Bolnisi Establishes New Platform for Efficient Business with Support of EU Initiative

Residents of Bolnisi Municipality in Georgia’s Kvemo Kartli region are improving their livelihoods after the municipal authorities provided them with practical tools and know-how to operate their businesses more efficiently, through a project financed by the European Union within the framework of the Mayors for Economic Growth (M4EG) Initiative.

Bolnisi is a multiethnic, mostly-rural region of Georgia, with a population of approximately 53,500. 63% of locals here are employed in the field of agriculture. Still, despite the existing opportunities in the agricultural sector, local producers rarely managed to optimize production and maximize their profits.

The reasons for this are partly traditional for rural areas: small-scale farmers do not have the skills or equipment to ensure the quality standards of their produce. The volumes of output are generally small and too fragmented to establish a strong regional reputation for local produce. And there’s also the specificity of the territory, which is home to a large proportion of ethnic Azerbaijani people, the majority of whom do not speak Georgian and stick to their traditional agricultural production without really considering the changing nuances of demand.

The Bolnisi Municipality is potentially attractive for tourists because of its rich cultural and historical heritage, unique local wines and food, and strategic location a one-hour drive from the Georgian capital. But until a couple of years ago, the tourism potential of the territory had been largely untapped.

This began to change in June 2017, when Bolnisi Municipality became a signatory of the European Union’s Initiative ‘Mayors for Economic Growth’ and started work on its Local Economic Development Plan (LEDP). Later the same year, the municipality took part in the M4EG Call for Pioneer Projects, and was named one of 16 winners out of 164 applicants. The European Union allocated €320,000 for the project ‘Establishing a platform for efficient flow of business activities in Bolnisi.’ The entire project budget reached €380,000 with the co-funding of the local municipality.

Also, within its commitments to the Mayors for Economic Growth initiative, Bolnisi Municipality developed a two-year Local Economic Development Plan, defining the main economic priorities and goals, as well as the concrete Action Plan to achieve them. The plan was assessed as excellent by independent experts of the World Bank.

Diagnosing the problems

When the project was launched at the beginning of 2018, the project team made sure to first study the local market, its potential, and the needs of local producers and entrepreneurs. The study, ‘Identifying production capacities and demand on locally produced goods, sources of supply, and assess business interest of peripheral customers in Bolnisi Municipality,’ helped to identify three areas with a high potential for economic development: agriculture, winemaking and tourism. Their relative limitations were also thoroughly addressed in the study.

The research findings, presented in January 2019, showed that local farmers would sell their primary agricultural products for further processing, which takes place in neighboring regions. Because of this, they were finding themselves at the very beginning of the local agricultural value chains, which resulted in lower incomes. This was largely due to the absence or unaffordability of necessary production and storage equipment. In addition, local producers had low technical capacity in adhering to the necessary production standards, to ensure high quality storage, packaging, distribution and marketing of their products. These same challenges were also faced by the wine producers in Bolnisi.

As for tourism, the study identified that local businesses providing services for tourists (café/bars, restaurants, family hotels, food facilities) couldn’t fully exploit their potential because of several factors. The first was that the biggest local tourist attraction, the historic neighborhood of Katharinenfeld, lacked the necessary tourism infrastructure and marketing instruments to promote and popularisz it. Secondly, the existing tourism service points couldn’t even satisfy existing demand for their services due to lack of know-how of running tourist-oriented businesses.

Developing research-based solutions

• Agro Center - helping local farmers and winemakers to grow

In a bid to address the challenges identified through the research, in January 2020, the project managers launched the Agro Center, an establishment run by the Bolnisi Municipality, offering various technologies to farmers and winemakers at affordable prices, free consultations and legal advice for them, and also a marketplace for the produced goods.

The premises for the Agro Center were built by the Bolnisi Municipality at its own cost, from scratch. It is located on the main road to Armenia, a strategic spot, easily available to the local producers and convenient for travelers to drop by and taste and buy locally-produced products.

The Agro Center offers local farmers and producers refrigerating, labelling, wrapping, packaging, bottling and filtering services for different agricultural products and wines at affordable prices through the use of modern technology. “In addition, today at the Agro Center, farmers receive consultations and expert services in Georgian, Armenian and Azerbaijani languages,” said Bolnisi Municipality Mayor David Sherazadishvili. “This is important for the multiethnic population of the municipality.”

“One of the first things we did was to study Bolnisi’s economic potential. We found that one of the most well-developed fields was winemaking,” said Natalia Kakabadze, project manager at the Bolnisi grant project, going on to note that in order to help winemakers, the Agro Center bought equipment that many wine producers couldn’t afford.

The facility purchased machines that allow winemakers to benefit from all the services needed for making a final product, such as bottling, corking and labelling. As Georgians usually store their wines in a Qvevri, a clay vessel submerged underground, for fermentation and aging, the Agro Center purchased a mobile device, designed to be carried around to small wineries. It allows farmers to have their wines extracted from Qvevris at their own wineries, and also filtered, bottled and labeled on the spot.

“Bolnisi wine is considered to be a very high-quality wine, many types of it unique to this territory,” Kakabadze says. “There are many less experienced, newcomer winemakers who needed bottling technology. The Agro Center now has mobile bottling equipment that can be transported to local wineries. Or winemakers can bring their wine for bottling to us. Buyers demand winemakers have their products bottled. Otherwise, they can’t showcase them on the markets. Because of the services we provide, the value of their products grew significantly,” she added.

Guram Arkhopashvili, the owner of Dzmebis Marani [Brothers’ Winery] is a beneficiary of the project. His enterprise has benefited from the bottling, filtration and other services needed for winemaking.

“The foundation of Agro Center has benefited us so much. Now we no longer have to buy bottling equipment and other accessories necessary for the production of wine. This service is very cheap, even the cheapest in the world I would say. They provide many other services, such as washing utensils and disinfection,” he notes, adding that currently 25 wineries use these services, however, there’s a potential to have up to 800 winemakers in Bolnisi.

Besides the technology for winemakers, the Agro Center also offers various packaging and labelling equipment for other businesses. The facility features vacuum and semi-automatic packaging equipment for vegetables, meat and cheese.

Meri Makharadze, the founder of a cheese-producing enterprise called Disveli, is yet another beneficiary of the Agro Center. She has also benefited from consultation services that the Agro Center offers, which she said were very useful.

“I have my own packaging equipment, but it’s not enough to package cheese in large quantities. My enterprise is capable of processing up to 3 tons of milk, but currently we are unable to do so due to lockdown because of the coronavirus. I really like the wrapping equipment that Agro Center has. It’s really high quality,” says Makharadze.

So far, she has received legal advice from the Agro Center and is willing to learn more about how to work with documents and how to do thorough accounting.

“Despite the fact that the Agro Center was launched in January 2020 and the following period coincided with the restrictions put in place to stop the spread of coronavirus, the enterprise has already provided services to 861 entrepreneurs. 1,500 liters of wine has been filtered, bottled and labelled so far, and we have held four meetings with winemakers, cheesemakers and meat producers,” said Meri Abramishvili, the Head of the Projects Management Department of Bolnisi Municipality.

• Bolstering Bolnisi’s tourism potential

The municipality offers many attractions to visitors, from Bolnisi Sioni, the oldest extant church in Georgia from the 5th century, to the remnants of its German heritage. In the 19th century, 95 German colonist families from Swabia founded a colony named Katharinenfeld here. Even today, Bolnisi’s historic neighborhood carries this name.

In order to popularize this neighborhood, within the project ‘Establishing a platform for efficient flow of business activities in Bolnisi,’ the Bolnisi Municipality invested in improving the tourism infrastructure of one of the streets of Katharinenfeld (Stephania Street). Sidewalks and the road were laid, and streetlights were installed to make the thoroughfare pedestrian-friendly. Tourist signs were put up, providing information about the neighborhood’s historic past.

“We also designed a marketing strategy for Katharinenfeld, which will help us attract tourists to the municipality,” says Abramishvili, adding that up to 150 workers were hired for the infrastructural works, including the modernization of Katharinenfeld and construction of the Agro Center.

As a result of the rehabilitation of Katharinenfeld, local residents expressed a willingness to turn their homes into guest houses, open markets and restaurants. And the project is ready to provide them with free consultations and legal advice on how to run their businesses.

“One of the main achievements of this project is how the trust of local residents and businesses grew towards the Municipality. They saw that the local government is interested in the needs of local entrepreneurs and supports them in their work,” Abramishvili says.

The project team and municipal officials believe now that tourism infrastructure has been significantly improved, and locally-produced wines and agricultural products have been bolstered, Bolnisi is ready to receive many more tourists. It became obvious that the municipality has many things to offer visitors, and this is not limited to either wines or historical monuments. Its rich historical-cultural heritage, combined with authentic agricultural products and unique local wines, are yet to be rediscovered by tourists.

Bolnisi during and after the lockdown caused by COVID-19

The implementation of the project activities has been significantly hindered by the COVID-19 crisis. For almost two months, the Bolnisi municipality was completely locked down and isolated from the rest of the country due to a strong local outbreak of the illness.

Now, with the steady improvement of the epidemiological situation in Georgia, local economic activity is coming back to life, and the Agro Center has re-opened its doors to clients.

To alleviate the impact of the COVID-19 crisis on the local producers, in July 2020, the Agro Center launched a new campaign offering local winemakers the chance to filter, bottle and label 10 bottles of each type of wine for free.

The Project Team is catching up on the project implementation plan, and working hard in order to make Bolnisi ready for domestic and international tourists when the borders open up. It will also serve as an example and a source of relevant expertise to other Georgian municipalities with similar economic priorities.

“Partnership with international organizations is especially important for Bolnisi Municipality. Thanks to the EU and Mayors for Economic Growth initiative, we are the only municipality in Georgia to support local farmers and small and medium entrepreneurs in their production via the Agro Center,” Mayor David Sherazadishvili said.

Consultation meeting with a local farmer