The FINANCIAL -- Gori Feeding Cannery Kula, which produces ecologically clean fruit and vegetable juices, intends to add a new line to its list of products. The company will soon introduce meat and fish products thanks to a new plant that will open in July 2016.
“The new plant will process fruit and vegetablesat the first stage. We will produce compotes and sauces in different packaging. Later we will activate the meat and fish processing plant and start producing meat and fish products. We intend to increase the production capacity by 20 percent,” Vano Goglidze, Director General at Kula, told The FINANCIAL.
Meanwhile, Kula increased sales on the Georgian market by 50 percent in 2015. However, Goglidze said sales decreased in the export markets, especially where the currency crisis was more severe.
“These countries are Russia, Ukraine, Belorussia and Kazakhstan. These countries also faced national currency devaluation and this affected their number of orders of our products. Despite the reduction in export our turnover exceeded over GEL 10 million,” Goglidze said.
“However, we did increase export capacity on those markets where a currency crisis was not observed. Such markets include the United States, Canada, Germany, France, and Israel. Each of these markets demand different products. For example, in Israel Georgian sauces are in high demand while in Europe compotes and jams are very popular,” he added.
Kula also intends to increase its export markets and is now focusing on China.
Kula annually produces more than 10,000 tonnes of Georgian fruit and vegetables. Currently the company produces more than 250 sorts of fruit and vegetable tinned production.
Recently Kula won the most prestigious Georgian business award Golden Brand 2015 in recognition of its utmost success from last year.
Q. Could you please summarise the year 2015 and the first quarter of 2016? What have been the main challenges for Kula so far?
A. The year 2015 ended successfully for our company despite the fact that we could not achieve the expected results because of the devaluation of the Georgian national currency the Lari.
We did our best to experience profit and make our company work according toits usual regime. Luckily, we are not dependent on foreign exchange because we buy national raw materials and pay for them in the national currency. This enabled us to keep prices as they were before the currency crisis started in Georgia. Thanks to this effort we managed to increase revenues.
The challenges continued into 2016 as well. At the beginning of this year we had problems related to the increasing prices of electricity and natural gas which were mainly caused again by the devaluation of the Lari. However, from the second quarter of the year the Lari started gaining value and we are seeing the positive results of that already.
Meanwhile, we hope the weather will help our farmers to enjoy a fruitful harvest as we are seeing some positive trends in this direction. We are 100 percent dependent on Georgian raw materials and it is in our interest for farmers to harvest high quality fruit and vegetables.
Yes, the Lari’s devaluation was challenging, but we still managed to use this fact to strengthen the situation on the market. While our competitor companies increased prices for their imported products we kept the same prices we originally had because we do not pay in a foreign currency. Some companies even stopped their activities in Georgia, while others were forced to increase prices. Kula’s production was one which was distinguished byhaving the best quality and the best price. This helped us to strengthen our position on the Georgian market.
Q. How does the Government of Georgia help producer companies to develop further? Is the environment in the country favourable for you to run your business?
A. The Government of Georgia gladly supports those Georgian companies which process agricultural products.
The state has been implementing several projects of which the most important ones are ‘Produce in Georgia’ and ‘Plant the Future’. Within these projects the state finances 70 percent of expenses for cultivating gardens and orchards.
Entrepreneurs who wished to create a garden were offered enough funds to cover 70 percent of plant costs and 50 percent of the cost of an irrigation system. For people wishing to establish a nursery, successful candidates will be offered 50 percent of their total costs.
At the same time, project beneficiaries will benefit from the agricultural credit programme; where farming cooperatives will receive pesticide sprayers as a gift; soil testing laboratory costs will be reimbursed for all beneficiaries; and they will be offered practical trainings and theory courses to improve their farming skills.
The project envisaged the creation of 1,000-1,200ha of modern-type gardens and between 30 and 40 new nurseries in 2016. In total GEL 5 million will be spent on the Plant the Future project this year, announced Georgia’s Agriculture Ministry.
It would be more helpful if the state supportedlocal enterprises in utility fees through subsidy. We understand that natural gas is not available in Georgia and the state cannot provide much relief to companies, but we have a huge supply of water,soa high price of water should not be set in Georgia. I hope this problem will also be resolved in Georgia.
Q. Did you participate inany international exhibitions in 2015-2016 and how did such activities benefit Kula?
A. Our company always tries to participate in every exhibition related to our sphere. The international exhibitions give a platform to us to find new partners, introduce them to our company and to recent developments on the Georgian market.
In 2015-2016 we participated in the following international exhibitions: Anuga (in Germany);TASTE GEORGIA 2015(in the United Kingdom);Polagra Food (in Poland);Riga Food (in Latvia);Summer food fancy show (in the United States);Gulfood (in the United Arab Emirates);Sial China(in China);Tallinn Foodfair 2015 (in Estonia); The Fourth Qatar International Agricultural Exhibition 2015 (in Qatar); Prod-Expo 2016 (in Russia);Caspian Agro 2016 (in Azerbaijan).
We have already planned to take part in Sial Paris 2016 which will be held in France’s capital on October 16-20.