Georgian President Commends Work of ACDI/VOCA’s AgVANTAGE Project
On December 13, 2006, Georgian President Mikheil Saakashvili officiated the opening ceremony of two newly constructed modern greens consolidation centers for the herb enterprises Herbia Ltd. and Georgia Fresh Herbs Ltd, which were built with the support of ACDI/VOCA’s USAID-funded AgVANTAGE project in the villages of Tkachiri and Kvitiri, Georgia.
President Saakashvili said, “We have found a new market for Georgian greens in Europe. Lots of greens are grown in the world, but the greens grown in the Imereti region have no competitors. Once we penetrate higher-end European markets and once the Europeans taste our Georgian greens, I doubt that we will have enough greens for other markets. Improved greens packaging is our business card to Europe.”
Minister of Agriculture Petre Tsiskarishvili, Governor of the Imereti region Akaki Bobokhidze, USAID Director Office of Economic Growth David Gosney and other high officials also attended the opening ceremony.
Fresh herbs are one of the major crops grown in the Imereti region and constitute the primary source of income for some 7,000 families. Prior to the Russian embargo in 2005, 85 percent of the 4,500 tons of greens grown by these families had been exported to lower-end markets in Russia. The remaining 15 percent went to the Ukraine.
Farmer income was severely impacted last year as a result of a Russian commercial embargo. Since this time, a priority for ACDI/VOCA’s AgVANTAGE project has been to work with Georgian growers and exporters to identify and develop alternative markets for Georgia’s fresh greens. A major element of the strategy is to target higher-end segments of these alternative export markets. Entry and competitiveness in these markets require the establishment of modern pack houses that have forced air cooling and storage, improved post-harvest handling and packaging, and cold chain integrity.
Two key partners in this effort have been the companies Herbia Ltd. and Georgia Fresh Herbs Ltd., which have each constructed modern consolidation/pack houses in two of the villages located in the main greens growing area of Tskaltubo district. These facilities will each have a throughput of 1,400 tons per season from November until May. The introduction of forced air cooling and modern post harvest handling technologies will nearly double the product’s shelf life from the present two to three weeks to three to five weeks, boosting the farmer’s profit by 30 percent. In addition, the two facilities will provide 130 permanent job opportunities for Tskaltubo residents.
To add more value to the product, AgVANTAGE has also introduced new packaging materials in both companies. These modern, 1.6 kilogram cardboard boxes are in stark contrast to the traditional, 30 kilogram, second-hand boxes typically used for the traditional, lower-end markets. The new modern packaging enables companies to explore new markets having higher profit margins and is part of the strategy for advancing the greens industry in Georgia.
During the consolidation centers’ first year of operation, the two companies plan to export 800 tons of greens to Ukraine, targeting primarily supermarkets and hypermarkets, which are combinations of supermarket and department stores. This amount is expected to represent approximately 40 percent of the Georgian greens exported to the Ukraine this year. As a result of AgVANTAGE’s effort, Olvita, one of Ukraine’s largest distributors of greens and other food products to supermarkets and hypermarkets, recently purchased 18 tons of parsley and dill from the Georgian companies.
In addition to the Ukraine, Herbia and Georgian Fresh Herbs will be entering the Polish market. At present, 95 percent of that market is supplied by Italy, which commands prices that are 30 percent higher than Georgia. This price difference combined with higher quality herbs and better packaging gives Georgia a real opportunity to take a share of the market from Italian suppliers.
AgVANTAGE has also facilitated linkages between Georgian exporters and potential buyers of fresh herbs by supporting the participation of Georgian companies in Polagra-Food 2006, Riga-Food 2006 and the third International Conference and Fair “Fruits and Vegetables of Ukraine 2006 – Open Market.” Plans are in place to continue this support for a key up-coming exhibit Germany. In addition, AgVANTAGE continues its efforts to help farmers improve their production practices through use of low-cost poly-tunnels which enable an extended growing season and crop diversification. Five of these tunnels are under construction in the Imereti region.