The secret of creation of Georgian tea business

Nino ArvelaDZe

The history of the tea-growing branch in Georgia amounts to one and a half century. In 1980s tea in Georgia was cultivated in the area of about 76 000 hectares.

Approximately 400 000 tons of tea leaf was picked, which was equal to 100 000 tons of finished commodity and made up 8% of the world tea production. Disintegration of the Soviet Union, liquidation of the centralized demand-supply regime and, what is most important, continuation of production of low-quality and expensive output caused a drop in the demand for Georgian tea on the consumer market and reduced production of this product to the minimum.

According to the last year’s data, about 24 000 tons of tea leaf was picked in Georgia and about 6 000 tons of output was produced. It’s a regrettable fact that a decline in the production volume rate is observed in Georgia. It is caused by the following factors:
– The increase in fuel prices has caused a notable rise in the cost price of the output. The efficiency coefficient of the drying kilns used in the Georgian tea-growing branch does not exceed 0.3 and they are morally outdated. For comparison, the efficiency coefficient of modern heat-generators exceeds 0.8, which provides for a possibility of twice and more economical fuel consumption.
– Electric power consumption at tea factories (per 1 kg of finished commodity) is more than 0.641 kilowatt-hours determined by the standard, which is very high in the case of the gone up electric power tariff. In other countries power consumption for similar tea enterprises does not exceed 0.430 kilowatt-hours.
– The first and mandatory process of black tea production is withering that practically does not take place at the factories now. The reason for that is the old one – withering devices produced in Russia that are absolutely non-applicable. Their substitution for withering units is necessary.
– The independent cycle of assorting and fermentation of stranded leaves in the corresponding operating conditions is liable to restoration.
– Fixation and drying processes in the tea production technology require modernization.
A group of specialists has worked out a special program for the development of tea business in Georgia. This program envisages settling of the several issues that will raise the export potential and employment indicators as well as will have a positive effect on the home market and the development of the greatest resource in the region – tea. The specialists have agreed upon several principles – they do not count on subsidies and tax privileges from the government, but ask for its active support. In particular, in the ongoing privatization process they ask for selling of tea plantations as a capital instead of their scattering. The specialists count on holding of privatization in accordance with an investment plan so that an investor’s goal should become clear; at the same time, the Ministry of Agriculture should take a full stock of the land resource, carry out cadastrization of the land and, proceeding from that, make a decision as to what cultures it will be more profitable to cultivate on the mentioned plots of land. With the purpose of carrying out of the mentioned research, the state needs a modern technology and specialists, while the state should render financial assistance in training of the specialists. Tea standards should be made, which is a necessary condition for formation of a Georgian brand. The state should actively advertise the produce in the world. The specialists hope for the state support in settling of these issues. The ideological aspect is also important – the country should understand that no culture more profitable than tea can grow on grey soils. The development of the tea business should become one of the state priorities and foreign donors should be given complete information on its promising character. The Georgian Chamber of Commerce and Industry, nongovernmental organization “The Institute of Free Economy and Business” and “Geoplant” group are planning to hold a conference on the mentioned issues in mid April. The analysis of Georgian tea, in which positive properties of this product are clearly singled out, will be presented to the government at the conference.
The Vice-President of “Geoplant” group – Shalva (Koki) Tsetskhladze, the Director General of Ltd. “Geoplant” – Gocha Dzneladze, a research worker of the Institute of Biochemistry – Levan Gulua and an expert in the field of economy – Emzar Jgerenaia are speaking about the issues related to the development of the tea business in Georgia.
1. Strong points of
Georgian tea-growing
– According to the number of sunny days, amount of precipitations, soil composition, hypsometry and other characteristics, western Georgia meets the requirements made for industrial tea-growing. Fluctuation of day and night temperature stipulates for generation of aromatic substances in tender sprouts, thanks to which Georgian tea is distinguished among other countries’ products.
– As distinct from the products of tropical countries, Georgian tea almost does not contain the remains of various pesticides, since there is no need in anti-pest treatment of tea plants in our country in winter. In comparison with other countries, the radiation background is lower by 18-20%. Tea plantations play an important role in protection of soil against erosion.
There are all conditions for production of ecologically clean tea in Georgia, for which it is purposeful that the tea growing branch should join the International Federation of Organic Agriculture Movements.
– In 1970s there was 65.0 thousand hectares of tea plantations in Georgia and, according to the current data – 45-50,0 thousand hectares, of which 10,0 thousand hectares are in Abkhazia. 12-15 thousand hectares are in condition suitable for picking of tea leaf. A considerable part of promising plantations is liable to clearing of weeds and extraneous plants, while bogged up lowland plantations should be uprooted.
– At 70-80% of tea plantations Indo-Chinese species are cultivated, at 12-15% – Japanese species and at 4-5% – Georgian selection ones (“Kolkhida” species) that are distinguished for frost-resistance, abundant yield, as well as high biochemical and technological potential.
– In spite of geographical location of Georgian tea-growing, in conditions of observance of tendance, leaf picking and processing technologies elaborated by Georgian scientists and practicians it is possible to produce the analogues of Indian, Sri-Lankan, Chinese and Japanese products, as well as Agura and Phyla instant teas, obtain biologically active substances, prepare tonics out of liquid and dry concentrate.
– Georgian scientists have elaborated new technologies and methods of tea plantation tendance, leaf picking and processing: mobile and small technical means of comprehensive mechanization, fixation of tea leaf in ultra high-frequency electric field, application of Joule-Lenz effect for fixation of green tea leaves, processing of tea leaves by means of fast and deep freezing, combined drying of tea leaves by infrared radiation, application of thermal pumps, technologies for obtaining of instant tea, food dye stuff, concentrates, biological preparations, etc.
The technology of tea growing by means of the vegetation method has been elaborated and tested in industrial conditions at the Institute of Tea, Subtropical Cultures and Tea Industry.
– Tea-growing used to represent (and potentially also represents now) the main source of employment and incomes of western Georgia’s population. An attempt to substitute tea for other cultures has not produced the expected effect in view of agrotechnical, technical and financial problems.
– Primary and secondary tea factories have been privatized, while tea production process – diversified, a part of tea plantations (11%) has been privatized.
– The scientific and technical potential and qualified staff has been retained, at 20% of the plantations it is possible to use mobile machinery, while small-scale mechanization is used everywhere. Economic motivation of the population’s participation in rehabilitation of tea-growing is high.
– The experience of high-quality tea production in Georgia amounts to several decades.
Raising of quality of Georgian tea is the basis for raising the efficiency of its production, since there is a close connection between quality, meeting of consumers’ requirements and profit of tea producing companies.
– In comparison with other tea-growing countries, Georgia is most closely located to the main tea consuming countries, in view of which it is possible to supply the product on the market with retaining of its aroma and freshness, which represents a tangible advantage in the competitive environment.

2. Weak points of Georgian
tea-growing
– 41% of the tea plantations in Georgia are located at the height of up to 100 meters above the sea level (in Ozurgeti, Lanchkhuti, Kobuleti, Khobi, Zugdidi and Gali regions), 45% – from 100 to 400 meters, 14% – higher than 400 meters, while as the best level for tea-growing in Georgia is considered 600 meters for Samegrelo and Abkhazia regions and 800 meters for Imereti region. According to the international practice, low-quality output is produced in lowland places.
– A superficial information concerning lack of prospects for Georgian tea-growing spread by foreign experts that worked in Georgia in the first half of 1990s was shared by international financial institutions, which had a negative effect on potential investors. Later on it was substantially refuted by both Georgian and foreign specialists.
– In view of intensive exploitation of tea plants and non-conducting of agrotechnical arrangements for a long period of time, biological activity of the bushes has considerably decreased. Derangement of the drainage system caused bogging of tea plantations located in lowlands, a two-three time line trimming of tea plants throughout the year took place because of the inculcated practice of rough leaf picking. In 1970-1980s, in comparison with the previous period, the raw materials base increased by 1%, while leaf picking and finished commodity production – by several times.
Works aimed at improvement and perfection of the quality of Georgian tea with participation of Georgian and foreign scientists have been reduced. The scientific potential was directed to utilization of the rough fraction obtained as a result of intensive picking and working out of technologies for production of various concentrates.
– In spite of rough leaf picking and deterioration of the finished commodity’s quality, the prices have remained unchanged, which contributed to formation of corruption environment that has partially remained in the sphere of both production and selling of output.
– Simplified process lines and devices for processing of rough leaves have become outdated and are out of order. Classical technologies of delicate plantlets, processing of high-quality specialized mark tea, LTP and CTC automated lines, production of biologically active substances are not inculcated almost anywhere. The branch’s social and production infrastructure, which used to represent an integral part of the tea industry, is disrupted.
– Privatized tea plantations are dismembered and abandoned. Leaf picking and seed plantations of “Kolkheti” species have been destroyed, young plant farms have been disrupted.
– The sale price of the produce made of low-quality raw materials is low and often cannot cover the expenses incurred for it. Tea trade is disrupted, it is diversified by unprofessional physical persons and firms ignorant in marketing. In view of production of low-quality output, the old consumer markets have been lost and Georgian producers of high-quality tea were substituted for foreign ones even on the home market, the volume of which makes up 45-50 million GEL.
– Most of tea-growing companies have no financial resources for conducting agrotechnical works, purchasing raw materials and inculcation of new technologies. They have accumulated debts to the state budget, various suppliers and tea growers. The atmosphere of absolute distrust towards the companies has set in among the population. Georgian tea-growing is not attractive to commercial banks and other financial institutions.
– The state assistance that has been allocated to the branch in the recent years has had no expected effect in view of lack of a strategy for rehabilitation of tea-growing, frequent changes in state organizations that implement subsidizing and objectives of rehabilitation, as well as untimely receipt of the allocated sums.
On account of scanty financing and the decrease in the demand for innovation produce, the volume of scientific-technical research has sharply dropped, renewal of scientific staff is taking place at a low rate.

3. The practice of
tea-growing rehabilitation
– Rehabilitation of tea-growing is possible by means of a full-fledged management of tea-growing, highly effective processing and the whole chain of the product’s marketing, i.e. in conditions of management of the processes from a tea plant to a consumer’s cup. Absence of such mechanism is caused by non-professionalism of proprietors, ignorance in the principles of market relations, inability to eradicate the conflict of interests and produce a competitive output, shortage of information on innovations and markets, lack of the state’s interest in tea-growers’ problems.
– According to the world practice, leading the branch out of the crisis is impossible without an efficient financial assistance of the state. After the end of the China-Japan war rehabilitation of the branch in both countries took place with state assistance; after privatization in Sri-Lanka, with the purpose of regulation of numerous processes, the state carried out deprivatization and then contributed to the development of the inverse process. In most of tea-growing countries (India, China, Turkey, Sri-Lanka, Kenya, Japan, etc) regulation of tea production and selling as well as realization of large-scale projects is implemented with state support. Important functions in the guidance of the branch are accomplished by the state structures, the activities of which in many countries are managed by deputy prime-ministers.
In none of the tea-growing countries the branch is managed by means of application of liberal market principles.
– The world practice shows us that coordination of cultivation of tea plantations, leaf picking and its processing, packing and selling of the finished commodity by means of implementation of institutional and structural reforms is mandatory, i.e. the whole process of rehabilitation should serve one clear purpose. Implementation of the mentioned task is possible by setting up of model enterprises integrated in various forms and located at the raw material base in accordance with geographical zones, in which inculcation of novelties will be recommended for all tea factories of the given zone. These principles should lay the basis for elaboration of the state policy of rehabilitation of tea-growing.
– By means of more than 17,0 million GEL allocated by the Georgian government for rehabilitation of tea-growing in the past decade it has become possible to retain the branch’s viability and prepare it for a large-scale rehabilitation.

4. Concerning the necessity of rehabilitation of tea-growing
– In the tea-growing regions, where more than half a million people live, substitution of tea for other cultures has failed. In Kolkheti lowland, in view of the recurring bogging processes, the areal of annual cultures and intensive livestock-breeding production has contracted. In the recent years more than 90,0 thousand hectares of agricultural lands have fallen out of the turnover. In the tea-growing regions production of agricultural output in calculation per head has decreased along with the dynamics of industrial development, and the number of people living below the poverty level has risen.
The passed period has proved that tea cultivated on typical soil is the culture that has no alternative in western Georgia from social-economic and ecological point of view. Moreover, in view of potentially high employment and income possibilities, the branch has a political load as well.
– The old psychology of setting hopes on the state and receiving the necessary assistance from it still prevails among the branch’s workers. The result of it is that in the country where we have tea plantations, labor force and specialists, privatization of tea factories is over and the process of rehabilitation of tea-growing is equivalent to its formation anew, moreover, given the country’s limited financial and energy resources, inculcation of new technologies and searching for new markets can be a more difficult task because of the distorted psychology.
– In view of the world trends in the tea-growing countries, taking into account the current processes as well as the arrangements implemented by the new countries for cultivation of tea and energetic actions for enlargement of a trade mark’s niche on the old markets and searching for new ones (for which the countries render a strong institutional support), a delay in the process of rehabilitation of tea-growing in Georgia and committing it only to the private sector would be equivalent to destruction of the branch with the social-economic consequences arising from it.

5. Main directions of rehabili-
tation work in tea-growing
– It is necessary to carry out inventory taking of tea plantations and processing enterprises with participation of the Institute of Tea, Subtropical Cultures and Tea Industry:
a) With the purpose of description of biological condition of tea plantations, ascertaining of promising plantations along with the ones to be left or uprooted and determination of agrotechnical arrangements liable to implementation.
b) With the purpose of technical re-equipment of the factories for processing of high-quality factories, inculcation of the corresponding technological novelties, determination of the list of factories that are not fit for production of high-quality output.
– The return of Georgian tea to the market is possible with complete observance of agrotechnical rules of tea-growing, restoration of traditions of picking delicate plantlets, production of high- quality output, including specialized elite tea which is in great demand.
It is possible to inculcate a double-stage picking method that envisages picking and processing of two-leaf delicate plantlets, production of “Specialty” type product in accordance with the orthodox technology, and seperately, processinmg by “LTP” technology of broken and fine-dispersed tea output out of the third and the fourth leaves picked at he second stage (apiece).
– Inculcation of practice of delicate plantlets picking is related to increasing of picking sequence, which will acutely raise the issue of the demand for labor force in view of advanced age of former tea-growers and an intensive long-term and circular migration of the population from these regions. Utilization of young labor force is possible in conditions of their equipping with technical mechanization means which should be purchased abroad at the initial stage.
– Farmstead should become the basic organizational form that should provide for rehabilitation of plantations, tendance of them, picking of tender leaves, increasing of picking sequence and restoration of the traditions. There is a real ground so that in prospect farmstead members should become founders of processing enterprises, stockholders or sharers.
Gradually farmsteads should be equipped with mechanization means for tendance of tea-plants and picking of leaves. In this case one farmstead can tend 2-3 hectares of tea plantations.
– In case of a full-fledged carrying of agrotechnical arrangements, at the first stage it is possible to pick 3,5-4 tons of 2-3 leaf delicate plantlets, i.e. produce 700-800 kg of packaged tea from 1 hectare of species widespread in Georgia. The market price of 1 kg of this tea makes up 3 USD, which means that it is possible to obtain 2100-2400 USD worth of produce from 1 hectare. In case of packing, the sale price of 1 kg of this tea will make up 10 USD, and the cost of the produce obtained from 1 hectare – 7-8 thousand USD. In conditions of a 30% “margin” the profit will reach 2000-2500 USD. In conditions of high-yield species and advanced agrotechnical background, redoubling of the mentioned data is possible, which is the indicator of a high economic efficiency of tea-growing.
– The machinery necessary for tea growing and picking of leaves, especially at feral plantations that need rehabilitation, requires modernization with the purpose of quality improving, increasing of exploitation reliability and reduction of power consumption.
– Tea factories need inculcation of modern effective technologies in order to produce a competitive output by means of processing of delicate plantlets.
– Modern technology and machinery (units) necessary for effective carrying out of the process of physical and chemical withering should be imported with the purpose of formation of aroma, taste and infusion characteristic of high-quality tea.
– The independent cycle of optimal fermentation of stranded leaves should be restored and perfected.
– Foreign mechanized technology, which is necessary for production of elite “Specialty” and “Bouquet” black teas should be imported.
– Factories and production areas for processing of green tea should be equipped with Japanese automated flow lines for production of elite “Sencha” and “Gunpowder” teas.
– Production of “Dragon” and “Uluncha” teas requires importing of Chinese and Taiwanese mechanical means and inculcation of “LTP” technology for fine-dispersed tea. Modern means for purification and assorting of tea semimanufactures are also necessary: “color-separators”, stock extractors”, “fiber extractors” and other devices.
– Ineffective fire-tube calorifers, the efficiency coefficient of which does not exceed 0,3 and that has become morally oputdated should be replaced with modern heat-generators (the efficieny coefficient of which exceeds 0,8) that consume twice as less liquid and solid fuel. Inculcation of an effective method of drying with natural gas combustion products with application of a hermetic tea dryer is particularly important. Importing of “Hamro” vibratory tea dryers, etc.
– The system of generation of the heating agent by steam calorifers, which provides for an effective consumption of fuel in transition of the heating agent from one aggregate state to another (steam condensation) and gives an opportunity of fuel economizing by 40%, is liable to restoration.
– With the purpose of production of high-quality output, it is necessary to carry out works for modernization of rollers, as a result of which the process of leaf twisting will be sharply improved.
– Production of instant tea on the basis of imported equipment and technologies should be widely inculcated. Along with a great export potential (high-extract small tea enriched with a concentrate, “tea balsams”, etc), it is possible to sell granulated tea soluble in cold and hot water, natural food dyestuff and natural tonics made on the basis of instant tea on the home market. Instant tea represents an irreplaceable component of food products prepared in accordance with “the holistic concept” of nutrition, so there is a great demand for it on the international market. 1 kg of some sorts of instant tea makes up 25 USD.
– Since Georgia is located in latitude of 420, the priority should be given to production of green tea, where, unlike other countries producing similar output, there is no need in artificial shading for retention of photosynthesis and other processes related to solar activity and, therefore, production of output of exceptionally good quality is possible.
– Taking into account settling of most complex processes related to evaluation of tea plantations’ condition, the volume and cost of the works necessary for their full-fledged rehabilitation, restoration of the tradition of high-quality leaf picking, renewal of factories’ technical equipment, obtaining of a trade mark for selling of the produce on the market and gaining a foothold on it, processing of tea leaves should be basically carried out at small and medium size tea factories technologically equipped for production of high-quality output.
Construction of large and extra large tea factories is not expedient at this stage.
It is expedient to produce tea output by means of the Chinese method (manual twisting) that has its consumers.
In Georgia there are already several enterprises that produce output out of high-quality raw materials that has a classical appearance, though it is not genuine from organoleptic point of view. A corresponding technological improvement is necessary so that tea produced at such enterprises should comply with the recognized standards.
– Development of small and medium business in tea-growing will entail further diversification of production, which, along with positive aspects, is characterized by heterogeneity of the produced output, diversity in purchase and sale prices of raw materials and the finished commodity, simplification of competition etc. In spite of it, in this situation there is no other way for improvement of the output’s quality. Eradication of the mentioned shortcomings is possible by means of uniting of entrepreneurs in associations, cooperatives, or in some other form with the purpose of conducting a single marketing policy under some brand.
– We do not rule out the possibility that, in order to overcome the prolonged crisis in the tea branch, in some regions the state will purchase abandoned but promising tea plantations and factories (5-6 enterprises) with the purpose of enabling of deprivatized enterprises, implementation of marketing works, improvement of the agrotechnical background and ensuring of the reproduction cycle of picking and effective processing.
The companies established with 100% of state means will be liable to privatization after achieving of the planned technical and economic indicators.
– Along with rehabilitation of the raw material base of tea factories having advanced technology, it is necessary to gradually improve the species structure of plantations by means of cultivation of new (triploid and selection) species instead of amortized tea plants, for which the infrastructure of young plant farming should be restored under the direction of the Institute of Tea, Subtropical Cultures and Tea Industry.
– One should consider formation of such service model that will render an assured service to tea producers in inculcation of the achievements of scientific and technological advance, training and supplying with materials, fertilizers, fuel, lubricants, packaging means, etc, as well as in processing of technological normative documents. In Georgia there are machine-building enterprises for manufacturing of new machinery, its replication, supplying of spare parts and utility, for which building of machines for the tea branch is not a major problem. It is expedient to use the capabilities of Ozurgeti mechanical plant for implementation of works related to repairs, adjustment and assembling.
– At the initial stage small and medium tea factories should be fitted out with technological equipment purchased by the state from foreign firms producing the mentioned machinery. In case of its handing over to private companies, it is expedient to apply the co-financing principles.

6. Stages of tea
production and selling
– The state task program for rehabilitation of tea-growing should be made so that at the initial stage it would be possible to establish model companies in each tea-growing region (Guria, Samegrelo, Imereti, Adjarian Autonomous Republic) with tea plantations, advanced technology and high management level, where it would be possible to produce elite “Orange Pekoe”, “Sencha”, Ulencha”, “Dragon” black and green teas, and there will be a real chance for raising the image of Georgian tea. Making of different brands of Georgian tea and successful entry to the foreign market will become possible this way.
– Distribution of high-quality produce on the market should be implemented by several stages: at the initial stage Georgian tea should gain a foothold on the home consumer market, which is possible with production of a great amount of high-quality output and stable supplies. At this stage Georgian tea should be represented at international exhibitions, presentations and tastings.
At the same time the state should carry out effective arrangements against getting to the market of not fresh, non-aromatic tea products colored with synthetic dyes that cause damage to human health and undeservedly competes with local entrepreneurs.
At the second stage, along with improvement of Georgian tea’s quality and growing of its amount, effective measures for intensification of cooperation with tea producing and consuming countries should be taken, which will make an opportunity for extension of production of high- quality output.
At the same stage it is necessary to obtain food safety certificates of such recognized centers as “Naturland”, IFOAM”, “CERES”. Training and accreditation of Georgian specialists should take place in these centers.
At the third stage, when Georgian tea produce will become stably competitive and the demand for it will rise, Georgia will implement independent exporting of its output to the world consumer market.
Georgian produce should be supplied to the consumer market in both pre-packed and unprepacked form, which will increase its cost by several times. Currently in Georgia there are facilities for packing 8,0 thousand tons of tea produce. Proceeding from Georgia’s climatic-soil conditions and raw material technological potential, it is expedient to produce output in accordance with the following structure:
– Competitive and highly liquid “Specialty”, leaf, broken and fine-dispersed black tea – 40%.
– Elite green tea of extra quality: “Orange Pekoe”, “Dragon”, “Sencha”, “Ganpowder”, highly liquid “Phoenix” – 40%.
– Instant tea concentrate, natural tea dyestuff, nonalcoholic tonics – 10%.
– “Tea balsams” (tea and vegetable composition, including iodinated tea) – 5%.
– Green “Agura”, granulated and briquetted tea – 5%.

International trends
of the tea business
According to the data of the UN Food and Agriculture Organization (FAO), well-known tea-growing export firms (Pomar Intermational, etc) and acknowledged specialists in the branch, a long-term trend of growing of the demand for tea is being formed in the world, which is conditioned on increasing of the number of population, rising of incomes from oil, extension of local tea consumption in classical tea-growing countries and, correspondingly, reduction of export and the trend of increasing of wholesale and retail prices of tea in comparison with its competitive products (coffee, cacao).
The structure of tea consumption is changing. The demand for green tea is growing, including the countries traditionally consuming black one. A similar trend is observed with instant tea and the products made of it (tonics, food dyestuff, etc). There is a great demand for special tea (“Specialty”). In view of the mentioned trends, in 2004 world tea consumption per head made up 0.39 kg, which will increase still more in the future.
By 2010 the volume of world tea production will reach the level of 3,8 million tons.
In view of the rise in domestic consumption in classical tea countries, the countries in which tea is traditionally consumed in small quantities (Kenya, Zimbabwe, Georgia, etc) will take the leading position. Kenya will become the largest tea exporter (275-280 thousand tons), while Georgia, according to the expert appraisal, can supply 75-78 thousand tons of tea to the world market, by which it will take a significant place among the exporting countries.
Georgian tea will be sold on the markets of the CIS, first of all in the Russian Federation and Central Asia, and also in Iran, Iraq and Mongolia. Export of Georgian will be also extended to the new markets – the US, Poland and other countries.
In the recent years the volume of tea production has been by 18-19 times less than the forecasted one. Moreover, it is the only tea-growing country where, against the background of the trend of rising demand for tea, tea areas have been reduced by several thousand hectares and now the process of uncontrolled uprooting of tea plants is continuing.
– What is going on in Georgian tea business and what is Georgian tea?
Shalva (Koki) Tsetskhladze:
– Finally, as far as tea business is concerns, the past has remained in the history, which is good in the case if this trend continues, while continuation in this business is provided for by involving of professionals.
– Does that mean that the failure of the business and anti-advertising in the matter was caused by involvement of nonprofessionals?
– The result of business of machine-operators, gamgebelis (regional leaders) and old agronomists is to the fore. Technical maladjustment and other problems in business are the result of made mistakes. A businessman should not produce a low-quality and expensive products which will be impossible to sell later on. For instance, if we invite a successful businessman, give him a tea factory and 200 hectares of tea plantations, he is sure to come to the particulars of this matter – he will engage experts and acquire new technologies, which will certainly bring him a positive result. This is a professional approach to business, which, unfortunately, is not done by anyone and the lamentable result is to the fore. I have to tell you that the past of the branch has remained in the past and this has had a positive result – plantations having a serious potential. An experienced businessman is sure to notice one threat – seasonality. In Ceylon and India plantations are exploited for 11 months a year, and in Georgia – for about 5 months, so there will be a threat of unequal competition. That is why a negative aspect of seasonality should be shaded by the advantages of this business. Of course, an example of a successful business will not be confined to the end, but a positive moment stands out in each episode. This has to do with a high level of quality. In case of application of the right technology, obtaining of a positive result is unavoidable. Georgian tea has acquired a name on the market, buyers have appeared, etc. We shall tell about all this at the planned conference, at which we shall familiarize the public with our company’s plans and outline the necessary steps for creation of a successful brand. The main thing is to start the matter, then it is sure to be followed by making of investments and creation of a brand. Our activity is not aimed at retention of tea in Georgia, we work resting upon real facts: there is land and plantations that may become one of the income sources for the state. One can reach success in the Georgian tea business. We cannot call the situation existing on our market a positive one, since I consider it unreal that the companies working with us should supply the picked leaves to the consumers sooner than in 6 months, even in best conditions. During the communist regime, in determination of the category of tea leaves after their storage in ideal conditions for 6 months, their quality was lowered by one category. Now, with the purpose of raising of incomes, a cheap tea is supplied and its quality is palpably low. The primary method for disguising old tea is aromatizing…
– What properties does Georgian tea have from the biochemical point of view?
Levan Gulua:
– Georgian tea does not need pesticides and it is chemically pure.
– What are pesticides and why Georgian tea does not need them?
– Pesticides are chemical poisons used against pests that have a negative effect on human health. In view of the climate existing in Georgia, there is no need in using of pesticides. If a tea plantation in Ceylon and India has no season, it is a big shortcoming for it from this point of view. Tea contains a beneficial substance – minusepigalocatekhingalat that has antioxidant, antitumorous, anticaries and other properties. In comparison with other teas, this substance is represented in Georgian tea leaf in large quantities. At first glance it seems that the more astringent substance – tannin is contained in tea the better, but in reality there is a certain limit and its surplus may lead to lamentable consequences. Georgian tea has a moderate content of tannin. This problem particularly concerns green tea, since oxidation and transformation of this substance takes place in black tea. It is met in green tea in larger quantities. Percentage wise, leaves of Georgian tea contain larger quantities of free amino acids than other teas. The risk of emergence of breast cancer among female consumers of Georgian tea is five times less. There is a research carried out together with the Institute of Oncology of Ukraine that shows positive properties of green tea extract. If we say the same about Chinese tea, it should be stressed that the traces of pesticides remained in the product increase this threat by ten times. Tea contributes to reduction of cholesterol content in the body and is one of the means in the struggle against adiposity. There is “bad” and “good” cholesterol in human body, and Georgian tea affects the “bad” one. Georgian contributes to gastrointestinal digestion, it restrains harmful microorganisms, but does not affect beneficial ones that are necessary for restraining of infection in human body. In case of taking of antibiotics, they kill positive microflora in the stomach and, as a result, one can get dysbacteriosis. However, active substances contained in Georgian tea have a selective effect, which is a great achievement for a preparation. There is another factor – these substances restrain oncogenes and stimulate expression of positive genes. Tea improves microflora of the mouth cavity and impedes the emergence of caries. It supplies the capital system and, according to our research, has a positive effect on healing of wounds. After treatment of a complicated wound with green tea it started to heal, since it stimulates emergence of beneficial cells and kills harmful ones. In 2005 a conference – “Nutrition and cancer problems” was held in the US, at which I gave a report. A lot of time at this conference was devoted to green tea. Tea has been studied for a very long period of time, but this problem is still relevant.
Sh. Ts. – Light tea is drunk in tea consuming countries. One cannot drink pronounced Indian tea on an empty stomach. It is also customary to drink tea with milk, since some teas contain substances, the surplus of which is harmful for human body, but astringent compounds together with milk protein make up a complex that neutralizes them. In order to make Chinese tea acceptable for French or German consumers, it should be processed in many ways since in Europe they do not like pronounced tea, but Georgian tea is acceptable and moderate for everyone.
– What organizational problems and difficulties are there in this business?
Emzar Jgerenaia:
– It would not be correct to speak about the wrong land reform, subsidies, inferior management of agricultural lands and the problems caused in view of similar aspects. It is time for us to understand what situation is in the tea business, how many tons of output we used to produce and how many we produce now, what potential and technologies we possess. We should also understand what secondary tea means. Ideology plays an important role, people have the idea that Georgian tea does not have the properties that are contained in Ceylon tea and that its use is possible only as a secondary one. It is interesting whether Georgian tea has an independent function.
Gocha Dzneladze:
– Tea businesses is divided into two parts – production of primary tea, which implies picking of leaves from plantations, their processing and obtaining of tea semi-finished product. The second direction is packing of the picked tea leaf and its selling in the form of a packed brand on the local or export market. It is a regrettable fact but today Georgian tea is used as a cheap blending component for other brands. Modern technologies are the primary problem of the branch in Georgia, and in view of this problem tea’s prime cost is rising and its competitive ability is decreasing. Tea drying represents the biggest difficulty. The initial amount of moisture in tea leaves makes up about 70%, and in the end products it decreases to 20%, which requires a big source of energy. In our case the efficiency coefficient of the mounting makes up about 25-20%, while in similar foreign mountings this indicator is twice higher, and it is an inhibitory factor in conditions of current power prices.
Privatization of agricultural lands represents a major problem. True, the state has adopted the law on granting of privileges for leasers’ purchases, but this process has been suspended for unknown reasons.
E.J.: – Unfortunately, most part of tea plantations is divided and broken up.
Sh.Ts. – In Guria there were tracts well organized from infrastructural point of view, but now they are broken up and distributed as plots. Unfortunately, their owners cannot use them either and other people are not given an opportunity of purchasing these plantations.
– Is that possible that small business should settle technical issues related to tea plantations and deliver tea leaves to a factory? Which is more effective – one big factory or many small and modern ones?
E.J. – During the communist regime this sphere was technology-capacious, tendace of a tea plantation requires a lot of things. Tractors, machines and many other mechanisms are necessary, special boxes used to be manufactures, in other words it will be difficult for an ordinary resident to look after it.
G. Dz. – Economic situation in the country is improving and soon workers will not work for the current payment. Correspondingly, we should inculcate small-scale mechanization at plantations, which is a necessary condition for the development of Georgian tea. Manual picking is a very big luxury, in this case it will be difficult for us to implement quality management. The matter does not concern the retention of the plantations that used to be in Georgia, but the 40 000 hectares of plantations. During the communist period tea was cultivated on approximately 60 000 hectares, but if it is confirmed that in some places tea growing is not profitable and it is better to cultivate other cultures there, then no one will have any claims. However, there are places where tea cultivation is necessary since it impedes the development of erosion.
Sh.Ts. – In case of manual picking of tea leaf, the prime cost of the product sharply increases. This method is not justified from the technological point of view either – tea leaves should linger for a long time, otherwise it loses its properties. It is another issue that one person will have an opportunity to pick two tons of tea leaf a day and get a high remuneration. If the opponents say that it will sharply reduce the number of workplaces, I will reply that today we have practically no workplaces, since during the season, which lasts for six months, workers get only 100 GEL, which makes up 8 GEL a month and it cannot be called a workplace. A worker equipped with corresponding machinery will be able to pick about 50 tons of tea leaf a year and will annually get about 5000 GEL. It should be emphasized before the inclusion of tea business in Millennium Program that now tea business will be formed since it has not existed in fact. If we retain 15 000 thousand hectares of tea plantations, we shall have 5 000 workplaces, but they will be real workplaces that will bring a real income to a working man.
E.J.: – In case of implementation of your program, about 50 000 people will be employed. The whole families become engaged in tea farming, and they will get high incomes from grey soil. Let us say that we have uprooted tea plants – what can we plant instead of them? Revival of tea plantations is necessary. It should be calculated how many dollars different cultures cultivated on 1 hectare of grey soil could bring. It is a fact that a person employed at a tea plantation will get remuneration that is twice higher than the subsistence minimum, the local budget will grow and the regional economy will develop.
– To what extent is tendace of a tea plantation labor-intensive?
G.Dz. – There are two directions – the Indian and the Japanese ones. In India a tea picker works for 20 USD a month, but in Japan the salaries are high. If we say it in simple words, Japan’s direction is correct mechanization. In this case one person will work on 3 hectares of plantations, he will be a private company’s employee, and the budget will also receive incomes.
E.J. – The regions are empty since the population has no incentives. With restoration of tea plantations’ functions, young people will have a motive to stay in the region, i.e. the social and demographic problem will be solved as well.
– What does “secondary tea” mean?
Sh.Ts.: – It is a cheap blending material and, with rare exception, all teas purchased by consumers consist of different components. The blending principle is as follows: 30% of Ceylon tea, as particularly aromatic one, 30% of Indian tea, as heaving good constitution, and 30% of cheap Indonesian or Kenyan tea are used. In this system Georgian tea is a low-grade one. However, in reality Georgian tea has a great potential and it is possible to rise its quality, change the niche and increase the price.
– According to your calculations, what amount of tea can we produce within the period of 3-5 years?
– In 4-5 years we shall be able to annually pick 100 000 tons of tea leaf and turn it into a product, but the problem lies in a correct marketing and Russia’s future decision is also important. It is difficult to work without a Georgian brand. The situation will be comparatively facilitated when a Georgian brand is established. Standard steps should be taken and it will be appreciated if the state renders assistance and makes advertising for us on the international market. We are looking forward to Turkey’s entry into the EU, in view of which the country’s customs space, where the customs tariff makes up 154% and custom clearance is made starting from 2 USD, will be broken. It can be said that the Turkish market is closed, they pay 25 cents to workers for 1 kg of tea, 250 000 tons of the produce is consumed on the home market, they pick 1 tons of tea leaves, i.e. peasants get 250 million USD. In case of breaking of this system 200 000 tons of tea will drop out of the market, while Georgia is the country the most closely located to it. Turks have already purchased two tea factories in Adjara. The EU will become important for Turkey on the tea market, since its economy is a very developed one.
– What amount of tea shall we be able to export in case of production of high-quality tea?
Sh.Ts. – Depending on the dynamics, the annual growth will make up 30%, i.e. in 5 years tea production should be raised to 20 000 tons, which is approximately equal to 50 million USD. The export income of 50 million USD from one branch of agriculture is not little.
– What are other branches, besides nuts and wine, by means of which we shall be able to enter the world market in a short period of time?
Sh.Ts. – In this case we again should think about natural resources, medicinal herbs, pharmacological raw materials, etc. Only standard steps should be taken in tea production. In case of the regime of long-term liabilities, this business will be a success and foreigners will be engaged in it.
– What is the volume of investments necessary for solving of this problem?
Sh.Ts. – Calculations have already been made and the figures may seem ridiculous. The matter concerns 25-30 million USD, while 40 million is the maximum. This sum envisages the latest technical achievements and restoration of plantations.
– What is the tea standard?
L.G. – Tea standards are becoming liberal, the main and principal requirement is safety standards.

Home consumer market of tea
Taking into account many years’ average statistical data as well as the customs data for the current period and various inquiries (social, marketing), annual tea consumption makes up 2800-3200 tons. According to the customs data, in the recent three years the amount of officially imported packed tea has been ranging from 1600 to 2400 tons.
Besides, 200-400 tons of unaccounted tea, both packed one and in bulk, comes from Azerbaijan for Georgia’s Azerbaijani population. It is noteworthy that the number of this population exceeds 500,0 thousand people and they traditionally consume the most intensively infused tea product, approximately more than 1000 tons.
The remaining requirement in tea in the amount of 500-800 tons is met on the spot by means of output produced at primary factories, farms and in households.
Tbilisi consumer market stands out for the most accurate and good stock-taking and annual tea consumption on it reaches 1500 tons. More than 80% of the product is supplied to the market by professional distribution centers, while the remaining part is sold by the piece.
The assortment of imported medium and low quality tea is basically predominated by low quality tea (sifted one and powder) in one-time bags. This tea is often treated with special dyestuff and flavoring substances in order to artificially increase its solubility in water and compensate for weak gustatory effects.
The Georgian is mainly represented by the products of extra (premium), medium and low quality. Premium quality produce is mainly sold in high level hotels and restaurants. It makes up 5% of the total produce. Medium quality produce is represented in restaurants, supermarkets, shops and makes up 40% of the total volume. Low quality produce is mainly sold at markets and makes up 55%. The structure of tea existing on the Georgian market is given below:
The assortment of imported medium and low quality tea is basically predominated by low quality tea (sifted one and powder) in one-time bags. This tea is often treated with special dyestuff and flavoring substances in order to artificially increase its solubility in water and compensate for weak gustatory effects.
Such species of tea as “Indian-Chinese”, “Kimini”, “Bakhtadze” and “Clone” that are adopted to the local conditions and have a unique technological potential and giving raw material with a rich chemical composition were selected in Georgia on the basis of scientific research and brought from abroad. The species distribution of the plantations possessed by “Geoplant” is as follows: “Indo-Chinese” – 66%, “Kimini” – 2%, “Bakhtadze” – 30%, “Clone” – 2%.
In other tea producing countries the cost of plantations is annually increasing and in 2006 it reached the following level:

1. India – 4000$-7000$
2. Sri-Lanka – 4500$-8000$
3. Indonesia – 3500$-4000$