The FINANCIAL — “Georgia has huge potential to exploit greenhouse production of vegetables,” believes David Dumaresq, Greenhouse/vegetable consultant at USAID EPI project.
The country is now importing tons of cheap vegetables from Turkey and Egypt. However consumers’ rights activists say such products are low quality.
“Turkish potatoes are cheaper,” explains Amiran Shengelia, Director of the International Organization of Protecting Consumers’ Rights. “Unfortunately people prefer to save money by purchasing low quality products. It’s very difficult to control quality and nobody does it,” he said.
Potatoes in Georgia are quite expensive considering the average salary statistics in the country: 1 kg of potatoes costs 2 GEL (1.30 USD) almost the same as in EU countries. 1 kg of Georgian produced tomatoes costs 4.5 GEL and Turkish produced – 2-3 GEL.
But the USAID EPI project is quite optimistic about future greenhouses in Georgia.
“The country has a competitive advantage over other vegetable grower countries due to its thermal water potential which is unique all over the world and can be used as a heating source for greenhouses,” said David Dumaresq.
“Thermal waters which are mainly found in western Georgia can reduce the operating costs of a greenhouse by 50% because the major expenditure is heating of the structure,” he believes.
“There is an inexorable amount of tomatoes (up to 7,000 tons per year) imported from Turkey which is of poor quality. The majority which comes in winter (6,000 tons of tomatoes) can be substituted by building greenhouses on 20 hectares of land,” said Zurab Chekurashvili, Agriculture Sectors Deputy Component Leader at USAID.
“Although the greenhouse business is a capital intensive one as it requires high starting costs, it’s very profitable in the longer term. Namely one square metre of greenhouse will cost 100 USD for Georgian farmers, thus to build a standard 1,000 sq. metre greenhouse will cost about 100,000 USD. But in addition the greenhouse operation costs are not included in that amount and the latter cost depends on what sort of heating is used and the types of crops. Thus Georgia has huge potential in the maintenance costs which are very important in the longer term to reduce the final price and outcompete existing imports,” said Chekurashvili
Herbia Ltd located in Tskaltubo Municipality, in the Imereti region of Georgia, is one of the first companies to own modern greenhouses and vegetable packing houses on 3 hectares of land.
From November to May Herbia exports 95% of total herbs (Mtsvanili) produced in Georgia. Herbia is the only company in Georgia as well as in post soviet countries to have a certificate of Global GAP which lets them easily export technologically advanced production to the EU.
“We at Herbia built a greenhouse on our own just by purchasing materials from Ukraine (metal), modern equipment/refrigeration units – made in the US, and an irrigation system – made in Israel.
It cost 25 USD per sq. meter to build the greenhouse excluding heating and other factors,” said Zurab Janelidze, Founding Director at Herbia.
“Our greens are mainly exported to Ukraine, we’ve also sent test versions to Holland, Germany, and to some Scandinavian countries. The number of exporting countries as well as the enterprise is increasing from year to year.”
“The main challenge remains logistics because it’s hard to make sure the refrigerator and other conserving conditions are put in place. There are two ways herbs can be shipped, either by air or land transport in refrigerated trucks. The latter form of transport is used to Ukraine whilst to other European countries we use air transport.”
“Our product remains fresh for 3-4 weeks if it’s rightly preserved and maintained.”
“The final price of Herbia Mtsvanili is 39 EUR per kilogram in most EU countries. On the market there are retail clients as well as wholesalers which are purchasing herbs from us.”
“During the non-seasonal period (October-May) the company grows vegetable crops like dill, parsley, coriander, celery, lettuce (lollo rosa, lollo bionda, etc.), rucola, chives, green onion, basil, mint, basil, cucumber, tomato, aubergines, paprika and others. The product is destined to be sold on the local market as well as be exported to international markets,” concluded Zurab Janelidze, Founding Director at Herbia.
Advantages of a greenhouse
“The risk of building a greenhouse is minimal due to the reason that natural catastrophes aren’t likely to affect it. For instance if there is a drought, then there is an irrigation system installed which can save the crops, if there is rain then the greenhouse has a roof, thus you’re controlling the whole system, and making it as you want it to be,” said David Dumaresq, Greenhouse/vegetable consultant.
“Even though it costs a lot, meaning investment in building the greenhouse, on the other hand it’s a very profitable business in the long term, especially once there is growing demand on local as well as international markets. And the latter is very apparent. The prices of vegetables double in winter compared to other seasons which actually makes greenhouses a very profitable business to run.”
“There are crops which require higher temperature heating like eggplants, cucumbers, tomatoes, peppers and others which can actually be solved by having thermal waters, the latter being the largest competitive edge of Georgians compared to other countries’ greenhouses,” said Dumaresq.
Education being the major challenge
“Increasing the qualifications of Georgian farmers in the field of greenhouse production is of the utmost importance and we’re working on that. This is a major problem in Georgia, that even if there is a greenhouse it’s very difficult to manage it with its financial resources and the chain of other processes as well,” said Zurab Chekurashvili, Agriculture Sectors Deputy Component Leader at USAID.
“What we’re doing is that we have an exchange programme around 1 year where young Georgians will be sent to the US to study how things are done there, actually there are a number of students already on the programme which will return in less than a year and help install greenhouses.”
“Another programme is inviting consultants and greenhouse owners which have experience in the field, the latter for several weeks, and there is also a farmer to farmer programme which will be helpful in this regard.”
“We’ve a very negative trade balance in terms of agro goods/vegetables and we’ll reverse this trend by building greenhouses.”
“It’s already a well-known fact that the EU lacks quality vegetables and often people catch diseases from agro goods. Thus if we tried to build technologically advanced greenhouses then it’d be very possible to export them to foreign markets.”
“The greenhouse business is a serious one and unfortunately it’s not aimed at small size producers but at big investors. It requires serious management and finances,” said Chekurashvili.
Once greenhouses are built in large quantities in Georgia, it’s very likely that Georgia will start exporting vegetables to Turkey which is in fact the opposite of the situation now.
“It’s well-known that the majority of tomato imports comes from Turkey during April, May and June. Thus if greenhouses were used in Georgia then it could help reduce the import or totally substitute it with local production in the longer term.”
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