Investment Council discusses challenges and recommendations to capitalize on the investment potentials in the agro-processing sector

What interventions (government-business-donor) are necessary at the sectorial level to speed up agro-processing SMEs to expand current and/or new investments?

Tirana, 10 November 2020 / On Tuesday, the Investment Council (IC) held a virtual plenary meeting to discuss main challenges and recommendations for the promotion of the agro-processing investments, with a focus on vegetables, fruits, nuts and medicinal and aromatic plants (MAPs)—with the ultimate goal of increasing their gross value added in the country. The meeting was chaired by the Minister of Finance and Economy, Ms Anila Denaj, and it was attended by almost all the IC members, while many other representatives from the public and private sector attended in the role of observer.

In her speech, Minister Denaj gave an overview of the government’s actions and vision to promote the development and growth of the agricultural production, targeting the sector’s improvement in regional competitiveness, as well as the harmonization of country’s policies and institutional settings with the EU acquis. Minister Denaj noted that the coronavirus crisis has unveiled the fragility of the modern supply chain, therefore the diversification of supply sources and digitalization will be crucial steps to building stronger and smarter supply chains and ensure a sustainable economic recovery of the country. This moment can also be used as a chance to transform and resize the agro-processing sector and capitalize on its potential in the country.

According to business representatives, there is a growing interest in new investments in the agro-processing sector. Although the sector has been vastly expanded and supported by government policies, they acknowledged that more efforts need to be done to address several issues, such as the phytosanitary certificates, certification of laboratories and the informality of the sector as well as the quality and certification of products.

Some main recommendations discussed during this meeting:

• Provision of incentives for the consolidation of farms/cooperatives to increase the economy of scale and competitiveness of primary production;
• The orientation of primary production necessary for the agro-processing industry as per 4 potential products selected;
• Support in the creation of an enabling environment for the development of Albanian exports to EU and other higher-value markets with the specific cross-cutting measures;
• Diversification of supporting grant schemes and the banking products as well, in terms of agriculture sub-sectors;
• Investing in the reduction of skills mismatch – through agriculture vocational education, etc.

For this meeting, a technical study was prepared and presented, including 4 investment profiles and technological cards to be used as a benchmark for the attraction of investments. Apart from the usual desk-research analysis, the analysis included the findings from a questionnaire conducted with 42 agro-processing companies as well as relevant information and data related to the access to finance for the sector provided by 8 second-tier banks. The study follows the work already initiated in the working group between MFE and MoARD—set-up to assess the potential for investment in the agro-processing sector, especially from the business perspective.

Full materials of this meeting will be published in the next few weeks, in our dedicated section https://www.investment.com.al/ic-meetings/.