Based in the autonomous Gagauzia region of Moldova and founded by Vitalii Carastoianov, Carvidon is a grain growing and trading company whose importance has grown exponentially in the context of recent geopolitical events in the region.
With support from the EBRD, the Swedish International Development Cooperation Agency (Sida) and Korea through the Small Business Impact Fund (SBIF), we supported Carvidon in developing new engineering solutions for its modern grain silos in Moldova, preventing waste and improving the quality of its produce.
A sector beset by challenges
Although one fifth of the economically active population in Moldova are employed by the agriculture sector, it is weak and highly risk prone.
In addition to severe weather fluctuations, Russia’s war on Ukraine has caused massive disruption, as Ukraine is a key supplier of fertilisers, seeds and produce globally.
Vitalii’s business is spread across a number of activities, from the import, sale and maintenance of agricultural equipment and spare parts to farmers, to more recently the growing and storage of grains including corn, sunflower and rape.
Due to the seasonality and challenges of the sector, a few years ago, Vitalii was offered grains in lieu of payment for equipment, which required him to invest in an effective storage solution and create a platform from which to trade.
This was the germ of this arm of the Carvidon business, and required the development of a storage premises and grain trading capacity – an activity that led to buying and renting agricultural land for growing its own grains.
The company currently employs 20 people and its grains are sold primarily on the local market. However, it also exports to Bulgaria, Romania and Türkiye based on demand.
A new advisory approach
In 2022, the EBRD’s Advice for Small Businesses team in Moldova launched the first Group Advisory Project (GAP) in the country. This new approach provided consultancy and guidance to multiple companies seeking the same type of support, reducing the costs compared to an individual project while still providing all the benefits of tailored advice.
Carvidon was part of that first GAP group. With funding from Sweden, it benefited from advice on implementing the ISO 22000 food safety standard along with five other companies. The project focused on the need to ensure that grain storage and quality corresponds to the strict standards of the company’s clients.
“When you grow and trade grains, the quality of the yield and the ability to preserve it are crucial for making a profit. We used to rent a silo for storage but it was old and poorly constructed, which caused excessive loss and damage,” says Vitalii.
Impact: technology makes the difference
With support from Korea through the SBIF, the EBRD helped to implement another project with the company, developing engineering solutions for a modern silo in which to store their grains.
In parallel, the company also constructed an automated elevator complex, reducing storage losses for wheat and sunflower seeds.
“Before building the new silos, we were losing a lot of grains to rodents, birds and worsening quality due to the humidity resulting from oscillating temperature fluctuations in the country. The storage premises that we rented were old and did not provide the controlled and ventilated environment required for quality grain,” says Vitalii.
The company is now registering 50% less grain and seed losses – making a huge difference to the business – and these new quality assurances have allowed it to charge a more competitive price in the marketplace while increasing the quality of available grains.
Food security: an assessment
The issue of food security is very much of the moment and Vitalii is doing everything he can to support the needs of the market, despite an uncertain outlook.
He says, “I hope the situation is only temporary, as it makes planning extremely challenging. Although the prices for fuel, seeds, equipment and plant protection have gone up, the acquisition prices for grains are small, as Ukraine is exporting its grains and seeds unprocessed, at a low price. I anticipate production may call for additional investments in 2023, given the ongoing drought and the expected need for additional fertilisation and irrigation during the remainder of the year to secure a good yield.”
The company’s biggest obstacle right now is remaining committed to its development plans – which it deems essential – despite external circumstances being more unpredictable than they have ever been before.
For a business to remain relevant and profitable there is no option to stand still, and with that in mind, Vitalii plans to increase the area of land on which the company is working, as well as the storage capacity of its silos, despite the fluidity of the current situation.
This will help the business grow, as well as meet the demands of the local market, which continue to increase given Russia’s protracted war on Ukraine and the destabilising effect this has had on the sector.