During his meeting with TV media, the former Prime Minister of Georgia, Bidzina Ivanishvili, talked about the enterprises opened after the new government assumed office and pointed out: "During one of my speeches, I said that it would be nice if one enterprise were opened in each of the 60 regions. These 60 enterprises turned into 100 and everyone expected this amount. Today, they have stopped counting them. More than 700 enterprises have been renovated, activated or constructed, including 129 start-ups."FactCheck wrote about the enterprises opened after the change of government earlier as well (see Article 1, Article 2 and Article 3).
According to the definition of the National Statistics Office of Georgia, an enterprise is an economic entity which produces goods or services with single or multiple profiles. An enterprise can be individual as well as a legal entity. Enterprises are divided into groups according to their size: large enterprises where the average annual number of workers is over 100 or which has an average annual turnover of more than GEL 1.5 million, medium size enterprises where the average annual number of workers varies from 20 to 100 with an average annual turnover of between GEL 0.5 million and GEL 1.5 million and small size enterprises where the maximum average annual number of workers is 20 with an average annual turnover of under GEL 0.5 million.
During his statements in the past, Bidzina Ivanishvili talked about the opening of large enterprises. On 30 May 2013 he stated: "The economy is in a critical state. We must manage to construct at least those 60 enterprises about which we talked during our pre-election campaign and have them up and running by the end of the year. We might not be able to actually construct them in this period of time but getting them started is absolutely possible. There must be at least one enterprise in every region. We are still not sure how many enterprises will be based in Tbilisi." It is a fact that Mr Ivanishvili was not only speaking about small enterprises.
Bidzina Ivanishvili also stated: "Hundreds and thousands of enterprises must be opened and this will be absolutely for real, not like it is today when they open a couple of enterprises and talk about it for two years. Hundreds of enterprises must be opened every month."
Creating new agricultural enterprises and re-equipping already existing ones is covered by two separate projects – Preferential Agro-Credit and Co-Financing Agricultural Products Processing Enterprises. These projects are run by the Agricultural Projects Management Agency. The Ministry of Economy and Sustainable Development of Georgia is currently implementing another project called Product of Georgia with one of its components financing enterprises in the field of agriculture.
According to the 2016 Report of the Agricultural Projects Management Agency, a total of 148 enterprises have been opened in terms of these projects (as of April 2016) including 120 as a part of the Preferential Agro-Credit project and 28 within the Co-Financing Agricultural Products Processing Enterprises project whilst 700 enterprises have been re-equipped as a part of the activities of these projects.
New Enterprises by FieldSource: Agricultural Projects Management Agency
We contacted the owners of several enterprises opened as a part of the aforementioned agricultural projects.Vasil Kalandadze received funding in terms of the Preferential Agro-Credit project (USD 550,000) and founded an oak barrel producing factory. The factory produces international standard oak barrels in various sizes. The barrels are then used for storing wine and other alcoholic beverages. A total of 15 people are employed in the factory. As Mr Kalandadze pointed out in his interview with FactCheck,
they have recently extended their production line to include furniture as well.
Imperial 2000 Ltd was also funded in terms of the Preferential Agro-Credit project and acquired refrigerators necessary for the preservation of various types of produce. In his conversation with us, the Director of the enterprise, Zviad Malakmadze, stated that he received a total of USD 600,000 in funding in terms of the project and acquired 11 refrigerators for preserving produce. The enterprise employs 40 people upon a permanent basis.
A nut processing enterprise, called Nut Invest, received a total of USD 387,000 in co-funding (a USD 172,000 grant and a USD 215,000 loan) in terms of the Co-Financing Agricultural Products Processing Enterprises project. The enterprise processes and packages nut products (nuts and nut flour). The production is mainly exported to Germany, Italy and Spain. The enterprise permanently employs 50 people whilst the number of employees goes up to 80 during the harvest season (August and September).
Giorgi Svanidze brought olive seedlings from Turkey to Georgia six years ago and planted them in Sakabo, Sighnaghi Municipality. His enterprise, Georgian Olive Ltd, obtained USD 350,000 funding through the Co-Financing Agricultural Products Processing Enterprises project. Mr Svanidze added his own investment to this money and opened an olive processing factory where he produces olives and olive oil. A total of 15 people are employed in the factory proper whilst the number of employees in the olive plantations varies from 100 to 150 according to the season.
Georgia Mushroom Ltd received USD 500,000 in funding through the Preferential Agro-Credit project and started producing mushroom growing bags. This is a ready-made material for growing mushrooms. The enterprise started functioning in May 2016 and employs a total of 35 people.
A fruit processing company, called Agro-Chokhatauri, was founded as a part of the Preferential Agro-Credit project (USD 500,000 loan). The enterprise produces compotes and jams from various fruits. The products are exported mainly to Russia, Belarus, Poland and the Czech Republic. The enterprise employs 70 people.
In his past statements, Bidzina Ivanishvili talked about opening large enterprises. In his most recent statement, Mr Ivanishvili also talks about opening at least one enterprise in each of Georgia’s 60 regions (however, he no longer speaks about factories). It is natural to assume that opening one small or medium sized enterprise in a region is no grand achievement for the state and will not have any dramatic influence on the development of the economy. Based upon the promise made by the former leader of the Georgian Dream coalition, it was expected that at least 60 large enterprises would be opened during the coalition’s time in office. Hence, the issue of enterprises is as controversial as ever.
Bidzina Ivanishvili also talked about opening hundreds of enterprises each month. Small and medium sized enterprises have indeed been opened in the field of agriculture with the help of targeted government projects; however, the actual scale is much different from the promised one.
According to the 2016 Report of the Agricultural Projects Management Agency, a total of 148 enterprises have been opened in terms of funding projects (as of April 2016) including 120 as a part of the Preferential Agro-Credit project and 28 as a part of the Co-Financing Agricultural Products Processing Enterprises project whilst 700 enterprises have been re-equipped in terms of these projects. Hence, small and medium sized enterprises have indeed been opened in the field of agriculture with the help of the targeted government projects. However, it should also be noted that the founder of the Georgian Dream coalition, Bidzina Ivanishvili, created unrealistic expectations among the population during his pre-election campaign, saying that 60 factories (large enterprises) would be opened after the Georgian Dream coalition assumed office and the economic situation of the population would improve dramatically.Hence, Bidzina Ivanishvili’s statement is HALF TRUE.