03/2013
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6 Geo r g i a Agriculture Finance Bulletin Russia Interested in Importing Fruit and Chacha from Georgia Spring Agricultural Works Supporting Program is in Active Phase Israeli Ambassador – Our Businessmen See interesting Opportunities in Georgia Marneuli Food Factory Launches Export to the UK
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Georgian Agriculture Finance Bulletin Edition #6, March 1—31, 2013
Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
“Russian Market may be more Profitable for Georgian Entrepreneurs than Local” ...................... 2 Russia Interested in Importing Fruit and Chacha from Georgia ...................................................... 2 “Rospotrebnadzor” Reveals a List of Companies that Have an Opportunity to Enter the Russian Market ............................................................................................................................................. 2 4) Second Delegation of Russian Experts to Arrive in Georgia on March 25 ...................................... 2 5) Georgian Agricultural Products May Also be Return to Russian Market ........................................ 2 6) Opening of wine laboratory in Kachreti Vocational College “Aisi” ................................................. 3 7) Tbilisi to Host Georgian-Israeli Business Forum on March 13—14 ................................................. 3 8) Georgian Business Delegation to Visit Russia on March 18 ............................................................ 3 9) Spring Agricultural Works Supporting Program is in Active Phase.................................................. 3 10) Presentation of the Preferential Agro-credits Project .................................................................... 4 11) 11 BANKS AND 2 MICRO-FINANCIAL ORGANIZATIONS JOINED PROJECT ON PREFERENTIAL AGRICULTURE CREDITS .................................................................................................................... 4
Foreign Aid ................................................................................................................. 4 12) 13) 14) 15) 16) 17)
Short-Term Financing for Farmers .................................................................................................. 4 Development of New Crop Insurance Scheme................................................................................ 4 Israeli Ambassador – Our Businessmen See interesting Opportunities in Georgia ........................ 5 AGREEMENT SIGNED WITH EU ON ALLOCATION OF 40M EUR TO GEORGIAN AGRICULTURE ....... 5 JAPAN TO ALLOCATE GRANT OF UP TO $1M TO GEORGIA ............................................................. 6 Georgian-Polish Economic Ties Improving ...................................................................................... 6
Private Sector.............................................................................................................. 6 18) 19) 20) 21) 22) 23) 24)
“Livo” Enters the Market under “Georgian” Trade Mark ................................................................ 6 Sales of “Nabeghlavi” mineral water in Russia, are expected to start in May ................................ 6 Socar to finance refrigerated warehouses in Georgia ..................................................................... 7 Marneuli Food Factory Launches Export to the UK ......................................................................... 7 AGRIBUSINESS PRODUCTION ACCOUNTED FOR 16.1% OF TOTAL OUTPUT ................................... 7 VTB Bank Georgia has already approevd 15 loans within preferential agriculture credit program 8 GPIH OFFERS INSURANCE ON LIVESTOCK ....................................................................................... 8
Note: The Georgian Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows to Georgia’s agricultural sector. This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Georgia. Currently, BFC is implementing the Agricultural Lending Programme for KfW. Read more » BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC. Georgian Agriculture Finance Bulletin. Edition #6, March 1—31, 2013
State Initiatives 1)
“Russian Market may be more Profitable for Georgian Entrepreneurs than Local”
March 5th, 2013, http://commersant.ge/eng/index.php?id=4730
In terms of dominance of imported products, Georgia is trying to open the Russian market for its agricultural products. How will agricultural products be exported to Russia, considering that local manufacturers have been unable to replace imported agricultural products by Georgian in the internal market? Read More »
2)
Russia Interested in Importing Fruit and Chacha from Georgia
March 6th, 2013, http://commersant.ge/eng/index.php?id=4750
After a 6 year pause, Georgian wine and “Borjomi” are returning to Russia. “Rospotrebnadzor” has given permission for drinks registration while negotiations on fruits export are underway. Market players expect that sales could begin already in May. Read More »
3)
“Rospotrebnadzor” Reveals a List of Companies that Have an Opportunity to Enter the Russian Market
March 6th, 2013, http://commersant.ge/eng/index.php?id=4747
“In total 200 varieties of Georgian wine might be exported to Russia”, Russia's chief sanitary official Gennady Onishenko told Russian media. He says that Georgian companies must submit samples for registration in Russia. Read More »
4)
Second Delegation of Russian Experts to Arrive in Georgia on March 25
March 6th, 2013, http://www.prime-news.ge/?p=100363&lang=en
A second team of the Rospotrebnadzor experts will arrive in Georgia on March 25, Levan Davitashvili, head of the National Wine Agency, said at a press conference on Wednesday. According to him, during the second inspection, the Russian experts will inspect 47 alcohol-producing enterprises located in Kakheti region and Western Georgia. Read More »
5)
Georgian Agricultural Products May Also be Return to Russian Market
March 7th, 2013, http://www.prime-news.ge/?p=100456&lang=en
Apart from Georgian wine and mineral water, agricultural products may also return to the Russian market.
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BFC. Georgian Agriculture Finance Bulletin. Edition #6, March 1—31, 2013
As Georgia’s Agriculture Ministry says, a 7 member delegation of Food Safety Agency is preparing for visiting Russia, where the issue related to the export of Georgian animal and plant products to Russian market will be discussed. Read More »
6)
Opening of wine laboratory in Kachreti Vocational College “Aisi”
March 7th, 2013, http://www.mes.gov.ge/content.php?id=4503&lang=eng
Deputy Minister of Education and Science of Georgia Ketevan Natriashvili and Jorg Oelschlager, Director of GIZ Private Sector Development Programme opened a wine laboratory in Kachreti Vocational College. Wine-making represents one of the main occupations, main sources of income and employment for local farmers in Kachreti Municipality. Wine-making is one of leading vocations at Kachreti Public College “Aisi” Read More »
7)
Tbilisi to Host Georgian-Israeli Business Forum on March 13—14
March 13th, 2013, http://www.prime-news.ge/?p=100934&lang=en
Georgian-Israeli Business Forum will take place in Tbilisi on March 13—14. Israeli Embassy in Tbilisi, BDO Israeli, BDO Georgia and Globe Gateway are organizers of the event. Yuval Fuchs, Ambassador of Israel to Georgia stated at a news conference on Tuesday that the idea of holding the forum created two years ago, when he met with his Georgian counterparts in Israel, while they started working on organizing the forum. Read More »
8)
Georgian Business Delegation to Visit Russia on March 18
March 14th, 2013, http://www.prime-news.ge/?p=101102&lang=en
A Georgian business delegation will arrive in Russia on March 18. PM Ivanishvili stated about it at the meeting with representatives of the regional media on March 13. He said more than 90 companies wanted to export mineral water and alcoholic drinks to Russia. 40 out of them have already reached an agreement and they may export products to the Russian market. Read More »
9)
Spring Agricultural Works Supporting Program is in Active Phase
March 20th, 2013, http://moa.gov.ge/?p=2567&lang=en
Update on Ministry of Agriculture’s Small Farmer Support Program. In the program framework, over 700 000 beneficiaries will receive agricultural cards. * 560,494 small farmers in Kvemo Kartli, Shida Kartli, Mtskheta-Mtianeti, Kakheti, Imereti, Guria, Samegrelo and Adjara Regions already received combined cards, which includes vouchers for mechanized land cultivation. * Distribution of nominal cards for agricultural inputs have been delivered to 207 561 beneficiaries in the same regions. * 10 072 hectares of land is cultivated by using agricultural cards. Read More » Page 3
BFC. Georgian Agriculture Finance Bulletin. Edition #6, March 1—31, 2013
10) Presentation of the Preferential Agro-credits Project March 27th, 2013, http://commersant.ge/eng/index.php?id=4967
A list of commercial banks, which will cooperate with One Billion Agriculture Fund, has been announced today. A presentation of “Preferential Agro-credits Project” was held at “Tbilisi Marriott” hotel. All the leading banks will collaborate with the Foundation. In the frames of the project, farmers will be able to get long-term agro loans at 0—3%, while maximum interest rate on loan will be 7—8%. Read More »
11) 11 BANKS AND 2 MICRO-FINANCIAL ORGANIZATIONS JOINED PROJECT ON PREFERENTIAL AGRICULTURE CREDITS March 27th, 2013, http://sarke.com/cgi/search/news.asp?Code=10037439
Agriculture Minister David Kirvalidze declared, while presenting today the project on preferential agriculture credits, that 3 components are envisaged “in order to make credit affordable for farmers of all size–small, medium and large”. At the presentation, participants of the project signed memorandum of cooperation. The project involves following commercial banks: Basisbank, Cartu, Constanta, Halyk Bank Georgia, KOR Standard Bank (KSB), Liberty Bank, ProCredit Bank, Republic, Sakartvelos Banki (Bank of Georgia), TBC Bank, VTB Bank Georgia. Credits will be issued also by 2 micro-financial organizations–Crystal and Credo. Read More »
Foreign Aid 12) Short-Term Financing for Farmers March 4th, 2013, http://epigeorgia.com/index.php/en/resources/news
In collaboration with Georgia’s largest agricultural input providers, laboratories, and MFI Credo, EPI developed new short-term financing schemes, which facilitated the creation of two new financial products: (a) an interest-free agricultural commodity (fertilizers, chemicals) loan and (b) an interest-free service loan for soil analyses. On March 12, MFI Credo approved interest-free commodity and service loans in the amount of USD 201,121 for 558 small scale mandarin and hazelnut growers. EPI and Credo plan to continue distribution of the interest free loans in late April, when the second round of pesticide and fertilizer application is due. Read More »
13) Development of New Crop Insurance Scheme March 4th, 2013, http://epigeorgia.com/index.php/en/resources/news?start=5
In order to significantly ease the policy-issuing process and rapidly raise the number of insured farmers, EPI, Bank of Georgia (BoG) and Aldagi BCI, developed a scheme, which enables BoG to make crop insurance mandatory for BoG agro loan borrowers who grow crops specified in the pilot project. As part of Page 4
BFC. Georgian Agriculture Finance Bulletin. Edition #6, March 1—31, 2013
the scheme, Aldagi BCI issues a one-year open crop policy to Bank of Georgia that entitles BoG the right to insure its borrowers on behalf of the insurance company. As soon as the farmer/borrower signs a loan agreement with BoG, the crop under collateral is insured. Together with the loan agreement, the borrower receives the terms and conditions of crop insurance, so that he/she has a thorough understanding of the offered insurance product and is instructed how to act if an insurance event occurs. Unlike the previous scheme, this scheme does not require a visit of the insurance agent to the farm as the part of work will be transferred to the bank’s loan officer. Read More »
14) Israeli Ambassador – Our Businessmen See interesting Opportunities in Georgia March 13th, 2013, http://www.prime-news.ge/?p=101016&lang=en
Our businessmen see that there are interesting opportunities in Georgia, Israeli ambassador to Georgia Yuval Fuchs said at the Georgia-Israel business forum. “We have a history of long coexistence. The Israeli state strategy is oriented on building economy. Georgia’s economic development is a crucial factor for the country, which is also important for the regional geo-political stability. Economics are one of the cornerstones of our countries’ security. I hope Israel will be in the top ten of Georgia’s partners and I believe this is possible in a short term perspective”, Yuval Fuchs said. Read More »
15) AGREEMENT SIGNED WITH EU ON ALLOCATION OF 40M EUR TO GEORGIAN AGRICULTURE March 13th, 2013, http://sarke.com/cgi/search/news.asp?Code=10037268
The EU representation in Georgia reported that an agreement was signed today in Tbilisi, envisaging allocation of 40 million EUR for Georgian agriculture, within the framework of the European Neighbourhood Programme for Agriculture and Rural Development (ENPARD). The five-year program includes the following components: * 18 million EUR for budgetary assistance. This will support the government’s intention to create information and consulting centers for farmers in rural areas and adopt EU-like legislation for cooperation promotion among farmers. * 15 million EUR for financing grants for agriculture development programs, which will assist farmers to reduce production expenditures, become more effective and improve market connections. * 2 million EUR will for capacity building in the Agriculture Ministry, and 3 million EUR will be given to Agriculture Ministry of Ajara. * 2 million EUR for audit, estimations and information arrangements. Read More »
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16) JAPAN TO ALLOCATE GRANT OF UP TO $1M TO GEORGIA March 19th, 2013, http://sarke.com/cgi/search/news.asp?Code=10037337
The Agriculture Ministry reported that Minister David Kirvalidze met with acting ambassador of Japan to Georgia Hiroki Tokunaga. The sides considered Japanese project 2KR, envisaging worldwide support of low-income farmers in terms of their access to agriculture machinery. “The Georgian government is conducting intensive procurement of new machinery, however, calculations made in accordance with agriculture territories, revealed the necessity of more tractors in order to perform works perfectly countrywide”, Kirvalidze noted. The ambassador confirmed readiness to send the mentioned proposal to respective institutions in Tokyo. Tokunaga considered also those grant projects, which are implemented in Georgia’s agriculture sphere under Japanese assistance and noted that Japanese government plans to fund this year more 10 such projects with about $1 million. Read More »
17) Georgian-Polish Economic Ties Improving March 25th, 2013, http://finchannel.com/Main_News/Geo/125304_Georgian-Polish_Economic_Ties_Improving/
Trade turnover between Georgia and Poland came to USD 91 million in 2012, exceeding the previous year’s data by 26 percent. Representatives from the Ministry of Economy and Sustainable Development of Georgia, the Embassy of Poland in Georgia and Polish businessmen, say that the economic relationship between Poland and Georgia is developing and improving further yet. Read More »
Private Sector 18) “Livo” Enters the Market under “Georgian” Trade Mark March 11th, 2013, http://commersant.ge/eng/index.php?id=4776
Natural citrus juices of “Livo” will appear in Georgian trading facilities. Product is produced in Adjara in “Citro” factory which was set up within “Millennium'' program. The factory is the only one in Georgia processing the citrus with the use of modern technologies. Read More »
19) Sales of “Nabeghlavi” mineral water in Russia, are expected to start in May March 12th, 2013, http://commersant.ge/eng/index.php?id=4791
“Nabeglavi” expects its products to start selling on the Russian market in May. As the company’s Director General explains to radio “Commersant”, it can take up to 2 months to do the laboratory check, hygienic and epidemiological examination, approval and adoption of the registration. Read More »
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BFC. Georgian Agriculture Finance Bulletin. Edition #6, March 1—31, 2013
20) Socar to finance refrigerated warehouses in Georgia March 13th, 2013, http://bizzone.info/agriculture/2013/1363192939.php
On the meeting of Premiere Minister of Georgia, Bidzina Ivanishvili and the president of Socar oil company, R. Abdulaeva, details of Socars future activities in Georgia were discussed. In addition to gas supply, SOCAR will participate in other regional projects. In Kvemo Kartli, they laid the foundation for a new warehouse and cold storage to be used by local producers. The new vegetable storage facility will be built on a 21,000 square meter plot. Financed by SOCAR, the construction will be carried out by Georgian—Azerbaijani joint venture “Agroinvest”. At the foundation laying ceremony, Minister of Agriculture David Kirvalidze said, “the number one issue for all agricultural producers is the ability to maintain their own products for future sales. Thus, the manufacturer will be able to regulate itself when to deliver their products to the market to get the most financial benefit.” Read More »
21) Marneuli Food Factory Launches Export to the UK March 13th, 2013, http://commersant.ge/eng/index.php?id=4820
From March 18, “Marneuli Food Factory” [MFF] will export its products to Europe. The products, which will be sold in the London “Weekend markets”, will be differently packed especially for the British consumer and based on marketing researches and assortment will vary from the Georgian market. “Paradise apple” and watermelon jam will be added to the already produced products especially for Londoners. Read More »
22) AGRIBUSINESS PRODUCTION ACCOUNTED FOR 16.1% OF TOTAL OUTPUT March 21st, 2013, http://sarke.com/cgi/search/news.asp?Code=10037369
According to preliminary data of Sakstat, the volume of agribusiness output in 2012 was 6.3 billion lari. Compared to 2011, the volume is increased by 1.8%. This sphere accounted for 16.1% of the country’s total output, declining by 1 percentage point year-onyear. In the reporting year, the total volume of agriculture production was up 2.7 billion lari, increasing by 2.5% year-on-year. Of this, 59.1% (i.e. 1.6 billion lari) was from cattle breeding, which increased by 21.3%. The total output of agriculture processing was 3.6 billion lari (growth – 1.8%). Out of this, 32.8% (i.e. 1.18 million lari, decline – 5.7%) was from bread and other pastries. Read More »
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23) VTB Bank Georgia has already approevd 15 loans within preferential agriculture credit program March 28th, 2013, http://sarke.com/cgi/search/news.asp?Code=10037453
VTB Bank Georgia reported that it has received already 100 applications within project of preferential agriculture crediting. Total sum of requested funding makes up 2 million lari. By the present moment, the bank has already approved 15 loans, with total volume of 500,000 lari. So far, all received applications correspond to the second component of the project, envisaging lending of 5,000—100,000 lari with interest rate of no more than 8%. Purpose of such credits is financing of floating and fixed assets in agriculture. To note, VTB Bank Georgia participates in all three components of the project (the first one envisages small commodity credits, while the third – preferential credits for agriculture companies). Read More »
24) GPIH OFFERS INSURANCE ON LIVESTOCK March 29th, 2013, http://sarke.com/cgi/search/news.asp?Code=10037477
GPIH has offered insurance of livestock, which costs 30 lari per head annually to farmers. Instead, reimbursement is defined by 300 lari per head. So far, the company provided insurance of yield only, GPIH said. Read More »
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content. The articles do not necessarily reflect the opinions of BFC, its staff, its associates or its partners. Copyright of articles is retained by their authors.