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Agricom Increasing Trade with the Help of Bank of Georgia

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The FINANCIAL — Agricom Ltd has imported 220,000 MT grain to Georgia in 2011, while export from Georgia has been about 60,000 MT. These figures are expected to rise in 2012.

 

“Agricom is a fast growing company and our team aims to achieve better results each year,” said Keti Kublashvili, Director of Agricom Ltd. “We mainly trade grain, which makes up 80 percent of our trade. Corn, soya and others make up the remaining 20 percent. Armenia is the main export destination for Agricom. As well as this country, we also export to Azerbaijan although its share is relatively small. Our main, regular sources of import are Russia, Ukraine and Kazakhstan. These countries are the main grain producers in our region.”

Georgia needs about 700-750 thousand tons of grain annually. Local produce provides for only 10-15 percent of demand. This is not nearly enough thus import is essential. Agricom Ltd is one of the main companies importing grain in Georgia. It was founded in 2005.

“Many years ago, when the private sector in Georgia was nonexistent, the country depended on donations and financial assistance for grain in order to sustain itself,” Kublashvili stated. “Donor nations were seeking companies to manage and distribute the product. Later, when the private sector started to develop we decided to form a similar enterprise in order to help Georgia free itself from permanent humanitarian assistance. The fact that our team had already had some experience working in a similar environment only helped. In 2005 Georgia was cut off from such humanitarian assistance, giving us the chance to found our company.”

Bank of Georgia is one of Agricom Ltd’s major partners in the country. The Bank has significantly helped Agricom over the years. Quite often they make decisions and work on various projects together. According to Agricom representatives Bank of Georgia has played a huge role in the successful operations of the company.

“The most interesting part of our relationship is Commodity Trade Finance (CTF) which is a step forward in doing business,” the Director said. “CTF is very popular in Europe and the US but not so much in Georgia. It requires a great sense of confidence on the part of the bank and fulfilment of that confidence by the client. Certainly, the relationship is based on certain guarantees but still greatly depends on mutual trust. Our relationship with Bank of Georgia has always depended on mutual trust and understanding up until today, and we hope to continue to work with the Bank this way in the future.”

Agricom Ltd has been an exclusive partner of BUNGE in Georgia since 2008 and does business directly with its office in Geneva. BUNGE is an American company established in 1818 and has extensive experience in this field.

“I would like to underline that being a representatives of multinational grain trader – BUNGE, has many positive aspects: having its offices in many countries of the world we have the opportunity to import grain from any point. For example, in autumn 2011 when Russia banned its grain exports, we imported commodity from Hungary and Germany,” she said.

“It was Bank of Georgia that helped us to strengthen the partnership with BUNGE,” Kublashvili added.

There are some similar companies operating in the market. Some of them import and further process the product. But they neither distribute it to the local market, nor export.

“We were able to obtain quite a solid position as an importer since we are the only exporting company in the field. We permanently share information and maintain relationships with all our partners. Our branch is actually a direct indicator of the country’s welfare. The final product of our operations is bread therefore it is absolutely necessary for us to work properly,” she claims.

Agricom Ltd pays a lot of attention to the quality of exported and imported products. The company’s staff carefully studies the needs of our clients and supplies the most suitable commodity therefore. Each shipment of goods is supervised by world-recognized independent surveyors, such as SGS, Control Union, Cotecna. Quality Certificates issued by these companies are always trusted by any grain-user.

“Agricom’s main advantage apart from its quality is signed contract execution. Notwithstanding price trend, the client is always guaranteed that the confirmed agreement will be fulfilled on time and without any changes,” she said.

“We do have very precise future plans related to improving and simplifying grain import and export activities for our company and country in general. Agricom has just finished first stage reconstruction of Poti Grain Terminal, which is located in Poti, alongside the birth of Poti Sea port No 15. After the full completion, which is planned for Spring 2012, the terminal will give us the possibility to import and export grain using a direct vessel-silo-vessel method, which is a novelty for Georgia, as well as for other countries in the Caucasus. Terminal trans-shipment capacity is up to 320,000 MT of grain on an annual basis. Based on future needs, capacity can easily be increased. We consider Bank of Georgia to be our main partner in all our plans.”

 

 

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