From farm to international market: supporting hazelnut production in Georgia
September 17, 2021

From farm to international market: supporting hazelnut production in Georgia

NutsGe is one of the largest hazelnut production companies in Georgia, exporting various types of local hazelnut products all over the world. The company supplies 2,000 tons of hazelnuts a year to world-famous brands, chocolate and ice-cream industries, bakers, distributors, providing them with a full range of hazelnut products. Currently, against the background of the COVID-19 pandemic, the company is operating at just 50% of its capacity, and this is directly reflected on the volume of exports.

Considering its position as a leading exporter and its huge economic importance, NutsGe has been selected for support from the ‘Advice for small businesses’ programme of the European Bank for Reconstruction and Development (EBRD), and has received funding from the European Union under the EU4Business initiative. Thanks to this support, the company has managed to bring its production into line with EU directives.

Mamuka Beriashvili, Director of NutsGe, says that the most difficult objective for any company is to comply with international standards and establish itself in the highly competitive export environment. He says the joint support from EU4Business and the EBRD has made a huge contribution to the development of the company: “The project offered us immeasurable benefits, ranging from the standardisation of of our processes to the organisation of meetings with potential buyers at international trade fairs.”

“A business needs to be continuously thinking about its development,” he added. “With the help of the EU and EBRD, and by engaging local and international consultants, we managed to streamline our production package – we have adapted our financial and accounting records to international standards, introduced an automated control system, and carried out consultancy works to assess the business situation in the company and draft a plan for its future development. This is a complete chain describing how to develop a company, because without compliance to the standards the products will never access international markets.”

Mamuka has been in the hazelnut business since 2007 when the business was launched. Given the highest yields of hazelnut in Samegrelo, the main region of hazelnut production in Georgia, he decided to establish a plant in Zugdidi, while another plant operates in Kakheti. Today, NutsGe is a member of the International Nut and Dried Fruits Council: “Success has been achieved by the approach we exercised. We try to develop the field in general and take Georgian hazelnuts to the international market. A successful and well developed hazelnut business in Georgia has the potential to further trigger the development of all the sectors it comprises. We have more than 1,000 suppliers in total, including small and medium-size farms, and the gatherers who supply hazelnuts collected from different farmers. Apart from them, we cooperate with companies that supply semi-processed raw materials. This is a very large segment, and the economic conditions of many entrepreneurs depend on the development of the field; for this reason, we try to rise the standard and to satisfy all international demands”, says Mamuka.

However, the company suffered badly from the COVID-19 pandemic. The director of NutsGe says it caused the reduction of the workforce by half, and this was directly reflected on the volume of production: “The pandemic caused lockdown, interruptions in logistics, with the established regulations that ensued. To comply with these regulations, requiring a two-metre distance between employees, we had to reduce the labour force by half and retain only 30 employees. The use of facemasks and face-shields was also a problem, as the employees were not used to wearing them and some of them even chose to leave the business. This has also cut our operation plans by 50% and hampered the production process. It was practically impossible to transport products between regions and between villages. The entrepreneurs wanted to sell their products but were unable to supply them. Despite this harm, the company had the strategy drafted with EU support, describing how to develop business and production. NutsGe managed to continue operations with minimum financial losses,” says Mamuka Beriashvili.

Zema Gergedava is one of the employees of NutsGe who continued to work at the company despite the pandemic. Zema has been working at the plant for five years. She says there are not so many jobs in the region, and that finding employment is especially difficult for women: “I had never worked before the opening of this plant, I was mainly occupied with housework. After the opening of the plant jobs were created for the residents of the region, which is very important for local families. You stop looking for a source of income outside the region and you can stay where you live. Transport was the biggest problem I faced during the pandemic, but the company managed to solve it – even today special transport takes us to the plant and brings us back home after the work is finished.”

Irakli Shamatava is another employee working in the company since its establishment. Irakli lives in Zugdidi permanently. He considers the operations of NutsGe very important for the region: “The country is developing, the region is developing, people are employed, they have jobs, they are paid, working conditions are good. The company is permanently expanding, and new workforce added to it. Apart from creating new jobs, NutsGe supports development of the hazelnut production sector in the region – it receives hazelnut from local farms providing a source of income for lots of people. Development of this sector is directly reflected on the economic condition of people and their families,” says Irakli.

According to the founder of the company Mamuka Beriashvili, the company’s key objective is to be an intermediary between the farmer and the end-client. The company follows the cycle: it buys the raw material from first-hand suppliers, brings it in line with humidity, drying, microbiological and other parameters, processes and transforms each type of raw material into relevant products. He calls this process a long chain where the function of NutsGe is vital: “For this reason, we are fully committed and try to do everything to implement high standards despite the complexity of the process. The allocation of extra financial resources is always a big problem for entrepreneurs, and that’s why the EU initiative and its financial support to the business is so important – it strengthens the sector and Georgian economy, ensuring both seamless business operations and the preservation of jobs,” adds Mamuka.

At this stage, due to pandemic, NutsGe is keeping 70 employees out of 120, plus extra labour force for seasonal works. The company exports 1,000 tons of hazelnut products to almost all regions and countries in the world, including Europe – 38%, China – 24%, Russia – 22%, Africa – 5%, the Middle East – 9%, and remaining countries – 2%.

Author: Tamar Kuratishvili

Article published in Georgian by

EU4Business – Advice for Small Businesses programme


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