FINAL REPORT - USAID Macedonia

FDI agents generated 38 opportunities, six of which reached
final stage with a total investment of US$26.71 million.
This included projects involving real estate (Hungary),
pharmaceuticals (India, see text box), health foods and
homeopathic medicine (Russia) and organic food production
(Austria).
Sustainability of the EDA model
Although MCP support for the EDA network ended in 2011,
a number of MCP’s EDAs abroad have continued to
promote Macedonia as a FDI and sourcing destination—as
envisioned in the initial EDA concept. MCP’s support
enabled these agents to generate enough leads and
opportunities to make it cost effective for them to continue
generating business between Macedonia and their spheres of
influence. For example, the India-based EDA is pursuing
fresh produce exports from Macedonia to the Middle East
and has facilitated a meeting between a local supplier and a
Dubai-based buyer. Initial trial shipment of two containers
was sent for a trial sale.
Servicing potential and existing investors
The road to “Indomak”
India’s pharmaceutical industry has a huge raw
material base and double‐digit growth rates. All
global players have manufacturing facilities in the
country, competing with 20,000 or more businesses.
Many of these medium‐sized companies are targeting
niche markets as a long‐range strategy for survival
and growth. Three such companies, encouraged by
MCP’s Indian based EDA and hosted by the project
FDI team, visited Macedonia in 2009. After a number
of meetings and six months of assisted due diligence,
they decided to make Macedonia their stepping stone
for their future expansion in the EU market. With
MCP assistance, the group quickly identified the right
local partner with whom to jointly develop a regional
sales and marketing strategy. In 2011, the joint
venture “Indomak” was officially registered as the
marketing and sales vehicle of their operations. The
group will invest in production capacities in
Macedonia, with an eye toward developing a long‐
term European presence.
MCP offered interested investors services to help them
choose to invest in Macedonia, or accelerate the roll-out (and thus employment and export generation) of a
given project. Activities included assistance in identifying local partners, feasibility validation, communication
with government agencies, regulatory troubleshooting, capacity-building support for domestic suppliers, and
tailored workforce development programs. Examples included facilitating the realization and mobilization of a
greenfield apparel investment (Macedonian Garment Industry (MGI) and Phalanx Capital), an investment in
private educational services (GEMS UK) and a logistics park investment (see below).
Facilitation of logistics park investment
As part of a long term effort, MCP worked to facilitate a major investment in a export-oriented logistics park in
Skopje. The prospective investment involves a well-known international commercial real estate company that
specializes in the development of industrial and logistics parks. The firm has an extensive network of
international business clients, putting it in a position to suggest that major industry players consider locating
operations within its Skopje facilities if the investment is realized. MCP felt that the investment could have a
transformative impact on the Macedonian economy, as the availability of world-class logistics services would
not only make Macedonian firms more competitive, but would also help attract new investors to Macedonia
(particularly in industries where logistics costs and speed to market are an important success factor, such as light
manufacturing and product assembly). The proposed immediate investment—valued at $10 million—would
generate millions more in further investment, as local and international companies locate themselves within the
park or use its services, benefiting from cost-reductions and efficiencies.
Starting in April of 2009, MCP organized a series of investor mission that involved meetings with with key
government officials, (Invest Macedonia, Prime Minister, Minister of Transport and Communications, and
Deputy Prime Minister), potential local partners and park tenants, and USAID. After the investor chose a
preferred site and confirmed an interest to move explore the investment further, MCP assisted in gathering
information to determine the economic feasibility of the project, assisting in communications with the
government of Macedonia to clarify questions or address minor issues. At the same time, MCP engaged a local
financial advisor to develop the P&L analysis for attracting a world-class logistic service provider to serve as the
anchor for the logistics park.
Between 2010 and the end of the MCP, the logistics park has been on hold, as there were problems with the
initially selected land, such that the investor needed to choose an alternative site. Furthermore, the investors
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