Should Russia invade: Ruslan Cunup has a plan. “We have worked out a total of five possible scenarios, depending on what a Russian attack would look like and how much time we have,” says the head of electronics manufacturer Steinel Moldau. “Our employees always have priority.”
Cunup manages the production facility of the German medium-sized company Steinel in the Moldovan capital Chisinau. In three halls, around 300 employees place components on circuit boards or assemble sensor-controlled outdoor lights and pack them for customers. And like all major companies in the country in the north-eastern tip of the Balkans, this plant has had a contingency plan for a Russian invasion since the outbreak of war in Ukraine.
“We are prepared to start production in Romania within ten hours,” says Cunup. “In the event of a Russian attack, we will first get our employees and their families to safety and then, as the next step, the machines to start production on site.” The transport has been organized, the formalities have been prepared and it is already certain how employees would be housed in Romania if the worst came to the worst.
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Stone is no exception. Other foreign investors and domestic companies have also hastily drawn up or updated contingency plans after the outbreak of the Ukraine war, managers say.
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There are good reasons for it. The former Soviet Republic of Moldova is wedged between Romania to the west and Ukraine, which encircles the country to the north, east and south. Its 2.6 million residents share a 1,000-kilometer border with Ukraine, and Russian missiles have repeatedly flown over Moldova since the war broke out.
“If the Russian army hadn’t met so much resistance in Ukraine, Moldova would probably be occupied by Russia today,” says Alexander Di Leonardo. The manager, who grew up in Munich, runs a logistics company in Moldova. In the first few weeks after the war began, he was only on the road with the roof rack on the car. “Our bags were always packed, and if there had been a bang, we would have thrown them in the car and gone to Romania.”
permanent insecurity
For decades, the Russian state has been doing everything it can to keep the country and its people in a permanent state of insecurity. Moscow supports two separatist-controlled areas on Moldova’s territory, and Russian weapons are said to be stationed there. Most of the governments of the past 30 years were not only seen as corrupt, but also as Moscow’s vicarious agents.
The current, European-oriented government is receiving praise from local entrepreneurs and foreign observers. Since she took office, however, Russia has been more aggressive towards Moldova, flooding social media with false information, imposing economic sanctions and cutting off gas supplies.
Mobility is therefore already included in the business model of industrial investors. Many medium-sized companies from Germany, for example, have simpler production steps carried out in Moldova, such as metal processing or stamping work. It’s about benefiting from low labor costs without investing a lot of money in expensive machinery and equipment so that you can leave the country quickly if in doubt.
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In fact, in recent years more and more companies such as the automotive suppliers Dräxlmeier and Sumitomo Wiring, which produce very labour-intensive cable harnesses, have discovered Moldova as a cheap production location. Wages are lower than in EU member states such as Poland or Romania.
Moldova is also closer to the European home markets than China and Vietnam, for example. The workforce is also well trained. In Soviet times, Chisinau was a major industrial center, mainly for the production of televisions.
The fast-growing tech industry was able to react particularly flexibly to the war in neighboring Ukraine. A number of companies sent their employees abroad for a few weeks after the outbreak of war, mainly to Romania. After a few months, these remote workers returned to Moldova.
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“By early summer, it was clear that Russia had overreached itself in Ukraine, and we felt something of a collective relief,” recalls Natalia Dontu, who directs the Moldova Innovation and Technology Park, a program for locating IT companies .
Despite the enormous flexibility, tech companies are also vulnerable in the current situation. The local subsidiary of the British group Endava is the largest IT company in the country and carries out projects for customers such as Imax, Volkswagen and Zeiss.
Management also has plans in place should the situation deteriorate further. “If an evacuation should be necessary, we have taken precautions,” says Moldova boss Veaceslav Panfil. “We know how to contact our employees in an emergency and make sure they are safe.”
Fear of acts of sabotage
Entrepreneurs and managers are also concerned about possible acts of sabotage. For historical reasons, the country’s only power plant that produces electricity is in the breakaway region of Transnistria. New power lines to Romania are only just being completed. “What if we suddenly no longer get electricity from Transnistria? What if Russian hackers cut off our internet?” asks IT entrepreneur Andrei Jac, who runs the children’s learning platform Wakamakafo.
Outsourcing specialist Endava has therefore equipped the offices with emergency generators and secured the supply of diesel. The company has verified that the internet service provider can continue to operate during long power outages and has ensured that all employees can come to the office even in extreme circumstances.
Manager Panfil reports that not a single customer left Endava because of the outbreak of war. On the contrary: Many customers called the management and their supervisors every day, asked about the situation, whether everyone was safe and offered help. “Our customers have explicitly said that they definitely don’t want to withdraw projects from Moldova,” says Panfil. It is this kind of vote of confidence that strengthens the country – also towards Russia.
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