Romania

Deposit Refund System (DRS)

Challenges

I. DATA INPUT

1 Christian Morris Consultancy

 DRS - Challenges
ECONOMIC AND OPERATIONAL
01
 Product and materials included in DRS
 Take back infrastructure
 The structure and the level of the deposit
 Labeling and fraud prevention
 Ownership and sale of the material
 Workability on the remote area
 Flexibility of the model in the long run
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LEGAL AND STRATEGIC
02
 Setting the “right” legal framework for the DRS
(environmental and fiscal legislation).
 The governance of DRS (private structure and public
relationship, board representativity, services, control of
fees and results, monitoring and transparency).
 Strategic consideration and business implication over:
 Brewery industry (administrative and labeling
costs, inventory management, producers fee)
 On-trade and off-trade retail
 Small shops (kiosk and convenience)
 Logistic companies
 Recyclers
 Current recycling business model
 1. PRODUCT AND MATERIALS INCLUDED
“By Government Decision, until 1st of January 2021, based on
the evaluation economic, social and environmental efficiency as
well as impacts on small and medium enterprises, a
guaranteed-return system will be applied for non-reusable
primary packaging of glass, plastic or metal, with volumes
ranging between 0, 1 I and 3 I inclusive, used to make available
on national market : beer and beer mixes, mixtures of
alcoholic beverages, cider, other fermented beverages,
juices, nectars, soft drinks, mineral or any kind of waters,
wines and spirits.” - OUG 74/2018 – Art. 10
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ROLE of DATA
 This is the most important data of the model that
sets the economic size of the system ("market
value" of the model) and all other implications.
 Once analyzed and identified, the products and the
structure of the materials must be explicitly
regulated in national legislation.
CONSIDERATION
 Avoiding differentiations by product type (leading to
consumer confusion).
 Covering, within reason, all competing products in a
given market.
 Considering all potential product as long as the
appropriate take-back technologies are in place.
 Considering labeling requirements.
 DATA INPUT

Beer and mixes of beer

Wines and spirits

One-way packaging METAL Water (any kind of water)

Soft Drinks
PLASTIC Mixtures of alcoholic No. of units
beverages
Refillable packaging GLASS
Juices and nectars
Cider and other fermented
beverages

0,1l 0,33l 0,5l 1l 2l 2,5l 3l

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 2. TAKE BACK INFRASTRUCTURE
Both manual or automated Reverse Vending
Machin (RVM) should be considered on a case-by-
case basis. Provide the most convenient system for
consumers, allow for flexibility of take-back, and
keep logistics costs down.
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ROLE of DATA
 Installation and operation of the take-back
infrastructure represent the most important cost of
DRS and determine directly the system efficiency.
 The influential factors in establishing an optimal
take-bake infrastructure are: the national sales
network, the population distribution, logistic
capabilities and costs .
CONSIDERATION
 Opportunities for backhauling should be explored as
far as possible.
 Together with a number of other take back
infrastructure factors, it will determine the positioning
of counting centers in Romania.
 In rural and remote areas the principle would be to
provide take-back locations in strategic locations
where consumers could return the empty containers.
 DATA INPUT

NATIONAL RETAIL INFRASTRUCTURE ANALYZED DATA

No. of Sale surface  42 counties.

Type of shops Cross-checking
shops Sq. m  853 cities
< 100 Sq. m 734 48,585 734 48,585
 131 retailers
Small < 400 Sq. m 2,169 456,776 2,169 456,776
 4.597 shops identification
Medium 400 - 1.000 m Sq. m 1,082 668,705 1,082 668,705
Supermarket 1.000 - 2.500 Sq m 358 419,630 358 419,630  Shops segmentation based on the sales surface
Hypermarket > 2.500 Sq. m 254 1,594,771 254 1,594,771  Shops segmentation based on SKU

Total 4,597 3,188,467 4,597 3,188,467  Shop segmentation based on location

 Shops national classification analysis
 Shops county distribution
 Identification of logistic warehouses
Type of sale point No.
Gas station with stores 1,339 LOCAL ACTIVITY (one county)
Convenience stores and street kiosks Est. 38,000  501 shops with a 121.960 Sq. m sale surface
 83 networks
 124 Cities
 26 Counties
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 COUNTY DISTRIBUTION

No. County No. shops Sale surface Sq m No. County No. shops Sale surface Sq m
1 Bucureşti 981 686,998 22 Harghita 60 35,559
2 Alba 102 44,323 23 Hunedoara 92 82,441
3 Arad 91 76,785 24 Ialomiţa 27 17,267
4 Argeş 122 91,956 25 Iaşi 148 110,905
5 Bacău 111 89,935 26 Ilfov 30 12,199
6 Bistriţa Năsăud 52 28,792 27 Maramureş 91 70,020
7 Bihor 140 106,829 28 Mehedinţi 32 33,661
8 Braşov 207 131,137 29 Mureş 120 92,384
9 Brăila 46 46,824 30 Neamţ 69 48,200
10 Botoşani 58 25,730 31 Olt 59 32,848
11 Buzău 60 34,882 32 Prahova 135 108,276
12 Constanţa 156 154,172 33 Satu Mare 115 63,955
13 Caraş Severin 38 33,184 34 Sălaj 31 15,854
14 Călăraşi 37 16,977 35 Sibiu 75 60,538
15 Cluj 241 149,196 36 Suceava 89 80,933
16 Covasna 50 24,738 37 Teleorman 50 22,031
17 Dolj 85 74,481 38 Timiş 209 157,752
18 Dâmboviţa 71 44,721 39 Tulcea 36 16,197
19 Galaţi 73 76,930 40 Vaslui 42 17,038
20 Giurgiu 49 19,738 41 Vâlcea 176 70,043
21 Gorj 91 40,838 42 Vrancea 50 41,200
TOTAL 4,597 3,188,467
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 TOP RETAILERS – Sale surface TOP RETAILERS – Annual Turnover

No. Retail name No. shops Sale surface Sq. m No. Retail name Turnover 2017 (mil. lei)
1 Schwarz Gruppe 373 837,467 1 Kaufland 10,087
2 Carrefour Group 333 445,312 2 Carrefour Group 6,749
3 Profi 997 312,256 3 Lidl Discount 6,510
4 Penny Market 238 208,758 4 Auchan 5,223
5 Auchan 30 208,300 5 Mega Image 4,910
6 Metro Group 459 203,776 6 Metro Group 4,729
7 Selgros 22 200,000 7 Profi 4,730
8 Cora 11 103,100 8 Selgros 3,645
9 Mega Image 152 47,412 9 Penny Market 2,997
10 dm 102 34,570 10 Cora 1,700
TOTAL 2,717 2,600,951 TOTAL 51,280

Logistic warehouses Logistic warehouses

 Metro – 3 Bucuresti–Ilfov  Carrefour – 2 Ilfov, Timis
 Penny – 3 Ilfov, Cluj, Bacau  Kaufland – Prahova, Bacau, Cluj,
 Mega Image – Ilfov  Lidl – Bucuresti, Ploiesti, Bacau, Mures, Timis
 Profi – Ilfov, Bacau, Mures, Prahova, Timis  Auchan - Ilfov

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 Population

Urban Density Surface Urban Density Surface

No. County Population No. County Population
Population (loc/km2) (km2) Population (loc/km2) (km2)
1 Alba 342,336 205,402 61 6,242 22 Harghita 304,765 134,401 52 6,639
2 Arad 412,235 234,149 60 7,754 23 Hunedoara 410,383 307,787 69 7,063
3 Arges 612,431 299,479 95 6,862 24 Ialomita 265,559 125,875 67 4,453
4 Bacau 616,168 290,708 113 6,621 25 Iasi 772,348 372,272 150 5,476
5 Bihor 575,398 283,096 84 7,544 26 Ilfov 353,481 318,840 188 1,583
6 Bistrita-Nasaud 301,425 110,623 59 5,355 27 Maramures 472,117 283,742 81 6,304
7 Botosani 404,429 174,713 91 4,986 28 Mehedinti 259,212 131,161 62 4,933
8 Braila 529,906 383,122 86 4,766 29 Mures 540,508 271,335 86 6,714
9 Brasov 316,652 197,908 111 5,363 30 Neamt 507,399 182,664 99 5,896
10 Bucuresti 1,883,425 1,883,425 9,200 240 31 Olt 421,769 164,912 89 5,498
11 Buzau 440,347 169,974 81 6,103 32 Prahova 762,886 374,577 176 4,716
12 Calarasi 287,535 168,208 64 5,088 33 Salaj 336,117 162,008 64 3,864
13 Caras-Severin 287,269 103,991 39 8,514 34 Satu Mare 225,631 88,673 83 4,418
14 Cluj 691,106 460,277 105 6,674 35 Sibiu 377,273 249,755 78 5,432
15 Constanta 684,082 470,648 101 7,071 36 Suceava 634,810 276,777 80 8,553
16 Covasna 211,254 106,472 60 3,710 37 Teleorman 369,897 119,847 75 5,790
17 Dambovita 510,287 147,473 134 4,054 38 Timis 683,540 422,428 76 8,697
18 Doij 660,544 364,620 99 7,414 39 Tulcea 211,622 103,906 31 8,499
19 Galati 530,612 302,449 139 4,466 40 Valcea 393,340 151,829 72 5,765
20 Giurgiu 267,147 78,007 84 3,526 41 Vaslui 374,240 178,887 86 5,318
21 Gorj 345,771 168,045 69 5,602 42 Vrancea 339,510 122,903 81 4,857
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TOTAL 19,926,766 11,147,367 238,423
 Average NET salary Apr. 2018 – Apr. 2019
Apr. Mai Iun. Iul. Aug. Sept. Oct. Nov. Dec. Ian. Febr. Mart. Apr.
2018 2019
TOTAL ECONOMIE 2713 2704 2721 2708 2669 2688 2720 2792 2957 2936 2933 3075 3115
Agricultură, silvicultură şi pescuit 2123 2155 2115 2126 2113 2124 2126 2536 2516 2215 2247 2301 2408
Agricultură, vânătoare şi servicii anexe 1957 1934 1937 1986 1974 2019 2004 2100 2098 2095 2127 2190 2233
Silvicultură şi exploatare forestieră; pescuit şi acvacultură 2592 2786 2635 2536 2517 2425 2479 3784 3682 2566 2596 2621 2918
Industrie total 2476 2466 2495 2510 2437 2459 2482 2578 2748 2600 2572 2742 2810
Industria extractivă 4193 3740 3642 3837 3683 4104 3700 3809 4397 4162 3715 4125 4272
Extracţia cărbunelui superior şi inferior 3476 3230 2947 3575 2964 2974 2935 2975 4504 3235 3019 3364 3693
Extracţia petrolului brut şi a gazelor naturale 6262 5301 5269 5286 5340 6465 5353 5443 5752 5637 4798 5544 5582
Extracţia minereurilor metalifere 2842 3067 3094 3434 3250 3165 3123 3990 3395 4257 3378 3347 3937
Alte activităţi extractive 1753 1772 1812 1816 1847 1995 1877 1913 2272 2510 2532 2587 2686 Date Brut minim salary
Activităţi de servicii anexe extracţiei 5001 4470 4385 4440 4462 4531 4542 4672 4737 4860 4546 5057 5221 2,080 lei / 2,350 lei (high education)
Industria prelucrătoare 2351 2373 2407 2406 2341 2351 2395 2489 2610 2497 2488 2657 2692 1-Jan-19
/ 3,000 lei (construction)
Industria alimentară 1832 1840 1854 1844 1872 1867 1873 1904 2027 1992 1985 2038 2088
Fabricarea băuturilor 2924 2947 2925 2930 3024 3022 3025 3087 3234 2869 2836 3507 3045 1-Jan-18 1,900 lei
Fabricarea produselor din tutun 4209 4141 4248 4457 4276 4300 4476 4696 4849 4328 4371 7336 4565 1-Feb-17 1,450 lei
Fabricarea produselor textile 2032 2008 2104 2052 1988 2078 2090 2178 2280 2114 2123 2250 2192 1-May-16 1,250 lei
Fabricarea articolelor de îmbrăcăminte 1577 1619 1629 1662 1631 1619 1667 1664 1698 1718 1728 1756 1785
Tăbăcirea şi finisarea pieilor; fabricarea articolelor de voiaj şi
1-Jul-15 1,050 lei
marochinărie, harnaşamentelor şi încălţămintei; si vopsirea blănurilor 1765 1800 1870 1844 1766 1825 1860 1896 1894 1920 1930 1997 2008
Prelucrarea lemnului, fabricarea produselor din lemn şi plută, cu excepţia
Date Net minim salary
mobilei;fabricarea articolelor din paie şi din alte materiale vegetale 1748 1808 1793 1792 1763 1787 1811 1840 1903 1967 1974 2042 2090
Fabricarea hârtiei şi a produselor din hârtie 2416 2301 2344 2321 2288 2287 2328 2495 2738 2552 2524 2638 2707 1,263 lei / 1,413 lei (high education)
1-Jan-19
Tipărirea şi reproducerea pe suporturi a înregistrărilor 2297 2219 2504 2242 2243 2267 2307 2565 2621 2404 2431 2469 2590 / 2,362 lei (construction)
Fabricarea produselor de cocserie şi a produselor obţinute din 1-Jan-18 1,900 lei
prelucrarea ţiţeiului 5838 5551 6591 5344 5509 6040 5060 5427 6584 5433 5443 5679 6376
Fabricarea substanţelor şi a produselor chimice 2929 2757 2938 2821 2904 2824 2784 2896 3454 2874 2800 3105 3157
1-Feb-17 1,450 lei
Fabricarea produselor farmaceutice 3121 3233 3272 3163 3268 3322 3256 3337 3607 3254 3533 3585 3782 1-May-16 1,250 lei
Fabricarea produselor din cauciuc şi mase plastice 2489 2629 2698 2643 2508 2601 2648 2707 2785 2794 2768 2945 2968 1-Jul-15 1,050 lei
Fabricarea altor produse din minerale nemetalice 2498 2417 2475 2457 2422 2428 2487 2465 2785 2966 2985 3407 3276
Industria metalurgică 3021 3070 2864 3012 2975 2875 3138 2879 3480 3100 3088 3300 3439
Industria construcţiilor metalice şi a produselor din metal 2311 2358 2365 2377 2346 2351 2423 2511 2622 2636 2653 2767 2830
Fabricarea calculatoarelor şi a produselor electronice şi optice 2752 2816 3077 2933 2892 3062 3201 3106 3324 3040 3054 3165 3159
Fabricarea echipamentelor electrice 2453 2514 2446 2463 2400 2428 2485 2648 2686 2550 2568 2715 2692
Fabricarea de maşini, utilaje şi echipamente n.c.a 2901 2876 2984 2929 2853 2901 2930 3118 3168 3121 3043 3359 3390
Fabricarea autovehiculelor de transport rutier, remorci, semiremorci 2965 2979 2964 3024 2794 2761 2804 3113 3128 2885 2862 3146 3258
Fabricarea altor mijloace de transport 3090 3099 3216 3232 3142 2985 3146 3239 3665 3325 3188 3422 3633
Fabricarea de mobilă 1723 1787 1815 1832 1817 1844 1871 1906 1894 1901 1881 1920 1908
Alte activităţi industriale n.c.a. 1850 1874 1964 1950 1824 1927 1942 2053 2059 1993 1963 2023 2054
Repararea, întreţinerea şi instalarea maşinilor şi echipamentelor 2491 2478 2488 2573 2562 2515 2581 2656 2882 2587 2590 2679 2845

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 Average NET salary Apr. 2018 – Apr. 2019
Apr. Mai Iun. Iul.Aug. Sept. Oct. Nov. Dec. Ian. Febr. Mart. Apr.
2018 2019
TOTAL ECONOMIE 2713 2704 2721 2708 2669 2688 2720 2792 2957 2936 2933 3075 3115
Producţia şi furnizarea de energie electrică şi termică, gaze, apă
caldă şi aer condiţionat 4083 3724 3842 3978 3720 3681 3627 3887 4662 3901 3839 3865 4594
Distribuţia apei; salubritate gestionarea deşeurilor, activităţi de
decontaminare 2192 2226 2211 2261 2231 2223 2256 2281 2479 2333 2304 2429 2467
Captarea, tratarea şi distribuţia apei 2393 2422 2423 2530 2433 2431 2452 2474 2768 2586 2555 2750 2728
Colectarea şi epurarea apelor uzate 2388 2479 2371 2448 2393 2406 2427 2469 2795 2495 2467 2628 2729
Colectarea, tratarea si eliminarea deşeurilor; activităţi de recuperare a
materialelor reciclabile; activităţi şi servicii de decontaminare 1995 2027 2016 2016 2041 2027 2071 2095 2199 2097 2067 2134 2210 Date Brut minim salary
Construcţii 2039 1977 1986 2002 1995 1999 2033 2061 2144 2687 2763 2835 2909
2,080 lei / 2,350 lei (high education)
Comerţ cu ridicata şi cu amănuntul; repararea autovehiculelor şi
1-Jan-19
motocicletelor 2338 2280 2369 2311 2294 2277 2314 2384 2568 2447 2460 2618 2616 / 3,000 lei (construction)
Transport şi depozitare 2523 2469 2543 2585 2533 2517 2606 2598 3048 2743 2652 2713 2833
Transporturi terestre şi transporturi prin conducte 2252 2233 2292 2276 2277 2282 2304 2298 2531 2442 2385 2457 2521 1-Jan-18 1,900 lei
Transporturi pe apă 2861 2832 2751 2844 2909 2818 2847 2930 3013 2860 2865 3024 3227 1-Feb-17 1,450 lei
Transporturi aeriene 5180 5233 5235 5317 5430 5381 5390 5299 5259 5341 5137 5156 5300
Depozitare şi activităţi auxiliare pentru transport 3425 3229 3410 3619 3365 3294 3597 3518 4881 3763 3535 3572 3886 1-May-16 1,250 lei
Activităţi de poştă şi de curier 1934 1931 1931 1947 1943 1932 1980 2079 2104 2080 2075 2118 2156
Hoteluri şi restaurante 1563 1554 1557 1575 1556 1567 1580 1589 1657 1773 1744 1752 1825
1-Jul-15 1,050 lei
Informaţii şi comunicaţii 5287 5244 5458 5300 5272 5356 5304 5532 5754 5496 5485 5920 5787
Activităţi de editare 5043 5029 6031 5086 5334 5622 5356 5402 5795 4807 4906 5102 4873
Activităţi de producţie cinematografică, video şi de programe de Date Net minim salary
televiziune; înregistrǎri audio şi editare muzicalǎ; activităţi de difuzare 3232 3243 3374 3293 3235 3328 3352 3636 3630 3605 3884 3887 3823
1,263 lei / 1,413 lei (high education)
Telecomunicaţii 4025 3873 3918 3787 3984 3815 3902 3813 4324 4180 4128 4129 4328 1-Jan-19
Activităţi de servicii în tehnologia informaţiei; activităţi de servicii / 2,362 lei (construction)
informatice 6437 6437 6473 6566 6319 6446 6380 6835 6888 6768 6683 7491 7192
Intermedieri financiare şi asigurări 5243 5437 4782 4783 4551 4564 4654 4745 5747 4805 4848 5261 6004 1-Jan-18 1,900 lei
Intermedieri financiare, cu excepţia activităţilor de asigurări şi ale 1-Feb-17 1,450 lei
fondurilor de pensii 5301 5729 4860 4893 4661 4652 4758 4860 5990 4805 4875 5290 6061
Activităţi de asigurări, reasigurări şi ale fondurilor de pensii (cu excepţia 1-May-16 1,250 lei
celor din sistemul public de asigurări sociale) 6032 5027 5345 5085 4788 4829 4967 4900 5460 5621 5281 5995 6614
Activităţi auxiliare intermedierilor financiare, activităţi de asigurare şi
1-Jul-15 1,050 lei
fonduri de pensii 3704 3328 3326 3405 3274 3443 3322 3516 3916 3744 4046 4055 4712
Tranzacţii imobiliare 2651 2340 2408 2314 2374 2400 2389 2399 2763 2541 2413 2595 2789
Activităţi profesionale, ştiinţifice şi tehnice 3548 3634 3601 3595 3564 3606 3648 3697 4003 3964 4041 4572 4265
din care: Cercetare-dezvoltare 4111 4141 4069 4199 4107 4249 4257 4481 4468 4071 4222 4387 4522
Activităţi de servicii administrative şi activităţi de servicii suport 2039 2034 2037 2044 2031 2059 2065 2111 2173 2234 2226 2331 2371
Administraţie publică şi apărare; asigurări sociale din sistemul
public*) 4171 4213 4207 4228 4229 4235 4254 4317 4330 4600 4672 4697 4728
Învăţământ 2793 2851 2803 2699 2644 2731 2845 2877 2947 3239 3281 3381 3323
Sănătate şi asistenţă socială 3486 3523 3519 3515 3498 3505 3516 3536 3599 3715 3665 3718 3751
Activităţi de spectacole, culturale şi recreative 2304 2269 2295 2291 2262 2318 2300 2375 2531 2589 2596 2630 2755
Alte activităţi de servicii 1810 1826 1855 1870 1841 1836 1843 1853 1942 1962 1968 1995 2068
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 LOGISTIC COSTS – Transportation fee LOGISTIC COSTS – Logistic rental

Cost lei/trip Logistic platforms

Vehicle type Cost lei/km Logistic rental Office (lei/Sq. m)
(local distance) (lei/Sq. m)
min max min max min max min max
Van 1.40 1.80 80 250 Bacau 28.2 75.2 11.75 23.5
Semi trailer truck 3.20 5.20 250 1,000 Brasov 14.1 65.8 11.75 23.5
Special Van 1.60 2.20 150 300 Bucuresti 28.2 75.2 11.75 23.5
Special semi-trailer truck 3.60 5.60 300 1,000 Cluj 32.9 61.1 11.75 23.5
Craiova 23.5 70.5 11.75 23.5
Deva 23.5 70.5 11.75 23.5
Iasi 18.8 65.8 11.75 23.5
Oradea 9.4 47 11.75 23.5
Ploiesti 18.8 47 11.75 23.5
Salaj 18.8 37.6 11.75 23.5

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 3. LABELING AND FRAUD PREVENTION
The two most important reasons for a clear labelling
in DRS are:
 to give consumer the information about the level of
deposit;
 to act as an anti-fraud mechanism.
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ROLE of DATA
 Deposit value of the packaging as part of a DRS
 Protection against fraud
 Explicit allocation to a deposit account administrator
 Identification of Packaging in the RVM
CONSIDERATION
The decision regarding the type of labelling will depend
on the balance of a number of factors, including:
 The level of the deposit
 The level of cross-border shopping, and/or close
proximity of population centers across borders
 Impacts on the stock-keeping and distribution of
beverages and additional labeling costs
 Whether the beverage was imported or produced in
the Romania
 Likely cost to the system of fraudulent activity (if this
could be quantified) - attitude to risk.
 Country Population GDP MF ($) GDP UN 16 GDP Per Capita
Romania 19,483,360 265,265 186,691 $13,615
Hungary 9,655,361 172,827 125,817 $17,900
Bulgaria 6,988,739 68,490 53,240 $9,800
Serbia 8,733,407 51,304 38,300 $5,874
Ukraine 43,795,220 126,721 93,270 $2,893
Moldova 4,029,750 9,903 6,773 $2,457

Quality of Purchasing Cost of Property Price Pollution Climate

Rank Country
Life Index Power Index Living Index to Income Ratio Index Index
38 Romania 140.31 61.16 36.45 10.15 55.39 77.62
41 Hungary 134.47 54.66 42.03 12.58 46.47 78.74
43 Bulgaria 130.59 52.18 37.17 8.72 63.98 82.76
51 Serbia 119.83 39.9 35.39 18.62 58.86 83.23
62 Ukraine 102.34 32.72 27.94 14.35 66.63 70.69
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 Thank you!
Brinzea Marius Cristian

+40 720 534 507

marius.brinzea@chrmorris.com

www.chrmorris.com

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