Geopast: “There is Unequal Competition on the Georgian market”

Geopast: “There is Unequal Competition on the Georgian market”

The FINANCIAL -- “We have great competition,” said Tengiz Patsatsia, Founder of Geopast. “This competition is because of the large amount of products that are imported from abroad. There is an unequal competition environment on the market. The imported products from Azerbaijan and Kazakhstan are cheaper. However, the Georgian Government could be doing something to regulate this.”

Having been on the Georgian market since 2006, this year Geopast received a Golden Brand award for Favourite Brand - Production of Grains.

Q. How would you evaluate the year 2013 for Geopast?

A. The year 2013 was more or less successful for Geopast. However, we have also had problems with our work. We first started our production in the year 2006. The post-war period was very problematic, up until and including the year 2011. After this we improved our quality, and sales became more stable. The situation nowadays isn’t as ideal as we would want it to be for our production. But everything is comparative, and comparing the situation nowadays to previous years there have been definite improvements.

Everything depends on many things, for example we have great competition. This competition is because of the large amount of products that are imported from abroad. There is an unequal competition environment in the country. The imported products from Azerbaijan and Kazakhstan are cheaper. However, the Georgian Government could be doing something to regulate this. They could regulate the prices, for example for Italian macaroni.

A limit should be established. The Government should know how much it costs for a Georgian company to make its products. For example, in the case of one tonne of macaroni there should be USD 700 customs duty. Because from neighbouring countries there is no customs duty, the production here cannot develop. The costs of production here are very high, due to the high costs of water and electricity.

Q. What is the market share of Geopast?

A. Compared to the previous year, the market share has decreased. We have put an accent on producing a greater quantity. For some time the sales increased but then there was a decrease. For now sales are increasing, but slowly. The estimated amount of macaroni sold on the Georgian market is 2,000 tonnes, and our market share is 7-8%.

Q. Did the political changes affect this market?

A. We are the type of business that political changes don’t affect. But the Government should be interested in what happens to producing companies. They should think of how best to help them. There should be price regulations. A company which makes products here should be in the same situation as one who imports products, the prices should be the same. They should think about the individuals who are producing in Georgia. The quality of our products is not lower than others’. For example when one buys some product for USD 700 and then it comes and they say to customs that the product is worth USD 500 - that is not right, and it should be controlled. In terms of this not everything in the country is protected or regulated.

Q.  How do you compete with other companies?

A. It is with our high quality and good service that we compete with other companies.

Q. What is the most important thing for you in your relationship with customers?

A. What’s most important for us is to make products of a high quality. The main thing for us is quality.

Q. What were the first steps that your company ever took?

A. The first two years were not problematic; there was no competition. But then more industries came on to the market and we became competitors. Also many imported products have started arriving, and this has also become a cause of complications. About the DCFTA, this wouldn’t be very good for us. What we have to sell is one issue, but another problem is that more companies will then enter the market. Foreign countries have a wide range of products that can be imported in Georgia. After this there will be more difficulties for us. And in the event that the products are cheaper than ours then consumers will prefer the Italian products or other foreign products to our ones.
Q. What can you say about the quality of your products?

A. We have the resources to create more high quality products, everything depends on the technologies.

Q. How have the demands of consumers changed over time?

A. Demand is increasing for products that are not produced here. We pre-package products such are rice, buckwheat and oats. The best-selling products are rice and buckwheat. Also, sales of oats have increased because of a rise in purchasing this product for medical reasons. We import buckwheat from China, Ukraine and Russia. Most of it is imported from China. Rice is imported from India, Pakistan, Thailand, and Vietnam.

Q. How does winning Golden Brand help your company?

A. This adds to the prestige and profile of the company and helps us in our relations with our competitors.

Q. What will be the main challenge for you in 2014?

A. Producing the best quality in the right quantity is the main challenge. These are the kind of products for which advertising is very expensive. And advertisements on the television are additionally expensive. Therefore we have only minimal advertisements at the moment.

Q. Does the Georgian population have confidence in you?

A. Yes of course they do. And this helps us a great deal. Georgian products are greatly valued and appreciated on the Georgian market in general. As a local producer we have no problems with consumers. Georgians have great confidence in our production and this is helping us to revive our products.