Greenhouse Market – Prospective But Problematic
17 November, 2011
Greenhouse Market – Prospective But Problematic

Two key hurdles that include unreasonable heating costs and sluggish customs control hampers Georgian greenhouse sector to be available to ordinary farmers to enable them to utilize full potential of Georgian greenhouse market that will allow to cover the local market demands and enhance export. Some say that the way out is a cold culture production. 

Georgian greenhouse market has excellent prospects and potential to meet local demand completely and go to export, David Dumaresq, Greenhouse/Vegetables Consultant with the USAID-supported Economic

Prosperity Initiative (EPI), came to this conclusion after his two-week audit of Georgian greenhouse sector.

“I think the prospects are excellent, there is high potential for growth and profit,” he said in the interview with Georgian Journal.

The volume of imported product in Georgia that makes up roughly 80% of the market and high prices on the product, as well as number of diverse heating sources [including geothermal waters, gas, electricity, coal and hazelnut chaff] available in Georgia, makes Dumaresq think that the greenhouse sector can be profitable in Georgia and there will be still a lot of room for growth till the market becomes saturated and prices might start coming down.

He expects to reach this point of price-slump in 2 years that is a good news for consumer but somewhat regrettable for entrepreneurs who may get less profit. But within these two years producers are supposed to get more efficient and lower their cost of production by growing better and having higher yield. Export markets can bring more profit.

According to Dumaresq, Russian market is a big lure this end rather than EU that already has a lot of greenhouse producers in Netherland and Spain and needs higher transportation costs.

He believes Georgian greenhouse producers had better aim on local market first, and once it gets saturated to hit Russian and Ukrainian markets and only then think of the EU.

Russia accounted for more than 73% and 21% of Georgian vegetable and fruit export respectively before it imposed a ban on Georgian product in 2006 under alleged quality reasons. However now when Russia is supposed to join the World Trade Organization (WTO) by end-year it seems quite possible for Georgian product [Georgia is already the WTO state] to reappear at Russian market as the WTO removes trade problems between its member-states.

However to achieve realization of Georgian greenhouse sector’s potential it needs to be competitive with the infesting Turkish import that almost completely covers Georgian vegetables market starting November to March and enjoys higher profit as prices are the highest at this time of the year.

Two key reasons – high fuel prices and sluggish customs control undermines competitiveness of Georgian greenhouse business, Davit Chachanidze, Director Executive of Ltd of BioOrganic Georgia, producing Organic – the first certified liquid bio fertilizer in Caucasus, presumes. He had run greenhouse business in east Georgia for four years but quit it ultimately and undertook bio-fertilizers production.

According to him, the problem is that greenhouse activity is almost prestigious and not affordable to ordinary Georgian farmers as it demands huge investments: USD 1 million per hectare – this is the size that can be competitive with the Turkish product as it can give profit in spite of high heating prices and any other producing costs.

Although Georgia is blessed with heating sources tariffs on gas and electricity, geothermal waters are still unreasonable; thermal energy of Tkibuli coal, deposited in west Georgia,  is far from Ukrainian coal to make greenhouses competitive at smaller than 2 thousand square meter space. Hazelnut is also profitable on large areas.

“The more or less affordable size that can also be profitable starts from 2 thousand square meters scarcely affordable to peasants, however transportation costs are so high that producers in west Georgia where the climate is much milder and competitive with east Georgia prefer to export their product to Ukraine rather than take it to Tbilisi, the capital in eastern part of the country, that is the key consumer of greenhouse product,” Chachanidze said adding that Turkish import covers Georgian market because it is much cheaper.

Turkey exports cheaper non-bio product to Georgia that cannot be exported to the EU through almost damping prices and Georgian higher quality product including bio cannot compete it.

Georgian greenhouse industry counting 300 greenhouses with few bio-farmers can scarcely win over Turkey where all farmers have their own greenhouses, only bio-producing includes 20 thousand certified bio-farmers and 100 thousand hectare lands, and over the top of this Turkish government subsidizes the sector, makes number of preferences and has strong customs control demanding to tag each tomato exported to Turkey while Georgian customs allows all imported product in without much ado.

The only way out is to focus on cold product like salads and potatoes that require no heating and can be easily produced in open tunnel-furrows, Chachanidze suggests.

“Let’s forget tomatoes and cucumbers in winter, it is not healthy, and eat only seasonal food. Producing cold vegetables is quite possible and competitive, and American experts also do advise this,” he said.

 

Print
Other Stories
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
Investment Plan for Europe – Additional EUR 800 million for SMEs as EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 800 million to innovative small and medium-sized companies (SMEs),
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
18.07.2019
19.07.2019
USD
1
USD
2.8687
2.8714
EUR
1
EUR
3.2178
3.2191
GBP
1
GBP
3.5580
3.5832
RUB
100
RUB
4.5670
4.5608
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8714
EUR
1
EUR
3.2191
GBP
1
GBP
3.5832
RUB
100
RUB
4.5608
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31