The International Trade Centre (ITC) has officially launched the EU4Business ‘Ready to Trade’ project in Georgia. The launch event saw a presentation to the business community, institutions and government officials the key features of the project in Georgia, including the main findings of the value chain analysis for the selected product groups and the roadmap of project activities.
In Georgia, the project primarily supports the agro-processing sector, focusing on processed fruits and vegetables, non-alcoholic beverages, processed hazelnuts, dried fruits, spices (bay leaf), and tea.
The launch event on 2 July was addressed by the Minister of Environmental Protection and Agriculture Mr. Levan Davitashvili, Deputy Minister of Economy and Sustainable Development Mr. Genadi Arveladze as well as by the Ambassador of the European Union (EU) to Georgia Mr. János Herman. Other senior government officials, representatives of Enterprise Georgia, as well as representatives from project beneficiary companies, and relevant donor projects also attended.
“It is crucial to convey technical knowledge that will allow Georgian export products to meet standards and be competitive in the European market. This is what EU’s new initiative in Georgia implies. It will help not only the Georgian producers, but also the institutions, which contribute to small and medium size businesses for further development,” said Minister Levan Davitashvili.
Ashish Shah, Director of the Division of Country Programmes at the ITC introduced the project and the challenges it aimed to address: “We have done a comprehensive study, which identified problems related to the quality of products, as most of the exporters source raw materials from a large number of different farmers. This means that it is hard to maintain EU required quality standards. In the framework of this project, we will assist Georgian SMEs in the improvement of their production process. It is also very important to raise awareness among farmers about EU standards requirements. The project will also focus on such important issues as marketing, branding and establishing linkages with potential business partners. Our main goal is to improve the competitiveness of SMEs, in order to promote exports to the international markets,” he said.
Based on the company assessment, 74% of the processors/exporters who were surveyed complained about poor raw material quality and/or quantity. There are weak supply chain linkages with a lack of formal commitment of buyers and sellers. 64% of processors/exporters have a capacity utilization of less than 50%. More than 50% of processors exporters need a QM certification or aim at upgrading their certification. 36% of the surveyed companies complain about a lack of modern machinery, facilities & process automation. Many companies do not use advanced ICT tools e.g. for warehouse or traceability management. More than 50% of the surveyed companies indicate to need more market information, market linkages and trade fair participation support.
According to the results of the value chain assessments, the expressed support needs of processors/exporters, and the mandate of the Eastern Partnership-Ready to Trade project, the following five value chain upgrading solutions are suggested for the project beneficiary companies. Based on individual company development plans, activities will prioritized for each beneficiary company.
- Preparation of company specific development plans (QM system assessment; Process modernisation assessment; Supply chain assessment; Export marketing assessment)
- Improved quality management and certification (Individual QM consultancy; Post-harvest quality trainings for hazelnut farmers; Support of certification schemes for selected companies)
- Modernization of machinery and processes (Advice on process modernisation; Advice on the use of modern ICT tools; Facilitation of linkages with EU equipment suppliers)
- Intensified market linkages with EU buyers (Training on EU market requirements; Organization of trade fair participations; Inward and outward buyer missions)
- Strengthened linkages with raw material suppliers (piloting schemes will be explored in cooperation with other donor projects, involved in the selected value chains)
The ‘Ready to Trade’ project is funded by the European Union as part of the EU4Business initiative, and aims to improve the competitiveness of SMEs in Georgia and other Eastern Partnership countries and to connect them to international and EU markets.