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CNAA / Theses / 2005 / July /

The restructuring of the dairy – processing industry by integration of producing, processing and selling dairy produces

Author: Carolina Lozovanu
Degree:doctor of economics
Speciality: 08.00.05 - Economy and Management (in branch)
Scientific adviser: Larisa Bugaian
doctor habilitat, professor, Technical University of Moldova
Scientific council:


The thesis was presented on the 1 July, 2005
Approved by NCAA on the 27 October, 2005


Adobe PDF document0.42 Mb / in romanian


The present thesis was proposed to research the ways of restructuring dairy industry in the Republic of Moldova by integration of processing, producing and selling dairy produces. In order to achieve the proposed objective there was studied scientific and theoretical bases of integration, particularly vertical integration. In this context there were examined the forms of vertical integration and the opportunities of applying them in dairy industry, including strong and weak parts, profit and loss of each of such forms.

There was evaluated the financial and economic situation of dairy enterprises of the Republic of Moldova in order to reflect the difficulties in their operation, the problematic events dealing with raw materials supply and produce selling, there was also analyzed the effectiveness of dairy industry and the chains of value and price formation. On purpose to elaborate specific restructuring strategies there was examined the possibilities to apply vertical integration between direct participants of value chain, such as supplier, producer, consumer and indirect participants, as well as there was evaluated the possibility to create an industrial cluster.

In this thesis was proposed and confirmed the forms of integration for each participant of value chain. In order to develop the process of raw material supply there was recommended to facilitate the integration of individual farmers into cooperatives (partial integration) and set up private cattle-ranch near dairy-processing enterprises (backward integration).

Raw material collection and transportation process should be carried out by dairy-processing enterprises through their stations (backward integration), or/and through the local market cooperatives formed by individual farmers (partial integration), or/and through long-term contracts conceded between dairy enterprises and individual farmers or milk collecting cooperatives (quasiintegration).

In the aim to restructure the processing line there was proposed to improve enterprise’s produce policy by reduction of unused industrial capacity, to elaborate new products by developing mutual relation with scientific centers (quasi-integration), to use new technologies and new forms of packing, to specialize the activities by enterprises (quasi-integration). Having in view the restructuring of produce selling process there was recommended to use vertical distribution chains, as follows: creating of enterprises’ own sales markets (forward integration), establishing specific relation of cooperation between milk producers and commercial enterprise (quasi – integration), integration between retail enterprises into supplying cooperatives (partial integration) that would provide the good operation of the supplying process (quasi-integration).

Even though the processes of dairy industry are in a tired interconnection, the effectiveness of their performance would not be successful without the support of regulatory bodies. Otherwise there is necessary to develop specific relations between both direct and indirect participants of the industrial process in order to improve whole industrial chains, this way as long term restructuring strategy of dairy-processing industry there was proposed the creation of dairy cluster (quasi – integration).

Theoretical affirmations and practical recommendations exposed in the present thesis should be applied by dairy enterprises, raw material suppliers and sales enterprises and regulatory bodies in order to restructure their activities that would contribute to the perspective development of dairy industry in the Republic of Moldova.