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United Kingdom : EBRD provides US$ 1.32m funding for new dairy in Georgia.

Greenfield dairy in Kakheti region will produce fresh milk for country where most dairy products are made from imported milk powder.

The European Bank for Reconstruction and Development (EBRD) is lending US$ 1.32 million to a Georgian company, Kvareli Baga, for the construction of a greenfield industrial-sized dairy complex in the Kakheti region. Kvareli Baga was established by Georgian businessman Mr Lasha Papashvili, who has previously built commercial properties with EBRD financing. Mr Papashvili understands the need for Georgia to become self-sufficient in milk production, and he believes that such dairy complexes are the answer to the current situation.

After decades of under-investment, Georgia has come to rely on imported milk powder. Around 80 per cent of milk used to produce value-added dairy products, such as cheese, is reconstituted from powder. Industrial dairy farms produce only 10 per cent of the country s milk, while the remainder is produced by subsistence farmers.

The EBRD believes that future industrial-sized dairy complexes, such as the one being built by Kvareli Baga, have the potential to replace imported milk powder with fresh, locally produced milk consumed by families and made into dairy products.

Kvareli Baga will be a vertically-integrated dairy complex, producing fodder for its cows on its own 134 ha farm, which will greatly reduce costs and improve feed quality. Another key element will be the high level of bio-security and hygiene in order to ensure the constant health of the dairy herd and maintain a high quality and volume of milk produced. This will be aided by the fact that the herd will be composed of imported Holstein and Brown Swiss cows, which are the highest milk-yielding breeds (around 25 litres a day per cow). In addition, the dairy complex has been designed by a leading global supplier of solutions to dairy facilities, with equipment and systems that will optimise milk production performance all year round. It is expected that Kvareli Baga will pave the way for similar industrial-sized dairy complexes, thereby allowing Georgia s dairy sector to eventually become self-sufficient and prosperous.

To date, the EBRD has invested a total of 1.8 billion for 158 projects in various sectors of the Georgian economy, mobilising a further 3 billion for those ventures from other sources of financing.

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Publication:Mena Report
Date:Aug 2, 2013
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