The FINANCIAL -- Now that the sizzling summer lingers behind, and the autumn equinox marks the arrival of the season of fall this week, Experto is ready to come back with a new insight on the livestock breeding industry. Around this time last year, we let the valued readers of The FINANCIAL know about Sommet de L’élevage, the Europe’s undisputed number one annual livestock summit. In order to assess the developments in this field, we decided to revisit the topic, albeit from a different angle.
We started off by following up with Ms. Tatia Arabidze, Head of Breeding Farm and Meat Production at Blauenstein Georgia. As per Experto’s proposition, she has visited France last year to attend the mentioned livestock summit: “Participating in Sommet de L’élevage 2016 was vital for our company’s development. We locally breed Schwyz and Simmental varieties with artificial insemination and it was insightful to see the best samples of these species up close, as well as hear first-hand about the breakthrough experiences of leading livestock professionals in the field of genetics”. Ms. Arabidze revealed to Experto that: “for us it was equally interesting to get to know the presented pig breeders as well. We plan to build a modern pigsty in Georgia and we have gathered a lot of information and leads at the Summit to help us move forward in this regard. Having established personal contacts with the field experts, Blauenstein Georgia plans to cooperate with them soon”.
Among several other initiatives Blauenstein is currently working on, Tatia was particularly excited about the process they will implement at their meat processing plant: “we will shortly commence the thermal destruction of waste. We have already purchased the incinerator equipment of British origin, where we will be destroying animal waste utilizing hot temperatures”. They have already made the required environmental impact assessment and are actively working with the Ministry of Environment and Natural Resources Protection of Georgia. The launch of the project is only a few formalities away. “Blauenstein Georgia has invested GEL 220,000 in this project. Initially, we plan to destroy only the waste of our enterprise but in the future, we plan to offer the waste disposal services to the region at large” clarified proudly Ms. Arabidze.
Sommet de L’élevage is coming back for its 26th edition at the Grande Halle d’Auvergne’s showground in Clermont-Ferrand, France on October 4-6, 2017. According to Mr. Benoît Delaloy, International Manager of the livestock summit, the statistics look even better this year: “we have 1,500 exhibitors, out of which, 300 are foreign representing 31 different countries and we are all looking forward to welcome 88,000 visitors from over 80 countries this October”. He underlined that “in respect to cattle judging, the Limousin breed will take center stage, showcasing the breed’s maternal and butchery qualities, at its national championships where over 400 animals will be competing for the prestigious title of national champion”.
Speaking of the Limousin, how many of you know that the Hacker-Pschorr pub-restaurant in Tbilisi is supplied with environmentally clean products directly from their Agromax farm in Georgia that is home to around 250 cows of that particular French breed? Experto spoke with Mr. David Cheishvili, Director of Hacker-Pschorr who explained their business model with remarkable passion: “alongside the beer from Munich’s leading major brewery, Hacker-Pschorr, all dishes that we serve in our pub-restaurant are made of fresh beef we get exclusively from our own farm in Sartichala. Our Limousin cattle is fed with corn, wheat, soy and silage grown at the farm’s fields”. The initial investment in the farm exceeded USD 700,000 that got them the premises together with the 150 Limousin cows back in 2011: “with the correct breeding management, Agromax managed to upsurge and maintain on average 250 cows on the farm, with around 70 calves being born each season”.
Mr. Delaloy elaborated that “the Limousin is a well-balanced breed. Neither too big, nor too heavy, the limousin cow combines good maternal qualities with exceptional butchering qualities. Known for its easy-calving and its fertility, the Limousin breed boasts an exceptional prolificity: 94 weaned calves, on average, per 100 cows put to the bull. The easy-calving aptitude leads to livelier calves, less calf mortality and hence lower vet’s bills”.
As for the pork dishes, Hacker-Pschorr is supplied directly from an organic Bavarian farm. This must be the underlying reason why their beef and pork dishes are so tasty.
Experto also spoke with Mr. Vasib Osman, the founder of The Butcher: “I have been involved in sheep and meat export from Georgia to Arabic countries by aircraft and truck for some time now. We are focused on exporting live sheep, lamb, bulls, goats as well as sheep and lamb carcasses”. Mr. Osman revealed to Experto enthusiastically that they have recently signed agreements with new companies in Iran and Kuwait that will allow them to “export 350,000 KG lamb carcasses to Iran within a couple months as well as export 60,000 KG meat weekly to Kuwait. When establishing The Butcher in Georgia, Mr. Osman had in mind to supply Halal slaughtered meats to the few Muslim restaurants in Georgia: “I am exploring the option of obtaining the Halal Certificate”.
Now that we mentioned exports, let us briefly take a look at the numbers available at the National Statistics Office of Georgia.
While there is a downward trend for exporting live sheep and goats, the export of live bovine animals seems to be rebounding from USD 20,103 thousand in 2015 to USD 36,842 thousand in 2016 and could potentially exceed the numbers for year 2013 by the end of this year. Until we know for sure, we looked at the breakdown for year 2016 to see which countries have enjoyed the live bovine animals from Georgia.
As you see from the second chart, Georgia exported to only seven countries, Iraq leading the parade, with Egypt and Azerbaijan lingering behind. However, if you look at the best export value per KG, Egypt and Syria stand out with USD 2.10 and USD 2.05 per KG respectively. Azerbaijan gets for GEL 1.92 per KG. Whether this difference is mainly because of variance in quality of provided goods, negotiation skills of each party or exchange rate fluctuations is part of a separate discussion and without further examination it would be pointless to support either claim.
To conclude, Mr. Giorgi Jibladze, Deputy Director of Agricultural Projects Management Agency gave Experto a brief statistical overview of the governmental efforts in relation with the livestock breeding: “Since 2013, APMA has been implementing the preferential agro-credit project, that is also permitting the financing of livestock breeding activities. As of July 2017, there were 16,248 loans issued in Lari financing the animal husbandry related projects, amounting to GEL 349,301,762. The co-financing of the annual interest rate from the agency for these loans comprised GEL 37,394,134. As for the loans issued in US dollars - there were 518 amounting to USD 31,458,237 in total and the funded annual interest rate from the agency comprised USD 5,569,127”.
Whether this is enough to act as a catalyst for developing the sector, is hard to assess without knowing the nature and nuances of each project financed within the program, but what we can say is that companies such as Blauenstein and Agromax give hope that animals are treated respectfully until their last “fatal” day. We deliberately leave out the discussion on ethics of consuming meat and meat products - let it be your food for thought at your next meal.