QUARTERLY REPORT JANUARY 1 – MARCH 31, 2017

Moldova Competitiveness Project

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QUARTERLY REPORT

YEAR 2 QUARTER 2 (FY2017 Q2)

JANUARY 1 – MARCH 31, 2017

APRIL 13, 2017

Prime Contractor: Chemonics International Inc. www.chemonics.com/

Partners: J. E. Austin Associates, Inc. www.jeaustin.com

Bhavana World Project www.bhavanaworldproject.com

Contract No.: AID-117-C-15-00001

DISCLAIMER

This report was prepared by the Moldova Competitiveness Project, financed by the United States Agency for International Development (USAID) and Swedish International Development Cooperation Agency (Sida). The contents are the responsibility of creator and do not necessarily reflect the views of USAID, the United States Government or Sida and the Government of Sweden.

Photo credit: Geo Lupascu Photo caption: 41 participants at short term courses at Polimoda Institute, Italy, supported by MCP, during February 27 - March 13, 2017

2 TABLE OF CONTENTS

ACRONYM LIST ...... 5 EXECUTIVE SUMMARY ...... 7 SECTION I ...... 11

PROJECT TECHNICAL INTERVENTIONS DURING FY17 Q2 ...... 11 A. ACCOMPLISHMENTS, SCHEDULES, AND PROBLEMS ...... 11 A1. Wine and Tourism ...... 11 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 11 Activity 1: Support Development of the Stauceni Viticulture and Winemaking Excellence Center (WEC) .. 11 Activity 2: Design Wine of Moldova (WoM) Academy ...... 11 Activity 3: Assist upgrade of wine quality ...... 12 Activity 4: Support Moldovan Tourism Product Development ...... 14 Activity 5. Better Trained Workforce and Modern Skills in the Tourism Industry ...... 16 Objective 2: Expanded Market Linkages ...... 16 Activity 1: Build Wine of Moldova Brand Equity and Increase Awareness about Moldovan Wines ...... 16 Activity 2: Foster Business Linkages and Expand Wine of Moldova Exports ...... 17 Activity 3: Export Support Program (ESP): increased wine sales on target markets ...... 21 Activity 4: Develop domestic wine market and enhance wine culture ...... 23 Activity 5: Enhance awareness about Moldova as a Tourism Destination ...... 24 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 27 Activity 1: Support continued policy upgrading and legal regulatory reforms in the wine industry ...... 27 Activity 2: Strengthen the role of ONVV as the main professional organization of the wine industry ...... 28 Activity 3: Develop and strengthen the PGI wine associations ...... 29 Activity 4: Upgrade Tourism Sector Policies and Reform Regulatory Framework ...... 29 Activity 5: Strengthen ANTRIM’s Role in the Tourism Sector ...... 31 A2. Light Industry ...... 32 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 32 Activity 1: Develop the ZIPhouse Accelerator and Raise Skills through Education ...... 32 Activity 3: SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program ...... 37 Objective 2: Expanded Market Linkages ...... 44 Activity 1. Reposition Moldova as a Full Product Manufacturing Partner and Support Internationalization of Moldovan Fashion Brands on Regional Markets ...... 44 Activity 2: Consolidate the Din Inima Umbrella Brand and Expand Domestic Market ...... 49 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 52 Activity 1. Assist APIUS to Develop an Industry White Paper and Advocate for Policy or Regulatory Changes ...... 52 A3. Information and Communications TECHNOLOGY (ICT) and CREATIVE SERVICES INDUSTRY (CSI) ...... 53 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 53 Activity 1: Adapt University-Level ICT Education to Industry Needs ...... 53 Activity 2: Improve STEM Education and Promote Tech Careers at the Secondary Education Level ...... 53 Activity 3: Link ICT VET with Labor Market Building practical skills to VET students ...... 57 Activity 4: Develop an Entrepreneurial Ecosystem for the IT Sector ...... 58 Objective 2: Expanded Market Linkages ...... 62 Activity 1: Accelerate Adoption and Use of Technology by SMEs and Other Non-IT Sectors ...... 62 Activity 2: Implement marketing coaching programs ...... 63 Activity 3: Enhance global positioning of Moldova as IT Destination ...... 63 Activity 4: Profile the creative services industry and define export marketing opportunities ...... 64 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 68 Activity 1: Improved public policies for technology ecosystem ...... 68 Activity 2: Capacity building for ATIC ...... 70 Activity 3: Facilitate business support organizations that represent the creative industry ...... 71 A4. PRECISION ENGINEERING...... 72 Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) ...... 72

3 Activity 1: Increase productivity and efficiency for manufacturing companies ...... 72 Activity 2: Development of Makers Space to foster product design, prototyping and startup for creative industries, engineering, and technology ...... 73 Objective 2: Expanded Market Linkages ...... 74 Activity 1: Improve marketing skills and export capacity for more developed and higher value markets .. 74 Objective 3: Improved Sector-Enabling Environment and Increased Capacity ...... 75 Activity 1: Map high precision engineering cluster ...... 75 A5. OTHER TECHNICAL Activities to Support Implementation ...... 77 Access to finance through special channels/USAID Development Credit Authority (DCA) ...... 77 B. DELIVERABLES ...... 79 SECTION II ...... 80

PROJECT-LEVEL OUTCOMES AND RESULTS ...... 80 Sector Engagement, Enhancement, and Development (SEED) Fund ...... 80 Inclusive Development ...... 81 Monitoring & Evaluation ...... 83 A. Progress towards quantitative indicators targets ...... 83 B. Qualitative results ...... 85 SECTION III ...... 91

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY17 Q3 (APRIL– JUNE 2017) ...... 91 Wine and Tourism Industry ...... 91 Light Industry ...... 92 Information and Communications Industry and Creative Services Industry ...... 92 Other Technical Activities ...... 92 SECTION IV ...... 93 PROJECT COMMUNICATION ...... 93

4 ACRONYM LIST

AA Association Agreement ANTRIM National Association for Inbound Tourism ANAT National Association of Travel Agencies of Moldova APIUS Employers Association of Light Industry ASEM Academy of Economic Studies of Moldova ASW Association of Small Wineries ATIC Moldovan Association of Private ICT Companies B2B Business to Business B2C Business to Company BSP Business Service Provider C&M Cut & Manufacture CEE Central-Eastern European CEED I & II Competitiveness Enhancement and Enterprise Development I & II CIS Commonwealth of Independent States COP Chief of Party CRM Customer Relationship Management DCFTA Deep and Comprehensive Free Trade Agreement DCOP Deputy Chief of Party DMC Destination Management Company DO Development Objective ECP Expert Coaching Program EIB European Investment Bank EU European Union ICT Information Communication Technology IR Intermediate Result ISSPA State Inspectorate for Controls over the Wine and Alcoholic Products ICT Information and Communications Technology ICTCE ICT Center of Excellence (Tekwill) KPI Key Performance Indicators JAA J.E. Austin Associates LOP Life of Project MAFI Ministry of Agriculture and Food Industry MCCI Moldovan Chamber of Commerce Industries M&E Monitoring and Evaluation MICE Meetings, Incentives, Conferences, and Events Tourism MIEPO Moldova Investment and Export Promotion Organization MODART Modular Arrangements of Predetermined Time Standards MOE Ministry of Economy MOU Memorandum of Understanding NTA National Tourism Agency ONVV National Office of Vine and Wine PDO Protected Designation of Origin PGI Protected Geographical Indication PIRS Performance Indicator Reference Sheet PMP Performance Monitoring Plan PMU Project Management Unit PPP Public Private Partnership PR Public Relations RFP Request for Proposal SEED Sector, Engagement, Enhancement, and Development Fund SME Small and Medium Enterprise STTA Short-term Technical Assistance

5 SWM Startup Weekend Moldova TCB Tourism Country Brand TOR Terms of Reference TOT Training of Trainers TR Technical Regulation ULIM Free International University of Moldova USP Unique Selling Point TUM Technical University of Moldova USAID United States Agency for International Development USD United States Dollar USG United States Government VET Vocational Education Training WFD Work Force Development WoM Wine of Moldova

6 EXECUTIVE SUMMARY

Wine & Tourism

Wine of Moldova showcases at two of the largest wine trade events in the world for Europe and Asia. With USAID support, the Moldovan wine industry showcased at two of the most significant international trade events - ProWein in Dusseldorf, Germany, and the Food and Drink Trade Fair in Chengdu, China. Moldovan wineries had a joint booth under the country brand, "Wine of Moldova. A legend alive". Thirty-three companies presented over 200 wines, and released premiere wines with Protected Geographic Indication. USAID assisted with generate awareness prior to the event, and as a result the specialized master class dedicated to Wine of Moldova Assemblages was fully booked and was attended by more than 40 journalists, opinion formers and trade professionals. This contributes to the awareness of Wine of Moldova, which is key for this often-overlooked country. At the China Food exhibition, 24 Moldovan wineries showcased more than 180 wines, with impressive feedback from Chinese trade industry stakeholders and over 240 trade contacts. USAID assists Moldova with exploring emerging markets in Asia, such as China. As a result, Moldovan bottled wine exports to China tripled in the last three years, reaching $12 million in 2016. This helps Moldova decrease dependence on Russia and CIS markets, and overcome the deep industry crisis caused by the Russian bans that generated over $200 million worth of losses and severely shrunk industry exports.

Upgraded B&B will serve as best practice model for rural tourism. On March 21, Moldovan Minister of Culture Monica Babuc alongside Acting AA for E&E, Margot Ellis, and USAID Representative in Moldova, Karen Hilliard, inaugurated the refurbished Vila Roz Bed and Breakfast as a model of best practice for rural tourism. The guests attended a master class for making homemade cookies with rose petal jam and took a tour of the Orhei Vechi cultural reservation which is currently under assessment by UNESCO to become a world heritage site. Located in the village of Trebujeni within the Orhei Vechi reservation, Vila Roz offers an authentic rural experience to tourists. Former seamstress Liuba Railean retired to her home village, and rebuilt her parents’ house into a B&B in 2011. With MCP support, Vila Roz upgraded the terrace and kitchen to be used for interactive cooking with guests, installed heating for cold weather season, and put in place a bike rental service. This is part of USAID’s assistance for prototyping best practices for rural tourism. Moldova has only a

Photo Credit: Ion Savin, MCP Photo Caption: Monica Babuc, Minister of Culture, Karen Hilliard, Margot Ellis and Liuba Railean attending the master class of making homemade cookies with rose petal jam at Vila Roz rural pension

7 handful of rural pensions, and even less so of an international tourism standard. USAID supports the emergence of tourism itineraries in the most concentrated wine tourism hubs in Central and Southern Moldova. In 2016, assisted rural pensions recorded three times more visitors.

80 Moldovan wine tourism guides were trained by a top Romanian sommelier. During March 13-16, 80 tourism guides and sommeliers that lead wine tours were trained by Laurentiu Achim, Chairman of Romania's Sommelier Federation. The participants learned how to showcase Moldovan wines and wine heritage, creating quality and unforgettable experiences for tourists. With these courses, the Moldova Competitiveness Project launched its new program called “Wine Tourism Accelerator” which aims to upgrade tourism service quality within Moldovan wineries. With USAID assistance, over 20 local wineries in Stefan Voda and Codru regions opened doors for tourists. USAID assists Moldova with developing wine tourism, leveraging Moldova’s cultural and gastronomic appeal, as well as its millennia-old wine production. Travel and tourism’s impact on the economic and social development of Moldova can be enormous, creating jobs, protecting heritage, and opening it up for Photo Credit: Anatol Tomsa, MCP business. Photo Caption: Lurentiu Achim training wine guides

Light Industry

$4.3 million worth of contracts for apparel companies from February-March 2017 tradeshows. In February and March 2017, with Moldova Competitiveness Project support, 19 apparel companies participated at important regional tradeshows, including Premier Manufacturing in Paris, France; Ready to Wear Style Cabo exhibition in Brno, Czech Republic; Textilegprom and CPM (Dusseldorf-Moscow); and Central Asia Fashion Asia in Kazakhstan. The feedback from customers was impressive - contracts worth $4,338,300 were signed, with more potential business in the coming months anticipated given trial orders worth $26,250 and 96 new business leads generated from the tradeshows. More than 95 percent of all signed orders are for apparel designed and produced under own brands of these Moldovan manufacturers, with the highest value added.

In premiere, Moldovan apparel manufacturer gets certified in international social compliance and production standards. In January, the reputed International certification body CERTIND certified Artizana factory in the Integrated Quality System (focusing on ISO 9001:2015) and Occupational Health and Safety Management System (OHSAS 18001:2007). Artizana is the first apparel manufacturer in Moldova to implement an integrated quality management system that meets international standards, and ensures a production environment that delivers quality products. Artizana paid special attention to its social compliance and accountability, focusing on improved safety and working conditions for its 400 employees, mainly women, which are becoming increasingly important factors for the global apparel chain and even a requirement for European buyers. This will raise confidence in Artizana company as a reliable manufacturing partner and will allow the company to enhance exports by attracting quality-conscious buyers. In fact, Artizana’s major client, the prominent UK brand Barbour, has already secured larger orders for 2017 that will lead to an additional 100 jobs at this factory. Artizana is part of MCP’s SMART (Streamline Manufacturing, Accountability, Resource Efficiency and Transparency) Factory Program,

8 having benefited from essential in-factory consultancy over several months to implement this integrated quality system.

Moldova Fashion Days 2017 is now the leading professional industry event, showcasing 32 Moldovan brands and young talents. Moldova Fashion Days, initiated by USAID’s Moldova Competitiveness Project, is the top textile and apparel industry event in Moldova each year. Over 40 fashion collections of Moldovan designers were showcased during the Spring/Summer 2017 edition. Five startup designers made their debut. At the core of Moldova Fashion Days is the "See Now, Buy Now" movement that is heralding a new era for the fashion world, in which consumers can buy items immediately after they are presented on the runway. The event was a great success, with large crowds and press attending, as well as fashion buyers coming from across the country. With USAID assistance, the Moldovan fashion industry is better positioned to access new international markets and expand its ability to produce higher value textile products. This industry is in country’s top five exporting sectors, Photo Credit: Nata Eftene, MCP accounting for 16% of Moldova’s exports, or Photo Caption: Lia Fia children wear brand on approximately $360 million. catwalk at Moldova Fashion Days

Information and Communications Technology, Creative Services, and Precision Engineering Industries

Inbound tour operator implemented the most affordable online payment solution, operated in the past only by state agencies. MCP supported BestTravel company to implement the Government Electronic Payment Service MPay, which is the most cost-saving solution to allow its customers to pay electronically using credit and debit cards. As a result, any person from any country can buy online tours, excursions, and accomodation services provided by Moldovan tourism providers. This is a pilot project aiming to expand market linkages for assisted companies through the implementation of IT solutions in the non-IT sector. This activity could be extended to other inbound tourism companies, interested to increase sales locally and internationally.

A record number of 300 youths participated at FIRST LEGO League (FLL) National Competition, organized with MCP support. During February 25-26, 2017, forty-five youth teams from 21 schools across Moldova were challenged to use technology in solving a real- life problem on Animal Allies. The Champions Cup was awarded by the U.S. Ambassador alongside the Swedish Charge d ’Affairs and the Minister of Education. The winning team, RoboRangers, will represent Moldova at the Open European Championship in Denmark in May 2017. The FIRST LEGO League is the most significant science and technology competition, organized internationally in 88 countries with support from LEGO and the U.S. FIRST Foundation, which aims to use robotics as a tool of promoting IT education and tech careers among youth. FLL is part of USAID’s efforts to support STEM education and build technology skills in Moldova, thus contributing to the growing competitiveness of its ICT sector - a major employer of youth.

9 Photo Credit: ATIC/Yon Savin Photo Caption: Team RoboRangers - Champions of the FIRST LEGO League Moldova with US Ambassador James D. Petit, Charge d’Affairs of Swedish Embassy Adam Amberg and Minister of Education of Moldova Corina Fusu, their coach and representative of MCP

In Premiere, MCP supported companies from the creative services industry to attend regional events for skills upgrade and networking. Two local companies that specialize in animation and film production attended important industry events. During February, MCP supported Umbrella Production Studio creative company to participate at MOUVO Motion Design Festival in Prague, Czech Republic. As a result of attending this festival, Umbrella Production Studio had five qualitative contacts, including UX Motion at Google, USA, and Man vs. Machine and DBLG from the UK. Also in February, MCP supported Youbesc Creative Institute to attend the Berlinale Film Festival in Berlin, Germany, focused on the film and video industry targeting industry professionals such as writers, directors, producers, cinematographers, actors, editors, and production designers. Consequently, Youbesc Creative Institute received accreditation to organize an international film festival in Moldova. As a follow-up, both companies conducted knowledge sharing sessions with other Moldovan companies from the CSI industry in order to achieve the multiplication effect of their attendance.

The concept of the first Creative Hub for Moldova that will synergize creative, cultural and tech sectors was shaped and presented to the Moldovan Ministry of Culture. An initial strategic meeting between MCP, the Ministry of Culture, private creative companies, and educational institutions to discuss the first Creative Hub for Moldova was held on January 19, 2017. The Creative Hub will represent an educational, community, and entrepreneurship space for creative industries including digital marketing, design, architecture, and cultureThe project is viewed as a partnership between the Government of Moldova (Ministry of Culture), academia, and the private sector, connecting global vendors like Adobe. Creative industries are some of the fastest growing globally, and in Moldova are only emerging. MCP has estimated at least 500 net jobs growth in Moldova for creative professions per year, and this can be easily doubled or tripled in the coming years. In addition, creative professions engage youth.

For the first time, Moldova Technical University students had the opportunity to participate in a computer numerical control (CNC) machines building learning program. Starting January 2017, Atelier 99, a local nonprofit counterpart of MCP for engineering and makers’ community, launched several learning programs where Technical University students and Makers’ community members will learn to fabricate 3D printers and other computer numerical control (CNC) machines. The program aims to develop comprehensive theoretical knowledge and practical skills in machine building.

10 SECTION I

PROJECT TECHNICAL INTERVENTIONS DURING FY17 Q2

Chemonics International Inc. (Chemonics) and its partners, J. E. Austin Associates, Inc. and Bhavana World Project, are pleased to submit to the United States Agency for International Development in Moldova (USAID/Moldova) and and Swedish International Development Cooperation Agency (Sida), this Quarterly Report that covers the period from January 1 through March 31, 2017.

In Section I we describe the progress to-date by target industries, including project accomplishments, problems (if encountered), and solutions. We also list all deliverables submitted during the period. In Section II, we present project-level outcomes and results and report progress against Performance Monitoring Plan (PMP) targets. Section III contains a summary of our planned activities for the next quarter. Section IV contains Project administration information.

A. ACCOMPLISHMENTS, SCHEDULES, AND PROBLEMS

A1. WINE AND TOURISM

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Support Development of the Stauceni Viticulture and Winemaking Excellence Center (WEC)

The project seeks to ensure transparent and efficient implementation of the anticipated funds from EIB, following the WEC concept as proposed in the feasibility study developed by MCP. In addition, the project seeks to improve teaching quality and content by providing technical assistance to update curricula and teaching techniques which must be in line with international standards and industry realities. This activity was postponed until the legal questions from the reorganization of Stauceni College are clarified and Senior Executives of the college will be in position with full decision authority.

Activity 2: Design Wine of Moldova (WoM) Academy

Develop WoM Academy operational framework. The project is assisting ONVV to develop appropriate and sustainable institutional and operational framework necessary to sustain WoM Academy activities. The Wine of Moldova (WoM) Academy aims to address the continuous education needs in the wine industry. The design of the academy will integrate the lessons learned from MCP’s Skills Gap Analysis and the industry’s objectives. It is envisioned as a private sector service under ONVV, and as a supporting program for the wine industry’s educational institutions.

During the reported period, MCP contracted a local consultant, Daniela Luca, to launch the WoM Academy in close cooperation with ONVV experts. The short- term expert will systemize all the continuous education efforts planned by ONVV under the WoM Academy framework; organize the deployment of continuous education program within WoM Academy; coordinate the internship program for young specialists; and organize training for the professional school/college teachers. In order for this to be successfully implemented, at least 10 trainings and courses for wine industry workforce will be organized during 2017.

11 Activity 3: Assist upgrade of wine quality

Identify new small wine producers and support their successful startup (ASW Mentorship Program). Within the ASW Mentorship Program implemented in collaboration with the Association of Small Winemakers, MCP assists the development of newly launched small wineries (first intake) and seeks to identify new small wine producers to enter the program. Additionally, to create a sustainable ecosystem for the emergence and development of small wine producers, the Project offers ongoing support for ASW’s development and promotion. The aim is to increase trust from existing members and generate interest for peasant wine producers to institutionalize and adhere.

To strengthen the role and the importance of ASW as a sole and leading organization, during the reporting period, MCP supported the Association in completing its reorganization from an NGO to a Union of Legal Bodies, enabling the organization to better respond to the needs of its members as well as solving several legal issues, such as collection of membership fees and rendering services for members. As such, during the last General Assembly, ASW members discussed the most important issues of reorganization including: foundation of the new entity that is considered the evolving successor of former NGO, transfer of all material and non-material assets to the new entity, admission of existing and new members to the union, and electing the new Chairman (President) and Board componence.

Photo credit: Vitalie Babanuta Photo caption: Mihai Sava being assisted by fellow ASW colleagues from Fragolino: Ion Harbuz and Tudor Agaci during bottling of wines produced under ASW Mentorship Program. March 2017

During the reporting period, the project also conducted the Organization Capacity Assessment exercise (OCA tool) with ASW which helped ASW to identify institutional development areas and develop an associated capacity building plan. By enforcing the association’s capacities and plans, MCP seeks to achieve higher interest of emerging wine start-ups to connect with ASW and institutionalize their business.

Furthermore, MCP decided to deploy a joint marketing and promotion programs under the ASW umbrella to facilitate sales of existing members and new start-ups. In addition to activities on export markets reported hereto, during the reporting quarter, MCP managed to reach a principle agreement with one of the biggest retail chains (Hypermarket No.1) from Moldova to organize dedicated shelves and a series of supporting promotional activities. With this, MCP is facilitating a successful start-up of newly launched wineries, boosting their initial sales and increasing the trust companies have in ASW.

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On the enterprise level, during the quarter, the project offered ongoing support to the wineries from the first in-take of ASW Mentorship program. As such, by implementing a joint and holistic approach on product development (wine preparation, bottling, ageing) and marketing strategies, facilitated through MCP experts, four wineries, Est Euro Vitis, GCL Prim, Mihai Sava and Fragolino, were prepared to launch their first wines on the upcoming Wine Vernissage spring edition and planned retail promo. Moreover, following the initial tailored marketing support for small winemakers, MCP started the development of brand identities, marketing visions, and promotion and communication plans for the above- mentioned wineries. For this purpose, the project’s marketing experts worked closely with wineries in defining their marketing mix, unique selling points, positioning statements, and prepared briefs for creative agencies. This ensures that the anticipated brands of small wine producers will be compliant to wine styles, current marketing trends, and consumer preferences. In addition, MCP provided support to 4 small winemakers located in the Stefan Voda region, a project focus area, through which Mezalimpe, Nicolae Iurco, and Ilie Gogu were assisted to develop master plans and technical drawings of the anticipated tourist facilities, whereas Teba- Prim will benefit from extension of the grant contract and technical assistance to decorate and arrange the internal set- Photo credit: Maxim Kaluzhak up for the restored mansion of Photo caption: Illustration of Gogu Winery tasting room, February 2017 Purcari.

During the quarter, MCP deployed the second identification and audit for the second intake start-up wineries for ASW mentorship program. To this end, by means of its short-term consultant, Vitalie Babanuta, the project identified, visited, and audited 14 prospective new small winemakers, six of which prepared their applications and respective development projects under SEED Grants.

Product Quality Upgrading Program (PQUP) and Flying Winemakers’ Program (FWP).

The goal of this activity is to support ‘transition wineries’ in adopting the ‘quality over quantity’ paradigm by enabling program beneficiaries to convert their business models from bulk wine to production of bottled wines with higher added value.

In the reported quarter, MCP continued implementing the tailored assistance programs for four “PQUP graduate” wineries- Vinia Traian, Vinuri de Comrat, Vinaria Milestii Mici, and Tartcomvin in order to maintain growth momentum. Thus, after assessment of achieved results in terms of product quality, MCP decided to extend grant agreements tailoring this input in the most critical and prospective sectors. As such, it was decided to allocate funds for Vinia Traian and Vinaria Milestii Mici to procure special stainless steel tanks of small volumes for clarification of wine, enabling the companies to process small quantities of premium white and red wines. MCP agreed with Vinuri de Comrat and Tartcomvin to launch the development of the touristic capacities based on renovation of existing infrastructure. To achieve this, MCP delegated an expert specialized in tourism product development to draft an action plan and to guide the wineries with budget preparation. Tartcomvin, additionally, was supported to continue its complete re-equipment by expanding the inventory of tanks for fermentation, connectors, and pumps. All of these extensions led to significant leverage of

13 investments from winery owners, managing to attract almost USD 0.5 million in investment commitments during 2017.

The project continued the implementation of the marketing-management approach in three wineries. As such, two MCP experts guided Vinaria Milestii Mici Tartcomvin and Vinia Traian through the process of briefing for brand development and conducted the selection of creative agencies to execute branding and labeling designs. The core objective is that all three beneficiaries to present their new, upgraded quality wines as well as the updated visual identity during the Wine Vernissage spring edition.

Furthermore, the project in cooperation with ONVV launched the second in-take of PQUP program participants. Considering that the first phase is the technological audit, the team of MCP and ONVV’s experts visited six prospect wineries- Invinprom, Tomai Vinex, Leovin, Migdal-P, Bransesti, and Evervin. All wineries have been acknowledged with the audit results. The audit highlighted the current state and drawbacks in winemaking processes and equipment that hinders the audited companies to produce wines that comply with Wine of Moldova and PGI quality standards. Consequently, based on the audit results, ONVV and MCP experts developed a list of equipment that is strictly necessary to redress the situation. This will enable the wineries to develop their applications for SEED grant funding.

Activity 4: Support Moldovan Tourism Product Development

Develop regional tourism hubs around main wine attractions. In this quarter MCP provided continued assistance to 6 rural pensions as part of its strategy of building tourism service networks around the central wine attractions, by prototyping best practices for rural tourism and disseminating them throughout Moldovan wine regions.

During the reporting period three MCP beneficiaries, namely: Vila Roz, Hanul lui Hanganu and Eco Resort Butuceni, completed renovations of their facilities and are now ready to host tourists and visitors during the 2017 high season. An additional rural pension, Casa Verde, entered the assistance program and began receiving complex technical assistance from project’s consultants a small SEED Fund grant.

Photo credit: MCP Photo caption: Vila Roz, before (first line of pictures) and after upgrading (second line of pictures), inside and outside view

14 An official launch of Vila Roz rural pension, was organized on March 21, 2017. Moldovan Minister of Culture Monica Babuc alongside with Acting AA for E&E, Margot Ellis, and USAID Representative in Moldova, Karen Hilliard, inaugurated the refurbished Vila Roz Bed and Breakfast as best practice for rural tourism. Representatives of tourism industry, central and local authorities, grant beneficiaries, and press participated at the event.

The Vila Roz owner is Liuba Railean, a former seamstress who retired to her home village, and converted her parents’ house into a B&B in 2011. With MCP support Vila Roz upgraded the terrace and kitchen to be used for interactive cooking with guests, installed heating for cold weather season, and put in place a bike rental service. In result, reservations at Vila Roz doubled for the springtime period, compared with the previous year.

Photo credit: MCP Photo caption: Inauguration event at Vila Roz: cutting of the ribbon, owner Ms. Liubov Railean, traditional cookies with rose jam workshop

Develop cultural and traditional tourism events. Inbound tourism development is one of several strategic areas that MCP is working in Moldova to improve the country’s economic development and competitiveness in the region, and supporting cultural and traditional tourism events development is a way to achieve the established objectives. The attraction of Moldova for the foreign visitor lies in the unique range of experiences it offers, namely discovering the rich heritage, culture, folklore, history and character of Moldova through direct participation and human interaction.

USAID supports organization of Moldova Tourism Gala, an event that promotes industry recognition and excellence. 20 categories, including 10 best local festivals to bring foreign visitors; 10 best inbound tourism agencies; etc. will be awarded at the event on April 7th, 2017. Among the top two national brands promoting tourism in Moldova are nominated “Wine of Moldova” country brand and “Din Inima” brand of textile industry, both developed with USAID support. The rankings are made based on two voting processes: the public vote on the web-site (www.galaturismului.md) and the scoring of a specialized jury. Around 100,000 votes were received through the website, demonstrating the interest for the tourism initiatives in Moldova.

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Activity 5. Better Trained Workforce and Modern Skills in the Tourism Industry

Improved workforce the tourism industry. The Tourism Industry skills gap assessment organized by MCP in FY2016 indicated that local hotels face lack of skilled personnel. To support workforce development within the hospitality segment, In the reporting quarter, the project worked together with ANTRIM to conceptualize the ”Hospitality+Moldova” program aiming to provide support to Moldovan hotels in upgrading professional skills of their staff and improve guests’ experiences.

”Hospitality+Moldova” program will have the following approach :  Organizing a Mystery Guest assessment for about five hotels located in the capital. The hotels will be selected following an application procedure, among 4 to 5 star, full service hotels with 20+ rooms and full amenities. During the audit, which will be conducted incognito, about 16 services and 400 criteria will be assessed. Once the audit is completed, the hotel administration will receive a report and a tailored action plan for improvement.  Training and hospitality services upgrade will be offered for the audited hotels and other accommodation units. Trainings on specific topics will be delivered based on the most frequent gaps and deficiencies found during the assessment phase,  Certification of hospitality services shall close the program once the hotels are ready to fit the criteria of international certification organizations.

MCP throughout ANTRIM and other relevant business association will provide support in ”Hospitality+Moldova” program implementation and additional local and international expertise will be associated with ANTRIM program. In April-May the ”Hospitality+Moldova” program will be publicly announced and hotels will registered for assistance.

Objective 2: Expanded Market Linkages

Activity 1: Build Wine of Moldova Brand Equity and Increase Awareness about Moldovan Wines

Increase Wine of Moldova brand awareness through strategic international communication activities. In addition to activities on targeted export markets, Wine of Moldova needs to develop international awareness contributing to continuous market diversification and minimizing risks related to dependence on certain markets. Furthermore, the WoM international communications strategy underway shall support continuous promotion efforts to raise the country’s recognition and communicate the recent qualitative improvements in the Moldovan wine sector.

Within the reporting quarter, MCP re-lauched the development of a comprehensive master plan of activities and initiatives aimed to increase international awareness of the national wine brand “Wine of Moldova. A legend alive”, as well as to communicate to international wine professionals communities the recent structural changes in Moldova’s wine sector. Given that ONVV has partially accepted and included several activities proposed by MCP international marketing expert, Robert Joseph, the project decided to organize an April visit for the expert to finalize the activities plan and implementation approaches during an intensive workshop with ONVV experts.

Improve Wine of Moldova online presence and social media communication. Considering the importance of the internet and the need to have a reliable and continuously updatable information source, MCP supports ONVV in developing a new Wine of Moldova website and ensure its optimization for search engine’s enquiries.

16 Considering that during the reporting period, ONVV experienced important staff changes due to the resignation of two executive members of the marketing department, MCP decided to postpone this activity until the end of the second fiscal year.

Upgrade WoM Brandbook and brand guidelines. The national wine country brand was used as the main umbrella for Moldova’s marketing efforts for the last three years and numerous visual materials were developed and produced. According to best practices, the WoM brandook needs to be upgraded to ensure continuity and a streamlined image. In order to achieve this, MCP contracted Marco Tiggelman, to guide ONVV executive staff in systemizing the source materials and in briefing third parties to update Wine of Moldova brand guidelines and to streamline all branding tools and designs into an updated WoM brandbook and associated logo guideline for the third parties.

Activity 2: Foster Business Linkages and Expand Wine of Moldova Exports

Support generic participation under the Wine of Moldova country brand at wine exhibitions and trade events. Participation at international wine exhibitions and business- to-business (B2B) trade events remains the main and most efficient tool for building wine sales.

During the reporting period, MCP assited ONVV in the organization of the most important wine exhibitions from the 2017 calendar and activities: ProWein 2017 – the most significant annual B2B fair on international scale; and Chengdu Food & Drinks Fair - the most influential wine trade fair in China.

Considering the importance and the scale of Prowien, the project decided to be closely involved in its organization in order to ensure good execution and impactful participation. As such, MCP guided ONVV in developing the concept note, PR plan, scenarios of activities, and the Marketing and Promotion Framework. In addition, the Project mediated the presence of a dedicated press team from national TV channel ‘M1’, organized the live reporting and facebook live video broadcast, photo reporting, and contracted an advertisement in the most influential specialized magazines “Meininger Wine Business International” and “Weinwirtschaft. MCP also contributed to enhancing the list of booth activities with a dedicated Virtual Reality zone that offered stand visitors the opportunity to emerge in 360° tours through top destinations in Moldova.

The dedicated media campaign, mainly focused on Photo credit: Ares Kalogeropoulos online media has ensured high visibility before the Photo caption: Robert Joseph holding a Master event as well as an impressing number of visitors class at Wine of Moldova stand. Prowein, March 20, during the fair. As such the targeted campaign via 2017 social networks (Facebook and LinkedIn) as well as via google display network has managed to generate over 1.7 million impressions ensuring the confirmed attendance of almost 400 visitors on the Facebook event. In addition, MCP arranged pre- and post-PR coverage in partner press on Wine of Moldova target markets. As such, the participation at Prowein of Moldovan winemakers was reflected in publications including: Wino & Styl (Czech Republic); Winiciatiwa and Magazyn Wino (Poland); Vinul.ro (Romania).

17 Other activities during Prowein included an interactive master class moderated by the international wine expert, author and wine commentator, Robert Joseph. After the master class the host involved the audience in creating their own assemblages from indigenous and international grape varieties which proved to be a very interactive and generated interest from participants. Additionally, an informal after-hours networking event, “Moldova Night”, allowed wineries and their approx.200 guest to discuss plans in a more friendly and relaxing atmosphere.

To update the knowledge of creative and design agencies on modern trends in wine branding and promotion, MCP organized the visit to Prowein of representatives of three design agencies that were assigned to study the tendencies in branding and promotion and ensure the transfer of knowledge to their fellow -colleagues and marketing executives form wineries on return. This activity is further reported under Creative Industries.

Participation at Prowein, being one of the most significant B2B wine event on international scale, is Text Box. Testemonial of Dan particularly important in the context of reorientation Prisacaru on experience of participation as exhibitor at his of Wine of Moldova exports towards EU and building second edition of Prowein sustainable relationships with existing and new trade partners. Considering the specifics of the wine “It is important to participate at business, tangible results may be achieved only by such events [as Prowein] on yearly cumulative effect of yearly participation showcasing basis as the effect from the results attained in terms of wine quality, building showcasing our products comes trust and credibility among international wine trade. with several editions. For us [Minis The 2017 edition of Prowein is the fourth-time Terrios] it is the second time we Moldovan wineries participated with the common participate at Wine of Moldova booth united under the umbrella of the “Wine of stand, and this year we’ve Moldova” country brand. This fact, as well as an managed to enter into contract relationship with a partner from extensive pre-PR campaign contributed to increased Netherlands we’ve meet at the interest from visitors and wine professionals, as the 2016 edition. After tasting our national booth was visited by over 2,600 persons latest vintages, he has booked all generating the establishment of over 500 market the avalable quantities of 2 wine linkages by 36 participating companies. The varietaies." specialized master class dedicated to Wine of Dan Prisacaru Moldova Assemblages was fully booked, being Owner and Director of attended by over 40 journalists, opinion formers, and Minis Terrios Winery trade professionals.

As a result of events like Prowein, which have an important spill over-effect on Wine of Moldova awareness on international scale as well as on developed markets, the Moldovan winemaking sector managed to re-orient its exports dramatically, decreasing the dependence on traditional markets. In 2016 alone, Moldova registered an increase in sales of 30% to EU markets and reduced the total share of exports to CIS to under 40%, which is a significant leap in diversification of export destinations, considering that over 80% of Moldovan wine was exported to Russia and other neighboring CIS markets before 2013.

Akin to the above-mentioned activity, MCP provided logistical support for participation of Wine of Moldova, represented by 24 companies, at Chengdu Food & Drinks Fair in March 2017. MCP was involved in deploying a pre- and post-PR campaign and in the organization of a master class moderated by Master of Wine, Fongyee Walker. As such, the project assisted ONVV in developing and deploying a detailed PR plan which includes placement of editorial content on specialized Chinese web portals, including www.wines-info.com and

18 www.vinehoo.com, and a social media campaign on Chinese networks Wechat and Weibo involving references from highly popular pages Vinehoo and Micro Vin.

Photo credit: Constantin Celac Photo caption: Photo collage of participation of Wine fo Modlova at Chengdu Food and Drinks Trade Fair. March 23-25, 2017 It is forecasted that the Chinese wine market will grow by 39.8% by 2020, becoming the second largest on a global scale by volume (after USA). Considering this opportunity, it is of major importance to build constant and consistent presence on this emerging market. The Chinese wine market is a rising star for Moldovan bottled wine exports, as the volumes shipped to this destination tripled (+238%) during the last 3 years: 104% in 2015; and 66% in 2016 (in comparison to previous years).

Improve the image of Moldova’s wine quality by supporting participation at international wine contests. Participation in renowned international wine contests is an excellent tool to bring awareness to the improved quality of Moldova’s wine. During the first year of its activity, the project implemented a program that motivated the wineries to submit more samples to a span of the most reputed international wine contest, generating astounding results. Two-thirds of submitted wines received medals or special mentioning.

Within the reporting quarter, MCP managed to wrap-up the results of this program and launched an updated version of supporting package. As such, outstanding results in terms of international recognition of upgraded quality of Wine of Moldova on the international market within the period of report were achieved. With MCP support, Moldovan wines were awarded at two of the most important international wine contests:

 Mundus Vini Spring Tasting 2017 – 20 medals: seven gold (among which Chardonnay Sweet from Chateau Vartely Dulce Alb received the distinction “Best of Show”) and 13 Silver medals. Notably is that “Vinuri de Comrat”, the winery participating for the first time, being a MCP grantee and PQUP participant, was awarded with 2 silver medals (for Cabernet Sauvignion – Feteasca Neagra 2015 and Saperavi – Bastardo 2015). Participation at this contest was of high importance for Moldovan wineries and for the national country brand because the finalists’ wines were showcased in Meininger’s tasting booth during Prowein 2017.

 Berliner Wein Trophy – five gold and one silver medal, among which MCP grantees and ASW mentorship program participants, received two gold and one silver medal (Carpe Diem Famme Fatale 2016 – gold, Minis Terrios Feteasca Neagra 2015– gold, Gogu Winery – Sauvignon Blanc 2016 – silver).

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Photo credit: MCP/Facebook.com Photo caption: Photo collage Facebook posts from various wineries announcing the results from Mundus Vini Spring Tasting, February 2017

In addition, MCP partnered with ONVV which took over the support for five contests, focusing on target markets: International Wine Contest Bucharest (Romania), Galicja Vitis (Poland), Oenoforum (Czech Republic), Le Mundial du Rose, and Effervescentes du Monde.

As such, MCP collected applications, registered samples, and covered the registration fees for following contests: Decanter World Wine Awards - 17 samples, Concours Mondial du Bruxelles – 15 samples, International Wine Challenge – 9 samples and International Wine and Spirtis Competition – 4 samples.

Participation at international wine contests and earned results serve as credible evidence of improved quality of Moldovan wine while also sending a strong PR message during communication campaigns. Taking into consideration the rate of awarded wines, it is expected that Wine of Moldova will showcase another 60 medals and mentions by May.

Support trade marketing activities to expand WoM portfolio on target markets. Moldovan wineries are striving for more sales of quality dry wines on EU markets, focusing mostly on up-trading to new product segments to ensure higher added value. MCP supports ONVV in development and implementation of country-level trade marketing campaigns. These campaigns are aimed at increasing the demand at the wholesaler, retailer, and distributor levels and shall be coupled with the WoM generic campaign to create awareness and sustain the need at the consumer end.

Considering that ONVV determined that Poland should be the primary focus market for 2017, MCP is supporting the implementation of a complex plan that includes a retail promotion campaign in Selgros and Carrefour retail chains in April-May 2017 (with possible replication in September 2017), a supporting PR and consumer communications campaign, and a generic communications campaign to build awareness of the National Wine Country brand and increase the awareness of Moldova as a premium wine producing country. MCP consultant Mr. Witold Franczak, a Polish wine trade expert, negotiated and coordinated the actions in Poland and Irina Bistritchi, a local marketing expert, led and organized the activity on the Moldovan side.

20 As such, during the reporting period, ONVV, with MCP support, organized the critical stages of program implementation. BTL (below-the-line) agency and other implementing counter parts were defined, contracted and briefed and POSM materials were produced. During the implementation phase, ONVV and MCP noticed increased interest from Polish and Moldovan partners in organizing such activities and promoting the premium segment of Wine of Moldova. Chateau Vartely reported to double the quantity of shipped wines to their partner that imports mostly the premium range. It is anticipated that once the complete action plan for the Polish market is implemented, it will provide ONVV with needed expertise to deploy similar approaches on other target export markets such as Czech Republic, Romania, and China.

Activity 3: Export Support Program (ESP): increased wine sales on target markets

Assist ASW to increase marketing capacity and wine exports. MCP assists ASW with implementation of a long term promotional plan based on common marketing framework. Per this framework, small wineries identified the domestic market as a priority, along with foreign markets represented by Romania, Germany, and Poland.

With MCP support, ASW participated in February at WeinMesse Berlin 2017, one of the most important business-to-consumer events on the German market, being represented by six small winemakers (Carpe Diem, Equinox Wines, Et Cetera Winery, Gogu Winery, Minis Terrios, and Pelican Negru). ASW importers and distributors in Germany used WeinMesse Berlin as a platform for demand testing. Based on collected pre-orders at the fair, the merchants forecast amounts for annual orders. This is the fifth consecutive year of ASW participation, which was made possible through MCP’s SEED grant fund.

Photo credit: Ion Luca Photo caption: Mr. Ion Luca (ASW Member) presenting to Mr. I Witkowski its wine: “Carpe Diem, Bad Boys”. Mr. Witkowski is a loyal consumer of ASW wines and is visiting WeinMesse five years in the row, especially to taste the new blends and vintages of ASW wines. WeinMesse Berlin, 24-26 February 2017

In order to enhance the participation in the 2017 edition, MCP supported the activity with a robust communications campaign that included social media promotion, development and production of printed materials and dissemination of a newsletter through members’ contacts databases. The campaign brought almost 100 Facebook event reactions, reached almost

21 10,000 people with over 12,500 impressions, thus ensuring the visibility of ASW during the event. This year’s WineMesse Berlin registered almost 50,000 people, forcing organizers to limit the entrance to the exhibition halls generating lines of over 500 people.

Photo credit: Ion Luca and Dan Prisacaru Photo caption: Photo Collage of ASW stand, number of visitors and exhibited wines at WeinMesse Berlin, 24-26 February 2017

Support new generation wineries (NGW) in developing market penetration strategies. MCP identified five NGW with a clear vision and motivation to invest in accessing new markets for their wine or expanding on penetrated markets. Through its holistic assistance, MCP supports the beneficiaries from the concept to the execution of their marketing strategy for the selected markets.

Considering the importance and the anticipated outcome from the country-level campaign in Poland, MCP decided to capitalize on it by performing a set of activities for ‘new market entrants’. As such, during the reporting period, the Project developed its approach and concept note on activity implementation. After consultations with the beneficiaries and its expert on the Polish market, Witold Franczak, the implementation will start.

In addition, under this activity, MCP initiated the preparation of the third trade trip of the representatives of Polish retail chains that matched during dedicated events with new generation wineries.

Support wine champions in developing export markets. Another module of the MCP export support program is oriented towards “Export Champions”, or companies that have already entered targeted EU markets and have constant importers and sufficient distribution. These “export champions” can benefit from MCP support to implement “pull” strategies to increase their sales in these markets.

As such, within the reporting period, the Project monitored the program implementation by the campaigns deployed in in the first intake, mainly Chateau Vartely generic promotion in Poland and Gitana promotional activities on Romanian. Thus, Gitana was supported to

22 showcase their wines in the special catalogue of duty free shops in Bucharest’s Henri Coanda International airport and perform product samplings, whereas Chateau Vartely advanced in implementation of their promotional plan (publishing articles and wine reviews in printed and online versions of Czas Wina, organizing two wine and food pairing sessions for wine professionals, journalists, and bloggers in Wroclaw and Warsaw, as well as deploying a special program designed for bloggers).

Akin to above mentioned activity, MCP decided to support 3 ‘Export Champion’ wineries - Bostavan/Purcari, DK Intertrade, and Suvorov- vin/Kazayak, in the implementation of a visibility campaign in the Biedronka chain. It is anticipated that the wines from supported companies will be showcased in 2,500 outlets via a specially produced display stand which will be branded under “Wine of Photo credit: SC Graffitti 94 Moldova”. The Project’s approach is to align to this Photo caption: Insert in Duty free magazine activity by providing ‘on-top’ support for in Henry Coanda international Airport, communication and PR, thus MCP is waiting for Bucharest, January 2017 specific program design, based on which further support will be decided.

Activity 4: Develop domestic wine market and enhance wine culture

Promote wine culture and upgrade the quality of the wine services in local hospitality facilities. The domestic wine market research and consumers’ survey demonstrated poor knowledge about bottled wines and low awareness of wine brands and varieties. MCP is keen to organize communication campaigns aiming to raise pride and trust for locally- produced wines as well as contribute to increased service levels and offer variety in hospitality facilities. Text Box. Testimonial on Wine Friendly program During the reporting period, MCP offered ongoing assistance to ONVV in organizing the fifth wave of “Three glasses of wine make you ‘Wine Friendly’ campaign, which is dedicated to the understand that wine is a profound promotion of the PGI wines, thus contributing to the doctrine. The initiative [Wine achievement of two project objectives: enhancing wine Friendly] is superb, the same as the culture and promoting PGI concept among wine organization. We’ve noticed a great interest towards Moldovan wines, consumers and connoisseurs. receiving lots of phone calls from our visitors. It's a good way to socialize Thus, during February - March, 11 master classes of and create a new community. A the current edition were organized, six organized in a perfect solution to break the routine. new location, that are waiting to receive Wine Friendly It's a perfect relationship from which accreditation. The events were attended by 228 both the organizers and the venues persons (20 on average per location) who had the are winning, each promoting their possibility to taste 47 wines from 23 wineries. own products."

Victoria Savga The achieved results in terms of attendance, interest Administrator, from restaurant owners, generated social media buzz, Thomas Albert restaurant as well as the increased number of participating wineries demonstrate the viability of the concept which brings positive impact on enhanced wine culture via a ‘win-win’ approach. In the upcoming period, MCP decided to organize the

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next wave of the program in strong connection with Wine Vernissage and complimenting it with restaurant staff education, product offerings, formation of new sommeliers under cooperation with European Association of Sommelier, accreditation of new location, as well as extending the program to regions. The program will be supported by a national communication campaign that will contribute to increasing wine culture among the general population.

Increase awareness about wines and boost domestic sales. To boost wine companies’ sales locally, MCP in partnership with ONVV and wine producers, organize PR and communication campaigns focused around high sales seasons and other popular wine events.

Wine Vernissage has proven to be an efficient event that promotes wine culture and serves as a platform for new product launches. Thus, the project decided to support ONVV in the organization of the 12th edition of Wine Vernissage, planned for April. International wine experts will participate in the event, and will visit Moldova for the Rose Photo credit: ONVV Photo caption: Key visual of the upcoming 12th edition of Wine Selection and Seminar and meet Vernisage “Waltzing Vernissage” with the representatives of Polish wine trade who are visiting Moldova for a respective trade trip. Additionally, the event is a great opportunity for MCP to launch the ‘graduates’ of the ASW Mentorship and PQUP programs on the domestic market, thus contributing to the diversification of the portfolio of the premium and boutique Wine of Moldova.

Support wine tourism facilities and wine culture hubs. The WoM marketing and the evolving wine culture encouraged the emergence of several specialty gastronomic and wine shops, which are an important element of tourism development. MCP supports making these places more tourist friendly, ensuring high service, authentic cuisine, and quality wine listings. Consequently, the project launched a call for grant applications for facilities interested in contributing to development of the wine culture on the domestic market, and considering the e-mail and telephonic inquires with questions on application procedure, the domestic market may soon witness the launch of several specialized venues.

In addition, the project plans to offer support in development of the touristic products to SEED grantees and participants of ASW Mentorship and PQUP programs, in concurrence with general objectives and approaches towards the development of touristic products. As such during the reporting peiord, the project negotiated with several wineries (Gogu Winery, Fragolino, Mihai Sava, Nicolae Iurco, GCL Prim, Unicorn Estate, Tartcomvin and Vinuri de Comrat) extensions of grants agreements, for investing in development of basic touristic capacities.

Activity 5: Enhance awareness about Moldova as a Tourism Destination

Develop PR and communication campaigns and increase awareness about tourism in Moldova. MCP has developed the concepts for two complex promotion campaigns (#discoverMoldova and #beatouristinyourcountry) to be deployed in the Polish and Italian markets, as well as on the domestic market. An introductory campaign will begin in May on foreign markets, aiming to raise interest and position Moldova among tourism professionals and travelers. Local consultant Eugene Boico has presented the two concepts to the tourism

24 business associations, and local PR agencies will begin developing the campaign content within the next quarter.

Enhance Moldovan tourism and products’ online presence. In order to improve the quality of online promotional materials that promote Moldova as a tourism destination, MCP is continuing the implementation of 360-degree videos of the top 11 tourism destinations: Casa Parinteasca, Orheiul Vechi, Agro-pension Butuceni, Curchi Monastery, Et Cetera, Asconi, Cricova, Milestii Mici, Purcari, Castel Mimi, and Cetatea Soroca. These videos will allow travelers from all around the world to discover Moldova’s tourism attractions and experience them from their computers. These videos will be integrated into an online platform and on moldova.travel website for future promotion through dedicated campaigns in target markets.

Within the reporting period, the high-quality media content has been integrated in a mobile app that was used to showcase Moldovan tourism attractions in virtual reality at ProWein wine exhibition in Dusseldorf (Germany) and Borsa Internazionale del Turismo (BIT) in Milano (Italy). This innovative promotion tool significantly increased the number of visitors to the Moldovan stands.

Develop tourism information centers. Since Moldova does not have any Tourist Information Centers (TICs), MCP initiated the opening of such a center in Chisinau, in collaboration with ANTRIM and UNDP project “Support to Confidence Building Measures Programme (IV)”. Within the reporting period, ANTRIM succeeded to significantly advance on this activity. A Memorandum of Collaboration was signed on March 9, 2017 between Chisinau General Mayor, Dorin Chirtoaca and ANTRIM Chairman, Emilian Dzugas, outlining the main cooperation pillars, including that the Mayor’s office will provide space for such a public tourism office on the main streets of the capital. It is estimated that the Tourism Information Center will serve about 2,000 tourists monthly, which will have a direct impact on the tourists’ circulation in Chisinau and surrounding areas. Another TIC is under development in Tiraspol, in Transnistria, as a measure to build trust on the Nistru borders.

Photo credit: chisinau.md Photo caption: Signage of the Memorandum of collaboration between ANTRIM and Chisinau General Mayor

Activity 6: Foster Business Linkages and Increase Demand for Moldovan Tourism Products on Target Markets

25 Support generic country presentation at international tourism exhibitions. According to the Tourism Marketing and Promotion Strategy, developed by a UNWTO marketing expert provided by USAID, the top tourism source markets for Moldova are Poland and Italy, whose tourist numbers can increase by 50% in the next three years if appropriate promotions are organized under the tourism country brand “Tree of Life”.

As such, during the reporting period MCP supported participation of leading Moldovan inbound tour operators and wineries, via ANTRIM, at three major trade shows that can directly impact the growth of these markets: TS Poznan (Poland), ITB Berlin (Germany) and BIT Milano (Italy). Besides the country stand on the trade fair ground, ANTRIM conducted complex marketing and PR activities before and after the events, increasing the visibility of Moldovan booths within the pavilions as well as the awareness of Moldova as a tourism destination.

 TOUR SALON Poznan (Poland), during February 17-19, 2017, was attended by about 35,000 visitors, many of whom got acquainted with Moldova’s tourism products through a centrally-located Moldovan stand that organized wine tastings and presentations. Tour-operators Solei Turism, Amadeus Travel, and TatraBis showcased their tourism offerings, including the ‘Polish routes to the roots’ tour, elaborated in 2016 with MCP support specifically for Polish visitors.

As a result of efficient press management work, 59 publications about Moldova’s tourism offer appeared in Polish leading media, reaching an AVE (Advertising Value Equivalency, according to Instytut Monitorowania Mediów) of approximate 7820 EUR.

Due to the coordinated marketing actions organized with MCP assistance on the Polish market within the last 4 months, the incoming tourism agencies have announced an increased demand for Moldovan tours of up to 30 %. As such, Tatrabis and Solei have each already planned about 35 groups of Polish Photo credit: ANTRIM Photo caption: Promotional materials at the country stand for tourists for the summer Tour Salon Poznan 2017. season.

 At ITB Berlin, organized on March 8-12, 2017, the five Moldovan exhibitors presented their offers of tourism attractions including wine, wineries, gastronomy, numerous monasteries, medieval fortresses, rural life and authentic culture. The German travel fair has a strong impact not only in Germany but also on the

26 neighboring countries, especially in Poland and Holland, targeted by Moldovan tour operators. Travel agencies reported about 15 business contacts each that have potential to grow into new contracts and business partnerships.

 Borsa Internazionale del Turismo (BIT) in Milano (Italy), planned for April 2-5, 2017, is one of the most significant travel fairs in Italy. Since Moldovan business travel associations decided to penetrate the Italian travel market, following the Tourism Marketing and Promotion Strategy, MCP assisted ANTRIM and local tour-operators to get acknowledged with the Italian market specifics and strategically plan Italian market penetration. To this purpose, an international tourism marketing and PR consultant, Nadia Pasquale, was contracted to assist Moldovan tourism industry in planning and implementing a tailored marketing plan for Italian market. Between March 16-21, 2017, Nadia Pasquale held trainings, workshops and individual meetings in Moldova with tour operators, wineries and project team, in result of which an action plan was defined for 2017-2018 and the participation of Moldova for the first time at BIT Milano tourism exhibition was conceptualized and prepared. In result, in March 2017 two very first article about Moldova as a tourism destination were published in Italian travel journal “Guida Viaggi” and “TurismoItalianews”, inviting Italian travel operators to not miss Moldova at the fair.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1: Support continued policy upgrading and legal regulatory reforms in the wine industry

Sustain continuous improvements to legal and regulatory framework reform. The project supports MAFI, ONVV, and private sector associations to implement the new technical regulations into subordinated normative acts. Also, MCP supports the upgrading of the wine products’ controlling procedures and organization of these in a more efficient and less redundant manner aiming to increase the quality of wines on the market and diminish unfair competition.

As such, the project supports ONVV participation in the discussion of amendments and improvements in current legislation within dedicated workgroups organized by MAFI. The project considers this platform a public-private partnership since ONVV is the ‘speaking-tube’ of the private sector and represents its interests. On the other hand, the project considers it an achievement that ONVV is invited to participate in all working sessions on legal and regulatory issues, proving that ONVV has gained trust among authorities and the private sector as the leading expert organization.

Consequently, during the reporting period, the Parliament of the Republic of Moldova, resulting from the joint efforts of ONVV and MAFI has vetted a package of modifications to current legislation that recognizes wine as ‘food produce’. This is a very important step in liberalization of the market as wine will not be treated as other strong alcoholic beverages, allowing it to be advertised without restrictions. Additionally, the package harmonizes the current legislation with EU standards by defining the classification of wine by protected geographical indication, protected denomination of origin, and varietal or non-varietal wine.

Another achievement of ONVV, based on the efforts of CEED II followed by MCP, is the issue of the decree on Regulation of the methodology of issuing the non-exclusive license on the usage of the “Wine of Moldova” that was published in the Official Gazette in January 2017. By taking these steps, ONVV set concrete and transparent procedures for marking the

27 wines conform with the “Wine of Moldova” quality label, thus ensuring the transfer of image from generic awareness campaigns. Consequently, this regulation constitutes a significant leap in deploying the quality control functions of ONVV that are set to intervene in forming the representative export portfolio that will help position Moldova as a quality wine producing country.

Developing a national strategy for the wine industry (2017-2040). Over the last four years the wine industry, with USAID support, implemented the White paper “Rethink Wine Industry” (2010), and a sector-wide consensus was formed regarding the future of the industry. To secure and streamline its sustainable development, the wine sector needs to develop a comprehensive wine industry development strategy for the next 20 years. The project is dedicated to provide support to MAFI, ONVV, and the private sector in developing a sectorial strategy by using international expertise and managing a participatory consultation process.

Based on the consultations conducted with ONVV, MAFI, and other sector stakeholders during the reporting quarter, MCP started the initial phase of preparation for national strategy development. Project expert Marco Tiggelman was contracted to develop an outlined action for the wine industry strategy development process. Based on the approved structure of the experts’ team, the consultant will develop the scopes of work and terms of reference for each of the consultants involved in the strategy development team, as well as the list of the key competencies and expected deliverables.

Activity 2: Strengthen the role of ONVV as the main professional organization of the wine industry

Support the development of the ONVV institutional capacity. The project continues supporting ONVV in the implementation of appropriate business processes, including planning, reporting, monitoring and evaluation, PR and communication, transparency of decision making, and public-private dialogue platforms. MCP encouraged ONVV to implement ‘reload ONVV’ white paper’s recommendations such as budgeting issues and institutional performance monitoring. ONVV is also supported in defining its lobbying and advocacy role in representing the wine industry’s interests and streamlining MAFI’s supervisory role.

As ONVV in still undergoing the process of internal restructuring, mainly in the marketing and export promotion department, MCP decided to ensure continuity and execution of the transition according to international best practices. For this purpose, the project involved an expert, Marco Tiggelman, to: ensure the appropriate implementation of the Wine of Moldova strategic marketing program, ensure effective execution of marketing and promotion activities, and to contribute to upgrading the efficiency and quality of the ONVV activity within the ‘reload/reset’ framework.

Consequently, the project supported ONVV in recruiting, on permanent basis, the communication and outreach expert Marina Gospodarenco, who is also the co- author of ONVV’s Institutional PR and Communication strategyand assisted ONVV in implementation of the strategy. Furthermore, ONVV recuited Parascovia Ignat, to handle all B2C projects on domestic and international markets. MCP considers these HR acquisitions as a significant enhancement for ONVV team that will contribute to better implementation of the annual marketing and promotion plan.

Additionally, MCP provided support to ONVV in execution of Agricultural Informational System (SIA) – “Wine and Vine Register” – an USAID and UKZUZ program (Central Institute for Supervising and Testing in Agriculture of Czech Republic) implemented by National

28 Agency for Rural Development (ACSA). Considering the importance of the register software in insuring wine traceability and, ultimately, quality, MCP consultant Valeriu Iordachi, acted as project manager on side of ONVV overseeing the software development contracted at a Czech IT company. He mediated the implementation through other involved counterparts, such as “Agricultural Information Centre”, E-Government, and state enterprise Registru. As such, by the end of the reporting period, the software had undergone testing via all contractual test cases and has been deemed being ready for ‘commercial launch’ in the start of April.

Activity 3: Develop and strengthen the PGI wine associations

Upgrade PGI Technical Specifications and develop extension services within PGI Associations. The PGI associations are operating according to PGI technical specifications developed before the wine technical regulation was approved by the government. Consequently, these need to be upgraded to define the specifics of each wine region. Aiming to assist the producers in respecting the PGI requirements, extension services need to be put in place by the associations, aiming to develop specific viticulture and winemaking techniques that adjust to the terroir of the wine regions. PGI associations jointly with the EIB Filiere du Vin project conducted initial work, and MCP seeks to build further activities based on these findings. In addition, the PGI associations and ONVV are supported in developing and registering new Protected Designation Origin (PDO) which are the most superior quality standards in EU regulation.

Increased awareness about the PGI concept and promotion of PGI wines. Local consumers are not acquainted with PGI’s new quality standard; therefore, the producers need to promote its values and particularities. To this end, the project works with ONVV in developing a common promotion and communications plan, and support the associations in developing necessary marketing materials.

The first step in implementation of this activity is the need to promote PGI wines during the “Wine Friendly” campaign. Subsequently, MCP and ONVV gave priority to wines with PGI that were presented and tasted in the master classes during February and March. In addition, the Project will include the promotion of PGI wines in the upcoming communication campaign around Wine Vernissage and the sixth wave of Wine Friendly program.

Activity 4: Upgrade Tourism Sector Policies and Reform Regulatory Framework

The Tourism Agency of Moldova promoted a draft Law #302 that modifies and amends several legislative acts, including the legal framework pertaining to tourism, the Contravention Code and the law on local public administration. This draft law was approved by Parliament in the first reading on December 23, 2016, but the leading tourism business associations expressed severe concerns about the amendments, as well as the current tourism legal framework, as it is obsolete and hampers rather than supports Moldova’s emerging tourism sector, placing additional regulatory burdens upon businesses in Moldova’s tourism sector. For instance, as it stands, the proposed law strengthens the Tourism Agency with control functions giving it back the right to inspect and impose sanctions, which contradicts to ongoing Government’s inspection reform; as well as imposes additional cost and time burdens upon a fledgling industry.

In response to its inadequacies, seven private sector tourism associations, the World Bank and the US Embassy in Moldova have individually submitted official letters to Parliament requesting that the proposed law be annulled or improved upon. Specifically, this unified front requested that the law be re-crafted to effectively address industry regulation and governance. By creating and then implementing a “smart” regulatory approach, Moldova could grow this sector to significant economic importance. Re-thinking the regulatory model

29 for the tourism sector, in conjunction with on-going structural and institutional reforms are critical for Moldova’s economic prosperity, and would lay the foundation for a healthy and vibrant tourism sector.

In result of the position paper, the Parliamentary Committee on Public Administration, Regional Development, Environment and Climate Change, organized a public debate on March 1, 2017 with participation from USAID, the World Bank and private sector. MCP invited Syuzanna Azoyan from the Armenian Development Foundation, who showcased Armenian regulatory reform efforts, demonstrating how a country can drastically improve tourism sector growth through the implementation of positive reforms mindful of private sector needs.

Photo credit: MCP Photo caption: Meeting of the tourism private sector with the Parliamentary commission.

Following the debate organized on March 1, 2017, a working group was created, formed by public and private sector representatives with the mission to improve the draft law #302, among which the director of ANTRIM. The working group held seven reunions within which ANTRIM has voiced the positions of the “Tourism Development Partnership”, formed by five tourism business associations. Three position papers have been developed and submitted to the working group, raising the regulatory issues, arguments and proposed solutions, backed with relevant international practices. Since MCP hasn’t been allowed to participate to the working group sessions, the American Chamber of Commerce in Moldova has provided legal assistance to ANTRIM, as part of the grant agreement with MCP. Still, MCP remains concerned about the transparency and effectiveness of the working group, as well as the unjustified pressure to release an improved draft law by April 18, 2017.

Due to the strategic support provided by MCP within the last three months related on the draft law #302, Moldovan inbound tourism associations managed to have a unique voice within a common platform, has formulated strategic and comprehensive position papers and have tactically organized an efficient lobby and advocacy activity. In result, the tourism industry regulatory reform entered the agenda of the leading political representatives, as the Speaker of the Parliament, the Prime Minister and other ministries, such as Ministry of Culture, Ministry of Agriculture and Food Industry, etc. The public debates on the draft law #302 will continue and MCP has expressed readiness to provide international legal expertise, as well as to organize a study trip for tourism industry representatives to Armenia to learn from their best practices that enabled the four times tourism industry growth within the last ten years.

Considering the legal regulatory issues brought by the draft law #302, MCP has decided to postpone the initiation of the Tourism Master Plan development in Moldova, since the business climate is critical so that donor contributions to be truly impactful for Moldova

30 Activity 5: Strengthen ANTRIM’s Role in the Tourism Sector

In February 2017, MCP signed a modification to its grant with ANTRIM, (National Inbound Tourism Association of Moldova), to further extend the technical activities in line with Project objectives to continue solidifying and positioning ANTRIM as the leading tourism industry association in Moldova.

With MCP support, ANTRIM has succeeded in further developing its institutional capacities expanding its membership support program with additional services and assistance. In result, three more companies (Berlizzo, Lumea-Calatoriilor and Corina travel) adhered to ANTRIM in the reporting period, increasing the members to 30 companies. This has an impact on growing the sustainability of ANTRIM, as it receives more incomes from its members via membership and administrative fees.

31 A2. LIGHT INDUSTRY

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Develop the ZIPhouse Accelerator and Raise Skills through Education

Launched in late 2015, ZIPhouse was created to address challenges in industry education, promote fashion startups, and foster academia-industry collaboration. MCP considers ZIPhouse a flagship institution in workforce development, as ZIPhouse supports industry transition to higher value added by developing critical skills in fashion technology, design, marketing, and business. It offers training courses and acts as an accelerator for startups and the community. MCP supports ZIPhouse in becoming a viable institution, focusing on increasing its capacity building and content development.

Enhance ZIPhouse institutional capacity. MCP Text Box. ZIPhouse Results continued to strengthen ZIPhouse capacity. during January - March 2017 During the reporting period, supported by MCP and in collaboration with APIUS, ZIPhouse - More than 500 beneficiaries in total organized workshops, engaging community - 53 companies participating at least events, and also private companies in sector once in trainings, seminars and activities. As such, ZIPhouse launched the workshops within the quarter Fashion Acceleration Program for startups, - 18 access cards sold succeeding in connecting judges, mentors, and - 8 workshops and seminars, with coaches to more than 15 professionals from more than 185 participants More than 70 hours of technical private sector ready to contribute pro bono to the - training development of entrepreneurship in the fashion - 185 participants in total from private industry. In addition, the ZIPhouse monthly companies at advanced technical newsletter promotes its services (organized trainings events and trainings) to a wider audience and is - 17 teachers from 3 educational enhancing members’ and partners’ loyalty and institutions, participating at increasing the number of beneficiaries. In technical trainings January, ZIPhouse also created a separate - 13 community building events with community page on Facebook as an instrument more than 230+ participants to stimulate cooperation and collaboration - 85,000 MDL in revenues between professionals, designers, students, and - 2,730 followers on Facebook startups. The account will become a platform for sharing fashion and development content.

Boost fashion creativity, startup and community building. For building the emerging fashion community and promoting fashion entrepreneurship, MCP is providing support to ZIPhouse for implementing the 2017 community building plan ranging from community meet- ups to complex events like contests and conferences, or the startup acceleration program.

ZIPhouse succeeded in strengthening its position as a unique fashion community platform, through organizing on a regular basis the following community-building and knowledge-sharing branded events; 13 in total during the reporting period, gathering approximately 230 participants.

32 Text Box. Community building and experience sharing events organized by ZIPhouse during January-March 2017

Branded format ZIPhouse Description community events “Light UP” meet-up for startups, young designers, and students; 3 editions networking event for startups, young designers and professionals, focused on “Mon Talk” professional development topics “Pro Fashion” meet-up for professionals from the light industry; 2 editions “Light UP” special edition “Studies at Polimoda. Students’ experience sharing” “Pro Fashion” special edition “Studies at Polimoda. Professionals’ experience sharing”

“Fashion Huddle” networking event for professionals focusing on experience exchange. this edition: 2 local brands, Alina Bradu and Sekana, has been put in front of 2 marketing experts, for debates and opninion exchange; “Fashion “Recipe for successful collaboration between the fashion designer and the fashion Cappuccino” photographer” – held by Eva Elena, stylist and fashion photographer. “Fashion “Balance between art and business in the fashion design - with Olga Blanc. Cappuccino” “Fashion “Hobby or Career” – held by Ylianna Danko, stylist. Cappuccino”

To support fashion startups and emerging designers growing locally and internationally, MCP assisted ZIPhouse with launching the Fashion Acceleration Program (FAP) in Moldova , meant for fashion startups. The FAP is organized by ZIPhouse in partnership with

Fashion Technology Accelerator from Milan, Italy, and APIUS. Through FAP, ZIPhouse aims to accelerate several fashion startups with high potential to succeed on both, local and international markets. The FAP is designed to bring local and international mentorship and coaching, educational content and networking opportunities, providing the startups with the opportunity to improve their business model and their brand identity, as well as to improve their product.

Figure. Cover image for Fashion Acceleration Program launched by ZIPhouse in February 2017 More than 50 fashion startups applied and a professional jury selected 12 companies to be mentored for the local market and six for international acceleration. Over a six-month period, these fashion startups will benefit from tailored assistance and mentorship in brand building, market access, design, pattern making from international experts from Moldova, US, Italy and France, access to ZIPhouse production and creation spaces, and access to the WGSN fashion trends online database that is the number one authority in trends setting.

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The FAP was launched with an intensive introductory Training Program, with 26 hours in total, split into 9 sessions, with each session focusing around the main topics to be covered in depth over the FAP six-month period. A kickoff event, mentored by international mentor Leekei Tang, and one-on-one sessions with the mentor were organized for the startups, during which the agenda for collaboration was set up and key performance indicators were established.

Photo credit: ZIPhouse Photo caption: Sequence of the selection process during the Fashion Acceleration Program at ZIPhouse, in February 2017

Develop industry skills through quality advanced technical education and training. Better education and training is required to support the industry’s transition to higher value added. ZIPhouse addresses skill gaps in qualified labor, such as supervisors, management, marketing, and sales. ZIPhouse also provides quality practical technical education for industry professionals through trainings and workshops.

MCP assisted ZIPhouse and the Technical University of Moldova in developing partnerships with five leading Italian universities. Through collaboration with Polimoda University from Italy, which is ranked among the top ten in the world, for short-term courses aiming to enhance the skills or develop new skills in supported industry, ZIPHouse locally launched the Fashion Leadership Program. The main goal of the Fashion Leadership Program is the development of better professional skills of key personnel from companies and teaching staff from the university that could influence the quality of the workforce and bring added value to the production process.

As a result, during February 27- March 12, 2017, 41 Moldovan fashion representatives, including both professionals and young designers or startups attended a two-week training course at Polimoda in the following areas: fashion design, fashion brand management, and fashion business administration. Participants represent a range of Moldovan firms, from early stage designers to more established manufacturers, like Artizana or Crème Brulee.

This is a quick-win remedy to bridge the deep skills gap and assist Moldova in its transition from low-value cut-and-make manufacturing to higher value added concepts that include fashion design, branding, and marketing.

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Photo credit: Geo Lupascu Photo caption: 41 participants starting short term courses at Polimoda Institute, Italy, to take place during February 27 - March 13, 2017

The collaboration with Polimoda was facilitated by MCP over months of negotiations resulting in an established long-standing cooperation agreement between Polimoda and Technical University of Moldova (TUM) and reduced tuition fees. At the same time, the training program is managed by the ZIPhouse fashion accelerator within TUM ensuring its continuity.

To enhance the English language skills of participants at Polimoda, MCP organized an “English for Fashion Industry” course at ZIPhouse in January 2017. In total, 24 applicants for studying at Polimoda attended the course and significantly improved their level of professional English. All beneficiaries provided positive feedback and expressed the necessity of organizing such courses for further participants in the program to overcome the language barrier for expanding collaboration with the global fashion world. Text box. Testimonial on the participation of professionals at fashion related topics short term courses at Polimoda, Italy, ZIPhouse aims to strengthen its position as the platform bringing advanced “Attending Fashion Brand Management at Polimoda we technical education and training in the gained practical knowledge that we have already started to fashion industry. ZIPhouse developed a apply. We learned that fashion brand has to be build plan for training activities to take place in- around a special product range, visibly positioned, to insure differentiation and clear segmentation. After the house during 2017 and branded this course, we worked with our team at Zorile to identify the educational pillar as ZIPhouse Fashion things to improve, and decided to implement them for the Academy, led by experts with broad autumn collection” practical knowledge. ZIPhouse will provide Corina Sirbu, advanced technical trainings for the Production and Retail Department, Zorile industry to enhance the skills and abilities of local specialists. “It was amazing to receive insights and share experience with teachers that are also brand owners, with history of During the reporting period, 86 years behind. We learned how to work on a collection, keeping in mind the brand identity. The practical work in participants representing 53 local Polimoda creation atelier was extremely useful and companies, and 17 representatives from interesting” TUM and other educational institutions in total benefited from eight seminars Ludmila Storojuc, Designer of the Fashion brand “Ludmila Storojuc” organized at ZIPhouse.

35 Table. Advanced Technical Trainings for light industry, organized by ZIPhouse in Q2 2017

Training target Training subject Trainer Training Description audience The course covered modules such as creating new clothing silhouettes Larisa Cristian, Moldova, through the modeling process, "Constructive modeling more than 25 years in modelling of constructive and of apparel" industrial manufacturing and decorative elements in clothing tailored clothing products, and modeling products with waist support (skirts and pants). The purpose of the training was to promote specialized software in "MIND CAD application footwear and leather design, and Mariana Costea, Romania, in conceiving and promote effective use of these tools lecturer at the Technical designing of leather to optimize the manufacturing University of Iasi products" process for the launch of new models and diversifying the product mix. The seminar addressed the importance of effective communication with the client, the Mariana Raileanu, Romania, “Increasing production role of wages to increase efficiency director of Romanian-Swiss efficiency in the system and staff retention in the company, production company JSC of working with clients” measuring and monitoring efficiency, "Artifex" Focsani, Romania and price determination for different schemes of work with the foreign client. The seminar addressed the Advanced importance of effective level communication with the client, the “Training of non-qualified Olga Ionita, Romania, expert role of wages to increase efficiency personel: methods and at production company JSC and staff retention in the company, efficient techniques” "Artifex" Focsani, Romania measuring and monitoring efficiency, and price determination for different schemes of work with the foreign client. The seminar was structured on 4 main topics: efficient ortanization of the production flow, working place, methods and techniques on encreasing the efficiency; time "Efficient organization of Olga Rudi, Romania, expert management, setting the structure of the production flow. at production company JSC work timing, methods and Workloads. Quality "Artifex" Focsani, Romania techniques have been presented, management" supplimented with comparative analysis of the practical issues on implementation; quality management and methods of error correction; personel motivation Luisa Fazio, UK, a product New techniques and methodologies design specialist in leather for designing and creating footwear “WGSN Fashion: goods and footwear, with an and leather goods, and the use of Footwear and Leather" experience of over 15 years the top online resource for trend in the fashion industry in analysis in color and style - WGSN. Milan and London

Beginner "Apparel design for Nina Utochkina, Moldova, English method of designing and level women" ZIPhouse staff modeling of women's clothes.

36 Activity 3: SMART (Streamline Manufacturing, Accountability, Resource efficiency, and Transparency) Factory program

Create brands and products aligned with fashion trends. The quality of fashion items, which is determined by quality of design and fabrics, is the key factor in ensuring a high degree of competitiveness for light industry companies. The production process usually begins with design, and more Moldovan manufacturers are deciding to create more original designs. However, many lack the sophistication and finishing that distinguish a professional and high quality design. The quality of garments is decisively influenced by the design. A fashion design means that the product should be esthetically pleasing and should be functional. Because of the time required to bring a garment onto the market, designers must often anticipate changes to consumer tastes.

To support Moldovan companies to create brands and products aligned with fashion trends, MCP is implementing a “flying designers” program, in which international designers with extensive experience working with famous international brands, provide multiple, intermittent consultancies with Moldovan light industry factories with the goal of improving designers’ skills and helping firms develop better collections and enhancing companies’ competitive positions.

During the reporting quarter, with the support of MCP partner Bhavana World Project, international designer Kelly DeNooyer assisted four apparel companies (six brands - Alina Bradu, Sekana, Katea Gri, My Revival, Tricon, and Move), to review the SS/2017 collection and develop Fall 2017/2018 collections. The assistance focused on FW17/18 collection range planning (including the collection theme, colors, and embroidery motifs) and collection range.

Companies were trained on how to prepare whole sales templates, including cost of goods, invoice examples, preparation of line sheet, order forms, and how to prepare the design and production calendar for the whole sale. In addition, the international consultant provided the local consultant mood and inspiration research suggestions such as: Trade show Premiere Vision Indigo in Paris, Milano Unica Sourcing show in Milan, Bloom Magazine, museums, and fine art. The international designer also underlined that the WGSN Trend forecasting available at the Zip House is one of the best and most comprehensive Trend forecasting services for inspirational imagery Photo credit: Kelly DeNooyer, international Designer and Pantone color Photo caption: Katea Gri collection displayed at Indie Faces Pop-Up event in trend reference London February 17-19 2017 across different sectors.

37 The international designer also checked the sketches developed by local designers for Alina Bradu, Katea Gri, Secana, My Revival, and Move brands for the Fall 2017/2018 collection and made recommendations for the total looks. She suggested corrections by adding new fabric, embroidery methods and styles, and printed and handmade details, which increase the value of the finished garments. With the assistance of the international designer each brand created the collections in aligned to fashion trends.

The Moldovan brand Alina Bradu was assisted in developing the concept for a new brand, Loconic, oriented mostly for export in EU market. Using the concept of the new brand, the international consultant assisted the company in developing a new Fall-Winter (FW) 17/18 Loconic collection. For the new collection, only natural fabrics were suggested (cotton, silk, wool).

Photo credit: Kelly DeNooyer, international Designer Photo caption: Recommendations made by the international designer for FW 17/18 Loconic collection

With the assistance of the international designer, the local designer, Katea Gri, completed its collection capsule with a high-quality value and identity, and learned how to do costing, line sheets, pricing, and mark-ups for the wholesale and retail markets. She prepared professional photography and a video look book with the proper marketing aesthetic, critical to attract the attention of buyers and sales representatives. An important achievement is the participation of the Katea Gri brand in the Fall-Winter 2018 Indie Faces London. Ms. DeNooyer assisted Katea Gri by helping with the selection of the product assortment, line sheet preparation, retail and wholesale price points, and advice on marketing, specifically with selection of runway looks and styling suitable for the market and brand. Participation in Indie Faces London is the first step of the young brand into the international fashion world, and the United Kingdom is a market where her brand style and price point could have success.

38 Katea Gri brand demonstrated an appropriate competitive brand style for the market shown, great quality craftsmanship, and price points for this quality. Katea Gri had interest from wholesale buyers and a sales representative from a central London showroom, off the street individual buyers, and received positive feedback from fellow competitors and experienced event organizers. This experience has been a great beginning for Katea to understand the difficulties of the Western market, and the positive feedback was encouraging as she continues to grow and strengthen her brand and collections to become even more marketable and have a greater commercial attraction.

The footwear companies of the Moldovan Light Industry are focused mainly on producing and selling footwear under their own brand on the local market. Most companies are small and newly created and their designers have limited experience to create collections. To overcome this, MCP contracted a European professional designer with a broad experience, Luisa Fazio, to assist four Moldovan footwear companies -Cristina, Olsa Shoes, Hincu, and Oldcom. During the reported period, the international designer together with company designers, evaluated the developed Spring-Summer 2017 collections, identified and commented on the products’ weaknesses, and provided recommendations on design level, leather, and accessories used. In addition, the international consultant reviewed the design process in each company, including planning a new collection, sketch development, selection of leather and accessories, production of samples, and assigned task managers.

As a result, Moldovan footwear designers from assisted companies guided by the international designer, Luisa Fazio, identified Fall-Winter (FW) 2017/2018 seasonal directions, selected colors, decided the collection structure, and analyzed each style in terms of commercial success, function, last, heel/sole, end use, and market appeal. This helped the local designers create a clear collection framework for each brand for starting to design the collection.

Photo credit: Luisa Fazio, international Foorwear Designer Photo caption: Example of sketches developed by the international consultant for Hincu and Oldcom company for FW17/18

39 Following the evaluation of design and product, the international designer proposed a new range of products on the base of soles and lasts provided by each company, to be integrated in FW 2017/2018 collections:  Hincu created the “70s URBAN BOHO” overarching theme to provide clear design direction and coherence to the new collection;  Cristina will design new branding personalization in the form of hardware or a blind emboss, inspired by its slogan “find your match”;  Olsa will focus on comfort following its motto “everyday casual shoes.” Ms. Fazio recommended that styles include ankle boots, demi boots, lace up shoes, loafers, and a new idea for a military boot;  Oldcom will create a mini capsule range based on the theme of “cut up stripes,” to include one print-based item on an existing carry over style and one new concept style inspired by this theme and possibly introducing a microinjection detail.

The international designer, together with each company’s designer, selected 10 boots tree and developed 10 sketches per brand, inspired by the proposed theme, which will be integrated in the future collection.

Ensure access to better fabrics and accessories. The type of selected textiles are crucial in designing high quality apparels. Since Moldova does not manufacture textiles nor has significant domestic warehouses, MCP continues assisting local companies to strengthen sourcing skills and improving access to better fabrics and accessories in order to ensure the transition to higher segments of the value chain for more and more companies.

During the reported period, the project assisted seven Moldovan apparel companies (Ana Popov, Move, Mobile, Velitextil Plus, Saltoianca, Proinilia, and BabyMoon) to visit raw materials and accessories international exhibitions Premier Vision and Texworld, organized in Paris. Premier Vision is the world’s premier fabric show which presents the season’s fashion directions for 18 months in advance and has an exceptionally rich offer from hundreds of suppliers. The suppliers present collections to match all needs, in a wide range of price levels and include: embroideries, lace, suiting, silks, woolens, knits, color-woven, and technical fabrics. Visiting these two international fabrics and accessories exhibitions, Moldovan designers learned about future collection color trends, quality of fabrics, and accessories and had the opportunity to select fabrics for their future collections.

For the first time, a start-up designer (BabyMoon) was assisted by MCP to visit the two aforementioned raw materials exhibitions. The focus of Babymoon designer at Premier Vizion was the Wearables Lab zone and conference. Even being just a small part of Text Box. Testimonial on Raw materials Premiere Vision, it turned out to be incredibly stocks visits in Italy valuable for BabyMoon, as the designer networked with leading wearables and smart “We are thankful for this opportunity to visit textile specialists and organizations, raw materials stocks in Italy, as it allowed us to select of high quality fabrics at very including Intel, which is interested in the acceptable price for future collection. Our development of BabyMoon Carriers, and company recently began to create and to Pascal Denizart of CETI, who showed produce own collections. The quality and price interest in incorporating new technology into of raw materials is crucial the collection to be the BabyMoon hardware. The designer is competitive. We selected fabrics for SS 2017 following up with them for further collection and ordered the first batch of fabrics development of the BabyMoon prototypes. in the total amount of 5,000 Euro. I'm sure that clothes made from selected fabrics will enjoy The project identified five companies, success on the market and our customers will Ridiager, Olga Ceban, Sram, BabyMoon, be pleased” Ala Gordeeva and Le Parole, and arranged visits at raw Designer of "Ridiager" Moldovan Aparel Company

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material stocks in Italy for their designers and acquisition specialists. All companies visited raw materials stocks in Italy for the first time. The Moldovan delegation was guided by the international consultant Angela Dobinda who selected and arranged visits for Moldovan specialists at 10 suppliers in Darfo Boario Terme, Prato, and Carpi. The feedback indicated that the visits were useful and the companies had an opportunity to select and order high quality fabrics at very acceptable price. During the first visit, the designers selected and ordered fabrics valued at 23,000 Euro.

The assistance provided by the project in this field has already become sustainable and durable. This is demonstrated by the fact that companies who visited stocks of fabrics and accessories, previously with MCP assistance, now visit on their own expense and have the experience to select and buy the raw materials individually. For example, apparel companies Mobile, Ponti, Velitextil Plus, and Portavita were assisted by the project in Year I to visit raw materials stocks. During the reporting period, these companies visited the stocks independently in Carpi for sourcing fabrics and bought raw materials valued at around 80,000 USD.

Assist companies to implement complex innovative methods for productivity growth. Considering that ineffective processes and workflow management lead to poor overall performance and excess costs in apparel companies, MCP started coaching four apparel companies (Premiera Dona, Infintextil, Maicom, and Mobile) to increase productivity through implementation of high-end production engineering for improved efficiency. These production engineering methoods include production process planning, workplace engineering, workflow engineering, incentives system, production cost-cutting, and investment planning. The coaching program includes complex productivity and efficiency issues, and is supported through local and foreign consultants. This will allow mature manufacturers to achieve tangible results and serve as industry champions.

International consultant Martin Bucher provided direction on productivity enhancement basic measures (quantities, bundle quantities, current time, payments, posts per minute earned, and cost calculation). Mr. Bucher presented the plant manager and technical staff with the Advanced Analytical Method Training (AAMT) film, showing how to carry out systematical training for faster and effective operation learning, more and earlier earnings, operator turnover reduction, and reducing training and makeup cost. Assisted companies received the following recommendations:  reorganize production on all organization levels; Photo credit: Martin Bucher, international productivity  report daily production data for expert Photo caption: Table extension proposed by the timely management decisions; international consultant  increase operators’ skills through trainings;  keep flexible workplaces allowing for production to cover various operations;  transport bundles on bundle trucks and in standard plastic boxes.

41 With the support of local Consultant Demian Usanli, most of above mentioned recommendations started to be implemented. The local consultant took inventory of all equipment on all lines (flows) for new flow planning, developed and coordinated with company managers new flow layouts, discussed with company mechanics, and ordered prototype table extensions for each kind of sewing machine.

One of the main weaknesses mentioned by the international consultant after productivity audit was that the operators’ skills are underdeveloped and must be upgraded, while newly hired staff must be trained systematically in skills, right method, speed, and stamina. The international consultant presented the Advanced Analytical Method Training (AAMT) film to company managers and technical staff, which showed how to carry out systematical training for operators to learn faster and become more effective, increase earlier earnings, increase operators’ motivation, and reduce operator turnover.

The international consultant recommended that assisted companies develop special devices for operators’ training to increase their speed. The local consultant coordinated with production managers to manufacture the proposed devices for training of basic skills of seamstresses and introduced necessary corrections for technical parameters. Consequently, the companies started to produce, with the assistance of local consultant, recommended devices for training of basic skills of seamstresses. With the new devices, the international consultant can conduct the training of seamstresses during his next assignment.

Assist companies to implement innovative technological solutions. The implementation of innovative technological solutions is one way to upgrade the company, leading to increased productivity, quality, and competitiveness. Thus, MCP continues supporting light industry companies through its grants program to implement new technologies, such as special machines for complex manufacturing operations, embroidery, special finishes, and production of innovative and special products. This leads to improved product quality and manufacturing efficiency, complements and strengthens the technical assistance in knowledge and know-how, and contributes to factory growth and better paying jobs.

During the reported period, the project received applications to grants from 26 companies from the light industry. The selection committee analyzed the concepts and budgets of all applicants, based on which the selection committee selected 7 applications: 2 large companies (Artizana and Portavita), 2 medium companies (Ponti and Bombinici) and 3 small companies (Olga Ceban, Arilux and Olsa Shoes). The industry Team Leader assisted all selected enterprises to prepare final grant proposals and presented it to the SEED department for USAID approval.

Support factories with implementation of international social compliance and production standards. As companies expand their manufacturing and sourcing capabilities around the world, supply chain workplace conditions are increasingly scrutinized. The conditions under which products are manufactured became a dimension of quality and an important part of the business value proposition. The lack of a process for managing risks related to supply chain social compliance can have a direct impact on a company’s financial results, especially for those organizations in consumer markets where image and brand names are critical assets.

Moldova needs to adhere to responsible and sustainable manufacturing principles. Responsible business practices are a necessary investment in future factory and industry success. These practices are becoming increasingly important for international customers, even being required by European clients too.

42 MCP assisted Artizana apparel company with implementing an Integrated Quality System focusing on ISO 9001:2015 and Occupational Health and Safety Management System (OHSAS 18001:2007). In January, the International certification body CERTIND certified the Integrated Quality System, which recognizes that working conditions are managed in a manner consistent with other elements of quality.

Photo credit: CERTIND, International Certification Body Photo caption: The international Certificates for Artizana Company (ISO and OHSAS)

Artizana is the first apparel manufacturer in Text Box. Testimonial on implementation of Moldova to implement an integrated quality Integrated Quality Management System management system that meets international standards, and ensures a “We are very satisfied and we are thankful for production environment that delivers quality the opportunity to be assisted and successfully products. Artizana paid special attention to implement an Integrated Quality Management its social compliance and accountability, System, which was recognized and certified by focusing on improved safety and working the international body CERTIND. This conditions for its 400 employees, mainly certification brought immediate results for our company. It increased the company image in women, which are becoming increasingly the eyes of our main Barbour client from UK, important factors for the global apparel who already informed us about his decision to chain or even a requirement for European increase monthly orders by 2000 pieces. This buyers. This raised confidence in Artizana will generate creation of around 100 new and as a reliable manufacturing partner and well secured jobs, mostly for women.” allowed the company to enhance exports by attracting quality-conscious buyers. Genadie Tentiuk Director of "Artizana” In addition, MCP started to provide support Moldovan Aparel Company in the development and implementation of an Integrated Quality System focusing on ISO 9001:2015 and Occupational Health and Safety Management System (OHSAS 18001:2007) to Steaua Red via a local consultant. The company is specialized in production of knitwear products. It provides services for well-

43 known foreign brands, such as Luisa Spagnoli and Stefanel, which pay special attention to the conditions under which products are manufactured from the point of view of social compliance. The local consultant made the Quality and Occupational Health and Safety Management System audit, which evaluate the existing management system in the context of the requirements of international standards. Based on the preliminary audit the local consultant developed an implementation program and developed the organizational structure of the integrated Quality and Occupational Health and Safety Management System and allocated responsibilities and commenced the training of the personal. The implementation of the Integrated Quality System will continue in the next quarter.

Objective 2: Expanded Market Linkages

Activity 1. Reposition Moldova as a Full Product Manufacturing Partner and Support Internationalization of Moldovan Fashion Brands on Regional Markets

Grow EU exports through showcasing at major tradeshows. MCP supported the participation of Moldovan light industry companies in leading international exhibitions in France, Germany, Italy, Spain, Kazakhstan, Russia, and Ukraine. Building on the previous achievements, the Project is continuing to facilitate exports and entering new markets, through promotion at trade shows, B2B events, fashion shows, and other specialized events.

During the reported period, with MCP support, 32 light industry companies participated at 9 international exhibitions. The 32 participating light industry companies included 20 apparel companies, 19 footwear and leather accessories companies, and 3 jewelry brands.

At most of the international exhibitions, the Moldovan companies participated under the common stand designed under the Din Inima umbrella brand logo.

Photo credit: Nikita Rinadi Photo caption: Moldovan companies work with potential clients at Fashion Central Asia Exhibition, in March 2017

44 Table. The results of supporting apparel companies at international exhibitions

The name and type of Participating Results the exhibition companies New Preorders, Signed contacts US $ Contracts, US $ Premier Manufacturing 1. Ionel 15 $5,500 $17,600 Sourcing exhibition 2. Ridiager 3. Portavita 4. Odema Textilegprom 1. Infinitextil 8 $8,600 $80,700 Ready to wear exhibition 2. Iradextextil CPM Dusseldorf-Moscow 1. Ridiager 73 $12,150 $4,240,000 Ready to wear exhibition 2. Alina Bradu 3. Milabrega 4. Steaua Reds 5. Iulia Allert 6. Portavita 7. Ionel 8. Premiera Dona 9. Secana 10. Nikita Rinadi 11. Eostil 12. Intercentre lux Fashion Central Asia 1. Mobile 78 $107,350 Exhibition, Alma-Ata, 2. Iulia Allert Kazakhstan 3. Steaua Reds 4. Coralav Lux 5. Portavita 6. Vistline 7. Premiera Dona 8. Cocsinelle 9. Nikita Rinadi 10. Katea Gri 11. Secana Leather & Shoes 1. Floare 100 $61,000 exhibition, Kiev, Ukraine 2. Tigina 3. Artizana Factory 4. Oldcom ShoeStar in Almaty, 1. Bitprogram 16 Kazahstan 2. Oldcom 3. Maalex bags 4. Floare 5. Tigina 6. Rotan 7. Trenwood 8. Zorile ExpoZahid, Lviv, Ukraine 1. Bitprogram 27 $2,000 $20,000 2. Oldcom 3. Maalex bags 4. Floare 5. Tigina Bijutex jewelry expo, Paris, 1. Ana Popava 31 $21,780 France jewelry 2. Marinelle 3. Rodica Braga jewelry Bijutex, Madrid, Spain 1. Ana Popava 29 $5,720 jewelry 2. Marinelle 3. Rodica Braga jewelry TOTAL 32 377 $224,100 $4,358,300

45 It is necessary to mention that all preorders as well as signed contracts are for high value added products. All orders signed at ready to wear exhibitions are for products designed and produced under the brands of Moldovan companies with the highest value added.

Participation at the spring edition of Fashion Central Asia Exhibition in Alma-Ata, Kazakhstan was a great success. It was for the first time when all participating companies at an international exhibition signed preorders and orders. Collections presented by Moldovan designers were perceived by potential clients as very stylish and in accordance with season fashion trends. This is mainly the impact of the design assistance provided by MCP in the past year to the participating companies. The impressive results the Moldovan companies obtained at international exhibitions represent their strong penetration on new export markets.

In February, Moldova showcased in premiere at the International Exhibition in Brno, Czech Republic- STYL KABO, being represented by three Moldovan DIN INIMA brands – Julia Allert (womenswear), Vitalie Burlacu (handbags) and Floare (footwear). The fair is one of the most prestigious professional shows of the products of the Czech Republic and foreign fashion manufacturers within Eastern Europe. This was a great opportunity for Moldovan manufacturers to break the ice for new markets, gain feedback from potential clients, and gain new experience.

Jullia Allert succeeded not only to impress the audience, but also to start a collaboration with a Concept Store in the center of Brno, her collection being exhibited immediately in the store and a public presentation was arranged to mark the start of the collaboration. Also, Julia Allert received an invitation to participate at Czech Design Week. Additionally, Jullia Allert received experimental orders from Rena Exclusive, Brno and Erorre Showroom from Slovakia. Based on this experimental collection, the Jullia Allert brand will negotiate the permanent orders.

Photo credit: Styl Kabo exhibition Photo caption: Moldovan brand, Jullia Allert, showcasing Styl Kabo exhibition, Brno, Czech Repubilic in February 2017.

With respect to handmade fashion accessories manufacturers, MCP assisted three Moldovan brands: Ju-Bijoux, Marinelle, and Rodica Braga, to exhibit their handmade collections at the two most important B2B trade fairs in Europe - Bijorhca, Paris, and Bijutex, Madrid in January 2017. Participation at these important trade platforms is the premise for Moldovan designers to enhance their jewelry exports to EU buyers and enter new markets. Real-time feedback from participants focused on describing how the new buyers from all

46 around the world approached Moldovan brands. Specific interest was registered from European buyers (i.e. France, Spain, Great Britain, Belgium), as well as from worldwide (i.e. from Japan, Brazil, Mauritius). All buyers were impressed by the jewelry design, style, and quality. As a result, producers received 35 test orders valued at $25,000 and 60 contacts focusing now on transforming them into sales, thus being challenged to quickly grow their local production teams to fulfill the orders, thus creating new jobs.

Handmade accessories have the potential to become a high-growth segment for export in Moldova’s fashion manufacturing.

Support companies to penetrate new markets through company-level efforts. To boost exports of Moldovan brands to regional markets, MCP is providing tailored support to local companies to participate at trade shows and other international exposure events. As part of MCP trade support, Katea Gri brand was assisted to get international exposure and customers in export markets that would enable it to grow beyond the domestic market. As such, Ecaterina Grigor, the emerging designer of local fashion brand Katea Gri unveiled her AW17/18 collection at Indie Faces London Fashion Week A/W Popup Shop Event, in February 2017 in Soho, London, UK. Indie Faces is a renowned platform for independent artists worldwide, including those from the fashion industry. Indie Faces is a point of reference for Text Box. Testimonial on Bijorhca discovering and launching new indie talents, and 2017 trade fair participation offers great opportunities for emerging fashion “We are thankful for this opportunity to designers to showcase their work to industry exhibit at international trade shows in professionals with the actual intent to work with Europe, as it allowed us to break the ice new talent. in exports, get orders from Japan, Brazil, Great Britain, Spain as well as to get Ecaterina Grigor applied for participation at Indie inspiration for growth. Faces London Fashion Week Pop Up Event with Katea Gri AW17/18 collection developed as a From 400 designers exhibiting at result of the assistance received through the Bijorhca, the collection Urban Glam was “Flying Designers” Program, supported by MCP, selected by Elizabeth Leriche Trend Forecasting Office for The Fashion in which international design consultants in Trends space (aiming to inspire buyers women’s wear provide multiple, intermittent around four headline themes) and consultancies with Moldovan factories for appreciated as one of the top trendy improving designers’ skills and helping firms jewelry.” develop better collections. Katea Gri’s participation at the event was based on Rodica Braga competition, with Indie Faces selecting from Designer of "Rodica Braga" worldwide applicants and only 15 designers to be Moldovan jewelry brand awarded the possibility to participate.

As a result of improved designers’ skills and better collection for both local and international markets designed through “Flying Designers” Program, MCP supported Lilia Suru, designer at Atelier Mov company, to showcase the MOVE brand collection at IMONI Showroom Paris, during Paris Fashion Week. IMONI represents an amazing opportunity for Atelier Mov SRL, as it is a seasonal showroom with selected brands that provides an inspirational environment that encourages building partnerships between brands, buyers and press, in the heart of Paris. The IMONI Showroom brings together well known established brands as well as new sophisticated brands with a story during Paris Fashion Week.

47

Text Box. Testimonial on IMONI showroom participation

“We received very positive feedback related to consistency of our collection. Buyers said that when approaching to our stand they see a story and a unique concept. We really made a huge progress in preparing FW17/18 collection and accomplished a genuine capsule, with a full range of garments for many occasions yet keeping one idea.

This is due to past months collaboration with the consultant in design provided by MCP who helped us from the very inception of the collection idea till the final presentation during the showroom.”

Photo credit: Lilia Suru Lilia Suru Photo caption: Participation of local designer Lilia Suru, showcasing Designer and owner of fashion brand MOVE, at IMONI Showroom Paris, during Paris Fashion Week, in brand "MOVE" March 2017.

The showroom with exclusive products was visited by more than 70 different buyers representing various department stores, thus the company met potential clients and gained new experience, focusing now on transforming contacts into sales.

In February, MCP supported the local brand Doua Inimi, specialized in design and production of wedding dresses, to participate for the first time at Tirgul de Nunti GidMariaja wedding trade fair organized in Iasi, Romania. The fair covered the entire range of products and services dedicated to organizing a wedding. As a result, the Moldovan brand managed to sign contracts and delivered dresses in the total amount of $6,800.

Supported by MCP, three Moldovan eveningwear brands -O’Blank, Anette, and Di Vero, built recognition on the regional market due to the participation at the Romanian Fashion Philosophy international fashion show organized in Bucuresti,Romania, in March, 2017. Moldovan designers showcased their collections along withother 25 European designers. Such international exposure Photo credit: Romanian Fashion Philosophy is a necessary step for preparing to enter Photo caption: Moldovan eveningwear brand “Anette” at new markets. As a result, the Di Vero the catwalk of Romanian Fashion Philosophy, Bucuresti, in Brand succeeded in launching March 2017.

48 negotiations of opening a representative office in Bucharest, and signed a contract for delivering 20 dresses for promotion on the Romanian market.

Find new key customers through apparel supplier performance evaluation. To assist companies in finding new key customers and generate business, MCP in partnership with MIEPO is supporting 19 Moldovan apparel companies (20 brands) to be included in the Trigon Select Performance Evaluations and Promotion Program. Trigon Select teamed up with the International Apparel Federation (IAF), the global federation of the apparel industry, and the German Apparel Industry Association to offer a new evaluation and promotion program to help suitable clothing manufacturers promote their services to international garment buyers. The evaluation scheme consists of up to 280 key criteria covering every aspect of the level of development in manufacturing systems, organization and management of the apparel suppliers. During the reported period, assisted companies’ capabilities were rated on a following scale: - AAA - World class manufacturing standards for the industry - AA - High standard of industry manufacturing - A - Good industry standard of manufacturing - AB - Satisfactory The results showed a variation in standards, but it was noted that all companies showed at least a good capability of manufacturing, demonstrated by their experience of working for well-known brands in the different product categories across the European markets.

Based on the results of final evaluation, the assisted manufacturers are promoted to buyers in selected export markets (Germany, UK, Italy, France and the Netherlands) through: - direct contacts to 128 key Fashion & Apparel Buyers, including 41 clients from Germany, 24 clients

from France, 16 clients from UK, 16 clients from Netherlands and 31 clients from Italy; - personal presentations at the apparel associations in the

selected export markets affiliated with the International Apparel Federation; - a database made available to apparel associations and their Photo credit: Trigon Select member companies Photo caption: Number of Evaluated Moldovan Apparel Companies and prominent buyers by Rating Scores affiliated with the International Apparel Federation.

Activity 2: Consolidate the Din Inima Umbrella Brand and Expand Domestic Market

Assist domestic market growth through common multi-brand stores under the Din Inima umbrella identity. Moldovan fashion brands typically develop and manage their own retail, which can lack critical elements of success, i.e. merchandising, lighting, good design/layout, and service. This results in untapped sales and consumers leaving empty handed. At the same time, international trends show that “consolidation” is the name of the game in retail. Therefore, domestic fashion retail improvement is a priority for MCP assistance with a focus on joint retail under the Din Inima brand.

49

In February, the Din Inima Store in the Zorile shopping mall celebrated the re-launch of the common Din Inima space, following the restructuring process that resulted in doubling the space and bringing 29 brands under Din Inima logo. Having now 1,100 square meters, the store became the second largest of Moldovan brands.

MCP was involved in the shop restructuring process, including dialogue and negotiations between Moldovan firms and Zorile’s owner to ensure fair pay and a professional store layout and design. Also, MCP assisted with the installation of a professional lighting system as well as planning and designing of several individual retail spaces (Ionel, Shram, Lenicris, Passer, Gloria, Mobile, Alina Bradu, and Maxikids). Now the Din Inima retail space provides a fresh and pleasant shopping experience aligned to customers’ expectations.

Photo credit: Tatiana Durlestean Photo caption: Din Inima at Zorile Shopping Mall

Support APIUS in implementing Din Inima campaigns to raise industry profile and awareness. MCP increasing the industry’s profile and boostingconsumers’ pride in wearing Made in Moldova cloths by enhancing the power of the umbrella brand Din Inima- Branduri de Moldova (From the Heart — Brands of Moldova). Becoming a credible, singular identity for the domestic fashion brands, through Din Inima initiative has achieved valuable gains for the industry, sales growth, and retail market expansion.

During the reporting period, a strong public relations, communications, and advertising campaign #discoverlocalbrands was organized jointly with APIUS to inform customers about the creation of an online Din Inima umbrella page that presents information, product images, and sales points for about 60 local brands.The aim of this campaign was to attract the customer’s attention to each brand under the Din Inima umbrella and simultaneously promote the dininima.md info website as a source of information on local brands. During the campaign, both individual and Din Inima common stores such as ZORILE, MODA, and UNIC benefited of the promotion. This initiative capitalized on the existing valuable content such as look books, video material, articles and fashion listicles, produced with MCP support.

The campaign lasted two months and accounted for more than 61,200 unique visitors to dininima.md, more than 400,000 views of the brands’ individual pages, and more than 1,300 shares on social media.

50 Additionally, two sales campaigns were organized by APIUS to promote and stimulate sales at Din Inima stores ZORILE, MODA, and UNIC. One campaign announced the end of winter season sales, while another was developed around Valentine’s Day, #imbraca-te in dragoste (#wearlove), , playing on the umbrella brand’s symbo, the heart.

These two campaigns showed the commitment and readiness of Moldovan fashion brands joined under the Din Inima umbrella to follow a common marketing strategy and implement a marketing action plan previously developed with MCP support. Companies joined these campaign efforts and offered seasonal discounts and produced thematic collections.

In March, MCP supported Figure: Print screens of dininima.md online platform gathering about Moldova Fashion Days 60 Moldovan brands SS17 showcasing the Spring/Summer 2017 collections of 32 local producers. Moldova Fashion Days is the leading professional industry event, showcasing collections of established Moldovan brands and young talents. The core of Moldova Fashion Days is "See Now, Buy Now," meaning consumers can buy items immediately after they are presented on the runway. It is the driving force for innovations in design and young talent, it builds recognition of Moldovan fashion brands and spurs sales on the domestic market. With USAID’s support, Moldova Fashion Days (MFD) became the leading industry event showcasing original designs and brands from Moldova.

The concept for the Spring-Summer 2017 edition was inspired by the Greenery, the 2017 Pantone color of the year. This edition was split in two evening catwalks, presenting 40 collections formed of more than 600 looks of the season. The collections ranging from pret-

51 a-porte women’s wear to children’s wear and accessories, concluded with special appearances from celebrities and respected members of the international community.

The MFD SS17 edition introduced five new designers and their brands - Anette, Gepetto, Malliny, „Anastasia Che și Sophie. The two-day event was attended by 900 people, including designers, producers, fashion critics, journalists, fashion photographers, bloggers, artists, and the trendsetting Moldovan public.

The event had an impressive awareness, reaching more than 130,000 social media users and over 60 media appearances.

Important guests from Ukraine were invited by MCP to attend the event and to set up potential collaborations for the future. Two representatives for Ukrainian Ministry of Culture, Creative Industries Department, met with MCP to share experiences. The general producer of the Ukrainian Fashion Week, one of the most prominent fashion event in Eastern Europe, attended the event and met the

MFD working team to share experiences, Photo credit: Berlizzo Events suggest improvements for the event and Photo caption: Julia Allert brand showcasing at MFD SS17 set up future collaboration with Ukrainian fashion world.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1. Assist APIUS to Develop an Industry White Paper and Advocate for Policy or Regulatory Changes

MCP assisted APIUS to develop an initial Moldova Light Industry Global Positioning Strategy and Roadmap, involving foreign and local expertise. Based on this document, MCP assisted APIUS to develop the Industry White Paper. The objective is to situate Moldova’s fashion manufacturing industry’s place in the global value chain and to identify how can it build value added elements, increasing profitability, sales per employee, and wages. In consultation with APIUS, it was decided to present the Industry White Paper in May to APIUS members.

52

A3. INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) AND CREATIVE SERVICES INDUSTRY (CSI)

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Adapt University-Level ICT Education to Industry Needs

MCP is assisting Technical University from Moldova (TUM) in designing and endowing a cluster of tech labs aimed at developing students’ practical skills, which were found among the most critical in the ICT Skills Gap Assessment. During the reporting period, the concept was developed and list of necessary equipment was drafted. The project plans to use a PPP approach to this matter, attracting private vendors and partners to join the initiative. Negotiations with the potential partners will continue during the next quarter and the list of equipment will be amended based on the vendor curricula and recommendations.

To help TUM study successful experiences in implementing and promoting practical labs, as well as to identify potential international partners and vendors, a study visit to Armenia was organized by the project for the TUM rector and IT department representatives. The visit will take place in the beginning of April 2017.

Activity 2: Improve STEM Education and Promote Tech Careers at the Secondary Education Level

Motivating youth interest toward engineering and tech careers through the FIRST LEGO League (FLL) Moldova competition. FIRST LEGO League is the most significant science and technology competition, organized internationally in 88 countries with support from LEGO and US FIRST Foundation, which aims to use robotics as a tool of promoting IT education and tech careers among youth. FLL is part of MCP’s efforts to support STEM education and build technology skills in Moldova, thus contributing to the growing competitiveness of its ICT sector, a major employer of youth.

After the organization in December of the FIRST LEGO League and coaches training for 70 robotics teachers, in January registration for robotics teams opened to prepare for the FIRST LEGO League 2016-2017 competition. Based on the increasing number of participants, it was decided to organize the 3rd edition of the competition over two days. Together with ATIC, MCP reviewed several potential venues for the FLL competition and chose theoretical lyceum “Gh. Asachi.” The third edition of FIRST LEGO League Moldova, “Animal Allies” season, took place during February 25-26, 2017 and attracted 320 pupils aged 10-16, guided by 74 adult coaches.

Forty-five (45) youth teams from 21 schools across Moldova were challenged to use technology in solving a real-life problem on Animal Allies. Since robotics was extended not only in the schools but also teams were created within libraries, the Novateca project was closely involved in FLL competition organization and supported the participation of all seven libraries involved. Also, 26 professionals from different fields served as judges and 15 volunteers helped with the organization of the event.

The Champions Cup for FIRST LEGO League Moldova 2017 was awarded by the US Ambassador alongside the Swedish Charge d ’Affairs and Minister of Education.

53 RoboRangers, the winning team will represent Moldova at the Open European Championship in Denmark in May 2017.

Photo Credit: ATIC/Yon Savin Photo Captions: Picture up: Team RoboRangers - Champions of the FIRST LEGO League Moldova with US Ambassador James D. Petit, Charge d’Affairs of Swedish Embassy Adam Amberg and Minister of Education of Moldova Corina Fusu, their coach and MCP representative; Picture down left: RoboRangers champions preparing the robot for demonstration; Picture down right: Andrei Copaci, member of the RoboRangers team, following the robot on the competition table, supported by the other teams and fans.

The competition was organized under the patronage of the Ministry of Education, and also attracted private sponsorship. The event was extensively covered by local and national media, generating increased public awareness and interest toward the robotics program.

The FLL competition is critical for the nationwide Educational Robotics program as it is the only event that brings all the robotics clubs together in a shared task and is a culmination of the work of the clubs over the year. The teams prepared for about two months in advance of the competition. Teams traveled to Chisinau from villages across Moldova for the competition and took this opportunity to meet other youth who are passionate about robotics.

54 Table. Third edition of FIRST LEGO League Moldova Award Winners

Name Name of roboclub/person and City/Region lyceum (LT) Project awards Research ROBOKIDS, LT Stefanesti, Floresti Presentation TechnoLight, LT G. Coșbuc Bălți Innovative Solution AlphaBots, ARTICO Chisinau Special awards for Enthusiasm Robodab, LT Stefan cel Mare Chisinau Best fans SkyNet, Caușeni raion library Caușeni Raising star Minioni, Fălești public library Fălești Referee award RoboFantasticii, LT M. Sadoveanu Giurgiulești village, Cahul Core Values awards Teamwork ALL FOR ONE, LT V. Alexandri Bălți Inspiration PoweRobot, LT M. Sadoveanu Călărași Gracious Professionalism The Helpers, ST Inventor Chisinau Robot Design awards Mechanical Design RaptorTeam, LT M. Viteazul and Chisinau Socrate Programming Făgurașii, Centrul Tehnologii Chisinau Informaţionale şi Comunicaţionale în Educaţie (CTICE) Strategy and Innovation RoboJunior, LT I. Creangă Chisinau Personal special awards Best coach Florin Cazac, coach of the 2 award Chisinau winning teams Roborangers and Alfabots Best volunteer Pavel Gheorghița Robot Performance award RoboRangers, ARTICO Chisinau and Champion award

International experience has proven that participation in FIRST LEGO League robotics competition increases student interest in STEM careers and improves their problem-solving skills. Robotics encourages the curiosity of children, showing them an exciting and hands-on application of science and coding, and ignites careers in STEM-related fields.

Piloting the Future Classroom Lab project. MCP initiated a pilot project aimed to increase the quality of STEM education in schools through the establishment of several demonstration classes. These will be endowed with modern education equipment and software such as tables, computers, multimedia boards, and electronic bulks.

After the preliminary agreement with Orange Moldova Foundation to join forces to develop this pilot project of Future Classroom Lab based on the recommendations of the European Schoolnet, a study visit to Estonia was organized in February to familiarize staff with the

55 possibilities of the concept implementation. The participants visited two schools, one pedagogical university and one teacher training center were visited, as well as a tech center focused on workforce development. All the institutions had excellent technical equipment for didactical purposes.

The Estonian experience is worth following in terms of implementing pedagogical innovation, using digital, and creative tools and methodologies in education, encouraging teachers to create and share digital content. However, the implementation model in Estonia differs significantly from the original concept, proposed by European Schoolnet. Thus, together with Orange Moldova it was decided to organize in April 2017 another study visit, this time to Belgium where the first Future Classroom Lab is located. Those interested in creating their own lab can learn and adapt the concept to their countries or institutions’ specifics.

Piloting the Educational Robotics for STEM. MCP worked with the European Software Institute for Central and Eastern Europe (ESI CEE) to prepare the implementation of the Educational Robotics for STEM (ER4STEM) project, aimed at promoting the interest toward STEM subjects with young pupils (age 7-13).

The activity targets the know-how transfer and experience exchange for design, implementation, and evaluation of educational robotics workshops for teachers and schools in Moldova. The initiative aims to encourage the curiosity of the children, showing them an exciting, hands-on application of science – robotics. Guided by ESI CEE, MCP purchased the electronic parts necessary to build a custom Arduino- based robotics kit, which used to run the workshops with children. During the workshops, children assemble the robot through a visual guide, consisting of only photos, no instructions, allowing them to learn through a constructionist pedagogical approach.

This activity is implemented with a prior Photo credit: Ionela Titirez approval from and in close cooperation with Photo captions: Activities during the training of the Ministry of Education. The initial plan teacher on Robotics: Team of teachers proudly was for MCP to include seven schools in the demonstrating the robot they assembledRobotics teachers collaborating on assembling the new robot

56 pilot project. During the open competition, there was a high interest from several educational institutions for the inclusion in the pilot. Together with the Ministry of Education, it was decided to preselect representatives from eleven institutions and they were invited to participate in the teachers training, which took place March 9-10, 2017 at iHub. Twenty-eight people attended the training. Afterward, it was decided to select eight institutions for the pilot project “Educational robotics for creativity and STEM”:

No. Name City Total number of students 1 LT "Gh. Asachi" Chișinău 1,817 2 LT "Ion Creangă" Chișinău 1,388

3 LT, Mircea Eliade” Chișinău 1,065 4 LT “Mihail Kogalniceanu” Chișinău 909 5 LT „Alexandru cel Bun” Sîngera 1,163 6 LT "V. Alecsandri" Bălţi 1,254 7 LT” George Coșbuc” Bălţi 1,106 8 LT, Ion Luca Caragiale” Orhei 1,167

Promoting digital skills via Coder Dojo. The Coder Dojo Chisinau program, a free-of- charge volunteer-based coding club, expanded to the hotel Villa Verde, which offers a conference room, where every Saturday children learn to code. Twenty-five children are invited and activities are led by three volunteer mentors. A total number of 140 youths were involved in Coder Dojo activities, led by 14 volunteers.

Since the shortage of volunteer mentors is the biggest problem impeding the expansion of the program, MCP decided to make some promotional materials of the Coder Dojo initiative, focusing on benefits the mentors can get while volunteering.

A video about the initiative with testimonials from children and mentors was produced and published on CoderDojo Chisinau Facebook. It was seen by 9,268 people and had 50 shares. Several media publications also featured CoderDojo in online media: diez.md and agora.md; and TV channels: TRM, TVR Moldova and Realitatea TV. As a result, six new volunteer mentors were attracted to the Coder Dojo initiative.

Activity 3: Link ICT VET with Labor Market Building practical skills to VET students

Following up on the implementation of CISCO IT Essentials in VET institutions, MCP worked with the DNT Association, one of the lead training providers for teaching staff on technological subjects, to identify potential areas where VET teachers would need additional training. As it is so important to build practical skills for VET students and these institutions are in general strugling with the technical endowment, it was agreed that, during the summer vacations, DNT, with MCP support, will run a new series of trainings for trainers focused on micro-electronics followed by a pilot project providing technical endowment for practical laboratories with Arduino based kits. These kits will be used for didactical purposes to construct and program simple embedded systems and will be available for implementation in the 2017-2018 academic year.

57 Activity 4: Develop an Entrepreneurial Ecosystem for the IT Sector

“404 Not Found” co-working space was launched with the support of MCP. As part of MCP’s efforts to develop the entrepreneurial ecosystem, the Project launched a grant program with the objective to develop the ICT ecosystem in Moldova. The Moldovan company Pycoding submitted a grant application requesting support to develop a co-working space that will specialize in cloud computing and big data analysis. With a number of clients from large media companies, through establishing a co-working space, Pycoding will connect the Moldovan IT community to its clients by providing the opportunity for co-working members to participate in large IT projects. As such, MCP awarded the grant to Pycoding to establish the co-working space called “404 Not Found”.

Photo credit: Proimagine Phot caption: Interior layout of the co-working space and its members in work process

The space provides over 50 workplaces in a class A office infrastructure. The launch of the “404 Not Found” took place on March 9, 2017. By the end of March, more than 60% of the space was already occupied by IT specialists.

Photo credit: Pycoding Photo caption: Launch event of “404 Not Found” co-working space (from left to right: Sergiu Rabii, MCP; Linnéa Hermansen, Sida; Vlad Ursu, Pycoding CEO; Doina Nistor, MCP COP; Dan Thompson, USAID Moldova, Eugene Istrati, Mitoc Group)

58 Activity 5: Create IT infrastructure

Starnet obtained the first loan of EUR3,5 million to initiate the construction of the first IT Park in Moldova called Digital City. MCP supported Starnet in developing the investment plan and design the future IT Park that will host 2,000 IT employees from about 50 Moldovan IT companies. The first stage of the project will finalize the construction of two buildings that will provide 6,000 square meters of office space. With of MCP assistance, Starnet submitted a loan application to a private Moldovan bank, Moldova Agroindbank, that was successfully approved, and the construction began. Additionally, MCP is facilitating the provision of a DCA guarantee for financing the next phases of the IT Park development from USAID to Starnet. A Letter of Intent regarding the USAID DCA Credit Authority Guarantee proposal with the Moldova Agroindbank was signed by the Chairman of the Management Board of the bank. With this letter of intent, the bank agrees to explore the possibility of Architectural design of the Digital City included in the Phase 1 of implementing of a DCA development. guarantee for financing the Digital City IT Park with USAID.

Activity 6: Enable training and certification for professionals and executives

ATIC’s grant application for implementing the training and certification program for IT professionals was successfully submitted and approved by MCP. MCP in partnership with the USAID Regional Economic Growth Program (REG) (http://www.regproject.net), designed a program to support Moldovan IT companies and IT specialists to benefit from training and certification services at a subsidized price. The Project will cover 33% of the total cost, and USAID REG will cover 33% of the total cost for the training and certification. The implementation of the program will be carried out with the support of ATIC. This will also contribute to increasing ATIC capacity in supporting the IT industry with training and certification services. In this context, a workshop was organized by the Project and REG to explain the condition of the support program to the Moldovan IT Companies. ATIC submitted the grant application to MCP and was successfully approved by the project selection committee. The training and certification program will be launched in April 2017.

Additionally, besides the training and certification program for IT executives, MCP is helping Moldovan IT companies obtain international certifications. MCP supported AlfaSoft SRL in obtaining the ISO 9001 certification by training the staff of the company. Also, in partnership with the USAID Regional Growth Project, MCP is helping AlfaSoft SRL obtain the CMMI Level 3 certification. As part of the long process, to obtain a CMMI Level 3 certification, the company should employ a certified Project Manager. MCP co-financed the training costs necessary for the company’s project manager’s certification.

Activity 7: Create an enabling ecosystem for creative industry development

Following the international growth of the creative economy and quick developments of the sector due to technologies and youth involvement, the creative services industry is gaining

59 more and more attention worldwide. Links between cultures and creative services are welcomed and common in the creative industry across the world and while companies providing creative services in Moldova already have some export experience, there is an acute need for skills to provide services on the global market. Moreover, new talent needs to be attracted to the industry to meet export requirements. Given that local creative service providers are spread around the subsectors, there is also a need for a platform for interaction for the creative players.

Creative Hub Model research and concept. Creative Text Box. Creative Hub hubs are workplaces designed to engage independent Concept Presentation professionals such as freelancers (artists, architects, painters, graphic designers, animators, game “I am happy to see that the developers), creative entrepreneurs, communities, NGOs, Creative Services Industry is and private creative companies. They are uniquely taken into consideration by the diverse in structure, sector, and services. During the donors and receives attention reporting period, MCP international consultant in Creative from the creative community".

Industries, Luka Piskoric, researched the demand for a Andrei Chistol Creative Hub in Moldova, identified potential locations, State Secretary and recommended the best model of operation for the Republic of Moldova space.

In total, Mr. Piskoric conducted 18 in-depth interviews with creative companies, cultural organizations, opinion leaders, representatives from educational institutions, local Hubs, NGOs working in the creative sectors, and visited seven potential locations for the Creative Hub (Zorile fabrics, Tipografia 5, Academy of Music, Theatre and Arts, The Union of Cinematographs, Mihai Eminescu Theatre, Muzeul Zemsvei, a private house in the city center), two of which have been shortlisted. For the Creative Hub Chisinau, a few models have been proposed and two shortlisted: the first model focuses on learning and ideation near the Academy of Theatre, Music and Fine Arts and the second on creative entrepreneurship near the Eminescu Theatre.

In addition, in January, the Concept of Creative Hub was presented to the Minister of Culture, Monica Babuc, at the ministry. The objective of the presentation was to discuss models of operation for the Hub, infrastructure, and location Photo credit: Ministry of Culture of Moldova possibilities with the Minister of Photo caption: Creative Hub concept presentation at the Culture along with representatives Moldovan Ministry of Culture, on January 19, 2017 (from left to of creative companies in Moldova. right: Sergiu Botezatu – USAID/Moldova Contracting Officer Thirteen people participated in the Representative, Monica Babuc – Minister of Culture, Andrei Chistol – State Secretary, Sergiu Rabii – ICT Team Leader, event, including the State MCP) Secretary Andrei Chistol, two creative companies’ CEOs, ODIMM Director Iulia Ibanji, the Dean of the Fine Arts Faculty at the Academy of Arts, Svetlana Platinda, as well as USAID and MCP representatives.

As a result, MCP secured support from the Minister of Culture for further collaboration for the development of the Creative Hub. As a follow-up to this strategic meeting, a work committee

60 was established for the hub’s development and further meetings are to be held at the Ministry of Culture to establish the juridical form and exact location of the hub.

Moreover, during the reporting period, MCP advanced in negotiations with the Academy of Music, Theatre and Arts to develop the first creative hub within the space of the Faculty of Fine Arts. MCP has presented the concept of the Creative Hub to the Senate of the Academy and has thus obtained a positive response on locating the first creative hub at the Faculty of Fine Arts.

First Environment Concept Art Workshop. During the reporting quarter, MCP supported the organization of the first art workshop discussing environment design within game development. This workshop, which was integrated into the Global Game Jam worldwide conference, happened simultaneously in countries all over the world, including Moldova. The aim of the workshop was to introduce environmental concept art to students, youth, and freelancers working in or interested in creative industries. This event had the specific objective of sharing and teaching tools and techniques of character and environment design.

The workshop was implemented by Game Factory representatives in Moldova. As a result of this workshop, 40 participants, representing students from creative companies in Moldova, graduates, and young specialists with creative, IT, and engineering backgrounds gained knowledge and upgraded their skills in environment concept art. The workshop was led by Stefan Semionov, a specialist in game design, and was held at the Korean Information Center.

Photo credit: Game Factory Photo caption: Participants Environment Concept Art Workshop organized on January 19, 2017

61 Objective 2: Expanded Market Linkages

Activity 1: Accelerate Adoption and Use of Technology by SMEs and Other Non-IT Sectors

Implementing information technology solutions. MCP, in partnership with the Moldovan office of the European Bank for Reconstruction and Development, designed a program to supporting Moldovan SMEs in adopting information technology solutions within their companies. Per program conditions, any domestic SME will benefit from support of up to 75% oftotal costs for implementing information technology solutions within each company. During the reporting period, MCP developed and coordinated with the EBRD office an announcement and application form for the applicants of the program. Per the agreement with EBRD, a joint evaluation committee will be formed from representatives of MCP and EBRD to evaluate the applications.

Online payment solution implemented by an inbound tourism company. To support the businesses inceasing local and international sales, MCP supports the implementation of IT solutions within non-IT sectors. BT Travel Ltd (BESTMoldova) is a Moldovan company that provides inbound tourism services. To increase its sales locally and internationally, the company requested support from MCP in implementing an online payment system to allow its customers to pay electronically using credit and debit cards. MCP decided to use the Government Electronic Payment Service (MPay, www.mpay.gov.md) as a payment system because it provides the lowest fees on the domestic market for internet service that is also provided by several local commercial banks.

The integration services on the MPay system with the BESTTravel website were provided by a local company, Qsystems, that specializes in financial technology solutions. As a result, any person from any country can buy online tours, excursions, and accomodation services provided by Moldovan service providers.

Figure. Screenshot from the payment interface for paying on the BT Travel Ltd website

62 Activity 2: Implement marketing coaching programs

Marketing Coaching Program for Entry the German Market. As part of the Marketing Coaching Program for Entry int the German Market, MCP supported QSystems participation at the FinTech Forum, in November 2016, where the company successfully established connections with German companies and as a result is planning to register a startup in Germany, and seek financing from German investors. Also, based on the successful participation at the event in November 2016 and interest from potential clients and partners, QSystems was invited to participate at FinTech Forum On Tour | FinTech meets Telecom that took place on March 23, 2017. The event is focusing on fintech non-banking solutions for the telecommunications industry in Germany.

QSystems was also certified with the support of MCP for the German Market by BW BusinessBridge.

Picture: Target markets for the Moldovan IT sector

Activity 3: Enhance global positioning of Moldova as IT Destination

Develop Global Positioning Strategy of Moldova as IT destination. To support the Government and private sector in defining the interventions for the ICT sector development, MCP became engaged in development of the Global Positioning Strategy of Moldovan ICT Sector. The strategy essentially highlights required capacity development and investment promotion activities across 4 pillars – infrastructure, talent pool, business environment and country marketing and branding – to better orchestrate IT industry development initiatives in the country. While doing so, the roadmap highlights the following key aspects of Moldova’s IT Industry and the path it should adopt to achieve non-linear growth.

Based on a comprehensive assessment of the current state of the industry, global trends, risks and evolving requirements, the roadmap clearly identifies geographies, industries and services/solutions that Moldova’s IT Industry should target to achieve rapid export oriented growth.

Based on the Strategy developed by MCP, the Prime Minister will also lead a high level strategic session on future goals and development objectives for Moldova’s ICT sector. Discussions will include how the Government and development partners can work together

63 through synchronized and conjoined efforts to achieve these goals, including policy environment, business infrastructure, talent/skills, and trade promotion.

Picture: Components of the Strategy interventions

Activity 4: Profile the creative services industry and define export marketing opportunities

Creative Services companies are usually small, about 5 to 20 employees, mostly young, and self-taught. Export opportunities are very important for these businesses as they can channel economic growth and professional development. Nevertheless, to be able to export, companies require careful preparation. Consequently, during the reporting period, MCP undertook the following first steps to profile the industry and define export marketing opportunities: Developed Creative Services Industry Roadmap; provided assistance to local creative companies in attending international specialized events and participation at international competitions; supported local creative companies to participate at specialized wine labelling and packaging workshops.

Development of the Creative Services Industry Roadmap. With the support of J.E. Austin Associates, MCP proceeded to map the Creative Services Industry (CSI), identifying all its components in order to elaborate the sector roadmap. During the reporting period, MCP international consultant Luka Piskoric finalized the development of the Roadmap for the Moldovan CS Industry. As a follow-up to 18 in-depth interviews with creative companies, cultural organizations, opinion leaders, representatives from educational institutions, local hubs, and NGOs active in the creative sectors, Mr. Piskoric elaborated the CSI Roadmap which includes strengths, weaknesses, opportunities, and threats (SWOT) analysis of the local creative industry. Mr. Piskoric proposed a set of strategic activities (such as creation of an online platform named “Creative Moldova” for hosting all events, publications, promoting talents within the industry; development of the creative hub; organizing/hosting an international conference “What next?” introducing Moldova on the sector regional map) and the timeline for implementation for the industry. The Roadmap will be used by the team in defining its intervention and support activities as well as in defining the strategic activities to build the ecosystem for the industry.

Assistance provided to local creative companies in attending international specialized events. During the reporting period, MCP supported the participation of two CSI companies at two International festivals: MOUVO Motion Design Festival in Prague, Czech Republic in

64 order to upgrade skills where Umbrella Production Studio participated, and Berlinale Film Festival in Berlin, Germany in order to establish contacts and networks where Youbesc Creative Institute participated.

MCP supported Umbrella Production Studio Creative Director, Lidia Scarlat, in participating at MOUVO Motion Design Festival. The goal of the festival is to draw attention to one of the most progressively developing areas in graphic design in live form. The festival featured a wide range of speakers from different creative and technological fields: imagery, branding, television, commercial, visual effects, apps, and games. As a result of attending this festival, Umbrella Production Studio has been put in touch with five contacts active in the motion design sub-sector, such as: UX Motion at Google, USA; Man vs. Machine, UK; DBLG, UK and others.

Photo credit: Lidia Scarlat, Umbrella Production Studio Photo caption: participation of Creative Umbrella Production studio representative, Lidia Scarlat, at the Mouvo Motion Design Festival during February 17-18, 2017, having also the possibility to discuss with John Schlemmer - Motion Lead at Google

Through this workshop attendance, Mrs. Scarlat enriched Umbrella Production Studio with: new and upcoming relevant software understanding knowledge of similar companies’ workflows, setting up new creative goals, knowledge of new industry tools, and extended understanding of Cinema 4D possibilities.

As a follow-up, Umbrella Production Studio conducted, with MCP support, an open workshop via which the Creative Director, Lidia Scarlat, shared the Mouvo experience and engaged in a discussion about possibilities of Motion Design in Moldova. The event gathered over 30 participants representing students from the Academy of Music, Theatre and Fine Arts, industry colleagues, and digital arts enthusiasts. The workshop raised awareness about Cinema 4D for Education, a program which offers free Cinema 4D software licenses for schools, universities (Cinema 4D Academy Program; CAP), and for individual students.

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Picture credit: Umbrella Production Studio Photo caption: Participants at the Motion Design sharing experience workshop organized by Umbrella on March 31, 2017 at the Umbrella Production Studio Premises

During the reporting period, MCP also supported Youbesc Creative Institute co-founder, Sergiu Cumatrenco, to attend the Berlinale Film Festival in Berlin. The Berlinale 2017 Festival focuses on the film and video industry and targets professionals from the industry such as writers, directors, producers, cinematographers, actors, editors, production designers, composers, sound designers, sales agents and distributors, and film critics. Every year more than 20,000 industry delegates and representatives of the press from over 125 countries are accredited for the International Film Festival Berlin and the European Film Market.

Photo credit: Sergiu Cumatrenco, Youbesc Creative Institute Photo caption: Participation of Youbesc Creative Institute representative, Sergiu Cumatrenco, at the Berlinale International Film Festival, Berlin, 2017 and the associated activities within it, February 9-19, 2017

66 As a result of Mr. Cumatrenco’s attendance to the Festival, Youbesc Creative Institute received accreditation to organize an International Film Festival in Moldova. The participation at Berlinale Film Festival allowed Mr. Cumatrenco to learn about best practices for organizing festivals, media education programs organization, development of international co-production practices and the increase of the export capacity of video and filming products and services. As a follow-up, Youbesc has conducted a knowledge sharing session with the National Center of Cinematography of Moldova on organizing film festivals.

Assistance provided to 3 local creative companies in attending specialized wine labelling and packaging workshops. MCP supported three creative companies’ representatives, Piko Creative, Indigo Ogilvy Publicis, to visit during March 19-21, 2017 the ProWein International Trade Faire in Dusseldorf, Germany. As a result, theparticipants upgraded their knowledge in labeling and packaging and understood the modern trends in wine branding and promotion, as well as attended the specialized workshops such as ‘Same but Different - Creative marketing methods’ and ‘Packaging and Design panel discussions’.

Photo credit: Vadim Sokolovschi Photo Caption: Follow-up workshop participants listening to lessons learned from Prowein 2017 in wine design, conducted by Vadim Sokolovschi, at the premises of Publicis Moldova, March 2017

The follow-up meeting with lessons learned shared to a group of 30 marketing representatives from different tiers of wineries, ONVV & ANRTIM focused on the trends in winemaking and correlation between bottle design and price; new possibilities of glass brandingpackaging trends and materials used, stand design and importance of light in presentation.

Moreover, one of the companies, Piko Creative, was contacted by the Italian winery Casa Catelli, for their creative work. The project has thus reached multiple beneficiaries through this visit: creative agencies staff increased and updated their knowledge and further will be reaching winery marketing representatives are to be informed on new trends and strategies in wine labeling and package design. Moreover, this study visit allowed Creative Agencies to network and provided the opportunity to get in contact with international clients given that the selected agencies already have a small portfolio and expertise in wine packaging and labeling.

Support provided to local creative company in participation at international competitions. During the reporting period, MCP supported Piko Creative company to submit its materials online for the participation at the European Design Award 2017

67 competition. Submission of works for international contests represent one of the mechanisms creative companies use for exposure of their works on an international scale, as well as competing with the best in their field and gaining attention from international clients on their works. With MCP support, Piko Creative submitted five graphic design works to the European Design Awards 2017. As a result of the participation in the competition, Piko Creative submitted works are published on the website of the competition and are exposed to international media reach.

Photo credit: Piko Photo Caption: One of the 5 works submitted by Piko Creative to the European Design Competition, 2017

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1: Improved public policies for technology ecosystem

Moldova ICT Summit. Moldova ICT Summit 2017, the leading industry event, took place on March 30, 2017 at the premises of Tekwill ICT Excellence Center. The event was organized by the Moldovan Association of ICT Companies under the patronage of the Ministry of Information Technology and Communications with the support of the U.S. Agency for International Development (USAID) and the Government of Sweden through Swedish International Development Cooperation Agency (Sida) and Austian Development Agency (ADA), in partnership with Microsoft, IBM, MIEPO, Oracle, Ellation, Rockstart, Tenerlab.

At the eighth edition, the Moldova ICT Summit gathered all industry stakeholders to discuss trends and challenges facing the ICT industry globally and in the country, set the premises for sustainable entrepreneurship environment to foster innovation and attract investments. It focused on bringing the most pertinent topics into discussion and showcased the top experiences from national and international experts.

By bringing the cutting-edge global trends and inviting visionary leaders, the event had the aim of breaking barriers, driving innovation, and fostering higher aspirations at all levels. Going through an intense change from its first edition, Moldova ICT Summit 2017 emphasized the development of the Republic of Moldova’s ICT industry to enable the country’s alignment to the global trends.

This time, 570 participants, representing the ICT industry, government, multinationals and academia attended the event, having 45 speakers, of which 23 came from abroad, who shared their experience and valuable insights within the 3 event tracks: ICT4Development, ICT4Education, and ICT4Startups.

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Photo credit: Yon Savin Photo captions: Moldova ICT Summit st the eight edition, organized on March 30, 2017

69 Startup Visa Policy development. MCP is working closely with the Ministry of ICT to improve sector-enabling policies. In February, the Parliament approved in the first reading the modifications to ease the permits of stay for foreign IT technology and investors. Branded as “Startup Visa”, this initiative is a joint effort of Ministry of ICT, with the support of USAID MCP, initiated in Spring 2016.

Startup Visa promotes “brain-gain” and foreign direct investment to Moldova’s ICT sector, connecting the country to the international tech knowledge and investor circuit. This initiative is the direct outcome of MCP’s efforts, whereby the project brought successful similar examples from a number of countries, including Ireland, Lithuania, Chile, Poland, and facilitated the dialogue with Moldovan private ICT industry, provided strategic vision through drafting of Moldova’s ICT Entrepreneurship Ecosystem Blueprint, as well as policy drafting expertise.

According to these policy modifications approved by Parliament, ICT CEOs enjoy 6 months of stay without being required to obtain a temporary permit of stay in Moldova over one year, tech investors – 3 months, while tech professionals - 6 months.

Support the implementation of IT Parks Law. In February, the Government approved the supporting legislation to implement the Law on IT Parks. MCP support in this field was to demonstrate to the Ministry of Finance and International Monetary Fund (IMF) representatives that the IT Park law will not negatively impact the state budget, and consequently, the Government approved the law.

The legislation amendments include the area of taxation, social insurance, and medical insurance. These amendments will make possible the implementation of the Law on IT Parks that envisions the application of a single 7 percent tax from the total turnover of the IT Parks residents. This will contribute to the increasing attractiveness of the IT industry for domestic and international investors, as well as increasing of the growth rate and potential of the industry. The single 7 percent tax includes the personal and corporate income taxes, social insurance contributions, medical insurance contributions, local taxes, real estate taxes and road usage tax. The calculation and reporting of the single tax will be carried out by the IT Parks residents on a monthly basis that will be monitored by the State Tax Service.

Activity 2: Capacity building for ATIC

Starting in the 2017, ATIC’s board of directors decided to focus on the advocacy activities. This is related to the ongoing changes of the legislation, central public administration reform and the changes in the global IT trends that require new policies to streamline the IT industry development. In this regard, starting January 2017, ATIC hired a full-time lawyer who will be responsible for the advocacy and regulatory activities of the association.

To support ATIC to increase its advocacy capacity, MCP engaged two of the strongest business associations in Moldova, American Chamber of Commerce (AmCham) and European Business Association (EBA), to provide coaching and advocacy support to ATIC as well to the other associations that represent the MCP supported industries: ANTRIM, APIUS and ONVV.

During the reporting period, AmCham and EBA supported and coached ATIC in advocating for modifications to the legislation that have an impact on the members of the association. The first advocacy subject is related to the exclusion of the cap for the personal employee contribution to the social insurance fund and the second is related to the modification of the intellectual property rights protection - particularly changing the Law Nr. 139/2010 about property rights. Additionally, as a result of provided coaching and support, ATIC participated at several public-private dialogue platforms such as Prime Minister’s Economic Council and

70 various working groups established within the Ministry of Economy, Finance, Labor and Social Protection. MCP is continuing its activities to increase ATIC’s advocacy capacity.

Activity 3: Facilitate business support organizations that represent the creative industry

To gain a better understanding of the creative services industry potential, MCP developed a mapping document in the form of a comprehensive survey to identify companies that are championing the industry and display potential for creative services exports. The document was designed to identify common issues across industry representatives that would require interventions. Based on this mapping, MCP will design and fine-tune the activities for assisting this industry.

Following the conducted survey among creative companies, during the reporting period, MCP organized a workshop for creative companies to present the preliminary Moldovan Creative Industry survey findings and initiated the creation of the Creative Industries Business Association.

Workshop for creative companies to Preliminary survey results of 26 present the preliminary Moldovan interviewed companies: Creative Industry survey findings. During the reporting period, data was gathered from . 80 % surveyed companies are already the conducted survey and a presentation exporting; held by the J.E. Austin consultant Karén . Most of companies felt that the number Isahakyan together with Luka Piskoric. of employed staff was not enough . 50% of companies consider their employees’ skills were not sufficient The workshop gathered representatives from . Only 20% of respondents received nine companies from the following sub- donor support in the past sectors of the creative industry: digital and . 25 companies would consider being a creative communication, advertising, part of an industry association animation, filming, PR, and graphic and web- . The companies’ clientele base design. As a follow-up of this workshop, registered a 45%annual growth during MCP has initiated the process to found the last five years CSI Association.

Creative Industries Business Association initiation - Eight founders have laid the ground for the consolidation of the Creative Industries Business Association. With the support of MCP, seven companies and one NGO, representing the following sub-sectors: music, communication and advertising, design, animation, video and sound production, met to Creative Industries Business lay the ground for the first association uniting Association founding companies/NGO the Moldovan Creative Industries. As such, on  Publicis March 13, 2017, the founders agreed to  Youbesc Creative Institute consolidate their efforts and to associate in  Kurilov Group order to consolidate the industry. Following the  Pot Music companies’ mutual agreement of the, the  Imago Association Statute was elaborated with MCP  Simplas support, all legal required documents were  Umbrella Studio gathered and will be submitted for registation  Locals Project with the Ministry of Justice of Moldova.

The Association will further undertake its first steps in defining the strategic workplan for the creative industry and will thus require the support of MCP in identifying best practices in leading and managing the Association.

71 A4. PRECISION ENGINEERING

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation)

Activity 1: Increase productivity and efficiency for manufacturing companies

Collaboration within Makers’ Space for 3D Printers building and development. MCP, together with the established Makers Movement, launched a joint activity to involve young engineers and Technical University students in a pilot project of building 3D printing machines and other computer numerical control (CNC) machines for educational purposes and for the Makers Community needs.

Atelier 99 launched several programs where the students of TUM and representatives of the Makers community will learn to fabricate 3D printers and other CNC machines. The 3D printers and CNC engravers will be fabricated manually within a program implemented by Atelier 99 with the participation of TUM students and Makers community and will later be used for their activities to fabricate and prototype products. The program is structured per workshop including theoretical and practical skills and knowledge

During the reporting period, Atelier 99, with MCP support, conducted nine workshops for the selected 10 youth participants, under the earlier launched program for TUM students and representatives of the Makers community to fabricate 3D printers and other CNC machines including:  Theoretical inputs on 3D printers structure, parts and components  Theoretical inputs on electric motors (steppers)  Theoretical inputs on 3D printer’s cinematics  Theoretical inputs on plastic materials suitable for 3D printing  Fundamentals on Computer Aided Machining (CAM) software  Preparatory works on the raw materials (cutting the frame parts, 3D printing cinematics components)  Electronic plates soldering and their assembly  Programing the Arduino plates and Frame assembly.

Photo credit: Victor Bujoreanu Photo caption: Workshop “Theoretical inputs on plastic materials suitable for 3D printing”, February 16, 2017

72 The program aims to develop comprehensive theoretical knowledge and practical skills in machine building. Moreover, the program equips young professionals with hands-on experience and extensive knowledge in engineering, aligning them with current global trends in the field. At the same time, the program consolidates the makers’ community, raising awareness on the entire Makers movement initiative. This helps MakerSpace to increase its ability to act independently and to take the lead in equipping the MakerSpace and in providing manufacturing solutions to the private sector.

Activity 2: Development of Makers Space to foster product design, prototyping and startup for creative industries, engineering, and technology

MCP is supporting the launch of a Makers Space at the Technical University of Moldova that is expected to open its doors to students in autumn 2017. TUM assigned about 650 square meters for the Makers Space next to Tekwill technology center of excellence, which is going to be adapted and equipped through a grant. Creative and innovative young people with backgrounds in engineering, electronics, design, and architecture will share the Makers Space, creating an atmosphere for boosting creativity, developing a new way of working and learning, fostering innovation, and accessing new technologies for startup entrepreneurs.

Strengthen the capacity of the makers’ community. Strengthening the capacity of the makers’ community will be done in conjunction with Atelier 99, which is active in bringing together makers with different backgrounds, knowledge, and skill sets to inspire potential makers and provide guidance on improving skills and competencies.

MCP provided support for opening a Makers Space at the Technical University of Moldova that is expected to be launched in autumn 2017. Before launching the Makers Space workspace, it is pivotal that the capacity of the makers’ community is strengthened.

Photo credit: Atelier 99, Victor Bujoreanu Photo caption: Participants of the Repair Café learning to fix kettle, Makers meetup #9 – Atelier99, 2017

During the reporting period, under the Makers’ Fundamentals Program, MCP supported Atelier 99 in the implementation of “Repair Café” series of workshops, organizing two workshops that provide basic skills on electronic device functioning from the technical point

73 of view by disassembling and assembling them back together. MCP supports this activity for contributing to the development of the young peoples’ ability to integrate technology into creative industries for enhancing participants’ skills. Both workshops gathered 37 people including students from the Technical University of Moldova, graduates, and young specialists with an engineering background.

Also under the Makers’ Fundamentals Program, MCP supported Atelier 99 in the organization of Makers Moldova Meetup event, at its nine editions. The aim of this event was to bring the makers community together and to discuss the latest innovations and technologies and new maker’s projects. At the event, 24 students, graduates and young specialists with engineering background participated. There were 3 presentations from makers from community - Build a smart lock in 48 hours, AVAI - the car for people with disability, and Red Bull - Time Warp.

Objective 2: Expanded Market Linkages

Activity 1: Improve marketing skills and export capacity for more developed and higher value markets

Support the leading Moldovan pump manufacturer to establish new market linkages. Historically, the companies from the precision engineering sector have established markets in former Soviet Union countries. With the implementation of the Deep and Comprehensive Free Trade Agreement with the European Union, there is an opportunity to enter more developed and higher value markets in the EU. In this respect, MCP supports companies from the precision engineering industry to participate at trade shows and specialized precision engineering industry events to allow Moldovan companies to connect with new clients and markets.

Due to the fact that participation at international exhibitions is an efficient way of increasing market linkages and generate exports, in the reported period, MCP selected the Cris Hermetic Pumps Company to support its participation at the Hannover Messe 2017 exhibition in Germany in April 2017. The firm specializes in development and manufacturing of canned centrifugal electrical pumps destined for the chemical, petrochemical, gas, nuclear, pharmaceutical, and transportation industries.

Currently, “Cris Hermetic Pumps” (Cris) is marketing more than 80% of its products to the Russian and CIS markets because of the legacy of market linkages and value chains established during the former Soviet Union. With the signing of the Deep and Comprehensive Free Trade Agreement between Moldova and European Union, to encourage Cris Hermetic Pumps in its endeavors in accessing and shifting towards the EU

Photo credit: Cris Hermetic Pumps Photo caption: Samples preparation and presentation video concept for the upcoming exhibitions.

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market, MCP decided to support the company to participate at the Hannover Messe 2017 exhibition in Germany (in April 2017), the leading technology trade fair under Pump Plaza display space for pump producers around the world.

During the reported period, MCP started preparations for ensuring the company’s proper and efficient participation, assisting with promotional materials development, sample preparation, and organizing meetings at the exhibition with potential final buyers, pump dealers, and integrators.

Objective 3: Improved Sector-Enabling Environment and Increased Capacity

Activity 1: Map high precision engineering cluster

Roadmap for PE Industry development. During the reported period, MCP international consultant in Precision Engineering (PE) Thomas Ruddy developed the Roadmap for the Development of the Moldovan Precision Engineering Industry and the concept of the organizational and functional model for the cooperation between companies within the industry (cluster, business service association, value chain defining). The Roadmap will be used by MCP to define its intervention and support activities and by the private companies from the industry to define their strategic activities to build the ecosystem and define the necessary interventions and policies for supporting the PE industry.

The consultant worked in partnership with the Cluster Development Specialist, Karen Isahakyan, in defining the industry cluster, identification of industry constraints, and elaboration of the activities for the Roadmap.

Photo credit: Mihai Litvinciuc Photo caption: Field visit on January 17,2017 to Cris Hermetic Pumps company with MCP international consultant, Tom Ruddy, PE Industry Expert (from left to right: Pavel Becciv, CEO at Cris Hermetic Pumps company, Mihai Litvinciuc, PE industry Specialist, Constantin Cecan and ion Grosu, Cris Hermetic Pumps company engineers)

Moldova PE Industry Development Roadmap defines the focus points for workforce development (including skills upgrade and entrepreneurship encouragement), external markets and niches to be targeted and reached, activities to be undertaken by the

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Government, the private sector, and industry stakeholders. It conceptualizes the cooperation model for companies within this industry (cluster, BS association, value chain defining), envisaging the immediate and long term perspective for the creation of the required infrastructure for the industry.

In addition, during the reporting quarter, MCP international consultants conducted 22 visits of the most relevant companies and industry stakeholders including: business associations, technical university, and donors. Following the survey conducted by MCP in December 2016, the consultants had in-depth interviews with company managers and owners to validate the findings and define an industry profile, the current situation, sectors’ expectations, and preconditions for the PE Industry Roadmap Development.

The visits were followed by an extensive analysis of the cluster’s opportunities and constraints and the extent to which the value chain is covered by the firms in Moldova and in the region, the existing dynamics, relationships, and teamwork as well as an assessment of the quality of linkages amongst firms and between the private and public sectors.

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A5. OTHER TECHNICAL ACTIVITIES TO SUPPORT IMPLEMENTATION

Access to finance through special channels/USAID Development Credit Authority (DCA)

MCP assists Development Credit Authority (DCA) loan guarantee programs to improve access to finance in Moldova. There are two DCA guarantees that MCP supports: - USAID DCA guarantee to promote industry growth in Moldova which enabled almost $3.9 million in lending. It operated with three financial institutions (Comertbank, Rural Finance Corporation and Prime Capital) from September 2011 until March 2016. - A joint $3.5 million USAID-Sida guarantee to support lending to the energy sector and is operated with Prime Capital since 2013 until 2027. By encouraging local channels of financing, USAID and Sida empower individuals to improve their lives and Moldovan entrepreneurs - to grow their businesses and increase sector competitiveness - a pillar for economic growth.

In the reporting period, MCP continued its ongoing support to financial institutions with DCA agreements for implementation, monitoring, reporting, and field visits to selected DCA borrowers.

Following the DCA Monitoring Plan for loan portfolio guarantees’ requirements of annual monitoring visits, MCP conducted three monitoring visits to financial institutions with under guarantee in 2016.

During the monitoring visits, the loan files were verified in accordance with the loan guarantee agreements’ provisions to match the Credit Monitoring System (CMS), and reflect the environmental compliance and anti-terrorism requirements. For each analyzed loan, a loan file review checklist was filled providing detailed information on: - Loan eligibility verification (if the loan is a new and a term loan, the reason for being placed under guarantee); - Transaction report verification (if the name of the borrower, the state, the sector, purpose, collateral value, interest rate, etc. included in CMS Transaction Report match the real data); - Status of the loan (if the loan is in good standing or not, does the financial institution intend to submit any claims, level of lender’s engagement with the client, and borrower progress).

The monitoring memoranda with detailed information related to outcomes, outputs and impact of DCA were prepared by MCP and submitted to USAID and Sida, concluding that:

 DCA determined a greater development impact. Local financial institutions with DCA agreements consider the DCA guarantee as an extra instrument to cover the risks related to the transaction or to the borrower. Thus, without the DCA guarantee, the borrowers would not have received loans or would have been provided with smaller amounts. DCA enabled the borrowers to have sufficient lending resources to grow and develop their businesses.  Behavior change in partner financial institutions due to the DCA. The implemented DCA made changes in partners’ behavior: the financial institutions increased lending in the targeted sectors or groups; provided improved collateral requirements; most loans were long term loans; and extended loans to youth and women. entrepreneurs, as well as to first time borrowers.

77  To date, USAID received zero claim requests for defaulted borrowers. Institutions will continue to monitor these loans until maturity.

With respect to the ongoing USAID-Sida DCA in Energy Efficiency, the DCA utilization rate registered a decline and Prime Capital volume of new loans granted for purchase and renewal of real estate decreased by 55%. As a result, MCP representatives met with Prime Capital management and USAID Moldova to understand the challenges Prime Capital is facing. Prime Capital explained that the mortgage lending market situation in 2017 does not show any signs of improvement. Since outwards migration is high, Prime Capital proposed to expand the guarantee to cover other categories of qualifying borrowers, such as youth and women entrepreneurs, to speed up DCA utilization.

Photo credit: Prime Capital Photo caption: USAID-Sida joint meeting on DCA in Energy Efficiency with Prime Capital organized on March 20, 2017 (from left to right: Virginia Bilici, Program Officer, Embassy of Swedish; Annelie Gabrielson, Energy Advisor, Sida; Ebba Aurell, Partnership and Innovations Advisor, Sida; Elena Sahlin, Program Manager, Loans and Guarantees, Sida; Angela Maican, Financial Director, Prime Capital; Elena Mocanu, Main Financial Analyst, Prime Capital; Ruxanda Cheibas, DCA Coordinator, MCP; Sergiu Botezatu, Senior Project Management Specialist, USAID.

A Sida mission then met with USAID, MCP and Prime Capital to discuss the DCA implementation and conducted site visits to three qualified borrowers with loans placed under guarantee. One of the businesses visited, Mediabox-Grup, which renovated its building with energy efficienct air conditioning and ventilation systems, mentioned that the company has doubled its energy savings. Similar results were reported at another site visit and the mission observed the construction of an energy efficient residential building.

By the end of March 2017, Prime Capital placed 43 loans valued at $474,100 under guarantee, of which $473,966 were disbursed.

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Photo credit: Ruxanda Cheibas, Prime Capital Photo caption: Field visits to three Qualified Borrowers placed under USAID-Sida DCA with Prime Capital, March 21, 2017: First row- Mediabox-Grup company that renovated with energy efficiency impact its building, by procuring and installing a conditioning and ventilation system; second row –, the first DCA in Energy Efficiency client, Silvia Gherasim finalized construction of the building with Energy Efficiency impact; third row - the house in Ciorescu village constructed by Lilia Ignat with energy efficiency improvements under DCA

B. DELIVERABLES

During the reporting quarter, the project submitted to USAID the following deliverables per contract requirements: 1. Monthly Report, February 2017 2. Monthly Report, January 2017 3. Quarterly Report for for October-December 2016

79 SECTION II

PROJECT-LEVEL OUTCOMES AND RESULTS

Sector Engagement, Enhancement, and Development (SEED) Fund

During the quarter, MCP worked on implementing the US$5 million SEED fund through several channels:  The Project continued to make grants disbursements, with a SEED Fund Performance through total of US$252,664 March. 2017 disbursed, including payments for 17 active grants covering the Total tourism, fashion, wine, Awarded* $2,713,844 ICT, and creative industries, as well as two $2,286,156 additional crosscutting Total grants. Disbursed  To date, the SEED fund disbursed a total of Remaining US$1,186,889 or 52% of $1,186,… Budget total grant awards and 23.7% of the total SEED Fund budget. *at the March ER rate of 1 USD = 20 MDL  The Project awarded Grant Allocation by Industry seven new grants: in- kind grants to Crama through March 2017 (by Value) Mircesti, Ludmila Buzila, Divib Media and Dax Wine Tandem; fixed 2% 17% Tourism amountawards to the American Chamber of ICT Commerce and the 20% European Business Fashion Association; and a 42% 10% simplified grant to Pycoding.  With USAID approval, the Project executed funded grant modifications with APIUS, ZIPHouse, ANTRIM, I.I. Railean Liubov (Vila Roz), and I.I. Ecaterina Popescu (Arta Rustica).

Local Capacity Building Program

In Year 1, MCP adapted the Organizational Capacity Assessment (OCA) Tool to assess the capacities and identify high priority capacity gaps of counterpart business associations. These results were incorporated in the design and implementation of technical assistance programs and SEED Fund grants. In Quarter 2 of Year 2, MCP initiated the Year 2 OCA assessment process, with completed OCAs expected for early Q3. Additionally, as part of

80 capacity building support, MCP focused on financial management, including building association capacity to develop procurement and financial reporting practices.

Inclusive Development

All MCP activities use a non-discriminatory approach and aim to increase inclusiveness. In this respect, the Project designed activities to empower women and youth in enhancing better carriers and better economic opportunities. Also, the Project enabled the companies from the regions with special status, such as Transnistria and Gagauzia, to benefit from economic opportunities.

Assistance to Women-Owned Companies. Since one of MCP objective is to increase companies’ competitiveness from the assisted industries, the Project place a special focus on supporting women-owned companies. During the reporting period, 81 women-owned companies (39,71% from total) participated in project activities. A woman-owned company is one in which women hold more than 50 percent of the equity. For example, in the tourism industry, a high-level inauguration ceremony took place for the Vila Roz touristic pension, a woman-owned company. Vila Roz is one of rural pensions participating in MCP’s tourism product development and facility upgrade, along with three other women-owned businesses.

Table. Women-owned companies participating in project activities in the reporting period

Light Description Wine Tourism ICT CSI TOTAL industry Total companies participating in project 91 54 17 30 12 204 activities Women-owned companies participating 51 19 5 3 3 81 in project activities Share of women-owned 56% 35.19% 29,41% 10% 25% 39.71% companies from the total

The cumulative data up to date for assisted companies involved in project activities show a 30.9% rate of implication of women-owned companies. At the same time, in the reporting period, women-owned companies’ participation in project activities was of 39.71%, higher that cumulative data. That demonstrates that through MCP implemented activities target to increase the participation of women-owned companies in project activities

Assistance to companies from Transnistria and Gagauzia. In the wine industry, the following companies from Gagauzia have been involved in MCP activities:  GCL Prim, a small wine producer from Vulcanesti, under ASW mentorship program, received ongoing support in development of its marketing strategy and brand identity.  Vinuri de Comrat, PQUP program participant and one of the largest wine producers and exporters from the Gagauzia region, participated in international exhibitions (ProWein 2017 and China Food and Drinks Trade Fair), establishing new market linkages and expanding export operations. In addition, MCP supported Vinuri de Comrat to apply to four wine contests (Mundus Vini Spring Tasting, Decanter World Wine Awards, and Concours Mondial du Bruxelles). As a result, two of four submitted samples to Mundus Vini received silver medals, an impressive result considering it was company’s first participation in international wine contests.

81  Tomai Vinex, a transitional winery from Gagauzia, was audited by ONVV and MCP experts under the PQUP program. The audit results enabled the winery to identify areas for improvement, as well as to formulate its SEED grant application. In addition, the winery was supported to participate in the China Food and Drinks Trade Fair, enabling it to explore the opportunities of establishing export operations to China.  Tarcomvin is a winery based in the Tartaul village, Leova district, and owned by a Gagauzian family based in Comrat. As a participant of the PQUP program, the winery received 22 French oak barrels enabling the winery to produce wines for the premium price segment whereas the winemaking process is supervised and directed by a dedicated MCP expert in oenology.The winery is being supported to develop its marketing capacity, with a dedicated consultant providing coaching in strategy development, roadmap to the market, promotion and communications plans as well as the development of corporate branding and label design.

In the light industry, MCP assistance to grow Moldova’s competitiveness is inclusive of several apparel and footwear firms from Transnistria which are the region’s largest employers, collectively employing nearly 3,000 people. The following companies were assisted to find new clients and expand sales:  Odema participated in the Premier Manufacturing Sourcing exhibition, getting four new contacts from European clients.  Intercenterlux participated in CPM Dusseldorf-Moscow Ready to wear exhibition getting 35 new contracts, and contracts valued at $4,000,000.  Floare (footwear) showcased their products at the STYL KABO. The fair is one of the most prestigious professional shows for Czech and Eastern European fashion manufacturers. The fair was a great opportunity for Moldovan manufacturers to break into new markets, gain feedback from potential clients, and gain new experience.

Highlighted MCP activities targeting women and youth. During the quarter, 49% out of 1,769 participants in various MCP-supported capacity building programs were women (869) and 71% - youth (1,255). The highest share of women participants in MCP activities was registered in light industry (86.71%) and ICT (29,11%).

Table. Women and Youth participating in project activities in the reporting period, by industries

Description Light industry Wine Tourism ICT CSI PE TOTAL

Total participants 519 0 77 986 146 41 1769 per industry 450 0 55 287 61 16 869 Women 452 0 18 603 141 41 1255 Youth

In the light industry, more than 85 percent of employees from apparel companies that received support are women and 65 percent of them were 35 years old or younger. Out of the 519 ZIPhouse activities’ participants, 450 were women (86,7%) and 452 are youth (87,1%). The activities aim to stimulate creativity and entrepreneurship in the fashion industry to develop the necessary technical skills and abilities to become industry professionals, succeed in this field, and create a favorable environment for collaboration between students, teachers, professionals, and employers.

82 Of the ICT activities implemented during the quarter (trainings for teachers on Educational Robotics and FIRST LEGO League coaching, Startup Weekend Moldova and Chisinau Startup Week, etc.), 254 or 27% of the attendees were women and 641 or 67% were young.

Women and youth were in the creative services industry were represented in: (a) Conferences and Fairs participation (Motion Design Festival, Prague, Czech Republic– Lidia Scarlat Umbrella Production Studio; and ProWein International Festival, Berlin, Germany – Ekaterina Skrupski, Indigo Ogilvy); and (b) Events participation: “Environment Concept Art'' workshop–40 youth trained in Character Design, 14 of which were young women; Makers Moldova events and workshops – over 160 participating youth, of which 26 percent were women.

Monitoring & Evaluation

General M&E activities. Data for the quarterly report were analyzed and included in the M&E database to generate the report for the second quarter. The technical team worked with new assisted companies in signing Memoranda of Understanding and collecting baseline data. In addition, M&E templates were updated following new requirements (adding Sweden as donor).

A. Progress towards quantitative indicators targets

The following table presents the project’s progress to-date against the targets set.

Table. Performance Monitoring: Targets versus Results

Performance Monitoring: Target vs. Actual

Indicator YEAR 1 YEAR 2

Cumulative Cumulative Y1 Target Cumulative Y1 Target Y1 Result Target Result versus Target versus Established Achieved Established Achieved Result Result (Y1+Y2) (Y1+Y2) (Y1+Y2Q1-Q2) Project Purpose: Grow and Expand Targeted Competitive Industries

1

Objective 1: Increased Productivity and Quality (Better Workforce and Adopted Innovation) IR 2.2: Improved Private Sector Competitiveness in Selected Industries

83 Sub-IR 2.2.1: Increased Productivity

4

Actual Target Indicator Achieved Actual Achieved Q2 - Y1 Established Y1 Q1 - Y1 Objective 2. Expanded Market Linkages IR 2.2: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.2.2: Expended Market Linkages

9

IR 2.1: Improved Private Sector Competitiveness in Selected Industries Sub-IR 2.1.2: Expended Market Linkages

10

84 Objective 3. . Improved Sector –Enabling Environment and Increased Local Capacity IR 2.1: Improved Economic Foundation for Growth Sub-IR 2.1.1: Improved Business and Trade Enabling Environment

13

B. Qualitative results

Wine and Tourism Industries’ Results

 Quality of Moldovan wines is noted internationally: 12 gold and 14 silver medals were received at two renowned wine competitions Mundus Vini Spring Tasting Berliner Wein Trophy. Small winemakers and transition wineries were acknowledged at international wine contests, which proves the quality improvement trajectory of Moldova’s wine sector and the effectiveness of MCP assistance. MCP supported the registration of samples increasing the likelihood of success for Moldovan wines. • With MCP support, through participation at Prowein 36 Moldovan wine producers expanded on EU market, establishing over 500 market linkages. MCP supported the participation of Wine of Moldova and 36 wineries at the 2017 of the most important specialized exhibition on international scale – Prowein. The extensive pre-PR campaign contributed to increased interest from visitors and wine professionals, the national booth being visited by over 2,600 persons generating market linkages, whereas the specialized master class dedicated to Wine of Moldova Assemblages was fully booked, being attended by over 40 journalists, opinion forms and trade professionals

85 • 24 wineries were supported by MCP to explore expanding exports opportunities on Chinese market. MCP facilitated participation of Wine of Moldova and 24 Moldovan wine producers at one of the most important trade fairs on Chinese market “Chengdu Food and Drinks Fair” contributing to better visibility of our stand and activities by deploying a pre-PR campaign. • 4 new small winemakers were assisted by MCP to develop its visual identities and label designs. Under first intake of ASW Mentorship program, Est Euro Vitis, GCL Prim, Mihai Sava and Fragolino were prepared to launch their first wines during the upcoming Wine Vernissage spring edition. • ASW Mentorship program is extending registering 14 potential participants in the second in-take of the program. Tthe project has identified, visited, and audited 14 prospect new small winemakers, 6 of which have prepared their applications and respective development project under SEED Grants APS-2016-001 • Six transitional wineries audited under PQUP program. Project in cooperation with ONVV launched the second in-take of PQUP program participants, as such the team of MCP and ONVV’s experts visited “Invinprom”, “Tomai Vinex”, “Leovin”, “Migdal-P”, “Bransesti” and “Evervin”, acknowledging the wineries on drawbacks in winemaking processes and equipment that hinders them to produce wines that comply with Wine of Moldova and PGI quality standards. • With MCP support, 16 wine producers submited 45 samples to the most reputed international wine constests. This is within MCP annual program for stimulating wineries to apply with more samples at international wine contests. MCP collected applications, registeedr sample and covered the registration fees for Decanter World Wine Awards, Concours Mondial du Bruxelles, International Wine Challenge and International Wine and Spirtis Competition. • Chateau Vartely, the participant in MCP program for “export champions” doubled the quantity of shipped wines to Poland. • With MCP and ONVV efforts, the decree on Regulation of the methodology of issuing the non-exclusive license on the usage of the “Wine of Moldova” was issued. It was published in the Official Gazette in January 2017. By this means, ONVV set concrete and transparent procedures for marking the conform wines with “Wine of Moldova” quality label, thus ensuring the transfer of image from generic awareness campaigns. Consequently, this regulation constitutes a significant leap in deploying of quality control functions of ONVV, that is set to intervene in forming the representative export portfolio that will help position Moldova as a quality wine producing country. • One rural pension with upgraded tourism facilities has been officially opened for visitors in Orheiul Vechi region. With MCP support Vila Roz rural pension of Orheiul Vechi has completed the terrace and kitchen renovations and officially presented its renewed facilities to local press and officials, including USAID and Minister of Culture. Given the increased service capacity at the terrace and improved amenities, Villa Roz has a doubled demand for its services, compared with the previous year for the springtime period, including Easter holidays. • A large space in the Mayor’s office building of the capital Chisinau has been allocated for the first Tourism Informational Center of Moldova. Based on the Memorandum of Collaboration signed in March 2017 by Chisinau General Mayor and ANTRIM, a large office at the ground floor on the central avenue will be used for public services within the Tourism Informational Center that will be managed based on a public-private partnership by ANTRIM and Mayor’s office. • 30% increased demand for tours to Moldova following the participation at TS Poznan Tourism Exhibition. With MCP assistance 3 tour- operators (TatraBis, Solei Turism, Amadeus) and 1 winery (Maurt) promoted Moldovan tourism products at Tour Salon Poznan, in Poland, February 17-19. Two of the exhibitors, Tatrabis and Solei have already sold each about 35 groups of Polish tourists for the summer season.

86  About 60 new business contacts gained in result of participation at ITB Berlin Tourism Exhibition. With MCP support, 4 tour-operators (Amadeus, Tatrabis, Ways Travel, Solei), and 1 winery (Asconi) promoted their offers and Moldova under the tourism country brand “Tree of Life” at ITB Berlin, one of the world’s leading travel trade show, on March 8-12, 2017.  Four position papers including about 15 regulatory initiatives for reform submitted by five tourism associations to Parliament of Moldova. With MCP support, the ‘Tourism Development Platform of Moldova’, represented by five leading inbound tourism associations have efficiently engaged into a lobby&advocacy activity related to the draft law #302, participating to public debates and working group reunions within the Parliamentary Committee and submitting comprehensive position papers on most important regulatory issues of the tourism industry.

Light Industry Results

 Four apparel companies (six local brands) improved SS 2017 collections through the “flying designers” program. The local apparel brands learned about Collection Range Planning, which included the Collection Theme, Colors, Embroidery Motifs and collection range.  MCP support to Sekana company (Katea Gri brand) enhanced its designer’s capabilities and exposed the brand to Indie Faces Pop-Up event. The young designer Katea Gri, developed an exceptional SS 2017 collection, and attended the February 2017 Indie Faces Pop-Up event in London. Western market exposure has been key to introducing Katea to this extremely competitive fashion market in one of the most important destinations for the industry.  Four Moldovan footwear companies enhanced their design skills and learned how to correctly create a shoes collection. With assistance from international designer Luisa Fazio, the companies - Cristina, Olsa Shoes, Hincu, and Oldcom, identified Fall-Winter 2017/2018 seasonal directions, selected colors and decided about collection structure, analyzing each style in terms of commercial success, function, last, heel/sole, end use, and market appeal.  Seven Moldovan apparel companies improved their knowledge on sourcing. The assisted companies - Ana Popov, Move, Mobile, Velitextil Plus, Saltoianca, Proinilia, and BabyMoon learned about future collection color trends, and quality of fabrics and accessories during visits to raw materials and accessories international exhibitions Premier Vision and Texworld. They also selected fabrics for their future collections.  Five apparel companies visited raw materials stocks in Italy to select high quality fabrics, resulting in fabric procurements in totaling 23,000 Euro. Designers and acquisition specialists from Ridiager, Olga Ceban, Sram, BabyMoon, and Le Parole, for the first time visited raw materials stocks, gaining new experience, and ordered high quality fabrics at good prices.  MCP support and raw materials acquisition coaching to local companies proved to be sustainable. The apparel companies - Mobile, Ponti, Velitextil Plus and Portavita, which were assisted by the project in Year 1 to visit raw materials stocks in Italy, joined their forces and visited, at their own expense, the raw materials stocks in Carpi, Italy and bought raw materials valued at around $80,000.  Apparel companies recorded impressive results for own collections and high value added services due to participation in international exhibitions. Nineteen apparel companies participated in the sourcing exhibition Premier Manufacturing in Paris, France, ready-to-wear Style Cabo exhibition in Brno, Czech Republic, ready-to-wear Textilegprom exhibition in Moscow, and ready-to-wear CPM (Dusseldorf-Moscow) exhibition.

. More than 95

87 percent of all signed orders are for products designed and produced under the Moldovan apparel companies own brands with the highest value added.  All eleven apparel companies that attended Fashion Central Asia international exhibition with MCP support returned with signed preorders and orders. This achievement demonstrates the increased quality of Moldovan brands and their readiness to export as a result of their increased capacity. In addition, more companies were willing to participate in the exhibition, demonstrating the industry’s shift to exports.  An apparel manufacturer was certified in international social compliance and production standards by CERTIND. The certification brought immediate results as Artizana increased its image in the eyes of Barbour, its main client from UK, which increased monthly orders by 2,000 pieces. This will generate approximately 100 new jobs, mostly for women.  Twenty apparel brands (19 companies) were evaluated and included in Trigon Select Performance Evaluations and Promotion Program, to attract new clients and grow their exports. The companies were promoted to 128 key fashion and apparel buyers from selected EU markets, (including 41 clients from Germany, 24 from France, 16 from UK, 16 from Netherlands, and 31 from Italy).  MCP contributed to the development of professional skills of key personnel in fashion companies. Fortyone Moldovan fashion representatives, including professionals, young designers, and startups attended two-week training at Polimoda in the following areas: fashion design, fashion brand management, and fashion business administration. The courses were organized under the branded Fashion Leadership Program launched by ZIPhouse aiming to develop better professional skills and bring added value to the production process.  The Fashion Acceleration Program (FAP) was launched. Organized by ZIPhouse in partnership with Fashion Technology Accelerator from Milan and APIUS, was launched with 12 participating companies and will last last 6 months. Participants will be mentored for local and international market acceleration. More than 15 local and five international experts have been connected to the program.  Boosting entrepreneurship skills for fashion startups. An intensive 9-session introductory training program was organized during the first weeks of the FAP for 20 participants. Additional kick off workshops and one-on-one sessions have been held.  ZIPhouse Fashion Academy brings international expertise to local professionals. Led by international experts, of the ZIPhouse Fashion Academy provided technical training for 185 industry professionals.  MCP supported three accessories companies enhance exports and market linkages. As result of participation in B2B trade fairs in Europe - Bijorhca, Paris and Bijutex, Madrid in January 2017, the companies (Ju-Bijoux, Marinelle, and Rodica Braga) receieved 35 small test orders valued at $25,000 and 60 contacts of buyers in France, Spain, Great Britain, Belgium, Japan, Brazil, and Mauritius.  Local designer Lilia Suru showcased fashion brand MOVE’s collection at IMONI Showroom Paris during Paris Fashion Week. The showroom was visited by more than 70 buyers representing various department stores and established positive discussions on new business relationships.  As a result of participation in four regional market exhibitions, Moldovan footwear and leather companies generated 143 new contacts and $83,000 in contracting preorders. Exhibitions included Leather & Shoes exhibition in Kiev, ShoeStar in Almaty, ExpoZahid in Lviv, and STYL Kabo in Brno.As a result of three companies’ participation at the Romanian Fashion Philosophy international fashion show in Romania, three eveningwear brands increased their international brand recognition. Di Vero started negotiations to open a representative office in Bucharest and signed a contract for 20 dresses from the new collection to start being promoted in the Romanian market.  The Din Inima Store in the Zorile shopping mall expanded, becoming the second largest of Moldovan brands. In February, Zorile commercial center and APIUS celebrated the re-

88 launch of the common Din Inima space, following the restructuring process that resulted in doubling the space and bringing 29 brands under Din Inima.  #discoverlocalbrands campaign promoted 60 local brands. A strong PR, communications, and advertising campaign was organized jointly with APIUS to inform customers about the creation of a Din Inima website and promote 60 local brands. The campaign accounted for more than 50,000 unique visitors to dininima.md, more than 260,000 views of the brands’ individual pages, and more than 1,000 shares on social media.  Moldova Fashion Days (MFD) SS17 strengthened the position of leading professional fashion industry event. The key bi-annual industry event, showcased the Spring/Summer 2017 collections of 32 local producers. The event reached more than 70,000 social media users, 60 media appearances and 150,000 views while being broadcasted live online on social media.  Four start-ups placed in UNIC Center created 14 new jobs and generated $38,700 in sales. MCP integrated four light industry start-ups under the Din Inima umbrella brand and helped them create their first sales point in the largest Din Inima store in UNIC.

ICT Industry and Creative Services Industry Results

 The FIRST LEGO League Robotics competition had a record number of participants. A total of 320 students aged 10-16 guided by 74 coaches participated in the event. Also, 26 professionals from different fields were involved in judging and 15 volunteers helped organizethe event.  New pilot on educational robotics for creativity and STEM was initiated. Eight schools were selected to be included in the pilot, after 28 pre-selected teachers attended the training conducted by representatives of ESI CEE (Bulgaria).  Moldova ICT Summit gathered 570 professionals and youth interested in ICT. They represent the ICT industry, government, multinationals, and academia. A total of 45 speakers shared their experience and valuable insights in the three event tracks - ICT4Development, ICT4Education, and ICT4Startups.  CoderDojo Chisinau program was extended. A new location - hotel Villa Verde, was added to the CoderDojo program. In addition, six new volunteers were attracted in this activity. As a result, 140 children, ages 8 to 16, joined the free-of-charge, volunteer- based coding clubs and started learning IT. Fourteen volunteers, young IT professionals, and students are mentoring these classes.  Three creative agencies upgraded their knowledge in international labeling and packaging standards. MCP supported the representatives from local creative agencies to attend the ProWein 2017 to gain international experience in the field.  First international contract signed by a Moldovan CSI company as result of MCP support to the company to participate at international events. As result of attending ProWein 2017, Piko was contracted for their creative works by an Italian winery.  Two creative agencies represented Moldova at international events within the creative industry. With MCP support, two creative companies attended international industry events and have further shared the knowledge with local creative staff.  More than 70 participants in two workshops and seminars improved technical skills and abilities more than 10 hours of technical trainingin motion design and environment concept art.

Precision Engineering Industry

 Three community building and technology education events were organized by Atelier 99. MCP supported the organization of three events in an effort to enhance community building and basic understanding and skills of how electronic devices are constructed, gathering 61 youth from different backgrounds.

89

SECTION III

HIGHLIGHTS OF ACTIVITIES PLANNED FOR FY17 Q3 (APRIL– JUNE 2017)

Wine and Tourism Industry

 Launch Wine of Moldova Academy trainings and seminars (local STTA- TBD);  Develop and implement tailored assistance packages for second intake of the PQUP based winemaking and viticulture audit and ASW Mentorship program (local STTA – TBD);  Deploy ‘New Generation’ wineries assistance program via “Flying winemakers” (international STTA – TBD);  Finalize Wine of Moldova international PR and communications master plan (international STTA - Robert Joseph);  Develop concept note for improving online and social media presence of Wine of Moldova (international STTA – TBD);  Develop concept note for updating Wine of Moldova brand guidelines (local STTA – TBD, associated budget 5,000 USD);  Assist ONVV to develop its new website (local STTA, associated budget 2,000 USD);  Support ONVV to organize trade promotion and consumer communication campaigns in Poland (international STTA – Witold Franczak, local STTA – Irina Bistritchi, associated budget 20,000 USD);  Deploy PR and promotional campaign for domestic market for ASW wines (associated budget 10,000 USD);  Deploy New Generation Wine penetration campaign for Polish market (international STTA - Witold Franczak);  Initiate second intake of Export Champions support program (associated budget 35,000 USD);  Organize local communications campaigns “Wine Friendly”, Wine Vernissage PGI (local STTA – TBD; associated budget 8,000 USD);  Initiate the development of National Strategy for Wine Industry 2017-2040 (international STTA-TBD, local STTA-TBD, associated budget 2,000 USD);  Support ONVV in organization of sector meetings and consultations (associated budget 1,000 USD);  Support rural pensions to develop tourism products, websites and visual identities (local STTAs- Maxim Calujac, Ludmila Ionel, associated budget- 35,000 USD);  Develop culinary routes in wine tourism hubs (associated budget- 10,000 USD);  Develop the layout for Event Organization handbook (associated budget- 1,000 USD);  Support wine tour operators’ participation at IWINETC Wine Tourism Conference;  Support the institutionalization and launch of MICE Moldova Convention Bureau (Local STTA- Oleg Utica, associated budget- 7,000 USD);  Implement the Roadmap for Guides workforce development program (Local STTA- TBD, associated budget- 10,000 USD);  Finalize the new tourism country video (associated budget- 10,000 USD);  Finalize the assessments on marketing and promotion strategy, and tourism legal and regulatory (international STTAs - Augusto Huescar, John Downes);  Develop legal pocket guide for tourism service (local STTA- TBD).

91 Light Industry

 Support Iulia Allert Company to participate in the Czech Design Week (associated budget - 2,000 Euro);  Implement coaching design program for light industry companies (international consultants Kelly Denooyer and Luisa Fazio);  Continue to implement the productivity enhancement program (local STTA - Demian Usanli);  Continue implementation of the Integrated Quality Management System in Steaua Reds Company (Local STTA- Ala Oberst);  Assist APIUS to organize promotional activities, including the Din Inima outdoor and indoor PR and advertising campaigns; creation of seasonal look books and video look books;  Support ZIPhouse in organizing professional workshops and community building events;  Assist ZIPhouse in implementing Fashion Acceleration Program;  Define Oldcom shoes company retail strategy (international STTA - Dmitry Ditchkovsky);  Support ZIPhouse to organize a Fashion Photography Challenge Contest.

Information and Communications Industry and Creative Services Industry

 Work with TUM on the practical labs project;  Work on the development of the National Program for STEM Education improvement (internationalSTTA – Mart Laanpere and John O’Sullivan and local STTA – TBD);  Coordinate the participation of FIRST LEGO League Moldova champion at the Open European Championship in Denmark, (associated budget - 3,000 USD);  Coordinate the implementation of the Arduino based Robotics workshop (subcontractor – ESI CEE, Bulgaria, associated budget – 9,500 USD).  Work on the design of the Future Classroom Lab pilot (international STTA – Mart Laanpere, associated budget – 3,000 USD);  Develop the Concept for Regional Innovation Centers (international STTA – Irakli Kashibadze);  Initiate the analysis and develop proposals to amend the legislation for protecting intellectual property rights (Local STTA – TBD);  Support the participation of DAAC System Company to the ITO & BPO Germany Forum (associated budget -USD 600);  Support workshops in gaming and animation sub-sectors (associated budget – 500 USD);  Support international conference attendance for local agencies (associated budget – 1,500 USD);  Promote Chisinau Mini Maker Fair (subcontractor – AdCenter- 700 USD);  Organize export coaching sessions (associated budget – 3,000 USD).

Presicion Enginering

 Support Maker Space to advance network installation;  Develop Industry White Paper (international STTA- TBD);  Finalize Maker Space legal status and submit to all the parties for agreement.

Other Technical Activities

 Provide ongoing support to Prime Capital for the energy efficiency DCA agreement.

92

SECTION IV

PROJECT COMMUNICATION

The reported quarter was marked by the several highly attractive PR events in the ICT, Wine and Fashion Industries, namely FIRST LEGO League 2017, Wine exhibitions in Berlin and Chendu, and Moldova Fashion Days 2017.

Media coverage. As part of 15 public campaigns promoting MCP’s activities, 18 PR materials (press releases, media invitations and articles) were developed and sent out to press. As result, 66 national media channels produced 247 press materials about Project activities implemented during the reporting period. The following Project-implemented activities were prominent in mass media:

 In the ICT sector: The most extensive media coverage of MCP activities was for FIRST LEGO League. This event generated 8 publications, including news reports and talk shows on local TV channels, articles, and video reports on important online portals. US Ambassador James Pettit and Swedish Charge d’affair Adam Amberg were interviewed at the event by national televisions while Ionela Tititrez, MCP IT Figure. Visit of Karen Hilliard and Signe Burgstaller to Sekana and Katea Gri brands reflected by seven Development Manager, participated in a minutes’ reportage on EA.MD morning TV show on Moldova 1.

Figure. Project ICT related activities highlighted in press (TVR, Realitatea)

 In light industry, Moldova Fashion Days event was highly attractive for press, 47 media materials being generated, including large photo reportages, video reportages, TV shows and news. Media and journalists focused more on the brands, designers and collections promotions, thus lots of attention was paid to the backstage interviews with models, designers and tendencies for the coming season. Also, Karen Hilliard, USAID Representative and Signe Burgstaller, Swedish Ambassador paid a visit to Sekana and Katea Gri fashion brands. They were accompanied by press, who called them “ambassadors of the Moldovan brands”.This visit was reflected in 11 press materials. Out of them three were video interviews and reportages that raised awareness of the quality of the local brands and the fact that diplomats wear and buy Moldovan made cloths.

93  In tourism sector, Vila Roz rural pension inauguration was widely covered by press. E&E Acting USAID Administrator Margot Ellis, USAID Representative to Moldova, Karen Hilliard and Minister of Culture Monica Babuc participated in a master class for cooking home-made cookies with rose petal jam, making the event highly attractive for media. Agora also developed a video interview with Karen Hilliard on the tourism regulatory reform.

Social Media. MCP continued to promote its activities via the USAID Moldova and Embassy of Sweden Facebook pages. Through sharing of upcoming events, providing media links or posting statuses, photos and slideshows from events, MCP is one of the most active USAID funded projects on social media.

MCP developed several video slideshows to reflect the information in an easier to consume format for social media target audiences. Video slideshows consist of pictures and video inserts on a certain topics and short phrases or key words to send the message. During the quarter, five video slideshows were developed, announcing following events:  biggest robotics competition FIRST LEGO League,  Fashion Accelerator Program,  Vila Roz rural pension opening, which has hit the record for USAID Moldova page hits, reaching 9,244 people,  Wine of Moldova participating at the world’s most important wine exhibition in Berlin and Chendu,  MCP support to young designers to participate at the world’s famous fashion shows.

Branding and Marking. To ensure donor visibility, during the quarter all branding and marking signage was changed at the MCP office, ZipHouse, and for rural pension grant beneficiaries. Marking plates, rollups and other communications materials were developed.

Figure Mark on the wall of the rural pension, MCP grant beneficiary

Figure. Vila Roz media clipping UNIMEDIA, AGORA

94