__MAIN_TEXT__

Page 1

caucasus

DISTRIBUTED FREE OF CHARGE

BUSINESS

November 19, 2018 - www.cbw.ge

#261

WEEK

International Monetary Fund Warning against Monopolies in Pharmaceutical and Banking Sectors

p.6

Election Programmes Reflect Economic Problems Resolution Mechanisms Proportionally to Presidential Powers

p.9

Rare Opportunity to Invest in the most Prominent Location in the Heart of Old Tbilisi

p.10

Innovating Process never Ends


2 November 19, 2018 #261

Local Apple to Replace Imported Product in Georgia

Russia Reported as Georgia’s Major Fuel Supplier

Alioni company consultant Archil Lobzhanidze says that the imported apples in Georgia will be replaced with local produce. As for him, the trend is clearly visible and is already affected the price.

According to Association of Oil Product Importers, in October 2018, imports of aviation fuel made up 8.3 thousand tons, down 2 000 tons compared to September 2018 (10.3 thousand tons).

Air France – to start direct flights at Tbilisi International Airport Allocations for Municipalities to Rise by 107 million GEL in 2019 Under the new formulation, the 2019 allocations for municipalities will increase by 107 million GEL as compared to 2018, the parliament’s majority MP Zaza Gabunia said.

Georgian Companies Attend Paris Food Fair Leading to Orders Worth of 4 Million EUR Thirteen Georgian companies took part in the ‘SIAL’ international food exhibition in Paris last month, with the support of the EU4Business initiative. As a result of the contacts established during the event, these companies received dozens of confirmed orders worth a total value of €4 million.

Rehabilitation of Akhtala Begins in 2019

From April 2019, flag carrier of France – Air France starts to operate direct regular flights on the route Paris-Tbilisi. Negotiations between Air France and operator company of Tbilisi and Batumi International Airports – TAV Georgia are already in final phase.

Citrus Exports Grow 11 Times Citrus exports have grown 11 times year on year, Ministry of Environment Protection and Agriculture, says.

Tbilisi Bypass Railway Won’t Complete- Government Launches New Project The project to build a bypass railway which would allow Tbilisi to be freed from train traffic, primarily freight has been standing idle for 6 years. A total of $ 210 million have already been spent for the project.

In the spring of 2019 rehabilitation works will begin on the medicinal-balneological resort Akhtala. According to its head, the construction will take 2-3 years. Geostat to Launch International Method to Calculate Unemployment Rate

Genadi Arveladze: 71% of Georgia’s net Export Falls on Free Trade Agreement Partner-states Deputy Minister of Economy and Sustainable Development, Genadi Arveladze participated in the work of the Parliamentary Committee on Foreign Relations and introduced to the MPs the Free Trade Agreement between Georgia and Hong Kong, China as well as the report on the Implementation of the Free Trade Agreements signed by Georgia.

Geostat uses an international methodology while calculating the number of unemployed in the country, but it might be revised.

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili WWW.CBW.GE Address: Aleksidze Street 1 Sales: Mob: +995 591 01 39 36 Email: caucasianbusiness@gmail.com Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Copy Editor: Ellie Rambo Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili, Economic columnist: Andria Gvidiani; Technical Assistant: Giorgi Kheladze;


3 November 19, 2018 #261


4 November 19, 2018 #261

International Monetary Fund Warning against Monopolies in Pharmaceutical and Banking Sectors Georgia should show caution to prevent anti-competition practices as a result of high concentration in distinct economic sectors (including banking and medical services), the report by International Monetary Fund (IMF) “Caucasus and Central Asia: Employment of Region’s Growth Potential” reads. According to the document, competition is of crucial importance in all economic sectors for improving resource distribution process and upgrading efficiency. “The state control should not be replaced by private monopolies. The example of Armenia is exceptional in this respect – namely, its amendments to the law on Protection of Economic Competition”, the report reads. Professor of European University and banking sector expert Gocha Tutberidze agrees with the IMF report and says that consolidation process continues in the banking sector over the past 5 years, whilst the National Bank of Georgia (NBG) cannot ensure efficient implementation of antitrust regulations. As a result, we have the situation, when two commercial banks hold more than 80% of the total banking assets. This is an alarming fact, because any problems before either of them will ruin the whole system”, Tutberidze noted. The financial market has been monopolized by commercial banks, in practice, and access to money resources is determined by commercial banks, Tutberidze said. Banking sector expert Gogita Tsutskiridze explains that there is low competition in the country and this is

evident. The operating profit margin in 2015 was 5.2%, in 2016 – 5.8% and in 2017- 7%, that is, the growth made up 1.2% as a result of growing assets of leading commercial banks. At the same time, the net interest margin declined by only 0.4%. This factor reaffirms that in 2015-2017 the high concentration in the banking sector brought not very desirable effects, first of all, in terms of market competitive capacity. According to his statement, the net interest margin due to countries demonstrate that the Georgian banking sector practices high interest margins. “Georgia ranks beside developing economies of Africa and Latin America in terms of interest rate margin. The mentioned countries (Ghana, Aruba, Honduras, Kenia, Uganda, Nicaragua and others) have worse economic development level and living standards than Georgia, For example, incomes per capita due to the purchasing power parity (PPP) is 10000 USD in Georgia and 3000 USD in Kenia and Tanzania, about 4000 USD in Ghana and Zambia”, Tsutskiridze said. High margin of operating profits and its growth tendencies point to declining banking competition amid growing ratios of two major commercial banks and this process comprises oligopoly tendencies, he explained. Shota Gulbani, president of Association of Young Financiers and Businessmen (AYFB) says that there is nothing new in IMF statements. “We have been supervising and examining these sectors for many years. Regretfully, IMF recommendations and

suggestions will change nothing in this respect. Development of competitive environment is a long-term process and this process requires bold steps by the Authorities. The fact is that we have oligopoly in the banking sector, as the ratio of these two commercial banks in total net profits of the sector accounts for 71%. The same figure is reported for the crediting portfolio. This situation generates multilateral problems in the economy. Access to money resources is of crucial importance, the crediting market concentrated on the banking sector offers expensive credits and this factor frequently frustrates the business development”,Gulbani said. IMF expresses fears that low competition in pharmaceutical and banking sectors will grow into monopolies, however, citizens of Georgia have suffered from monopolies for a long period. For example, it is unclear how Georgian manufacturers manage to sold their generics for higher prices compared to original medications, or sell the same medications cheaper in Armenia, when the same companies take additional transportation costs and pay customs taxes in addition. However, Competition Agency keeps silent on these issues for many years. It has announced plans for examining the pharmaceutical market starting 2019. Let’s see what results the agency, which is responsible for valuable competition, will bring to the country.


5 November 19, 2018 #261


6 November 19, 2018 #261

Election Programmes Reflect Economic Problems Resolution Mechanisms Proportionally to Presidential Powers On November 28 Georgia will hold rerun presidential elections. What do election programs say about economic problems and what promises do they offer? Independent presidential candidate Salome Zurabishvili, backed by the ruling Georgian Dream party, says: “The president is to protect business, care for its freedom, because economy depends on business. I will be a female President that will care for vulnerable and unprotected strata that need more attention and more resources. This will be my European Georgia of Tomorrow, my Georgian Georgia. Grigol Vashadze, presidential candidate from the United We Stand opposition alliance: “The state budget analysis shows how much money is spent without urposeless. No country spends state budget funds on Football League. It is evident that we have catastrophic size of bureaucracy in Georgia. As to pensions and salaries, pensions should increase, initially, and then, salaries, step by step, by reducing state expenditures, narrowing bureaucracy and relieving the state budget from all excessive spending. More than 400 million GEL was spent on tillage and sowing and today peasants have no fuel money for tillage and no other resources; Vouchers system in kindergartens; - raising minimum salaries of schools teachers to 1000 GEL; - based on the market research and the customers’ interests, introduction of vocational programs, development of priority educational programs and their popularization. We will lower income tax to 15%, reduce excise rates on oil products, decrease excise rate on strong drinks to medium European indicator; only companies with more than 200 000 GEL annual turnover will pay VAT; to achieve high economic growth, we will ensure macroeconomic stability, balance the state budget and stabilize GEL. Attractive investment environment will draw more foreign currency and new technologies to the country, increase exports, develop tourism and other fields of services. We will foster real independence of the National Bank of Georgia (NBG) and strengthen financial stability”, Vashadze said. The Caucasus Business Week (CBW) has inquired whether presidential candidates have applied valuable economic calculations. Rati Abuladze, doctor of economics, says that election programs of presidential candidates reflect economic problem resolution mechanisms proportionally to presidential powers. The president of Georgia is a head of the state and guarantee of unity and national independence of Georgia. The president’s power is limited in foreign and internal policy, but he/she is elected by nation-wide voting and therefore: • Charismatic and political viability can ensure an efficient implementation of state powers (state development depends on efficient implementation of powers of state offices); • The president is able to strengthen positon of the country in globcal politics (because he/she executes representative powers and holds negotiations in foreign relations, with various countries and international organizations); • Based on Georgian reality, the president is able to shape a new political team and a new political structure that may launch a new economic wave; Rati Abuladze explains that the presidential elections

have essential importance for economy. The society knows how the economy works, how incomes are distributed, how social environment is shaped, how economic innovations are achieved. Facts prove that the more economy develops, the more citizens trust political parties and persons put forward by them directly or indirectly. Based on evaluation of priorities of candidates participating in the rerun presidential elections, we can outline the following circumstances: • Salome Zurabishvili’s program make focus on tourism, culture, healthcare, sports, medicines, territorial integrity and independence of the country, public solidarity, strengthening regions, establishment of European standards and integration into EU, role of youth and diaspora. At the same time, she does not make accents on such important directions as: education and science, digital and investment policy. In whole, her program seems imperfect and invaluable and does not enable to make broader analysis. This program shows that the presidential candidate dos not have intellectuals in her team, such as economic experts and academicians; • Grigol Vashadze’s pprogramme makes foucs on education, science, healthcare, reduction of taxes, growing employment, social safety, balancing drugs policy; security policy, growing economy, defending territorial integrity, ensuring environment protection and defence policy. Promises for reduction of taxes, excise rates, VAT are populist rhetoric, because it is easy to decrease them, but it is difficult to find new sources for replenishing the state budget. Promises about growing salaries and pensions, doubling GDP per capita are unreal and populist, because the President does not have such authority. If his political team is able to reduce taxes, excise rates and VAT, on the one hand, and grow pensions and salaries, on the other hand, they could submit a due program to the parliament and bring benefits to our society in this way. In whole, this program seems more diverse and multilateral, but with more populist tendencies”, Rati Abuladze said. In both cases, priorities of the presidential candidates does not match their political capabilities. Consequently, their election activities and public evaluations demonstrate the level of their presidential charisma, political technologies and programs. That’s why, the rerun elections will be held in the country. President is part of state policy. Therefore, I stress that titles only waste political time, whilst it is impossible to cope with political and economic challenges, foreign debts and unanswered questions, and the condition of our citizens worsens day to day. There is not public group and team in our country that would revive the country. We do not have political situation, where new political and economic wave would be shaped independently. Regretfully, the ongoing

presidential elections seem hopeless in this respect. The solution should be found by honourable politicians and citizens: • Who disagree with the policy that frustrates a development of economic and social environment and want to shape a new political environment; • Who are taking efforts to stimulate new political forces (not revival of bankrupt policy); • Who aspire to leave trace in our society and shape valuable political milieu; • Who consider themselves obliged before the family, country and nation to change Georgian political environment and immortalize their names, Rati Abuladze explains. “ At this stage it is impossible to raise pensions to 400 GEL. Similar decision will ruin the budget and depreciate the national currency”, Vakhtang Charaia, head of the TSU Centre for Analysis and Prognosis said. Promises made by Grigol Vashadze, presidential candidate from the united opposition, about growth in pensions is not based on valuable calculations, he said. “If the population wants to receive 400 GEL pension with 10 times less solvency compared to current 180 GEL, naturally, this is possible theoretically and we can print money and issue not only 400 GEL, but 1000 GEL, but this decision will worsen living standards of more than 3 million residents in Georgia. We will sink in the period of Coupons again, when a bread cost 2 million Coupon. Therefore, pre-election promises should be based on valuable calculations. For example, total annual budget of Interior Ministry, Defence Ministry and Foreign Ministry is 1.6 billion GEL, while 2 billion GEL is required to raise pensions to 400 GEL. This signifies that even theoretical abolition of these Ministries will not suffice to increase pensions to 400 GEL. Total payments to all public workers in the state sector amounts to 1.8 billion GEL, including 60 000 teachers, 30 000 soldiers, several thousands of policemen. In one word, even if we fire all public employees, the saved funds will not suffice to raise pensions to 400 GEL”, Vakhtang Charaia noted. Under the 2019 state budget bill, universal healthcare program will be financed by

754 million GEL. Abolition of even similar major program does not suffice to increase pensions to 400 GEL, while the negative effect of the universal healthcare program suspension will worsen the condition of our population, including pensioners.


7 November 19, 2018 #261

Keti Pirtskhalaishvili: "PR and Merking Never Lose Actuality" Interview with the Founder of Marketing Agency Gingers Keti Pirtskhalaishvili. Why did you decide to enter this field and what kind of opportunities does it give in terms of career growth? During my studies at ESM I tried to get different types of work experience to better understand which area was interesting to me and what would I do with pleasure. After studying, I have worked in various fields at leading companies in Georgia and I think that's what I like and I want to do. PR and marketing never lose actuality, so if you are a professional, career growth it is proportionate to your selfgrowth. You get to the point of development to make a decision to do your favorite work from the other side - become the business owner and serve companies yourself. What is it necessary to establish a successful communication with the public? Strategy, correctly-set goals and the plan to implement them who, what and how we share it.

What three tips would you offer someone just starting out in PR? • Just do the thing that you enjoy and love; • Be constantly in search of news and self-development; • Be ready to do magic. What do you wish you would have known before starting your career in PR? The main component of the professional growth is to get real work experience, which can not be achieved before the start of your career, and accordingly the specific preliminary knowledge is less relevant. Descrive your typical week. Working on projects, distribution of duties and monitoring of executed cases, meetings, brainstorming, a lots of emails and Q&A, motivating myself and employees, making decisions on a number of issues. How would you go about finding relevant contacts and sources?

In modern reality, it is easy to find contacts. The most effective way is to get it through acquaintances. How would you prioritize and start your work day? Review the day schedule, write down to do list and sort it as priority. Then carry out the planned activities. What skills are required to be a successful manager? Maintained calmness and objectivity in challenging situations, positive mood, courage, motivation of self and team, correct planning of time and priorities. What trait do you value the most in your co-workers? The sense of responsibility and integrity are the values that are very important. I also appreciate teamplayers and positivity.


8 November 19, 2018 #261

Business News Georgian Restaurant in New York – Cheeseboat

the shape of Abrisi Dighomi. Global Entrepreneurship Week Started in Tech Park

Cheeseboat is a family owned Georgian bistro offering an eclectic variety of authentic cuisine with locally sourced ingredients. Restaurant brings the best dishes from the country of Georgia.

During one week each November, thousands of events and competitions in 170 countries inspire millions to engage in entrepreneurial activity while connecting them to potential collaborators, mentors and even investors. Powered by the Kauffman Foundation, the initiative is supported by dozens of world leaders and a network of more than 15,000 partner organizations. First Wine Forum of Georgia Held in Washington DC

The first thing that came to me was clay. So I found myself in a ceramic workshop. “ Green Climate Fund supports EBRD’s Green Cities Facility Polish Film Festival Hosts Georgian Movie Retrospective Rochester Polish Film Festival returns for its 21st year of bringing the best of contemporary cinema to Rochester. Presented by the Skalny Center for Polish and Central European Studies, the Polish Filmmakers Association, and the University of Rochester Cinema Group, the festival screened nine features over six days.

“FIRST VINO* FORUM OF GEORGIA” is being held in the capital of the USA, Washington DC, which is organized by the US-Georgia Business Council, supported by the National Wine Agency of the Ministry of Environment Protection and Agriculture of Georgia and the Embassy of Georgia in the United States. The EBRD has received a €87 million contribution approved by the Green Climate Fund’s (GCF) Board. The funding will support the EBRD’s Green Cities Facility for climate-focused sustainable urban development in Albania, Armenia, Georgia, Jordan, FYR Macedonia, Moldova, Mongolia, Serbia and Tunisia.

International Wine Contest “Georgia – Wine Homeland” Opens in Tbilisi

EAWSC Georgia – Wine Homeland, international contest of wines and strong drinks, opened in Tbilisi on November 7.

Abrisi Builds Premium-Class Residential Building in a Quiet and Neutral Area

Milk Processing Plant Opens in Terjola Milk processing plant has opened in the village of Siktarva, Terjola Municipality. Zekari plant was unveiled with the financial support of Government of Georgia, as part of United Agro Project. Unicorn Ceramics – Traditions Represented in Contemporary Way The story of Unicorn Ceramics started three years ago when the artist Maia Baratashvili got interested in ceramics. “It was a period when I wanted to temporarily distance myself from the painting.

A reduction in green zones in central Tbilisi has led to an ever-increasing demand for green space. In response to this demand, a premium-class offer has been made available near the city centre in

Amochame Jam of Pepper and Onion Have you ever heard about jam of pepper and onion? Have you ever thought of making sweets of similar products? Tamar Kinadze, Tina Vashakidze and Ia Dzagania have decided to implement similar project.


9 November 19, 2018 #261


10 November 19, 2018 #261

Innovating Process never Ends Experts forecast HUAWEI to move to the first place and replace Samsung. According to indicators of leading analytical companies - IDC, IHS Markit and Counterpoint, HUAWEI keeps surpassing Apple in number of sold smartphones and remains the wortld’s second major company in the third quarter in terms of global sales of smartphones. HUAWEI surpassed Apple in terms of sales and ranked second. This was unexpected result for experts, however, after introduction of new Mate20 series, they forecast HUAWEI to rank first and replace Samsung. We remind you that in September the International Data Corporation – IDC published business achievements of 2018, under which, in the global supply of smartphones, HUAWEI recorded an upturn of more than 95 millions. According to the IDC indicators, HUAWEI company surpassed Apple in number of sold smartphones and moved to the second position. It is noteworthy that according to the past 3 months’ indicators, HUAWEI sold total of 54.2 million smartphones and the

company’s market ratio constituted 15.8%. As to apple, in April-June, the company sold 41.3 million products. According to the report, Samsung ranked first in number of sold smartphones (71.5 million). The company’s market ratio was 20.9%. Today, HUAWEI company ranks second in the third quarter too. Nevertheless, its market ratio declined after the last quarter, HUAWEI sold 52 million phones and the company’s market ratio constituted 14.6%. In terms of products, the P and Mate series turned out very competitive. According to experts, HUAWEI’s success was preconditioned by its permanent efforts directed to research works and development: “Research and development have become one of the formulas of HUAWEI success”. HUAWEI is a leading brand in the industry thanks to its innovative technologies. Thanks to its premium products, this giant manufacturer of smartphones has won both market and consumers. „Only solution consists in improving products and services so as consumer

see how HUAWEI cares for consumer interests. Thanks to these efforts, today HUAWEI is the global brand. Moreover, more and more consumers give preference to HUAWEI smartphones”, Richard Iu, executive director for the business team of the company consumers, noted. Media outlets have widely highlighted HUAWEI Mate20 series and its unique potential. „HUAWEI Mate20 Pro is a smartphone that will make Apple and Samsung nervous. This is a smartphone with the best camera in the world, powerful processor and strongest batteries. All this mixture is enriched by other unique functions, such as phone wireless charging and scanner of fingerprint in display”, Hi-tech.mail.ru has released this ambitious statement. HUAWEI products and services are attainable in more than 170 countries and they are used by one third of the world population. There are 16 research and development canters worldwide in the USA, Germany, Sweden, Russia, India and China. HUAWEI Consumer BG is one of

the three business units of HUAWEI manufacturing personal computers, tabs and cloud services. HUAWEI’s global network is based on its 2-year experience in telecommunication business and serves to offer innovative technologies to consumers worldwide.

The Fourth Official Ceremony of the Welcome to Georgia! National Tourism Awards

in Georgia for the field of tourism and hospitality since 2015 and has successfully established itself as a unique platform to develop Tourism industry of the State. Welcome to Georgia! National Tourism Awards is the Annual Awards Ceremony, which is held in Georgia for the field of tourism and hospitality since 2015. It is kind of "Oscar" to celebrate the achievements of Georgian tourism and hospitality industry! Award Ceremony is closed and will host to 800 guests: General Managers and owners of the best hotels, restaurants, wineries of the country, the market leading developers, the main businesses of the country,

Government officials, national and local authorities, representatives of the largest hotel operators, travel agencies and tour operators, mass media and industry press. The venue of event is national and cultural monument of Georgia Rustaveli Theatre. Exquisite culture, centuries old traditions and unique hospitality will come together in Rustaveli Theatre on the Fourth Official Ceremony of Welcome to Georgia! National Tourism Awards to celebrate success of Georgian Tourism and Hospitality! After Party host is Republic – newly opened multifunctional venue which combines cool and contemporary interiors by the worldwide renowned

Georgian architects and artists. Located in the very heart of the city with panoramic windows offering a spectacular view over the city center and the Caucasus Mountains, Republic with its slick design and gorgeous views is an elegant addition to the historical center of Tbilisi. For the fourth year already Georgian National Tourism Administration on behalf of Ministry of Economy and Sustainable Development of Georgia is Co-organizer of the Award Project. Also Co-organizer of the project is Bank of Georgia. Official Supporters: Tbilisi City Hall and Partnership Found. General Sponsor - Alliance Group.

On December 17, 2018 Rustaveli Theatre will host the most remarkable event of the Tourism and Hospitality industry of Georgia - the Fourth Official Ceremony of the Welcome to Georgia! National Tourism Awards. On the Awards Ceremony winners and finalists of 20 different nominations, out of more than 350 nominees will deservedly receive recognition of “The Best in Tourism and Hospitality”. Welcome to Georgia! National Tourism Awards is the Annual Awards Ceremony, which is held


11 November 19, 2018 #261

The Current Situation, Big Players on the Market and Opportunities of Breeding Sector in Georgia Georgia has a significant rural population - about 42% of total inhabitants live in rural areas. Thus, agriculture has just 8.2% share in total GDP. Livestock was and is one of the major components of the agricultural sector of the country - almost 50% of total agricultural output comes on animal husbandry. Georgian Breeders mostly own small farms. Most of them just remain small with minor scale production mainly because of the lack of modern and efficient approaches in resource management, breeding and species selection. According to the Georgian National Statistics Office of Georgia, the demand for meat consumption in country has an increasing trend. Around 62% of consumed meat in Georgia is

of sheep are brought in Georgia: Tushetian and Imeretian. Tushetian is mainly spread in Eastern Georgia. Chart below represents meat import and export during 2010-2017 years, as well as local meat consumption and meat production. The chart shows that meat consumption in Georgia has a growing trend and local production cannot satisfy it. About 62% of meat is imported, while meat export is very low. Among local meat producers, the main ones are: ABD and Co – the company combines a pig farm, slaughterhouse and a meat processing plant. The company was founded in Bolnisi in 2013. ABD Georgia Pig Farm is designed to meet the European standards. Breeding work is organized jointly

and employs 60 people in Georgia. Currently, Blauenstein Georgia produces fresh meat and meat products; the Company owns a farm, a meat processing plant and a brand shop. Chirina - the producer of Biu-Biu chicken is the largest poultry producer in Southern Caucasian region. The Company is vertically integrated starting from cultivating raw materials for feed, until distribution and selling of poultry products. Chirina owns the entirely automatized meat processing line. The equipment is provided by Dutch companies MEYN, NIJHUIS WATER TECHNOLOGIES, a DutchAmerican company BIG DUTCHMAN, and Spanish company ROSAL. The leading company of Israel - AGROTOP designed and built pullet breeder and

vaccination. Thus, lack of veterinary clinics, special equipment, vet doctors and poor qualification of breeders remain as the biggest problem in the sector. Agricultural governmental projects useful for breeding sector are: • Preferential Agro Credit Project - The purpose of the project is to improve the processes of primary agricultural production, processing, storage and sale by providing farmers and entrepreneurs engaged in agriculture with cheap, long-term and preferential funds. • Produce in Georgia – the goal of this program is to facilitate development of the industries focused on production, establishment of new enterprises and extension/upgrade of the existing ones. Local and foreign investors could

Livestock Numbers in Holdings of all Categories (as of End of Year, ths. heads)

Cattle

Pigs

Goats

Sheep

Poultry, ths. heads

2011

1,087.6

105.1

53.6

576.8

6,360.2

2012

1,128.8

204.3

54.4

688.2

6,159.1

2013

1,229.7

191.2

60.8

796.0

6,760.7

2014

970.0

169.,7

53.7

865.9

6,657.8

2015

992.1

161.5

49.8

841.6

8,308.6

2016

962.7

136.2

60.6

875.9

8,237.8

2017

909.7

150.7

51.1

855.9

8,386.0 Source: National Office of Statistics of Georgia

imported, therefore there is an import substitution opportunities in all kind of meat market. The tables below depict livestock numbers and animal production in holdings of all categories for the period of 2011-2017 years: Mostly dairy and combined (milkmeat) cows are spread in Georgia, but not beef cattle. The species that one can meet in Georgia are Georgian mountain cow, Caucasian Tsabla, Brown Swiss Cattle and Holstein Friesian cattle. Two local breeds

with the Danish company – ‘Breeders’. Nursing and fattening the piglets is carried out in accordance with the sanitary standards and monitored by veterinarians on the site. Kvareli Baga - Kvareli Baga is a dairy farm in Kvareli, operating in a dairy market and managed by a livestock expert from Israel. The total Project cost is estimated at USD 8 million. The EBRD loan and IFC investment (USD 2 million) helped launch the Kvareli Baga farm. In the beginning of 2018, the company had about 1000 cows producing approximately 14,000 liters of milk per day. Kvareli Baga plans to expand its activity and increase production. Blauenstein Georgia - Blauenstein Georgia, created by Georgian-Swiss investment, has been operating in Racha since 2008. The Company has invested more than GEL 15 million

broiler farms for them. As for the equipment supplier, the local company, which can be useful, is Caucasus Genetics. It is a company, which combines dairy experts and breeding and AI specialists. It was founded in 2006 as a small company and nowadays represents one of the key suppliers in breeding and AI field. The activities of the company include consulting, distribution and service for livestock farm equipments, AI kits and tools, as well as semen and embryos of livestock, bacteriological starters and cultures for dairy products, lab equipment and hygienic materials. The Government tries to support breeders as much as possible. The Ministry of Agriculture finances vaccination of livestock towards main diseases. Every year special amount from the budget is allocated for livestock health control and

easily benefit from the rising consumption on the local market, as well as take advantage of the Duty-free access to an over 900 million markets under Free Trade Agreements with Turkey, Ukraine and CIS countries and Deep and Comprehensive Free Trade Agreement with the EU. The investment opportunities that exist in the sector are huge. Starting from the import substitution opportunity in meat production by developing modern farms, or improving access to modern technologies, importing vet medicines, equipment and vet hospitals/medical service, ending with special training programs. By Tatia Kartvelishvili Experto Consulting


Profile for Caucasian Business Week

Caucasus Business Week #261  

1. Local Apple to Replace Imported Product in Georgia 2. International Monetary Fund Warning against Monopolies in Pharmaceutical and Bankin...

Caucasus Business Week #261  

1. Local Apple to Replace Imported Product in Georgia 2. International Monetary Fund Warning against Monopolies in Pharmaceutical and Bankin...

Advertisement