BUSINESS
Agricultural projects success-show
02 December, 2010

Georgian agriculture projects funded by the US-supported Millennium Challenge Georgia Fund (MCG) are assessed successful. USD 32 million-worth investments were made in total 283 projects within the four year Agribusiness Development Activity project of the MCG and 2600 jobs were created. Georgian government believes success of the project will attract more investments in Georgian agriculture sector.
Georgia, a traditional agricultural country, faces a task to restore its currently underdeveloped agriculture. Georgian agriculture that was making about 55% of GDP in

80s of the last century cuts a modest 9% in Georgian GDP today. Banks shun financing agriculture - agriculture ranks below 1% in the total loan portfolio of Georgian banking sector.
Therefore agriculture was listed among the priorities of the USD 395 million-worth MCG compact launched in 2006 in Georgia. USD 20.2 million-worth grant was disbursed within the frames of the Agribusiness Development Activity (ADA) project of the MCG to finance agriculture-oriented projects throughout Georgia. The ADA project is completed presently and to assess the aftermath of the works done within the project, the grantees held a show-case exhibition Agri-Food Expo November 29, 2010.
Since 2007, total 283 grant projects have been financed with the budget of USD15.9 million, generating the same amount of matching investments that eventually doubled total investment made through MCG into the country’s agribusiness sector up to USD 32 million. The projects are implemented in every region of Georgia in the sectors such as cattle-breeding, poultry farming, beekeeping, fruits and vegetables processing, dairy and many more, and they aim at the development of primary production, small and medium enterprises and farm services centers throughout Georgia.  As a result of ADA Project implementation, up to 3 thousand new jobs have been created in rural areas, indirectly benefiting more than 100 thousand people.
Both Georgian government and MCG officials assess the ADA project implementation as successful; all financed projects became successful irrespective of global financial crisis. About 15 enterprises even manage to export their product.   
According to Nika Gilauri, Prime Minister of Georgia, the ADA project aimed to show to investors and private sector that Georgian agriculture can be profitable and it can create jobs and bring profits.
“Of course USD 36 million could not make the entire Georgian agriculture flourish but the boon of the project is that about 300 different projects came true, more than 2600 people are employed, and all these projects turned out profitable. It proves that Georgian agriculture has a huge potential as an exporter, job creator, innovative, open to new technologies. Now we see that more investors and businessmen are ready to invest in agriculture, produce products in Georgia, export and employ Georgians,” Gilauri told media during the event.
As Giorgi Abdushelishvili, CEO of MCG, explained to Georgian Journal, the ADA project participant businesses are supposed to be more and more successful as far as they learn how to manage their business, how to be in line with international standards, be open to high tech, supply local market and hit oversee markets.
ADA participant exporters are focused on fruit, nut, and processed fruits mainly. The key market is CIS for fruit and vegetable, and EU – for nut.
Ilia Giorgadze, an individual entrepreneur who runs cold storage business, started his business from zero, establishing a cold storage infrastructure [of 250 ton capacity] in Gurjaani, Kakheti region, thanks to USD 150 thousand ADA grant and USD 154 thousand of his co-financing. He mainly focuses on storage and sale of persimmons, grapes and nectarines harvested at his own garden; he also purchases needed quantities of fruit throughout Georgia. The export goes to Ukraine generally, however, Armenian and Azeri wholesalers also purchase product in Georgia so as to export them to Russia ultimately.  Giorgadze plans to enter Swiss market next year after the year-long negotiations with the Swiss Company gets through.  
“There is a demand for bio-food in Europe and our fruit is of bio material actually but you need some time to assure them that all procedures of fruit gardening are implemented in line of bio-product standards that takes about 2 years,” Giorgadze told GJ. “We are negotiating with a Swiss company for more than a year already and hope to export to Switzerland next year.”
Tornike Margvelashvili, Sales manager of Ekopex LLC located in Mtskheta District, focused on raw nut export to EU countries including Germany, Holland, Austria and Czech Republic starting 2006. Later he shifted the focus on local market. After the enterprise was reequipped [by USD 125 thousand of ADA grant and more than USD 153 thousand of co-financing] Ekopex started processing and packing of shelled, roasted and grounded nut as he found it more profitable. The enterprise plans to resume export [of packed product this time] to EU and hit US market as well.

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