Copenhagen on 26. August 2022
DAF Danish – Albanian Association
Minutes of meeting on exports.
18th. August 2022 1 7.00 at Gentofte Main Library
Attendees from the DAF board:
Ixhet Lutfiu, Hans-Georg Nielsen, Linda Kabashi, Claudia West Lonning, Safet Seljmanovski
John Aagaard, Dhimiter Zaka, Karsten Ankj-r Jensen, Ibrahim Xhemajli, Zim Berat Zimberi, Michael Nørregård, Fatmir Kabashi, Xhevdet Veseli, Morten Johansen, Kemal Libohova, Gazmend Salihi, Almira Pajenga, Tue Magnussen, Helge Andersen, Brunilda Andersen, Bernarda Begu Radonchic, Erik Gravgaard, Christian Sevdari, Ilir Hasani og Zarko Masanovic – Head of Trade Department of The Danish Trade Council of Zagreb, Tove Lonning, Rizvan Bajrami
Guests: Elita Petoshati – Ambassador of Albania to Denmark,
Valdrin Grainca – Consul of Kosovo in Denmark,
Erion Isai – Mayor of Kolonje – Albania,
Referent: Linda Kabashi
1. Hans-Georg Nielsen welcomed Elida Petoshati – Albania’s Ambassador to Denmark, Valdrin Grainca – Kosova’s Consul in Denmark and Erion Isai – Mayor of Kolonjë – Albania. He reviewed the program and informed that Bersant Hobdari had unfortunately been prevented from taking part and that the panel discussion would therefore be without his participation.
2. Zarko Masanovic presented himself as Head of Trade at the Danish Embassy in Zagreb, where he has been responsible for Croatia, Slovenia, Albania and Kosova since 2016. Among other things, he advises Danish companies on trade with Albania. The inquiries come from various sectors, including the agricultural industry, day care centers, the textile industry. He looks at where Danish companies would have an interest in Albania and vice versa.
Zarko has gained a lot of experience from Danish companies that have tried to do business with Albania, both in relation to analysis of the market and understanding of the business culture. In short, Danish companies are expected to take control of the collaboration and ‘follow up’, otherwise nothing will happen. It is currently difficult to find Danish companies interested in investing in Albania, but hopefully this will change as Albania gets on the Danish ‘business map’. Now, the link consists primarily of Denmark importing from Albania.
Zarko was asked if he can name a completed deal. He says that a playground with Danish-produced playground equipment has just been built at the airport in Tirana and that Danish Christmas trees are being exported to Albania. Things are moving in the right direction, but the relationship is still in an ‘early stage’. The embassy helps to advise and introduce the parties, but they must follow up themselves.
Zarko was asked what the embassy’s relationship is with the Albanian Investment Development Agency (AIDA). He replied that they currently use AIDA a lot to search for potential business partners, but when Albania gets on the Danish ‘business map’ this will no longer be necessary.
Zarko was asked if there are inquiries from Albanian companies who want to import from Denmark? He said that there had been interest in importing Danish cows to Albania, but it had not materialized because of changed priorities. Zarko also says that it is difficult for the embassy to work with imports from Denmark, as they are not in Denmark but in Zagreb, which makes it difficult to search for potential partners.
Zarko was asked what the priorities should be for Danish companies wishing to export to Albania? He replied that the sectors where Denmark is already strong are the areas, they can also be successful in in Albania. Especially technology, energy, food.
Zarko was asked if the embassy also advises Danish citizens who want to buy private properties in Albania, and he replied that so far there had been no inquiries about this.
3. Dhimiter Zaka introduced himself and told about his experience with imports from Albania, which so far, unfortunately, has failed. He divided his experience into three categories: importing beer, producing ‘spicy plants’ and importing everyday products.
He told how he imported the Albanian beer Korca Beer, where sales went well in Copenhagen, but he received no support from the manufacturer in relation to posters and other promotional material. On the other hand, he now imports beer from Italy, where he experiences much greater support both in the form of advertising material, follow-up calls, information about new products, etc.
Dhimiter Zaka summed up the challenges he has experienced trading with Albania:
- Albanian companies do not have culture of participation in food fairs
- The way they meet our questions is negative if we only order a little at a time, which is a problem because the people of Denmark do not know much about Albanian products yet.
- Albanian companies need to take a greater interest in other countries’ similar products, which are often cheaper and possibly better. Among other things, he has experienced that food companies import their cans/glasses from other countries, which makes the products expensive.
- Bureaucracy in Albania is a problem. Although there is a trade agreement with the EU on no taxes, you still must go through the tariffs, which delays the process. This makes it much faster to order from other countries. Dhimiter Zaka has tried to talk to Albanian authorities about support in resolving this, but without success.
Of possible solutions, he mentioned:
- Join forces for fair participation: Albania will be able to learn from Kosova and Macedonia. At a food fair in Cologne, Kosova was represented by 25 producers who had gathered under one ‘umbrella’. By contrast, there were hardly any producers from Albania. It is expensive to participate, but it can be solved by joining forces.
- Advertising on google/databases: very few Albanian websites appear by google search and they are often very amateurish. Dhimiter misses a database with an overview of albanian producers, so you know whom to contact.
- Cooperation between producers and importers: we must jointly arrive at quality requirements and procedures: how do we proceed with Albanian imports in Denmark? Albanian producers must be helped to understand how to build mutual trust with importers. Most importers want to order a little at a time until they have figured out if it is a success.
- Subsidised production can be part of the solution so that it does not become too expensive. For example, if the Albanian state creates a joint venture with an Italian company, it would push the sale of small productions. An entire truck may not be sold from Albania to Denmark, but possibly to a company in Verona that can sell it on.
After Dhimiters Zaka’s presentation, there were remarks from the assembly. Among other things, there was a proposal to invest more in wine imports, e.g. of the Kosovan Albanian brand StoneCastle. Dhimiter Zaka replies that he sells many Italian beers in Denmark and therefore he also believes there is a need for Albanian beers in Denmark. There were also proposals to use crowdfunding as an alternative method to the joint venture to support producers.
Hans-Georg Nielsen talks about his experience with trade with Albania. For example, at one point he managed to arrange a beer tasting with Korca Beer in the supermarket Menu. The manager was particularly enthusiastic about the label and said that they could fit it into their range of over 100 different international beers. The problem was that the follow-up from the manufacturer was extremely deficient, so it did not come to fruition. He also once tried to offer Coop to sell Albanian olive oil after he was approached by Coop looking at importing from the Western Balkans. Hans-Georg Nielsen approached a well-known manufacturer in Albania, who promised to send samples to Denmark. After a long wait, he received two samples, of which there was only content in one and the manufacturer would rather go on vacation than come to the presentation. This experience was not very positive either.
Based on his experiences, Hans-Georg Nielsen realized that something must be done about the manufacturers / sales. If you believe that your products are the best in the world and the price is non-negotiable, it is difficult to enter a new market. Therefore, before the Corona pandemic, he prepared a series of courses together with some experts together with the Albanian Chamber of Commerce. The Chamber of Commerce already offers courses, but if Danish teachers were to teach these, the participant price would be too high due to travel and hotel costs. Hans-Georg Nielsen drew attention to the problem, and the Chamber of Commerce said that he himself had to turn to the EU to apply for funding.
Hans-Georg Nielsen noted that AIDA has a very good website, so there is a positive development, but there is a backlog in thinking. 50% of the companies exporting from Albania are between 1-9 employees, while the large companies only account for 4% of exports, and half of the exports go to Italy. What is obviously happening is that the products are reprocessed in Italy and sold on as Italian products. In Kosova, they have a little more success than Albania with exports to Scandinavia. Albania’s exports to Denmark, Norway and Sweden account for only 2% of total Albanian exports. As there are 20.5 million inhabitants in Scandinavia and a generally high-income level, Hans-Georg Nielsen believes that it is a reasonably interesting market, so there is no reason to give up. Therefore, he has also contacted the director of AIDA and informed him about today’s event. However, he has not yet responded to the email.
As a summary, Hans-Georg Nielsen said that the products are there, the companies are there, but he believes there are some internal problems that need to be solved. Among other things, there is a need for a clear analysis of how to sort out the fact that Albania is in the same situation as the UK, which is no longer in the EU. The UK still trades with the EU and needs solutions to the significant challenges there are, so Albania must be able to learn from that. There is also a need for a discussion, with the Chamber of Commerce, on how to bring members together and get them to cooperate. How can you help producers understand the market they are going to export to?
Hans-Georg Nielsen thinks it would be a good idea to set up a working group under the auspices of the association that goes into depth with the issues for the benefit of Danish consumers and Albanian exporters.
After Hans-Georg Nielsen’s presentation, there were remarks from the assembly.
4. In the panel debate, Hans-Georg Nielsen chaired the panel. He began by asking John Aagaard and Karsten A. Jensen: what are your immediate reactions to the speeches we have heard today?
Karsten A. Jensen said that his angle is not commercial, as he has not been very involved in it while he was in Albania. He did, however, do so in Shanghai, where he worked lateron. He is positive about developments in Albania, as the pace is like that in China. During the four years he was ambassador to Tirana, there was a very great development. He has great faith in the Albanian people, as he finds that they have a great drive, a skill and a kindness, also towards foreigners, which is quite unique. He believes the greatest asset of Albania is the population, which has a very strong willingness to build. The politicians are the problem. He has talked to companies that have done business with Albania and everyone talks about the same challenges. It has been difficult and expensive for them, but they have succeeded. For example, there is a Danish company with production of vegetables in Albania that sells products on the vegetable market in Copenhagen. Albania has a large textile industry, and fashion is sold in Italy where almost everything is produced in Albania. There are very large companies and professional factories, e.g. shoe factories with several thousand employees with Clark’s shoes in Tirana.
John Aagaard said that he has worked in business for many years. Commenting on Hans-Georg’s presentation, he was surprised that 50% of Albanian exports come from small companies with max. 9 employees. That is generally speaking the opposite picture of the situation when he was hired to promote exports in Denmark. He thinks small businesses can teach us something, because they obviously know what it takes to bring goods to other countries. John Aagaard said that Albania mainly exports to Italy and Kosova. When John Aagaard joined SMVdanmark, he had to make sure to teach small and medium-sized Danish companies how to export. At that time, only large companies in Denmark exported. His experience is that the state must help by telling them what conditions must be met, providing financial support for export travel, e-sports group cooperation, etc. They also introduced an ‘export manager for hire’ – scheme and ‘reverse contact meetings’ where Danish companies invited companies from other countries. Itwas all possible because there was a broad public interest in internationalizing the Danish market. Today, all Danish companies are in one way or another internationalized, because we are a small country that needs to trade with foreign countries.
At the end of the panel debate, Director Helge Andersen from Solar Park was asked to talk about his experiences with doing business in Albania. In 2016, he started exporting solar cells to Kosova. Later, he also started exporting to Albania. He has also imported steel from Albania. However, he finds albanian rules on VAT on export goods to be a problem. In Albania, they can deliver and can meet the requirements, but we cannot use them if we must pay Albanian VAT when importing. He would like to make a production in Albania of e.g. wind turbines. He has thought about importing used wind turbines from Germany, which has several advantages: they are cheap and not so big which is important when the turbines are going up a mountain in Albania. The turbines from Germany can be renovated, which requires a lot of manpower and Albania has that. Albania could take the lead and send the renovated wind turbines out of the country again.
After Helge Andersen’s presentation, there were questions from the assembly:
It was asked if his company uses local labor for the assembly. Helge Andersen replied that they only use local labor, and that he wants to emphasize that if they manage to get hold of good people, you must take good care of them. Personal relationships are alfa and omega when doing business in Albania, and you must use personal relationships. Hans-Georg Nielsen agreed and said that his experience is that even email is still not considered by many as a relevant communication tool. It was asked who the potential buyers of the wind turbines would be, and Helge Andersen said that Vestas has been down there and is interested. However, Helge Andersen has not spoken to the banks yet.
5. Hans Georg Nielsen thanked all the participants for their attendance. He said that DAF will arrange more meetings on exports and that the next meeting will probably be in early 2023. The plan is to set up a working group under the auspices of the association that goes into depth to investigate the challenges and potential of import/export between Albania and Denmark. He urged that you sign up yourself – and otherwise you will be contacted.
6. Elita Petoshati closed the event by saying that it had been a pleasure to be involved and that trade is the most important dimension of the Danish-Albanian relationship. She has had many conversations with Hans-Georg Nielsen about how Albania will be included on the Danish ‘business map’ and that an event like this brings us closer. Many sectors are currently growing in Albania, including tourism, Albania is mentioned in Berlingske Tidende and other media every day, and there have been direct flights to Albania over the summer. All of this leads to greater knowledge of Albania. There are several areas where Danish and Albanian companies can benefit from collaborating, e.g. Denmark is a leader in water management and green transition, IT and the digital area, while Albania has a young and well-educated population and, like Denmark, a large agricultural industry. There was recently an important event on green energy in Tirana, where there were many Danish stakeholders, and there will soon be a follow-up. What is important to get to grips with is: where are the challenges and especially where is the potential?
26. august 2022