Produce in Georgia Assists Hundreds of Enterprises in First Year

One year has passed since the Georgian Government first launched its Produce in Georgia program to encourage new entrepreneurs and stimulate local production.

The Head of the Georgian Government, Irakli Garibashvili, and the Minister of Economy and Sustainable Development, Giorgi Kvirikashvili, summed up the achievements the program so far at exhibition center Expo-Georgia on June 7.

The Prime Minister highlighted that, since launching the program, more than 130 enterprises had been funded, and over 600 revamped. During the last year, 90 new projects were undertaken under the program with a collective investment of $252 million, providing jobs for more than 5,000 people.

“Today, more than 130 enterprises are funded and more than 600 enterprises are further supported. We invested a total of 900 million GEL in the agriculture sector during the past two years,” the Prime Minister said.

David Bardavelidze’s pet’s furniture and accessories business is among the hundreds of new projects implemented within the Produce in Georgia program, enabling him to export goods in European Union member countries.

“Traditionally, such products are produced in China and from there are imported into Europe. In our case, we are exclusively cooperating with a German company and managing export into EU member countries. We are competitive with the Chinese market, because, unlike other Asian countries, we do not pay 12 percent import taxes. Today, we are producing 20 million Gel ($8, 929,000) worth of products and we plan to gradually increase this amount up to 100 million Gel,” Bardavelidze said.

The Prime Minister highlighted that the program supports any entrepreneur who decides to create a new industrial and agriculture enterprise.

In this case, the Government has been offering three type of assistance: financial, infrastructure accessibility and consulting service.

Within the program, entrepreneurs have to pay only 1-2 percent of a preferential loan, as the Government covers 10 percent of the interest cost. The credit line for those involved in industrial production enterprises ranges from $150,000 to $2 million.

In terms of infrastructure accessibility, which means real estate assistance, program beneficiaries are either granted real estate with an amortized price, which is state property, or the building is ‘sold’ to the applicant for a symbolic 1 (one) Lari ($ 0.44).

“When you’re going to start a new business, start-up funding is the most difficult part,” said Mamia Motsradze, owner of the Energy Georgia company. “Due to high risks banks don’t trust you to give back the money, or offer loans with a high interest rate. Thanks to the [Produce in Georgia] project, we have an interest rate of 1-2 percent. Challenges are always there, but I’m sure everything can be accomplished.”.

Locally produced VS Import

Garibashvili announced that the Georgian Government had set a goal to gradually replace imported agricultural goods with locally produced alternatives.

“I had conversations with the leaders of our neighboring countries who have successfully promoted local production and development programs. They have followed the path for years and have had good results. They have strong agricultural and industry sectors. Establishing such enterprises creates jobs for many Georgian people. This is one of the main tasks of our Government,” Garibashvili said.

“I want to emphasize that we are not against imports. On the contrary, we welcome foreign companies to Georgia, but for us the main concern is the development of local industry and the creation of new jobs for our citizens,” he added.

The Georgian PM stated that government officials are going to hold talks with persons who have obtained licenses to extract the country’s natural resources.

“The waste of our natural resources has taken place over the past twenty years. As a consequence, we have hundreds of licenses issued for unique resources, which, unfortunately, are not used. This happens because these people seized the state resources through different persons’ lobbying efforts at the time and these resources go unused today. This is a crime. No one has the right not to use the country’s resources and to reserve them only for personal interests,” Garibashvili said, adding that it was shameful that so many Georgian citizens were living in poverty.

“We can start to implement projects together with enterprises. Produce in Georgia and cheap Agro-Credit programs provided by the state are everything an entrepreneur could ask for. Within the program entrepreneurs have to pay only 1-2 percent of a loan, as we cover 10 percent,” Garibashvili said.

The Prime Minister also announced that several components will be added to the program for its further development.

Tamar Svanidze