing economies in Europe with a steady economic growth of 6% during the recent years, though the economic crisis has affected the country in 2009 and 2010. The economic development was accompanied by rapid reductions in poverty. Poverty fell by half (to about 12,4 percent) between 2002 and 2008, while extreme poverty now affects under 2 percent of the population.
As Agroweb reports, agriculture has been a bright spot for Albania's economy in 2015. While all exports fell 7,8 percent, agriculture outperformed itself. In 2015 the amount of exports reached the value of ALL 4,4 billion (USD 4 million), about twice more than the previous year - ALL 2,9 billion in 2014 (USD 2 million).
Vegetables have given an impetus to the export figures, almost doubling in value against other products. Thus, last year's export of vegetables accounted for about ALL 4 billion (USD 4 million), compared to ALL 2,1 billion (almost USD 2 million) in 2014. According to official data of the Ministry of Agriculture, the value of agricultural products in 2015 is recorded to be ALL 10,5 billion (USD 10 million), compared with ALL 8,1 billion (USD 8 million) in 2014.
To follow the growth trend, the Albanian agricultural exports to foreign markets grew significantly in the first two months of 2016, compared to an year earlier, according to the Ministry of Agriculture, Rural Development and Water Management of Albania.
Agriculture and agro-industry are sectors that not only bring a significant contribution to the GDP of Albania, but are also considered as major sectors with great employment potential. In 2015, agricultural and livestock production increased by 2,9% compared to 2014, while vegetables showed that production rose 8%, the production of fruit trees with 11,4%, and 43% of citrus.
During the period 2005-2014, Albanian agro-food exports have been increasing significantly - on average 14% per year - reaching EUR 128,9 million in 2014. Imports on the other hand have been increasing on average by 8% per year. The export to import ratio has improved from 11,2% in 2005 to 17,9% in 2014, since exports increased more than imports for the given period.
The main partners for agrifood export are EU members, mainly Italy, Greece and Germany. However, international trade partners are changing, mainly due to geopolitical attitudes of EU members toward Russia and the Russian embargo as well, also new market linkage with other countries. In this context, fresh vegetables sector is undergoing also a rapid change.
Currently, Albania is exploring mostly the Eastern market, with Bulgaria, Serbia, Bosnia & Herzegovina, Croatia and Hungary as its main partners. Serbia has maintained its domination since 2014, purchasing 61% of Albanian agricultural exports. Macedonia was the second largest destination in 2006, but over years has decreased its share to 4% in 2014. In 2014, Bosnia and Herzegovina and Montenegro made up the second and third market for Albanian export by 20% and 11% respectively.
Meat processing and production
In Albania many slaughterhouses are not in operation and the active 20 slaughterhouses only slaughter few cattle or pigs or small ruminants daily. All slaughterhouses are operating far below their capacities due to low supplies. Usually the facilities are outdated and in most cases they do not even comply with the Albanian law. EU standards on hygiene, public authority, traceability and HACCP are not fulfilled.
There are three major slaughterhouses for poultry in rather good condition: Chicken Farm in Kavaja (belonging to Frigofood company), Agrizoo in Lushnja region, and Driza in Fier region.
The situation in the chicken sub-sector looks much better as here several investors are active also in other agribusinesses, e.g. feed production companies or slaughterhouses.
There is a trend to establish a complete integrated chain of operations, from chicken farms to feed mills and retail outlets. Aiba Company shpk and Floryhen shpk dominate the chicken and egg production in Albania and belong to the three big fodder producers together with Agrotek ALB shpk, who control 70 - 80 % of the market in Albania. Wheat and barley for animal feed is purchased mainly locally, but other inputs are imported from Greece, Italy and Serbia.
There are currently 14 consolidated meat processing enterprises that operate throughout Albania. 95% of the meat processed in the country is imported, primarily from South America. Local meat is too expensive and of limited availability. The processed meat is mainly pork, but also poultry and beef. Meat processing companies use modern technology in processing frozen meat, but face limited know how in processing fresh meat, since most processing companies import meat for processing.
The leading companies have a sound documentation of their production including traceability and applied HACCP. Albanian standards according to the food law and orders of MAFCP are often applied; even EU standards on hygiene, public authority, traceability and HACCP are in place at big companies which are almost ready for EU export licences.
The premises of the top meat processing companies like EHW, KMY, and TONA are very modern and fulfill all EU standards. Therefore, the best opportunities are among this relatively small, but dynamic group of companies that aim to produce for export markets. These companies often import their raw materials from the world market and export to adjacent markets like Kosovo, Macedonia, and other former Yugoslavian countries.
Milk processing and production
The commercial milk market in Albania consists of informal (direct selling from farmers) and formal market channels (collection & distribution by dairies). More than half of the milk produced in Albania is used for self consumption, sold directly in the informal markets or used for feeding animals, and less than 50 percent reaches the processing industry.
The dairy processing industry is still on the way of modernizing structures and technologies. The system of value added tax (VAT) is a major obstacle for the processing industry. A 20 % VAT is charged on all products. Since farmers are excluded from VAT payments, the tax is levied on processed products only. This increases the retail price and aggravates competition of processed products compared to the informal market.
There are about 27 modern dairy processing plants in Albania operating with a capacity of 10-40 tons per day, but struggling with competition from the informal market. None of them can utilize its capacity. The dairy plants with complete milk processing lines are producing pasteurized milk, yogurt, UHT milk, butter, butter milk, curd, cheese and fruit yogurt.
Meggle is the first foreign milk processing company active in the milk processing business in Albania. Meggle Eastern Europe Ltd. officially became in August 2010 a 100% owner of the Albanian dairy Ferlat sh.p.k. with headquarters situated in Rhogozine.
The dairy Ferlat is one of the largest dairies in Albania, located in Tirana province. According to Meggle, with more than 10 tons purchased raw milk per day Ferlat has growth and capacity enlargement potential, especially with regard to its 57% market share in consumer milk. Other larger dairies in Albania are Greal in Korca, Mireli in Kavaja, Deltadoni in Lushnja, and Gjirofarma in Gjirokastra.
Bakeries, flour mills and edible oil production
Albania's milling industry uses mostly imported grain. The five important milling plants (Sh. A. Mielli, Prima- Bloja SH.A., Atlas SH.A., Mulliri i Arte and Prima) in the country cover about 50% of the market needs according to data from the factories and the Ministry of Food & Agriculture.
In the edible oil industry, larger companies dominate the domestic markets. One is the prominent company of OLIM, processing a variety of seeds - most importantly sunflower. Other larger companies are Vajra Bimore Fiol and Erbiron.
The olive oil sector provides potential for SMEs, in particular in the field of organic olive oil. At the same time there are hurdles to be overcome: product quality should be improved, the value chain is rather inefficient, and international trade is not yet mature. In view of the growing market for organic olive oils in Western Europe, the production conditions in Albania can offer an attractive sourcing options. Agrotal 1 SHA is one of the few Albanian companies with EBRD as shareholder (30%).
Fruits and vegetable processing and production
The main vegetables produced in Albania are cucumbers and tomatoes. Winter season vegetables cultivated include lettuce, spinach, carrot and cauliflower. The absence of profit tax on farmers on the one hand, and of protective measures for home production on the other, have had a considerable influence on agriculture production, especially in greenhouses, reducing imports and beginning to export modest quantities of vegetables.
The vegetable and fruit processing industry fulfils only 30% of the needs of the domestic market. The processing industry is dominated by micro and small enterprises. There are only two companies with more than 100 employees using both local and imported raw material.
One of these companies, Sejega is located in Tirana, and the other, Sidnej, in Berat. These are the only companies producing both for the domestic market and for export. In addition, there are several medium sized companies: in this group are Shpiragu (in Berat) and Kampion (in Shkoder).
Beer, mineral water, soft drinks
In the years until 2010 local beer producers have made investments totaling up to EUR 30-40 million with production capacity providing for more than 120% of the national beer consumption. The beer industry has used its influence within the state administration in terms of protectionism and negotiations on free trade agreements with other Balkan countries and the European Union. The competition for the industry comes mostly from Greece and Serbia.
Birra Malto is the largest brewery in Albania. The company sells a pilsner beer under the Birra Tirana brand, named after the capital, Tirana, where the beers are brewed. Further important beer brewers are Birra Korca and Stefani & Co.
The soft drink market in Albania is dominated by Coca Cola; important mineral water producers are from Alfa Glina, Tepelena, Dilo shpk Uji Qafshtama produced by EHW Group.
Albanian grape production is primarily dominated by small, independent vineyards. Quality standards of the grapes are generally low due to heterogeneity of cultivars and inefficient agronomic production practices. Some quality improvement trends have been recorded recently, but the quality achieved still falls short of the standards of many wineries in EU.
70-75% of wine consumed in Albania is produced by farmers and/or small wineries, which are not licensed. Important spirit producers and wineries are Aquila Liquori and Kantina Gjergj Kastriot Skenderbeg. More than 80% of total Albanian wine imports come from the EU countries, with Italy as the main supplier (82% of EU imports).
Етикети: Meat processing and production Milk processing and production Bakeries Sugar factories Fruits and Vegetable Wine and grape production Confectionary and snacks