The issues of Tea Business in Georgia

SOFO GOGOLADZE

For the first time tea appeared in Georgia in 1770, when Ekaterina II presented King Irakli with a samovar and a tea set.

As a plant, tea has been known in Georgia since 1848, when tea plant was transferred because of unsuitable climate conditions from Nikitski botanical gardens to Sukhumi botanical gardens, Ozurgeti greenhouse and to D. Dadiani’s Zugdidi estate. The experiments of prince Eristavi proved that tea cultivation in Georgia is possible. Nowadays, in the country of great tea culture tea industry does not exist.
Mr. Jemal Inaishvili, the President of Georgian Chamber of Commerce and Industry – Tea production was one of the leading branches of agriculture in our country. Georgia was a monopolist on the market of the former Soviet Union. Now we have quite a different situation from the viewpoint of drop in production and we have lost our old markets. It is clear that it was stipulated by our monopolistic position since the marked of the Soviet Union was a closed one. But in conditions of a planned economy that existed then the state protected the market and promoted the development of tea-growing. Today the situation has drastically changed, since our country is developing in conditions of market economy we have to work in the competitive environment of markets of Russia and other former Soviet countries or on our traditional markets. A lot of problems existing in our country left a mark on practically the whole tea-growing industry.
Now the matter is that we are going to hold a meeting with the Prime Minister of Georgia, also there was a meeting with the representatives of the tea association and we want to support them in the revival of this brunch but, it is clear, not in that volume as it used to be. It is out of question, and tea growing will not be restored in its former volume, but anyway we and those who currently work in this field believe that there will be certain results.
The government envisaged assistance to the development of tea-growing (for example 3 million USD were allocated for its revival last year). The government rendered assistance and now tea-growing is practically free from taxes, but we believe that additional assistance is still needed since we know that a great number of people were employed in this brunch and that revival of tea-growing would partially solve the employment problem. This is one issue. At the same time much land which is occupied by tea plantations must be used. Privatization and sale of land would contribute to it, since the land will have the owner. Many tea-plantations during the period of desertion regenerated and require huge funding for their revival. Besides, it is necessary to carry out technical re-equipment since the technologies that are used in tea processing industry are outdated and are very power consuming, that is why their use is expensive. For example, black oil that is used in tea processing is not efficient.
Thus, for the revival of tea production it is necessary to privatize lands so that they could have an owner, to carry out technical re-equipment, and to have support in recovering the existing markets and acquiring new ones. Since tea is an exchange commodity, it is rather expensive. It is clear that we shall not be able to compete with Indian tea, but we have an opportunity to have our own niche. The possibility of investments will increase when the land will have the owner.
Beso Jugeli, an MP, “Mazhoritarebi” faction – Tea production and tea business are completely deranged. One company is working in Zestafoni that produces iodinated tea. This is a novelty in food and process industry. This tea is used for prevention and treatment of goiter. New technologies are introduced in its production. Iodinated tea is produced out of local raw materials, according to special technology and this company has a license for it. The head of the firm is Dato Dolidze, chemist who took out a patent for this invention.
In November-December of the last year we held an action: we took this tea to Ajara and distributed it among the population and children of school and pre-school age. It is a well-known fact that there is iodine deficit in the water of the mountain regions, and this is so all over the world. In the countries with mountain regions the problem of goiter is very widespread. That is why this action was carried out as an experiment. The children who took part in the experiment were subjected to a blood count test both before the prophylaxis and after it. The result turned out to be satisfactory.
Now we have an agreement with Turkmenistan as it one of the most important tea consuming countries, and I have an agreement with the Ukrainians on delivery of Georgian iodinated tea to the Ukrainian market. Everybody knows that we are in debt to Turkmenistan and this tea will partially cover this debt.
In particular, tea culture along with many branches of the process industry are without the owner.
Last year the government allocated 3 million USD for the revival of tea industry and distributed the money among those who are engaged in tea production and processing. But there occurred a disaster – the Ministry of Energy did not provide the enterprises that have already received the money with power supply, and these 3 million USD were practically wasted. It turned out that energy is crucial in tea production like in any other brunch. For the time being nothing else is being done in this field, the enterprises are standing by. A lot of things are dependant on energy. We hope that it will work better this year. As to the prospect of investments, everything is possible since the investment space has already opened, if investors see that energy is in order – Georgia is a country of tea culture, and it can’t be ruled out that from this point of view they will take some interest. However, for the time being no one is eager to invest in this field.
By the time of establishing Soviet power in Georgia the agriculture was in a lamentable condition. A part of tea plantations did not exist yet, others were in a bad condition. The joint stock company “Tea-Sakartvelo” that was established in 1926 tried to revive tea production. In 1931 it was transformed into a Research Institute of Tea and Subtropical Plants. 1930s were the main years in Georgian tea industry. During this period the area of tea plantations amounted to 40 000 hectares, 32 tea factories were built.
Several sorts of tea are to be found in Georgia, among which Chinese make up 65%, Indo-Chinese – 15%, Japanese – 10%, Georgian selection sorts – 10%. Tea collection begins in May and lasts till October. During the season leaves are picked four-five times. There can be distinguished several micro zones where top quality tea grows. These are plantations of Tkibuli, Chiatura, Tskaltubo, Lanchkhuti, Ozurheti and other regions.
Presently several private companies operate in Georgia. For example joint-stock company “Kartuli Chai” owns control stock of three tea factories. Famous foreign companies have invested certain capital in tea production. Among them “Martin Bauer” which uses 7000 hectares which makes up 14% of the total territory occupied by tea plantations in Georgia. In 1995-1997 on average 40 thousand tons of tealeaves were produced (10 thousand tons of finished commodity). Now out of 50 thousand hectares of tea plantations only 20 thousand hectares are in use.